CODE OF FEDERAL REGULATIONS
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The Code of Federal Regulations is a codification of the general and permanent rules published in the Federal Register by the Executive departments and agencies of the Federal Government. The Code is divided into 50 titles which represent broad areas subject to Federal regulation. Each title is divided into chapters which usually bear the name of the issuing agency. Each chapter is further subdivided into parts covering specific regulatory areas.
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Title 7—
The Food and Nutrition Service current regulations in the volume containing parts 210-299, include the Child Nutrition Programs and the Food Stamp Program. The regulations of the Federal Crop Insurance Corporation are found in the volume containing parts 400-699.
All marketing agreements and orders for fruits, vegetables and nuts appear in the one volume containing parts 900-999. All marketing agreements and orders for milk appear in the volume containing parts 1000-1199.
For this volume, Robert J. Sheehan, III was Chief Editor. The Code of Federal Regulations publication program is under the direction of Michael L. White, assisted by Ann Worley.
(This book contains parts 1600 to 1759)
7 U.S.C. 941
The purpose of this part is to effectuate the provisions of the Government in the Sunshine Act. This part applies to the deliberations of a quorum of the Directors of the Bank required to take action on behalf of the Bank where such deliberations determine or result in the joint conduct or disposition of official Bank business. Any deliberation to which this part applies is hereinafter in this part referred to as a meeting of the Board of Directors.
As used in this part:
(1) Deliberations to determine whether a meeting or portions of a meeting will be open or closed or whether information pertaining to closed meetings will be disclosed;
(2) Calling a meeting at a date earlier than announced as provided in § 1600.5;
(3) Changing the subject matter of a publicly announced meeting as provided in § 1600.5;
(4) Disposition of Board business by circulation of materials to individual Board members;
(5) Staff briefings of Board members;
(6) Informal background discussions among Board members and staff which clarify issues and expose varying views; or
(7) Sessions with individuals from outside the Bank where Board members listen to a presentation and may elicit additional information.
(a) Except as provided for in § 1600.6 every portion of every meeting of the Board shall be open to public observation. Observation does not include participation or disruptive conduct by observers, and persons engaging in such conduct will be removed from the meeting. Documents being considered at meetings of the Board may be obtained subject to the exemptions set forth in § 1600.8.
(b) Board members shall not jointly conduct or dispose of official Board business other than in accordance with this part.
(c) The Secretary of the Board shall be responsible for assuring that ample space, sufficient visibility, and adequate acoustics are provided for public observation of meetings of the Board.
A decision to hold a meeting of the Board should be made as provided in the bylaws of the Bank and at least ten days prior to the scheduled meeting date in order for the Secretary of the
(a) Except as otherwise provided in this section, public announcement of open meetings and meetings or portions thereof closed under § 1600.7 will be made at least seven days in advance of each meeting. Except to the extent that such information is determined to be exempt from disclosure under § 1600.6, each such public announcement will state the time, place, and subject matter of the meeting, whether it is to be open or closed to the public, and the name and telephone number of the official designated to respond to requests for information about the meeting. Each such announcement shall be submitted for publication in the
(b) If a meeting is closed, the Board may omit from the announcement information usually included, if and to the extent that it finds that disclosure would be likely to have any of the consequences listed in § 1600.6.
(c) Where a majority of the Board members determine by recorded vote that Bank business requires that a meeting be called on less than ten days notice, public announcement shall be made at the earliest practicable time. Such announcement will state the time, place, and the subject matter of the meeting, whether it is to be open or closed to the public, and the name and telephone number of the official designated to respond to requests for information about the meeting.
(d) The time or place of a meeting may be changed following the public announcement required by paragraph (a) of this section only if the Secretary publicly announces such change at the earliest practicable time. The subject matter of a meeting, or the determination of the Board to open or close a meeting, or portion of a meeting, to the public, may be changed following the public announcement required by this section only if:
(1) A majority of the Directors determines by a recorded vote that business so requires and that no earlier announcement of the change was possible; and
(2) The Secretary publicly announces such change and the vote of each Director upon such change at the earliest practicable time.
(e) The earliest practicable time, as used in this subsection, means as soon as possible, which should in few, if any, instances be later than the commencement of the meeting or portion in question.
(f) Each person interested in attending an open meeting of the Board should notify the Assistant Secretary of the Board at least one business day prior to the open meeting of their intention to attend the meeting. Any person who fails to do so may not be accommodated if there is insufficient space in the meeting room.
(a) A portion or portions of a Board meeting may be closed to the public and any information pertaining to such meeting otherwise required by § 1600.3 to be disclosed to the public may be withheld, where the Board determines that public disclosure of information to be discussed at such meetings is likely to:
(1) Disclose matters that are:
(i) Specifically authorized under criteria established by an Executive Order to be kept secret in the interests of national defense or foreign policy; and
(ii) In fact properly classified pursuant to such Executive Order.
(2) Relate solely to the internal personnel rules and practices of the Bank;
(3) Disclose matters specifically exempted from disclosure by statute
(i) Requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue; or
(ii) Establishes particular criteria for withholding or refers to particular types of matters to be withheld.
(4) Disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential;
(5) Involve accusing any person of a crime, or formally censuring any person;
(6) Disclose information of a personal nature where disclosure would constitute a clearly unwarranted invasion of personal privacy;
(7) Disclose investigatory records compiled for law enforcement purposes, or information which if written would be contained in such records, but only to the extent that the production of such records or information would:
(i) Interfere with enforcement proceedings;
(ii) Deprive a person of a right to a fair trial or to an impartial adjudication;
(iii) Constitute an unwarranted invasion of personal privacy;
(iv) Disclose the identity of a confidential source, and, in the case of a record compiled by a criminal enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source;
(v) Disclose investigative techniques and procedures; or
(vi) Endanger the life or physical safety of law enforcement personnel.
(8) Disclose information contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of the Bank or any other agency responsible for the regulation or supervision of financial institutions;
(9) Disclose information the premature disclosure of which would be likely to significantly frustrate implementation of a proposed action of the Board or of another agency, except that this shall not apply in any instance where the content or nature of the proposed action has already been disclosed to the public or where the Board is required by law to make such disclosure on its own initiative prior to taking final action on such proposal; or
(10) Specifically concern the Board's participation in a civil action or proceeding, an action in a foreign court or international tribunal, or an arbitration, or the initiation, conduct, or disposition by the Board of a particular case of formal agency adjudication pursuant to the procedures in 5 U.S.C. 554 or otherwise involving a determination on the record after opportunity for a hearing.
(b) Any Board meeting or portion thereof, which may be closed, or any information which may be withheld under paragraph (a) of this section, will not be closed or withheld, respectively, in any case where the Board finds the public interest requires otherwise.
(a) A majority of all Directors may vote to close a meeting or withhold information pertaining to that meeting. A separate vote shall be taken with respect to any action under § 1600.6(a). A majority of the Board may act by taking a single vote with respect to a series of meetings, a portion or portions of which are proposed to be closed to the public, or with respect to any information concerning such series of meetings, so long as each meeting in such series involves the same particular subject matter and is scheduled to be held no more than thirty days after the initial meeting in such series. The vote of each Director participating in such vote shall be recorded and no proxy shall be allowed.
(b) Whenever any person whose interests may be directly affected by a portion of the Board's meeting requests that the Board close such portion to the public on the basis of exemptions in paragraph (a)(5), (a)(6), or (a)(7) of § 1600.6, the Board, upon request of any one of its members, will vote whether or not to close such portion of the meeting. The vote of each Director participating in such vote shall be recorded and no proxy shall be allowed.
(c) Before every Board meeting closed on the basis of one or more of the exemptions in § 1600.6(a), the Legal Counsel will publicly certify that, in Counsel's opinion, the meeting may be closed to the public and shall state each relevant exemption.
(d) Within one business day after any vote taken pursuant to paragraph (a), (b), or (c) of this section, the Board will make publicly available a written copy of the vote, reflecting the vote of each Board member. Except to the extent that such information is exempt from disclosure, if a meeting or portion of a meeting is to be closed to the public, the Board will make publicly available within one business day after the required vote a full written explanation of its action, together with a list of all persons expected to attend the meeting and their affiliation.
(a) The Secretary of the Board will maintain the following records for each Board meeting, or portion thereof which is closed to the public pursuant to a vote under § 1600.7:
(1) A copy of the Legal Counsel's certification required by § 1600.7;
(2) A copy of a statement from the presiding officer which sets forth the time and place of the closed meeting or portion thereof and a list of persons present; and
(3) A complete verbatim transcript or electronic recording adequate to record fully the proceedings of each Board meeting or portion of a meeting, except that in the case of a meeting or portion of a meeting closed to the public on the basis of exemptions in paragraph (a)(8) or (a)(10) of § 1600.6, the Secretary of the Board will maintain either a transcript, electronic recording, or a complete set of minutes. Such minutes shall fully and clearly describe all matters discussed and shall provide a full and accurate summary of actions taken and the reasons therefor, including a description of each of the views expressed on any item and the record of all roll-call vote reflecting the vote of each member of the question. All documents considered in connection with any action will be identified in such minutes.
(b) The retention period for the records required by paragraph (a) of this section will be for a period of at least two years after the particular Board meeting or until one year after the conclusion of any Board proceeding with respect to which the meeting or portion thereof was held, whichever occurs later.
(c) The Secretary of the Board will make promptly available to the public the transcript, electronic recording, transcription of the recording, or minutes of the discussion of any item on the agenda of a Board meeting, except for such item or items of such discussion as the Board determines to contain information which may be withheld on the basis of one or more of the exemptions in § 1600.6.
(d) Requests for public inspection of electronic recording, transcripts or minutes of Board meetings shall be made to the Assistant Secretary of the Board of Directors of the Rural Telephone Bank, room 4051-South Building, U.S. Department of Agriculture, 14th Street and Independence Avenue SW., Washington, DC 20250. Requests for inspection or copies of transcripts shall specify the date of the meeting, the name of the agenda and the agenda item number; this information will appear in the notice of the meeting.
(e) The transcripts, minutes, or transcriptions of electronic recordings of a Board meeting will disclose the identity of each speaker, and will be furnished to any person at the actual cost of transcription or duplication.
7 U.S.C. 941
Loans made by the Governor of the Rural Telephone Bank (the “Bank”) will be made in conformance with title IV of the Rural Electrification Act of 1936 (the “Act”), as amended (7 U.S.C. 941
As used in this part:
The aggregate amount of loans made will not exceed the amount authorized by the Board of Directors (the “Board”) of the Bank.
No application for a loan will be considered for approval by the Bank until it has been reviewed by RUS and the Governor has determined, based on such review, the eligibility of the applicant for a Bank loan and the amount thereof. Loan application forms are available from RUS on request. No fees or charges are assessed for Bank loans.
A Bank loan will not be made unless the applicant qualifies for a Bank loan of at least $50,000.
(a) The Bank makes loans, under section 408 of the Act, concurrently with RUS cost-of-money loans made under section 305(d)(2) of the Act. To qualify for concurrent Bank and RUS cost-of-money loans on or after November 1, 1993, a borrower must meet each of the following requirements:
(1) The average number of proposed subscribers per mile of line in the service area of the borrower is not more than 15, or the borrower has a projected TIER (including the proposed loans) of
(2) The Administrator of RUS has approved and the borrower is participating in a telecommunications modernization plan for the state, see 7 CFR part 1751, subpart B.
(b) The loan amounts from each program (Bank, including amounts for class B stock, and RUS cost-of-money) will be proportionate to the total amount of funds appropriated for the fiscal year for Bank loans and RUS cost-of-money loans. To determine the Bank portion, the total loan amount will be multiplied by the ratio of Bank funds appropriated for the fiscal year to the sum of RUS cost-of-money and Bank funds appropriated for the fiscal year in which the loan is approved. The same method would be used to calculate the RUS cost-of-money portion (see 7 CFR 1735.31(b)). If during the fiscal year the amount of funds appropriated changes, the ratio will be adjusted accordingly and applied only to those loans approved afterwards.
(c) The actual rate of interest on the Bank loan shall be determined as provided in § 1610.10; the RUS cost-of-money loan shall bear interest at a rate equal to the current cost of money to the Federal Government, on the date of advance of funds to the borrower, for loans of similar maturity, but not more than 7 percent per year (see 7 CFR 1735.31(c)).
(d) Generally, no more than 10 percent of lending authority from appropriations in any fiscal year for Bank and RUS cost-of-money loans may be loaned to a single borrower. The Bank will publish by notice in the
In the interest of making optimum use of the Bank's loan funds, a Bank loan for the acquisition of exchange facilities under section 408(a)(2) of the Act (7 U.S.C. 948(a)(2)) will not be recommended by the Governor for approval by the Secretary of Agriculture unless the Governor determines that the acquisition is reasonably necessary to improve the efficiency, effectiveness, or financial stability of the borrower's telephone system, that the location and character of the proposed acquisition are such that the acquisition is reasonably necessary to accomplish such improvement, and that the amount of the requested loan for such acquisition is reasonably justified by the nature and scope of the improvement which the acquisition would effect.
The policies embodied in 7 CFR part 1610, in all parts of 7 CFR chapter XVII except those identified below, will be utilized by the Governor in carrying out the Bank's loan program to the extent that such policies are consistent with title IV of the Act (7 U.S.C. 941
Borrowers receiving loans from the Bank shall be required to invest in class B stock at 5 percent of the total amount of loan funds advanced. Borrowers may purchase class B stock by:
(1) Paying an amount (using their own general funds) equal to 5 percent of the amount, exclusive of the amount for class B stock, of each loan advance, at the time of such advance; or
(2) Requesting that funds for the purchase of class B stock be included in the loan. If funds for class B stock are included in a loan, the funds for class B stock shall be advanced in an amount equal to 5 percent of the amount, exclusive of the amount for class B stock, of each loan fund advance, at the time of such advance.
(a) All loan fund advances made on or after December 22, 1987 under Bank loans approved on or after October 1, 1987, shall bear interest at the rate determined as established below, but not less than 5 percent per annum.
(b) The interest rate for the period beginning on the date the advance is made and ending at the close of the fiscal year in which the advance is made shall be the average yield on the date of advance on outstanding marketable obligations of the United States having a final maturity comparable to the final maturity of the advance. The interest rate shall be determined to the nearest 0.01 percent.
(1) For this determination, the Bank will use yields on actively traded Treasury issues adjusted to constant maturities obtained from the
(2) The Bank will notify the borrower in writing of the interest rate that applies to each advance.
(c) After the fiscal year in which the advance is made, the interest rate applied to the advance will be the sum of the calculations made in paragraphs (c) (1) through (5) of this section. This interest rate determination shall be made by the Governor within 30 days of the end of each fiscal year and shall be determined to the nearest 0.01 percent.
(1) The aggregate of all amounts received by the Bank during the fiscal year from the issuance of Class A stock, multiplied by the rate of return payable by the Bank during the fiscal year as specified in section 406(c) of the Act, which product is divided by the aggregate of the amounts advanced by the Bank during the fiscal year.
(2) The aggregate of all amounts received by the Bank during the fiscal year from the issuance of Class B stock, multiplied by the rate at which dividends are payable by the Bank during the fiscal year as specified in section 406(d) of the Act, which product is divided by the aggregate of the amounts advanced by the Bank during the fiscal year. Section 406(d) provides that “No dividends shall be payable on Class B stock.” The “amounts received by the Bank during the fiscal year from the issuance of Class B stock” means the amount of cash received during the fiscal year for the purchase of Class B stock, plus the amount advanced to borrowers by the Bank during the fiscal year for such purchases, less any Class B stock that is rescinded during the fiscal year.
(3) The aggregate of all amounts received by the Bank during the fiscal year from the issuance of Class C stock, multiplied by the rate at which dividends are payable by the Bank during the fiscal year as specified in section 406(e) of the Act, which product is divided by the aggregate of the amounts advanced by the Bank during the fiscal year.
(4) The amounts received by the Bank during the fiscal year from each issue of telephone debentures and other obligations of the Bank, multiplied, respectively, by the rates at which interest is payable by the Bank during the fiscal year to holders of each issue, each of which product is divided, respectively, by the aggregate of the amounts advanced by the Bank during the fiscal year.
(5) The amount by which the aggregate of the amounts advanced by the Bank during the fiscal year exceeds the aggregate of the amount received by the Bank from the issuance of Class A stock, Class B stock, Class C stock, and telephone debentures and other obligations of the Bank during the fiscal year, multiplied by the historic cost of money rate as of the close of the immediately preceding fiscal year, which product is divided by the aggregate of the amounts advanced by the Bank during the fiscal year.
(6) As used in paragraph (c)(5) of this section, the term “historic cost of money rate as of the close of the immediately preceding fiscal year,” means the sums of the results of the following
(d) A borrower with a Bank loan approved on or after October 1, 1987, and before December 22, 1987, and with funds not fully advanced as of December 22, 1987, may until the next advance under the loan or March 21, 1988, whichever is later, elect to have the interest rate specified in the loan commitment apply to the unadvanced portion in lieu of the rate which would otherwise apply as set forth in § 1610.10(a). A borrower making such an election shall contact, in writing, the applicable Area Office of RUS. The Governor shall then adjust the interest rate that applies to the unadvanced portion of the loan accordingly.
(e) If the Bank, pursuant to section 407(b) of the Act, issues telephone debentures to refinance outstanding telephone debentures or other obligations, the Bank shall reduce the interest rate charged on each advance of Bank loan funds made during the fiscal year(s) in which the refinanced debentures or other obligations were originally issued. The reduction shall be for the period beginning on the issue date of the refinancing debentures and ending on the date the advance matures or is completely prepaid, whichever is earlier. This reduction shall be in addition to any other interest rate reduction required by section 408(b)(3) of the Act. The interest rate shall be reduced by the amount which fully reflects that percentage of the funds saved by the Bank as a result of the refinancing which is equal to the percentage representation of the advance of all advances made during the fiscal year(s) involved. In no case, however, shall the interest rate be reduced to less than 5 percent per annum. The interest rate reduction for each advance shall be determined as follows:
(1) The funds saved by the Bank as a result of the refinancing shall be computed.
(2) The advance shall be divided by the total of all advances made during the fiscal year(s) involved, and stated to the nearest .01 percent.
(3) The percentage in paragraph (e)(2) of this section is multiplied by the amount in paragraph (e)(1) of this section to determine the savings for a particular advance. The interest rate on that advance is then reduced to fully reflect the savings over the remaining amortization period of the loan from which the advance was made.
(f) Within 60 days after the issue date described in paragraph (e) of this section, the Governor shall amend the loan documentation for each advance described in paragraph (e) of this section, as necessary, to reflect any interest rate reduction applicable to the advance by reason of paragraph (e) of this section, and shall notify each affected borrower of the reduction.
(g) Within 5 days of determining the cost of money rate for a fiscal year, the Governor shall:
(1) Cause the determination to be published in the
(2) Furnish a copy of the determination to the Comptroller General of the United States.
(h) A borrower should not wait until the end of the fiscal year to submit a
(a) Bank loans approved before November 1, 1993, may be prepaid in accordance with the terms thereof, including payment of the premium as provided therein.
(b) A borrower may prepay part or all of a Bank loan made on or after November 1, 1993, by paying the outstanding principal and any accrued interest without being required to pay a prepayment premium.
(c) Borrowers that qualify to issue a refunding note or notes in accordance with 7 CFR 1735.43, Payments on loans, shall not be required to pay a prepayment premium on all payments made in accordance with the new payment schedule.
5 U.S.C. 301, 552; 7 U.S.C. 901
(a) The Rural Electrification Administration (REA) was established by Executive Order No. 7037 on May 11, 1935. Statutory authority was provided by the Rural Electrification Act of 1936 (RE Act) (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, the RE Act was amended to authorize REA to make loans to improve and extend telephone service in rural areas. The Rural Telephone Bank (RTB), an agency of the United States, was established by amendment to the RE Act, approved May 7, 1971. The Administrator of RUS serves as the Bank's chief executive with the title of Governor.
(c) The Secretary of Agriculture (Secretary) established the Rural Utilities Service (RUS) on October 20, 1994, pursuant to the Department of Agriculture Reorganization Act of 1994, (7 U.S.C. 6941
(a) The offices of RUS are located in the South Building of the United States Department of Agriculture at 1400 Independence Avenue, SW, Washington, DC 20250-1500. Hours of operation are from 8:15 AM to 4:45 PM, Eastern time on Federal Government business days.
(b) Information about RUS is available for public inspection and copying as required by the Freedom of Information Act, 5 U.S.C. 552
(c) RUS issues indexes of publications in conformance with the Freedom of Information Act and Department of Agriculture regulations at 7 CFR part 1. Many RUS documents, including regulations and delegations of authority for headquarters and field staff are
Department of Agriculture procedures for requests for records under the Freedom of Information Act are found at 7 CFR part 1. Requests must be in writing and may be submitted in person or by mail to United States Department of Agriculture, Rural Utilities Service, Room 5159-S, 1400 Independence Avenue, SW., STOP 1530, Washington, DC 20250-1530; or by FAX to 202-401-1977. As set forth in 7 CFR 1.16, fees may be charged for processing of requests for records. An appeal of the agency determination concerning the request for official records shall be made in writing to the Administrator, Rural Utilities Service, United States Department of Agriculture, Room 5135-S, 1400 Independence Avenue, SW., STOP 1510, Washington, DC 20250-1510.
RUS requires that all persons submitting comments to a proposed rule or other document published by the agency in the
The Administrator, who also serves as Governor of the RTB, is appointed by the President, with the advice and consent of the Senate. The Under Secretary, Rural Development delegated to the Administrator, in 7 CFR part 2, responsibility for administering the programs and activities of RUS and RTB. The Administrator is aided directly by Deputy Administrators and by Assistant Administrators for the electric program, telecommunications program, the water and environmental programs, and program accounting and regulatory analysis, and by other staff offices. The work of the agency is carried out as described in this part.
The Deputy Administrator aids and assists the Administrator. The Deputy Administrator provides overall policy direction to all RUS programs. The Deputy Administrator reviews agency policies and, as necessary, implements changes and participates with the Administrator and other officials in planning and formulating the programs and activities of the agency, including the making and servicing of loans and grants. The Deputy Administrator is “first assistant” for purposes of the Federal Vacancies Reform Act of 1998 (5 U.S.C. 3345-3349d).
The Chief of Staff aids and assists the Administrator and the Deputy Administrator. The Chief of Staff advises the Administrator regarding policy initiatives and operational issues and assists the Administrator and the Deputy Administrator in developing and planning agency program initiatives. The Chief of Staff is responsible for implementation of overall policy initiatives and provides direction to all RUS programs.
RUS, through the Electric Program, makes loans and loan guarantees for rural electrification and the furnishing of electric service to persons in rural areas.
(a)
(b)
(c)
RUS and RTB, through the Telecommunications Program, make loans and loan guarantees to furnish and improve telecommunications service in rural areas.
(a)
(b)
(c)
RUS, through the Water and Environmental Programs, provides loan and grant funds for water and waste disposal projects serving the most financially needy rural communities.
(a)
(b)
(c)
RUS, through the Telecommunications Program, makes grants and loans to furnish and improve telemedicine services and distance learning services in rural areas.
(a)
(b)
RUS, through Program Accounting and Regulatory Analysis, monitors and administers applicable regulations, RUS policy, and accounting requirements. The staffs assist the Assistant Administrator with respect to management, information systems, budgets, and other such matters.
(a)
(b) This division monitors borrowers' accounting operations in order to ensure compliance with applicable statutory and regulatory requirements and with the requirements of the Office of Management and Budget.
(c) The two regional branches (the Northern Region and the Southern Region) work directly with borrowers. Each regional office has a staff of headquarters and field accountants. The Technical Accounting and Auditing Staff monitors industry developments, including the standards of the Financial Accounting Standards Board, and recommends Agency policies and procedures.
(d) Program Development and Regulatory Analysis directs and administers the preparation, clearance, processing, and distribution of RUS submissions to the Office of the Federal Register in the form of proposed and final rules and notices and RUS bulletins and staff instructions.
The Financial Services Staff evaluates the financial condition of financially troubled borrowers in order to protect the Government's interests.
RUS, through the Electric Program, makes grants and loans to assist high energy cost rural communities. The Assistant Administrator, Electric Program, directs and coordinates the assistance to high energy cost rural communities program and serves as the primary point of contact for applicants, grantees, and borrowers.
In accordance with procedures established in the RUS Continuity of Operations (COOP) plan, the following officials, in the order indicated below, shall act in the office of Rural Utilities
(a) The Deputy Administrator is “first assistant” for purposes of the Federal Vacancies Reform Act of 1998 (5 U.S.C. § 3345-3349d) and shall, in the absence or disability of the Administrator, or in the event of a vacancy in the office of Administrator, serve as Acting Administrator, subject to the limitations established by law.
(b) In the event of the absence or disability of both the Administrator and the Deputy Administrator, or in the event of a vacancy in both the office of the Administrator and the Deputy Administrator, the official incumbents of the following positions shall, in the sequence shown, temporarily perform all of the functions and duties of the Administrator, except to the extent that such functions and duties may not be delegated by law.
(1) Chief of Staff.
(2) Assistant Administrator, Electric Program.
(3) Assistant Administrator, Water and Environmental Programs.
(4) Assistant Administrator, Telecommunications Programs.
(5) Assistant Administrator, Program Accounting and Regulatory Analysis.
(6) Community Programs Director of the Rural Development Kentucky State Office.
(c) Eligibility for succession to the position of RUS Administrator shall be limited to officially assigned incumbents of positions listed in paragraph (b) of this section. Only officials specifically designated in the approved order of succession are eligible. Persons appointed on acting basis, or on some other temporary basis, are ineligible by virtue of so serving to serve as a successor. Therefore the order of succession would fall to the next designated official in the approved order of succession. The eligibility of the incumbent of paragraph (b)(6) of this section to serve as a successor is also limited to periods of national emergency declared by the President or during the activation of the RUS COOP plan.
(d) In the event of the absence or disability of the Administrator, or in the event that the Administrator's position is vacant, the Deputy Rural Utilities Service Administrator is the only RUS official authorized to serve as Acting Administrator. When serving as Acting Administrator, the Deputy Administrator is authorized to perform all of the functions and duties of the office of the Administrator, including those functions and duties that are required by statute or regulation to be performed exclusively by the Administrator. In the event of the absence or disability of both Administrator and the Deputy Administrator, or in the event that both the office of Administrator and Deputy Administrator are vacant, the officials in the order of succession indicated in paragraph (b) of this section shall perform all the functions and duties of the Administrator but may not serve as Acting Administrator.
(e) The Administrator retains the discretion to depart from the order in paragraph b for occasions where deviation from automatic succession is desired by the Administrator. Such temporary designations shall be in writing. Notwithstanding the provisions of this § 1710.53 not contained in this paragraph (e), the Administrator may delegate full or limited authority to perform the functions and duties of the office of Administrator except to the extent that such functions and duties may not be delegated by law.
(f) The Administrator may terminate the delegations under this section 1700.53, in whole or in part, at any time. Unless terminated by the Administrator, written delegations under paragraph (e) of this section expire in accordance with their terms. Individuals acting as successors under paragraph (b) of this section will be relieved of such authority as soon as an incumbent in a position listed higher on the order of succession is available, able, and assumes the functions and duties of the Administrator, or when an official with requisite authority designates a permanent or acting Administrator.
(g) Individuals exercising authority under this § 1700.53 shall keep a record of important actions taken and the period during which the authority is exercised.
(h) The authority to perform functions and duties pursuant to this § 1700.53 can not be redelegated by an incumbent of a position listed in paragraph (b) of this section.
(a)
(1) All discretionary hardship loans.
(2) All loans, loan guarantees, and lien accommodations and subordinations of liens to finance operating costs.
(3) All loans, loan guarantees, and lien accommodations and subordinations of liens of more than $20,000,000 for distribution borrowers or more than $50,000,000 for power supply borrowers.
(4) All loans, loan guarantees, and lien accommodations and subordinations of liens for distribution borrowers that are members of a power supply borrower that is in default of its obligations to the Government or that is currently assigned to the Financial Services Staff, unless otherwise determined by the Administrator.
(5) All loans, loan guarantees, and lien accommodations and subordinations of liens that require an Environmental Impact Statement.
(6) Certifications and findings required by the RE Act or other applicable laws and regulations, the placing and releasing of conditions precedent to the advance of funds, and all security instruments, loan contracts, and all other necessary documents relating to the authorities reserved in this section.
(7) Execution of all loan contracts, security instruments, and all other documents in connection with loans, loan guarantees, and lien accommodations approved by the Administrator.
(b)
(1) Loans, loan guarantees, and lien accommodations and subordinations of liens for distribution borrowers in amounts not exceeding $20,000,000.
(2) Loans, loan guarantees, and lien accommodations and subordinations of liens for power supply borrowers in amounts not exceeding $50,000,000.
(3) Execution of all loan contracts, security instruments, and all other documents in connection with loans, loan guarantees, and lien accommodations approved by the Assistant Administrator, Electric Program.
(c)
(1) Loans, loan guarantees, and lien accommodations and subordinations of liens in amounts not exceeding $15,000,000 except for those approvals reserved to the Administrator.
(2) All certifications and findings required by the RE Act or other applicable laws and regulations, the imposing and releasing of conditions precedent to the advance of loan funds, and all security instruments, loan contracts, and all other documents relating to the delegations set forth in paragraph (c)(1) of this section.
(d)
(1) Loans, loan guarantees, and lien accommodations and subordinations of liens in amounts not exceeding $30,000,000, except for those approvals reserved to the Administrator.
(2) All certifications and findings required by the RE Act or other applicable laws and regulations, the placing and releasing of conditions precedent to the advance of funds, and all security instruments, loan contracts or all other documents relating to the delegations set forth in paragraph (d)(1) of this section.
(a)
(1) All loans, loan guarantees, and lien accommodations and subordinations of liens to finance operating costs.
(2) All loans, loan guarantees, or lien accommodations and subordinations of liens of $25,000,000 or more.
(3) Loans and loan guarantees with acquisition costs of $5,000,000 or more.
(4) Loans and loan guarantees containing funds to refinance outstanding debt of more than $5,000,000.
(5) All loan contracts, security instruments, and all other documents to be executed in connection with loans and loan guarantees approved by the Administrator.
(b)
(1) Loans, loan guarantees, and lien accommodations and subordinations of liens not to exceed $25,000,000 except for those reserved to the Administrator.
(2) Loans and loan guarantees with acquisition costs where the acquisition portion of the loan is less than $5,000,000.
(3) Loans and loan guarantees including refinancing amounts that do not exceed $5,000,000.
(4) Distance learning and telemedicine loans and loan guarantees that do not exceed $5,000,000.
(5) Loan contracts, security instruments, and other documents to be executed in connection with loans and loan guarantees approved by the Assistant Administrator, Telecommunications Program.
(c)
(1) Loans, loan guarantees, and lien accommodations and subordinations of liens of less than $10,000,000.
(2) Loans and loan guarantees with acquisition costs of less than $2,000,000.
(3) Loans and loan guarantees including refinancing amounts of less than $2,000,000.
(4) Any modifications in the method of carrying out loan purposes.
The State Rural Development Offices have the responsibility for making and servicing water and waste loans and grants.
(a)
(1) Grants or loan and grant combinations.
(2) The number selected from each state for financial assistance for grant approval and loans or grants approved.
(3) Extension of principal and interest repayments for rural development purposes.
(4) Loan contracts, security instruments, and all other documents to be executed in connection with loans and loan guarantees approved by the Administrator.
(b)
(1) Loans, that do not also include requests for grant funds, except for those reserved to the Administrator.
(2) Loan contracts, security instruments, and all other documents to be executed in connection with loans and loan guarantees approved by the Assistant Administrator, Telecommunications Program.
(a)
(1) Allocation of appropriated funds among high energy cost community assistance programs;
(2) Awards of grants and loans to extremely high energy cost communities;
(3) Awards of grants and loans to the Denali Commission;
(4) Awards of grants to State entities for State bulk fuel revolving funds; and
(5) Grant agreements, loan contracts, security instruments and all other documents executed in connection with grants and loans agreements approved by the Administrator.
(b)
7 U.S.C. 901
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 E contains the policies and procedures related to grants; subpart F contains the policies and procedures related to a combination loan and grant; and subpart G contains the policies and procedures related to loans.
(a) The transmission of information is vital to the economic development, education, and health of rural Americans. To further this objective, RUS will provide financial assistance to distance learning and telemedicine projects that will improve the access of people residing in rural areas to educational, learning, training, and health care services.
(b) In providing financial assistance, RUS will give priority to rural areas that it believes have the greatest need for distance learning and telemedicine services. RUS believes that generally the need is greatest in areas that are economically challenged, costly to serve, and experiencing outward migration. This program is consistent with the provisions of the Telecommunications Act of 1996 that designate telecommunications service discounts for schools, libraries, and rural health care centers. RUS will take into consideration the community's involvement in the proposed project and the applicant's ability to leverage grant funds.
(c) In administering this subpart, RUS will not favor or mandate the use of one particular technology over another.
(d) Rural institutions are encouraged to cooperate with each other, with applicants, and with end-users to promote the program being implemented under this subpart.
(e) RUS staff will make diligent efforts to inform potential applicants in rural areas of the programs being implemented under this subpart.
(f) The Administrator will provide only loans under this subpart to any entity that has received a telecommunications or electric loan under the Rural Electrification Act of 1936. Telecommunications and Electric borrowers are encouraged to seek a loan under this subpart to bolster educational and health care opportunities in the rural communities they serve. A borrower receiving a loan shall:
(1) Make the loan available to entities that qualify as distance learning or telemedicine projects satisfying the requirements of this subpart, under any terms it so chooses as long as the terms are no more stringent than the terms under which it received the financial assistance.
(2) Use the loan to acquire, install, improve, or extend a distance learning or telemedicine system referred to in this subpart.
(g) The Administrator will allocate funds that are appropriated each fiscal year for the subparts E, F, and G, of this part respectively. Not more than 30 days before the end of the fiscal year, the Administrator may transfer any funds not committed to grants in the combination loan and grant program to the grant program.
(h) Financial assistance may be provided for end user sites. Financial assistance may also be provided for hubs located in rural or non-rural areas if they are necessary to provide distance learning or telemedicine services to rural residents at end user sites.
(i) The Administrator will publish, at the end of each fiscal year, a notice in the
(1) Provide educational programs, instruction, or information originating in one area, whether rural or not, to students and teachers who are located in rural areas; or
(2) Connect teachers and students, located in one rural area with teachers and students that are located in a different rural area.
(1) Rural elementary, secondary schools, and other educational institutions, such as institutions of higher education, vocational and adult training and education centers, libraries, and teacher training centers, and students, teachers and instructors using such rural educational facilities, that participate in a rural distance learning telecommunications program through a project funded under this subpart;
(2) Rural hospitals, primary care centers or facilities, such as medical centers, nursing homes, and clinics, and physicians and staff using such rural medical facilities, that participate in a rural telemedicine program through a project funded under this subpart; and
(3) Other rural community facilities, institutions, or entities that receive distance learning or telemedicine services.
(1) Assistance in learning to manage, operate, or use equipment or systems; and
(2) Studies, analyses, designs, reports, manuals, guides, literature, or other forms of creating, acquiring, or disseminating information.
(a) To be eligible to receive a grant, loan and grant combination, or loan under this subpart:
(1) The applicant must be legally organized as an incorporated organization or partnership, 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 § 1703.102, 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 applicant proposes to utilize the financing to:
(i) Operate a rural community facility; or
(ii) Deliver distance learning or telemedicine services to entities that operate a rural community facility or to residents of rural areas at rates calculated to ensure that the benefit of the financial assistance is passed through to such entities or to residents of rural areas.
(b) Electric or telecommunications borrowers are not eligible for grants.
(a) During the period between the submission of an application and the execution of documents, the applicant must inform RUS if the project is no longer viable or the applicant no longer is requesting financial assistance for the project. When the applicant so informs RUS, the selection will be rescinded or the application withdrawn and written notice to that effect sent to the applicant.
(b) If an application has been selected and the scope of the project changes substantially, the applicant may be required to submit a new application to RUS for review and consideration depending on the degree of change. A new application will be subject to review in accordance with this subpart. The financial assistance may not be transferred by the applicant for use for another project.
(c) If State or local governments raise objections to a proposed project under the intergovernmental review
(d) RUS may request additional information to complete the appropriate documents covering financial assistance.
(e)
(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.
(3) The recipient of a loan will be required to execute a security instrument in form and substance satisfactory to RUS and must, before receiving any advance of loan funds, provide security that is adequate, in the opinion of RUS, to assure repayment, within the time agreed, of all loans to the borrower under the DLT program. This assurance will generally be provided by a first lien upon all facilities and equipment financed by the loan. RUS may require additional security as it deems necessary.
(4) Adequate security may also be provided by third-party guarantees, letters of credit, pledges of revenue, or other forms of security satisfactory to RUS.
(5) The security instrument and other loan documents required by RUS in connection with a loan under the DLT program shall contain such pledges, covenants, and other provisions as may, in the opinion of RUS, be required to secure repayment of the loan.
(6) If the project does not constitute a complete operating system, the DLT recipient shall provide evidence, in form and substance satisfactory to RUS, demonstrating that the recipient has sufficient contractual, financing, or other arrangements to assure that the project will provide adequate and efficient service.
(f) Prior to the execution of a grant and loan document, RUS reserves the right to require any changes in the project or legal documents covering the project to protect the integrity of the DLT program and the interests of the government.
(g) If the applicant fails to submit, within 120 calendar days from the date of RUS' selection of an application, all of the information that RUS determines to be necessary to prepare legal documents and satisfy other requirements of this subpart, RUS may rescind the selection of the application.
(a) For financial assistance of $100,000 or greater, prior to the disbursement of a grant and a loan, the recipient, if it is not a unit of government, will provide evidence of fidelity bond coverage as required by 7 CFR part 3019.
(b) Grants and loans will be disbursed to recipients on a reimbursement basis, or with unpaid invoices for the eligible purposes contained in this subpart, by the following process:
(1) An SF 270, “Request for Advance or Reimbursement,” will be completed by the recipient and submitted to RUS not more frequently than once a month;
(2) RUS will review the SF 270 for accuracy when received and will schedule payment if the form is satisfactory. Payment will ordinarily be made within 30 days; and
(3) For financial assistance approved during and subsequent to FY 1999, funds will be advanced in accordance with 7 CFR 1744.69.
(c) The recipient's share in the cost of the project must be disbursed in advance of the loan and grant, or if the recipient agrees, on a pro rata distribution basis with financial assistance during the disbursement period. Recipients will not be permitted to provide their contributions at the end of the project.
(d) A combination loan and grant will be disbursed on a pro rata basis based on the respective amounts of financial assistance provided.
(a) A project performance activity report will be required of all recipients on an annual basis until the project is complete and the funds are expended by the applicant.
(b) A final project performance report must be provided by the recipient. It must provide an evaluation of the success of the project in meeting the objectives of the program. The final report may serve as the last annual report.
(c) RUS will monitor recipients, as it determines necessary, to assure that projects are completed in accordance with the approved scope of work and that the financial assistance is expended for approved purposes.
(d) Recipients shall diligently monitor performance to ensure that time schedules are being met, projected work by time periods is being accomplished, and other performance objectives are being achieved. Recipients are to submit an original and one copy of all project performance reports, including, but not limited to, the following:
(1) A comparison of actual accomplishments to the objectives established for that period;
(2) A description of any problems, delays, or adverse conditions which have occurred, or are anticipated, and which may affect the attainment of overall project objectives, prevent the meeting of time schedules or objectives, or preclude the attainment of particular project work elements during established time periods. This disclosure shall be accompanied by a statement of the action taken or planned to resolve the situation; and
(3) Objectives and timetable established for the next reporting period.
A recipient of financial assistance shall provide RUS with an audit for each year, beginning with the year in which a portion of the financial assistance is expended, in accordance with the following:
(a) If the recipient is a for-profit entity, a Telecommunications or Electric borrower, or any other entity not covered by the following paragraph, the recipient shall provide an independent audit report in accordance with 7 CFR part 1773, “Policy on Audits of RUS Borrowers.”
(b) If the recipient is a State or local government, or non-profit organization, the recipient shall provide an audit in accordance with 7 CFR part 3052, “Audits of States, Local Governments, and Non-Profit Organizations.”
RUS will conduct reviews as necessary to determine whether the financial assistance was expended for approved purposes. The recipient is responsible for ensuring that the project complies with all applicable regulations, and that the grants and loans are expended only for approved purposes. The recipient is responsible for ensuring that disbursements and expenditures of funds are properly supported by invoices, contracts, bills of sale, canceled checks, or other appropriate forms of evidence, and that such supporting material is provided to RUS, upon request, and is otherwise made available, at the recipient's premises, for review by the RUS representatives, the recipient's certified public accountant, the Office of Inspector General, U. S. Department of Agriculture, the General Accounting Office, and any other official conducting an audit of the recipient's financial statements or records, and program performance for the grants and loans made under this subpart. The recipient shall permit
The recipient shall obtain prior written approval by RUS for any material change to the scope or objectives of the project, including any changes to the scope of work or the budget submitted to RUS. Any material change shall be contained in a revised scope of work plan to be prepared by the recipient, submitted to, and approved by RUS in writing.
(a) The financial assistance may be terminated when RUS and the recipient agree upon the conditions of the termination, the effective date of the termination, and, in the case of a partial termination of the financial assistance, any unadvanced portion of the financial assistance to be terminated and any advanced portion of the financial assistance to be returned.
(b) The recipient may terminate the financial assistance by written notification to RUS, providing the reasons for such termination, the effective date, and, in the case of a partial termination, the portion of the financial assistance to be terminated. In the case of a partial termination, if RUS believes that the remaining portion of the financial assistance will not accomplish the approved purposes, then, RUS may terminate the financial assistance in its entirety, pursuant to the provisions of paragraph (a) of this section.
RUS will expedite consideration and determination of an application submitted by an RUS telecommunications borrower for a loan under the Act or an advance of such loan funds to be used in conjunction with financial assistance under subparts E, F, or G of this part. See 7 CFR part 1737 for loans and 7 CFR part 1744 for advances under this section.
For distance learning and telemedicine projects, grants shall finance only the costs for approved purposes. Grants shall be expended only for the costs associated with the initial capital assets associated with the project. The following are approved grant purposes:
(a) Acquiring, by lease or purchase, eligible equipment as defined in § 1703.102;
(b) Acquiring instructional programming; and
(c) Providing technical assistance and instruction for using eligible equipment, including any related software; developing instructional programming; providing engineering or environmental studies relating to the establishment or expansion of the phase of the project that is being financed with the grant (this purpose shall not exceed 10 percent of the grant).
(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 § 1703.121. Matching contributions generally must be in the form of cash. However, in-kind contributions solely for the purposes listed in § 1703.121 may be substituted for cash.
(b) In-kind items listed in § 1703.121 must be non-depreciated or new assets with established monetary values. Manufacturers' or service providers' discounts are not considered in-kind matching.
(c) Costs incurred by the applicant, or others on behalf of the applicant, for facilities or equipment installed, or
(d) Costs incurred for non-approved purposes for grant outlined in § 1703.123 shall not be used as an in-kind matching contribution.
(e) Any financial assistance from Federal sources will not be considered as matching contributions under this subpart unless there is a Federal statutory exception specifically authorizing the Federal financial assistance to be considered as a matching contribution.
(a) A grant made under this subpart will not be provided or used:
(1) To cover the costs of acquiring, installing or constructing telecommunications transmission facilities;
(2) To pay for medical equipment not having telemedicine as its essential function;
(3) To pay salaries, wages, or employee benefits to medical or educational personnel;
(4) To pay for the salaries or administrative expenses of the applicant or the project;
(5) To purchase equipment that will be owned by the local exchange carrier or another telecommunications service provider unless that service provider is the applicant.
(6) To duplicate facilities providing distance learning or telemedicine services in place or to reimburse the applicant or others for costs incurred prior to RUS' receipt of the completed application;
(7) To pay costs of preparing the application package for financial assistance under this program;
(8) For projects whose sole objective is to provide links between teachers and students or between medical professionals who are located at the same facility;
(9) For site development and the destruction or alteration of buildings;
(10) For the purchase of land, buildings, or building construction;
(11) For projects located in areas covered by the Coastal Barrier Resources Act (16 U.S.C. 3501
(12) For any purpose that the Administrator has not specifically approved;
(13) Except for leases provided for in § 1703.121, to pay the cost of recurring or operating expenses for the project; or
(14) For any other purposes not specifically contained in § 1703.121.
(b) Except as otherwise provided in § 1703.112, 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.
Applications for grants under this subpart will be subject to limitations on the proposed amount of grant funds. The Administrator will establish the maximum amount of a grant to be made available to an individual recipient for each fiscal year under this subpart by publishing notice of the maximum amount in the
The following items are required to be submitted to RUS in support of an application for grant funds:
(a)
(b)
(1) A description of why the project is needed;
(2) An explanation of how the applicant will address the need cited in paragraph (b)(1) of this section, why the applicant requires financial assistance, the types of educational or medical services to be offered by the
(3) A description of the applicant, documenting eligibility in accordance with § 1703.103;
(4) An explanation of the total project cost including a breakdown of the grant required and the source of matching contribution and other financial assistance for the remainder of the project;
(5) A statement specifying whether the project is either a distance learning or telemedicine facility as defined in § 1703.102. If the project provides both distance learning and telemedicine services, the applicant must identify the predominant use of the system;
(6) A general overview of the telecommunications system to be developed, including the types of equipment, technologies, and facilities used;
(7) A description of the participating hubs and end user sites and the number of rural residents that will be served by the project at each end user site; and
(8) A certification by the applicant that facilities constructed with grants do not duplicate adequate established telemedicine or distance learning services.
(9) A listing of the location of each end user site (city, town, village, borough, or rural areas) plus the State.
(c)
(d)
(1) The specific activities to be performed under the project;
(2) Who will carry out the activities;
(3) The time-frames for accomplishing the project objectives and activities; and
(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 nonapproved purposes for grants as contained in § 1703.123.
(e)
(f)
(g)
(1) Payment of all proposed expenditures for the project;
(2) All required matching contribution in 1703.120;
(3) any additional matching funding provided in accordance with § 1703.126(b)(4); and
(4) Any other funds necessary to complete the project.
(h)
(1) The capabilities of the telecommunications terminal equipment, including a description of the specific equipment which will be used to deliver the proposed service. The applicant must document discussions with various technical sources which could include consultants, engineers, product vendors, or internal technical experts, provide detailed cost estimates for operating and maintaining the end user equipment and provide evidence that alternative equipment and technologies were evaluated.
(2) A listing of the proposed telecommunications terminal equipment, telecommunications transmission facilities, data terminal equipment, interactive video equipment, computer hardware and software systems, and components that process data for transmission via telecommunications, computer network components, communication satellite ground station equipment, or any other elements of
(3) A description of the consultations with the appropriate telecommunications carriers (including other interexchange carriers, cable television operators, enhanced service providers, providers of satellite services and telecommunications equipment manufacturers and distributors) and the anticipated role of such providers in the proposed telecommunications system.
(i)
(1) E.O. 11246, Equal Employment Opportunity, as amended by E.O. 11375 and as supplemented by regulations contained in 41 CFR part 60;
(2) Architectural barriers;
(3) Flood hazard area precautions;
(4) Assistance and Real Property Acquisition Policies Act of 1970;
(5) Drug-Free Workplace Act of 1998 (41 U.S.C. 701);
(6) E.O.s 12549 and 12689, Debarment and Suspension;
(7) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352).
(j)
(2) The applicant may use the “Environmental Questionnaire,” available from RUS, to assist in complying with the requirements of this section.
(k)
(l)
(m)
(n)
(o)
(p)
(a)
(1) The need for services and benefits derived from services (up to 55 points);
(2) The comparative rurality of the project service area (up to 45 points);
(3) The economic need of the applicant's service area as estimated by the NSLP or other supplemental objective criteria (up to 35 points);
(4) The ability of the applicant to leverage resources (up to 35 points);
(5) Innovativeness of the project (up to 15 points);
(6) The cost effectiveness of the system (up to 35 points);
(7) Project participation in EZ/ECs (Empowerment Zone and Enterprise Communities) and Champion Communities (up to 15 points).
(b) Scoring criteria:
(1)
(ii) RUS will consider the extent of the applicant's documentation explaining the economic, education, or health care challenges facing the community; the applicant's proposed plan to address these challenges; how the grant can help; and why the applicant cannot complete the project without a grant. RUS will also consider the extent to which the applicant provides evidence that economic, education, or health care challenges could not be addressed without employing advanced technology. The Administrator will also consider any support by recognized experts in the related educational or health care field, any documentation substantiating the educational or health care underserved nature of the applicant's proposed service area, and any justification for specific educational or medical services which are needed and will provide direct benefits to rural residents.
(A) Some examples of benefits to be provided by the project include, but are not limited to:
(
(
(
(
(
(
(
(
(
(B) Other matters that will be considered by RUS under this criterion include:
(
(
(
(
(2)
(i) The following definitions are used in the evaluation of rurality:
(A) Exceptionally Rural Area means any area of the United States not included within the boundaries of any incorporated or unincorporated city, village, or borough having a population in excess of 5,000 inhabitants.
(B) Rural Area means any area of the United States included within the boundaries of any incorporated or unincorporated city, village, or borough having a population over 5,000 and not in excess of 10,000 inhabitants.
(C) Mid-Rural Area means any area of the United States included within the boundaries of any incorporated or unincorporated city, village, or borough having a population over 10,000 and not in excess of 20,000 inhabitants.
(D) Urban Area means any area of the United States included within the boundaries of any incorporated or unincorporated city, village, or borough having a population in excess of 20,000 inhabitants.
(ii) There are a total of 45 possible points for this criterion. Each end user site will receive points based on its location in accordance with paragraph (b)(2)(i) of this section. If a hub is utilized as an end user site, the hub will be considered as an end user site. The applicant will receive points as follows:
(A) If the end user site is located in an Exceptionally Rural Area, it will receive 45 points.
(B) If the end user site is located in a Rural Area, it will receive 30 points.
(C) If the end user site is located in a Mid-Rural Area, it will receive 15 points.
(D) If the end user site is located in an Urban Area, it will receive 0 points.
(iii) The total score for this criterion will be based on the average score for all the end user sites included in the project.
(iv) An application must receive a minimum of 20 points as an average score for all the end user sites under this criterion to be eligible for a grant.
(3)
(i) The following guidelines will be used to determine the applicable NSLP percent for a particular application:
(A) Public schools or non-profit private schools of high school grade or under will use the actual eligibility percentage for that particular school.
(B) Schools and institutions of higher learning ineligible to participate in the NSLP and non-school end user sites (medical facilities, libraries, etc.) will use the eligibility percentage of all students in the school district where the end user will be located.
(C) Percentage ratios will be rounded up to the next highest or rounded down to the next lowest whole number for fraction of percentages at or greater than .5 or less than .5, respectively.
(D) The project NSLP percentage will be determined by the average of the NSLP percentages of the end user sites.
(ii) The applicant will receive points as follows:
(A) NSLP percentage greater than or equal to 75 percent—35 points
(B) NSLP percentage greater than or equal to 50 percent but less than 75 percent—25 points
(C) NSLP percentage greater than or equal to 25 percent but less than 50 percent—15 points
(D) NSLP percentage less than 25% percent—0 points
(4) The ability of the applicant to leverage financial resources—Up to 35 points. This criterion will be used to evaluate the ability of the applicant to provide a matching contribution for the project using other non-Federal financial assistance. Documentation submitted in support of the application should reflect any additional financial support for the project from non-Federal sources above the applicant's minimum matching contribution of 15 percent as required by § 1703.122. The applicant must include evidence, from authorized representatives of the sources, of a commitment that the funds are available and will be used for the project. The applicant will receive points as follows:
(i) Matching contribution for approved purposes greater than 15 percent, but less than or equal to 30 percent of the grant requested—0 points.
(ii) Matching contribution for approved purposes greater than 30 percent, but less than or equal to 50 percent of the grant requested—15 points.
(iii) Matching contribution for approved purposes greater than 50 percent, but less than or equal to 75 percent of the grant requested—25 points.
(iv) Matching contribution for approved purposes greater than 75 percent, but less than or equal to 100 percent of the grant requested—30 points.
(v) Matching contribution for a grant for approved purposes greater than 100 percent of the grant requested—35 points.
(5)
(i) The extent to which the project differs from a technical standpoint;
(ii) The extent to which the project differs from an educational or medical programmatic standpoint;
(iii) The extent to which the project reflects a unique adaptation of technology based on the special needs or circumstances of the proposed area to be served by the project; and
(iv) The potential of the project to influence or lead changes in how telecommunications services can be delivered in other areas.
(6)
(i) The extent to which the applicant has considered various technological options for delivering the services. The applicant must provide sufficient documentation reflecting accepted analytical and financial methodologies to substantiate its choice of technology as the most cost-effective option. RUS will consider the applicant's documentation and analysis comparing various systems and technologies.
(ii) Whether buying or leasing specific equipment is more cost effective.
(iii) The extent to which the project will utilize other existing networks at the regional, statewide, national or international levels. To the extent possible, educational and health care networks should be designed to utilize the widest practicable number of other networks that expand the capabilities of
(iv) The extent to which the facilities being constructed with financial assistance, particularly financial assistance under this chapter provided to entities other than the applicant, will be utilized to extend or enhance the benefits of the project.
(v) The extent to which the project utilizes existing telecommunications transmission facilities that could provide the transmission path for the needed services. For projects that do not utilize existing transmission facilities, RUS will consider documentation explaining the necessity of this option. RUS will also consider any agreements between the applicant and other entities for sharing transmission facilities to lower the fixed costs of such facilities.
(7)
(a) Applications will be selected for approval based on scores assigned, availability of funds, and the provisions 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 § 1703.126, the Administrator may, based on a review of the applications in accordance with the requirements of this subpart:
(1) Limit the number of applications selected for projects located in any one State during a fiscal year;
(2) Limit the number of selected applications for a particular project;
(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 § 1703.125(e)(1). An applicant or multiple applicants affected under this paragraph will have the opportunity to be considered for loan financing in accordance with subparts F and G of this part.
(c) RUS will not approve a grant if RUS determines that:
(1) The applicant's proposal does not indicate financial feasibility or is not sustainable in accordance with the requirements of § 1703.125(e)(1);
(2) The applicant's proposal indicates technical flaws, which, in the opinion of RUS, would prevent successful implementation, operation, or sustainability of the project;
(3) Other applications would provide more benefit to rural America based on a review of the financial and technical information submitted in accordance with § 1703.125(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 § 1703.101.
(d) Grant applications will be ranked by the type of application (health care or educational) and total points scored. Grants available for medical and educational applicants may be allocated
(e) RUS may reduce the amount of the applicant's grant based on insufficient program funding for the fiscal year in which the project is reviewed. RUS will discuss its findings informally with the applicant and make every effort to reach a mutually acceptable agreement with the applicant. Any discussions with the applicant and agreements made with regard to a reduced grant amount will be confirmed in writing, and these actions shall be deemed to have met the notification requirements set forth in paragraph (f) of this section.
(f) RUS will provide the applicant with an explanation of any determinations made with regard to paragraphs (c)(1) through (c)(4) of this section prior to making final project selections for the year. 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 § 1703.129.
(g) Grantees shall comply with all applicable provisions of 7 CFR parts 3015, 3016, and 3019.
(a) Applications for grants shall be submitted to the RUS, U.S. Department of Agriculture, 1400 Independence Avenue, SW., STOP 1590, Washington, DC 20250-1590. Applications should be marked “Attention: Assistant Administrator, Telecommunications Program”.
(b) Applications must be submitted to RUS postmarked not later than the application filing deadline established by the Administrator if the applications are to be considered during the period for which the application was submitted. The deadline for submission of applications each fiscal year will be published, and provided through other notices, by RUS in the
(c) All applicants must submit an original and two copies of a completed application. Applicants must also submit a copy of the application to the State government point of contact, if one has been designated for the State, at the same time it submits an application to RUS. All applications must include the information required by § 1703.125.
All qualifying applications under this subpart will be scored based on the criteria contained in § 1703.126. Awards will be made by RUS based on the highest ranking applications and the amount of financial assistance available for grants. All applicants will be notified in writing of the score each application receives, and included in this notification will be a tentative minimum required score to receive financial assistance. If the score received by
(a) A combination loan and grant may be used by eligible organizations as defined in § 1703.103 for distance learning and telemedicine projects to finance 100 percent of the cost of approved purposes contained in § 1703.131 provided that no financial assistance may exceed the maximum amount for the year in which the combination loan and grant is made.
(b) Applicants must meet the minimum eligibility requirement for determining the extent to which the project serves rural areas as determined in § 1703.126(b)(2) (the applicant must receive at least 20 points to be eligible to receive financial assistance under this subpart).
The approved purposes for a combination loan and grant are:
(a) Acquiring, by lease or purchase, eligible equipment or facilities as defined in § 1703.102;
(b) Acquiring instructional programming;
(c) Providing technical assistance and instruction for using eligible equipment, including any related software; developing instructional programming; providing engineering or environmental studies relating to the establishment or expansion of the phase of the project that is being financed with a combination loan and grant (this purpose shall not exceed 10 percent of the total requested financial assistance);
(d) Paying for medical or educational equipment and facilities that are shown to be necessary to implement the project, including vehicles utilizing distance learning and telemedicine technology to deliver educational and health care services. The applicant must demonstrate that such items are necessary to meet the purposes under this subpart and financial assistance for such equipment and facilities is not available from other sources at a cost which would not adversely affect the economic viability of the project;
(e) Providing links between teachers and students or medical professionals who are located at the same facility, provided that such facility receives or provides distance learning or telemedicine services as part of a distance learning or telemedicine network which meets the purposes of this subpart;
(f) Providing for site development and alteration of buildings in order to meet the purposes of this subpart. Financial assistance for this purpose must be necessary and incidental to the total amount of financial assistance requested;
(g) Purchasing of land, buildings, or building construction determined by RUS to be necessary and incidental to the project. The applicant must demonstrate that financial assistance funding from other sources is not available at a cost that does not adversely impact the economic viability of the
(h) Acquiring telecommunications transmission facilities provided that no telecommunications carrier will install such facilities under the Act or through other financial procedures within a reasonable time period and at a cost to the applicant that does not impact the economic viability of the project, as determined by the Administrator.
(a) Without limitation, a combination loan and grant made under this subpart shall not be expended:
(1) To pay salaries, wages, or employee benefits to medical or educational personnel;
(2) To pay for the salaries or administrative expenses of the applicant or the project;
(3) To purchase equipment that will be owned by the local exchange carrier or another telecommunications service provider, unless the applicant is the local exchange carrier or other telecommunications service provider;
(4) To duplicate facilities providing distance learning or telemedicine services in place or to reimburse the applicant or others for costs incurred prior to RUS' receipt of the completed application;
(5) For projects located in areas covered by the Coastal Barrier Resources Act (16 U.S.C. 3501
(6) For any purpose that the Administrator has not specifically approved;
(7) Except for leases (see § 1703.131), to pay the cost of recurring or operating expenses for the project; or,
(8) For any other purposes not specifically outlined in § 1703.131.
(b) Except as otherwise provided in § 1703.112, 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.
Applications for a combination loan and grant under this subpart will be subject to limitations on the proposed amount of loans and grants. The Administrator will establish the maximum amount of loans and grants and the portion of grant funds as a percentage of total assistance for each project to be made available to an individual recipient for each fiscal year under this subpart, by publishing notice of the maximum amount in the
The following items are required to be submitted to RUS in support of an application for a combination loan and grant:
(a)
(b)
(1) A description of why the project is needed;
(2) An explanation of how the applicant will address the need cited in paragraph (b)(1) of this section, why the applicant requires financial assistance, the types of educational or medical services to be offered by the project, and the benefits to the rural residents;
(3) A description of the applicant, documenting eligibility in accordance with § 1703.103;
(4) An explanation of the total project cost including a breakdown of the combination loan and grant required and the source of funding, if applicable, for the remainder of the project;
(5) A statement specifying whether the project provides predominantly distance learning or telemedicine services as defined in § 1703.102. If the project provides both distance learning and telemedicine services, the applicant must identify the predominant use of the system;
(6) A general overview of the telecommunications system to be developed, including the types of equipment, technologies, and facilities used;
(7) A description of the participating hubs and end user sites and the number of rural residents that will be served by the project at each end user site;
(8) A certification by the applicant that facilities constructed with a combination loan and grant do not duplicate adequately established telemedicine or distance learning services.
(9) A listing of the location of each end user site (city, town, village, borough, or rural area plus the State).
(c)
(1) The specific activities to be performed under the project;
(2) Who will carry out the activities;
(3) The time-frames for accomplishing the project objectives and activities; and
(4) A budget for capital expenditures reflecting the line item costs for both the combination loan and grant and any other sources of funds for the project.
(d)
(1) Applicants must include sufficient pro-forma financial data that 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 loan portion of the combination loan and grant. 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 portion of the combination loan and grant.
(2) A list of property which will be used as collateral to secure repayment of the loan. The applicant shall purchase and own collateral that secures the loan free from liens or security interests and take all actions necessary to perfect a security interest in the collateral that secures the loan. RUS considers as adequate security for a loan, a guarantee by a RUS telecommunications or electric borrower or by another qualified party. Additional forms of security, including letters of credit, real estate, or any other items will be considered. RUS will determine the adequacy of the security offered.
(3) As applicable, a depreciation schedule covering all assets of the project. Those assets for which a combination loan and grant are being requested should be clearly indicated.
(4) For each hub and end user site, the applicant must identify and provide reasonable evidence of each source of revenue. If the projection relies on cost sharing arrangements among hub and end user sites, the applicant must provide evidence of agreements made among project participants.
(5) For applicants eligible under § 1703.103(a)(3), an explanation of the economic analysis justifying the rate structure to ensure that the benefit, including cost saving, of the financial
(e)
(f)
(1) The capabilities of the telecommunications terminal equipment, including a description of the specific equipment which will be used to deliver the proposed service. The applicant must document discussions with various technical sources which could include consultants, engineers, product vendors, or internal technical experts, provide detailed cost estimates for operating and maintaining the end user equipment and provide evidence that alternative equipment and technologies were evaluated.
(2) A listing of the proposed purchases or leases of telecommunications terminal equipment, telecommunications transmission facilities, data terminal equipment, interactive video equipment, computer hardware and software systems, and components that process data for transmission via telecommunications, computer network components, communication satellite ground station equipment, or any other elements of the telecommunications system designed to further the purposes of this subpart, that the applicant intends to build or fund using a combination loan and grant.
(3) A description of the consultations with the appropriate telecommunications carriers (including other interexchange carriers, cable television operators, enhanced service providers, providers of satellite services, and telecommunications equipment manufacturers and distributors) and the anticipated role of such providers in the proposed telecommunications system.
(4) Results of discussions with local exchange carriers serving the project area addressing the concerns contained in § 1703.131(h).
(5) The capabilities of the telecommunications transmission facilities, including bandwidth, networking topology, switching, multiplexing, standards, and protocols for intra-networking and open systems architecture (the ability to effectively communicate with other networks). In addition, the applicant must explain the manner in which the transmission facilities will deliver the proposed services. For example, for medical diagnostics, the applicant might indicate whether or not a guest or other diagnosticians can join the network from locations off the network. For educational services, indicate whether or not all hub and end-user sites are able to simultaneously hear in real-time and see each other or the instructional material in real-time. The applicant must include detailed cost estimates for operating and maintaining the network, and include evidence that alternative delivery methods and systems were evaluated.
(g)
(1) E.O. 11246, Equal Employment Opportunity, as amended by E.O. 11375 and as supplemented by regulations contained in 41 CFR part 60;
(2) Architectural barriers;
(3) Flood hazard area precautions;
(4) Assistance and Real Property Acquisition Policies Act of 1970;
(5) Drug-Free Workplace Act of 1998 (41 U.S.C. 701);
(6) E.O.s 12549 and 12689, Debarment and Suspension;
(7) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352).
(h)
(2) The applicant may use the “Environmental Questionnaire,” available from RUS, to assist in complying with the requirements of this section.
(i)
(j)
(k)
(l)
(a) A combination loan and grant will be approved based on availability of funds, the financial feasibility of the project in accordance with § 1703.134(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 set forth in § 1703.126.
(c) RUS will not approve a combination loan and grant if RUS determines that:
(1) The applicant's proposal does not indicate financial feasibility, or will not be adequately secured in accordance with the requirements contained in § 1703.134(d);
(2) The applicant's proposal indicates technical flaws, which, in the opinion of RUS, would prevent successful implementation, or operation of the project; or
(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 § 1703.101.
(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 § 1703.137.
(a) RUS will accept applications for a combination loan and grant submitted by RUS telecommunications General Field representatives (GFRs), by Rural Development State Directors, or by applicants themselves. Applications for a combination loan and grant under this subpart may be filed at any time and will be evaluated as received.
(b) Applications submitted to the State Director, Rural Development, in the State serving the headquarters of the project will be evaluated as they are submitted. All applicants must submit an original and two copies of a completed application. The applicant must also submit a copy of the application to the State government point of contact, if one has been designated for the State, at the same time it submits an application to the State Director. The State Director will:
(1) Review each application for completeness in accordance with § 1703.134, 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 § 1703.135, 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 § 1703.135 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 sections § 1703.134 and § 1703.135 and other applicable requirements of this subpart.
(4) If the application is determined suitable for further consideration by RUS, forward an original and one copy 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 §§ 1703.105 through 1703.112 of subpart D.
(5) If the State Director determines that the application is not suitable for further consideration by RUS, notify the applicant with the reasons for this determination. The applicant may appeal this determination pursuant to section § 1703.137 of this subpart.
(c) Applications submitted by RUS telecommunications GFRs or directly by applicants will be evaluated as they are submitted. All applicants must submit an original and two copies of a completed application. The applicant must also submit a copy of the application to the State government point of contact, if one has been designated for the State, at the same time it submits an application to RUS. RUS will:
(1) Review each application for completeness in accordance with § 1703.134, and notify the applicant, within 15 working days of receiving the application, of the results of this review, acknowledging a complete application, or
(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 § 1703.135, 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 §§ 1703.105 through 1703.112 of subpart D.
(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 § 1703.137 of this subpart.
Any appeal must be made, in writing, within 10 days after the applicant is notified of the determination to deny the application. Appeals shall be submitted to the Administrator, RUS, U.S. Department of Agriculture, 1400 Independence Ave., SW., STOP 1590, Washington, DC 20250-1590. Thereafter, the Administrator will review the appeal to determine whether to sustain, reverse, or modify the original determination. Final determinations will be made after consideration of all appeals. The Administrator's determination will be final. A copy of the Administrator's decision will be furnished promptly to the applicant.
A loan may be used by eligible organizations as defined in § 1703.103 for distance learning and telemedicine projects to finance 100 percent of the cost of approved purposes contained in § 1703.141 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 § 1703.103. If a RUS telecommunications borrower is seeking a loan, the borrower does not need to submit all of the financial security information required by § 1703.144(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;
(b) Any non-profit or for-profit entity, public or private entity, urban or rural institution, or rural educational broadcaster, which proposes to provide and receive distance learning and telemedicine services to carry out the purposes of this subpart; or
(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 § 1703.141, except for those purposes in § 1703.141(h).
(d) Applicants must meet the minimum eligibility requirement for determining the extent to which the project serves rural areas as contained in § 1703.126(b)(2) (the applicant must receive at least 20 points to be eligible to
The following are approved purposes for loans:
(a) Acquiring, by lease or purchase, eligible equipment or facilities as defined in § 1703.102;
(b) Acquiring instructional programming;
(c) Providing technical assistance and instruction for using eligible equipment, including any related software; developing instructional programming; providing engineering or environmental studies relating to the establishment or expansion of the phase of the project that is being financed with the loan (financial assistance for this purpose shall not exceed 10 percent of the requested financial assistance);
(d) Paying for medical or educational equipment and facilities which are shown to be necessary to implement the project, including vehicles utilizing distance learning and telemedicine technology to deliver educational and health care services. The applicant must demonstrate that such items are necessary to meet the purposes under this subpart and financial assistance for such equipment and facilities is not available from other sources at a cost which would not adversely affect the economic viability of the project;
(e) Providing links between teachers and students or medical professionals who are located at the same facility, provided that such facility receives or provides distance learning or telemedicine services as part of a distance learning or telemedicine network which meets the purposes of this subpart;
(f) Providing for site development and alteration of buildings in order to meet the purposes of this subpart. Loans for this purpose must be necessary and incidental to the total amount of financial assistance requested;
(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;
(h) Acquiring of telecommunications transmission facilities provided that no telecommunications carrier will install such facilities under the Act or through other financial procedures within a reasonable time period and at a cost to the applicant that does not impact the economic viability of the project, as determined by the Administrator;
(i) Any project costs, except for salaries and administrative expenses, not included in paragraphs (a) through (h) of this section, incurred during the first two years of operation after the financial assistance has been approved. The applicant must show that financing such costs are necessary for the establishment or continued operation of the project and that financing is not available for such costs elsewhere, including from the applicant's financial resources. The Administrator will determine whether such costs will be financed based on information submitted by the applicant. Loans shall not be made exclusively to finance such costs, and financing for such costs will not exceed 20 percent of the loan provided to a project under this section; and
(j) All of the costs needed to provide distance learning broadcasting to rural areas. Loans may be used to cover the costs of facilities and end-user equipment dedicated to providing educational broadcasting to rural areas for distance learning purposes. If the facilities are not 100 percent dedicated to broadcasting, a portion of the financing may be used to fund such facilities based on a percentage of use factor that approximates the distance learning broadcasting portion of use.
(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 § 1703.141).
(b) Loans made under this subpart will not be provided for any of the following costs:
(1) To purchase equipment that will be owned by the local exchange carrier or another telecommunications service provider, unless the applicant is the local exchange carrier or other telecommunications service provider;
(2) To duplicate facilities providing distance learning or telemedicine services in place or to reimburse the applicant or others for costs incurred prior to RUS' receipt of the completed application;
(3) For projects located in areas covered by the Coastal Barrier Resources Act (16 U.S.C. 3501
(4) To pay for salaries, wages, or administrative expenses; or
(5) For any purpose that the Administrator has not specifically approved.
(c) Except as otherwise provided in § 1703.112, 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 G or is dependent upon the receipt of other funding that is not assured.
Applications for loans under this subpart will be subject to limitations on the proposed amount of loans. The Administrator will establish the maximum amount of a loan available to an applicant under this subpart, by publishing notice of the maximum amount in the
The following items are required to be submitted in support of an application for a loan:
(a)
(b)
(1) A description of why the project is needed;
(2) An explanation of how the applicant will address the need (see paragraph (b)(1) of this section), why the applicant requires financial assistance, the types of educational or medical services to be offered by the project, and the benefits to the rural residents;
(3) A description of the applicant, documenting eligibility in accordance with § 1703.103;
(4) An explanation of the total project cost including a breakdown of the loan required and the source of funding, if applicable, for the remainder of the project;
(5) A statement specifying whether the project provides predominantly distance learning or telemedicine services as defined in § 1703.102. If the project provides both distance learning and telemedicine services, the applicant must identify the predominant use of the system;
(6) A general overview of the telecommunications system to be developed, including the types of equipment, technologies, and facilities used;
(7) A description of the participating hubs and end user sites and the number of rural residents which will be served by the project at each end user site;
(8) A certification by the applicant that facilities funded by a loan do not duplicate adequate established telemedicine or distance learning services.
(9) A listing of the location of each end user site (city, town, village, borough, or rural area plus the State).
(c)
(1) The specific activities to be performed under the project;
(2) Who will carry out the activities;
(3) The time-frames for accomplishing the project objectives and activities; and
(4) A budget for capital expenditures reflecting the line item costs for the loan and any other sources of funds for the project.
(d)
(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.
(2) A list of property which will be used as collateral to secure repayment of the proposed loan. The applicant shall purchase and own collateral that secures the loan free from liens or security interests and take all actions necessary to perfect a first lien in the collateral that secures the loan. RUS will consider as adequate security a loan guarantee by a telecommunications or electric borrower or by another qualified party. Additional forms of security, including letters of credit, real estate, or any other items will be considered. RUS will determine the adequacy of the security offered.
(3) As applicable, a depreciation schedule covering all assets of the project. Those assets for which a loan is being requested should be clearly indicated.
(4) For each hub and end user site, the applicant must identify and provide reasonable evidence of each source of revenue. If the projection relies on cost sharing arrangements among hub and end user sites, the applicant must provide evidence of agreements made among project participants.
(5) For applicants eligible under § 1703.103(a)(3), 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.
(e)
(f)
(1) The capabilities of the telecommunications terminal equipment, including a description of the specific equipment which will be used to deliver the proposed service. The applicant must document discussions with various technical sources which could include consultants, engineers, product vendors, or internal technical experts, provide detailed cost estimates for operating and maintaining the end user
(2) A listing of the proposed purchases or leases of telecommunications terminal equipment, telecommunications transmission facilities, data terminal equipment, interactive video equipment, computer hardware and software systems, and components that process data for transmission via telecommunications, computer network components, communication satellite ground station equipment, or any other elements of the telecommunications system designed to further the purposes of this subpart, that the applicant intends to build or fund using a loan.
(3) A description of the consultations with the appropriate telecommunications carriers (including other interexchange carriers, cable television operators, enhanced service providers, providers of satellite services, and telecommunications equipment manufacturers and distributors) and the anticipated role of such providers in the proposed telecommunications system.
(4) Results of discussions with local exchange carriers serving the project area addressing the concerns contained in § 1703.141(h).
(5) The capabilities of the telecommunications transmission facilities, including bandwidth, networking topology, switching, multiplexing, standards, and protocols for intra-networking and open systems architecture (the ability to effectively communicate with other networks). In addition, the applicant must explain the manner in which the transmission facilities will deliver the proposed services. For example, for medical diagnostics, the applicant might indicate whether or not a guest or other diagnosticians can join the network from locations off the network. For educational services, indicate whether or not all hub and end-user sites are able to simultaneously hear in real-time and see each other or the instructional material in real-time. The applicant must include detailed cost estimates for operating and maintaining the network, and include evidence that alternative delivery methods and systems were evaluated.
(g)
(1) E.O. 11246, Equal Employment Opportunity, as amended by E.O. 11375 and as supplemented by regulations contained in 41 CFR part 60;
(2) Architectural barriers;
(3) Flood hazard area precautions;
(4) Assistance and Real Property Acquisition Policies Act of 1970;
(5) Drug-Free Workplace Act of 1998 (41 U.S.C. 701);
(6) E.O.s 12549 and 12689, Debarment and Suspension;
(7) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352).
(h)
(2) The applicant may use the “Environmental Questionnaire,” available from RUS, to assist in complying with the requirements of this section.
(i)
(j)
(k)
(l)
(a) Loans will be approved based on availability of funds, the financial feasibility of the project in accordance with § 1703.144(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 set forth in § 1703.126.
(c) A loan will not be approved if it is determined that:
(1) The applicant's proposal does not indicate financial feasibility, or is not adequately secured in accordance with the requirements of § 1703.144(d);
(2) The applicant's proposal indicates technical flaws, which, in the opinion of RUS, would prevent successful implementation, or operation of the project; or
(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 § 1703.101.
(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 § 1703.147.
(a) RUS will accept applications for loans submitted by RUS telecommunications General Field Representatives (GFRs), by Rural Development State Directors, or by applicants themselves. Applications for loans under this subpart may be filed at any time and will be evaluated as received on a non-competitive basis.
(b) Applications submitted to the State Director, Rural Development, in the State serving the headquarters of the project will be evaluated as they are submitted. All applicants must submit an original and two copies of a completed application. The applicant must also submit a copy of the application to the State government point of contact, if one has been designated for the State, at the same time it submits an application to the State Director. The State Director will:
(1) Review each application for completeness in accordance with § 1703.144, 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
(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 § 1703.145, 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 § 1703.145 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 §§ 1703.144 and 1703.145 and other applicable requirements of this subpart.
(4) If the application is determined suitable for further consideration by RUS, forward an original and one copy 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 §§ 1703.105 through 1703.112.
(5) If the State Director determines that the application is not suitable for further consideration by RUS, notify the applicant with the reasons for this determination. The applicant will be offered appeal rights in accordance with § 1703.147.
(c) Applications submitted by RUS telecommunications GFRs or directly by applicants will be evaluated as they are submitted. All applicants must submit an original and two copies of a completed application. The applicant must also submit a copy of the application to the State government point of contact, if one has been designated for the State, at the same time it submits an application to the RUS. RUS will:
(1) Review each application for completeness in accordance with § 1703.144, 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.
(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 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 loan can be approved, the applicant will be notified. Applications will be processed, and approved loans serviced, in accordance with §§ 1703.105 through 1703.112 of subpart D.
(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
Any appeal must be made, in writing, within 10 days after the applicant is notified of the determination to deny the application. Appeals shall be submitted to the Administrator, RUS, U.S. Department of Agriculture, 1400 Independence Ave., SW., STOP 1590, Washington, DC 20250-1590. Thereafter, the Administrator will review the appeal to determine whether to sustain, reverse, or modify the original determination. Final determinations will be made after consideration of all appeals. The Administrator's determination will be final. A copy of the Administrator's decision will be furnished promptly to the applicant.
This subpart E sets forth RUS's policies and procedures for making loan deferments of principal and interest payments on direct loans or insured loans made for electric or telephone purposes, but not for loans made for rural economic development purposes, in accordance with subsection (b) of section 12 of the RE Act. Loan deferments are provided for the purpose of promoting rural development opportunities.
It is RUS's policy to encourage borrowers to invest in and promote rural development and rural job creation projects that are based on sound economic and financial analyses. Borrowers are encouraged to use this program to promote economic, business and community development projects that will benefit rural areas.
(a)
(i) In default or near default on interest or principal payments due on loans made or guaranteed under the RE Act;
(ii) A borrower that was in default or near default, but is currently participating in a workout or debt restructuring plan with RUS; or
(iii) Experiencing a financial hardship.
(b)
The deferment of loan payments may be granted to any borrower that is not financially distressed, delinquent on any Federal debt, or in bankruptcy proceedings. However, the deferment of loan payments will not be granted to a borrower during any period in which the Administrator has determined that no additional financial assistance of any nature should be provided to the borrower pursuant to any provision of the RE Act. The determination to suspend eligibility for the deferment of loan payments under this subpart will be based on:
(a) The borrower's demonstrated unwillingness to exercise diligence in repaying loans made by RUS or RTB or guaranteed by RUS that results in the Administrator being unable to find that such loans, would be repaid within the time agreed; or
(b) The borrower's demonstrated unwillingness to meet the requirements in RUS's or RTB's legal documents or regulations.
(a) The deferment must not impair the security of any loans made RUS or RTB, or guaranteed by RUS, pursuant to the RE Act.
(b) At no point in time may the amount of the debt service payments deferred exceed 50 percent of the total cost of a community, business, or economic development project for which a deferment is provided.
(c) A borrower may defer debt service payments only in an amount equal to the investment made by such borrower in a rural development project. The investment must not be made from:
(1) Proceeds of loans made or guaranteed pursuant to the RE Act, or grants made pursuant to the RE Act or section 2331 through section 2335A of the Rural Economic Development Act of 1990 (7 U.S.C. 950aaa
(2) Funds necessary to make timely payments of principal and interest on loans made, guaranteed or lien accommodated pursuant to the RE Act;
(3) Insurance proceeds from mortgaged property;
(4) Damage awards and sale proceeds resulting from eminent domain and similar proceedings involving mortgaged property;
(5) Sale proceeds from mortgaged property sales requiring specific Administrator approval; and
(6) Funds which are restricted by RUS or RTB loan instruments to be held in trust for the Government or to be held for any other specific purpose.
(d) Any investment made in a rural development project prior to the date
(a) Except as otherwise provided in paragraph (b) of this section, the borrower must make a cushion of credit payment equal to the amount of the payment deferred and subject to the following rules:
(1) Cushion of credit payments made prior to the date that an application for deferral has been approved by RUS cannot be used to satisfy the requirements of this section;
(2) Once a cushion of credit payment has been made to satisfy the requirements of paragraph (a) of this section, it must remain on deposit in the cushion of credit account on the date of the deferral or the deferral will not take place; and
(3) The cushion of credit payment must be received by RUS on the date the payment being deferred is due, or within 30 days prior to this date.
(b) A borrower may elect to consolidate in one application filed pursuant to § 1703.311, all of the related deferrals it wishes to receive in a twelve month period following application approval. In such a case, the requirement contained in paragraph (a)(1) of this section may alternatively be satisfied by depositing an amount equal to the aggregate deferrals covered by such application into the cushion of credit account at the time the first cushion of credit payment is due under paragraph (a)(1) of this section.
Funds derived from the deferment of loan payments will not be used:
(a) To fund or assist projects which would, in the judgement of the Administrator, create a conflict of interest or the appearance of a conflict of interest. The borrower must disclose to the Administrator information regarding any potential conflict of interest or appearance of a conflict of interest;
(b) For any purpose not reasonably related to the project as determined by the Administrator;
(c) To transfer existing employment or business activities from one area to another; or
(d) For the borrower's electric or telephone operations, nor for any operations affiliated with the borrower unless the Administrator has specifically informed the borrower in writing that the affiliated operations are part of the approved purposes.
The deferment of loan payments will be made to enable the borrower to provide funding and assistance for rural development and job creation projects. This includes, but is not limited to, the borrower providing financing to local businesses, community development assistance, technical assistance to businesses, and other community, business, or economic development projects that will benefit rural areas.
(a) The total amount of deferments made available for each fiscal year under this program will not exceed 3 percent of the total payments due during fiscal year 1993 from all borrowers on direct loans and insured loans made under the RE Act. For each subsequent fiscal year after 1993, the total amount of deferments will not exceed 5 percent of the total payments due for the year from all borrowers on direct loans and insured loans.
(b) The total amount of annual deferments are subject to limitations established by appropriations Acts.
(a) Deferments made to enable the borrower to provide financing to local businesses will be repaid over a period of 60 months, in equal installments, with payments beginning on the date of the deferment, and continuing in such a manner until the total amount of the deferment is repaid. The deferment payments will be made on either a monthly or quarterly basis depending on the existing repayment
(b) In the case of deferments made to enable the borrower to provide community development assistance, technical assistance to businesses, and for other community, business, or economic development projects not included in paragraph (a) of this section, the deferment will be repaid over a period of 120 months, in equal installments, with payments beginning on the date of the deferment and continuing in such a manner until the total amount of the deferment is repaid. The deferment payments will be made on either a monthly or quarterly basis depending on the existing repayment terms of the direct loan or insured loan being deferred. The deferment will not accrue interest.
(c) The maturity date of a loan may not be extended as a result of a deferment.
(d) If the required payment is not made by the borrower or received by the Administrator when due, the Administrator will reduce the borrower's cushion of credit account established under this subpart in an amount equal to the deferment payment required.
(e) The balance in a borrower's cushion of credit account shall not be reduced by the borrower below the level of the unpaid balance of the payment deferred.
Prospective recipients of funds received from the deferment of loan payments are encouraged to consider the potential environmental impact of their proposed projects at the earliest planning stage and plan development in a manner that reduces, to the extent practicable, the potential to affect the quality of the human environment adversely.
(a) A borrower applying for a deferment must:
(1) Submit a certified board resolution to the Administrator requesting a deferment of principal and interest. The resolution must:
(i) Be signed by the president or vice president of the borrower;
(ii) Contain information on the total amount of deferment requested for each specific project;
(iii) Contain information on the type of project and the length of deferment requested as defined in § 1703.309; and
(iv) Specify which officer of the borrower has been given the authority to certify to those matters required in this section;
(2) Submit certification by the appropriate officer to the Administrator that the proposed project will not violate the limitations set forth in § 1703.306 and disclose all information regarding any potential conflict of interest or appearance of a conflict of interest that would allow the Administrator to make an informed decision;
(3) Submit certification by the appropriate officer to the Administrator that an investment in the rural development project will be made by the borrower in an amount equal to the deferred debt service payment;
(4) Submit certification by the appropriate officer to the Administrator that the amount of the deferment will not exceed 50 percent of the total cost of the project for which the deferment is provided;
(5) Submit certification by the appropriate officer to the Administrator that it will make a cushion of credit payment necessary to satisfy the requirement of § 1703.305(a);
(6) Submit certification by the appropriate officer to the Administrator that it will comply with § 1703.313 and provide documentation showing that its total investments, including the proposed investment, will not exceed the investment limitations specified in 7 CFR part 1717, Subpart N, Investments, Loans and Guarantees by Electric Borrowers, or 7 CFR Part 1744, Post Loan Policies and Procedures Common to Guaranteed and Insured Loans. The documentation must provide a list of each rural development project the borrower has invested in to date, including the investment amounts;
(7) Submit to the Administrator written identification of the direct loan(s) and/or insured loan(s) for which payments are to be deferred;
(8) Submit to the Administrator a written narrative which contains information regarding the proposed rural development or job creation project such as the manner in which the project will promote community, business, or economic development in rural areas, the nature of the project, its location, the primary beneficiaries, and, if applicable, the number and type of jobs to be created; and
(9) Submit to the Administrator a letter of approval from the state regulatory authority, if applicable, granting its approval for the borrower to defer direct loan payment(s) and/or insured loan payment(s) and invest the amount in a rural development project.
(b) The Administrator reserves the right to determine that special circumstances require additional data from borrowers before acting on a deferment. The Administrator also reserves the right to require, as a condition of approving a loan payment deferment pursuant to this subpart, that the borrower execute and deliver any amendments or supplements to its loan documents that may be necessary or appropriate to achieve the purposes outlined in § 1703.300.
(c) The Administrator will decide whether the borrower is eligible for the deferment and will notify the borrower of the decision.
Borrowers shall ensure that funds are invested in the rural development project as approved by RUS. The Administrator reserves the right to review the books and copy records of borrowers receiving loan payment deferments as necessary to ensure that the investments in the rural development project are in accordance with this subpart and the representations and purposes stated in the borrower's completed application. If an audit discloses that the amount deferred was not used for the purposes stated in the completed application, the borrower shall be required to promptly repay the amount deferred and the benefits of the deferment to the borrower will be recaptured by RUS. The borrower is responsible for ensuring that disbursements and expenditures of funds covering the investment in the rural development project are properly supported with certifications, invoices, contracts, bills of sale, cancelled checks, or any other forms of evidence determined appropriate by the Administrator and that such supporting material is available at the borrower's premises for review by the RUS field accountant, borrower's certified public accountant, the Office of Inspector General, the General Accounting Office and any other accountant conducting an audit of the borrower's financial statements for this rural development program.
(a) Investments in a rural economic development project made by an electric borrower under this subpart are subject to the provisions of 7 CFR part 1717, Subpart N, Investments, Loans and Guarantees by Electric Borrowers.
(b) Investments in a rural economic development project made by a telephone borrower under this subpart are subject to the provisions of 7 CFR Part 1744, Post Loan Policies and Procedures Common to Guaranteed and Insured Loans.
5 U.S.C. 301, 7 U.S.C. 901
The purpose of the Rural Utilities Service (RUS) Assistance to High Energy Cost Rural Communities Program is to help local communities meet their energy needs through direct loans and grants for energy facilities in qualifying extremely high energy cost communities, grants and loans to the Denali Commission for extremely high energy cost communities in Alaska, and grants to States to support revolving funds to finance more cost effective means of acquiring fuel in qualifying communities. This subpart sets forth definitions and requirements which are common to all grant and loan programs in this part administered by the RUS Electric Program under section 19 of the Rural Electrification Act of 1936, as amended (RE Act) (7 U.S.C. 918a).
The Administrator, in his sole discretion, shall allocate available funds among the programs administered under this part and determine the grant application periods under each program. In making fund allocations for each fiscal year, the Administrator may consider the amount of available funds, the nature and amount of unfunded grant applications and prior awards, Agency resources, Agency priorities, and any other pertinent information.
(a) The Administrator shall establish, using the most recent data available, and periodically revise, the home energy cost benchmarks and the high energy cost benchmarks used to determine community eligibility for high energy cost grant and loan programs and the Denali Commission high energy cost grants and loans. In setting these energy cost benchmarks, the Administrator shall review the latest available information on home energy costs published by the EIA. High energy cost benchmarks will be set at 275 percent of the applicable national average home energy cost benchmark as determined by the Administrator from the published EIA data. Eligibility benchmarks shall be published in each grant announcement.
(b) For use in determining eligibility for High Energy Cost Grants, the Administrator may establish benchmarks for national average annual household expenditures and for national average household per unit energy expenditures for major home energy sources or fuels, including, but not limited to, electricity, natural gas, fuel oil, kerosene, liquified petroleum gas (propane), other petroleum products, wood and other biomass fuels, coal, wind and solar energy.
An applicant may appeal a decision by the Assistant Administrator, Electric Program rejecting an application for failure to meet eligibility requirements. Applicants may not appeal rating panel scores or rankings. An appeal
An outstanding judgment obtained against an applicant by the United States in a Federal Court (other than in the United States Tax Court), which has been recorded, shall cause the applicant to be ineligible to receive a grant or loan under this part until the judgment is paid in full or otherwise satisfied. RUS financial assistance under this part may not be used to satisfy the judgment.
Applicants may submit applications and reports electronically if so provided in the applicable grant announcement and grant agreements or if other regulations provide for electronic submission. Any electronic submissions must be in the form prescribed in the applicable grant announcement, grant agreement, or regulation.
The grantee must execute a grant agreement that is acceptable to the Agency. The grantee must sign and return the grant agreement to the Agency, within the time specified, before any grant funds will be advanced.
Grant funds under this part may not be used to:
(a) Pay costs of preparing the application package for funding under programs in this part, or for any finders fees or incentives for persons or entities assisting in the preparation or submission of an application.
(b) Fund political activities;
(c) Pay any judgment or debt owed to the United States; or
(d) Pay construction costs of the project incurred prior to the date of grant award except as provided herein. Construction work should not be started and obligations for such work or materials should not be incurred before the grant is approved.
(1) Applicants may request Agency approval for reimbursement of pre-award construction obligations if there are compelling reasons for proceeding with construction before grant approval. Such requests may be approved if the Agency determines that:
(i) Compelling reasons, as determined by the Agency, exist for incurring obligations before grant approval;
(ii) The obligations will be incurred for authorized grant purposes;
(iii) All environmental requirements applicable to the Agency and the applicant have been met;
(iv) The applicant has the legal authority to incur the obligations at the time proposed, and payment of the debts will remove any basis for any mechanic's, material, or other liens that may attach to the grant financed property: and
(v) The expenditure is incurred no more than 18 months before the date of the Administrator's approval of the grant award.
(2) The Agency may authorize payment of approved pre-award project construction obligations at the time of award approval. The applicant's request and the Agency's authorization for paying such obligations shall be in writing.
In addition to all other grant requirements, all approved applicants will be required to do the following:
(a) Enter into a grant agreement with the Agency in form and substance acceptable to the Agency;
(b) Request advances or reimbursements, as applicable, as provided in the grant agreement; and
(c) Maintain a financial management system that is acceptable to the Agency.
To support Agency monitoring of project performance and use of grant funds, Grantees shall file periodic reports, required under 7 CFR part 3015, as provided in this part, and the grant agreement as follows:
(a) A financial status report listing project expenditures by budget category in such form and at such times as provided in the grant agreement.
(b) Project performance reports in such form and at such intervals as provided in the grant agreement. The project performance report shall compare accomplishments to the objectives stated in the proposal and grant agreement. The project performance report should identify all completed tasks with supporting documentation. If the project schedule as approved in the grant agreement is not being met, the report should discuss the problems or delays that may affect completion of the project. Objectives for the next reporting period should be listed. Compliance with any special condition on the use of award funds should be discussed. Reports are due as provided in the grant agreement.
(c) A final project performance report with supporting documentation in such form and at the time specified in the grant agreement.
(d) Such other reports as the Agency determines are necessary to assure effective grant monitoring as part of the grant agreement or the grant announcement as a condition of the grant award or advances of funds.
The authority to approve administrative actions is vested in the Administrator except as otherwise provided in the RUS delegations of authority. Administration of RUS grants is governed by the provisions of this subpart and subpart B of this part, the terms of the grant agreement and, as applicable, the provisions of 7 CFR parts 3015, 3016 and 3017, or their successors.
The grantee will permit periodic inspection of the grant project operations by a representative of the Agency.
Grant closeout is when all required work is completed, administrative actions relating to the completion of work and expenditure of funds have been accomplished, the final project report has been submitted and found acceptable by RUS and RUS accepts final expenditure information. No monitoring action by RUS of the grantee is required after grant closeout. However, grantees remain responsible in accordance with the terms of the grant agreement for compliance with conditions on property acquired or derived through grant funds.
Each grant agreement shall include performance criteria and RUS will regularly evaluate the progress and performance of grantee according to such criteria. If the grantee does not comply with or does not meet the performance criteria set out in the grant agreement, the Administrator may require amendment of the grant agreement, or may suspend or terminate the grant pursuant to 7 CFR 2015, subpart N.
(a) All grants made under this subpart are subject to the requirements of 7 CFR part 1794 or its successor.
(b) Applicants must address environmental aspects of their projects in the grant application in sufficient detail to allow the Agency to categorize the project for purposes of compliance with environmental review requirements. The grant announcement will establish the form and content of the environmental information required for the application.
(c) Projects that are selected for grant awards by the Administrator will be reviewed by the Agency under 7 CFR part 1794 prior to final award approval. The Agency may require the selected applicant to submit additional information, including an environmental report, environmental assessment, or environmental impact statement, as may be required, concerning the proposed project in order to complete the required reviews and to develop any project-specific conditions for the final grant agreement.
This program will be administered in accordance with applicable Federal Civil Rights Law. All grants made under this subpart are subject to the requirements of title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color or national origin. In addition, all grants made under this subpart are subject to the requirements of section 504 of the Rehabilitation Act of 1973, as amended, which prohibits discrimination on the basis of disability; the requirements of the Age Discrimination Act of 1975, which prohibits discrimination on the basis of age; and title III of the Americans with Disabilities Act, which prohibits discrimination on the basis of disability by private entities in places of public accommodations. Grantees are required to comply with certain regulations on nondiscrimination in program services and benefits and on equal employment opportunity including 7 CFR parts 15 and 15b; and 45 CFR part 90, as applicable.
The grant programs under this part are subject to the provisions of other departmental regulations, including but not limited to the following departmental regulations, or their successors, as applicable:
(a) 7 CFR part 3015, Uniform Federal Assistance Regulations;
(b) 7 CFR part 3016, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments;
(c) 7 CFR part 3017, Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants);
(d) 7 CFR part 3018, New Restrictions on Lobbying;
(e) 7 CFR part 3019, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-profit Organizations; and
(f) 7 CFR part 3052, Audits of States, Local Governments and Non-profit Organizations.
Each grant agreement under this part shall provide that no member of Congress shall be admitted to any share or part of a grant program or any benefit that may arise there from, but this provision shall not be construed to bar as a contractor under a grant a publicly held corporation whose ownership might include a member of Congress.
The grantee shall provide the Agency with an audit for each year, beginning with the year in which a portion of the financial assistance is expended, in accordance with the following:
(a) If the grantee is a for-profit entity, an RUS Electric or Telecommunication borrower or any other entity not covered by paragraph (b) of this section, the recipient shall provide an independent audit report in accordance with 7 CFR part 1773, “Policy on Audits of RUS Borrowers” and the grant agreement.
(b) If the grantee is a State or local government, or a non-profit corporation (other than an RUS Electric or Telecommunication Borrower), the recipient shall provide an audit in accordance with 7 CFR part 3052.
The Grantee shall obtain prior written approval from the Agency for any change to the scope or objectives of the approved grant project.
The information collection requirements in this part are approved by the Office of Management and Budget and assigned OMB control number 0572-0136.
This subpart establishes policies and procedures for the Rural Utilities Service (RUS) High Energy Cost Grant Program under section 19(a)(1) of the Rural Electrification Act of 1936, as amended
(a) All high energy cost grants will be awarded competitively subject to the limited exceptions in 7 CFR 3015.158(d).
(b) RUS may give priority consideration to projects that benefit smaller rural communities, communities experiencing economic hardship, projects that extend service to households that lack reliable centralized or commercial energy services, and projects that correct imminent hazards to public safety, welfare, the environment or critical community energy facilities. RUS may also give priority to projects that are coordinated with State rural development initiatives or that serve a Federally-identified Empowerment Zone or Enterprise Community (EZ/EC) or a USDA-identified “Champion Community.” Priority consideration will be provided through the award of additional points under the project selection criteria as specified in the grant announcement.
(a) Eligible applicants for grants to fund projects serving eligible extremely high energy cost communities include Persons, States, political subdivisions of States, and other entities organized under the laws of States.
(b) Eligible applicants may be for-profit or non-profit business entities including but not limited to corporations, associations, partnerships, limited liability partnerships (LLPs), cooperatives, trusts, and sole proprietorships.
(c) Eligible government applicants include State and local governments, and agencies and instrumentalities of States and local governments.
(d) Indian tribes, other tribal entities, and Alaska Native Corporations are eligible applicants.
(e) Individuals are also eligible applicants under this program, however the proposed grant project must provide community benefits and not be for the sole benefit of the individual applicant or an individual household.
(f) As a condition of eligibility, the applicant must demonstrate the capacity:
(1) to enter into a binding grant agreement with the Federal Government at the time of the award approval; and
(2) to carry out the proposed grant project according to its terms.
(a) An eligible community under this program is one in which the average home energy costs exceed 275 percent of the national average under one or more high energy cost benchmarks established by RUS based on the latest available residential energy information from the Energy Information Administration (EIA) of the United States Department of Energy. RUS will update the national and high energy cost community benchmarks periodically to incorporate any changes in national home energy costs reported by EIA. RUS will publish the high energy cost community benchmark criteria in the grant announcement. Community eligibility will be determined by RUS at the time of application based on the criteria published in the applicable grant announcement.
(b) The Application must include information demonstrating that each community in the grant's proposed target area exceeds one or more of the RUS high energy cost community benchmarks to be eligible for assistance under this program. The smallest area that may be designated as a target area is a 2000 Census block
(c) The target community may include an extremely high cost to serve portion of a larger service area that does not otherwise meet the criteria, provided that the applicant can establish that the costs to serve the smaller target area exceed the benchmark.
(d) In determining the community energy costs, applicants may include
(e) The applicant may propose a project that will serve high energy cost communities across a State or region, but where individual project beneficiaries will be selected at a later time. In such cases, to establish eligibility, the applicant must provide sufficient information in the application to determine that the proposed target area includes eligible high energy cost communities and proposed selection criteria to assure that grant funds are used to serve eligible communities.
The application shall include the following:
(a)
(b)
(c)
(1) Where historical community energy cost data are unavailable (unserved areas), incomplete or otherwise inadequate;
(2) Where the target area is not connected to central station electric service to a degree comparable with other residential customers in the State or region.
(3) Where historic energy costs do not reflect the costs of providing a necessary upgrade or replacement of energy infrastructure that would have the effect of raising costs above one or more of the Agency benchmarks.
(d)
Eligible projects are those that acquire, construct, extend, repair, upgrade or otherwise improve energy generation, transmission or distribution facilities serving communities with extremely high energy costs. All energy generation, transmission and distribution facilities and equipment used to provide or improve electricity, natural gas, home heating fuels, and other energy services to eligible communities are eligible. Projects providing or improving service to communities with extremely high energy costs through on-grid and off-grid renewable energy technologies, energy efficiency, and energy conservation projects and services are eligible. A grant project is eligible if it improves, or maintains energy services, or reduces the costs of providing energy services to eligible communities. Examples of eligible activities include, but are not limited to, the acquisition, construction, replacement, repair, or improvement of:
(a) Electric generation, transmission, and distribution facilities, equipment, and services serving the eligible community;
(b) Natural gas distribution or storage facilities and associated equipment and activities serving the eligible community;
(c) Petroleum product storage and handling facilities serving residential or community use.
(d) Renewable energy facilities used for on-grid or off-grid electric power generation, water or space heating, or process heating and power for the eligible community;
(e) Backup up or emergency power generation or energy storage equipment, including distributed generation, to serve the eligible community; and
(f) Implementation of cost-effective energy efficiency, energy conservation
(a)
(1) Costs of conducting, or hiring a qualified consultant to conduct, a feasibility analysis of the proposed project to help establish the financial and technical sustainability of the project, provided that such costs do not exceed more than 10 percent of total project costs;
(2) Design and engineering costs, including costs of environmental and cultural surveys and consulting services necessary to the project and associated environmental review, siting and permit approvals; and
(3) Fees for legal and other professional services directly related to the project.
(b)
(c)
(d)
(a)
(b)
(a) Grant funds may not be used for the costs of preparing the grant application, finders fees, fuel purchases, routine maintenance or other operating costs, or purchase of equipment, structures or real property not directly associated with providing energy services in the target community, or, except as provided in § 1709.11(d), project construction costs incurred prior to the date of the grant award.
(b) In general, grant funds may not be used to support projects that primarily benefit areas outside of eligible target communities. However, grant funds may be used to finance an eligible target community's proportionate share of a larger energy project.
(c) Grant funds may not be used to refinance or repay the applicant's outstanding loans or loan guarantees under the Rural Electrification Act of 1936, as amended.
(a) The Administrator may establish minimum or maximum amount of funds that may be awarded in a single grant application within in any grant cycle in order to distribute available grant funds as broadly as possible. If the Administrator elects to impose a minimum or maximum grant amount, the limitations will be published in the grant announcement.
(b) The Administrator may restrict eligible applicants to a single award of grant funds or to a monetary cap on grant awards within a grant cycle in order to assure that the available grant funds are distributed as broadly as possible. If the Administrator elects to impose a limit or cap on grant awards, the terms will be established in the grant announcement.
The RUS will request applications for high energy cost grants on a competitive basis by publication of a grant announcement as a Notice of Funds Availability (NOFA) or Notice of Funding Opportunity. The grant announcement will establish the amount of funds available, the application package contents and additional requirements, the availability of application materials, high energy cost community eligibility benchmarks, selection criteria and weights, priority considerations, and deadlines and procedures for submitting applications.
Application materials, including copies of the grant announcement and all required forms and certifications will be available by request from the Agency and by such other means as the Agency may determine. In addition, the Agency may make available an application guide and other materials that may be of assistance to prospective applicants.
The requirements for the application package will be established in the grant announcement. A complete application package will consist of the standard application for federal assistance (SF-424 series), as applicable, a narrative project proposal prepared in accordance with the grant announcement, an RUS environmental profile, and such other supporting documentation, forms, and certifications as required in the grant announcement and this part.
(a)
(b)
(1)
(2)
(3)
(i) Location and population of the areas to be served by the project;
(ii) Population of the local government division to which they belong;
(iii) Identity of local energy providers; and
(iv) Sources of the high energy cost data and estimates used.
(4)
(5)
(i) Describe the project design, materials, and equipment in sufficient detail to support a finding of technical feasibility;
(ii) Identify the major tasks to be performed and a proposed timeline for completion of each task; and
(iii) Identify the location of the project target area and the eligible extremely high energy cost communities to be served.
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
Unless otherwise provided in the grant announcement, a complete original application package and two copies must be submitted by the application deadline to RUS at the address specified in the applicable announcement. Instructions for submittal of applications electronically will be established in the grant announcement.
(a) RUS will review each application package received to determine whether the applicant is eligible and whether the application is timely, complete, and responsive to the requirements set forth in the grant announcement.
(b) RUS may, at its discretion, contact the applicant to clarify or supplement information in the application needed to determine eligibility, identifying information, and grant requests to allow for informed review. Failure of the applicant to provide such information in response to a written request by the Agency within the time frame established by the Agency may result in rejection of the application.
(c) After consideration of the information submitted, the Assistant Administrator, Electric Program will determine whether an applicant or project is eligible and whether an application is timely, complete, and responsive to the grant announcement and shall notify the applicant in writing. The Assistant Administrator's decision on eligibility may be appealed to the Administrator.
(a) The Agency will establish one or more rating panels to review and rate the grant applications. The panels may include persons not employed by the Agency.
(b) All timely and complete applications that meet the eligibility requirements will be referred to the rating panel. The rating panel will evaluate and rate all referred applications according to the evaluation criteria and weights established in the grant announcement. Panel members may make recommendations for conditions on grant awards to promote successful performance of the grant or to assure compliance with other Federal requirements.
(c) After the rating panel has evaluated and scored all proposals, in accordance with the point allocation specified in the grant announcement, the panel will prepare a list of all applications in rank order, together with funding level recommendations and recommendations for conditions, if any.
(d) The list of ranked projects and rating panel recommendations will be forwarded to the Administrator for review and selection.
(a) The final decision to make an award is at the discretion of the Administrator. The Administrator shall make any selections of finalists for grant awards after consideration of the applications, the rankings, comments, and recommendations of the rating panel, and other pertinent information.
(b) Based on consideration of the application materials, ranking panel ratings, comments, and recommendations, and other pertinent information, the Administrator may elect to award less than the full amount of grant requested by an applicant. Applicants will be notified of an offer of a reduced or partial award. If an applicant does not accept the Administrator's offer of a reduced or partial award, the Administrator may reject the application and offer an award to the next highest ranking project.
(c) The projects selected by the Administrator will be funded in rank order to the extent of available funds.
(d) In the event an insufficient number of eligible applications are received in response to a published grant announcement and selected for funding to exhaust the funds available, the Administrator reserves the discretion to reopen the application period and to accept additional applications for consideration under the terms of the grant announcement. A notice regarding the reopening of an application period will be published in the
At the discretion of the Administrator, the grant announcement may provide that all eligible but unfunded proposals submitted under preceding competitive grant announcements may also be considered for funding. This option is provided to reduce the burden on applicants and the Agency. The grant announcement shall indicate how applicants may request reconsideration of previously submitted, but unfunded, applications and how they may supplement their applications.
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(c)
(1)
(2)
(3)
(4)
(5)
(a)
(b)
(c)
(d)
This subpart establishes policies and procedures for the Rural Utilities Service (RUS) State Bulk Fuel Revolving Fund Grants. The purpose of this grant program is to assist State entities in establishing and supporting a revolving fund to provide a more cost-effective means of purchasing fuel for communities where the fuel cannot be shipped by means of surface transportation.
As used in this subpart, the following definitions apply:
Eligible applicants are restricted to State entities in existence as of November 9, 2000. Eligible State entities may partner with other entities, including other government agencies, in carrying out the programs funded by this program. Each applicant must demonstrate that it has the authority to enter into a binding agreement with the Federal Government to carry out the grant activities.
Grant funds must be used to establish and support a revolving loan fund that facilitates cost effective fuel purchases for persons, communities, and businesses in eligible areas. Where a recipient State entity's existing program is authorized to fund multiple purposes, grant funds may only be used to the extent the recipient fund finances eligible activities.
Not more than 4 percent of the grant award may be used for the planning and administrative expenses of the grantee.
(a)
(b)
(c)
(1)
(2)
(3)
(4)
(i) Describe the legal structure and staffing of the revolving fund proposal for fuel purchase support.
(ii) Identify the objectives of the project, the proposed criteria for establishing project funding eligibility and how the project is to be staffed, managed and financed.
(iii) Describe how the potential beneficiaries will be informed of the availability of revolving fund benefits to them.
(iv) Explain how the proposed revolving fund program will help provide a more cost-effective means of meeting fuel supply needs in eligible areas, encourage the adoption of financially sustainable energy practices, the adequate planning and investment in bulk fuel facility operations and maintenance and cost-effective investments in energy efficiency.
(v) If the revolving fund program is not yet operational, a proposed implementation schedule and milestones should be provided.
(5)
(6)
(7)
Completed applications must be submitted to RUS at the address specified in the grant announcement on or before the deadline specified in the grant announcement. Instructions for submittal of applications electronically will be established in the grant announcement. Late applications will be rejected.
The Agency will review all applications to determine whether the applicant is eligible and whether the application is timely, complete and sufficiently responsive to the requirements set forth in the grant announcement to allow for an informed review. Failure to address any of the required evaluation criteria or to submit all required forms will disqualify the proposal. The Agency reserves the right to contact the applicant to clarify information contained in the proposal to resolve issues related to eligibility and the grant request. Applications that are timely, complete, and responsive will be forwarded for further evaluation. Applications that are late, incomplete, or non-responsive will be rejected.
(a) The Agency will establish one or more rating panels to review and rate the grant applications. The panels may include persons not employed by the Agency.
(b) The rating panel will evaluate and rate all complete applications that meet the eligibility requirements according to the evaluation and selection criteria and weights established in the grant announcement. Panel members may make recommendations for conditions on grant awards to promote successful performance of the grant or to assure compliance with other Federal requirements.
(c) After all proposals have been evaluated and scored, the proposals, the rankings, recommendations, and comments of the rating panel will be forwarded to the Administrator.
(a) The final decision to make a grant award is at the discretion of the Administrator. The Administrator shall consider the applications, the ranking, comments, and recommendations of the rating panel, and any other pertinent information before making a decision about which, if any, applications to approve, the amount of funds awarded, and the order of approval. The Administrator reserves the right not to make any awards from the applications submitted. When the Administrator decides not to make any awards, the Administrator shall document in writing the reason for the decision.
(b) Decisions on grant awards will be made by the Administrator after consideration of the applications, the rankings and recommendations of the rating panel. The Administrator may elect to award less than the full amount of grant requested by an applicant.
(c) The applications selected by the Administrator will be funded in rank order to the extent of available funds.
The grant announcement may provide that all eligible but unfunded proposals submitted under preceding announcements may also be considered for funding. The announcement shall describe whether and how prior applicants may request reconsideration and supplement their application material.
Unless supplemented in the grant announcement, the criteria listed in this
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(a)
(b)
(c)
(d)
This subpart prescribes the policies of the Rural Utilities Service (RUS) when it is subsequently determined that the recipient of an Assistance to High Energy Cost Rural Communities program loan or grant was not eligible for all or part of the financial assistance received or that the assistance received was used for unauthorized purposes. It is the policy of the Agency that when assistance under this part has been received by an ineligible recipient or used for unauthorized purposes the Agency shall initiate appropriate actions to recover from the recipient the sum that is determined to be ineligible or used for unauthorized purposes, regardless of amount, unless any applicable statute of limitation
7 U.S.C. 901
(a) This part establishes general and pre-loan policies and requirements that apply to both insured and guaranteed loans to finance the construction and improvement of electric facilities in rural areas, including generation, transmission, and distribution facilities.
(b) Additional pre-loan policies, procedures, and requirements that apply specifically to guaranteed and/or insured loans are set forth elsewhere:
(1) For guaranteed loans in 7 CFR part 1712 and RUS Bulletins 20-22, 60-10, 86-3, 105-5, and 111-3, or the successors to these bulletins; and
(2) For insured loans in 7 CFR part 1714 and in RUS Bulletins 60-10, 86-3, 105-5, and 111-3, or the successors to these bulletins.
(c) This part supersedes those portions of the following RUS Bulletins and supplements that are in conflict.
(d) When parts 1710, 1712, and 1714 are published in final form, the bulletins cited in paragraph (b) of this section will be rescinded, in whole or in part, or revised.
(a)
(ii) Any area within a service area of a borrower for which a borrower has an outstanding loan as of June 18, 2008, made under titles I through V of the Rural Electrification Act of 1936 (7 U.S.C. 901-950bb). For initial loans to a borrower made after June 18, 2008, the “rural” character of an area is determined at the time of the initial loan to furnish or improve service in the area.
(b)
References in this part to RUS or REA forms or line numbers in RUS or REA forms are based on RUS or REA Form 7 and Form 12 dated December 1992, unless otherwise indicated. These references will apply to corresponding information in future versions of the forms. The terms “RUS form”, “RUS standard form”, “RUS specification”, and “RUS bulletin” have the same meanings as the terms “REA form”, “REA standard form”, “REA specification”, and “REA bulletin”, respectively, unless otherwise indicated.
Consistent with the RE Act and other applicable laws, the Administrator may waive or reduce any requirement imposed by this part or other RUS regulations on an electric borrower, or a lender whose loan is guaranteed by RUS, if the Administrator determines that imposition of the requirement
Information about the availability of RUS forms and publications cited in this part is available from Administrative Services Division, Rural Utilities Service, United States Department of Agriculture, Washington, DC 20250-1500. These RUS forms and publications may be reproduced.
(a) Certain new or revised policies and requirements set forth in this part, which are listed in this paragraph, shall not apply to a pending loan application that has been determined by RUS to be complete as of January 9, 1992, the date of publication of such policies and requirements in the
(1) Paragraph 1710.115(b)—with respect to limiting loan maturities to the expected useful life of the facilities financed;
(2) Section 1710.116—with respect to the requirement to develop and follow an equity development plan;
(3) Paragraph 1710.151(f)—with respect to the borrower providing satisfactory evidence that a state regulatory authority will allow the facilities to be included in the rate base or otherwise allow sufficient revenues to repay the loan;
(4) Paragraphs 1710.250(b), 1710.251(a), and 1710.252(a)—with respect to the requirement that improvements, replacements, and retirements of generation plant be included in a Construction Work Plan; and
(5) Paragraph 1710.300(d)(5)—with respect to the requirement that a borrower's financial forecast include a sensitivity analysis of a reasonable range of assumptions for each of the major variables in the forecast.
(b) Certain provisions of this part apply only to loans made on or after February 10, 1992. These provisions are identified in the individual sections of this part.
RUS makes insured loans under section 305 of the RE Act.
(a)
(b)
RUS makes direct loans under section 4 of the RE Act.
(a)
(1)
(2)
(3)
(4)
(b)
RUS provides financing through 100 percent loan guarantees made under sections 306 and 306A of the RE Act. RUS also provides 90 percent loan guarantees under section 311 of the RE Act to enable borrowers to secure financing from certain private lenders. The loan guarantees are made for a term of up to 35 years, and the interest rate is established at a rate agreed to by the borrower and the lender, with RUS concurrence. The guarantee applies to the repayment of both principal and interest.
RUS makes loans and loan guarantees to finance the construction of electric distribution, transmission and generation facilities, including system improvements and replacements required to furnish and improve electric service in rural areas, and for demand side management, energy conservation programs, and on grid and off grid renewable energy systems. In some circumstances, RUS may finance selected operating expenses of its borrowers. Loans made or guaranteed by the Administrator of RUS will be made in conformance with the Rural Electrification Act of 1936, as amended (7 U.S.C. 901
(a) RUS makes loans to corporations, states, territories, and subdivisions and agencies thereof; municipalities; people's utility districts; and cooperative, nonprofit, limited-dividend, or mutual associations that provide or propose to provide:
(1) The retail electric service needs of rural areas, or
(2) The power supply needs of distribution borrowers under the terms of power supply arrangements satisfactory to RUS.
(b) In making loans, RUS gives preference to states, territories, and subdivisions and agencies thereof; municipalities; people's utility districts; and cooperative, nonprofit, or limited-dividend associations. RUS does not make loans to individual consumers.
(c) For the purpose of determining eligibility of a distribution borrower
(1) Be considered a default by the distribution borrower;
(2) Reduce the eligibility of the distribution borrower for assistance under the RE Act; or
(3) Be the cause, directly or indirectly, of imposing any requirement or restriction on the borrower as a condition of the assistance, except such requirements or restrictions as are necessary to implement a debt restructuring agreed on by the power supply borrower and RUS.
(d) For the purpose of determining the eligibility of a distribution borrower, RUS will consider whether the distribution borrower is current on its obligations to its wholesale power supplier under the RUS wholesale power contract.
(e) Nothing in paragraph (c) of this section relieves any distribution borrower that is a member of a power supply borrower in default on its obligations to RUS or operating under a debt restructuring agreement, of requirements set forth in RUS regulations, including, without limitation, § 1710.112(b)(6), or of any terms and conditions that the Administrator may otherwise impose on any borrower as a condition of obtaining a loan or loan guarantee (including, in appropriate cases, member guarantees).
(f) Except as provided in paragraph (g) of this section, former borrowers that have paid off all outstanding loans may reapply for a loan to serve RE Act beneficiary loads accruing from the time the former borrower's complete loan application is received by RUS. The determination of whether an area is rural will be based on the Census designation of the area at the time of the reapplication for a loan, if the area is not served by electric facilities financed by RUS. If the area is served by electric facilities financed by RUS, it will continue to be considered rural.
(g) Former borrowers that have prepaid all, or portions of outstanding insured and direct loans in accordance with RUS regulations must comply with the provisions of 7 CFR part 1786 before being considered eligible to borrow additional funds from RUS.
(a)
(b)
(c)
(d)
(e)
(a) Borrowers shall make a diligent effort to extend electric service to all unserved persons within their service area who:
(1) Desire electric service; and
(2) Meet all reasonable requirements established by the borrower as a condition of service.
(b) If economically feasible and reasonable considering the cost of providing such service and/or the effects on all consumers' rates, such service shall be provided, to the maximum extent practicable, at the rates and minimum charges established in the borrower's rate schedules, without the payment by such persons, other than seasonal or temporary consumers, of a contribution in aid of construction. A seasonal consumer is one that demands electric service only during certain seasons of the year. A temporary consumer is a seasonal or year-round consumer that demands electric service over a period of less than five years.
(c) Borrowers may assess contributions in aid of construction provided such assessments are consistent with the policy set forth in this section.
(a) To the greatest extent practical, loans are limited to providing and improving electric facilities to serve consumers that are RE Act beneficiaries. When it is determined by the Administrator to be necessary in order to furnish or improve electric service in rural areas, loans may, under certain circumstances, be made to finance electric facilities to serve consumers that are not RE Act beneficiaries.
(b) Loan funds may be approved for facilities to serve non-RE Act beneficiaries only if:
(1) The primary purpose of the loan is to furnish or improve service for RE Act beneficiaries; and
(2) The use of loan funds to serve non-RE Act beneficiaries is necessary and incidental to the primary purpose of the loan.
(a) In States where a borrower is required to obtain approval of a project or its financing from a state regulatory authority, RUS may require that such approvals be obtained, if feasible for the borrower to do so, before the following types of loans are approved by RUS:
(1) Loans requiring an Environmental Impact Statement;
(2) Loans to finance generation and transmission facilities, when the loan request for such facilities is $25 million or more; and
(3) Loans for the purpose of assisting borrowers to implement demand side management and energy conservation programs and on and off grid renewable energy systems.
(b) At minimum, in the case of all loans in states where state regulatory approval is required of the project or its financing, such state approvals will be required before loan funds are advanced.
(c) In cases where state regulatory authority approval has been obtained,
(a) Funds from loans made or guaranteed by RUS may be used to finance:
(1)
(ii) The purchase, rehabilitation and integration of existing distribution facilities and associated service territory when the acquisition is an incidental and necessary means of providing or improving service to persons in rural areas who are not receiving adequate central station service, and the borrower is unable to finance the acquisition from other sources. See § 1710.107.
(2)
(ii) The purchase of an ownership interest in new or existing transmission or generation facilities to serve RE Act beneficiaries.
(3)
(4)
(5) Certain costs incurred in demand side management, energy conservation programs and on and off grid renewable energy systems.
(b) In cases of financial hardship, as determined by the Administrator, loans may also be made to finance the following items:
(1) The headquarters office and other headquarters facilities in addition to those cited in paragraph (a)(4) of this section;
(2) General plant equipment, including furniture, office, transportation, data processing and other work equipment; and
(3) Working capital required for the initial operation of a new system.
(c) RUS will not make loans to finance the following:
(1) Electric facilities, equipment, appliances, or wiring located inside the premises of the consumer, except qualifying items included in a loan for demand side management or energy resource conservation programs, or on or off grid renewable energy systems;
(2) Facilities to serve consumers who are not RE Act beneficiaries unless those facilities are necessary and incidental to providing or improving electric service in rural areas (See § 1710.104);
(3) Any facilities or other purposes that a state regulatory authority having jurisdiction will not approve for inclusion in the borrower's rate base, or will not otherwise allow rates sufficient to repay with interest the debt incurred for the facilities or other purposes; and
(4) Any facilities or other specific purposes that were included in a loan made or guaranteed by RUS that the borrower has prepaid or that has been rescinded.
(d) A distribution borrower may request a loan period of up to 4 years. Except in the case of loans for new generating and associated transmission facilities, a power supply borrower may request a loan period of not more than 4 years for transmission and substation facilities and improvements or replacements of generation facilities. The loan
(e)(1) If, in the sole discretion of the Administrator, the amount authorized for lending for municipal rate loans, hardship rate loans, and loan guarantees in a fiscal year is substantially less than the total amount eligible for RUS financing, RUS may limit the size of all loans of that type approved during the fiscal year. Depending on the amount of the shortfall between the amount authorized for lending and the loan application inventory on hand for each type of loan, RUS may either reduce the amount on an equal proportion basis for all applicants for that type of loan based on the amount of funds for which the applicant is eligible, or may shorten the loan period for which funding will be approved to less than the maximum of 4 years. All applications for the same type of loan approved during a fiscal year will be treated in the same manner, except that RUS will not limit funding to any borrower requesting an RUS loan or loan guarantee of $1 million or less.
(2) If RUS limits the amount of loan funds approved for borrowers, the Administrator shall notify all electric borrowers early in the fiscal year of the manner in which funding will be limited. The portion of the loan application that is not funded during that fiscal year may, at the borrower's option, be treated as a second loan application received by RUS at a later date. This date will be determined by RUS in the same manner for all affected loans and will be based on the availability of loan funds. The second loan application shall be considered complete except that the borrower must submit a certification from a duly authorized corporate official stating that funds are still needed for loan purposes specified in the original application and must notify RUS of any changes in its circumstances that materially affects the information contained in the original loan application or the primary support documents. See 7 CFR 1710.401(f).
(f)(1) For borrowers having one or more loans approved on or after October 1, 1991, advances of funds will be made only for the primary budget purposes included in the loan as shown on RUS Form 740c as amended and approved by RUS, or on a construction work plan or a construction work plan amendment approved by RUS. Each advance will be charged to the oldest outstanding note(s) having unadvanced funds for the primary budget purpose for which the request for advances was made, regardless of whether such notes are associated with loans approved before or after October 1, 1991, unless any conditions on advances under any of these notes have not been met by the borrower.
(2) For borrowers whose most recent loan was approved before October 1, 1991, advances will be made on the oldest outstanding note having unadvanced funds, unless any conditions on advances under such note have not been met by the borrower.
The maximum amount that will be lent for an acquisition is limited to the value of the property, as determined by RUS. If the acquisition price exceeds this amount, the borrower shall provide the remainder without RUS financial assistance.
(a) RUS encourages its borrowers to consider merging or consolidating with another electric borrower when such action will contribute to greater operating efficiency and financial soundness.
(b) After a merger or consolidation, RUS will give priority consideration per § 1710.119 to the processing of loans for the surviving system to finance the integration and rehabilitation of electric facilities, if necessary, and the improvement or extension of electric
(a) Borrowers may request that a loan include funds to reimburse general funds and/or replace interim financing used to finance equipment and facilities that were included in an RUS-approved construction work plan, work plan amendment or other RUS-approved plan, and for which loan funds have not been provided by RUS. Such reimbursement and/or replacement of interim financing may include the direct costs of procurement and construction, as well as the related cost of engineering, architectural, environmental and other studies and plans needed to support the project, when such cost is capitalized as part of the cost of the facilities.
(b) If procurement and/or construction of the equipment and facilities was completed prior to the current loan period, reimbursement, including replacement of interim financing, will be limited, except in cases of extreme financial hardship as determined by the Administrator, to the cost of procurement and construction completed during the period immediately preceding the current loan period, as specified in paragraph (c) of this section. As defined in § 1710.2, the loan period begins on the date shown on page 1 of RUS Form 740c, Cost Estimates and Loan Budget for Electric Borrowers.
(c)(1) The period immediately preceding the current loan period for which reimbursement and replacement of interim financing is authorized under paragraph (b) of this section is as follows:
(i) The number of months agreed to by RUS and the borrower for complete loan applications received by RUS before February 10, 1992;
(ii) 36 months for complete loan applications received from February 10, 1992 through February 10, 1993; or
(iii) 24 months for complete loan applications received after February 10, 1993.
(2) Policies for reimbursement of general funds and interim financing following certain mergers, consolidations, and transfers of systems substantially in their entirety are set forth in 7 CFR 1717.154.
(d) If the reimbursement of general funds and/or replacement of interim financing is for approved expenditures for equipment and facilities whose procurement and/or construction is completed during the current loan period, the time limits of paragraph (c) of this section do not apply.
(a) Except in the case of financial hardship as determined by the Administrator, and following certain mergers, consolidations, and transfers of systems substantially in their entirety as set forth in 7 CFR 1717.154, applicants for a municipal rate loan will be required to obtain a portion of their loan funds from a supplemental source without an RUS guarantee, in the amounts set forth in paragraph (c) of this section. RUS will normally grant a lien accommodation to the supplemental lender. RUS does not require supplemental financing in conjunction with an RUS guaranteed loan. However, if a borrower elects to obtain supplemental financing in conjunction with a guaranteed loan, the granting of RUS's loan guarantee may be conditioned on the borrower's obtaining supplemental financing.
(b) The terms and conditions of supplemental financing and any security offered to the supplemental lender are subject to RUS approval. Generally, supplemental loans must have the same final maturity and be amortized in the same manner as RUS loans made concurrently. Borrowers may elect to repay the loans either in substantially
(c)
(ii) All other distribution borrowers must obtain supplemental financing according to their plant revenue ratio (PRR), as defined in § 1710.2, based on the most recent year-end data available on the date of loan approval, as follows:
(iii) If a distribution borrower enters into a merger, consolidation, or transfer of system substantially in its entirety, and the provisions of 7 CFR 1717.154(b) do not apply, required supplemental financing will be determined as follows for loans approved by RUS after December 19, 1996. If one of the merging parties met the criteria in paragraph (c)(1)(i) of this section prior to the effective date of the merger consolidation or transfer, the borrower will be required to obtain supplemental financing equal to 10 percent of any loan funds requested for facilities to serve consumers located in the territory formerly served by the “paragraph (c)(1)(i)” borrower. The required amount of supplemental financing for the rest of the loan will be determined according to the provisions of paragraph (c)(1)(ii) of this section.
(2)
(3)
(ii) If a borrower's supplemental financing requirement as set forth in paragraphs (a), (c)(1), and (c)(2) of this section has not changed between the most recent loan and the loan being considered, then the amount of supplemental financing required for the new loan will be computed as follows:
(iii) If a borrower's supplemental financing requirement as set forth in paragraphs (a), (c)(1), and (c)(2) of this section has changed between the most recent loan and the loan being considered, then the amount of supplemental financing required for the new loan will be the weighted average of the portions otherwise applicable on the two loans and will be computed as follows:
(d) Supplemental financing will not be required in connection with hardship rate loans. Borrowers that qualify for hardship rate loans but elect to take municipal rate loans instead, will be required to obtain supplemental financing pursuant to this section, unless at the time of loan approval, there are no funds remaining available for hardship loans, in which case supplemental financing will not be required.
(a) RUS makes loans or loan guarantees to refinance the outstanding indebtedness of borrowers in the following cases:
(1) Loans or loan guarantees to refinance long-term debt owed by borrowers to the Tennessee Valley Authority fpr credit extended under the terms of the Tennessee Valley Authority Act of 1933, as amended.
(2) Loan guarantees made in accordance with the provisions of section 306A of the RE Act to prepay a loan (or any loan advance thereunder) made by the Federal Financing Bank.
(b) In certain circumstances, RUS may make a loan to replace interim financing obtained for the construction of facilities (See § 1710.109).
(a) RUS will make a loan only if there is reasonable assurance that the loan, together with all outstanding loans and other obligations of the borrower, will be repaid in full as scheduled, in accordance with the mortgage, notes, and loan contracts. The borrower must provide evidence satisfactory to the Administrator that the loan will be repaid in full as scheduled, and that all other obligations of the borrower will be met.
(b) Based on evidence submitted by the borrower and other information, RUS will use the following criteria to evaluate loan feasibility:
(1) Projections of power requirements, rates, revenues, expenses, margins, and other factors for the present system and proposed additions are based on reasonable assumptions and adequate supporting data and analysis, including analysis of a range of assumptions for the significant variables, when required by § 1710.300(d)(5).
(2) Projected revenues from the rates proposed by the borrower are adequate to meet the required TIER and DSC ratios based on the borrower's total costs, including the projected maximum debt service cost of the new loan.
(3) The economics of the borrower's operations and service area are such that consumers can reasonably be expected to pay the proposed rates required to cover all expenses and meet RUS TIER and DSC requirements, and the borrower can reasonably compete with other utilities and other energy sources to prevent substantial load loss while providing satisfactory service to its consumers.
(4) Risks of possible loss of substantial loads from large consumers or from load concentrations in particular industries will not substantially impair loan feasibility.
(5) Risks of loss of portions of the borrower's service territory from annexation or other causes will not substantially impair loan feasibility. If there appears to be a substantial risk, RUS may require additional information from the borrower, such as a summary and analysis of the risk by the borrower; state, county or local planning reports having information on projected growth or expansion plans of local communities; annexation plans of the municipalities in question; and any other relevant information.
(6) In states where rates or investment decisions are subject to approval
(7) The experience and performance of the system's management is acceptable.
(8) In the case of joint ventures, the borrower has sufficient management control or other contractual safeguards with respect to the construction and operation of the jointly owned facility to ensure that the borrower's interests are protected and the credit risk is minimized.
(9) The borrower has implemented adequate financial and management controls and there are and have been no significant financial or other irregularities.
(10) The borrower's projected capitalization, measured by its equity as a percentage of total assets, is adequate to enable the borrower to meet its financial needs and to provide service consistent with the RE Act. Among the factors to be considered in reviewing the borrower's projected capitalization are the economic strength of the borrower's service territory, the inherent cost of providing service to the territory, the disparity in rates between the borrower and neighboring utilities, the intensity of competition faced by the borrower from neighboring utilities and other power sources, and the relative amount of new capital investment required to serve existing or new loads.
(c) RUS considers a loan to be feasible only if the borrower's electric system is year 2000 compliant, or if the borrower provides RUS with evidence, satisfactory to RUS, that it is taking measures necessary to ensure that its electric system will be year 2000 compliant on or before December 31, 1999. Year 2000 compliant means that product performance and function are not affected by dates before, during, and a reasonable time after the year 2000.
(a) RUS makes loans only if, in the judgment of the Administrator, the security therefor is reasonably adequate and the loan will be repaid according to its terms within the time agreed.
(b) RUS generally requires that borrowers provide it with a first lien on all of the borrower's real and personal property, including intangible personal property and any property acquired after the date of the loan. This lien shall be in the form of a mortgage by the borrower to the Government or a deed of trust between the borrower and a trustee satisfactory to the Administrator, together with such security documents as RUS may deem necessary in a particular case.
(c)(1) When a borrower is unable by reason of preexisting encumbrances, or otherwise, to furnish a first mortgage lien on its entire system the Administrator may accept other forms of security, such as a pledge of revenues, if he or she determines such security is reasonably adequate and the form and nature thereof is otherwise acceptable.
(2) The Administrator, at his or her discretion, may approve the use of an indenture patterned after those indentures commonly used by utilities engaged in private market financing, in lieu of a mortgage as the security instrument for loans to power supply borrowers. The use of an indenture will be by mutual agreement of the borrower and the Administrator. The terms of each indenture and related loan agreement will be negotiated on a case by case basis to best meet the needs of the individual borrower and the Government. The provisions of the indenture and loan contract shall control, notwithstanding any provisions of 7 CFR Chapter XVII which may be in conflict therewith.
(d) In the case of loans that include the financing of electric facilities that are operated as an integral component of a non-RUS financed system (such as generation and transmission facilities co-owned with other electric utilities), the borrower shall, in addition to the mortgage lien on all of the borrower's electric facilities, furnish adequate assurance, in the form of contractual or other security arrangements, that the system will be operated on an efficient and continuous basis. Satisfactory evidence must also be provided that the non-RUS financed system is financially
(e) Additional controls on the borrower's financial, investment and managerial activities appear in the loan contract and mortgage required by RUS.
(a)
(b)
(2) The minimum coverage ratios required of power supply borrowers, whether applied on an annual or average basis, are a TIER of 1.05 and DSC of 1.00.
(3) When new loan contracts are executed, the Administrator may, case by case, increase the coverage ratios of distribution and power supply borrowers above the levels cited in paragraphs (b)(1) and (b)(2), respectively, of this section if the Administrator determines that the higher ratios are required to ensure reasonable security for and/or the repayment of loans made or guaranteed by RUS. Also, the Administrator may, case by case, reduce said coverage ratios if the Administrator determines that the lower ratios are required to ensure reasonable security for and/or the repayment of loans made or guaranteed by RUS. Policies for coverage ratios following certain mergers, consolidations, and transfers of systems substantially in their entirety are in 7 CFR 1717.155.
(4) If a distribution borrower has in service or under construction a substantial amount of generation and associated transmission plant financed at a cost of capital substantially higher than the cost of funds under section 305 of the RE Act, then the Administrator may establish, in his or her sole discretion, blended levels for TIER, DSC, OTIER, and ODSC based on the respective shares of total utility plant represented by said generation and associated transmission plant and by distribution and other transmission plant.
(c)
(d)
(2)
(3)
(e)
(2) With respect to any outstanding loan approved by RUS on or after February 10, 1992, if, based on actual or projected financial performance of the borrower, RUS determines that the borrower may not achieve its required coverage ratios in the current or future years, RUS may withhold the advance of loan funds until the borrower has taken remedial action satisfactory to RUS.
(a) RUS is authorized to make loans and loan guarantees with a final maturity of up to 35 years. The borrower may elect a repayment period for a loan not longer than the expected useful life of the facilities, not to exceed 35 years. Most of the electric facilities financed by RUS have a long useful life, often approximating 35 years. Some facilities, such as load management equipment and Supervisory Control and Data Acquisition equipment, have a much shorter useful life due, in part, to obsolescence. Operating loans to finance working capital required for the initial operation of a new system are a separate class of loans and usually have a final maturity of less than 10 years.
(b) Loans made or guaranteed by RUS for facilities owned by the borrower generally must be repaid with interest within a period, up to 35 years, that approximates the expected useful life of the facilities financed. The expected useful life shall be based on the weighted average of the useful lives that the borrower proposes for the facilities financed by the loan, provided
(c) [Reserved]
(d) The Administrator may approve a repayment period longer than the expected useful life of the facilities financed, up to 35 years, if a longer final maturity is required to ensure repayment of the loan and loan security is adequate.
(e) The final maturity of a loan established pursuant to the provisions of this section shall not be extended as a result of extending loan payments under section 12(a) of the RE Act.
Borrowers are required to comply with 7 CFR part 1794, which sets forth applicable requirements of the National Environmental Policy Act (NEPA), as amended (42 U.S.C. 4321
(a) Generally loans are processed in chronological order based on the date the complete application is received in the Regional office.
(b) The Administrator may give priority to processing loans that are required to meet the following needs:
(1) To restore electric service following a major storm or other catastrophe;
(2) To bring existing electric facilities into compliance with any environmental requirements imposed by Federal or state law that were not in effect at the time the facilities were originally constructed;
(3) To finance the capital needs of borrowers that are the result of a merger, consolidation, or a transfer of a system substantially in its entirety, provided that the merger, consolidation, or transfer has either been approved by RUS or does not need RUS approval pursuant to the borrower's loan documents (See 7 CFR 1717.154); or
(4) To correct serious safety problems, other than those resulting from borrower mismanagement or negligence.
(c) The Administrator may also change the normal order of processing loan applications when it is necessary to ensure that all loan authority for the fiscal year is utilized.
Borrowers shall follow all RUS requirements regarding construction work plans, construction standards, approved materials, construction and related contracts, inspection procedures, and bidding procedures.
Borrowers are required to comply with certain requirements with respect
Borrowers are required to comply with certain regulations on nondiscrimination in program services and benefits and on equal employment opportunity as set forth in RUS Bulletins 20-15 and 20-19 or their successors; 7 CFR parts 15 and 15b; and 45 CFR part 90.
Borrowers are required to comply with certain requirements on debarment and suspension as set forth in 7 CFR part 3017.
Borrowers are required to comply with applicable provisions of 49 CFR part 24, which sets forth the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970 (Pub. L. 91-646; 84 Stat. 1894), as amended by the Uniform Relocation Act Amendments of 1987 (Pub. L. 100-17; 101 Stat. 246-256) and the Intermodal Surface Transportation Efficiency Act of 1991.
Borrowers are required to comply with certain requirements with respect to restrictions on lobbying activities. See 7 CFR part 3018.
(a) Prior to approval of a loan or advance of funds, a borrower must report to RUS whether or not it is delinquent on any Federal debt, such as Federal income tax obligations or a loan or loan guarantee from another Federal agency. If delinquent, the reasons for the delinquency must be explained, and RUS will take such explanation into consideration in deciding whether to approve the loan or advance of funds.
(b) Applicants for a loan or loan guarantee must also certify that they have been informed of the collection options the Federal government may use to collect delinquent debt.
Borrowers are required to comply with the Drug Free Workplace Act of 1988 (Pub. L. 100-690, title V, subtitle D) and the Act's implementing regulations (7 CFR part 3017) when a borrower receives a Federal grant or enters into a procurement contract awarded pursuant to the provisions of the Federal Acquisition Regulation (title 48 CFR) to sell to a Federal agency property or services having a value of $25,000 or more.
The RE Act and prudent lending practice require that the Administrator make certain findings before approving an electric loan or loan guarantee. The borrower shall provide the evidence determined by the Administrator to be necessary to make these findings.
(a)
(b)
(c)
(d)
(e)
(f)
The following primary support documents and studies must be prepared by the borrower for approval by RUS in order to support a loan application:
(a)
(b)
(c)
(d)
Additional requirements and procedures for obtaining RUS financial assistance are set forth in 7 CFR part 1712 for loan guarantees, and in 7 CFR part 1714 for insured loans.
This subpart contains RUS policies for the preparation, review, approval and use of load forecasts and load forecast work plans. A load forecast is a thorough study of a borrower's electric loads and the factors that affect those loads in order to estimate, as accurately as practicable, the borrower's future requirements for energy and capacity. The load forecast of a power supply borrower includes and integrates the load forecasts of its member
(a) The policies, procedures and requirements in this subpart are intended to implement provisions of the loan documents between RUS and the electric borrowers and are also necessary to support approval by RUS of requests for financial assistance.
(b) Notwithstanding any other provisions of this subpart, RUS may require any power supply or distribution borrower to prepare a new or updated load forecast for RUS approval or to maintain an approved load forecast on an ongoing basis, if such documentation is necessary for RUS to determine loan feasibility, or to ensure compliance under the loan documents.
(a) A power supply borrower with a total utility plant of $500 million or more must maintain an approved load forecast that meets the requirements of this subpart on an ongoing basis and provide an approved load forecast in support of any request for RUS financial assistance. The borrower must also maintain an approved load forecast work plan. The borrower's approved load forecast must be prepared pursuant to the approved load forecast work plan.
(b) A power supply borrower that is a member of another power supply borrower that has a total utility plant of $500 million or more must maintain an approved load forecast that meets the requirements of this subpart on an ongoing basis and provide an approved load forecast in support of any request for RUS financial assistance. The member power supply borrower may comply with this requirement by participation in and inclusion of its load forecasting information in the approved load forecast of its power supply borrower. The approved load forecasts must be prepared pursuant to the RUS approved load forecast work plan.
(c) A power supply borrower that has total utility plant of less than $500 million and that is not a member of another power supply borrower with a total utility plant of $500 million or more must provide an approved load forecast that meets the requirements of this subpart in support of an application for any RUS loan or loan guarantee which exceeds $50 million. The borrower is not required to maintain on an ongoing basis either an approved load forecast or an approved load forecast work plan.
(a) A distribution borrower that is a member of a power supply borrower with a total utility plant of $500 million or more must maintain an approved load forecast that meets the requirements of this subpart on an ongoing basis and provide an approved load forecast in support of any request for RUS financial assistance. The distribution borrower may comply with this requirement by participation in and inclusion of its load forecasting information in the approved load forecast of its power supply borrower. The distribution borrower's load forecast must be prepared pursuant to the approved load forecast work plan of its power supply borrower.
(b) A distribution borrower that is a member of a power supply borrower which is itself a member of another power supply borrower that has a total utility plant of $500 million or more must maintain an approved load forecast that meets the requirements of this subpart on an ongoing basis and provide an approved load forecast in support of any request for RUS financial assistance. The distribution borrower may comply with this requirement by participation in and inclusion of its load forecasting information in the approved load forecast of its power supply borrower. The distribution borrower's approved load forecast must be prepared pursuant to the approved load forecast work plan of the power supply borrower with total utility plant in excess of $500 million.
(c) A distribution borrower that is a member of a power supply borrower
(d) A distribution borrower with a total utility plant of less than $500 million and that is unaffiliated with a power supply borrower must provide an approved load forecast that meets the requirements of this subpart in support of an application for any RUS loan or loan guarantee which exceeds $3 million or 5 percent of total utility plant, whichever is greater. The borrower is not required to maintain on an ongoing basis either an approved load forecast or an approved load forecast work plan.
(e) A distribution borrower with a total utility plant of $500 million or more must maintain an approved load forecast that meets the requirements of this subpart on an ongoing basis and provide an approved load forecast in support of any request for RUS financing assistance. The borrower must also maintain an approved load forecast work plan. The distribution borrower may comply with this requirement by participation in and inclusion of its load forecasting information in the approved load forecast of its power supply borrower.
(a)
(1) Submitting a new load forecast to RUS for review and approval at least every 36 months, and then submitting updates to the load forecast to RUS for review and approval in each intervening year; or
(2) Submitting a new load forecast to RUS for review and approval not less frequently than every 24 months.
(b)
(a)
(1) The load forecast and supporting documentation;
(2) A memorandum from the borrower's general manager to the board of directors recommending that the board approve the load forecast and its uses; and
(3) A board resolution from the borrower's board of directors approving the load forecast and its uses.
(b)
(1) A narrative describing the borrower's system, service territory, and consumers;
(2) A narrative description of the borrower's load forecast including future load projections, forecast assumptions, and the methods and procedures used to develop the forecast;
(3) Projections of usage by consumer class, number of consumers by class, annual system peak demand, and season of peak demand for the number of years agreed upon by RUS and the borrower;
(4) A summary of the year-by-year results of the load forecast in a format that allows efficient transfer of the information to other borrower planning or loan support documents;
(5) The load impacts of a borrower's demand side management activities, if applicable;
(6) Graphic representations of the variables specifically identified by management as influencing a borrower's loads; and
(7) A database that tracks all relevant variables that might influence a borrower's loads.
(c)
(d)
(e)
(f)
(g)
(a)
(1) Scope of the load forecast. The narrative shall address the overall approach, time periods, and expected internal and external uses of the forecast. Examples of internal uses include providing information for developing or monitoring demand side management programs, supply resource planning, load flow studies, wholesale power marketing, retail marketing, cost of service studies, rate policy and development, financial planning, and evaluating the potential effects on electric revenues caused by competition from alternative energy sources or other electric suppliers. Examples of external uses include meeting state and Federal regulatory requirements, obtaining financial ratings, and participation in reliability council, power pool, regional transmission group, power supplier or member system forecasting and planning activities.
(2) Resources used to develop the load forecast. The discussion shall identify and discuss the borrower personnel, consultants, data processing, methods
(3) A comprehensive description of the database used in the study. The narrative shall describe the procedures used to collect, develop, verify, validate, update, and maintain the data. A data dictionary thoroughly defining the database shall be included. The borrower shall make all or parts of the database available or otherwise accessible to RUS in electronic format, if requested.
(4) A narrative for each new load forecast or update of a load forecast discussing the methods and procedures used in the analysis and modeling of the borrower's electric system loads as provided for in the load forecast work plan.
(5) A narrative discussing the borrower's past, existing, and forecast of future electric system loads. The narrative must identify and explain substantive assumptions and other pertinent information used to support the estimates presented in the load forecast.
(6) A narrative discussing load forecast uncertainty or alternative futures that may determine the borrower's actual loads. Examples of economic scenarios, weather conditions, and other uncertainties that borrowers may decide to address in their analysis include:
(i) Most-probable assumptions, with normal weather;
(ii) Pessimistic assumptions, with normal weather;
(iii) Optimistic assumptions, with normal weather;
(iv) Most-probable assumptions, with severe weather;
(v) Most-probable assumptions, with mild weather;
(vi) Impacts of wholesale or retail competition; or
(vii) new environmental requirements.
(7) A summary of the forecast's results on an annual basis. Include alternative futures, as applicable. This summary shall be designed to accommodate the transfer of load forecast information to a borrower's other planning or loan support documents. Computer-generated forms or electronic submissions of data are acceptable. Graphs, tables, spreadsheets or other exhibits shall be included throughout the forecast as appropriate.
(8) A narrative discussing the coordination activities conducted between a power supply borrower and its members, as applicable, and between the borrower and RUS.
(b)
Load forecasts submitted by distribution borrowers that are unaffiliated with a power supply borrower, or by distribution borrowers that are members of a power supply borrower that has a total utility plant less than $500 million and that is not itself a member of another power supply borrower with a total utility plant of $500 million or more must satisfy the following minimum criteria:
(a) The borrower considered all known relevant factors that influence the consumption of electricity and the known number of consumers served at the time the study was developed;
(b) The borrower considered and identified all loads on its system of RE Act beneficiaries and non-RE Act beneficiaries;
(c) The borrower developed an adequate supporting data base and considered a range of relevant assumptions; and
(d) The borrower provided RUS with adequate documentation and assistance to allow for a thorough and independent review.
All load forecasts submitted by power supply borrowers and by distribution borrowers required to maintain an approved load forecast must satisfy the following criteria:
(a) The borrower objectively analyzed all known relevant factors that influence the consumption of electricity and the known number of customers served at the time the study was developed;
(b) The borrower considered and identified all loads on its system of RE Act beneficiaries and non-RE Act beneficiaries;
(c) The borrower developed an adequate supporting database and analyzed a reasonable range of relevant assumptions and alternative futures;
(d) The borrower adopted methods and procedures in general use by the electric utility industry to develop its load forecast;
(e) The borrower used valid and verifiable analytical techniques and models;
(f) The borrower provided RUS with adequate documentation and assistance to allow for a thorough and independent review; and
(g) In the case of a power supply borrower required to maintain an approved load forecast on an ongoing basis, the borrower adequately coordinated the preparation of the load forecast work plan and load forecast with its member systems.
(a) In addition to the approved load forecast required under §§ 1710.202 and 1710.203, any power supply borrower with a total utility plant of $500 million or more and any distribution borrower with a total utility plant of $500 million or more must maintain an approved load forecast work plan. RUS borrowers that are members of a power supply borrower with a total utility plant of $500 million or more must cooperate in the preparation of and submittal of the load forecast work plan of their power supply borrower.
(b) An approved load forecast work plan establishes the process for the preparation and maintenance of a comprehensive database for the development of the borrower's load forecast, and load forecast updates. The approved load forecast work plan is intended to develop and maintain a process that will result in load forecasts that will meet the borrowers' own needs and the requirements of this subpart. An approved work plan represents a commitment by a power supply borrower and its members, or by a large unaffiliated distribution borrower, that all parties concerned will prepare their load forecasts in a timely manner pursuant to the approved load forecast work plan and they will modify the approved load forecast work plan as needed with RUS approval to address changing circumstances or enhance the usefulness of the approved load forecast work plan.
(c) An approved load forecast work plan for a power supply borrower and its members must cover all member systems, including those that are not borrowers. However, only members that are borrowers, including the power supply borrower, are required to follow the approved load forecast work plan in preparing their respective load forecasts. Each borrower is individually responsible for forecasting all its RE Act beneficiary and non-RE Act beneficiary loads.
(d) An approved load forecast work plan must outline the coordination and preparation requirements for both the power supply borrower and its members.
(e) An approved load forecast work plan must cover a period of 2 or 3 years depending on the applicable compliance filing schedule elected under § 1710.204.
(f) An approved load forecast work plan must describe the borrower's process and methods to be used in producing the load forecast and maintaining current load forecasts on an ongoing basis.
(g) Approved load forecast work plans for borrowers with residential demand of 50 percent or more of total kWh
(h) Approved load forecast work plans must provide for RUS review of the load forecasts as the load forecast is being developed.
(i) A power supply borrower's work plan must have the concurrence of the majority of the members that are borrowers.
(j) The borrower's board of directors must approve the load forecast work plan.
(k) A borrower may amend its approved load forecast work plan subject to RUS approval. If RUS concludes that the existing approved load forecast work plan will not result in a satisfactory load forecast, RUS may require a new or revised load forecast work plan.
For good cause shown by the borrower, the Administrator may waive any of the requirements applicable to borrowers in this subpart if the Administrator determines that waiving the requirement will not significantly affect accomplishment of RUS' objectives and if the requirement imposes a substantial burden on the borrower. The borrower's general manager must request the waiver in writing.
(a) An ongoing, integrated planning system is needed by borrowers to determine their short-term and long-term needs for plant additions, improvements, replacements, and retirements. The primary components of the system consist of long-range engineering plans, construction work plans (CWPs), CWP amendments, and special engineering and cost studies. Long range engineering plans identify plant investments required over a period of 10 years or more. CWPs specify and document plant requirements for the short-term, usually 2 to 3 years, and special engineering and cost studies are used to support CWPs and to identify and document requirements for specific items or purposes, such as load management equipment, System Control and Data Acquisition equipment, sectionalizing investments, and additions of generation capacity and associated transmission plant.
(b) Generally, all borrowers are required to maintain up-to-date long range engineering plans approved by their boards of directors. Current CWPs approved by the borrower's board must also be developed and maintained for distribution and transmission facilities and for improvements and replacements of generation facilities. All such distribution, transmission or generation facilities must be included in the respective CWPs regardless of the source of financing.
(c) A long range engineering plan specifies and supports the major system additions, improvements, replacements, and retirements needed for an orderly transition from the existing system to the system required 10 or more years in the future. The planned future system should be based on the most technically and economically sound means of serving the borrower's long-range loads in a reliable and environmentally acceptable manner, and it should ensure that planned facilities will not become obsolete prematurely.
(d) A CWP shall include investment cost estimates and supporting engineering and cost studies to demonstrate the need for each proposed facility or activity and the reasonableness of the investment projections and the engineering assumptions used in sizing the facilities. The CWP must be consistent with the borrower's long
(e) Applications for a loan or loan guarantee from RUS (new loans or budget reclassifications) must be supported by a current CWP approved by both the borrower's board of directors and RUS. RUS approval of these plans relates only to the facilities, equipment, and other purposes to be financed by RUS, and means that the plans provide an adequate basis from a planning and engineering standpoint to support RUS financing. RUS approval of the plans does not mean that RUS approves of the facilities, equipment, or other purposes for which the borrower is not seeking RUS financing. If RUS disagrees with a borrower's estimate of the cost of one or more facilities for which RUS financing is sought, RUS may adjust the estimate after consulting with the borrower and explaining the reasons for the adjustment.
(f) Except as provided in paragraph (g) of this section, to be eligible for RUS financing, the facilities, including equipment and other items, included in a CWP must be approved by RUS before the start of construction. This requirement also applies to any amendments to a CWP required to add facilities to a CWP or to make significant physical changes in the facilities already included in a CWP. Provision for funding of “minor projects” under an RUS loan guarantee is permitted on the same basis as that discussed for insured loan funds in 7 CFR part 1721, Post-Loan Policies and Procedures for Insured Electric Loans.
(g) In the case of damage caused by storms and other natural catastrophes, a borrower may proceed with emergency repair work before a CWP or CWP amendment is prepared by the borrower and approved by RUS, without loosing eligibility for RUS financing of the repairs. The borrower must notify the RUS regional office in writing, not later than 45 days after the natural catastrophe, of its preliminary estimates of damages and repair costs. Not later than 120 days after the natural catastrophe, the borrower must submit to RUS for approval, a CWP or CWP amendment detailing the repairs.
(h) A CWP may be amended or augmented when the borrower can demonstrate the need for the changes.
(i) A borrower's CWP or special engineering studies must be supported by a Borrower's Environmental Report, and when necessary by an Environmental Analysis or Environmental Impact Statement, as set forth in 7 CFR 1794 or required by other Federal or state regulations or laws.
(j) All engineering activities required by this subpart must be performed by qualified engineers, who may be staff employees of the borrower or outside consultants.
(k) Upon written request from a borrower, RUS may waive in writing certain requirements with respect to long-range engineering plans and CWPs if RUS determines that such requirements impose a substantial burden on the borrower and that waiving the requirements will not significantly affect the accomplishment of the objectives of this subpart. For example, if a borrower's load is forecast to remain constant or decline during the planning period, RUS may waive those portions of the plans that relate to load growth.
(a) All distribution borrowers must maintain a current CWP approved by their board of directors covering all new construction, improvements, replacements, and retirements of distribution and transmission plant, and improvements replacements, and retirements of any generation plant. Construction of new generation capacity need not be included in a CWP but must be specified and supported by specific engineering and cost studies. (See § 1710.253.)
(b) A distribution borrower's CWP shall cover a construction period of between 2 and 4 years, and include all facilities to be constructed which are eligible for RUS financing, whether or not RUS financial assistance will be sought or be available for certain facilities.
(c) The facilities, equipment and other items included in a distribution borrower's CWP may include:
(1) Line extensions required to connect consumers, improve service reliability or improve voltage conditions;
(2) Distribution tie lines to improve reliability of service and voltage regulation;
(3) Line conversions and changes required to improve existing services or provide additional capacity for new consumers;
(4) New substation facilities or additions to existing substations;
(5) Transmission and substation facilities required to support the distribution system;
(6) Distribution equipment required to serve new consumers or to provide adequate and dependable service to existing consumers, including replacement of existing plant facilities;
(7) Residential security lights;
(8) Communications equipment and meters;
(9) Headquarters facilities;
(10) Improvements, replacements, and retirements of generation facilities;
(11) Load management equipment, automatic sectionalizing facilities, and centralized System Control and Data Acquisition equipment. Load management equipment eligible for financing, including the related costs of installation, is limited to capital equipment designed to influence the time and manner of consumer use of electricity, which includes peak clipping and load shifting. To be eligible for financing, such equipment must be owned by the borrower, although it may be located inside or outside a consumer's premises; and
(12) The cost of engineering, architectural, environmental and other studies and plans needed to support the construction of facilities, when such cost is capitalized as part of the cost of the facilities.
(a) All power supply borrowers must maintain a current CWP approved by the borrower's board of directors covering all new construction, improvements, replacements, and retirements of distribution and transmission plant, and improvements, replacements, and retirements of generation plant. Applications for RUS financial assistance for such facilities must be supported by a current, RUS-approved CWP. Construction of new generation capacity need not be included in a CWP but must be specified and supported by specific engineering and cost studies.
(b) Normally a power supply borrower's CWP shall cover a period of 3 to 4 years. While comprehensive CWP's are desired, if there are extenuating circumstances RUS may accept a single-purpose transmission or generation CWP in support of a loan application or budget reclassification. The construction period covered by a CWP in support of a loan application shall not be shorter than the loan period requested for financing of the facilities.
(c) Facilities, equipment, and other items included in a power supply borrower's CWP may include:
(1) Distribution and related facilities as set forth in § 1710.251(c);
(2) Transmission facilities required to deliver the power needed to serve the existing and planned new loads of the borrower and its members, and to improve service reliability, including tie lines for improved reliability of service, line conversions, improvements and replacements, new substations and substation improvements and replacements, and Systems Control and Data Acquisition equipment, including communications, dispatching and sectionalizing equipment, and load management equipment;
(3) The borrower's proportionate share of transmission facilities required to tie together the operating systems of supporting power pools and
(4) Improvements and replacements of generation facilities; and
(5) The cost of engineering, architectural, environmental and other studies and plans needed to support the construction of facilities, when such cost is capitalized as part of the cost of the facilities.
(d) A CWP for transmission facilities shall normally include studies of load flows, voltage regulation, and stability characteristics to demonstrate system performance and needs.
(a) The construction or purchase of additional generation capacity and associated transmission facilities by a power supply or distribution borrower, including the replacement of existing capacity, shall be supported by comprehensive project-specific engineering and cost studies as specified by RUS. The studies shall cover a period from the beginning of the project to at least 10 years after the start of commercial operation of the facilities.
(b) The studies must include comprehensive economic present-value analyses of the costs and revenues of the available self-generation, load management, energy conservation, and purchased-power options, including assessments of service reliability and financing requirements and risks. Requirements for analyzing purchased-power options are set forth in § 1710.254.
(c) Generally, studies of self-generation, load management, and energy conservation options shall include, as appropriate, analyses of:
(1) Capital and operating costs;
(2) Financing requirements and risks;
(3) System reliability;
(4) Alternative unit sizes;
(5) Alternative types of generation;
(6) Fuel alternatives;
(7) System stability;
(8) Load flows; and
(9) System dispatching.
(d) At the request of a borrower, RUS, in its sole discretion, may waive specific requirements of this section if such requirements imposed a substantial burden on the borrower and if such waiver will not significantly affect the accomplishment of the objectives of this subpart.
(a)
(i) Where no adequate and dependable source of power is available to meet the consumers' needs; or
(ii) Where the rates offered by other power sources would result in a higher cost of power to the consumers than the cost from facilities financed by RUS, and the amount of the power cost savings that would result from the RUS-financed facilities bears a significant relationship to the amount of the proposed loan.
(2) If a borrower already owns and operates the types of facilities included in a loan request, then a loan for the purposes contained in paragraph (a)(1) of this section, as well as for the construction of transmission facilities by a distribution borrower, will be considered and evaluated by RUS in terms of whether the proposed facilities constitute an effective and economical means of meeting the power requirements of the consumers. A borrower shall contact RUS as soon as practicable in order for RUS to review information submitted by the borrower and advise the borrower, in writing, whether there is a need for the borrower to investigate and seek alternative sources of power. RUS will determine, based on information provided by the borrower or otherwise available, whether there is a need to investigate alternative sources of power or whether RUS will require information or other methods of determining the need for the generation capacity. RUS will base its determination on whether RUS is able to conclude that the project is needed, the borrower would incur delays and costs in pursuing an RFP,
(b) Loan requests for the addition of generation capacity, including replacement of existing capacity, will be accepted by RUS when the applicant has completed the requirements established by RUS, in a manner satisfactory to RUS. The investigations of alternative sources of power must be coordinated in advance with RUS. This section applies to RUS financed generation capacity whether owned solely by the borrower, owned on an undivided ownership basis with other utilities or substantially controlled by the borrower.
(c) The applicant may be required to seek and utilize capacity available from RUS borrowers and other organizations before developing plans for additional generation capacity. RUS may require, on a case by case basis, that the applicant, among other things:
(1) Solicit power and energy purchase proposals from all reasonable potential sources of power, such as other electric cooperatives, investor-owned utilities, municipal utility organizations, and Federal and state power authorities.
(2) Solicit proposals from independent power producers, including co-generators, to determine the terms and conditions under which these producers can supply the additional power and energy needs of the applicant, without RUS financial assistance. Such solicitations should be placed in at least three national newspapers or trade publications, and they meet all planning, coordination or other requirements imposed by state authorities, as well as the environmental requirements of RUS.
(d) When solicitations are received in accordance with paragraph (c) of this section, the applicant will evaluate all alternative proposals on an economic, present-value basis, giving consideration to cost-effectiveness, reliability of service, the short-term and long-term financial viability of the supplier, and the financial risk to the borrower and its creditors. The applicant will keep RUS fully informed on these evaluations and provide supporting information and analysis as requested by RUS.
(e) After evaluation of all proposals received in accordance with paragraph (c) of this section, and having informed RUS of the results, the applicant may be required to negotiate final proposals with the entities submitting the best acceptable offers. Contracts requiring RUS approval will either be approved in advance by the Administrator or contain a provision that the contract is not valid until approved, in writing, by the Administrator. The Administrator will approve the contracts in a timely manner provided that the borrower has met all applicable requirements, including, among other matters, evidence that the alternative source of power selected is an economical and effective alternative.
(f) RUS may make independent inquiries with potential power suppliers as to the availability of power to meet borrowers' needs. Information developed by RUS will be shared with borrowers at their request.
(g) Further details of RUS requirements for financing of generation and bulk transmission facilities are set forth in 7 CFR part 1712.
(h) At the request of a borrower, RUS, in its sole discretion, may waive specific requirements of paragraphs (b) through (e) of this section if such waiver is required to prevent unreasonable delays in obtaining generation capacity that could result in system reliability problems.
(a) RUS encourages borrowers to maintain a current long-range financial forecast. The forecast should be used by the board of directors and the manager to guide the system towards its financial goals.
(b) A borrower must prepare, for RUS review and approval, a long-range financial forecast, approved by its board
(c) The financial forecast and related projections submitted in support of a loan application shall include:
(1) The projected results of future actions planned by the borrower's board of directors;
(2) The financial goals established for margins, TIER, DSC, equity, and levels of general funds to be invested in plant;
(3) A pro forma balance sheet, statement of operations, and general funds summary projected for each year during the forecast period;
(4) A full explanation of the assumptions, supporting data, and analysis used in the forecast, including the methodology used to project loads, rates, revenue, power costs, operating expenses, plant additions, and other factors having a material effect on the balance sheet and on financial ratios such as equity, TIER, and DSC;
(5) Current and projected cash flows;
(6) Projections of future borrowings and the associated interest and principal expenses required to meet the projected investment requirements of the system;
(7) Current and projected kW and kWh energy sales;
(8) Current and projected unit prices of significant variables such as retail and wholesale power prices, average labor costs, and interest;
(9) Current and projected system operating costs, including, but not limited to, wholesale power costs, depreciation expenses, labor costs, and debt service costs;
(10) Current and projected revenues from sales of electric power and energy;
(11) Current and projected non-operating income and expense;
(12) A discussion of the historical experience of the borrower, and in the case of a power supply borrower its member systems as appropriate, with respect to the borrower's market competitiveness as it relates to the rates charged for electricity, competition from other fuels, and other factors. Additional data and analysis may be required by RUS on a case by case basis to assess the probable future competitiveness of those borrowers that have a history of serious competitive problems; and
(13) An analysis of the effects of major factors, such as projected increases in rates charged for electricity, on the ability of the borrower, and in the case of a power supply borrower its member systems, to compete with neighboring utilities and other energy sources.
(d) The following plans, studies and assumptions shall be used in developing the financial forecast:
(1) The RUS-approved CWP;
(2) RUS-approved power requirements data;
(3) The current rate schedules or new rates already approved by the board of directors;
(4) Future plant additions and operating expenses projected at anticipated future cost levels rather than in constant dollars, with the annual rate of inflation for major items specified; and
(5) A sensitivity analysis may be required by RUS on a case-by-case basis taking into account such factors as the number and type of large power loads, projections of future borrowings and the associated interest, projected loads, projected revenues, and the probable future competitiveness of the borrower. When RUS determines that a sensitivity analysis is necessary for distribution borrowers, the variables to be tested will be determined by the General Field Representative in consultation with the borrower and the regional office. The regional office will consult with the Power Supply Division in the case of generation projects for distribution borrowers. For power supply borrowers, the variables to be tested will be determined by the borrower and the Power Supply Division.
(e) The financial forecast shall use the accrual method, as approved by RUS, for analyzing costs and revenues, and, as applicable, compare the economic results of the various alternatives on a present value basis.
(a) Financial forecasts prepared by distribution borrowers shall cover at least a ten-year period, unless a shorter period is authorized by other RUS regulations.
(b) In addition to the requirements set forth in § 1710.300 of this part, financial forecasts prepared by distribution borrowers in support of a loan application shall:
(1) Include expenditures for any maintenance determined to be needed in the current system's operation and maintenance review and evaluation in order to comply with mortgage covenants and prudent utility practice;
(2) Fully explain the basis for the power cost projections used. Generally, the power supplier's most recent forecasted rates shall be used; and
(3) Use RUS Form 325 or computer-generated equivalent reports.
(a) The requirements of this section apply only to financial forecasts submitted by power supply borrowers in support of a loan from RUS. The financial forecast prepared by power supply borrowers shall demonstrate the effects that the addition of generation, transmission and any distribution facilities will have on the power supply borrower's sales, costs, and revenues, and on the cost of power to the member distribution systems.
(b) The financial forecast shall cover a period of 10 years. RUS may request projections for a longer period of time if RUS deems necessary.
(c) Financial forecasts prepared in support of loan applications to finance additional generation capacity shall include a power cost study as set forth in § 1710.303.
(d) In addition to the requirements set forth in § 1710.300, financial forecasts prepared by power supply borrowers shall:
(1) Identify all plans for generation and transmission capital additions and system operating expenses on a year-by-year basis, beginning with the present and running for 10 years, unless a longer period of time has been requested by RUS.
(2) Integrate projections of operation and maintenance expenses associated with existing plant with those of new proposed facilities to determine total costs of system operation as well as the costs of new generation and generation-related facilities;
(3) Provide an in-depth analysis of the regional markets for power if loan feasibility depends to any degree on a borrower's ability to sell surplus power while its system loads grow to meet the planned capacity of a proposed plant;
(4) If not previously submitted, furnish RUS with all material information on operating agreements, ownership agreements, fuel contracts and any other special agreements that affect annual cost projections, as may be required by RUS on a case by case basis; and
(5) Include sensitivity analysis if required by RUS pursuant to § 1710.300(d)(5).
(e) The projections shall be coordinated in advance with RUS so that agreement can be reached on major aspects of the economic studies. These include, but are not limited to, projections of future kW and kWh requirements, RE Act beneficiary loads, electricity prices, revenues from system and off-system power sales, the cost of prospective plant additions, interest and depreciation rates, fuel costs, cost escalation factors, the discount rate, and other factors.
(f) The projections, analysis, and supporting information must be included in a report that will provide RUS with the information needed to:
(1) Understand and compare various power supply plans;
(2) Determine that the facilities to be financed will perform satisfactorily; and
(3) Determine that the overall system is economically viable and the loan is financially feasible and secure.
(a) All applications for financing of additional generation capacity and the associated bulk transmission facilities shall be supported by a power cost
(b) A power cost study shall include the following basic elements:
(1) A study of all reasonably available self-generation, purchased-power, load management, and energy conservation alternatives as set forth in §§ 1710.253 and 1710.254;
(2) A present-value analysis of the costs of the alternatives and their effects on total power costs, covering a period of at least 10 years beyond the projected in-service date of the facilities;
(3) A description of proposed new power-purchase contracts or revisions to existing contracts, and an analysis of the effects on power costs;
(4) Use of sensitivity analyses to determine the vulnerability of the alternatives to a reasonable range of assumptions about fuel costs, failure to achieve projected load growth, changes in operating and financing costs, and other major factors, if the financial forecast is used in support of a loan or loan guarantee that exceeds the smaller of $25 million or 10 percent of the borrower's total utility plant. Individual sensitivity analyses need not be duplicated if they have been included in other materials submitted to RUS; and
(5) Assessment of the financial risks of the various alternatives, especially as between capital-intensive and non-capital-intensive alternatives, under the range of assumptions set forth in paragraph (b)(4) of this section.
(c) Power cost studies must use current, RUS-approved power requirements data, and all major assumptions are subject to RUS approval. Alternative assumptions about projected power requirements may be used, however, in conjunction with the sensitivity analyses required by paragraph (b)(4) of this section.
(a) Loan applicants that do not have outstanding loans from RUS should write to the Rural Utilities Service Administration, United States Department of Agriculture, Washington, DC 20250-1500. A field or headquarters staff representative may be assigned by RUS to visit the applicant and discuss its financial needs and eligibility. Borrowers that have outstanding loans should contact their assigned RUS general field representative (GFR) or, in the case of a power supply borrower, the Director, Power Supply Division. Borrowers may consult with RUS field representatives and headquarters staff, as necessary.
(b) Before submitting an application for an insured loan the borrower shall ascertain from RUS the amount of supplemental financing required, as set forth in § 1710.110. If the borrower is applying for either a municipal rate loan subject to the interest rate cap or a hardship rate loan, the application must provide a preliminary breakdown of residential consumers either by county or by census tract. Final data must be included with the application. See § 1710.401(a)(8).
(a)
(1)
(i) The need for flood hazard insurance;
(ii) Breakdown of requested loan funds by state;
(iii) A listing of the counties served by the borrower;
(iv) A listing of threatened actions by third parties that could adversely affect the borrower's financial condition, including annexations or other actions affecting service territory, loads, or rates; and
(v) A listing of pending regulatory proceedings pertaining to the borrower.
(2)
(i) The requested loan type, loan amount, loan term, final maturity and method of amortization (§ 1710.110(b));
(ii) The sources and amounts of any supplemental or other financing;
(iii) Authorization for RUS to release appropriate information to supplemental or other lender(s), and authorization for these lenders to release appropriate information to RUS; and
(iv) For an insured loan, a statement of whether the application is for a municipal rate loan, with or without the interest rate cap, or a hardship loan. If the application is for a municipal rate loan, the board resolution must indicate whether the borrower intends to elect the prepayment option. See 7 CFR 1714.4(c).
(3)
(i)
(ii)
(iii)
(iv)
(4)
(5)
(6)
(7)
(i)
(A) A listing of the counties where the borrower's existing electric facilities and new facilities are or will be located;
(B) A listing and description of all real property owned by the borrower; and
(C) An opinion of the borrower's counsel certifying that the property schedule is complete and adequate for inclusion in a security instrument to be executed by the borrower to secure an RUS loan.
(ii)
(8)
(9)
(10)
(11)
(12)
(i)
(ii)
(13)
(i)
(ii)
(A) Report the borrower's delinquent account to a credit bureau;
(B) Assess additional interest and penalty charges for the period of time that payment is not made;
(C) Assess charges to cover additional administrative costs incurred by the Government to service the borrower's account;
(D) Offset amounts owed directly or indirectly to the borrower under other Federal programs;
(E) Refer the borrower's debt to the Internal Revenue Service for offset against any amount owed to the borrower as an income tax refund;
(F) Refer the borrower's account to a private collection agency to collect the amount due; and
(G) Refer the borrower's account to the Department of Justice for collection.
(14)
(i) The borrower's articles of incorporation currently in effect, as filed with the appropriate state office, setting forth the borrower's corporate purpose; and
(ii) The bylaws currently in effect, as adopted by the borrower's board of directors, setting forth the manner by which the borrower's organization will be governed and regulated.
(15)
(16)
(17)
(ii) A power supply borrower shall submit a schedule of its wholesale rates currently in effect. Any changes in this schedule are subject to RUS approval.
(18)
(b)
(c)
(1) Along with the loan application, the borrower shall submit to RUS a Long-Range Financial Forecast (LRFF), that meets the requirements of subpart G of this part. The forecast shall include any sensitivity analysis or analysis of alternative scenarios required by subpart G of this part, and shall be accompanied by a certified board resolution adopting, and indicating the board of directors' approval of, the LRFF, and directing management to take whatever steps may be necessary, including the filing for rate increases, to achieve the TIER goals set forth in the LRFF.
(2) Prior to RUS's acceptance of the loan application, the borrower shall submit to RUS and receive approval of:
(i) Power Requirements Study (PRS) that meets the requirements of subpart E of this part, and is accompanied by a certified board resolution adopting, and indicating the board of directors' approval of, the PRS.
(ii) Construction Work Plan (CWP) and/or related engineering and cost studies that meets the requirements of subpart F of this part, and is accompanied by a certified board resolution adopting, and indicating the board of directors' approval of, the CWP and/or engineering and cost studies.
(iii) Borrower's Environmental Report (BER), or other environmental information as required by 7 CFR part 1794.
(iv) Demand Side Management Plan and/or Integrated Resource Plan, if required by subpart H of this part.
(d)
(2) To facilitate loan review, RUS urges borrowers to ensure that their applications contain all of the information required by this section before submitting the application to RUS. Borrowers may consult with RUS field representatives and headquarters staff as necessary for assistance in preparing loan applications.
(3) RUS may, in its discretion, return an application to the borrower if the application is not materially complete to the satisfaction of RUS within 10 months of receipt of any of the items listed in paragraph (a) or (b) of this section. RUS will generally advise the borrower in writing at least 2 months prior to returning the application as to the elements of the application that are not complete.
(4) If an application is returned, an application for the same loan purposes will be accepted by RUS if satisfactory evidence is provided that all of the information required by this section will be submitted to RUS within a reasonable time. An application for loan purposes included in an application previously returned to the borrower will be treated as an entirely new application.
(e)
(f)
(g)
Additional requirements for insured electric loans are set forth in 7 CFR part 1714.
(a) The borrower is responsible for ensuring that the loan documents required for supplemental financing pursuant to § 1710.110 are executed in a timely fashion. These documents are subject to RUS approval.
(b) Security. Any security offered by the borrower to a supplemental lender is subject to RUS approval.
(a) A loan is approved when the Administrator signs the administrative findings.
(b) If the loan is not approved, RUS will notify the borrower of the reason.
Following approval of a loan, RUS will forward the loan documents to the borrower for execution, delivery, recording, and filing, as directed by RUS.
7 U.S.C. 901
The definitions set forth in 7 CFR 1710.2 are applicable to this part, unless otherwise stated. References to specific RUS forms and other RUS documents, and to specific sections of such forms and documents, shall include the corresponding forms, documents, sections and lines in any subsequent revisions of these forms and documents.
(a)
(b)
(a)
(b)
(c)
(a) RUS will post on the RUS website, Electric Program HomePage, a schedule of interest rates for municipal rate loans at the beginning of each calendar quarter. The schedule will show the year of maturity and the applicable interest rates in effect for all funds advanced on municipal rate loans during the calendar quarter and all interest rate terms beginning in the quarter. All interest rates will be adjusted to the nearest one eighth of one percent (0.125 percent).
(b) The rate for interest rate terms of 20 years or longer will be the average of the 20 year rates published in the Bond Buyer in the 4 weeks specified in paragraph (d) of this section for the “11-Bond GO Index” of Aa rated general obligation municipal bonds, or the successor to this index.
(c) The rate for terms of less than 20 years will be the average of the rates published in the Bond Buyer in the 4 weeks specified in paragraph (d) of this section in the table of “Municipal Market Data—General Obligation Yields” for Aa rated bonds, or the successor to this table, for obligations maturing in the same year as the interest rate term selected by the borrower.
(d) The interest rates on municipal rate loans shall not exceed the interest rate determined under section 307(a)(3)(A) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1927(a)(3)(A)) for Water and Waste Disposal loans. The method used to determine this rate is set forth in the regulations of the Farmers Home Administration (FmHA) at 7 CFR 1942.17(f) (1) and (4). Pursuant to the FmHA rule, the interest rates are set using as guidance the average of the Bond Buyer Index for the four weeks prior to the first Friday of the last month before the beginning of the quarter. Information about the Bond Buyer is available by writing Bond Buyer, One State Street Plaza, New York, NY 10004-1549, or by calling 1-800-982-0633.
(a)
(1) The initial interest rate term will begin on the date of the advance. All rollover interest rate terms will begin on the first day of a month, and except for the last interest rate term to final maturity, shall end on the last day of a month. All terms except for the initial interest rate term on an advance, and the last term to final maturity shall be in yearly increments.
(2) The following limits apply to the number of advances of funds that may be made to the borrower on any municipal rate loan:
(i) If the loan period is 2 years or less, not more than 6 advances;
(ii) If the loan period is more than 2 years, not more than 8 advances.
(3) For the initial interest rate term of an advance, a letter from an authorized official of the borrower indicating
(4) At the end of any interest rate term, the borrower shall pay all accrued interest and principal balance then due, and either prepay the remaining principal of the advance at face value, or roll over the remaining principal for a new term, provided that no interest rate term may end later than the date of the final maturity.
(i) If the borrower elects to prepay all or part of the remaining principal of the advance at face value, it must notify the Director of the appropriate Regional Division or the Power Supply Division in writing not later than 20 days before the rollover maturity date.
(ii) If the borrower wishes to elect a new interest rate term that is different from the term previously selected, it must notify RUS in writing of the new term not later than 20 days before the end of the current term. The election of the new term shall be addressed to the Director, Financial Operations Division, Rural Utilities Service, Washington, DC 20250-1500.
(iii) If the borrower fails to notify RUS within the timeframes set out in this paragraph of its intention to prepay or elect a different interest rate term, RUS will automatically roll over the remaining principal for the shorter of, and at the interest rate applicable to:
(A) A period equal in length to the term that is expiring; or
(B) The remaining period to final maturity.
(b)
Except as provided in paragraph (c) of this section, the municipal interest rate may not exceed 7 percent on a loan advance to a borrower primarily engaged in providing retail electric service if the borrower meets, at the time of loan approval, either the consumer density test set forth in paragraph (a) of this section, or both the rate disparity test for the interest rate cap and the consumer income test set forth in paragraph (b) of this section.
(a)
(b)(1)
(2)
(i) To qualify under the consumer income test, the borrower must include in its loan application information about the location of its residential consumers. The borrower must provide to RUS, based on the most recent data available at the time of loan application, either the number of consumers in each county it serves or the number of consumers in each census tract it serves. Using the most recently published decennial census data on income from the Bureau of the Census, RUS will compare, on a weighted average basis, the average per capita and median household income of the counties
(ii) In cases where conditions have substantially changed so that the decennial census data no longer accurately describes the economic conditions of the borrower's consumers, the borrower may provide RUS with more current income data from a reliable source such as a State agency. The Administrator has the sole discretion to determine whether such data submitted by the borrower is sufficient to determine whether the borrower qualifies under the consumer income test.
(3)
(c)
Except as provided in paragraph (d) of this section, the Administrator shall make an insured electric loan for eligible purposes at the 5 percent hardship rate to a borrower primarily engaged in providing retail electric service if the borrower meets, at the time of loan approval, both the rate disparity test for hardship and the consumer income test described in paragraph (a) of this section; or the extremely high rates test set forth in paragraph (b) of this section. A loan at the 5 percent hardship rate may also be made to any borrower pursuant to paragraph (c) of this section who, in the sole discretion of the Administrator, has experienced a severe hardship. The Administrator may not require a loan from a supplemental source in connection with a hardship rate loan.
(a)(1)
(2)
(3)
(b)
(c)
(d)
This section sets out provisions for prepayment of insured electric loans at face value. Provisions for discounted prepayment of RUS loans are set out in 7 CFR part 1786.
(a)
(1)
(2)
(b)
The borrower shall request advances of funds as needed. Advances are subject to RUS approval and must be requested in writing on RUS Form 595 or an RUS approved equivalent. Funds will not be advanced until the Administrator has received satisfactory evidence that the borrower has met all applicable conditions precedent to the advance of funds, including evidence that the supplemental financing required under 7 CFR part 1710 and any concurrent loan guaranteed by RUS are available to the borrower under terms and conditions satisfactory to RUS.
(a) For loans approved on or after February 21, 1995, the fund advance period begins on the date of the loan note and is one year longer than the loan period, but not less than 4 years. For example, the fund advance period for a loan with a 2-year loan period terminates automatically 4 years after the date of the loan note; a loan with a 4-year loan period terminates automatically 5 years after the date of the loan note. The Administrator may extend the fund advance period on any loan if the borrower meets the requirements of paragraph (c) of this section. As defined in 7 CFR 1710.2, the loan period begins on the date shown on page 1 of RUS Form 740c submitted with the loan application.
(b) For loans approved on or after June 1, 1984, and before February 21, 1995, the fund advance period begins on the date of the loan contract, or the most recent amendment thereto, and terminates automatically 4 years from the date of the loan contract, or the most recent amendment thereto, except as provided in paragraph (c) of this section.
(c) The Administrator may agree to an extension of the fund advance period for loans approved on or after June 1, 1984, if the borrower demonstrates to the satisfaction of the Administrator that the loan funds continue to be needed for approved loan purposes (i.e., facilities included in an RUS approved construction work plan). Policies for extension of the fund advance period following certain mergers, consolidations, and transfers of systems substantially in their entirety are set forth in 7 CFR 1717.156.
(1) To apply for an extension, the borrower must send to RUS, at least 120 days before the automatic termination date, the following:
(i) A certified copy of a board resolution requesting an extension of the Government's obligation to advance loan funds;
(ii) Evidence that the unadvanced loan funds continue to be needed for approved loan purposes; and
(iii) Notice of the estimated date for completion of construction.
(2) In the case of financial hardship, as determined by the Administrator, RUS may agree to an extension of the fund advance period even though the borrower has failed to meet the 120-day requirement of paragraph (c)(1) of this section.
(3) If the Administrator approves a request for an extension, RUS will notify the borrower in writing of the extension and the terms and conditions thereof. An extension will be effective only if it is obtained in writing prior to the automatic termination date.
(d) Advances of funds from loans approved before June 1, 1984, are generally made during the first 6 years of the note.
(e) RUS will rescind the balance of any loan funds not advanced to a borrower as of the final date approved for advancing funds.
(a) Except as set forth in paragraph (b) of this section, concurrent loan funds will be advanced in the following order:
(1) 50 percent of the RUS insured loan funds;
(2) 100 percent of the supplemental loan funds;
(3) The remaining amount of the RUS insured loan funds.
(b) At the borrower's request and with RUS approval, all or part of the supplemental loan funds may be advanced before funds in paragraph (a)(1) of this section.
(a) For insured loans approved on or after February 21, 1995:
(1) Amortization of funds advanced during the first 2 years after the date of the note shall begin no later than 2 years from the date of the note. Except as set forth in paragraph (a)(2) of this section, amortization of funds advanced 2 years or more after the date of the note shall begin with the scheduled loan payment billed in the month following the month of the advance.
(2) For advances made 2 years or more after the date of the note, the Administrator may authorize deferral of amortization of principal for a period of up to 2 years from the date of the advance if the Administrator determines that failure to authorize such deferral would adversely affect either the Government's financial interest or the achievement of the purposes of the RE Act.
(b) For insured loans approved before February 21, 1995, amortization of principal shall begin 2 years after the date of the note for advances made during the first and second years of the loan, and 4 years after the date of the note for advances made during the third and fourth years.
(a) A borrower may request rescission of a loan with respect to any funds unadvanced by submitting a certified copy of a resolution by the borrower's board of directors.
(b) RUS may rescind loans pursuant to § 1714.56.
(c) Borrowers who prepay RUS loans at a discounted present value pursuant to 7 CFR part 1786, subpart F, are required to rescind the unadvanced balance of all outstanding electric notes pursuant to 7 CFR 1786.158(j).
7 U.S.C. 901
(a) This subpart establishes RUS policies and procedures for mergers of electric borrowers. These policies and procedures are intended to provide borrowers with the flexibility to negotiate and enter into mergers that offer advantages to the borrowers and to rural communities, and adequately protect the integrity and credit quality of RUS loans and loan guarantees.
(b) Consistent with prudent lending practices, the maintenance of adequate security for RUS loans and loan guarantees, and the objectives of the Rural Electrification Act of 1936, as amended, (7 U.S.C. 901
(c) Pursuant to the loan documents and RUS regulations, certain mergers are subject to RUS approval. See § 1717.615.
(d) Since RUS must take action in order to advance funds and otherwise conduct business with a successor, RUS encourages borrowers to consult RUS early in the process regardless of whether RUS approval of the merger is required. RUS will provide technical assistance and guidance to borrowers to help expedite the processing of their requests and to help resolve potential problems early in the process.
The definitions set forth in 7 CFR 1710.2 are applicable to this subpart unless otherwise stated. In addition, for the purpose of this subpart, the following terms shall have the following meanings:
(1) Sells or intends to sell electric power and energy at retail;
(2) At one time had an outstanding loan made or guaranteed by RUS, or its predecessor the Rural Electrification Administration (REA) for rural electrification; and
(3) Either repaid such loans at face value or prepaid pursuant to 7 CFR part 1786.
(2) A merger where one company is absorbed by another, the former ceasing to exist as a separate business entity, and the latter retaining its own identity and acquiring the assets, liabilities, franchises and powers of the former; or
(3) A transfer of mortgaged property by one company to another where the transferee acquires substantially as an entirety the assets, liabilities, franchises, and powers of the transferor.
In order for RUS to advance funds, send bills, and otherwise conduct business with a successor, the documents listed in this section must be submitted to RUS regardless of the need for RUS approval of the merger. Borrowers are responsible for ensuring that these documents are received by RUS in timely fashion. In cases of mergers that require RUS approval, or cases where borrowers must submit requests for transitional assistance, the documents listed in this section may be combined with the documents required by §§ 1717.157 and/or 1717.160 where appropriate.
(a) Prior to the effective date, borrowers must submit:
(1) A transmittal letter on corporate letterhead signed by the manager of each active borrower that is a party to the proposed merger indicating the borrower's intention to merge and tentative timeframes, including the proposed effective date;
(2) An original certified board resolution from each party to the proposed merger affirming the board's support of the merger;
(3) All documents necessary to evidence the merger pursuant to applicable law. Examples include plan of merger, articles of merger, amended articles of incorporation, bylaws, and notices and filings required by law. These documents may be copies of documents filed elsewhere, unless otherwise specified by RUS; and
(4) A letter addressed to the Administrator from the counsel of at least one of the active borrowers briefly describing the merger and indicating the relevant statutes under which the merger will be consummated.
(b) On or after the effective date, borrowers must submit:
(1) An opinion of counsel from the successor addressing, among other things, any pending litigation, proper authorization and consummation of the merger, proper filing and perfection of RUS' security interest, and all approvals required by law. RUS will provide the form of the opinion of counsel to the successor;
(2) A letter signed by the manager of the successor advising RUS of the effective date of the merger; the corporate name, address, and phone number; the names of the officers of the successor; and the taxpayer identification number; and
(3) Evidence of proper filing and perfection of RUS' security interest, as instructed by RUS, and an executed loan contract.
RUS recognizes that short-term financial stresses can follow even the most beneficial mergers. To help stabilize electric rates, enhance the credit quality of outstanding loans made or guaranteed by the Government, and otherwise ease the transition period before the long-term efficiencies and economies of a merger can be realized, RUS may approve one or more types of transitional assistance to a successor under the conditions set forth in this part.
Requests for transitional assistance in connection with new loans may be submitted to RUS no later than the loan application.
(a)
(2) For any subsequent loans approved during those 5 years, RUS may offer loan processing priority. In reviewing requests for loan processing priority on subsequent loans, RUS will consider the loan authority for the fiscal year, the borrower's projected cash flows, its electric rates and rate disparity, and the likely mitigation effects of priority loan processing.
(3) Loan processing priority is available following any merger where at least one of the merging parties is an active borrower.
(b)
(2) Waiver of supplemental financing may be available if:
(i) All parties to the merger are active distribution borrowers,
(ii) At least one of the merging parties is an active distribution borrower, all merging parties are either active distribution borrowers or former distribution borrowers,
(c)
(2) A longer reimbursement period may be available if:
(i) All parties to the merger are active distribution borrowers,
(ii) At least one of the merging parties is an active distribution borrower, all merging parties are either active distribution borrowers of former distribution borrowers,
Requests for transitional assistance affecting new and preexisting loans must be received by RUS no later than 2 years after the effective date.
(a)
(2) Section 12 deferment may be available following any merger where at least one of the merging parties is an active borrower.
(b)
(1) A phase-in plan for coverage ratios must provide a pro forma level for each ratio during each year of the phase-in period and be supported by a financial forecast covering a period of not less than 10 years from the effective date of the merger. The plan must demonstrate that a minimum TIER level of 1.00 will be achieved in each year, that trends will be generally favorable, that the borrower will achieve the levels required in its loan documents and RUS regulations by the end of the phase-in period, and that these levels will be maintained in subsequent years.
(2) In reviewing phase-in plans for coverage ratios, RUS will review rates, rate disparity, and likely mitigating effects of the proposed phase-in plan.
(3) The borrower is responsible for obtaining approvals of supplemental lenders.
(4) Upon RUS approval of a phase-in plan, the levels in that plan will be substituted for the levels required in the borrower's preexisting loan documents and will be incorporated in any new loan or security documents.
(5) A phase in plan for coverage ratios may be available if:
(i) All parties to the merger are active distribution borrowers,
(ii) At least one of the merging parties is an active distribution borrower, all merging parties are either active distribution borrowers or former distribution borrowers, and the merger is effective after December 19, 1996.
The fund advance period for an insured loan, which is the period during which RUS may advance loan funds to a borrower, terminates automatically after a specific period of time. See 7 CFR 1714.56. If, on the effective date the original fund advance period or the fund advance period as extended pursuant to 7 CFR 1714.56(c), on any preexisting RUS loan to any of the active borrowers involved in a merger has not terminated, such fund advance period shall be automatically lengthened by 2 years. On the borrower's request RUS will prepare documents necessary for the advance of loan funds. RUS will prepare documents for the borrower's execution that will reflect this extension and will provide the legal authority for RUS to advance funds to the successor.
(a) If the merger requires RUS approval, the borrower should, where possible, indicate that it desires transitional assistance at the time it requests approval of the merger. The formal request for transitional assistance
(1) Transmittal letter(s) formally listing the types of transitional assistance requested. If the request is submitted before the effective date, a transmittal letter must be signed by the manager of each party to the transaction. If the request is submitted on or after the effective date, a transmittal letter must be signed by the manager of the successor. Transmittal letter(s) must be signed originals on corporate letterhead stationery;
(2) Board resolution(s). If the request is submitted before the effective date, a separate board resolution must be submitted from each entity involved in the merger. If the request is submitted on or after the effective date, a board resolution from the successor must be submitted. Each board resolution must be a certified original;
(3) A merger plan, financial forecasts, and any available studies such as net present value analyses showing the anticipated costs and benefits of the merger and likely timeframes for the merger. The merger plan must clearly identify those benefits that cannot be achieved without a merger, and those benefits that can be achieved through other means;
(4) If the transitional assistance requires RUS approval, the type and extent of the mitigation that the transitional assistance is expected to provide; and
(5) Other information that may be relevant.
(b) Borrowers are responsible for ensuring that requests for transitional assistance are complete and sound in form and substance when they are submitted to RUS. After submitting a request, borrowers shall promptly notify RUS of any changes or events that materially affect the request or any information in the request.
(c) In considering whether to approve requests for transitional assistance, RUS will evaluate the costs and benefits of the merger; the type and extent of the likely transitional stress; whether the transitional assistance requested is likely to materially mitigate such stress; and the likely impacts on electric rates and on the security of RUS loans. Review factors applicable to each type of transitional assistance are set forth in §§ 1717.154-1717.156.
In some cases, an active distribution borrower may merge with a borrower that has prepaid RUS debt at a discount pursuant to 7 CFR part 1786, and whose eligibility for future RUS financing is thereby restricted. During the period when the restrictions on future financing are in effect, the successor will be eligible for RUS loans to finance facilities to serve consumers located in the territory that was served by the active distribution borrower immediately prior to the effective date, provided that other requirements for loan eligibility are met.
If a proposed merger requires RUS approval according to RUS regulations and/or the loan documents executed by any of the active borrowers involved, the application must be submitted to RUS not later than 90 days prior to the effective date of the proposed borrower action. A distribution borrower should consult with its assigned RUS general field representative, and a power supply borrower with the Director, Power Supply Division for general information prior to submitting the request.
An application for RUS approval of a merger must include the documents listed in this section. Documents listed in this section may be combined with the documents required by §§ 1717.152 and/or 1717.157 where appropriate.
(a)
(b)
(c)
(d)
(e)
(f)
(a) Borrowers are responsible for ensuring that their applications for RUS approval of a merger are complete and sound in form and substance when they are submitted to RUS. After submitting an application, borrowers shall promptly notify RUS of any changes or events that materially affect the application or any information in the application.
(b) In reviewing borrower requests for approval of mergers, RUS will consider the likely effects of the action on the ability of the successor to provide reliable electric service at reasonable cost to RE Act beneficiaries and on the security of outstanding RUS loans. Among the factors RUS will consider are whether the proposed merger is likely to:
(1) Contribute to greater operating efficiency and financial soundness;
(2) Mitigate high electric rates and or rate disparity;
(3) Help borrowers to diversify their loads or otherwise hedge risks;
(4) Have beneficial effects on rural economic development in the community served by the borrower, such as diversifying the economic base or alleviating unemployment; and
(5) Provide other benefits consistent with the purposes of the RE Act.
(c) RUS will not approve a merger if, in the sole judgment of the Administrator, such action is likely to have an adverse effect on the credit quality of outstanding loans made or guaranteed by the Government. RUS will thoroughly review each request for approval of such action, including review of the feasibility and security of outstanding Government loans according to the standards in 7 CFR 1710.112 and 1710.113, respectively, and in other RUS regulations.
(d) RUS will keep the borrowers apprised of the progress of their applications.
This subpart contains regulations of the Rural Utilities Service (RUS) implementing provisions of Section 4 of the RE Act (7 U.S.C. 904) which authorize the Administrator to establish terms and conditions of loans and implementing provisions of the RUS wholesale power contracts and other RUS documents which provide for the establishment of rates to be charged by power supply borrowers for the sale of electric power and energy. This subpart contains the general regulations of RUS for the pre-emption, under certain circumstances, which are not exclusive, of the regulation of a power supply borrower's rates by a state regulatory authority under state law and for the exercise of exclusive jurisdiction over rates by RUS pursuant to the RUS documents.
(a) RUS makes and guarantees loans to borrowers to bring electric service to persons in rural areas. RUS requires, as a condition to making or guaranteeing any loans to power supply borrowers, that the borrower enter into RUS wholesale power contracts with its several members and assign and pledge such contracts as security for the repayment of loans made or guaranteed by RUS and for other loans which, pursuant to the RE Act, RUS has permitted to be secured pursuant to the RUS mortgage. The RUS wholesale power contract requires, among other matters, that the rates charged for power and energy sold thereunder produce revenues sufficient to enable the power supply borrower to make payments on account of all indebtedness of the power supply borrower. The Administrator relies upon the RUS wholesale power contracts together with other RUS documents to find and certify, as required in section 4 of the RE Act (7 U.S.C. 904), that the security for the loan is reasonably adequate and the loan will be repaid within the time agreed.
(b) RUS requires power supply borrowers to take such actions as may be necessary to charge rates for the sale of electric power and energy which are sufficient to pay the principal and interest on loans made or guaranteed by RUS in a timely manner and to meet the requirements of the RUS wholesale power contract and other RUS documents.
(c) With respect to power supply borrowers which are not subject to rate regulation by a state regulatory authority, RUS requires that such borrowers establish rates and obtain RUS approval of such rates as required by the terms of the RUS wholesale power contract and other RUS documents.
(d) With respect to power supply borrowers which are subject to regulation by a state regulatory authority, RUS does not make or guarantee a loan for the construction, operation or enlargement of any generating plant or transmission facility unless the consent of the state regulatory authority having jurisdiction in the premises is first obtained.
(e) Pursuant to applicable provisions of state law state regulatory authorities regulate many aspects of a power supply borrowers business activities, including such matters as the setting of wholesale electric rates, the borrowing of money, and the mortgaging of property. A state regulatory authority's jurisdiction over the rates charged by a power supply borrower shall be pre-empted where the Administrator has determined that such jurisdiction has compromised Federal interests, including without limitation, the ability of the borrower to repay its secured loans in accordance with the terms of the RUS documents. Thereupon, RUS shall, pursuant to the RUS documents, exercise exclusive jurisdiction over the rates charged by a power supply borrower.
(a)
(b)
(a) Pursuant to the terms of the RUS documents each power supply borrower shall establish and adjust rates for the sale of electric power and energy in such a manner as to assure that the borrower will be able to make required payments on secured loans.
(b) Pursuant to the terms of the RUS wholesale power contract, the Board of Directors or Board of Trustees of the power supply borrower shall review rates not less frequently than once each calendar year and revise its rates as therein set forth.
(c) Pursuant to the terms of the RUS mortgage, each power supply borrower must design its rates as therein set forth and must give 90 days prior notice to RUS of any proposed change in its general rate structure.
(a) In the event that rate revisions required by the terms of the RUS wholesale power contract or other RUS documents may be subject to the approval of a state regulatory authority, the power supply borrower shall seek such required approval in a timely manner.
(b) RUS recognizes the need of state regulatory authorities for documents, information and records for use in connection with an application for rate approval and will consider any reasonable request by a borrower or a state regulatory authority for such documents, information and records. The failure of RUS to provide requested documents, information or records shall not limit any rights of RUS including the right with respect to pre-emption of the state regulatory authority as provided in this subpart.
(c) In the event that the state regulatory authority shall fail to act favorably upon the borrower's application for rate increases required by terms of the RUS wholesale power contract or other RUS documents, the borrower shall pursue such legal and administrative appeals as may be available to it, unless RUS shall approve otherwise in writing.
(a)
(b)
(1) Notify the borrower and the state regulatory authority in writing of the determination, indicating the jurisdiction of the state regulatory authority over the rates of the borrower has been pre-empted pursuant to this part and the borrower shall henceforth establish its rates in accordance with the term of the RUS documents.
(2) publish a notice in the
(a) Upon the publication in the
(b) So long as the state regulatory authority shall be pre-empted hereunder, RUS shall be considered the governmental regulatory body with jurisdiction over rates for the purposes of the RUS documents and for the purposes of section 1129(a)(6) of the Bankruptcy Code of 1978, as amended (11 U.S.C. 1129(a)(6)).
(c) If a borrower, which is subject to exclusive RUS rate jurisdiction, shall fail to establish rates in accordance with terms of the RUS wholesale power contract and other RUS documents in
(d) The jurisdiction of the state regulatory authority over the rates of the borrower shall continue to be pre-empted hereunder until the Administrator shall in writing approve the resumption of jurisdiction by the state regulatory authority and publish in the
A state regulatory authority which has been pre-empted as provided in this subpart may continue to exercise jurisdiction, pursuant to applicable provisions of state law, over all other business affairs of the power supply borrower and over the rates of its distribution members: Provided, however, that the state regulatory authority shall treat any RUS approved rate for the power supply borrower as fair and reasonable and shall not in any manner, directly or indirectly, prevent or impede the distribution member from recovering the costs of paying the RUS approved rates to the power supply borrower.
Borrowers may request and RUS may approve rates which do not conform with the requirements of the RUS wholesale power contract and other RUS documents if RUS determines, in its sole discretion, that such approval is in the interests of RUS. If RUS approval is granted prior to pre-emption hereunder, and if the state regulatory authority shall have approved such rates, then, so long as RUS's approval of the nonconforming rates remains in effect, the jurisdiction of the state regulatory authority over the rates of the borrower shall not be pre-empted hereunder.
This subpart addresses pre-emption of state law and state regulatory authority in only those specific circumstances herein described. Nothing in this subpart waives, limits, or otherwise affects the explicit pre-emption or pre-emption, which is implicit and shall occur pursuant to the RE Act as a matter of law, of state law or action of a state regulatory authority where such state law or such action compromises Federal interests, including the ability of any borrower, including power supply borrowers, to repay loans made or guaranteed by RUS.
This subpart contains regulations of the Rural Utilities Service (RUS) implementing provisions of section 4 of the RE Act (7 U.S.C. 904) which authorizes the Administrator to establish terms and conditions of loans, and provisions of the RUS documents which provide for the establishment of rates for electric service to be charged by RUS electric borrowers. This subpart contains the general regulations of RUS for the pre-emption of the regulation by a State Regulatory Authority under State law of an RUS borrower's rates and for the exercise by RUS, pursuant to the RUS documents, of exclusive jurisdiction over rates of a borrower by or against whom a case under the Bankruptcy Code of 1978, as amended, has commenced.
(a) RUS makes and guarantees loans to borrowers to bring electric service to persons in rural areas. To accomplish this objective, RUS normally requires, as a condition to making or guaranteeing any loans to an electric borrower, that the borrower execute
(b) RUS requires borrowers to take such actions as may be necessary to establish rates for electric service which are sufficient to pay the principal of and interest on the loans made or guaranteed by RUS in a timely manner and to meet the requirements of the RUS documents.
(c) With respect to borrowers whose rates are not regulated by a State Regulatory Authority, RUS requires that such borrowers establish rates and to obtain RUS approval of such rates as required by the RUS documents.
(d) To protect Federal interests, including without limitation the ability of the borrower to repay RUS loans, RUS's policy is to exercise, pursuant to the RUS documents, exclusive jurisdiction over the rates for electric service charged by a borrower by or against whom a case under the Bankruptcy Code of 1978, as amended, has commenced.
(a)
(b)
Each borrower shall establish and adjust rates for electric service as set forth in the RUS documents to assure that the borrower will be able to make required payments on secured loans and to otherwise meet the terms of the RUS documents.
State Regulatory Authority jurisdiction over an RUS borrower's rates shall be pre-empted by the RE Act and RUS shall have exclusive jurisdiction over the borrower's rates:
(a) On October 19, 1990, with respect to any borrower by or against whom a case under the Bankruptcy Code of 1978, as amended, was commenced prior to and remains outstanding on October 19, 1990; and
(b) With respect to all other borrowers, upon the filing of a petition by or against the borrower commencing a case under the Bankruptcy Code of 1978, as amended.
(a) Upon the pre-emption of State Regulatory Authority as provided in this subpart, RUS will exercise exclusive jurisdiction over the rates of the borrower pursuant to the terms of the RUS documents.
(b) So long as the State Regulatory Authority shall be pre-empted hereunder, RUS shall be considered the governmental regulatory body with jurisdiction over rates for all purposes, including for the purposes of the RUS documents and for the purposes of section 1129(a)(6) of the Bankruptcy Code of 1978, as amended (11 U.S.C. 1129(a)(6)).
(c) RUS shall, pursuant to the terms of the RUS documents, exercise exclusive jurisdiction over the rates of the borrower until the Administrator shall in writing approve the resumption of jurisdiction by the State Regulatory Authority. The Administrator shall approve resumption only after determining that such jurisdiction shall be exercised in a manner consistent with Federal interests.
This subpart addresses pre-emption of State law and State Regulatory Authority upon the filing of a petition by or against the borrower commencing a case under the Bankruptcy Code of 1978, as amended. Nothing in this subpart waives, limits, or otherwise affects the explicit pre-emption or pre-emption, which is implicit and shall occur pursuant to the RE Act as a matter of law, of State law or action of a State Regulatory Authority where such State law or such action compromises Federal interests, including the ability of any borrower to repay loans made or guaranteed by RUS.
(a)
(b)
(c)
(a) The approvals and exceptions to controls conveyed by this subpart apply only to controls and approval rights normally included in RUS loan documents dated prior to January 29, 1996. They do not apply to special controls and approval requirements included in loan documents or other agreements executed between a borrower and RUS that relate to individual problems or circumstances specific to an individual borrower.
(b) The approvals and exceptions to controls granted by RUS in this subpart shall not in any way affect the rights of other co-mortgagees under the mortgage or their loan contracts.
Terms used in this subpart that are not defined in this section have the meanings set forth in 7 CFR part 1710. In addition, for the purposes of this subpart:
(a)
(1) Construction, procurement, or leasing of generating facilities if the combined capacity of the facilities to be built, procured, or leased, including any future facilities included in the planned project, will exceed the lesser of 5 megawatts or 30 percent of the borrower's equity;
(2) Acquisition or leasing of existing electric facilities or systems in service whose purchase price, or capitalized value in the case of a lease, exceeds 10 percent of the borrower's net utility plant; and
(3) Construction, procurement, or leasing of electric facilities to serve a customer whose annual kWh purchases or maximum annual kW demand in the foreseeable future is projected to exceed 25 percent of the borrower's total kWh sales or maximum kW demand in the year immediately preceding the acquisition or start of construction.
(b)
(c)
(a) All borrowers are required to maintain up-to-date long-range engineering plans and construction work plans (CWPs) in form and substance as set forth in 7 CFR part 1710, subpart F.
(b) Applications for financing from RUS must be supported by a long-range engineering plan and CWP approved by RUS.
(c) RUS approval is not required for long-range engineering plans and CWPs if the borrower does not intend to seek RUS financing for any of the facilities, equipment or other purposes included
All borrowers, regardless of the source of funding, are required to comply with applicable RUS requirements with respect to system design, construction standards, and the use of RUS accepted materials. Borrowers must comply with applicable RUS requirements with respect to plans and specifications only if the construction or procurement will be financed by RUS. These requirements are set forth in other RUS regulations, especially in 7 CFR parts 1724 and 1728.
All borrowers are encouraged to use the standard forms of contracts promulgated by RUS for construction, materials, equipment, engineering services, and architectural services, regardless of the source of funding for such construction and services. Borrowers are required to use these standard forms of contracts only if the construction, procurement or services are financed by RUS, and only to the extent required by RUS regulations. RUS requirements with respect to such standard forms of contract are set forth in 7 CFR part 1724 for architectural and engineering services, and in 7 CFR part 1726 for construction, materials, and equipment.
Borrowers must follow RUS requirements regarding bidding for contracts for construction, materials, and equipment only if financing of the construction or procurement will be provided by RUS. These requirements are set forth in 7 CFR part 1726.
(a)
(b)
(c)
(2) Any amendment to a schedule or exhibit contained in any power supply arrangement subject to RUS approval, which merely has the effect of either altering a list of interconnection or delivery points or changing the value of a variable term (but not the formula itself) contained in a formulary rate or charge is deemed approved.
(3) The provisions of this paragraph (c) apply regardless of whether the borrower is a seller or purchaser of the services furnished by the contracts or arrangements, and regardless of whether or not a Federal power marketing agency is a party to any of them.
(d)
(e)
(a) If a borrower's mortgage or loan contract grants RUS the unconditioned right to approve the employment and/or the employment contract of the general manager of the borrower's system, such approval is hereby granted provided that the borrower is in compliance with all provisions of its loan documents and any other agreements with RUS.
(b) If a borrower is in default with respect to any provision of its loan documents or any other agreement with RUS:
(1) Such borrower, if directed in writing by RUS, shall replace its general manager within 30 days after the date of such written notice; and
(2) Such borrower shall not hire a general manager without prior written approval by RUS.
If a borrower's mortgage or loan contract requires the borrower to obtain approval from RUS for compensation provided to members of the borrower's board of directors, such requirement is hereby waived.
(a) If a borrower's mortgage or loan contract requires the borrower to obtain approval from RUS before incurring expenses for legal, accounting, supervisory (other than for the management and operation of the borrower's electric system, see § 1717.608(d)), or other similar services, such approval is hereby granted. However, while expenditures for accounting do not require RUS approval, the selection of a certified public accountant by the borrower to prepare audited reports required by RUS remains subject to RUS approval.
(b) If a borrower's mortgage or loan contract requires the borrower to obtain approval from RUS before incurring expenses for engineering services, such approval is hereby granted if such services will not be financed by RUS. Approval requirements with respect to engineering services financed by RUS are set forth in other RUS regulations.
If a borrower's mortgage or loan contract gives RUS the authority to approve the bank or other depositories used by the borrower, such approval is hereby granted. However, without the prior written approval of RUS, a borrower shall not deposit funds from loans made or guaranteed by RUS in any bank or other depository that is not insured by the Federal Deposit Insurance Corporation or other Federal agency acceptable to RUS, or in any account not so insured.
If a borrower's mortgage or loan contract requires the borrower to obtain approval from RUS before purchasing data processing equipment or system control equipment, such approval is hereby granted if the equipment will not be financed by RUS.
If a distribution borrower is required by its loan documents to notify RUS in writing of proposed changes in electric rates more than 30 days prior to the effective date of such rates, the required notification period shall be 30 days. Moreover, such notification shall be required only upon the request of RUS.
A distribution or power supply borrower may without the prior approval of RUS, consolidate or merge with any other corporation or convey or transfer the mortgaged property substantially as an entirety if the following conditions are met:
(a) Such consolidation, merger, conveyance or transfer shall be on such terms as shall fully preserve the lien and security of the RUS mortgage and the rights and powers of the mortgagees;
(b) The entity formed by such consolidation or with which the borrower is merged or the corporation which acquires by conveyance or transfer the mortgaged property substantially as an entirety shall execute and deliver to the mortgagees a mortgage supplemental in recordable form and containing an assumption by such successor entity of the due and punctual payment of the principal of and interest on all of the outstanding notes and the performance and observance of every covenant and condition of the mortgage;
(c) Immediately after giving effect to such transaction, no default under the mortgage shall have occurred and be continuing;
(d) The borrower shall have delivered to the mortgagees a certificate of its general manager or other officer, in form and substance satisfactory to each of the mortgagees, which shall state that such consolidation, merger, conveyance or transfer and such supplemental mortgage comply with this section and that all conditions precedent herein provided for relating to such transaction have been complied with;
(e) The borrower shall have delivered to the mortgagees an opinion of counsel in form and substance satisfactory to each of the mortgagees; and
(f) The entity formed by such consolidation or with which the borrower is merged or the corporation which acquires by conveyance or transfer the mortgaged property substantially as an entirety shall be an entity having:
(1) Equity equal to at least 27% of its total assets on a pro forma basis after giving effect to such transaction;
(2) A pro forma TIER of not less than 1.25 and a pro forma DSC of not less than 1.25 for each of the two preceding calendar years;
(3) Net utility plant equal to or greater than 1.0 times its total long-term debt on a pro forma basis.
A distribution borrower may without the prior approval of RUS sell, lease, or transfer any capital asset if the following conditions are met:
(a) The borrower is not in default;
(b) In the most recent year for which data are available, the borrower achieved a TIER of at least 1.25, DSC of at least 1.25, OTIER of at least 1.1, and ODSC of at least 1.1 in each case based on the average or the best 2 out of the 3 most recent years;
(c) The sale, lease, or transfer of assets will not reduce the borrower's existing or future requirements for energy or capacity being furnished to the borrower under any wholesale power contract which has been pledged as security to the government;
(d) Fair market value is obtained for the assets;
(e) The aggregate value of assets sold, leased, or transferred in any 12-month period is less than 10 percent of the borrower's net utility plant prior to the transaction;
(f) The proceeds of such sale, lease, or transfer, less ordinary and reasonable expenses incident to such transaction, are immediately:
(1) Applied as a prepayment of all notes secured under the mortgage equally and ratably;
(2) In the case of dispositions of equipment, materials or scrap, applied to the purchase of other property useful in the borrower's utility business; or
(3) Applied to the acquisition of construction of utility plant.
If a distribution or power supply borrower is required by its loan documents to obtain prior approval from RUS before declaring or paying any dividends, paying or determining to pay any patronage refunds, or retiring any patronage capital, or making any other cash distributions, such approval is hereby given if the following conditions are met:
(a) After giving effect to the distribution, the borrower's equity will be greater than or equal to 30 percent of its total assets;
(b) The borrower is current on all payments due on all notes secured under the mortgage;
(c) The borrower is not otherwise in default under its loan documents; and
(d) After giving effect to the distribution, the borrower's current and accrued assets will be not less than its current and accrued liabilities.
7 U.S.C. 901-950b; Pub.L. 103-354, 108 Stat. 3178 (7 U.S.C. 6941
This subpart sets forth general regulations for implementing and interpreting provisions of the RUS mortgage and loan contract regarding investments, loans, and guarantees made by electric borrowers, as well as the provisions of the Rural Electrification Act of 1936, as amended, including section 312 (7 U.S.C. 901
(a)
(b)
As used in this subpart:
Subsidiary means a company which is controlled by the borrower through ownership of voting stock, and is further defined in 7 CFR 1767.10.
Any borrower not in compliance with all provisions of its mortgage, loan contract, or any other agreements with RUS must, unless the borrower's mortgage, loan contract, or other agreement with RUS specifically provides otherwise with respect to such a borrower:
(a) Obtain prior written approval from the Administrator to invest its own funds or to make loans or guarantees regardless of the aggregate amount of such investments, loans, or guarantees; and
(b) If requested by the Administrator, restructure or reduce the amount of its investments, loans, and guarantees to a level determined by the Administrator, in his or her sole discretion, to be in the financial interest of the government with respect to loan security and/or repayment. If the borrower does not so restructure or reduce its portfolio within a reasonable period of time determined by the Administrator, which shall not exceed 12 months from the date the borrower was notified of the required action, then, upon written notice from RUS, the borrower shall be in default of its RUS loan contract and mortgage.
(a) A borrower in compliance with all provisions of its RUS mortgage, RUS loan contract, and any other agreements with RUS may, without prior written approval of the Administrator, invest its own funds or make loans or guarantees not in excess of 15 percent of its total utility plant without regard to any provision contained in any RUS mortgage or RUS loan contract to the effect that the borrower must obtain prior approval from RUS, provided, however, that the borrower may not,
(b) RUS will not consider requests from borrowers to exclude investments, loans, or guarantees made below the 15 percent level. (Categorical exclusions are set forth in § 1717.655.)
(a) In calculating the amount of investments, loans and guarantees permitted under this subpart, there is excluded from the computation any investment, loan or guarantee of the type which by the terms of the borrower's RUS mortgage or RUS loan contract the borrower may make in unlimited amounts without RUS approval.
(b) Furthermore, the borrower may make unlimited investments, without prior approval of the Administrator, in:
(1) Securities or deposits issued, guaranteed or fully insured as to payment by the United States Government or any agency thereof;
(2) Capital term certificates, bank stock, or other similar securities of the supplemental lender which have been purchased as a condition of membership in the supplemental lender, or as a condition of receiving financial assistance from such lender, as well as any other investment made in, or loans made to, the National Rural Utilities Cooperative Finance Corporation, the Saint Paul Bank for Cooperatives, and CoBank, ACB;
(3) Patronage capital allocated from an electric power supply cooperative of which the borrower is a member; and
(4) Patronage capital allocated from an electric distribution cooperative to a power supply borrower.
(c) Without prior approval of the Administrator, the borrower may also:
(1) Invest or lend funds derived directly from:
(i) Grants which the borrower in not obligated to repay, regardless of the source or purpose of the grant; and
(ii) Loans received from or guaranteed by any Federal, State or local government program designed to promote rural economic development, provided that the borrower uses the loan proceeds for such purpose;
(2) Make loans guaranteed by an agency of USDA, up to the amount of principal whose repayment, with interest, is fully guaranteed; and
(3)(i) Make unlimited investments in and unlimited loans to finance the following community infrastructure that serves primarily consumers located in rural areas as defined in 7 CFR 1710.2, and guarantee debt issued for the construction or acquisition of such infrastructure, up to an aggregate amount of such guarantees not to exceed 20 percent of the borrower's equity:
(A) Water and waste disposal systems;
(B) Solid waste disposal systems;
(C) Telecommunication and other electronic communication systems; and
(D) Natural gas distribution systems.
(ii) In each of the four cases in paragraph (c)(3)(i) of this section, if the system is a component of a larger organization other than the borrower itself (e.g., if it is a component of a subsidiary of the borrower or a corporation independent of the borrower), to be eligible for the exemption the borrower must certify annually that a majority of the gross revenues of the larger organization during the most recent fiscal year came from customers of said system who were located in a rural area.
(d) Also excluded from the calculation of investments, loans and guarantees made by the borrower are:
(1) Amounts properly recordable in Account 142 Customer Accounts Receivable, and Account 143 Other Accounts Receivable;
(2) Any investment, loan, or guarantee that the borrower is required to make by an agency of USDA, for example, as a condition of obtaining financial assistance for itself or any other person or organization;
(3) Investments included in an irrevocable trust for the purpose of funding
(4) Reserves required by a reserve bond agreement or other agreement legally binding on the borrower, that are dedicated to making required payments on debt secured under the RUS mortgage, not to exceed the amount of reserves specifically required by such agreements; and
(5) Investments included in an irrevocable trust approved by RUS and dedicated to the payment of decommissioning costs of nuclear facilities of the borrower.
(e) Grandfathered exclusions. All amounts of individual investments, loans, and guarantees excluded by RUS as of February 16, 1995 shall remain excluded. Such exclusions must have been based on the RUS mortgage, RUS loan contract, regulations, bulletins, memoranda, or other written notice from RUS. Profits, interest, and other returns earned (regardless of whether or not they are reinvested) on such investments, loans and guarantees after February 16, 1995 shall be excluded only if they are eligible for exclusion under paragraphs (a) through (d) of this section. Any new commitments of money to such investments, loans and guarantees shall likewise be excluded only if they are eligible under paragraphs (a) through (d) of this section.
(f) Any investment, loan or guarantee made by a borrower that is not excluded under this section or under § 1717.657(d) shall be included in the aggregate amount of investments, loans and guarantees made by the borrower, regardless of whether RUS has specifically approved the investment, loan or guarantee under § 1717.657(c), or has approved a related transaction (e.g., a lien accommodation).
(a) Any distribution or power supply borrower that meets all of the following criteria is exempted from the provisions of the RUS mortgage and loan contract that require RUS approval of investments, loans, and guarantees, except investments, loans, and guarantees made to extend, add to, or modify the borrower's electric system:
(1) The borrower is in compliance with all provisions of its RUS mortgage, RUS loan contract, and any other agreements with RUS;
(2) The average revenue per kWh for residential service received by the borrower during the two most recent calendar years does not exceed 130 percent of the average revenue per kWh for residential service during the same period for all residential consumers located in the state or states served by the borrower. This criterion applies only to distribution borrowers and does not apply to power supply borrowers. If a borrower serves customers in more than one state, the state average revenue per kWh will be based on a weighted average using the kWh sales by the borrower in each state as the weight. The calculation will be based on the two most recent calendar years for which both borrower and state-wide data are available. If a borrower fails to qualify for an exemption based solely on its failure to meet this criterion on rate disparity, at the borrower's request the Administrator may, at his or her sole discretion, exempt the borrower if he or she finds that the borrower's strengths with respect to the other criteria are sufficient to offset any weakness due to rate disparity;
(3) In the most recent calendar year for which data are available, the borrower achieved an operating TIER of at least 1.0 and an operating DSC of at least 1.0, in each case based on the average of the two highest ratios achieved in the three most recent calendar years;
(4) The borrower's ratio of net utility plant to long-term debt is at least 1.1, based on year-end data for the most recent calendar year for which data are available; and
(5) The borrower's equity is equal to at least 27 percent of its total assets, based on year-end data for the most recent calendar year for which data are available.
(b) While borrowers meeting the criteria in paragraph (a) of this section are exempt from RUS approval of investments, loans and guarantees, they are nevertheless subject to the record-keeping, reporting, and other requirements of § 1717.658.
(c) Any borrower exempt under paragraph (a) of this section that ceases to meet the criteria for exemption shall, upon written notice from RUS, no longer be exempt and shall be subject to the provisions of this subpart applicable to non-exempt borrowers. A borrower may regain its exemption if it subsequently meets the criteria in paragraph (a) of this section, and is so notified in writing by RUS.
(d)(1) A borrower that loses its exemption and is not in compliance with all provisions of its mortgage, loan contract, or any other agreement with RUS may be required to restructure or reduce its portfolio of investments, loans and guarantees as provided in § 1717.653(b). If the borrower's portfolio exceeds the 15 percent level, the borrower will be required to restructure or reduce its portfolio to the 15 percent level or below. For example, if the borrower's mortgage or loan contract has an approval threshold, the borrower may be required to reduce its portfolio to that level, which in many cases is 3 percent of total utility plant.
(2) A borrower that loses its exemption but is in compliance with all provisions of its mortgage, loan contract, and any other agreements with RUS will be required, if its investments, loans and guarantees exceed the 15 percent level, to restructure or reduce its portfolio to the 15 percent level, unless the Administrator, in his or her sole discretion, determines that such action would not be in the financial interest of the government with respect to loan security and/or repayment. (Such borrower is eligible to ask RUS to exclude a portion of its investments under the conditions set forth in § 1717.657(d).)
(3) If a borrower required to reduce or restructure its portfolio does not fully comply within a reasonable period of time determined by the Administrator, which shall not exceed 12 months from the date the borrower was notified of its loss of exemption, then, upon written notice from RUS, the borrower shall be in default of its RUS loan contract and/or RUS mortgage.
(e) By no later than July 1 of each year, RUS will provide written notice to any borrowers whose exemption status has changed as a result of more recent data being available for the qualification criteria set forth in paragraph (a) of this section, or as a result of other reasons, such as corrections in the available data. An explanation of the reasons for any changes in exemption status will also be provided to the borrowers affected.
(a)
(2) Nothing in this section shall in any way affect the Administrator's authority to exercise approval rights over investments, loans, and guarantees made by a borrower that is not in compliance with all provisions of its mortgage, loan contract and any other agreements with RUS.
(b)
(c)
(i) Satisfactory evidence has been provided that the borrower is in compliance with all provisions of its RUS mortgage, RUS loan contract, and any other agreements with RUS;
(ii) The borrower is not in financial workout and has not had its government debt restructured;
(iii) The borrower has equity equal to at least 5 percent of its total assets; and
(iv) After approval of the investment, loan or guarantee, the aggregate of the
(2) Borrower requests for approval to exceed the 15 percent level will be considered on a case by case basis. The requests must be made in writing.
(3) In considering borrower requests, the Administrator will take the following factors into consideration:
(i) The repayment of all loans secured under the RUS mortgage will continue to be assured, and loan security must continue to be reasonably adequate, even if the entire investment or loan is lost or the borrower is required to perform for the entire amount of the guarantee. These risks will be considered along with all other risks facing the borrower, whether or not related to the investment, loan or guarantee;
(ii) In the case of investments, the investment must be made in an entity separate from the borrower, such as a subsidiary, whereby the borrower is protected from any liabilities incurred by the separate entity, unless the borrower demonstrates to the satisfaction of the Administrator that making the investment directly rather than through a separate entity will present no substantial risk to the borrower in addition to the possibility of losing all or part of the original investment;
(iii) The borrower must be economically and financially sound as indicated by its costs of operation, competitiveness, operating TIER and operating DSC, physical condition of the plant, ratio of equity to total assets, ratio of net utility plant to long-term debt, and other factors; and
(iv) Other factors affecting the security and repayment of government debt, as determined by the Administrator on a case by case basis.
(4) If the Administrator approves an investment, loan or guarantee, such investment, loan or guarantee will continue to be included when calculating the borrower's ratio of aggregate investments, loans and guarantees to total utility plant.
(d)
(1) The borrower will not be in default of the RUS loan contract or RUS mortgage with respect to required approval of investments, loans and guarantees, provided that the borrower had not made additional net investments, loans or guarantees without approval after reaching the 15 percent level; and
(2) At the request of the borrower, the Administrator in his or her sole discretion may decide to exclude up to the amount of net profits or margins earned on the borrower's investments, loans and guarantees during the past 10 calendar years, if the Administrator determines that such exclusion will not increase loan security risks. The borrower must provide documentation satisfactory to the Administrator as to the current status of its investments, loans and guarantees and the net profits earned during the past 10 years. Any exclusion approved by the Administrator may or may not reduce the level of investments, loans and guarantees to or below the 15 percent level. If such exclusion does not reduce the level to or below the 15 percent level, RUS will notify the borrower in writing that it must reduce or restructure its investments, loans and guarantees to a level of not more than 15 percent of total utility plant. If the borrower does not come within the 15 percent level within a reasonable period of time determined by the Administrator, which shall not exceed 12 months from the date the borrower was notified of the required action, then, upon written notice from RUS, the borrower shall be in default of its RUS loan contract and mortgage.
(a) Every borrower shall maintain accurate records concerning all investments, loans and guarantees made by it. Such records shall be kept in a manner that will enable RUS to readily determine:
(1) The nature and source of all income, expenses and losses generated from the borrower's loans, guarantees and investments;
(2) The location, identity and lien priority of any loan collateral resulting from activities permitted by this subpart; and
(3) The effects, if any, which such activities may have on the feasibility of loans made, guaranteed or lien accommodated by RUS.
(b) In determining the aggregate amount of investments, loans and guarantees made by a borrower, the borrower shall use the recorded value of each investment, loan or guarantee as reflected on its books and records for the next preceding end-of-month, except for the end-of-year report which shall be based on December 31 information. Every borrower shall also report annually to RUS, in the manner and on the form specified by the Administrator, the current status of each investment, outstanding loan and outstanding guarantee which it has made pursuant to this subpart.
(c) The records of borrowers shall be subject to the auditing procedures prescribed in part 1773 of this chapter. RUS reserves the right to review the financial records of any subsidiaries of the borrower to determine if the borrower is in compliance with this subpart, and to ascertain if the debts, guarantees (as defined in this subpart), or other obligations of the subsidiaries could adversely affect the ability of the borrower to repay its debts to the Government.
(d) RUS will monitor borrower compliance with this subpart based primarily on the annual financial and statistical report submitted by the borrower to RUS and the annual auditor's report on the borrower's operations. However, RUS may inspect the borrower's records at any time during the year to determine borrower compliance. If a borrower's most recent annual financial and statistical report shows the aggregate of the borrower's investments, loans and guarantees to be below the 15 percent level, that in no way relieves the borrower of its obligation to comply with its RUS mortgage, RUS loan contract, and this subpart with respect to Administrator approval of any additional investment, loan or guarantee that would cause the aggregate to exceed the 15 percent level.
(a) Nothing in this subpart shall affect any provision, covenant, or requirement in the RUS mortgage, RUS loan contract, or any other agreement between a borrower and RUS with respect to any matter other than the prior approval by RUS of investments, loans, and guarantees by the borrower, such matters including, without limitation, extensions, additions, and modifications of the borrower's electric system. Also, nothing in this subpart shall affect any rights which supplemental lenders have under the RUS mortgage, or under their loan contracts or other agreements with their borrowers, to limit investments, loans and guarantees by their borrowers to levels below 15 percent of total utility plant.
(b) RUS will require that any electric loan made or guaranteed by RUS after October 23, 1995 shall be subject to a provision in the loan contract or mortgage restricting investments, loans and guarantees by the borrower substantially as follows: The borrower shall not make any loan or advance to, or make any investment in, or purchase or make any commitment to purchase any stock, bonds, notes or other securities of, or guaranty, assume or otherwise become obligated or liable with respect to the obligations of, any other person, firm or corporation, except as permitted by the RE Act and RUS regulations.
(c) RUS reserves the right to change the provisions of the RUS mortgage and loan contract relating to RUS approval of investments, loans and guarantees made by the borrower, on a case-by-case basis, in connection with providing additional financial assistance to a borrower after October 23, 1995.
(a)
(2) This subpart and subpart S of this part apply only to debt to be secured under the mortgage, the issuance of which is subject to the approval of the Rural Utilities Service (RUS) by the terms of the borrower's mortgage with respect to the issuance of additional debt or the refinancing or refunding of debt. If RUS approval is not required under such terms of the mortgage itself, a lien accommodation is not required. If the loan contract or other agreement between the borrower and RUS requires RUS approval with respect to the issuance of debt or making additions to or extensions of the borrower's system, such required approvals do not by themselves result in the need for a lien accommodation.
(b)
(2) It is also the policy of RUS to provide effective and timely assistance to borrowers in promoting rural development by subordinating RUS's lien for financially sound rural development investments under the conditions set forth in § 1717.858.
(c)
(1) The value of the added assets compared with the amount of new debt to be secured;
(2) The value of the assets already pledged under the mortgage, and any effects of the proposed transaction on the value of those assets;
(3) The ratio of the total outstanding debt secured under the mortgage to the value of all assets pledged as security under the mortgage;
(4) The borrower's ability to repay debt owed to the Government, as indicated by the following factors:
(i) Revenues, costs (including interest, lease payments and other debt service costs), margins, Times Interest Earned Ratio (TIER), Debt Service Coverage (DSC), and other case-specific economic and financial factors;
(ii) The variability and uncertainty of future revenues, costs, margins, TIER, DSC, and other case-specific economic and financial factors;
(iii) Future capital needs and the ability of the borrower to meet those needs at reasonable cost;
(iv) The ability of the borrower's management to manage and control its system effectively and plan for future needs; and
(5) Other factors that may be relevant in individual cases, as determined by RUS.
(d)
(e)
(f)
(2) RUS “Buy American” requirements shall not apply.
(g)
(i) Remit loan advances to a separate subaccount of the Cash-Construction Fund-Trustee Account;
(ii) Obtain a certification from a registered professional engineer, for each year during which funds from the separate subaccount are utilized by the borrower, that all materials and equipment purchased and facilities constructed during the year from said funds comply with RUS safety and performance standards, as required by paragraph (f) of this section, and are included in an CWP or CWP amendment approved by the borrower's board of directors;
(iii) Obtain an auditor's certification from a Certified Public Accountant, for each year during which funds are advanced to or remitted from the separate subaccount, certifying:
(A) The amount of loan funds advanced to and remitted from the separate subaccount during the period of review;
(B) That based on the auditor's review of construction work orders and other records, all moneys disbursed from the separate subaccount during the period of review were used for purposes contemplated in the loan agreement and the lien accommodation; and
(iv) Immediately notify RUS in writing if the lender is unable to obtain the certifications cited in paragraphs (g)(1)(ii) and (g)(1)(iii) of this section.
(2) The measures listed in paragraph (g)(1) of this section will normally be sufficient to meet the lender's responsibility provided that additional measures are not reasonably required based on the particular circumstances of an individual case. Should a lender fail to carry out its responsibility in the manner described in this paragraph (g) or in another manner acceptable to RUS, RUS may disqualify such lender from participation in advance approval under §§ 1717.854 and 1717.857 and condition the lender's receipt of a lien accommodation or subordination upon the lender providing satisfactory evidence that it will fulfill its responsibility under this paragraph (g).
(h)
(2) To the extent that provisions in a borrower's loan contract or mortgage in favor of RUS may be inconsistent with paragraphs (g)(1) and (h)(1) of this section, paragraphs (g)(1) and (h)(1) of this section are intended to constitute an approval or waiver under the terms of such instruments, and in any regulations implementing such instruments, with respect to facilities financed with debt obtained entirely from non-RUS sources without an RUS guarantee.
(i)
(1) The borrower must provide RUS with a certification by the project architect that the buildings will be designed and constructed in compliance with Section 504 of the Rehabilitation Act of 1973 as amended (29 U.S.C. 794), as applicable under that Act, and that the facilities will be readily accessible to and usable by persons with handicaps in accordance with the Uniform Federal Accessibility Standards (UFAS), (Appendix A to 41 CFR part 101.19, subpart 101-19.6). The certification must be included in the borrower's application for a lien accommodation or subordination. In addition to these requirements, building construction may also be subject to requirements of The Americans with Disabilities Act (42 U.S.C. 12101
(2) The borrower must comply with RUS's seismic safety requirements set forth in 7 CFR part 1792, subpart C.
(j)
(k)
(l)
(m)
(n)
Terms used in this subpart have the meanings set forth in 7 CFR 1710.2. References to specific RUS forms and other RUS documents, and to specific sections or lines of such forms and documents, shall include the corresponding forms, documents, sections and lines in any subsequent revisions of these forms and documents. In addition to the terms defined in 7 CFR 1710.2, the following terms have the following meanings for the purposes of this subpart:
(a)
(1) The acquisition, construction, improvement, modification, and replacement (less salvage value) of systems, equipment, and facilities, including real property, used to supply electric and/or steam power to:
(i) RE Act beneficiaries; and/or
(ii) End-user customers of the borrower who are not beneficiaries of the RE Act. Such systems, equipment, and facilities include those listed in 7 CFR 1710.251(c) and 1710.252(c), as well as others that are determined by RUS to be an integral component of the borrower's system of supplying electric and/or steam power to consumers, such as, for example, coal mines, coal handling facilities, railroads and other transportation systems that supply fuel for generation, programs of demand side management and energy conservation, and on-grid and off-grid renewable energy systems;
(2) The purchase, rehabilitation and integration of existing distribution facilities, equipment and systems, and associated service territory;
(3) The following types of community infrastructure substantially located within the electric service territory of the borrower: water and waste disposal systems, solid waste disposal systems, telecommunication and other electronic communications systems, and natural gas distribution systems;
(4) Front-end costs, when and as the borrower has obtained a binding commitment from the non-RUS lender for the financing required to complete the procurement or construction of the facilities;
(5) Transaction costs included as part of the cost of financing assets or refinancing existing debt, provided, however, that the amount of transaction costs eligible for lien accommodation or subordination normally shall not exceed 5 percent of the principal amount of financing or refinancing provided, net of all transaction costs;
(6) The refinancing of existing debt secured under the mortgage;
(7) Interest during construction of generation and transmission facilities if approved by RUS, case by case, depending on the financial condition of the borrower, the terms of the financing, the nature of the construction, the treatment of these costs by regulatory authorities having jurisdiction, and such other factors deemed appropriate by RUS; and
(8) Lien subordinations for certain rural development investments, as provided in § 1717.858.
(b)
(1) Working capital, including operating funds, unless in the judgment of RUS the working capital is required to ensure the repayment of RUS loans and/or other loans secured under the mortgage;
(2) Facilities, equipment, appliances, or wiring located inside the premises of the consumer, except:
(i) Certain load-management equipment (see 7 CFR 1710.251(c));
(ii) Renewable energy systems and RUS-approved programs of demand side management and energy conservation; and
(iii) As determined by RUS on a case by case basis, facilities included as part of certain cogeneration projects to furnish electric and/or steam power to end-user customers of the borrower;
(3) Investments in a lender required of the borrower as a condition for obtaining financing; and
(4) Debt incurred by a distribution or power supply borrower to finance facilities, equipment or other assets that are not part of the borrower's electric system or one of the four community infrastructure systems cited in paragraph (a)(3) of this section, except for certain rural development investments eligible for a lien subordination under § 1717.858.
(c)
(a)
(1) The maturity of the loan or bond used to finance facilities or other capital assets must not exceed the weighted average of the expected remaining useful lives of the assets being financed;
(2) The loan or bond must have a maturity of not less than 5 years, except for loans or bonds used to refinance debt that has a remaining maturity of less than 5 years;
(3) The principal of the loan or bond must be amortized at a rate that will yield a weighted average life not greater than the weighted average life that would result from level payments of principal and interest; and
(4) The loan, or any portion of the loan, may bear either a variable (set annually or more frequently) or a fixed interest rate.
(b)
(a)
(b)
(c)
(1) The borrower has achieved a TIER of at least 1.25 and a DSC of at least 1.25 for each of 2 calendar years immediately preceding, or any 2 consecutive 12 month periods ending within 180 days immediately preceding, the issuance of the debt;
(2) The ratio of the borrower's equity, less deferred expenses, to total assets, less deferred expenses, is not less than 27 percent, after adding the principal
(3) The borrower's net utility plant as a ratio to its total outstanding long-term debt is not less than 1.0, after adding the principal amount of the proposed loan to the existing outstanding long-term debt of the borrower;
(4) There are no actions or proceedings against the borrower, pending or overtly threatened in writing before any court, governmental agency, or arbitrator that would materially adversely affect the borrower's operations and/or financial condition;
(5) The borrower is current on all debt payments and all other financial obligations, and is not in default under the RUS mortgage, the RUS loan contract, the borrower's wholesale power contract, any debt restructuring agreement, or any other agreement with RUS;
(6) The borrower has:
(i) Submitted the annual auditor's report, report on compliance, report on internal controls, and management letter in accordance with 7 CFR part 1773;
(ii) Received an unqualified opinion in the most recent auditor's report;
(iii) Resolved all material findings and recommendations made in the most recent Loan Fund and Accounting Review;
(iv) Resolved all material findings and recommendations made in the most recent financial statement audit, including those material findings and recommendations made in the report on internal control, report on compliance, and management letter;
(v) Resolved all outstanding material accounting issues with RUS; and
(vi) Resolved any significant irregularities to RUS's satisfaction; and
(7) If the borrower has a power supply contract with a power supply borrower, the power supply borrower is current on all debt payments and all other financial obligations, and is not in default under the RUS mortgage, the loan contract, any debt restructuring agreement, or any other agreement with RUS.
(d)
Applications for a lien accommodation or subordination that meet the requirements of § 1717.854 must include the following information and documents:
(a) A certification by an authorized official of the borrower that the borrower and, as applicable, the loan are in compliance with all conditions set forth in § 1717.854(c) and all applicable provisions of §§ 1717.852 and 1717.853;
(b) A resolution of the borrower's board of directors requesting the lien accommodation or subordination and including the amount and maturity of the proposed loan, a general description of the facilities or other purposes to be financed, the name and address of the lender, and an attached term sheet summarizing the terms and conditions of the proposed loan;
(c) The borrower's financial and statistical report, the data in which shall not be more than 60 days old when the complete application is received by RUS;
(d) Draft copy of any new mortgage or mortgage amendment (supplement) required by RUS or the lender, unless RUS has notified the borrower that it wishes to prepare these documents itself;
(e) A copy of the loan agreement, loan note, bond or other financing instrument, unless RUS has notified the borrower that these documents need not be submitted;
(f) Borrower's environmental report and/or other environmental documentation, if required by 7 CFR part 1794;
(g) RUS Form 740c, Cost Estimates and Loan Budget for Electric Borrowers, and RUS Form 740g, Application for Headquarters Buildings;
(h) A CWP or CWP amendment covering the proposed project, in accordance with 7 CFR part 1710, subpart F, and subject to RUS approval, and a resolution of the borrower's board of directors adopting the CWP;
(i) The certification by the project architect for any buildings to be constructed, as required by § 1717.850(i);
(j) A certification by an authorized official of the borrower that flood hazard insurance will be obtained for the full value of any buildings, or other facilities susceptible to damage if flooded, that will be located in a flood hazard area;
(k) Form AD-1047, Certification Regarding Debarment, Suspension, and Other Responsibility Matters—Primary Covered Transactions, as required by 7 CFR part 3017;
(l) A report by the borrower stating whether or not it is delinquent on any Federal debt, and if delinquent, the amount and age of the delinquency and the reasons therefor; and a certification, if not previously provided, that the borrower has been informed of the Government's collection options;
(m) The written acknowledgement from a registered engineer or architect regarding compliance with seismic provisions of applicable model codes for any buildings to be constructed, as required by 7 CFR 1792.104; and
(n) Other information that RUS may require to determine whether all of the applicable provisions of this subpart have been met.
Applications for a lien accommodation or subordination for 100 percent private financing for eligible purposes that do not meet the requirements of § 1717.854 must include the following information and documents:
(a) A certification by an authorized official of the borrower that:
(1) The borrower and, as applicable, the loan are in compliance with all applicable provisions of §§ 1717.852 and 1717.853; and
(2) There are no actions or proceedings against the borrower, pending or overtly threatened in writing before any court, governmental agency, or arbitrator that would materially adversely affect the borrower's operations and/or financial condition. If this certification cannot be made, the application must include:
(i) An opinion of borrower's counsel regarding any actions or proceedings against the borrower, pending or overtly threatened in writing before any court, governmental agency, or arbitrator that would materially adversely affect the borrower's operations and/or financial condition. The opinion shall address the merits of the claims asserted in the actions or proceedings, and include, if appropriate, an estimate of the amount or range of any potential loss; and
(ii) A certification by an authorized official of the borrower as to the amount of any insurance coverage applicable to any loss that may result from the actions and proceedings addressed in the opinion of borrower's counsel;
(b) The information and documents set forth in § 1717.855 (b) through (n);
(c) A long-range financial forecast providing financial projections for at least 10 years, which demonstrates that the borrower's system is economically viable and that the proposed loan is financially feasible, and a resolution of the borrower's board of directors adopting the long-range financial forecast. The financial forecast must comply with the requirements of 7 CFR part 1710 subpart G. RUS may, in its sole discretion, waive the requirement of this paragraph that a long range financial forecast be provided, if:
(1) The borrower is current on all of its financial obligations and is in compliance with all requirements of its mortgage and loan agreement with RUS;
(2) In RUS's judgment, granting a lien accommodation or subordination for the proposed loan will not adversely affect the repayment and security of outstanding debt of the borrower owed to or guaranteed by RUS;
(3) The borrower has achieved the TIER and DSC and any other coverage ratios required by its mortgage or loan contract in each of the two most recent calendar years; and
(4) The amount of the proposed loan does not exceed the lesser of $10 million or 10 percent of the borrower's current net utility plant;
(d) [Reserved]
(e) As applicable to the type of facilities being financed, a CWP, related engineering and cost studies, a power cost study, and a resolution of the borrower's board of directors adopting these documents. These documents must meet the requirements of 7 CFR part 1710, subpart F and, as applicable, subpart G;
(f) Unless the requirement has been waived in writing by RUS, a current, RUS-approved power requirements study, which must meet the requirements of 7 CFR part 1710, subpart E, to the same extent as if the loan were being made by RUS, and a resolution of the borrower's board of directors adopting the study; and
(g) A discussion of the borrower's compliance with RUS requirements on accounting, financial reporting, record keeping, and irregularities (see § 1717.854(c)(5)). RUS will review the case and determine the effect of any noncompliance on the feasibility and security of RUS's loans, and whether the requested lien accommodation or subordination can be approved.
(a)
(1) The refinancing is a current refunding and does not involve interest rate swaps, forward delivery contracts, or similar features;
(2) The principal amount of the refinancing loan does not exceed the sum of the outstanding principal amount of the debt being refinanced plus the amount of transactions costs included in the refinancing loan that are eligible for lien accommodation or subordination under § 1717.852(a)(4);
(3) The weighted average life of the refinancing loan is not greater than the weighted average remaining life of the loan being refinanced; and
(4) The present value of the cost of the refinancing loan, including all transaction costs and any required investments in the lender, is less than the present value of the cost of the loan being refinanced, as determined by a method acceptable to RUS. The discount rate used in the present value analysis shall be equal to either:
(i) The current rate on Treasury securities having a maturity equal to the weighted average life of the refunding loan, plus one-eighth percent, or
(ii) A rate approved by RUS based on documentation provided by the borrower as to its marginal long-term borrowing cost.
(b)
(c)
(1) A certification by an authorized official of the borrower that the application meets the requirements of paragraph (a) of this section and all applicable provisions of §§ 1717.852 and 1717.853;
(2) Documentation and analysis demonstrating that the application meets the qualification criteria set forth in paragraph (a) of this section;
(3) A resolution of the borrower's board of directors requesting the lien accommodation or subordination and including the amount and maturity of the proposed loan, a general description of the debt to be refinanced, the name and address of the lender, and an attached term sheet summarizing the terms and conditions of the proposed loan;
(4) The borrower's financial and statistical report, the data in which shall not be more than 60 days old when the complete application is received by RUS;
(5) Draft copy of any new mortgage or mortgage amendment (supplement) required by RUS or the lender, unless RUS has notified the borrower that it wishes to prepare these documents itself;
(6) A copy of the loan agreement, loan note, bond or other financing instrument, unless RUS has notified the borrower that these documents need not be submitted;
(7) Form AD-1047, Certification Regarding Debarment, Suspension, and Other Responsibility Matters—Primary Covered Transactions, as required by 7 CFR part 3017;
(8) A report by the borrower stating whether or not it is delinquent on any Federal debt, and if delinquent, the amount and age of the delinquency and the reasons therefor; and a certification, if not previously provided, that the borrower has been informed of the Government's collection options; and
(9) Other information, documents and opinions that RUS may require to determine whether all of the applicable provisions of this subpart have been met.
(d)
(1) The information and documents set forth in paragraphs (c)(3) through (9) of this section;
(2) A complete description of the refinancing loan and the outstanding debt to be refinanced;
(3) An analysis comparing the refinancing loan with the loan being refinanced as to the weighted average life and the net present value of the costs of the two loans; and
(4) If the present value of the cost of the refinancing loan is greater than the present value of the cost of the debt being refinanced, financial forecasts for at least 5 years comparing the borrower's debt service and other costs, revenues, margins, cash flows, TIER, and DSC, with and without the proposed refinancing.
(e)
(f)
(a)
(b)
(1) The borrower must be current on all of its financial obligations and be in compliance with all provisions of its mortgage and loan agreement with RUS; and
(2) In the judgment of RUS, the borrower must be able to repay all of its outstanding debt, and the security forall outstanding loans made to the borrower by RUS, including loans guaranteed by RUS, must be adequate, after taking into account the proposed subordination or release of lien.
(c)
(1) A resolution of the borrower's board of directors requesting the lien subordination or release of lien;
(2) A certification by an authorized official of the borrower that the borrower is current on all of its financial obligations and is in compliance with all provisions of its mortgage and loan agreement with RUS;
(3) A description of the facilities or other purposes to be financed and the projected effects on economic development and employment in rural areas;
(4) The borrower's financial and statistical report, the data in which shall not be more than 60 days old when the complete application is received by RUS;
(5) If requested by RUS, a long-range financial forecast providing financial projections for at least 10 years, in form and substance satisfactory to RUS, which demonstrates that the borrower's system is economically viable and that the borrower will be able to repay all of its outstanding debt and meet all other financial obligations;
(6) A discussion of the borrower's compliance with RUS requirements on accounting, financial reporting, record keeping, and irregularities (see § 1717.854(c)(5)). RUS will review the case and determine the effect of any noncompliance on the feasibility and security of RUS's loans, and whether the requested lien subordination or release of lien can be approved;
(7) If any buildings are to be constructed with the proceeds of the loan to be made to the subsidiary:
(i) A certification by the project architect that the buildings will be designed and constructed in compliance with Section 504 of the Rehabilitation Act of 1973 as amended (29 U.S.C. 794), as applicable under that Act, and that the facilities will be readily accessible to and usable by persons with handicaps in accordance with the Uniform Federal Accessibility Standards; and
(ii) A written acknowledgement from a registered engineer or architect regarding compliance with seismic provisions of applicable model codes, as required by 7 CFR 1792.104;
(8) A certification by an authorized official of the borrower that flood hazard insurance will be obtained for the full value of any buildings, or other facilities susceptible to damage if flooded, that will be located in a flood hazard area;
(9) Form AD-1047, Certification Regarding Debarment, Suspension, and Other Responsibility Matters—Primary Covered Transactions, as required by 7 CFR part 3017;
(10) A report by the borrower stating whether or not it is delinquent on any Federal debt, and if delinquent, the amount and age of the delinquency and the reasons therefor; and a certification, if not previously provided, that the borrower has been informed of the Government's collection options; and
(11) Other information that RUS may require to determine whether all of the
(a)
(2) It is recommended that borrowers consult with RUS staff before submitting their applications to determine whether they will likely qualify for advance approval or normal review, and to obtain answers to any questions about the information and documents required for the application.
(3) A borrower shall, after submitting an application, promptly notify RUS of any changes that materially affect the information contained in its application.
(4) After submitting an application and having been notified by RUS of additional information and documents and other changes needed to complete the application, if the required information and documents are not supplied to RUS within 30 calendar days of the borrower's receipt of the notice, RUS may return the application to the borrower. The borrower may resubmit the application when the required additional information and documents are available.
(5)
(i) The types of lien accommodations or subordinations requested are of the “standard” types that RUS has approved previously, i.e., the so-called Type I, II and III lien accommodations. Future revisions of the RUS mortgage may result in other “standard” types of lien accommodations and lien subordinations acceptable to RUS. Requests for lien accommodations or subordinations that are substantially different than the “standard” types previously approved by RUS may require additional time for review and action;
(ii) The requested lien accommodation or subordination does not require the preparation of an environmental assessment or an Environmental Impact Statement. Preparation of these documents often will require additional time beyond the timeframes cited in this section; and
(iii) The timeframes set forth in this section, except for paragraph (b)(4) of this section, which deals only with approval of a new mortgage or mortgage amendment, include RUS review and/or approval of a loan contract, if required as part of the application, and required supporting documents, such as a CWP.
(b)
(2) If no additional or amended information is needed for RUS to complete its review of the application once it is received in the Washington Office, RUS will, within 45 calendar days of receiving the application in the Washington Office, either:
(i) Approve the lien accommodation or subordination if the borrower has demonstrated satisfactorily to RUS that all requirements of this subpart applicable to advance approval have been met, and send written notice to the borrower. RUS's approval, in this
(ii) If all requirements have not been met, so notify the borrower in writing. The application will be returned to the borrower unless the borrower requests that it be reconsidered under the requirements and procedures for normal review set forth in paragraph (c) of this section and in § 1717.856; or
(iii) Send written notice to the borrower explaining why a decision cannot be made at that time and giving the estimated date when a decision is expected.
(3) If additional or amended information is needed after the application is received in the Washington Office, RUS will so notify the borrower in writing within 15 calendar days of receiving the application in the Washington Office. If RUS subsequently becomes aware of other deficiencies in the application, additional written notice will be sent to the borrower. Within 30 calendar days of receiving all of the information required by RUS to complete its review, RUS will act on the application as described in paragraphs (b)(2)(i) through (b)(2)(iii) of this section.
(4) If a new mortgage or mortgage amendment is required, within 30 days of receiving such documents satisfactory to RUS, including required execution counterparts, RUS will execute the documents and send them to the borrower, along with instructions pertaining to recording of the mortgage, an opinion of borrower's counsel, and other matters. RUS will promptly notify the borrower upon receiving satisfactory evidence that the borrower has complied with said instructions.
(c)
(ii) If no additional or amended information is needed for RUS to complete its review of the application once it is received in the Washington office, RUS will, within 90 calendar days of receiving the application in the Washington office, send written notice to the borrower either approving the request, disapproving the request, or explaining why a decision cannot be made at that time and giving the estimated date when a decision is expected.
(iii) If additional or amended information is needed after the application is received in the Washington Office, RUS will so notify the borrower in writing within 15 calendar days of receiving the application in the Washington Office. If RUS subsequently becomes aware of other deficiencies in the application, additional written notice will be sent to the borrower. Within 90 calendar days of receiving all of the information required by RUS to complete its review, RUS will act on the application as described in paragraph (c)(1)(ii) of this section.
(iv) If a new mortgage or mortgage amendment is required, the procedures and timeframes of paragraph (b)(4) of this section will apply.
(2)
(ii) Within 30 calendar days of receiving the borrower's application containing the information and documents required by § 1717.856, RUS will send written notice to the borrower of any deficiencies in its application as to completeness and acceptable form and substance. Additional written notices may be sent to the borrower if RUS subsequently becomes aware of other deficiencies in the borrower's application.
(iii) Within 90 calendar days of receiving all of the information required by RUS to complete its review, RUS
(iv) If a new mortgage or mortgage amendment is required, these documents will be reviewed and executed pursuant to the procedures and timeframes of paragraph (b)(4) of this section.
(d)
(1)
(ii) Within 15 calendar days of receiving all of the required information and documents, in form and substance satisfactory to RUS, RUS will either:
(A) Approve the lien accommodation or subordination if the borrower has demonstrated satisfactorily to RUS that all requirements of § 1717.857(a) and (c) have been met, and send written notice to the borrower;
(B) If all requirements have not been met, so notify the borrower in writing. The application will be returned to the borrower unless the borrower requests that it be reconsidered under the requirements and procedures for normal review set forth in paragraph (d)(2) of this section and in § 1717.857; or
(C) Send written notice to the borrower explaining why a decision cannot be made at that time and giving the estimated date when a decision is expected.
(iii) If a new mortgage or mortgage amendment is required, these documents will be reviewed and executed pursuant to the procedures and timeframes of paragraph (b)(4) of this section.
(2)
(ii) Within 30 calendar days of receiving all of the required information and documents, in form and substance satisfactory to RUS, RUS will notify the borrower in writing either approving the request, disapproving the request, or explaining why a decision cannot be made at that time and giving the estimated date when a decision is expected. If the proposed refinancing involves complicated transactions such as interest rate swaps or forward delivery contracts, additional time may be required for RUS review and final action.
(iii) If a new mortgage or mortgage amendment is required, these documents will be reviewed and executed pursuant to the procedures and timeframes of paragraph (b)(4) of this section.
(e)
(2) The GFR will work with the borrower to ensure that all components of the application are assembled. Once the application is satisfactory to the GFR, it will be sent promptly to the Washington Office for further review and action. After the application is received in the Washington Office, if additional or amended information is needed for RUS to complete its review, RUS will so notify the borrower in writing within 15 calendar days of receiving the application.
(3) Applications from power supply borrowers containing the information and documents required by § 1717.858(c) will be reviewed in the Washington office and the borrower given written notice within 30 calendar days of receiving the application of any deficiencies as to completeness and acceptable form and substance. Additional written notices may be sent to the borrower if RUS subsequently becomes aware of
(4) Within 60 calendar days of receiving in the Washington office all of the required information and documents, in form and substance satisfactory to RUS, RUS will give written notice to the borrower either approving the request, disapproving the request, or explaining why a decision cannot be made at that time and giving the estimated date when a decision is expected.
(5) If a new mortgage or mortgage amendment is required, these documents will be reviewed and executed pursuant to the procedures and timeframes of paragraph (b)(4) of this section.
(a)
(b)
(2) Net worth shall be calculated by taking total margins and equities (Line 33 of Part C of RUS Form 7 for distribution borrowers, or Line 34 of Section B of RUS Form 12a for power supply borrowers) and subtracting assets properly recordable in account 182.2, Unrecovered Plant and Regulatory Study Costs, and account 182.3, Other Regulatory Assets, as defined in 7 CFR part 1767.
(c)
(2) The application must include the following:
(i) A resolution of the borrower's board of directors requesting the lien accommodation and including the amount and maturity of the proposed loan, a general description of the facilities or other purposes to be financed, the name and address of the lender, and an attached term sheet summarizing the terms and conditions of the proposed loan;
(ii) A certification by an authorized official of the borrower that the borrower is in compliance with all requirements of its mortgage, loan agreement with RUS, and any other agreement with RUS that have not been exempted in writing by RUS;
(iii) The borrower's financial and statistical report, the data in which shall not be more than 60 days old when the complete application is received by RUS;
(iv) Draft copy of any new mortgage or mortgage amendment (supplement) required by RUS or the lender, unless RUS has notified the borrower that it wishes to prepare these documents itself;
(v) A copy of the loan agreement, loan note, bond or other financing instrument, unless RUS has notified the borrower that these documents need not be submitted. These documents will not be subject to RUS approval, but may be reviewed to determine whether they contain any provisions that would result in the security, including assurance of repayment, for loans made or guaranteed by RUS no longer being reasonably adequate;
(vi) The following certifications and reports required by law:
(A) The certification by the project architect for any buildings to be constructed, as required by 7 CFR 1717.850(i);
(B) A certification by an authorized official of the borrower that flood hazard insurance will be obtained for the full value of any buildings, or other facilities susceptible to damage if flooded, that will be located in a flood hazard area;
(C) Form AD-1047, Certification Regarding Debarment, Suspension, and Other Responsibility Matters—Primary Covered Transactions, as required by 7 CFR part 3017;
(D) A report by the borrower stating whether or not it is delinquent on any Federal debt, and if delinquent, the amount and age of the delinquency and the reasons therefor; and a certification, if not previously provided, that the borrower has been informed of the Government's collection options; and
(E) The written acknowledgement from a registered engineer or architect regarding compliance with seismic provisions of applicable model codes for any buildings to be constructed, as required by 7 CFR 1792.104. All other elements of an application listed in § 1717.855, § 1717.856, and § 1717.858(c) not listed in this paragraph (c) are exempted.
(3) Applications from distribution borrowers are submitted to the general field representative (GFR), while applications from power supply borrowers are submitted to the RUS Power Supply Division, or its successor, in Washington, DC. When an application is satisfactory to the GFR, it will be sent promptly to the Washington office. If Washington office staff determine that an application is incomplete, the borrower will be promptly notified in writing about the deficiencies. When the application is complete, and if the security, including assurance of repayment, of loans made or guaranteed by RUS will remain reasonably adequate after granting the lien accommodation or subordination, the borrower and the lender will be promptly notified in writing that the lien accommodation or subornation has been approved, subject to the conditions cited in paragraph (c)(1) of this section.
(d)
(e)
Applications for a lien accommodation for supplemental financing required by 7 CFR 1710.110 must meet the same requirements as an RUS insured loan. The justification and documentation materials submitted as part of the borrower's application for an insured loan also serve as the justification and documentation of the request for a lien accommodation for the required supplemental loan. Unless early approval under § 1717.901 is requested by a borrower, these applications will be processed during the same time as RUS's review of the borrower's application for the concurrent insured loan.
(a)
(1) The required supplemental loan meets the requirements for an insured loan, as set forth in 7 CFR part 1710, subparts A through G, and other RUS regulations pertaining to required supplemental loans;
(2) The borrower has demonstrated the ability to obtain the funds that would be needed to complete other portions of the project, if the portion to be constructed with private loan funds could not be used productively without completion of such other portions, in the event concurrent RUS insured loan funds are not forthcoming. Such evidence may include financial records demonstrating the availability of general funds, and/or a written commitment from the private lender to provide a loan for the remaining amount of financing required, with such commitment being conditioned upon the availability of a lien accommodation from RUS; and
(3) An authorized official of the borrower has requested early approval of the lien accommodation and explained the reasons therefor, and has certified that the funds are needed and will be drawn down before funds from the concurrent insured loan are expected to be available, assuming that the insured loan is approved.
(b)
(2) If a mortgage or mortgage amendment is required, RUS will consult with the other mortgagees as to who will prepare the documents. Within 30 days of obtaining the documents satisfactory to RUS, including required execution counterparts, RUS will execute the documents and send them to the borrower, along with instructions pertaining to recording of the mortgage,
(c)
Supplemental loans required by 7 CFR 1710.110 are subject to the same post-loan requirements as insured RUS loans regarding accepted materials, construction standards, contracting and procurement procedures, standard forms of contracts, RUS approval of the advance of loan funds, and other matters.
It is the intent of this subpart that any failure on the part of RUS to comply with any provisions of this subpart, including without limitation, those provisions setting forth specified timeframes for action by RUS on applications for lien accommodations or lien subordinations, shall not give rise to liability of any kind on the part of the Government or any employees of the Government including, without limitation, liability for damages, fees, expenses or costs incurred by or on behalf of a borrower, private lender or any other party.
(a)
(b)
(c)
(a) Section 331(b) of the Consolidated Farm and Rural Development Act (Con Act), as amended on April 4, 1996 by Public Law 104-127, 110 Stat. 888 (7
(b) This subpart sets forth the policy and standards of the Administrator of RUS with respect to the settlement of debts and claims arising from loans made or guaranteed to rural electric borrowers under the RE Act. Nothing in this subpart limits the Administrator's authority under section 12 of the RE Act.
Terms used in this subpart that are not defined in this section have the meanings set forth in 7 CFR part 1710. In addition, for the purposes of this subpart:
(a) It is the policy of the Administrator that, wherever possible, all debt owed to the government, including but not limited to principal and interest, shall be collected in full in accordance with the terms of the borrower's loan documents.
(b) Nothing in this subpart by itself modifies, reduces, waives, or eliminates any obligation of a borrower under its loan documents. Any such modifications regarding the debt owed by a borrower may be granted under the authority of the Administrator only by means of the explicit written approval of the Administrator in each case.
(c) The Administrator's authority to settle debts and claims will apply to cases where a borrower is unable to pay its debts and claims in accordance with their terms, as further defined in § 1717.1204(b)(1), and where settlement will maximize, on a present value basis, the recovery of debts and claims owed to the government.
(d) In structuring settlements and determining the capability of the borrower to repay debt and the amount of debt recovery that is possible, the Administrator will consider, among other factors, the RE Act, the National Energy Policy Act of 1992 (Pub. L. 102-486, 106 Stat. 2776), the policies and regulations of the Federal Energy Regulatory Commission, state legislative and regulatory actions, and other market and nonmarket forces as to their effects on competition in the electric utility industry and on rural electric systems in
(a) The Attorney General will be notified by the Administrator whenever the Administrator intends to use his or her authority under section 331(b)of the Con Act to settle a debt or claim.
(b) If an outstanding claim has been referred in writing to the Attorney General, the Administrator will not use his or her own authority to settle the claim without the approval of the Attorney General.
(c) If an application for additional debt relief is received from a borrower whose debt has been settled in the past under the authority of the Attorney General, the Administrator will promptly notify the Attorney General before proceeding to consider the application.
(a)
(b)
(2) In its application to RUS for debt settlement, the borrower must provide, in form and substance satisfactory to RUS, an in-depth analysis supporting the borrower's contention that it is unable or will not be able to meet its financial obligations as described in paragraph (b)(1) of this section. The analysis must include:
(i) An explanation and analysis of the causes of the borrower's inability to meet its financial obligations;
(ii) A thorough review and analysis of the opportunities available or potentially available to the borrower to reduce administrative overhead and other costs, improve efficiency and effectiveness, and expand markets and revenues, including but not limited to opportunities for sharing services, merging, and/or consolidating, raising rates when appropriate, and renegotiating supplier and service contracts. In the case of a power supply borrower, the study shall include such opportunities among the members of the borrower, unless the Administrator waives this requirement;
(iii) Documentation of the actions taken, in progress, or planned by the borrower (and its member systems, if applicable) to take advantage of the opportunities cited in paragraph (b)(2)(ii) of this section; and
(iv) Other analyses and documentation prescribed by RUS on a case by case basis.
(3) RUS may require that an independent consultant provide an analysis of the efficiency and effectiveness of the borrower's organization and operations, and those of its member systems in the case of a power supply borrower. The following conditions will apply:
(i) RUS will select the independent consultant taking into account, among other matters, the consultant's experience and expertise in matters relating to electric utility operations, finance, and restructuring;
(ii) The contract with the consultant shall be to provide services to RUS on such terms and conditions as RUS deems appropriate. The consultant's scope of work may include, but shall not be limited to, an analysis of the following:
(A) How to maximize the value of the government's collateral, such as through mergers, consolidations, or sales of all or part of the collateral;
(B) The viability of the borrower's system, taking into account such matters as system size, service territory and markets, asset base, physical condition of the plant, operating efficiency, competitive pressures, industry trends, and opportunities to expand markets and improve efficiency and effectiveness;
(C) The feasibility and the potential benefits and risks to the borrower and the government of corporate restructuring, including aggregation and disaggregation;
(D) In the case of a power supply borrower, the retail rate mark-up by member systems and the potential benefits to be achieved by member restructuring through mergers, consolidations, shared services, and other alliances;
(E) The quality of the borrower's management, management advisors, consultants, and staff;
(F) Opportunities for reducing overhead and other costs, for expanding markets and revenues, and for improving the borrower's existing and prospective contractual arrangements for the purchase and sale of power, procurement of supplies and services, and the operation of plant and facilities;
(G) Opportunities to achieve efficiency gains and increased revenues based on comparisons with benchmark electric utilities; and
(H) The accuracy and completeness of the borrower's analysis provided under paragraph (b)(2) of this section;
(iii) RUS and, as appropriate, other creditors, will determine the extent to which the borrower and third parties (including the members of a power supply borrower) will be required to participate in funding the costs of the independent consultant;
(iv) The borrower will be required to make available to the consultant all corporate documents, files, and records, and to provide the consultant with access to key employees. The borrower will also normally be required to provide the consultant with office space convenient to the borrower's operations and records; and
(v) All analyses, studies, opinions, memoranda, and other documents and information produced by the independent consultant shall be provided to RUS on a confidential basis for consideration in evaluating the borrower's application for debt settlement. Such documents and information may be made available to the borrower and other appropriate parties if authorized in writing by RUS.
(4) The borrower may be required to employ a temporary or permanent manager acceptable to the Administrator, to manage the borrower's operations to ensure that all actions are taken to avoid or minimize the need for debt settlement. The employment could be on a temporary basis to manage the system during the time the debt settlement is being considered, and possibly for some time after any debt settlement, or it could be on a permanent basis.
(5) The borrower must submit, at a time determined by RUS, a resolution of its board of directors requesting debt settlement and stating that the borrower is either currently unable to meet its financial obligations to the government or will not be able to meet said obligations sometime within the next 24 months, and that, in either case, the default is likely to continue indefinitely.
(c)
(i) Reamortization of debt;
(ii) Extension of debt maturity, provided that the maturity of the borrower's outstanding debt after settlement shall not extend more than 10 years beyond the latest maturity date prior to settlement;
(iii) Reduction of the interest rate charged on the borrower's debt, provided that the interest rate on any portion of the restructured debt shall not be reduced to less than 5 percent, unless the Administrator determines that reducing the rate below 5 percent would maximize debt recovery by the government;
(iv) Forgiveness of interest accrued, penalties, and costs incurred by the government to collect the debt; and
(v) With the concurrence of the Under Secretary for Rural Development, forgiveness of loan principal.
(2) In the event that RUS has, under section 306 of the RE Act, guaranteed loans made by the Federal Financing Bank or other third parties, the Administrator may restructure the borrower's obligations by: acquiring and restructuring the guaranteed loan; restructuring the loan guarantee obligation; restructuring the borrower's reimbursement obligations; or by such means as the Administrator deems appropriate, subject to such consents and approvals, if any, that may be required by the third party lender.
(d)
(e)
(f)
(2) RUS may use such methods, analyses, and assessments as the Administrator deems appropriate to determine the value of the borrower's system.
(g)
(h)
(i)
(j)
(1) The borrower may be required to undertake a corporate restructuring and/or sell a portion of its plant, facilities, or other assets
(2) The borrower may be required to replace senior management and/or hire outside experts acceptable to the Administrator. Such changes may include a commitment by the borrower's board of directors to restructure and/or obtain new membership to improve board oversight and leadership;
(3) The borrower may be required to agree to:
(i) Controls by RUS on the general funds of the borrower, as well as on any investments, loans or guarantees by the borrower, notwithstanding any limitations on RUS' control rights in the borrower's loan documents or RUS regulations; and
(ii) Requirements deemed necessary by RUS to perfect and protect its lien on cash deposits, securities, equipment, vehicles, and other items of real or non-real property; and
(4) In the case of a power supply borrower, the borrower may be required to obtain credit support from its member systems, as well as pledges and action plans by the members to change their operations, management, and organizational structure (e.g., shared services, mergers, or consolidations) in order to reduce operating costs, improve efficiency, and/or expand markets and revenues.
(k)
(l)
(m)
Pursuant to section 331(b) of the Con Act, the Administrator, at his or her sole discretion, may waive or otherwise reduce conditions and requirements imposed on a borrower by its loan documents if the Administrator determines that such action will contribute to enhancement of the government's recovery of debt. Such waivers or reductions in conditions and requirements under this section shall not include the exercise of any of the debt settlement measures set forth in § 1717.1204(c), which are subject to all of the requirements of said § 1717.1204.
In considering any future loan requests from a borrower whose debt has been settled in whole or in part (including the surviving entity of merged or consolidated borrowers, where at least one of said borrowers had its debts settled), it will be presumed that credit support for the full amount of the requested loan will be required. Such support may be in a number of forms, provided that they are acceptable to the Administrator on a case by case basis. They may include, but need not be limited to, equity infusions and guarantees of debt repayment, either from the applicant's members (in the case of a power supply borrower), or from a third party.
Nothing in this subpart affects the obligations of RUS under loan guarantee commitments it has made to the Federal Financing Bank or other lenders.
Nothing in this subpart limits, modifies, or otherwise affects the rights of the government under loan documents
7 U.S.C. 901
Unless otherwise indicated, terms used in this subpart are defined as set forth in 7 CFR 1710.2.
(a) Adequate loan security must be provided for loans made or guaranteed by RUS. The loans are required to be secured by a first mortgage lien on most of the borrower's assets substantially in the form set forth in appendix A of this subpart. At the discretion of RUS, this model form of mortgage may be adapted to satisfy different legal requirements among the states and individual differences in lending circumstances, provided that such adaptations are consistent with the policies set forth in this subpart.
(b) Some borrowers, such as certain public power districts, may not be able to provide security in the form of a first mortgage lien on their assets. In these cases RUS will consider accepting other forms of security, such as resolutions and pledges of revenues.
(c) RUS may require supplemental and amending mortgages to protect its security, or in connection with additional loans.
(d) RUS may also require such other security instruments (such as loan contracts, security agreements, financing statements, guarantees, and pledges) as it deems appropriate.
(e) All distribution borrowers that receive a loan or loan guarantee from RUS on or after August 17, 1995 will be required to enter into a mortgage with RUS that meets the requirements of this subpart. The concurrence of any other lenders secured under the borrower's existing mortgage may be required before the borrower can enter into a new mortgage.
Nothing contained in this subpart amends, invalidates, terminates or rescinds any existing mortgage entered into between the borrower and RUS and any other mortgagees.
Nothing contained in this subpart is intended to alter or affect any other mortgagee's rights under an existing mortgage.
Single copies of the model mortgage (RUS Informational Publication 1718 B) are available from the Administrative Services Division, Rural Utilities Service, United States Department of Agriculture, Washington, DC 20250-1500. This document may be reproduced.
RESTATED MORTGAGE AND SECURITY AGREEMENT, dated as of _______ 19__, hereinafter sometimes called this “Mortgage”) is made by and between
WHEREAS, the Mortgagor, the Government and ________ are parties to that certain ________ Mortgage and Security Agreement dated as of _________, 19__, as supplemented, amended or restated (the “Original Mortgage” identified in Schedule “A” of this Mortgage) originally entered into between the Mortgagor, the Government acting by and through the Administrator of the Rural Electrification Administration, the predecessor of RUS, and ________;
WHEREAS, the Mortgagor deems it necessary to borrow money for its corporate purposes and to issue its promissory notes and other debt obligations therefor from time to time in one or more series, and to mortgage and pledge its property hereinafter described or mentioned to secure the payment of the same;
WHEREAS, the Mortgagor desires to enter into this Mortgage pursuant to which all secured debt of the Mortgagor hereunder shall be secured on parity;
WHEREAS, this Mortgage restates and consolidates the Original Mortgage while preserving the priority of the Lien under the Original Mortgage securing the payment of Mortgagor's outstanding obligations secured under the Original Mortgage, which indebtedness is described more particularly by listing the Original Notes in Schedule “A” hereto; and
WHEREAS, all acts necessary to make this Mortgage a valid and binding legal instrument for the security of such notes and obligations, subject to the terms of this Mortgage, have been in all respects duly authorized;
NOW, THEREFORE, THIS MORTGAGE WITNESSETH: That to secure the payment of the principal of (and premium, if any) and interest on the Original Notes and all Notes issued hereunder according to their tenor and effect, and the performance of all provisions therein and herein contained, and in consideration of the covenants herein contained and the purchase or guarantee of Notes by the guarantors or holders thereof, the Mortgagor has mortgaged, pledged and granted a continuing security interest in, and by these presents does hereby grant, bargain, sell, alienate, remise, release, convey, assign, transfer, hypothecate, pledge, set over and confirm, pledge, and grant a continuing security interest and lien in for the purposes hereinafter expressed [other language may be required under various state laws], unto the Mortgagees all property, rights, privileges and franchises of the Mortgagor of every kind and description, real, personal or mixed, tangible and intangible, of the kind or nature specifically mentioned herein OR ANY OTHER KIND OR NATURE, except any Excepted Property, now owned or hereafter acquired by the Mortgagor (by purchase, consolidation, merger, donation, construction, erection or in any other way) wherever located, including (without limitation) all and singular the following:
A. all of those fee and leasehold interests in real property set forth in Schedule “B” hereto, subject in each case to those matters set forth in such Schedule;
B. all of the Mortgagor's interest in fixtures, easements, permits, licenses and rights-of-way comprising real property, and all other interests in real property, comprising any portion of the Utility System (as herein defined) located in the Counties listed in Schedule “B” hereto;
C. all right, title and interest of the Mortgagor in and to those contracts of the Mortgagor (i) relating to the ownership, operation or maintenance of any generation, transmission or distribution facility owned, whether solely or jointly, by the Mortgagor, (ii) for the purchase of electric power and energy by the Mortgagor and having an original term in excess of 3 years, (iii) for the sale of electric power and energy by the Mortgagor and having an original term in excess of 3 years, and (iv) for the transmission of electric power and energy by or on behalf of
D. all the property, rights, privileges, allowances and franchises particularly described in the annexed Schedule “B” are hereby made a part of, and deemed to be described in, this Granting Clause as fully as if set forth in this Granting Clause at length; and
ALSO ALL OTHER PROPERTY, real estate, lands, easements, servitudes, licenses, permits, allowances, consents, franchises, privileges, rights of way and other rights in or relating to real estate or the occupancy of the same; all power sites, storage rights, water rights, water locations, water appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways, waterways, dams, dam sites, aqueducts, and all other rights or means for appropriating, conveying, storing and supplying water; all rights of way and roads; all plants for the generation of electric and other forms of energy (whether now known or hereafter developed) by steam, water, sunlight, chemical processes and/or (without limitation) all other sources of power (whether now known or hereafter developed); all power houses, gas plants, street lighting systems, standards and other equipment incidental thereto; all telephone, radio, television and other communications, image and data transmission systems, air conditioning systems and equipment incidental thereto, water wheels, waterworks, water systems, steam and hot water plants, substations, lines, service and supply systems, bridges, culverts, tracks, ice or refrigeration plants and equipment, offices, buildings and other structures and the equipment thereto all machinery, engines, boilers, dynamos, turbines, electric, gas and other machines, prime movers, regulators, meters, transformers, generators (including, but not limited to, engine-driven generators and turbogenerator units), motors, electrical, gas and mechanical appliances, conduits, cables, water, steam, gas or other pipes, gas mains and pipes, service pipes, fittings, valves and connections, pole and transmission lines, towers, overhead conductors and devices, underground conduits, underground conductors and devices, wires, cables, tools, implements, apparatus, storage battery equipment, and all other fixtures and personalty; all municipal and other franchises, consents, certificates or permits; all emissions allowances; all lines for the transmission and distribution of electric current and other forms of energy, gas, steam, water or communications, images and data for any purpose including towers, poles, wires, cables, pipes, conduits, ducts and all apparatus for use in connection therewith, and (except as hereinbefore or hereinafter expressly excepted) all the right, title and interest of the Mortgagor in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or employed in connection with any property hereinbefore described, but in all circumstances excluding Excepted Property;
All other property, real, personal or mixed, of whatever kind and description and wheresoever situated, including without limitation goods, accounts, money held in a trust account pursuant hereto or to a Loan Agreement, and general intangibles now owned or which may be hereafter acquired by the Mortgagor, but excluding Excepted Property, now owned or which may be hereafter acquired by the Mortgagor, it being the intention hereof that all property, rights, privileges, allowances and franchisees now owned by the Mortgagor or acquired by the Mortgagor after the date hereof (other than Excepted Property) shall be as fully embraced within and subjected to the lien hereof as if such property were specifically described herein.
Also any Excepted Property that may, from time to time hereafter, by delivery or by writing of any kind, be subjected to the lien hereof by the Mortgagor or by anyone in its behalf; and any Mortgagee is hereby authorized to receive the same at any time as additional security hereunder for the benefit of all the Mortgagees. Such subjection to the lien hereof of any Excepted Property as additional security may be made subject to any reservations, limitations or conditions which shall be set forth in a written instrument executed by the Mortgagor or the person so acting in its behalf or by such Mortgagee respecting the use and disposition of such property or the proceeds thereof.
Together with (subject to the rights of the Mortgagor set forth on Section [5.01]) all and singular the tenements, hereditaments and appurtenances belonging or in anywise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and all the tolls, earnings, rents, issues, profits, revenues and other income, products and proceeds of the property subjected or required to be subjected to the lien of this Mortgage, and all other property of any nature appertaining to any of the plants, systems, business or operations of the Mortgagor, whether or not affixed to the realty, used in the operation of any of the premises or plants or the System, or otherwise, which are now owned or acquired by the Mortgagor, and all the estate, right, title and interest of every nature whatsoever, at law as well as in equity, of
There is, however, expressly excepted and excluded from the lien and operation of this Mortgage the following described property of the Mortgagor, now owned or hereafter acquired (herein sometimes referred to as “Excepted Property”):
A. all shares of stock, securities or other interests of the Mortgagor in the National Rural Utilities Cooperative Finance Corporation, the National Bank for Cooperatives and the St. Paul Bank for Cooperatives other than any stock, securities or other interests that are specifically described in Subclause D of Granting Clause First as being subjected to the lien hereof;
B. all rolling stock (except mobile substations), automobiles, buses, trucks, truck cranes, tractors, trailers and similar vehicles and movable equipment, and all tools, accessories and supplies used in connection with any of the foregoing;
C. all vessels, boats, ships, barges and other marine equipment, all airplanes, airplane engines and other flight equipment, and all tools, accessories and supplies used in connection with any of the foregoing;
D. all office furniture, equipment and supplies that is not data processing, accounting or other computer equipment or software;
E. all leasehold interests for office purposes;
F. all leasehold interests of the Mortgagor under leases for an original term (including any period for which the Mortgagor shall have a right of renewal) of less than five (5) years;
G. all timber and crops (both growing and harvested) and all coal, ore, gas, oil and other minerals (both in place or severed);
H. the last day of the term of each leasehold estate (oral or written) and any agreement therefor, now or hereafter enjoyed by the Mortgagor and whether falling within a general or specific description of property herein: PROVIDED, HOWEVER, that the Mortgagor covenants and agrees that it will hold each such last day in trust for the use and benefit of all of the Mortgagees and Noteholders and that it will dispose of each such last day from time to time in accordance with such written order as the Mortgagee in its discretion may give;
I. all permits, licenses, franchises, contracts, agreements, contract rights and other rights not specifically subjected or required to be subjected to the lien hereof by the express provisions of this Mortgage, whether now owned or hereafter acquired by the Mortgagor, which by their terms or by reason of applicable law would become void or voidable if mortgaged or pledged hereunder by the Mortgagor, or which cannot be granted, conveyed, mortgaged, transferred or assigned by this Mortgage without the consent of other parties whose consent has been withheld, or without subjecting any Mortgagee to a liability not otherwise contemplated by the provisions of this Mortgage, or which otherwise may not be, hereby lawfully and effectively granted, conveyed, mortgaged, transferred and assigned by the Mortgagor; and
J. the property identified in Schedule “C” hereto.
PROVIDED, HOWEVER, that (i) if, upon the occurrence of an Event of Default, any Mortgagee, or any receiver appointed pursuant to statutory provision or order of court, shall have entered into possession of all or substantially all of the Mortgaged Property, all the Excepted Property described or referred to in the foregoing Subdivisions A through H, inclusive, then owned or thereafter acquired by the Mortgagor shall immediately, and, in the case of any Excepted Property described or referred to in Subdivisions I through J, inclusive, upon demand of any Mortgagee or such receiver, become subject to the lien hereof to the extent permitted by law, and any Mortgagee or such receiver may, to the extent permitted by law, at the same time likewise take possession thereof, and (ii) whenever all Events of Default shall have been cured and the possession of all or substantially all of the Mortgaged Property shall have been restored to the Mortgagor, such Excepted Property shall again be excepted and excluded from the lien hereof to the extent and otherwise as hereinabove set forth.
However, pursuant to Granting Clause Third, the Mortgagor may subject to the lien of this Mortgage any Excepted Property, whereupon the same shall cease to be Excepted Property.
TO HAVE AND TO HOLD all said property, rights, privileges and franchises of every kind and description, real, personal or mixed, hereby and hereafter (by supplemental mortgage or otherwise) granted, bargained, sold, aliened, remised, released, conveyed, assigned, transferred, mortgaged, encumbered, hypothecated, pledged, setover, confirmed, or subjected to a continuing security interest and lien as aforesaid, together with all the appurtenances thereto appertaining (said properties, rights, privileges and franchises, including any cash and securities hereafter deposited with any Mortgagee ((other than any such cash, if any, which is specifically stated herein not to be deemed part of the Mortgaged Property)), being herein collectively called the “Mortgaged Property”) unto the Mortgagees and the respective assigns of the Mortgagees forever, to secure equally and ratably the payment of the principal of (and premium, if
SUBJECT, HOWEVER, to Permitted Encumbrances (as defined in Section 1.01).
Section 1.01.
(1) as to the property specifically described in Granting Clause First, the restrictions, exceptions, reservations, conditions, limitations, interests and other matters which are set forth or referred to in such descriptions and each of which fits one or more of the clauses of this definition, PROVIDED, such matters do not in the aggregate materially detract from the value of the Mortgaged Property taken as a whole and do not materially impair the use of such property for the purposes for which it is held by the Mortgagor;
(2) liens for taxes, assessments and other governmental charges which are not delinquent;
(3) liens for taxes, assessments and other governmental charges already delinquent which are currently being contested in good faith by appropriate proceedings; PROVIDED the Mortgagor shall have set aside on its books adequate reserves with respect thereto;
(4) mechanics', workmen's, repairmen's, materialmen's, warehousemen's and carriers' liens and other similar liens arising in the ordinary course of business for charges
(5) liens in respect of judgments or awards with respect to which the Mortgagor shall in good faith currently be prosecuting an appeal or proceedings for review and with respect to which the Mortgagor shall have secured a stay of execution pending such appeal or proceedings for review; PROVIDED the Mortgagor shall have set aside on its books adequate reserves with respect thereto;
(6) easements and similar rights granted by the Mortgagor over or in respect of any Mortgaged Property, PROVIDED that in the opinion of the Board or a duly authorized officer of the Mortgagor such grant will not impair the usefulness of such property in the conduct of the Mortgagor's business and will not be prejudicial to the interests of the Mortgagees, and similar rights granted by any predecessor in title of the Mortgagor;
(7) easements, leases, reservations or other rights of others in any property of the Mortgagor for streets, roads, bridges, pipes, pipe lines, railroads, electric transmission and distribution lines, telegraph and telephone lines, the removal of oil, gas, coal or other minerals and other similar purposes, flood rights, river control and development rights, sewage and drainage rights, restrictions against pollution and zoning laws and minor defects and irregularities in the record evidence of title, PROVIDED that such easements, leases, reservations, rights, restrictions, laws, defects and irregularities do not materially affect the marketability of title to such property and do not in the aggregate materially impair the use of the Mortgaged Property taken as a whole for the purposes for which it is held by the Mortgagor;
(8) liens upon lands over which easements or rights of way are acquired by the Mortgagor for any of the purposes specified in Clause [(7)] of this definition, securing indebtedness neither created, assumed nor guaranteed by the Mortgagor nor on account of which it customarily pays interest, which liens do not materially impair the use of such easements or rights of way for the purposes for which they are held by the Mortgagor;
(9) leases existing at the date of this instrument affecting property owned by the Mortgagor at said date which have been previously disclosed to the Mortgagees in writing and leases for a term of not more than two years (including any extensions or renewals) affecting property acquired by the Mortgagor after said date;
(10) terminable or short term leases or permits for occupancy, which leases or permits expressly grant to the Mortgagor the right to terminate them at any time on not more than six months' notice and which occupancy does not interfere with the operation of the business of the Mortgagor;
(11) any lien or privilege vested in any lessor, licensor or permittor for rent to become due or for other obligations or acts to be performed, the payment of which rent or performance of which other obligations or acts is required under leases, subleases, licenses or permits, so long as the payment of such rent or the performance of such other obligations or acts is not delinquent;
(12) liens or privileges of any employees of the Mortgagor for salary or wages earned but not yet payable;
(13) the burdens of any law or governmental regulation or permit requiring the Mortgagor to maintain certain facilities or perform certain acts as a condition of its occupancy of or interference with any public lands or any river or stream or navigable waters;
(14) any irregularities in or deficiencies of title to any rights-of-way for pipe lines, telephone lines, telegraph lines, power lines or appurtenances thereto, or other improvements thereon, and to any real estate used or to be used primarily for right-of-way purposes, PROVIDED that in the opinion of counsel for the Mortgagor, the Mortgagor shall have obtained from the apparent owner of the lands or estates therein covered by any such right-of-way a sufficient right, by the terms of the instrument granting such right-of-way, to the use thereof for the construction, operation or maintenance of the lines, appurtenances or improvements for which the same are used or are to be used, or PROVIDED that in the opinion of counsel for the Mortgagor, the Mortgagor has power under eminent domain, or similar statutes, to remove such irregularities or deficiencies;
(15) rights reserved to, or vested in, any municipality or governmental or other public authority to control or regulate any property of the Mortgagor, or to use such property in any manner, which rights do not materially impair the use of such property, for the purposes for which it is held by the Mortgagor;
(16) any obligations or duties, affecting the property of the Mortgagor, to any municipality or governmental or other public authority with respect to any franchise, grant, license or permit;
(17) any right which any municipal or governmental authority may have by virtue of any franchise, license, contract or statute to purchase, or designate a purchaser of or order the sale of, any property of the Mortgagor upon payment of cash or reasonable compensation therefor or to terminate any franchise, license or other rights or to regulate the property and business of the Mortgagor; PROVIDED, HOWEVER, that nothing in this clause 17 is intended to waive any
(18) as to properties of other operating electric companies acquired after the date of this Mortgage by the Mortgagor as permitted by Section [3.10] hereof, reservations and other matters as to which such properties may be subject as more fully set forth in such Section;
(19) any lien required by law or governmental regulations as a condition to the transaction of any business or the exercise of any privilege or license, or to enable the Mortgagor to maintain self-insurance or to participate in any fund established to cover any insurance risks or in connection with workmen's compensation, unemployment insurance, old age pensions or other social security, or to share in the privileges or benefits required for companies participating in such arrangements; PROVIDED, HOWEVER, that nothing in this clause 19 is intended to waive any claim or rights that the Government may otherwise have under Federal laws;
(20) liens arising out of any defeased mortgage or indenture of the Mortgagor;
(21) the undivided interest of other owners, and liens on such undivided interests, in property owned jointly with the Mortgagor as well as the rights of such owners to such property pursuant to the ownership contracts;
(22) any lien or privilege vested in any lessor, licensor or permittor for rent to become due or for other obligations or acts to be performed, the payment of which rent or the performance of which other obligations or acts is required under leases, subleases, licenses or permits, so long as the payment of such rent or the performance of such other obligations or acts is not delinquent;
(23) purchase money mortgages permitted by Section [3.08]; and
(24) the Original Mortgage.
(1) acquired (including acquisition by merger, consolidation, conveyance or transfer) or constructed by the Mortgagor after the date hereof, including property in the process of construction, insofar as not reflected on the books of the Mortgagor with respect to periods on or prior to the date hereof, and
(2) used or useful in the utility business of the Mortgagor conducted with the properties described in the Granting Clauses of this Mortgage, even though separate from and not physically connected with such properties.
“Property Additions” shall also include:
(3) easements and rights-of-way that are useful for the conduct of the utility business of the Mortgagor, and
(4) property located or constructed on, over or under public highways, rivers or other public property if the Mortgagor has the lawful right under permits, licenses or franchises granted by a governmental body having jurisdiction in the premises or by the law of the State in which such property is located to maintain and operate such property for an unlimited, indeterminate or indefinite period or for the period, if any, specified in such permit, license or franchise or law and to remove such property at the expiration of the period covered by such permit, license or franchise or law, or if the terms of such permit, license, franchise or law require any public authority having the right to take over such property to pay fair consideration therefor.
“Property Additions” shall NOT include:
(a) good will, going concern value, contracts, agreements, franchises, licenses or permits, whether acquired as such, separate and distinct from the property operated in connection therewith, or acquired as an incident thereto, or
(b) any shares of stock or indebtedness or certificates or evidences of interest therein or other securities, or
(c) any plant or system or other property in which the Mortgagor shall acquire only a leasehold interest, or any betterments, extensions, improvements or additions (other than movable physical personal property which the Mortgagor has the right to remove), of, upon or to any plant or system or other property in which the Mortgagor shall own only a leasehold interest unless (i) the term of the leasehold interest in the property to which such betterment, extension, improvement or addition relates shall extend for at least 75% of the useful life of such betterment, extension, improvement or addition and (ii) the lessor shall have agreed to give the Mortgagee reasonable notice and opportunity to cure any default by the Mortgagor under such lease and not to disturb any Mortgagee's possession of such leasehold estate in the event any Mortgagee succeeds to the Mortgagor's interest in such lease upon any Mortgagee's exercise of any remedies under this Mortgage so long as there is no default in the performance of the tenant's covenants contained therein, or
(d) any property of the Mortgagor subject to the Permitted Encumbrance described in clause [(23)] of the definition thereof.
(1) an opinion of counsel to the effect that the Mortgagor has title, whether fairly deducible of record or based upon prescriptive rights (or, as to personal property, based on such evidence as counsel shall determine to be sufficient), as in the opinion of counsel is satisfactory for the use thereof in connection with the operations of the Mortgagor, and counsel in giving such opinion may disregard any irregularity or deficiency in the record evidence of title which, in the opinion of such counsel, can be cured by proceedings within the power of the Mortgagor or does not substantially impair the usefulness of such property for the purpose of the Mortgagor and may base such opinion upon counsel's own investigation or upon affidavits, certificates, abstracts of title, statements or investigations made by persons in whom such counsel has confidence or upon examination of a certificate or guaranty of title or policy of title insurance in which counsel has confidence; or
(2) a mortgagee's policy of title insurance in the amount of the cost to the Mortgagor of the land included in Property Additions, as such cost is determined by the Mortgagor in accordance with the Accounting Requirements, issued in favor of the Mortgagees by an entity authorized to insure title in the states where the subject property is located, showing the Mortgagor as the owner of the subject property and insuring the lien of this Mortgage; and with respect to any
SECTION 1.02.
a. Accounting terms not referred to above are used in this Mortgage in their ordinary sense and any computations relating to such terms shall be computed in accordance with the Accounting Requirements.
b. Any reference to “directors” or “board of directors” shall be deemed to mean “trustees” or “board of trustees,” as the case may be.
SECTION 1.03.
a. In the case of any Notes that have been guaranteed or insured as to payment by RUS, as to such Notes RUS shall be considered to be the Noteholder, exclusively, regardless of whether such Notes are in the possession of RUS.
b. In the case of any prior approval rights conferred upon RUS by Federal statutes, including (without limitation) Section 7 of the Rural Electrification Act of 1936, as amended, with respect to the sale or disposition of property, rights, or franchises of the Mortgagor, all such statutory rights are reserved except to the extent that they are expressly modified or waived in this Mortgage.
SECTION 1.04.
SECTION 1.05
As to the Mortgagor:
As to the Mortgagee:
Rural Utilities Service,
United States Department of Agriculture,
Washington, DC 20250-1500
SECTION 2.01.
(1) As evidenced by a certificate of an Independent certified public accountant sent to each Mortgagee on or before the first advance of proceeds from such Additional Notes:
(i) The Mortgagor shall have achieved for each of the two calendar years immediately preceding the issuance of such Additional Notes, a TIER of not less than 1.25 and a DSC of not less than 1.25;
(ii) After taking into account the effect of such Additional Notes on the Total Long Term Debt of the Mortgagor, the ratio of the Mortgagor's Net Utility Plant to its Total Long Term Debt shall be greater than or equal to 1.0 on a pro forma basis;
(iii) After taking into account the effect of such Additional Notes on the Total Assets of such Mortgagor, the Mortgagor shall have Equity greater than or equal to 27 percent of Total Assets on a pro forma basis; and
(iv) The sum of the aggregate principal amount of such Additional Notes (if any) that are not related to the Electric System if added to the aggregate outstanding principal amount of all the existing Notes (if any) that are not related to the Electric System will not exceed 30% of the Mortgagor's Equity on a pro forma basis.
(2) No Event of Default has occurred and is continuing hereunder, or any event which with the giving of notice or lapse of time or both would become an Event of Default has occurred and is continuing.
(3) The Eligible Property Additions being constructed, acquired, procured or replaced are part of the Mortgagor's Utility System.
(4) The Borrower's general manager or other duly authorized officer shall send to each of the Mortgagees a certificate in substantially the form attached hereto as [Exhibit A] on or before the date of the first advance of proceeds from such Additional Notes.
(b) For purposes of this section:
(1) “Eligible Property Additions” shall mean Property Additions acquired or whose construction was completed not more than 5 years prior to the issuance of the Additional Notes and Property Additions acquired or whose construction is started and/or completed not more than 4 years after issuance of the Additional Notes, but shall exclude any Property Additions financed by any other debt secured under the Mortgage at the time additional Notes are issued;
(2) Notes are considered to be “issued” on, and the date of “issuance” shall be, the date on which they are executed by the Mortgagor; and
(3) For purposes of calculating the pro forma ratios in subparagraphs (a)(1)(ii) and (iii), the values for Total Long Term Debt and Total Assets before debt issuance and the values for Equity and Net Utility Plant shall be the most recently available end-of-month figures preceding the issuance of the Additional Notes, but in no case for a month ending more than 180 days preceding such issuance.
SECTION 2.02.
SECTION 2.03.
SECTION 2.04.
SECTION 2.05.
(b) In the event that the Mortgagor subsequently issues Additional Notes pursuant to Sections [2.01] or [2.02] to any existing Mortgagee and that Mortgagee desires further assurance that such Additional Notes will be secured by the lien of the Mortgage, an instrument substantially in the form of the supplemental mortgage attached as Exhibit B may be used.
(c) In the event that the Mortgagor issues Additional Notes pursuant to Section [2.03] to either an existing Mortgagee or a new lender, in either case with the prior written consent of each Mortgagee, then an instrument substantially in the form of the supplemental mortgage attached as Exhibit B may also be used.
SECTION 3.01.
SECTION 3.02.
(b) At the time of the execution and delivery of this instrument, the Mortgagor lawfully owns and is possessed of the personal property specifically described in Granting Clauses [First and Second], subject to no mortgage, lien, charge or encumbrance except as stated therein, and has full power and lawful authority to mortgage, assign, transfer, deliver, pledge and grant a continuing security interest in said property and, including any proceeds thereof, in the manner and form aforesaid.
(c) The Mortgagor hereby does and will forever warrant and defend the title to the property specifically described in Granting Clause First against the claims and demands of all persons whomsoever, except Permitted Encumbrances.
SECTION 3.03.
(b) The Mortgagor will cause this Mortgage and all Supplemental Mortgages and other instruments of further assurance, including all financing statements covering security interests in personal property, to be promptly recorded, registered and filed, and will execute and file such financing statements and cause to be issued and filed such continuation statements, all in such manner and in such places as may be required by law fully to preserve and protect the rights of all of the Mortgagees and Noteholders hereunder to all property comprising the Mortgaged Property. The Mortgagor will furnish to each Mortgagee:
(1) promptly after the execution and delivery of this instrument and of each Supplemental Mortgage or other instrument of further assurance, an Opinion of Counsel stating that, in the opinion of such Counsel, this instrument and all such Supplemental Mortgages and other instruments of further assurance have been properly recorded, registered and filed to the extent necessary to make effective the lien intended to be created by this Mortgage, and reciting the details of such action or referring to prior Opinions of Counsel in which such details are given, and stating that all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the rights of all of the Mortgagees and Noteholders hereunder, or stating that, in the opinion of such Counsel, no such action is necessary to make the lien effective; and
(2) within 30 days after _____ in each year beginning with the year __, an Opinion of Counsel, dated as of such date, either stating that, in the opinion of such Counsel, such action has been taken with respect to the recording, registering, filing, re-recording, re-registering and re-filing of this instrument and of all Supplemental Mortgages, financing statements, continuation statements or other instruments of further assurances as is necessary to maintain the lien of this Mortgage (including the lien on any property acquired by the Mortgagor after the execution and delivery of this instrument and owned by the Mortgagor at the end of preceding calendar year) and reciting the details of such action or referring to prior Opinions of Counsel in which such details are given, and stating that all financing statements and continuation statements have been executed and filed that are necessary to fully preserve and protect the rights of all of the Mortgagee
SECTION 3.04.
(b) The Mortgagor shall defend, indemnify, and hold harmless each Mortgagee, its successors and assigns, from and against any and all liabilities, losses, damages, costs, expenses (including but not limited to reasonable attorneys' fees and expenses), causes of actions, administrative proceedings, suits, claims, demands, or judgments of any nature arising out of or in connection with any matter related to the Mortgage Property and any Environmental Law, including but not limited to:
(1) the past, present, or future presence of any hazardous substance, contaminant, pollutant, or hazardous waste on or related to the Mortgaged Property;
(2) any failure at any time by the undersigned to comply with the terms of any order related to the Mortgaged Property and issued by any federal, state, or municipal department or agency (other than RUS) exercising its authority to enforce any Environmental Law; and
(3) any lien or claim imposed under any Environmental Law related to clause (1).
(c) Within 10 (ten) business days after receiving knowledge of any liability, losses, damages, costs, expenses (including but not limited to reasonable attorneys' fees and expenses), cause of action, administrative proceeding, suit, claim, demand, judgment, lien, reportable event including but not limited to the release of a hazardous substance, or potential or actual violation or non-compliance arising out of or in connection with the Mortgaged Property and any Environmental Law, the Mortgagor shall provide each Mortgagee with written notice of such matter. With respect to any matter upon which it has provided such notice, the Mortgagor shall immediately take any and all appropriate actions to remedy, cure, defend, or otherwise affirmatively respond to the matter.
SECTION 3.05.
SECTION 3.06.
SECTION 3.07.
SECTION 3.08.
(1) Additional Notes issued in compliance with Article II hereof;
(2) Purchase money indebtedness in non-Utility System property, in an amount not exceeding 10% of Net Utility Plant;
(3) Restricted Rentals in an amount not to exceed 5% of Equity during any 12 consecutive calendar month period;
(4) Unsecured lease obligations incurred in the ordinary course of business except Restricted Rentals;
(5) Debt represented by dividends declared but not paid; and
(6) Subordinated Indebtedness approved by each Mortgagee.
PROVIDED, However, that the Mortgagor may incur Permitted Debt without the consent of the Mortgagee only so long as there exists no Event of Default hereunder and there has been no continuing occurrence which with the passage of time and giving of notice could become an Event of Default hereunder.
PROVIDED, FURTHER, by executing this Mortgage any consent of RUS that the Mortgagor would otherwise be required to obtain under this Section is hereby deemed to be given or waived by RUS by operation of law to the extent, but only to the extent, that to impose such a requirement of RUS consent would clearly violate existing federal laws or government regulations.
SECTION 3.09.
SECTION 3.10.
SECTION 3.11.
SECTION 3.12.
(b) If in the sole judgement of any Mortgagee, the Mortgaged Property is not being maintained and repaired in accordance with paragraph (a) of this section, such Mortgagee may send to the Mortgagor a written report
(c) The Mortgagor further agrees that upon reasonable written request of any Mortgagee, which request together with the requests of any other Mortgagees shall be made no more frequently than once every three years, the Mortgagor will supply promptly to each Mortgagee a certification (hereinafter called the “Engineer's Certification”), in form satisfactory to the requestor, prepared by a professional engineer, who shall be satisfactory to the Mortgagees, as to the condition of the Mortgaged Property. If in the sole judgment of any Mortgagee the Engineer's Certification discloses the need for improvements to the condition of the Mortgaged Property or any other operations of the Mortgagor, such Mortgagee may send to the Mortgagor a written report of such improvements and the Mortgagor will upon receipt of such written report promptly undertake to accomplish such of these improvements as are required by such Mortgagee.
SECTION 3.13.
(b) The foregoing insurance coverage shall be obtained by means of bond and policy forms approved by regulatory authorities having jurisdiction, and, with respect to insurance upon any part of the Mortgaged Property, shall provide that the insurance shall be payable to the Mortgagees as their interests may appear by means of the standard mortgagee clause without contribution. Each policy or other contract for such insurance shall contain an agreement by the insurer that, notwithstanding any right of cancellation reserved to such insurer, such policy or contract shall continue in force for at least 30 days after written notice to each Mortgagee of cancellation.
(c) In the event of damage to or the destruction or loss of any portion of the Mortgaged Property which is used or useful in the Mortgagor's business and which shall be covered by insurance, unless each Mortgagee shall otherwise agree, the Mortgagor shall replace or restore such damaged, destroyed or lost portion so that such Mortgaged Property shall be in substantially the same condition as it was in prior to such damage, destruction or loss, and shall apply the proceeds of the insurance for that purpose. The Mortgagor shall replace the lost portion of such Mortgaged Property or shall commence such restoration promptly after such damage, destruction or loss shall have occurred and shall complete such replacement or restoration as expeditiously as practicable, and shall pay or cause to be paid out of the proceeds of such insurance all costs and expenses in connection therewith.
(d) Sums recovered under any policy or fidelity bond by the Mortgagor for a loss of funds advanced under the Notes or recovered by any Mortgagee or any Noteholder for any loss under such policy or bond shall, unless applied as provided in the preceding paragraph, be used to finance construction of utility plant secured or to be secured by this Mortgage, or unless otherwise directed by the Mortgagees, be applied to the prepayment of the Notes
SECTION 3.14.
SECTION 3.15.
SECTION 3.16.
(b) If any part of the Mortgaged Property shall be taken by eminent domain, each Mortgagee shall release the property so taken from the Mortgaged Property and shall be fully protected in so doing upon being furnished with:
(1) A certificate of a duly authorized officer of the Mortgagor requesting such release, describing the property to be released and stating that such property has been taken by eminent domain and that all conditions precedent herein provided or relating to such release have been complied with; and
(2) an opinion of counsel to the effect that such property has been lawfully taken by exercise of the right of eminent domain, that the award for such property so taken has become final and that all conditions precedent herein provided for relating to such release have been complied with.
SECTION 3.17.
SECTION 3.18.
SECTION 3.19.
SECTION 3.20.
SECTION 4.01.
(a) default shall be made in the payment of any installment of or on account of interest on or principal of (or premium, if any associated with) any Note or Notes for more than five (5) Business Days after the same shall be required to be made;
(b) default shall be made in the due observance or performance of any other of the covenants, conditions or agreements on the part of the Mortgagor, in any of the Notes, Loan Agreements or in this Mortgage, and such default shall continue for a period of thirty (30) days after written notice specifying such default and requiring the same to be remedied and stating that such notice is a “Notice of Default” hereunder shall have been given to the Mortgagor by any Mortgagee; PROVIDED, HOWEVER that in the case of a default on the terms of a Note or Loan Agreement of a particular Mortgagee, the “Notice of Default” required under this paragraph may only be given by that Mortgagee;
(c) the Mortgagor shall file a petition in bankruptcy or be adjudicated a bankrupt or insolvent, or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of itself or of its property, or shall institute proceedings for its reorganization or proceedings instituted by others for its reorganization shall not be dismissed within sixty (60) days after the institution thereof;
(d) a receiver or liquidator of the Mortgagor or of any substantial portion of its property shall be appointed and the order appointing such receiver or liquidator shall not be vacated within sixty (60) days after the entry thereof;
(e) the Mortgagor shall forfeit or otherwise be deprived of its corporate charter or franchises, permits, easements, or licenses required to carry on any material portion of its business;
(f) a final judgment for an amount of more than $_____ shall be entered against the Mortgagor and shall remain unsatisfied or without a stay in respect thereof for a period of sixty (60) days; or,
(g) any material representation or warranty made by the Mortgagor herein, in the Loan Agreements or in any certificate or financial statement delivered hereunder or thereunder shall prove to be false or misleading in any material respect at the time made.
SECTION 4.02.
(a) If an Event of Default described in Section [4.01(a)] has occurred and is continuing, any Mortgagee upon which such default has occurred may declare the principal of all its Notes secured hereunder to be due and payable immediately by a notice in writing to the Mortgagor and to the other Mortgagees (failure to provide said notice to any other Mortgagee shall not affect the validity of any acceleration of the Note or Notes by such Mortgagee), and upon such declaration, all unpaid principal (and premium, if any) and accrued interest so declared shall become due and payable immediately, anything contained herein or in any Note or Notes to the contrary notwithstanding.
(b) If any other Event of Default shall have occurred and be continuing, any Mortgagee may declare the principal of all its Notes secured hereunder to be due and payable immediately by a notice in writing to the Mortgagor and to the other Mortgagees (failure to provide said notice to any other Mortgagee shall not affect the validity of any acceleration of the Note or Notes by such Mortgagee), and upon such declaration, all unpaid principal (and premium, if any) and accrued interest so declared shall become due and payable immediately, anything contained herein or in any Note or Notes to the contrary notwithstanding.
(c) Upon receipt of actual knowledge of or any notice of acceleration by any Mortgagee, any other Mortgagee may declare the principal of all of its Notes to be due and payable immediately by a notice in writing to the Mortgagor and upon such declaration, all unpaid principal (and premium, if any) and accrued interest so declared shall become due and payable immediately, anything contained herein or in any Note or Notes or Loan Agreements to the contrary notwithstanding.
(d) If after the unpaid principal of (and premium, if any) and accrued interest on any of the Notes shall have been so declared to be due and payable, all payments in respect of principal and interest which shall have become due and payable by the terms of such Note or Notes (other than amounts due as a result of the acceleration of the Notes) shall be paid to the respective Mortgagees, and (i) all other defaults under the Loan Agreements, the Notes and this Mortgage shall have been made good or cured to the satisfaction of the Mortgagees representing at least 80% of the aggregate unpaid principal balance of all of the Notes then Outstanding, (ii) proceedings to foreclose the lien of this Mortgage have not been commenced, and (iii) all reasonable expenses paid or incurred by the Mortgagees in connection with the acceleration shall have been paid to the respective Mortgagees, then in every such case such Mortgagees representing at least 80% of the aggregate unpaid principal balance of all of the Notes then Outstanding may by written notice to the Mortgagor, for purposes of this Mortgage, annul such declaration and waive such default and the consequences thereof, but no such waiver shall extend to
SECTION 4.03.
(a) take immediate possession of the Mortgaged Property, collect and receive all credits, outstanding accounts and bills receivable of the Mortgagor and all rents, income, revenues, proceeds and profits pertaining to or arising from the Mortgaged Property, or any part thereof, whether then past due or accruing thereafter, and issue binding receipts therefor; and manage, control and operate the Mortgaged Property as fully as the Mortgagor might do if in possession thereof, including, without limitation, the making of all repairs or replacements deemed necessary or advisable by such Mortgagee in possession;
(b) proceed to protect and enforce the rights of all of the Mortgagees by suits or actions in equity or at law in any court or courts of competent jurisdiction, whether for specific performance of any covenant or any agreement contained herein or in aid of the execution of any power herein granted or for the foreclosure hereof or hereunder or for the sale of the Mortgaged Property, or any part thereof, or to collect the debts hereby secured or for the enforcement of such other or additional appropriate legal or equitable remedies as may be deemed necessary or advisable to protect and enforce the rights and remedies herein granted or conferred, and in the event of the institution of any such action or suit the Mortgagee instituting such action or suit shall have the right to have appointed a receiver of the Mortgaged Property and of all proceeds, rents, income, revenues and profits pertaining thereto or arising therefrom, whether then past due or accruing after the appointment of such receiver, derived, received or had from the time of the commencement of such suit or action, and such receiver shall have all the usual powers and duties of receivers in like and similar cases, to the fullest extent permitted by law, and if application shall be made for the appointment of a receiver the Mortgagor hereby expressly consents that the court to which such application shall be made may make said appointment; and
(c) sell or cause to be sold all and singular the Mortgaged Property or any part thereof, and all right, title, interest, claim and demand of the Mortgagor therein or thereto, at public auction at such place in any county (or its equivalent locality) in which the property to be sold, or any part thereof, is located, at such time and upon such terms as may be specified in a notice of sale, which shall state the time when and the place where the sale is to be held, shall contain a brief general description of the property to be sold, and shall be given by mailing a copy thereof to the Mortgagor at least fifteen (15) days prior to the date fixed for such sale and by publishing the same once in each week for two successive calendar weeks prior to the date of such sale in a newspaper of general circulation published in said locality or, if no such newspaper is published in such locality, in a newspaper of general circulation in such locality, the first such publication to be not less than fifteen (15) days nor more than thirty (30) days prior to the date fixed for such sale. Any sale to be made under this subparagraph (c) of this Section [4.03] may be adjourned from time to time by announcement at the time and place appointed for such sale or for such adjourned sale or sales, and without further notice or publication the sale may be had at the time and place to which the same shall be adjourned;
(d) In the event that a Mortgagee proceeds to enforce remedies under this Section, any other Mortgagee may join in such proceedings. In the event that the Mortgagees are not in agreement with the method or manner of enforcement chosen by any other Mortgagee, the Mortgagees representing a majority of the aggregate unpaid principal balance on the then Outstanding Notes may direct the method and manner in which remedial action will proceed.
SECTION 4.04.
SECTION 4.05.
SECTION 4.06.
SECTION 4.07.
SECTION 5.01.
SECTION 5.02.
SECTION 5.03.
SECTION 6.01.
SECTION 6.02.
SECTION 6.03.
SECTION 6.04.
SECTION 6.05.
SECTION 6.06.
IN WITNESS WHEREOF, _____ as Mortgagor, has caused this Restated Mortgage and Security Agreement to be signed in its name and its corporate seal to be hereunto affixed and attested by its officers thereunto duly authorized, and UNITED STATES OF AMERICA, as Mortgagee, and as Mortgagee, has caused this Restated Mortgage and Security Agreement to be signed in its name by duly authorized persons, all as of the day and year first above written.
Executed by the Mortgagor in the presence of:
Executed by the United States of America, Mortgagee, in the presence of:
Executed by the above-named Mortgagee in the presence of:
1. The Maximum Debt Limit is _____.
2. The Original Mortgage as described in the [first] WHEREAS clause above is _____.
3. The outstanding secured indebtedness described in the [fourth] WHEREAS clause above as evidenced by the Original Notes is as follows:
[Note this requires computation of principal balances, not merely a toting up of the original face amounts of the notes. Alternative approaches may be used by the parties where legally effective and mutually agreeable.]
The fee and leasehold interests in real property referred to in Section Subclause (a) of Granting Clause One are _____.
The counties referred to in Subclause (B) of Granting Clause One are _____.
On this ___ day of _____, 19 __, before me appeared _____ and _____ personally known, by me and having been duly sworn by me, did say that they are the President and Secretary, respectively, of ________, a _____ corporation, and that the seal affixed to the foregoing instrument is the corporate seal of said corporation, and that said instrument was signed and sealed in behalf of said corporation by authority of its Board, and said _____ and _____ acknowledged that the execution of said instrument was a free act and deed of said corporation.
IN WITNESS whereof, I have hereunto set my hand and official seal the day and year last above written.
My commission expires:
The foregoing instrument was acknowledged before me this _______ day of 19__, by _________ Director, ________ Regional Division of the Rural Utilities Service, acknowledging an agency of the United States of America, on behalf of the Rural Utilities Service, United States of America.
My Commission expires:
BEFORE ME, a Notary Public, in and for the Commonwealth of Virginia, appeared in person ___________, signing for the Governor of the National Rural Utilities cooperative Finance Corporation, to me personally known, and known to be the identical person who subscribed the name of said corporation to the foregoing instrument, being by me duly sworn, and who stated that she/he is duly authorized to execute the foregoing instrument on behalf of said corporation, and further stated and acknowledged that she/he executed the foregoing instrument as a free and voluntary act and deed of said corporation for the consideration therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this _____ day of _____, 19__.
My commission expires:
On behalf on ___________ [Name of Borrower] (the “Borrower”), I ____________ hereby certify as follows:
1. I am the Manager of the Borrower and have been duly authorized to deliver this certificate in connection with the Additional Note or Notes to be issued on or about ___________ [Date Note or Notes are to be Signed] pursuant to Section [2.01] of the Mortgage dated ___________.
2. No Event of Default has occurred and is continuing under the Mortgage, or any event which with the giving of notice or lapse of time or both would become an Event of Default has occurred and is continuing.
3. The Additional Notes described in paragraph 1 are for the purpose of funding Property Additions being constructed, acquired, procured or replaced that are or will become part of the Borrower's Utility System.
4. The Property Additions referred to in paragraph 3 are Eligible Property Additions, i.e. Property Additions acquired or whose construction was completed not more than 5 years prior to the issuance of additional Notes and Property Additions acquired or whose construction is started and/or completed not more than 4 years after issuance of the additional Notes, but shall exclude any Property Additions financed by any other debt secured under the Mortgage at the time additional Notes are issued.
5. I have reviewed the certificate of the Independent certified public accountant also being delivered to each of the Mortgagees pursuant to Section [2.01] in connection with the aforesaid Additional Note or Notes and concur with the conclusions expressed therein.
6. Capitalized terms that are used in this certificate but are not defined herein have the meanings defined in the Mortgage.
Supplemental Mortgage and Security Agreement, dated as of _____, ___,
Whereas, the Mortgagor, the Government and _____ are parties to that certain Restated Mortgage and Security Agreement, as supplemented, amended or restated (the “Original Mortgage” identified in Schedule “A” of this Mortgage) originally entered into between the Mortgagor, the Government acting by and through the Administrator of the Rural Utilities Service (hereinafter called “RUS”), and _____; and
Whereas, the Mortgagor deems it necessary to borrow money for its corporate purposes and to issue its promissory notes and other debt obligations therefor, and to mortgage and pledge its property hereinafter described or mentioned to secure the payment of the same, and to enter into this Supplemental Mortgage pursuant to which all secured debt of the Mortgagor hereunder shall be secured on parity, and to add _____ as a secured party hereunder and under the Original Mortgage (the Supplemental Mortgage and the Original Mortgage, as it may have been previously amended or supplemented, hereinafter may be called collectively the “RUS Mortgage”); and
Whereas, the RUS Mortgage, as supplemented hereby, preserves the priority of the Original Mortgage for the pro rata benefit of all the Mortgagees and secures the payment of all of the Mortgagor's outstanding indebtedness as listed in the Instruments Recital of Schedule “A”; and
Whereas, all acts necessary to make this Supplemental Mortgage a valid and binding legal instrument for the security of such notes and obligations, subject to the terms of the RUS Mortgage, have been in all respects duly authorized:
Now, Therefore, This Supplemental Mortgage Witnesseth: That to secure the payment of the principal of (and premium, if any) and interest on all Notes issued hereunder according to their tenor and effect, and the performance of all provisions therein and herein contained, and in consideration of the covenants herein contained and the purchase or guarantee of Notes by the guarantors or holders thereof, the Mortgagor has mortgaged, pledged and granted a continuing security interest in, and by these presents does hereby grant, bargain, sell, alienate, remise, release, convey, assign, transfer, hypothecate, pledge, set over and confirm, pledge and grant a continuing security interest in for the purposes hereinafter expressed [other language may be required under various state laws], unto the Mortgagees all property, rights, privileges and franchises of the Mortgagor of every kind and description, real, personal or mixed, tangible and intangible, of the kind or nature specifically mentioned herein or any other kind or nature, except any Excepted Property set forth on Schedule “C” hereof owned or hereafter acquired by the Mortgagor (by purchase, consolidation, merger, donation, construction, erection or in any other way) wherever located, including (without limitation) all and singular the following:
A. All of those fee and leasehold interests in real property set forth in Schedule “B” hereto, subject in each case to those matters set forth in such Schedule; and
B. All of those fee and leasehold interests in real property set forth in Schedule “B” of the Original Mortgage or in any restatement, amendment or supplement thereto, subject in each case to those matters set forth in such Schedule; and
C. All of the kinds, types or items of property, now owned or hereafter acquired, described as Mortgaged Property in the Original Mortgage or in any restatement, amendment to supplement thereto as Mortgaged Property.
It is Further Agreed and Covenanted That the Original Mortgage, as previously restated, amended or supplemented, and this Supplement shall constitute one agreement and the parties hereto shall be bound by all of the terms thereof and, without limiting the foregoing.
1. All capitalized terms not defined herein shall have the meaning given in Article I of the Original Mortgage.
2. This Supplemental Mortgage is one of the Supplemental Mortgages contemplated by Article II of the Original Mortgage.
In Witness Whereof, _____ as Mortgagor.
1. The Maximum Debt Limit is _____.
2. The Original Mortgage as described in the first WHEREAS clause above is _____.
3. The outstanding secured indebtedness described in the third WHEREAS clause above is _____.
The fee and leasehold interests in real property referred to in clause A of the granting clause are _____.
(a)
(b)
(c)
(d)
(a)
(b)
For the purposes of this subpart:
Loan contracts executed pursuant to this subpart shall contain such provisions as RUS determines are appropriate to further the purposes of the RE Act and to ensure that the security for the loan will be reasonably adequate and that the loan will be repaid according to the terms of the promissory note. Such loan contracts will contain provisions addressing, but not necessarily limited to, the following matters:
(a) Description of the purpose of the loan;
(b) Specification of the interest to be charged on the loan, including the method for determining the interest rate if it is not fixed for the entire term of the loan;
(c) Specification of the method for repaying the loan principal, including the final maturity of the loan;
(d) The conditions under which the loan may be prepaid before its maturity date, including but not limited to requirements regarding the prepayment of loans made concurrently by RUS and another secured lender;
(e) The method for making scheduled payments on the loan;
(f) Accounting principles and system of accounts, and RUS authority to approve the accountant used by the borrower;
(g) The method and time period for advancing loan funds and the conditions precedent to the advance of funds;
(h) Representations and warranties by the borrower as a condition of obtaining the loan, including but not limited to: the legal authority of the borrower to enter into the loan contract and operate its system; that the loan documents will be a legal, valid and binding obligation of the borrower enforceable according to their terms; compliance of the borrower in all material respects with all federal, state, and local laws, regulations, codes, and orders; existence of any pending or threatened legal actions that could have a material adverse effect on the borrower's ability to perform its obligations under the loan documents; the accuracy and completeness of all information provided by the borrower in the loan application and with respect to the loan contract, and the existence of any material adverse change since the information was provided; and the existence of any material defaults under other agreements of the borrower;
(i) Representations, warranties, and covenants with respect to environmental matters;
(j) Reports and notices required to be submitted to RUS, including but not limited to: annual financial statements; notice of defaults; notice of litigation; notice of orders or other directives received by the borrower from regulatory authorities; notice of any matter that has resulted in or may result in a material adverse change in the condition or operations of the borrower; and such other information regarding the condition or operations of the borrower as RUS may reasonably require;
(k) Annual written certification that the borrower is in compliance with its loan contract, note, mortgage, and any other agreement with RUS, or if there has been a default in the fulfillment of any obligation under said agreements, specifying each such default and the nature and status thereof;
(l) Requirement that the borrower design and implement rates for utility services to meet certain minimum coverage of interest expense and/or debt service obligations;
(m) Requirement that the borrower maintain and preserve its mortgaged property in compliance with prudent utility practice and all applicable laws,
(n) Requirement that the borrower plan, design and construct its electric system according to standards and other requirements established by RUS, and if directed by the Administrator, that the borrower follow RUS planning, design and construction standards and requirements for other utility systems constructed by the borrower;
(o) Limitations on extensions and additions to the borrower's electric system without approval by RUS;
(p) Limitations on contracts and contract amendments that the borrower may enter into without approval by RUS;
(q) Limitations of the transfer of mortgaged property by the borrower;
(r) Limitations on dividends, patronage refunds, and cash distributions paid by the borrower;
(s) Limitations on investments, loans, and guarantees made by the borrower;
(t) Authority of RUS to approve a new general manager and to require that an existing general manager be replaced if the borrower is in default under its mortgage, loan contract, or any other agreements with RUS;
(u) Description of events of default under the loan contract and the remedies available to RUS;
(v) Applicability of state and federal laws;
(w) Severability of the individual provisions of the loan documents;
(x) Matters relating to the assignment of the loan contract;
(y) Requirements relating to federal laws and regulations, including but not limited to the following matters: area coverage for electric service; civil rights and equal employment opportunity; access to buildings and other matters relating to the handicapped; design and construction standards relating to earthquakes; the National Environmental Policy Act of 1969 and other environmental laws and regulations; flood hazard insurance; debarment and suspension from federal assistance programs; and delinquency on federal debt; and
(z) Special requirements applicable to individual loans, and such other provisions as RUS may require to ensure loan repayment and reasonably adequate loan security.
Single copies of the model loan contract (RUS Informational Publication 1718 C) are available from the Rural Utilities Service, United States Department of Agriculture, Washington, DC 20250-1533. This document may be reproduced.
AGREEMENT, dated __________, 199__, between __________ (“Borrower”), a corporation organized and existing under the laws of the State of __________ (the “State”) and the UNITED STATES OF AMERICA acting by and through the Administrator of the Rural Utilities Service (“RUS”).
The Borrower has applied to RUS for a loan for the purpose(s) set forth in Schedule 1 hereto.
RUS is willing to make such a loan to the Borrower pursuant to the Rural Electrification Act of 1936, as amended, on the terms and conditions stated herein.
THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto agree and bind themselves as follows:
Capitalized terms that are not defined herein shall have the meanings as set forth in the Mortgage. The terms defined herein include the plural as well as the singular and the singular as well as the plural.
“Act” shall mean the Rural Electrification Act of 1936, as amended.
“Advance” or “Advances” shall mean advances by RUS to Borrower pursuant to the terms and conditions of this Agreement.
“Agreement” shall mean this Loan Contract together with all schedules and exhibits and also any subsequent supplements or amendments.
“Business Day” shall mean any day that RUS is open for business.
“Contemporaneous Loan” shall mean any loan which the Borrower has used to satisfy RUS Regulations or loan conditions requiring that supplemental financing be obtained in order to obtain a loan from RUS. Any loan used to refinance or refund a Contemporaneous Loan is also considered to be a Contemporaneous Loan.
“Coverage Ratios” shall mean, collectively, the following financial ratios: (i) TIER of 1.25; (ii) Operating TIER of 1.1; (iii) DSC of 1.25; and Operating DSC of 1.1.
“Debt Service Coverage Ratio” (“DSC”) shall have the meaning provided in the Mortgage.
“Distributions” shall mean for the Borrower to, in any calendar year, declare or pay any dividends, or pay or determine to pay any patronage refunds, or retire any patronage capital or make any other Cash Distributions, to its members, stockholders or
“Electric System” shall have the meaning as defined in the Mortgage.
“Equity” shall mean the Borrower's total margins and equities computed pursuant to RUS Accounting Requirements but excluding any Regulatory Created Assets.
“Event of Default” shall have the meaning as defined in Section [7.1].
“Independent” when used with respect to any specified person or entity means such a person or entity who (1) is in fact independent, (2) does not have any direct financial interest or any material indirect financial interest in the Borrower or in any affiliate of the Borrower and (3) is not connected with the Borrower as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.
“Interest Expense” shall mean the interest expense of the Borrower computed pursuant to RUS Accounting Requirements.
“Loan” shall mean the loan described in Article III which is being made pursuant to the RUS Commitment in furtherance of the objectives of the Act.
“Loan Documents” shall mean, collectively, this Agreement, the Mortgage and the Note.
“Long-Term Debt” shall mean the total of all amounts included in the long-term debt of the Borrower pursuant to RUS Accounting Requirements.
“Maturity Date” shall have the meaning as defined in the Note.
“Monthly Payment Date” shall have the meaning as defined in the Note.
“Mortgage” shall have the meaning as described in Schedule 1 hereto.
“Mortgaged Property” shall have the meaning as defined in the Mortgage.
“Net Utility Plant” shall mean the amount constituting the Total Utility Plant of the Borrower, less depreciation, computed in accordance with RUS Accounting Requirements.
“Note” shall mean a promissory note executed by the Borrower in the form of exhibit A hereto, and any note executed and delivered to RUS to refund, or in substitution for such a note.
“Operating DSC” or “ODSC” shall mean Operating Debt Service Coverage calculated as:
“Operating TIER” or “OTIER” shall mean Operating Times Interest Earned Ratio calculated as:
“Payment Notice” shall mean a notice furnished by RUS to Borrower that indicates the precise amount of each payment of principal and interest and the total amount of each payment.
“Permitted Debt” shall have the meaning as defined in section [6.13].
“Prior Loan Contracts” shall have the meaning as defined in section 9.15.
“Regulatory Created Assets” shall mean the sum of any amounts properly recordable as unrecovered plant and regulatory study costs or as other regulatory assets, computed pursuant to RUS Accounting Requirements.
“RUS Accounting Requirements” shall mean any system of accounts prescribed by RUS Regulations as such RUS Accounting Requirements exist at the date of applicability thereof.
“RUS Commitment” shall have the meaning as defined in schedule 1 hereto.
“RUS Regulations” shall mean regulations of general applicability published by RUS from time to time as they exist at the date of applicability thereof, and shall also include any regulations of other Federal entities which RUS is required by law to implement.
“Special Construction Account” shall have the meaning as defined in section 5.21.
“Subsidiary” shall mean a corporation that is a subsidiary of the Borrower and subject to the Borrower's control, as defined by RUS Accounting Requirements.
“Termination Date” shall have the meaning as defined in the Note.
“Times Interest Earned Ratio” (“TIER”) shall have the meaning provided in the Mortgage.
“Total Assets” shall mean an amount constituting the total assets of the Borrower as computed pursuant to RUS Accounting Requirements, but excluding any Regulatory Created Assets.
“Total Utility Plant” shall mean the amount constituting the total utility plant of the Borrower computed in accordance with RUS Accounting Requirements.
“Utility System” shall have the meaning as defined in the Mortgage.
To induce RUS to make the Loan, and recognizing that RUS is relying hereon, the Borrower represents and warrants as follows:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
RUS agrees to make, and the Borrower agrees to request, on the terms and conditions of this Agreement, Advances from time to time in an aggregate principal amount not to exceed the RUS Commitment. On the Termination Date, RUS may stop advancing funds and limit the RUS Commitment to the amount advanced prior to such date. The obligation of the Borrower to repay the Advances shall be evidenced by the Note in the principal amount of the unpaid principal amount of the Advances from time to time outstanding. The Borrower shall give RUS written notice of the date on which each Advance is to be made.
The Note shall be payable and bear interest as follows:
(a)
(b)
(c)
(d)
The Borrower has no right to prepay the Note in whole or in part except such rights, if any, as are expressly provided for in the Note. However, prepayment of the Note (and any penalties) shall be mandatory under Section [5.3] hereof if the Borrower has used a Contemporaneous Loan in order to qualify for the RUS Commitment, and later prepays the Contemporaneous Loan.
The obligation of RUS to make any Advance hereunder is subject to satisfaction of each of the following conditions precedent on or before the date of such Advance:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
The obligation of RUS to make any Advance hereunder is also subject to satisfaction, on or before the date of such Advance, of each of the special conditions, if any, listed in Schedule 1 hereto.
Unless otherwise agreed to in writing by RUS, while this Agreement is in effect, whether or not any Advance is outstanding, the Borrower agrees to duly observe each of the affirmative covenants contained in this Article:
(a)
(b)
If the Borrower shall at any time prepay in whole or in part the Contemporaneous Loan described on Schedule 1, the Borrower shall prepay the RUS Note correspondingly in
(a)
(b)
(a)
(b) The average Coverage Ratios achieved by the Borrower in the 2 best years out of the 3 most recent calendar years must be not less than any of the following:
(c)
(d)
(e)
(f)
(g)
The Borrower shall adopt as its depreciation rates only those which have been previously approved for the Borrower by RUS.
The Borrower shall maintain and preserve its Utility System in compliance in all material respects with the provisions of the Mortgage, RUS Regulations and all applicable laws.
The Borrower shall at all times keep, and safely preserve, proper books, records and accounts in which full and true entries shall be made of all of the dealings, business and affairs of the Borrower and its Subsidiaries, in accordance with any applicable RUS Accounting Requirements.
The Borrower shall afford RUS, through its representatives, reasonable opportunity, at all times during business hours and upon prior notice, to have access to and the right to inspect the Utility System, any other property encumbered by the Mortgage, and any or all books, records, accounts, invoices, contracts, leases, payrolls, canceled checks, statements and other documents and papers of every kind belonging to or in the possession of the Borrower or in anyway pertaining to its property or business, including its Subsidiaries, if any, and to make copies or extracts therefrom.
(a) The Borrower shall make diligent effort to extend electric service to all unserved persons within the service area of the Borrower
(b) If economically feasible and reasonable considering the cost of providing such service and/or the effects on consumers' rates, such service shall be provided, to the maximum extent practicable, at the rates and minimum charges established in the Borrower's rate schedules, without the payment of such persons, other than seasonal or temporary consumers, of a contribution in aid of construction. A seasonal consumer is one that demands electric service only during certain seasons of the year. A temporary consumer is a seasonal or year-round consumer that demands electric service over a period of less than five years.
(c) The Borrower may assess contributions in aid of construction provided such assessments are consistent with this section.
In acquiring real property, the Borrower shall comply in all material respects with the provisions of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (the “Uniform Act”), as amended by the Uniform Relocation Act Amendments of 1987, and 49 CFR part 24, referenced by 7 CFR part 21, to the extent the Uniform Act is applicable to such acquisition.
The Borrower shall use or cause to be used in connection with the expenditures of funds advanced on account of the Loan only such unmanufactured articles, materials, and supplies as have been mined or produced in the United States or any eligible country, and only such manufactured articles, materials, and supplies as have been manufactured in the United States or any eligible country substantially all from articles, materials, and supplies mined, produced or manufactured, as the case may be, in the United States or any eligible country, except to the extent RUS shall determine that such use shall be impracticable or that the cost thereof shall be unreasonable. For purposes of this section, an “eligible country” is any country that applies with respect to the United States an agreement ensuring reciprocal access for United States products and services and United States suppliers to the markets of that country, as determined by the United States Trade Representative.
The Borrower shall prepare and use power requirements studies of its electric loads and future energy and capacity requirements in conformance with RUS Regulations.
The Borrower shall develop, maintain and use up-to-date long-range engineering plans and construction work plans in conformance with RUS Regulations.
The Borrower shall use design standards, construction standards, and lists of acceptable materials in conformance with RUS Regulations.
The Borrower shall submit plans and specifications for construction to RUS for review and approval, in conformance with RUS Regulations, if the construction will be financed in whole or in part by a loan made or guaranteed by RUS.
The Borrower shall use the standard forms of contracts promulgated by RUS for construction, procurement, engineering services and architectural services in conformance with RUS Regulations, if the construction, procurement, or services are being financed in whole or in part by a loan being made or guaranteed by RUS.
The Borrower shall follow RUS contract bidding procedures in conformance with RUS Regulations when contracting for construction or procurement financed in whole or in part by a loan made or guaranteed by RUS.
(a)
(b)
(c)
The Borrower shall cause to be prepared and furnished to RUS a full and complete annual report of its financial condition and of its operations in form and substance satisfactory to RUS, audited and certified by Independent certified public accountants satisfactory to RUS and accompanied by a report of such audit in form and substance satisfactory to RUS. The Borrower shall also furnish to RUS from time to time such other reports concerning the financial condition or operations of the Borrower, including its Subsidiaries, as RUS may reasonably request or RUS Regulations require.
The Borrower shall furnish to RUS:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
The Borrower shall hold all moneys advanced to it by RUS hereunder in trust for RUS and shall deposit such moneys promptly
The Borrower also agrees to comply with any additional affirmative covenant(s) identified in Schedule 1 hereto.
Unless otherwise agreed to in writing by RUS, while this Agreement is in effect, whether or not any Advance is outstanding hereunder, the Borrower shall duly observe each of the negative covenants set forth in this Article.
(a) The Borrower shall not extend or add to its Electric System either by construction or acquisition without the prior written approval of RUS if the construction or acquisition is financed or will be financed, in whole or in part, by a RUS loan or loan guarantee.
(b) The Borrower shall not extend or add to its Electric System with funds from other sources without prior written approval of RUS in the case of:
(1) Generating facilities if the combined capacity of the facilities to be built, procured, or leased, including any future facilities included in the planned project, will exceed the lesser of 5 Megawatts or 30 percent of the Borrower's Equity;
(2) Existing electric facilities or systems in service whose purchase price, or capitalized value in the case of a lease, exceeds ten percent of the Borrower's Net Utility Plant; and
(3) Any project to serve a customer whose annual Kwh purchases or maximum annual Kw demand is projected to exceed 25 percent of the Borrower's total Kwh sales or maximum Kw demand in the year immediately preceding the acquisition or start of construction of facilities.
The Borrower shall not change its principal place of business or keep property in a county not shown on a schedule to the Mortgage if the change would cause the lien in favor of RUS to become unperfected or fail to become perfected, as the case may be, unless, prior thereto, the Borrower shall have taken all steps required by law in order to assure that the lien in favor of RUS remains or becomes perfected, as the case may be, and, in either event, such lien has the priority accorded by the Mortgage.
At any time any Event of Default, or any occurrence which with the passage of time or giving of notice would be an Event of Default, occurs and is continuing the Borrower shall not employ any general manager of the Utility System or the Electric System or any person exercising comparable authority to such a manager unless such employment shall first have been approved by RUS. If any Event of Default, or any occurrence which with the passage of time or giving of notice would be an Event of Default, occurs and is continuing and RUS requests the Borrower to terminate the employment of any such manager or person exercising comparable authority, or RUS requests the Borrower to terminate any contract for operating the Utility System or the Electric System, the Borrower shall do so within thirty (30) days after the date of such notice. All contracts in respect of the employment of any such manager or person exercising comparable authority, or for the operation of the Utility System or the Electric System, shall contain provisions to permit compliance with the foregoing covenants.
Without the prior approval of RUS in writing, the Borrower shall not enter into any of the following contracts:
(a)
(b)
(c)
(d)
(e)
(f)
(a) The Borrower shall not consolidate with, or merge, or sell all or substantially all of its business or assets, to another entity or person except to the extent it is permitted to do so under the Mortgage. The exception contained in this paragraph (a) is subject to the additional limitation set forth in paragraph (b) of this section.
(b) The Borrower shall not, without the written approval of the Administrator, voluntarily or involuntarily sell, convey or dispose of any portion of its business or assets (including, without limitation, any portion of its franchise or service territory) to another entity or person if such sale, conveyance or disposition could reasonably be expected to reduce the Borrower's existing or future requirements for energy or capacity being furnished to the Borrower under any wholesale power contract which has been pledged as security to RUS.
Without the prior written approval of RUS, the Borrower shall not place the proceeds of the Loan or any loan which has been made or guaranteed by RUS in the custody of any bank or other depository that is not insured by the Federal Deposit Insurance Corporation or other federal agency acceptable to RUS.
Without the prior written approval of RUS, the Borrower shall not in any calendar year make any Distributions (exclusive of any Distributions to the estates of deceased natural patrons) to its members, stockholders or consumers except as follows:
(a) Equity above 30%. If, after giving effect to any such Distribution, the Equity of the Borrower shall be greater than or equal to 30% of its Total Assets; or
(b) Equity above 20%. If, after giving effect to any such Distribution, the aggregate of all Distributions made during the calendar year when added to such Distribution shall be less than or equal to 25% of the prior year's margins.
Provided however, that in no event shall the Borrower make any Distributions if there is unpaid when due any installment of principal of (premium, if any) or interest on its Notes, if the Borrower is otherwise in default hereunder or if, after giving effect to any such Distribution, the Borrower's current and accrued assets would be less than its current and accrued liabilities.
The Borrower shall not make any loan or advance to, or make any investment in, or purchase or make any commitment to purchase any stock, bonds, notes or other securities of, or guaranty, assume or otherwise become obligated or liable with respect to the obligations of, any other person, firm or corporation, except as permitted by the Act and RUS Regulations.
The Borrower shall not file with or submit for approval of regulatory bodies any proposed depreciation rates which are inconsistent with RUS Regulations.
The Borrower shall not, without approval in writing by RUS, use any Advance to construct any facilities which shall involve any district, site, building, structure or object which is included in, or eligible for inclusion in, the National Register of Historic Places maintained by the Secretary of the Interior pursuant to the Historic Sites Act of 1935 and the National Historic Preservation Act of 1966.
Without the prior written approval of RUS, the Borrower shall not decrease its rates if it has failed to achieve all of the Coverage Ratios for the calendar year prior to such reduction.
Except as expressly permitted by Article II of the Mortgage and subject to the further limitations expressed in the next section, the Borrower shall not incur, assume, guarantee or otherwise become liable in respect of any debt for borrowed money and Restricted Rentals (including Subordinated Indebtedness) other than the following: (“Permitted Debt”)
(a) Additional Notes issued in compliance with Article II of the Mortgage;
(b) Purchase money indebtedness in non-Utility System property, in an amount not exceeding 10% of Net Utility Plant;
(c) Restricted Rentals in an amount not to exceed 5% of Equity during any 12 consecutive calendar month period;
(d) Unsecured lease obligations incurred in the ordinary course of business except Restricted Rentals;
(e) Unsecured indebtedness for borrowed money, except when the aggregate amount of such indebtedness exceeds 15% of Net Utility Plant and after giving effect to such unsecured indebtedness the Borrower's Equity is less than 30% of its Total Assets;
(f) Debt represented by dividends declared but not paid; and
(g) Subordinated Indebtedness approved by RUS.
PROVIDED, However, that the Borrower may incur Permitted Debt without the consent of RUS only so long as there exists no Event of Default hereunder and there has been no continuing occurrence which with the passage of time and giving of notice could become an Event of Default hereunder.
PROVIDED, FURTHER, by executing this Agreement any consent of RUS that the Borrower would otherwise be required to obtain under this Section is hereby deemed to be given or waived by RUS by operation of law to the extent, but only to the extent, that to impose such a requirement of RUS consent would clearly violate federal laws or RUS Regulations.
(a) The Borrower shall not issue any Additional Notes under the Mortgage to finance Eligible Property Additions without the prior written consent of RUS unless the following additional requirements are met in addition to the requirements set forth in the Mortgage for issuing Additional Notes:
(1) The weighted average life of the loan evidenced by such Notes does not exceed the weighted average of the expected remaining useful lives of the assets being financed;
(2) The principal of the loan evidenced by such Notes is amortized at a rate that shall yield a weighted average life that is not greater than the weighted average life that would result from level payments of principal and interest; and
(3) The principal of the loan being evidenced by such Notes has a maturity of not less than 5 years.
(b) The Borrower shall not issue any Additional Notes under the Mortgage to refund or refinance Notes without the prior written consent of RUS unless, in addition to the requirements set forth in the Mortgage for issuing Refunding or Refinancing Notes, the weighted average life of any such Refunding or Refinancing Notes is not greater than the weighted average remaining life of the Notes being refinanced.
(c) Any request for consent from RUS under this section, shall be accompanied by a certificate of the Borrower's manager substantially in the form attached to this Agreement as Exhibit C-1 in the case of Notes being issued under Section [2.01] of the Mortgage and C-2 in the case of Notes being issued under Section [2.02] of the Mortgage.
The Borrower shall not materially breach any obligation to be paid or performed by the Borrower on any contract, or take any action which is likely to materially impair the value of any contract, which has been pledged as security to RUS by the Borrower or any other entity.
The Borrower also agrees to comply with any additional negative covenant(s) identified in Schedule 1 hereto.
The following shall be Events of Default under this Agreement:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Upon the occurrence of an Event of Default, then RUS may pursue all rights and remedies available to RUS that are contemplated by this Agreement or the Mortgage in the manner, upon the conditions, and with the effect provided in this Agreement or the Mortgage, including, but not limited to, a suit for specific performance, injunctive relief or damages. Nothing herein shall limit the right of RUS to pursue all rights and remedies available to a creditor following the occurrence of an Event of Default listed in Article VII hereof. Each right, power and remedy of RUS shall be cumulative and concurrent, and recourse to one or more rights or remedies shall not constitute a waiver of any other right, power or remedy.
In addition to the rights, powers and remedies referred to in the immediately preceding section, RUS may, in its absolute discretion, suspend making Advances hereunder if (i) any Event of Default, or any occurrence which with the passage of time or giving of notice would be an Event of Default, occurs and is continuing; (ii) there has occurred a change in the business or condition, financial or otherwise, of the Borrower which in the opinion of RUS materially and adversely affects the Borrower's ability to meet its obligations under the Loan Documents, or (iii) RUS is authorized to do so under RUS Regulations.
All notices, requests and other communications provided for herein including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement shall be given or made in writing (including, without limitation, by telecopy) and delivered to the intended recipient at the “Address for Notices” specified below; or, as to any party, at such other address as shall be designated by such party in a notice to each other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopier or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as provided for herein. The Address for Notices of the respective parties are as follows:
To the extent allowed by law, the Borrower shall pay all costs and expenses of RUS, including reasonable fees of counsel, incurred in connection with the enforcement of the Loan Documents or with the preparation for such enforcement if RUS has reasonable grounds to believe that such enforcement may be necessary.
If payment of any amount due hereunder is not received at the United States Treasury in Washington, DC, or such other location as RUS may designate to the Borrower within five (5) Business Days after the due date thereof or such other time period as RUS may prescribe from time to time in its policies of general application in connection with any late payment charge (such unpaid amount being herein called the “delinquent amount”, and the period beginning after such due date until payment of the delinquent amount being herein called the “late-payment period”), the Borrower shall pay to
To the extent permitted by law, the Borrower agrees to pay all expenses of RUS (including the fees and expenses of its counsel) in connection with the filing or recordation of all financing statements and instruments as may be required by RUS in connection with this Agreement, including, without limitation, all documentary stamps, recordation and transfer taxes and other costs and taxes incident to recordation of any document or instrument in connection herewith. Borrower agrees to save harmless and indemnify RUS from and against any liability resulting from the failure to pay any required documentary stamps, recordation and transfer taxes, recording costs, or any other expenses incurred by RUS in connection with this Agreement. The provisions of this subsection shall survive the execution and delivery of this Agreement and the payment of all other amounts due hereunder or due on the Note.
No failure on the part of RUS to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise by RUS of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.
EXCEPT TO THE EXTENT GOVERNED BY APPLICABLE FEDERAL LAW, THE LOAN DOCUMENTS SHALL BE DEEMED TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE [IN WHICH THE BORROWER IS INCORPORATED].
If any payment to be made by the Borrower hereunder shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing any interest in respect of such payment.
The Borrower may elect not to borrow the RUS Commitment in which event RUS shall release the Borrower from its obligations hereunder, provided the Borrower complies with such terms and conditions as RUS may impose for such release and provided also that if the Borrower has any remaining obligations to RUS for loans made or guaranteed by RUS under any Prior Loan Contracts, RUS may, under Section [9.15] of this Loan Contract, withhold such release until all such obligations have been satisfied and discharged.
This Agreement shall be binding upon and inure to the benefit of the Borrower and RUS and their respective successors and assigns, except that the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of RUS.
Subject to RUS Regulations, this Agreement and the other Loan Documents are intended by the parties to be a complete and final expression of their agreement. However, RUS reserves the right to waive its rights to compliance with any provision of this Agreement and the other Loan Documents. No amendment, modification, or waiver of any provision hereof or thereof, and no consent to any departure of the Borrower herefrom or therefrom, shall be effective unless approved in writing by RUS in the form of either a RUS Regulation or other writing signed by or on behalf of RUS, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
The headings and sub-headings contained in the titling of this Agreement are intended to be used for convenience only and do not constitute part of this Agreement.
If any term, provision or condition, or any part thereof, of this Agreement or the Mortgage shall for any reason be found or held invalid or unenforceable by any governmental agency or court of competent jurisdiction, such invalidity or unenforceability shall not affect the remainder of such term, provision or condition nor any other term, provision or condition, and this Agreement, the Note, and the Mortgage shall survive and be construed as if such invalid or unenforceable term, provision or condition had not been contained therein.
Upon the occurrence and during the continuance of any Event of Default, RUS is hereby authorized at any time and from time to time, without prior notice to the Borrower, to exercise rights of setoff or recoupment and apply any and all amounts held or hereafter held, by RUS or owed to the Borrower or for the credit or account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing hereunder or under the Note. RUS
Each Schedule and Exhibit attached hereto and referred to herein is each an integral part of this Agreement.
It is understood and agreed that with respect to all loan agreements previously entered into by and between RUS and the Borrower (hereinafter being referred to as “Prior Loan Contracts”) the Borrower shall be required, after the date hereof, to meet affirmative and negative covenants as set forth in this Agreement rather than those set forth in the Prior Loan Contracts. In addition, any remaining obligation of RUS to make additional advances on promissory notes of the Borrower that have been previously delivered to RUS under Prior Loan Contracts shall, after the date hereof, be subject to the conditions set forth in this Agreement. In the event of any conflict between any provision set forth in a Prior Loan Contract and any provision in this Agreement, the requirements as set forth in this Agreement shall apply. Nothing in this section shall, however, eliminate or modify any special condition, special affirmative covenant or special negative covenant, if any, unless specifically agreed to in writing by RUS.
In the case of any consent, approval or waiver from RUS that is required under this Agreement or any other Loan Document, such consent, approval or waiver must be in writing and signed by an authorized RUS representative to be effective. As used in this section, “authorized RUS representative” means the Administrator of RUS, and also means a person to whom the Administrator has officially delegated specific or general authority to take the action in question.
This Agreement shall remain in effect until one of the following two events has occurred:
(a) The Borrower and RUS replace this Agreement with another written agreement; or
(b) All of the Borrower's obligations under the prior loan contracts and this Agreement have been discharged and paid.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
1. The purpose of this loan is __________ and such other purposes that RUS may agree to in writing in order to carry out the purposes of the Rural Electrification Act.
2. The Mortgage shall mean the Restated Mortgage and Security Agreement, dated as of __________, between the Borrower and RUS, as it may have been or shall be supplemented, amended, consolidated, or restated from time to time.
3. The governmental authority referred to in Section [2.1(c)] is __________.
4. The exception being taken to the representations in Section [2.1(e)] concerning material compliance with laws is as follows: __________.
5. The litigation referred to in Section [2.1(f)] is described as follows: __________.
6. The date of the Borrower's financial information referred to in Section [2.1(h)] is __________.
7. The principal place of business of the Borrower referred to in Section [2.1(i)] is __________.
8. All of the property of the Borrower is located in the counties of __________.
9. The subsidiary (or subsidiaries) referred to in Section [2.1(k)] is (are): __________.
10. The Contemporaneous Loan referred to in Section [5.3] is described as follows: __________.
11. The RUS Commitment referred to in the definitions means a loan in the principal amount of $________ which is being made by RUS to the Borrower at the ___ Hardship Rate ___ Municipal Rate
12. Amortization of Advance shall be based upon the method indicated below:
13. The SPECIAL condition(s) referred to in Section [4.2] is (are): __________.
14. The additional AFFIRMATIVE covenant(s) referred to in Section [5.22] is (are) as follows: ________. 15. The additional NEGATIVE covenant(s) referred to in Section [6.16] is (are) as follows: __________.
16. The address of the Borrower referred to in Section [9.1]. is __________.
The Existing Liens referred to in Section [2.1(g)] are as follows:
The additional contracts referred to in Section [6.5(f)] are described as follows:
During the performance of this contract, the contractor agrees as follows:
(a) The contractor shall not discriminate against any employee or applicant for employment because of race, color, religion, sex or national origin. The contractor shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex or national origin. Such action shall include, but not be limited to the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause.
(b) The contractor shall, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants shall receive consideration for employment without regard to race, color, religion, sex or national origin.
(c) The contractor shall send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers' representative of the contractor's commitments under this section, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.
(d) The contractor shall comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations and relevant orders of the Secretary of Labor.
(e) The contractor shall furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by the rules, regulations and orders of the Secretary of Labor, or pursuant thereto, and shall permit access to his books, records and accounts by the administering agency and the Secretary of Labor for purposes of investigation to ascertain compliances with such rules, regulations and orders.
(f) In the event of the contractor's noncompliance with the non-discrimination clauses of this contract or with any of the said rules, regulations or orders, this contract may be cancelled, terminated or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts or federally assisted construction contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in said Executive Order or by rule, regulation or order of the Secretary of Labor, or as otherwise provided by law.
(g) The contractor shall include the provisions of paragraphs (a) through (g) in every subcontract or purchase order unless exempted by rules, regulations or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246, dated September 24, 1965, so that such provisions shall be binding upon each subcontractor or vendor. The contractor shall take such action with respect to any subcontract or purchase order as the administering agency may direct as a means of enforcing such provisions, including sanctions for noncompliance: Provided, however, that in the event a contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the agency, the contractor may request the United States to enter into such litigation to protect the interests of the United States.
On behalf on __________ [Name of Borrower] __________ I hereby certify that the Additional Note or Notes to be
(a) The weighted average life of the loan evidenced by such Notes (____ years) does not exceed the weighted average of the expected remaining useful lives of the assets being financed (____ years) as evidenced by the attached calculation of said weighted average lives.
(b) The principal of the loan evidenced by such Notes shall either be [check one and provide evidence in the second case]:
___ (1) repaid based on level payments of principal and interest throughout the life of the loan, or
___ (2) amortized at a rate that shall yield a weighted average life that is not greater than the weighted average life that would result from level payments of principal and interest throughout the life of the loan as evidenced by the attached analysis of said weighted average lives.
(c) The principal of the loan evidenced by such Notes has a maturity of not less than 5 years.
On behalf on __________ [Name of Borrower] __________ I hereby certify that the Additional Note or Notes to be issued under Section [2.02] of the Mortgage on or about __________ [Date Note or Notes are to be Signed] __________ meet the requirement of Section [6.14] of the Loan Contract that the weighted average life of such Notes is not greater than the weighted average remaining life of the Notes being refinanced, as evidenced by the attached calculation of said weighted average lives.
7 U.S.C. 901
This part prescribes regulations implementing a guarantee program for bonds and notes issued for electrification on telephone purposes authorized by section 313A of the Rural Electrification Act of 1936 (7 U.S.C. 940c-1).
The Rural Electrification Act of 1936 (the “RE Act”) (7 U.S.C. 901
For the purpose of this part:
(a) In accordance with section 313A of the RE Act, a guarantee will be issued by the Secretary only if the Secretary
(1) The proceeds of the guaranteed bonds will be used by the guaranteed lender to make loans to borrowers for electrification or telephone purposes eligible for assistance under this chapter, or to refinance bonds or notes previously issued by the guaranteed lender for such purposes;
(2) At the time the guarantee is executed, the total principal amount of guaranteed bonds outstanding would not exceed the principal amount of outstanding concurrent loans previously made by the guaranteed lender;
(3) The proceeds of the guaranteed bonds will not be used directly or indirectly to fund projects for the generation of electricity; and
(4) The guaranteed lender will not use any amounts obtained from the reduction in funding costs provided by the program to reduce the interest rates borrowers are paying on new or outstanding loans, other than new concurrent loans as provided in 7 CFR part 1710, of this chapter.
(b) During the term of the guarantee, the guaranteed lender shall:
(1) Limit cash patronage refunds, for guaranteed lenders having a credit rating below “A−” on its senior secured debt without regard to the guarantee. For such guaranteed lenders, cash patronage refunds are limited to five percent of the total patronage refund eligible. The limit on patronage refunds must be maintained until the credit rating is restored to “A−” or above. For those guaranteed lenders subject to patronage limitations, equity securities issued as part of the patronage refund shall not be redeemable in cash during the term of any part of the guarantee, and the guaranteed lender shall not issue any dividends on any class of equity securities during the term of the guarantee.
(2) Maintain sufficient collateral equal to the principal amount outstanding, for guaranteed lenders having a credit rating below “A−” on its senior secured debt without regard to the guarantee. Collateral shall be in the form of specific and identifiable unpledged securities equal to the value of the guaranteed amount. In the case of a guaranteed lender's default, the U.S. government claim shall not be subordinated to the claims of other creditors, and the indenture must provide that in the event of default, the government has first rights on the asset. Upon application and throughout the term of the guarantee, guaranteed lenders not subject to collateral pledging requirements shall identify, with the concurrence of the Secretary, specific assets to be held as collateral should the credit rating of its senior secured debt without regard to the guarantee fall below “A−”. The Secretary has discretion to require collateral at any time should circumstances warrant.
(c) The final maturity of the guaranteed bonds shall not exceed 20 years.
(d) The guaranteed bonds shall be issued to the Federal Financing Bank on terms and conditions consistent with comparable government-guaranteed bonds and satisfactory to the Secretary.
(e) The Secretary shall guarantee payment son guaranteed bonds in such forms and on such terms and conditions and subject to such covenants, representations, warranties and requirements (including requirements for audits) as determined appropriate for satisfying the requirements of this part. The Secretary shall require the guaranteed lender to enter into a guarantee agreement to evidence its acceptance of the foregoing. Any guarantee issued under this part shall be made in a separate and distinct offering.
(a) To be eligible to participate in the program, a guaranteed lender must be:
(1) A bank or other lending institution organized as a private, not-for-profit cooperative association, or otherwise on a non-profit basis; and
(2) Able to demonstrate to the Secretary that it possesses the appropriate expertise, experience, and qualifications to make loans for electrification or telephone purposes.
(b) To be eligible to receive a guarantee, a guaranteed lender's bond must meet the following criteria:
(1) The guaranteed leader must furnish the Secretary with a certified list
(2) The guaranteed bonds to be issued by the guaranteed lender must receive an underlying investment grade rating from a Rating Agency, without regard to the guarantee;
(c) A lending institution's status as an eligible applicant does not assure that the Secretary will issue the guarantee sought in the amount or under the terms requested, or otherwise preclude the Secretary from declining to issue a guarantee.
(a) Applications shall contain the following:
(1) Background and contact information on the applicant;
(2) A term sheet summarizing the proposed terms and conditions of, and the security pledged to assure the applicant's performance under, the guarantee agreement;
(3) A statement by the applicant as to how it proposes to use the proceeds of the guaranteed bonds, and the financial benefit it anticipates deriving from participating in the program;
(4) A pro-forma cash flow projection or business plan for the next five years, demonstrating that there is reasonable assurance that the applicant will be able to repay the guaranteed bonds in accordance with their terms;
(5) Consolidated financial statements of the guaranteed lender for the previous three years that have been audited by an independent certified public accountant, including any associated notes, as well as any interim financial statements and associated notes for the current fiscal year;
(6) Evidence of having been assigned an investment grade rating on the debt obligations for which it is seeking the guarantee, without regard to the guarantee;
(7) Evidence of a credit rating, from a Rating Agency, on its senior secured debt without regard to the government guarantee and satisfactory to the Secretary.
(8) Such other application documents and submissions deemed necessary by the Secretary for the evaluation of applicants.
(b) The application process occurs as follows:
(1) The applicant submits an application to the Secretary;
(2) The application is screened by RUS pursuant to 7 CFR 1720.7(a) of this part, to ascertain its threshold eligibility for the program;
(3) RUS evaluates the application pursuant to the selection criteria set forth in 7 CFR 1720.7(b) of this part;
(4) If RUS provisionally approves the application, the applicant and RUS negotiate terms and conditions of the bond documents, and
(5) The applicant offers its guaranteed bonds, and the Secretary upon approval of the pricing, redemption provisions and other terms of the offering, executes the guarantee.
(c) If requested by the applicant at the time it files its application, the General Counsel of the Department of Agriculture shall provide the Secretary with an opinion regarding the validity and authority of a guarantee issued to the lender under section 313A of the RE Act.
(a)
(b)
(1) The extent to which the proposed provisions indicate the applicant will be able to repay the guaranteed bonds;
(2) The adequacy of the proposed provisions to protect the Federal government, based upon items including, but not limited to the nature of the pledged security, the priority of the
(3) The applicant's demonstrated performance of financially sound business practices;
(4) The extent to which providing the guarantee to the applicant will help reduce the cost and/or increase the supply of credit to rural America, to generate other economic benefits, including the amount of fee income available to be deposited into the Rural Economic Development Subaccount, maintained under section 313(b)(2)(A) of the RE Act (7 U.S.C. 940c-1(b)(2)(B)), after payment of the subsidy amount.
(c)
(d)
(a) The following requirements must be met by the applicant prior to the endorsement of a guarantee by the Secretary.
(1) A guarantee agreement suitable in form and substance to the Secretary must be delivered.
(2) Bond documents must be executed by the applicant setting forth the legal provisions relating to the guaranteed bonds, including but not limited to payment dates, interest rates, redemption features, pledged security, additional borrowing terms including an explicit agreement to make payments even if loans made using the proceeds of such bond or note is not repaid to the lender, other financial covenants, and events of default and remedies;
(3) Prior to the issuance of the guarantee, the applicant must certify to the Secretary that the proceeds from the guaranteed bonds will be applied to fund eligible new loans under the RE Act, to refinance concurrent loans, or to refinance existing debt instruments of the guaranteed lender used to fund eligible loans;
(4) The applicant provides a certified list of concurrent loans and their outstanding balances as of the date the guarantee is to be issued;
(5) Counsel to the applicant must furnish an opinion satisfactory to the Secretary as to the applicant being legally authorized to issue the guaranteed bonds and enter into the bond documents;
(6) No material adverse change occurs between the date of the application and date of execution of the guarantee;
(7) The applicant shall provide evidence of an investment grade rating from a Rating Agency for the proposed guaranteed bond without regard to the guarantee;
(8) The applicant shall provide evidence of a credit rating on its senior secured debt without regard to the guarantee and satisfactory to the Secretary; and
(9) Certification by the Chairman of the Board and the Chief Executive Officer of the applicant (or other senior management acceptable to the Secretary), acknowledging the applicant's commitment to submit to the Secretary, an annual credit assessment of the applicant by a Rating Agency, an annual review and certification of the security of the government guarantee that is audited by an independent certified public accounting firm or federal banking regulator, annual consolidated financial statements audited by an independent certified public accountant each year during which the guarantee bonds are outstanding, and other such information requested by the Secretary.
(b) The Secretary shall not issue a guarantee if the applicant is unwilling or unable to satisfy all requirements.
(a) The guaranteed lender will be required to sign a guarantee agreement with the Secretary setting forth the terms and conditions upon which the Secretary guarantees the payment of the guaranteed bonds.
(b) The guaranteed bonds shall refer to the guarantee agreement as controlling the terms of the guarantee.
(c) The guarantee agreement shall address the following matters:
(1) Definitions and principles of construction;
(2) The form of guarantee;
(3) Coverage of the guarantee;
(4) Timely demand for payment on the guarantee;
(5) Any prohibited amendments of bond documents or limitations on transfer of the guarantee;
(6) Limitation on acceleration of guaranteed bonds;
(7) Calculation and manner of paying the guarantee fee;
(8) Consequences of revocation of payment on the guaranteed bonds;
(9) Representations and warranties of the guaranteed lender;
(10) Representations and warranties for the benefit of the holder of the guaranteed bonds;
(11) Claim procedures;
(12) What constitutes a failure by the guaranteed lender to pay;
(13) Demand on RUS;
(14) Assignment to RUS;
(15) Conditions of guarantee which may include requiring the guaranteed lender to adopt measures to ensure adequate capital levels are retained to absorb losses relative to risk in the guaranteed lender's portfolio and requirements on the guaranteed lender to hold additional capital against the risk of default;
(16) Payment by RUS;
(17) RUS payment does not discharge guaranteed lender;
(18) Undertakings for the benefit of the holders of guaranteed bonds, including: notices, registration, prohibited amendments, prohibited transfers, indemnification, multiple bond issues;
(19) Governing law;
(20) Notices;
(21) Benefit of agreement;
(22) Entirety of agreement;
(23) Amendments and waivers;
(24) Counterparts;
(25) Severability, and
(26) Such other matters as the Secretary believes to be necessary or appropriate.
(a)
(b) Subject to paragraph (c) of this section, up to one-third of the 30 basis point guarantee fee may be used to fund the subsidy amount of providing guarantees, to the extent not otherwise funded through appropriation actions by Congress.
(c) Notwithstanding subsections (c) and (e)(2) of section 313A of the RE Act, the Secretary shall, with the consent of the lender and if otherwise authorized by law, adjust the schedule for payment of the annual fee, not to exceed an average of 30 basis points per year for the term of the loan, to ensure that sufficient funds are available to pay the subsidy costs for note guarantees.
The Secretary, or other agent of the Secretary on his or her behalf, shall have the right to service the guaranteed bond, and periodically inspect the books and accounts of the guaranteed lender to ascertain compliance with the provisions of the RE Act and the bond documents.
(a) As long as any guaranteed bonds remain outstanding, the guaranteed lender shall provide the Secretary with the following items each year within 90 days of the guaranteed lender's fiscal year end:
(1) Consolidated financial statements and accompanying footnotes, audited by independent certified public accountants;
(2) A review and certification of the security of the government guarantee, audited by reputable, independent certified public accountants or a federal
(3) Pro forma projection of the guaranteed lender's balance sheet, income statement, and statement of cash flows over the ensuing five years;
(4) Credit assessment issued by a Rating Agency;
(5) Credit rating, by a Rating Agency, on its senior secured debt without regard to the guarantee and satisfactory to the Secretary;
(6) Other such information requested by the Secretary.
(b) The bond documents shall specify such bond monitoring and financial reporting requirements as deemed appropriate by the Secretary.
In a given year the maximum amount of guaranteed bonds that the Secretary may approve will be subject to budget authority, together with receipts authority from projected fee collections from guaranteed lenders, the principle amount of outstanding concurrent loans made by the guaranteed lender, and Congressionally-mandated ceilings on the total amount of credit. The Secretary may also impose other limitations as appropriate to administer this guarantee program.
(a) Any guarantee executed by the Secretary under this part shall be an obligation supported by the full faith and credit of the United States and incontestable except for fraud or misrepresentation of which the guaranteed bondholder had actual knowledge at the time it purchased the guaranteed bonds.
(b) Amounts due under the guarantee shall be paid within 30 days of demand by a bondholder, certifying the amount of payment then due and payable.
(c) The guarantee shall be assignable and transferable to any purchaser of guaranteed bonds as provided in the bond documents.
(d) The following actions shall constitute events of default under the terms of the guarantee agreements:
(1) The guaranteed lender failed to make a payment of principal or interest when due on the guaranteed bonds;
(2) The guaranteed bonds were issued in violation of the terms and conditions of the bond documents;
(3) The guarantee fee required by 7 CFR 1720.10 of this part, has not been paid;
(4) The guaranteed lender made a misrepresentation to the Secretary in any material respect in connection with the application, the guaranteed bonds, or the reporting requirements listed in 7 CFR 1720.12; or
(5) The guaranteed lender failed to comply with any material covenant or provision contained in the bond documents.
(e) In the event the guaranteed lender fails to cure such defaults within the notice terms and the timeframe set forth in the bond documents, the Secretary may demand that the guaranteed lender redeem the guaranteed bonds. Such redemption amount will be in an amount equal to the outstanding principal balance, accrued interest to the date of redemption, and prepayment premium, if any. To the extent the Secretary makes any payments under the guarantee, the Secretary shall be deemed the guaranteed bondholder.
(f) To the extent the Secretary makes any payments under the guarantee, the interest rate the government will charge to the guaranteed lender for the period of default shall accrue at an annual rate of the greater of 1.5 times the 91-day Treasury-Bill rate or 200 basis points (2.00%) above the rate on the guaranteed bonds.
(g) Upon guaranteed lender's event of default, under the bond documents, the Secretary shall be entitled to take such other action as is provided for by law or under the bond documents.
7 U.S.C. 901
(a)
(b)
(c)
(1) If applicable, state that the project is a categorical exclusion of a type described in § 1794.21(b), which normally does not require preparation of an Environmental Report (ER); or
(2) If applicable, state that the project is a categorical exclusion of a type that normally requires an ER and then:
(i) Submit the ER with the request for funds to be approved for advance, or
(ii) If applicable, certify that it has analyzed the minor project with respect to a comprehensive service area environmental map and data base collected and used in preparing the ER for its RUS-approved borrower's CWP, and that on the basis of that information, the minor project will not be located in an environmentally sensitive area or location.
(d)
This subpart contains RUS procedures and conditions under which Borrowers of loans made by RUS may request RUS approval for extensions for the payment of principal and interest.
(a) The procedures in this subpart are intended to provide Borrowers with the flexibility to request an extension of principal and interest as authorized under section 12(a) of the RE Act and section 236 of the Disaster Relief Act of 1970 (Public Law 91-606).
(b) The total amount of interest that has been deferred, including interest on deferred principal, will be added to the principal balance, and the total amount of principal and interest that has been deferred will be reamortized over the remaining life of the applicable note beginning in the first year the deferral period ends.
(c) Payment of principal and interest will not be extended more than 5 years after such payment is due as originally scheduled. However, in cases where the extension is being granted because, at the sole discretion of the Administrator, a severe hardship has been experienced, the Administrator may grant a longer extension provided that the maturity date of any such loan does not extend to a date beyond forty (40) years from the date of the note.
The definitions contained in 7 CFR 1710.2 are applicable to this subpart unless otherwise stated.
(a) In reviewing requests for extension of payment of principal and interest, consideration shall be given to the effect of such extensions on the security of the Government's loans, and on the ability of the Borrower to achieve program objectives. It is the policy of RUS to extend the time for payment of principal and interest on the basis of findings that such extension does not impair the security and feasibility of the Government's loans and:
(1) Is essential to the effectiveness of the Borrower's operations in achieving RUS program objectives which include providing reliable, affordable electricity to RE Act beneficiaries;
(2) Is necessary to help a Borrower place its operations on a more stable financial basis and thereby provide assurance of repayment of loans within the time when payments of such loans are due under the terms of the note or notes as extended; or
(3) Is otherwise in the best interest of the Government.
(b) Extensions will be given in the minimum amount to achieve the purpose of the extension.
(c) The maximum interest rate a RUS Borrower can charge on deferments for programs relating to consumer loans,
(a)
(2) RUS will determine whether a Borrower qualifies for the deferment on a case-by-case basis, considering such factors as the following:
(i) Substantial unreimbursed or uninsured expenses relating to storm damage;
(ii) Loss of large power load (as defined in § 1710.7(c)(6)(ii) of this chapter, Large retail power contracts); or
(iii) Substantial loss of consumers or load due to hostile annexations and condemnations, without adequate compensation.
(b)
(i) Caulking;
(ii) Weather-stripping;
(iii) Heat pump systems (including water source heat pumps);
(iv) Heat pumps, water heaters, and central heating or central air conditioning system replacements or modifications, which reduce energy consumption;
(v) Ceiling insulation;
(vi) Wall insulation;
(vii) Floor insulation;
(viii) Duct insulation;
(ix) Pipe insulation;
(x) Water heater insulation;
(xi) Storm windows;
(xii) Thermal windows;
(xiii) Storm or thermal doors;
(xiv) Electric system coordinated customer-owned devices that reduce the maximum kilowatt demand on the electric system;
(xv) Clock thermostats; or
(xvi) Attic ventilation fans.
(2) ERC loans will be amortized over not more than 84 months, without penalty for prepayment of principal.
(c)
(i) Energy conversion technology;
(ii) Electric power system interfaces;
(iii) Delivery equipment;
(iv) Control equipment; and
(v) Energy consuming devices.
(2) A Borrower may request that RUS defer principal payments for the purpose of enabling the Borrower to provide its consumers with loans to install all or part of customer-owned renewable energy systems up to 5kW.
(3) A renewable energy system is defined in § 1710.2 of this chapter.
(4) For the purpose of this subpart, a renewable energy project consists of one or more renewable energy systems.
(d)
(i) The Borrower will own and operate, or
(ii) The consumer owns, provided the system owned by the consumer does not exceed 5KW.
(2) A distributed generation project may include one or more individual systems.
(e)
(2) Amounts available for this purpose will be limited to the amount of the construction costs that are in excess of the average cost per residential consumer incurred by the Borrower to connect new full time residential consumers during the last calendar year for which data are available. The average cost per residential consumer is the total cost incurred by the Borrower and will not be reduced by the amounts received as a contribution-in-aid of construction.
(a)
(1) A summary of the financial position of the Borrower, based on the latest information available (usually less than 60 days old).
(2) A copy of the board resolution requesting an extension due to financial hardship.
(3) A 10-year financial forecast of revenues and expenses on a cash basis, by year, for the period of the extension and 5 years beyond to establish that the remaining payments can be made as rescheduled.
(4) A listing of notes or portions of notes to be extended, the effective date for the beginning of the extension, and the length of the extension.
(5) A narrative description of the nature and cause of the hardship and the strategy that will be instituted to mitigate or eliminate the effects of the hardship.
(b)
(1) A letter from the Borrower's General Manager requesting an extension of principal payments for the purpose of offering an ERC loan program to its members and describing the details of the program.
(2) A copy of the board resolution establishing the ERC loan program.
(c)
(1) A letter from the Borrower's General Manager requesting an extension of principal payments for the purpose of financing a renewable energy project and describing the details of the project.
(2) A copy of the board resolution establishing the renewable energy project.
(d)
(1) A letter from the Borrower's General Manager requesting an extension of principal payments for the purpose of financing distributed generation projects and describing the details of the project, and
(2) A copy of the board resolution establishing the distributed generation projects program.
(e)
(1) A letter from the Borrower's General Manager requesting an extension of principal payments for the purpose of offering a contribution-in-aid of construction program and describing the details of the program.
(2) A copy of the board resolution establishing the contribution-in-aid of construction program.
(3) A summary of the calculations used to determine the average cost per residential consumer. (See § 1721.104 (e)(2)).
(a)
(b)
After approval of the Borrower's request for a deferment of principal and interest, an extension agreement, containing the terms of the extension, together with associated materials, will be prepared and forwarded to the Borrower by RUS. The extension agreement will then be executed and returned to RUS by the Borrower.
The deferment of principal and interest will not begin until the extension agreement and other supporting materials, in form and substance satisfactory to RUS, have been executed by the Borrower and returned to RUS. Examples of other supporting materials are items such as approving legal opinions from the Borrower's attorney and approvals from the relevant regulatory body for extending the maturity of existing debt and for the additional debt service payment incurred.
The information collection requirements in this part are approved by the Office of Management and Budget and assigned OMB control number 0572-0123.
7 U.S.C. 901
(a) The policies, procedures and requirements in this part implement certain provisions of the standard form of loan documents between the Rural Utilities Service (RUS) and its electric borrowers.
(b) All borrowers, regardless of the source of financing, shall comply with RUS' requirements with respect to design, construction standards, and the use of RUS accepted material on their electric systems.
(c) Borrowers are required to use RUS contract forms only if the facilities are financed by RUS.
The Administrator may waive, for good cause on a case-by-case basis, requirements and procedures of this part.
Terms used in this part have the meanings set forth in § 1710.2 of this chapter. References to specific RUS forms and other RUS documents, and to specific sections or lines of such forms and documents, shall include the corresponding forms, documents, sections and lines in any subsequent revisions of these forms and documents. In addition to the terms defined in § 1710.2 of this chapter, the following terms have the following meanings for the purposes of this part:
The borrower shall ensure that:
(a) All selected architects and engineers meet the applicable registration and licensing requirements of the States in which the facilities will be located;
(b) All selected architects and engineers are familiar with RUS standards and requirements; and
(c) All selected architects and engineers have had satisfactory experience with comparable work.
(a)
(b)
(c)
(a) Borrowers shall ensure that all architects and engineers working under contract with the borrower have insurance coverage as required by part 1788 of this chapter.
(b) Borrowers shall also ensure that all architects and engineers working under contract with the borrower have insurance coverage for Errors and Omissions (Professional Liability Insurance) in an amount at least as large as the amount of the architectural or engineering services contract but not less than $500,000.
Borrowers shall comply with the requirements on debarment and suspension in connection with procurement activities as set forth in part 3017 of this title, particularly with respect to lower tier transactions, e.g., procurement contracts for goods or services.
Borrowers shall comply with the restrictions and requirements in connection with procurement activities as set forth in part 3018 of this title.
Borrowers shall comply with the requirements of part 1794 of this chapter, Environmental Policies and Procedures for Electric and Telephone Borrowers.
The standard loan agreement between RUS and its borrowers provides that, in accordance with applicable RUS regulations in this chapter, the borrower shall use standard forms of contracts promulgated by RUS for construction, procurement, engineering services, and architectural services financed by a loan made or guaranteed by RUS. This part implements these provisions of the RUS loan agreement. Subparts A through E of this part prescribe when and how borrowers are required to use RUS standard forms of contracts for engineering and architectural services. Subpart F of this part prescribes the procedures that RUS follows in promulgating standard contract forms and identifies those contract forms that borrowers are required to use for engineering and architectural services.
The provisions of this section apply to all borrower electric system facilities regardless of the source of financing.
(a) Each borrower shall select a qualified architect to perform the architectural services required for the design and construction management of headquarters facilities. The selection of the architect is not subject to RUS approval unless specifically required by RUS on a case by case basis. Architect's qualification information need not be submitted to RUS unless specifically requested by RUS on a case by case basis.
(b) The architect retained by the borrower shall not be an employee of the building supplier or contractor, except in cases where the building is prefabricated and pre-engineered.
(c) The architect's duties are those specified under the Architectural Services Contract and under subpart E of this part, and, as applicable, those duties assigned to the “engineer” for competitive procurement procedures in part 1726 of this chapter.
(d) If the facilities are RUS financed, the borrower shall submit or require the architect to submit one copy of each construction progress report to RUS upon request.
(e) Additional information concerning RUS requirements for electric borrowers' headquarters facilities are set forth in subpart E of this part. See also RUS Bulletin 1724E-400, Guide to Presentation of Building Plans and Specifications, for additional guidance.
The provisions of this section apply only to RUS financed electric system facilities.
(a) RUS Form 220, Architectural Services Contract, must be used by electric borrowers when obtaining architectural services.
(b) The borrower shall ensure that the architect furnishes or obtains all architectural services related to the design and construction management of the facilities.
(c) Reasonable modifications or additions to the terms and conditions in the RUS contract form may be made to define the exact services needed for a specific undertaking. Such modifications or additions shall not relieve the architect or the borrower of the basic responsibilities required by the RUS contract form, and shall not alter any terms and conditions required by law. All substantive changes must be approved by RUS prior to execution of the contract.
(d) Architectural services contracts are not subject to RUS approval and need not be submitted to RUS unless specifically requested by RUS on a case by case basis.
(e)
The provisions of this section apply to all borrower electric system facilities regardless of the source of financing.
(a) Each borrower shall select one or more qualified persons to perform the engineering services involved in the planning, design, and construction management of the system.
(b) Each borrower shall retain or employ one or more qualified engineers to inspect and certify all new construction in accordance with § 1724.32. The engineer must not be the borrower's manager.
(c) The selection of the engineer is not subject to RUS approval unless specifically required by RUS on a case by case basis. Engineer's qualification information need not be submitted to RUS unless specifically requested by RUS on a case by case basis.
(d) The engineer's duties are specified under the Engineering Services Contract and under part 1726 of this chapter. The borrower shall ensure that the engineer executes all certificates and other instruments pertaining to the engineering details required by RUS.
(e) Additional requirements related to appropriate seismic safety measures are contained in part 1792, subpart C, of this chapter, Seismic Safety of Federally Assisted New Building Construction.
(f) If the facilities are RUS financed, the borrower shall submit or require the engineer to submit one copy of each construction progress report to RUS upon RUS' request.
The provisions of this section apply only to RUS financed electric system facilities.
(a) RUS contract forms for engineering services shall be used. Reasonable
(b) RUS Form 236, Engineering Service Contract—Electric System Design and Construction, shall be used for all distribution, transmission, substation, and communications and control facilities. These contracts are not subject to RUS approval and need not be submitted to RUS unless specifically requested by RUS on a case by case basis.
(c) RUS Form 211, Engineering Service Contract for the Design and Construction of a Generating Plant, shall be used for all new generating units and repowering of existing units. These contracts require RUS approval.
(d) Any amendments to RUS approved engineering services contracts require RUS approval.
(e)
The provisions of this section apply to all borrower electric system facilities regardless of the source of financing.
(a) The borrower shall ensure that all field inspection and related services are performed within 6 months of the completion of construction, and are performed by a licensed engineer, except that a subordinate of the licensed engineer may make the inspection, provided the following conditions are met:
(1) The inspection by the subordinate is satisfactory to the borrower;
(2) This practice is acceptable under applicable requirements of the States in which the facilities are located;
(3) The subordinate is experienced in making such inspections;
(4) The name of the person making the inspection is included in the certification; and
(5) The licensed engineer signs such certification which appears on the inventory of work orders.
(b) The inspection shall include a representative and sufficient amount of construction listed on each RUS Form 219, Inventory of Work Orders (or comparable form), being inspected to assure the engineer that the construction is acceptable. Each work order that was field inspected shall be indicated on RUS Form 219 (or comparable form.) The inspection services shall include, but not be limited to, the following:
(1) Determination that construction conforms to RUS specifications and standards and to the requirements of the National Electrical Safety Code (NESC), State codes, and local codes;
(2) Determination that the staking sheets or as-built drawings represent the construction completed and inspected;
(3) Preparation of a list of construction clean-up notes and staking sheet discrepancies to be furnished to the owner to permit correction of construction, staking sheets, other records, and work order inventories;
(4) Reinspection of construction corrected as a result of the engineer's report;
(5) Noting, initialing, and dating the staking or structure sheets or as-built drawings and noting the corresponding work order entry for line construction; and
(6) Noting, initialing, and dating the as-built drawings or sketches for generating plants, substations, and other major facilities.
(c)
I hereby certify that sufficient inspection has been made of the construction reported by this inventory to give me reasonable assurance that the construction complies with applicable specifications and standards and meets appropriate code requirements as to strength and safety. This certification is in accordance with acceptable engineering practice.
(2) A certification must also include the name of the inspector, name of the firm, signature of the licensed engineer, the engineer's State license number, and the date of signature.
Borrowers shall have ongoing, integrated planning to determine their short-term and long-term needs for plant additions, improvements, replacements, and retirements for their electric systems. The primary components of the planning system consist of long-range engineering plans and construction work plans. Long-range engineering plans identify plant investments required over a long-range period, 10 years or more. Construction work plans specify and document plant requirements for a shorter term, 2 to 4 years. Long-range engineering plans and construction work plans shall be in accordance with part 1710, subpart F, of this chapter. See also RUS Bulletins 1724D-101A, Electric System Long-Range Planning Guide, and 1724D-101B, System Planning Guide, Construction Work Plans, for additional guidance. These bulletins are available from Program Development and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, Stop 1522, 1400 Independence Ave., SW., Washington, DC 20250-1522.
The provisions of this section apply to all borrower electric system facilities regardless of the source of financing.
(a) A borrower shall ensure that its electric system, including all electric distribution, transmission, and generating facilities, is designed, constructed, operated, and maintained in accordance with all applicable provisions of the most current and accepted criteria of the National Electrical Safety Code (NESC) and all applicable and current electrical and safety requirements of any State or local governmental entity. Copies of the NESC may be obtained from the Institute of Electrical and Electronic Engineers, Inc., 445 Hoes Lane, Piscataway, NJ 08855. This requirement applies to the borrower's electric system regardless of the source of financing.
(b) Any electrical standard requirements established by RUS are in addition to, and not in substitution for or a modification of, the most current and accepted criteria of the NESC and any applicable electrical or safety requirements of any State or local governmental entity.
(c) Overhead distribution circuits shall be constructed with not less than the Grade C strength requirements as described in Section 26, Strength Requirements, of the NESC when subjected to the loads specified in NESC Section 25, Loadings for Grades B and C. Overhead transmission circuits shall be constructed with not less than the Grade B strength requirements as described in NESC Section 26.
The provisions of this section apply to all borrower electric system facilities regardless of the source of financing.
(a)
(b)
(2) Design data consists of all significant design features, including, but not limited to, transmission line design data summary, general description of terrain, right-of-way calculations, discussion concerning conductor and structure selection, conductor sag and tension information, design clearances, span limitations due to clearances, galloping or conductor separation, design loads, structure strength limitations, insulator selection and design, guying requirements, and vibration considerations. For lines composed of steel or concrete poles, or steel towers, in which load information will be used to purchase the structures, the design data shall also include loading trees, structure configuration and selection, and a discussion concerning foundation selection.
(3) Line design data for uprating transmission lines to higher voltage levels or capacity must be approved by RUS.
(4) Transmission line design data which has received RUS approval in connection with a previous transmission line construction project for a particular borrower is considered approved by RUS for that borrower, provided that:
(i) The conditions on the project fall within the design data previously approved; and
(ii) No significant NESC revisions have occurred.
(c)
(2) Design data consists of all significant design features, including, but not limited to, a discussion of site considerations, oil spill prevention measures, design considerations covering voltage, capacity, shielding, clearances, number of low and high voltage phases, major equipment, foundation design parameters, design loads for line support structures and the control house, seismic considerations, corrosion, grounding, protective relaying, and AC and DC auxiliary systems. Reference to applicable safety codes and construction standards are also to be included.
(3) Substation design data which has received RUS approval in connection with a previous substation construction project for a particular borrower is considered approved by RUS for that borrower, provided that:
(i) The conditions on the project fall within the design data previously approved; and
(ii) No significant NESC revisions have occurred.
(d)
(2) For all new generation units and for all repowering projects, the design outline shall be approved by RUS, unless RUS determines that a design outline is not needed for a particular project.
(3) The design outline will include all significant design criteria. During the early stages of the project, RUS will, in consultation with the borrower and its consulting engineer, identify the specific items which are to be included in the design outline.
(e)
(i) Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. 794), which states that no qualified individual with a handicap shall, solely by reason of their handicap, be excluded from participation in, be denied the benefits of, or be subject to discrimination under any program or activity receiving Federal financial assistance. The Uniform Federal Accessibility Standards (41 CFR part 101-19, subpart 101-19.6, appendix A) are the applicable standards for all new or altered borrower buildings, regardless of the source of financing.
(ii) The Architectural Barriers Act of 1968 (42 U.S.C. 4151), which requires that buildings financed with Federal funds are designed and constructed to
(iii) The Earthquake Hazards Reduction Act of 1977 (42 U.S.C. 7701
(2) The borrower shall provide evidence, satisfactory in form and substance to the Administrator, that each building will be designed and built in compliance with all Federal, State, and local requirements.
(f)
(2) The performance considerations for a new or replacement master system must be approved by RUS. A master system includes the main controller and related equipment at the main control point. Performance considerations include all major system features and their justification, including, but not limited to, the objectives of the system, the types of parameters to be controlled or monitored, the communication media, alternatives considered, and provisions for future needs.
The provisions of this section apply to all borrower electric system facilities regardless of the source of financing.
(a)
(i) Structures are designed and constructed in accordance with “Suggested Practices for Raptor Protection on Powerlines: The State of the Art in 1996” (Suggested Practices for Raptor Protection); and,
(ii) Structures are in accordance with the NESC and applicable State and local regulations.
(2) Any deviation from the RUS construction standards for the purpose of raptor protection, which is not in accordance with the Suggested Practices for Raptor Protection, must be approved by RUS prior to construction. “Suggested Practices for Raptor Protection on Powerlines: The State of the Art in 1996,” published by the Edison Electric Institute/Raptor Research Foundation, is hereby incorporated by reference. This incorporation by reference is approved by the Director of the Office of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of this publication may be obtained from the Raptor Research Foundation, Inc., c/o Jim Fitzpatrick, Treasurer, Carpenter Nature Center, 12805 St. Croix Trail South, Hastings, Minnesota 55033. It is also available for inspection during normal business hours at RUS, Electric Staff Division, 1400 Independence Avenue, SW., Washington, DC, Room 1246-S, and at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(b)
(c)
(2) It is permissible to lower the transformer and associated neutral attachment up to two feet (0.6 m) to provide adequate clearance between the cutouts and single-phase, conventional distribution transformers.
(3) It is permissible to lower the neutral attachment on standard construction pole-top assemblies an additional distance of up to six feet (2 m) for the purpose of performing construction and future line maintenance on these assemblies from bucket trucks designed for such work.
The provisions of this section apply to all borrower electric system facilities regardless of the source of financing.
(a)
(2) Plans and specifications for distribution, transmission, or generating facilities must be based on a construction work plan (as amended, if applicable), engineering study or construction program which has been approved by RUS if financing for the facilities will at any time be requested from RUS.
(b)
(i)
(ii)
(iii)
(iv)
(A) A plot plan showing the location of the proposed building plus paving and site development;
(B) A one line drawing (floor plan and elevation view), to scale, of the proposed building with overall dimensions shown; and
(C) An outline specification including materials to be used (type of frame, exterior finish, foundation, insulation, etc.); and
(v)
(2) For contract work, the appropriate standard RUS construction contract form shall be used as required by part 1726 of this chapter.
The provisions of this section apply only to RUS financed electric system facilities.
(a) For any contract subject to RUS approval in accordance with part 1726 of this chapter, the borrower shall obtain RUS approval of the plans and specifications, as part of the proposed bid package, prior to requesting bids. RUS may require approval of other plans and specifications on a case by case basis.
(b)
(c)
(2) Unless RUS approval is required by paragraph (a) of this section, plans and specifications for transmission construction which use previously approved design data and standard structures do not require RUS approval. Plans and specifications for related work, such as right-of-way clearing, equipment, and materials, do not require RUS approval unless required by paragraph (a) of this section.
(d)
(A) The substation design has been previously approved by RUS; and
(B) No significant NESC revisions have occurred.
(ii) The borrower shall notify RUS in writing that a previously approved design will be used, including identification of the previously approved design.
(2) Unless RUS approval is required by paragraph (a) of this section, plans and specifications for substation modifications and for substations using previously approved designs do not require RUS approval.
(e)
(2) The borrower shall obtain RUS approval, prior to issuing invitations to bid, of the terms and conditions for all generating plant equipment or construction contracts which will cost $1,500,000 or more. Unless RUS approval is required by paragraph (a) of this section, plans and specifications for generating plant equipment and construction do not require RUS approval.
(f)
(2) Unless RUS approval is required by paragraph (a) of this section, plans and specifications for headquarters buildings do not require RUS approval. The borrower shall submit two copies of RUS Form 740g, Application for Headquarters Facilities. This form is available from Program Development and Regulatory Analysis, Rural Utilities Service, United States Department of Agriculture, Stop 1522, 1400 Independence Ave., SW., Washington, DC 20250-1522. The application must show floor area and estimated cost breakdown between office building space and space for equipment warehousing and service facilities, and include a one line drawing (floor plan and elevation view), to scale, of the proposed building with overall dimensions shown. The information concerning the planned building may be included in the borrower's construction work plan in lieu of submitting it with the application. (See 7 CFR part 1710, subpart F.) Prior to issuing the plans and specifications for bid, the borrower shall also submit to RUS a statement, signed by the architect or engineer, that the building design meets the Uniform Federal Accessibility Standards (See § 1724.51(e)(1)(i)).
(g)
(2) The borrower shall obtain RUS approval, prior to issuing invitations to bid, of the terms and conditions for communications and control facilities contracts which will cost $500,000 or more. Unless RUS approval is required by paragraph (a) of this section, plans and specifications for communications and control facilities do not require RUS approval.
(h) Terms and conditions include the RUS standard form of contract, general and special conditions, and any other non-technical provisions of the contract. Terms and conditions which have received RUS approval in connection with a previous contract for a particular borrower are considered approved by RUS for that borrower.
(a) The provisions of this section apply only to RUS financed electric system facilities.
(1)(i) Any borrower that owns or operates a RUS financed dam must utilize the“Federal Guidelines for Dam Safety,”(Guidelines), as applicable. A dam, as more fully defined in the Guidelines, is generally any artificial barrier which either:
(A) Is 25 feet (8 m) or more in height; or
(B) Has an impounding capacity at maximum water storage elevation of 55 acre-feet (68,000 m
(ii) The“Federal Guidelines for Dam Safety,”FEMA 93, June, 1979, published by the Federal Emergency Management Agency (FEMA), is hereby incorporated by reference. This incorporation by reference is approved by the Director of the Office of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of the“Federal Guidelines for Dam Safety”may be obtained from the Federal Emergency Management Agency, Mitigation Directorate, PO Box 2012, Jessup, MD 20794. It is also available for inspection during normal business hours at RUS, Electric Staff Division, 1400 Independence Avenue, SW., Washington, DC, Room 1246-S, and at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(2) The borrower shall evaluate the hazard potential of its dams in accordance with Appendix E of the U.S. Army Corps of Engineers Engineering and Design Dam Safety Assurance Program, ER 1110-2-1155, July 31, 1995. A summary of the hazard potential criteria is included for information as Appendix A to this subpart. The U.S. Army Corps of Engineers Engineering and Design Dam Safety Assurance Program, ER 1110-2-1155, July 31, 1995, published by the United States Army Corps of Engineers, is hereby incorporated by reference. This incorporation by reference is approved by the Director of the Office of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of the U. S. Army Corps of Engineers Engineering and Design Dam Safety Assurance Program may be obtained from the U. S. Army Corps of Engineers, Publications Depot, 2803 52nd Ave., Hyattsville, MD 20781. It is also available for inspection during normal business hours at RUS, Electric Staff Division, 1400 Independence Avenue, SW., Washington, DC, Room 1246-S, and at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(3) For high hazard potential dams, the borrower must obtain an independent review of the design and critical features of construction. The reviewer must have demonstrated experience in the design and construction of dams of a similar size and nature. The reviewer must be a qualified engineer not involved in the original design of the dam or a Federal or State agency responsible for dam safety. The reviewer must be approved by RUS.
(4) The independent review of design must include, but not necessarily be limited to, plans, specifications, design calculations, subsurface investigation reports, hydrology reports, and redesigns which result from encountering unanticipated or unusual conditions during construction.
(5) The independent review of construction shall include:
(i)
(ii)
(6) If the reviewer disagrees with any aspect of the design or construction which could affect the safety of the dam, then the borrower must meet with the design engineer and the reviewer to resolve the disagreements.
(7)
(b)(1) For more information and guidance, the following publications regarding dam safety are available from FEMA:
(i)“Emergency Action Planning Guidelines for Dams,”FEMA 64.
(ii)“Federal Guidelines for Earthquake Analysis and Design of Dams,”FEMA 65.
(iii)“Federal Guidelines for Selecting and Accommodating Inflow Design Floods for Dams,”FEMA 94.
(iv)“Dam Safety: An Owner's Guidance Manual,”FEMA 145, August, 1987.
(2) These publications may be obtained from the Federal Emergency Management Agency, Mitigation Directorate, PO Box 2012, Jessup, MD 20794.
The source for this appendix is U.S. Army Corps of Engineers Engineering and Design Dam Safety Assurance Program, ER 1110-2-1155, Appendix E. Appendix E is available from the address listed in § 1724.55(a)(2).
(a)
(b)
(a)
(b)
(c)
(d)
(e)
(a)
(b)
RUS may, from time to time, undertake to promulgate new contract forms or revise or eliminate existing contract forms. In so doing, RUS shall publish notice of rulemaking in the
(a)
(b)
(c)
(2) RUS Form 220, Rev. 6-98, Architectural Services Contract. This form is used for architectural services for building construction.
(3) RUS Form 236, Rev. 6-98, Engineering Service Contract—Electric System Design and Construction. This form is used for engineering services for distribution, transmission, substation, and communications and control facilities.
(d)
(2) RUS Form 215, Rev. 5-67, Engineering Service Contract—System Planning. This form is used for engineering services for system planning.
(3) RUS Form 234, Rev. 3-57, Final Statement of Engineering Fee. This form is used for the closeout of engineering services contracts.
(4) RUS Form 241, Rev. 3-56, Amendment of Engineering Service Contract. This form is used for amending engineering service contracts.
(5) RUS Form 244, Rev. 12-55, Engineering Service Contract—Special Services. This form is used for miscellaneous engineering services.
(6) RUS Form 258, Rev. 4-58, Amendment of Engineering Service Contract—Additional Project. This form is used for amending engineering service contracts to add an additional project.
(7) RUS Form 284, Rev. 4-72, Final Statement of Cost for Architectural Service. This form is used for the closeout of architectural services contracts.
(8) RUS Form 297, Rev. 12-55, Engineering Service Contract—Retainer for Consultation Service. This form is used for engineering services for consultation service on a retainer basis.
(9) RUS Form 459, Rev. 9-58, Engineering Service Contract—Power Study. This form is used for engineering services for power studies.
7 U.S.C. 901
The policies, procedures and requirements included in this part are intended to implement provisions of the standard form of loan documents between the Rural Utilities Service (RUS) and its electric borrowers. Unless prior written approval is received from RUS, borrowers are required to comply with RUS policies and procedures as a condition to RUS providing loans, loan guarantees, or reimbursement of general funds for the construction and improvement of electric facilities. Requirements relating to RUS approval of plans and specifications, duties and responsibilities of the engineer and architect, and engineering and architectural services contracts, are contained in other RUS regulations. The terms “RUS form”, “RUS standard form”, “RUS specification”, “and RUS bulletin” have the same meanings as the terms “REA form”, “REA standard form”, “REA specification”, “and REA bulletin”, respectively, unless otherwise noted.
Each borrower is responsible for the planning, design, construction, operation and maintenance of its electric system. RUS, as a secured lender, has a legitimate interest in accomplishing RUS's programmatic objectives, and in assuring that the costs of construction, materials, and equipment are reasonable and economical and that the property securing the loans is constructed adequately to serve the purposes for which it is intended.
The requirements of this part apply to the procurement of materials and equipment for use by electric borrowers in their electric systems and to the construction of their electric systems if such materials, equipment, and construction are financed, in whole or in part, with loans made or guaranteed by RUS, including reimbursable projects. In order for general fund expenditures for procurement or construction to be eligible for reimbursement from loan funds, the borrower must comply with the procedures required by this part. In the case of jointly owned projects, RUS will determine on a case by case basis the applicability of the requirements of this part.
The Administrator may waive, for good cause on a case by case basis, certain requirements and procedures of this part. RUS reserves the right, as a condition of providing loans, loan guarantees, or other assistance, to require any borrower to make any specification, contract, or contract amendment subject to the approval of the Administrator.
Terms used in this part have the meanings set forth in 7 CFR 1710.2. References to specific RUS forms and other RUS documents, and to specific sections or lines of such forms and documents, shall include the corresponding forms, documents, sections and lines in any subsequent revisions of these forms and documents. In addition to the terms defined in 7 CFR 1710.2, the following terms have the following meanings for the purposes of this part:
The borrower must ensure that all materials and equipment financed with loans made or guaranteed by RUS complies with the “Buy American” provisions of the Rural Electrification Act of 1938 (7 U.S.C. 903 note), as amended by the North American Free Trade Agreement Implementation Act (107 Stat 2129). When a “Buy American” certificate is required by this part, this must be on RUS Form 213.
Borrowers are required to comply with certain requirements on debarment and suspension in connection with procurement activities as set forth in part 3017 of this title, particularly with respect to lower tier transactions, e.g., procurement contracts for goods or services.
Borrowers are required to comply with certain restrictions and requirements in connection with procurement activities as set forth in part 3018 of this title.
Borrowers must consult with RUS prior to entering into any contract for material, equipment, or construction if a construction work plan, general funds, loan or loan guarantee for the proposed work has not been approved. While the RUS staff will work with the borrower in such circumstances, nothing contained in this part is to be construed as authorizing borrowers to enter into any contract before the availability of funds has been ascertained by the borrower and all the requirements of part 1794 of this chapter, Environmental Policies and Procedures for Electric and Telephone Borrowers, have been fulfilled.
RUS borrowers' procurement is not subject to the provisions of the Federal Acquisition Regulation (48 CFR chapter 1); however, since borrowers receive the benefit of Federal financial assistance borrowers must use competitive procurement to the greatest extent practical. The borrower must use competitive procurement for obtaining all goods or services when a RUS loan or loan guarantee is involved except:
(a) As specifically provided for in subparts B through F of this part; or
(b) A waiver is granted.
All materials, equipment, and construction must meet the minimum requirements of all applicable RUS standards and specifications. (See part 1728 of this chapter, Electric Standards and Specifications for Materials and Construction, which is applicable regardless of the source of funding.)
The borrower shall purchase only new materials and equipment unless otherwise approved by RUS, on a case by case basis, prior to the purchase.
The borrower is generally responsible for determining whether construction will be by contract or force account. If construction is by contract, the borrower must determine whether materials will be supplied by the contractor or will be furnished by the borrower. RUS reserves the right to require contract construction in lieu of force account construction on a case by case basis.
(a)
(b)
(a)
(b)
(2)
(3)
(ii) The borrower must make a contract amendment subject to RUS approval if the underlying contract was made subject to RUS approval and the total amended contract price exceeds 120 percent of the original contract price (excluding any escalation provision contained in the contract).
(iii) Contract amendments, except as provided in paragraph (b)(3)(ii) of this section, are not subject to RUS approval and need not be submitted to RUS unless specifically requested by RUS on a case by case basis.
Subcontracts are not subject to RUS approval and need not be submitted to
Certain RUS contract forms contain a provision concerning payment of interest on overdue accounts. Prior to issuing the invitation to bidders, the borrower must insert an interest rate equal to the lowest “Prime Rate” listed in the “Money Rates” section of the Wall Street Journal on the date such invitation to bid is issued. If no prime rate is published on that date, the last such rate published prior to that date must be used. The rate must not, however, exceed the maximum rate allowed by any applicable state law.
(a) RUS Form 168b, Contractor's Bond, shall be used when a contractor's bond is required by RUS Forms 200, 257, 786, 790, or 830 unless the contractor's surety has accepted a Small Business Administration guarantee and the contract is for $1 million or less.
(b) RUS Form 168c, Contractor's Bond, shall be used when a contractor's bond is required by RUS Forms 200, 257, 786, 790, or 830 and the contractor's surety has accepted a Small Business Administration guarantee and the contract is for $1 million or less.
(c) Surety companies providing contractor's bonds shall be listed as acceptable sureties in the U.S. Department of the Treasury Circular No. 570, Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies. Copies of the circular and interim changes may be obtained directly from the Government Printing Office (202) 512-1800. Interim changes are published in the
(a)
(b)
(c)
(1) A bid tabulation and evaluation and, if applicable, a written recommendation of the architect or engineer.
(2) For awards made under the informal competitive bidding procedure or the multiparty negotiation procedure, a written recommendation of the contracting committee (See §§ 1726.202 and 1726.203).
(3) Three copies of an executed contractor's bond on RUS approved bond forms as required in the contract form (at least one copy of which must be an original signed in ink) and one copy of the bid bond or facsimile of the certified check.
(4) A certification by the borrower or chairperson of the contracting committee, as applicable, that the appropriate bidding procedures were followed as required by this part.
(5) A certified copy of the board resolution awarding the contract.
(6) Evidence of clear title to the site for substations and headquarters construction contracts, if not previously submitted.
(7) Documentation that all reasonable measures were taken to assure competition if fewer than three bids were received.
(d)
(1) A certified copy of the board resolution approving the amendment; and
(2) A bond extension, where necessary.
(e)
(2) For contracts not subject to RUS approval (except for generation projects), loan or loan guarantee funds will normally be encumbered using RUS Form 219, Inventory of Work Orders, after closeout of the contracts. In cases where the borrower can show good cause for a need for immediate cash, the borrower may request encumbrance of loan or loan guarantee funds based on submittal of a copy of the executed contract, provided it meets all applicable RUS requirements.
(3) For generation project contracts not subject to RUS approval, the borrower must submit to RUS the following documentation:
(i) A brief description of the scope of the contract, including contract identification (name, number, etc.);
(ii) Contract date;
(iii) Contractor's name;
(iv) Contract amount;
(v) Bidding procedure used;
(vi) Borrower certification that:
(A) The board of directors approved the contract;
(B) The bidding procedures and contract award for each contract were in conformance with the requirements of Part 1726, Electric System Construction Policies and Procedures;
(C) If a RUS approved form of contract is required by this part, the terms and conditions of the RUS approved form of contract have not been altered;
(D) If RUS has approved plans and specifications for the contract, the contract was awarded on the basis of those plans and specifications; and
(E) No restriction has been placed on the borrower's right to assign the contract to RUS or its successors.
(4)
(ii) For amendments not subject to RUS approval (except generation projects), loan or loan guarantee funds will normally be encumbered using RUS Form 219, Inventory of Work Orders, after closeout of the contracts. In cases where the borrower can justify a need for immediate cash, the borrower may request encumbrance of loan or loan guarantee funds based on submittal of a copy of the executed amendment, providing it meets all applicable RUS requirements.
(iii) For each generation project contract amendment not subject to RUS approval, the borrower must submit to RUS the following information and documentation:
(A) The contract name and number;
(B) The amendment number;
(C) The amendment date;
(D) The dollar amount of the increase or the decrease of the amendment;
(E) Borrower certification that:
(
(
(
Unless otherwise indicated, the borrower shall make all contracts and
The collection of information requirements in this part have been approved by the Office of Management and Budget and assigned OMB control number 0572-0107.
(a)
(2) The borrower may, in its discretion, use RUS Form 198, Equipment Contract, or a written purchase order for purchases of equipment of less than $500,000 and for all materials.
(b)
(c)
(d)
(a)
(1) The borrower may use RUS Form 790, Electric System Construction Contract—Non-Site Specific Construction, under the following circumstances:
(i) For contracts for which the borrower supplies all materials and equipment; or
(ii) For non-site specific construction contracts accounted for under the work order procedure; or
(iii) If neither paragraph (a)(1)(i) or (a)(1)(ii) of this section are applicable, the borrower may use RUS Form 790 for contracts, up to a cumulative total of $250,000 or one percent of net utility plant (NUP), whichever is greater, per calendar year of distribution line construction, exclusive of the cost of owner furnished materials and equipment.
(2) The borrower must use RUS Form 830, Electric System Construction Contract—Project Construction, for all other distribution line construction.
(b)
(2) In addition to the cumulative total stipulated in paragraph (b)(1) of this section, a borrower may use Multiparty Unit Price Quotations to award contracts in amounts of up to a cumulative total of $350,000 or 1.5 percent of NUP, whichever is greater, per calendar year of distribution line construction (including minor modifications or improvements), exclusive of the cost of owner furnished materials and equipment.
(3) The borrower shall use formal competitive bidding for all other distribution line contract construction. The amount of contracts bid using the formal competitive bidding procedure do not apply to the cumulative total stipulated in paragraph (b)(1) of this section.
(4) An amendment which increases the scope of the contract by adding a project is not considered competitively bid, therefore, the amount of that amendment does apply to the cumulative total stipulated in paragraph (b)(1) of this section.
(c)
As used in this part, “substations” includes substations, switching stations, metering points, and similar facilities.
(a)
(2) The borrower may, in its discretion, use RUS Form 198, Equipment Contract, or a written purchase order for purchases of equipment of less than $500,000 and for all materials.
(b)
(c)
(d)
(a)
(b)
(2) The borrower shall use formal competitive bidding for all other contract construction, including all contracts requiring RUS approval. The amount of contracts bid using the formal competitive bidding procedure do not apply to the cumulative total stipulated in paragraph (b)(1) of this section.
(3) An amendment which increases the scope of the contract by adding a project is not considered competitively bid, therefore, the amount of that amendment does apply to the cumulative total stipulated in paragraph (b)(1) of this section.
(c)
This section covers the construction of all portions of a generating plant, including plant buildings and the generator step-up transformer. Generally, the transmission switchyard will be covered under this section during initial construction of the plant. Subpart C of this part covers subsequent modifications to transmission switchyards. Warehouses and equipment service type buildings are covered under subpart E of this part.
(a)
(2) The borrower must use RUS Form 200, Construction Contract—Generating, for generating project construction contracts in the amount of $1,500,000 or more and for any generating project construction contract requiring RUS approval.
(3) The borrower may, in its discretion, use other contract or written purchase order forms for those contracts in amounts of less than $1,500,000 and that do not require RUS approval.
(b)
(2) If the amount of the contract is $1,500,000 or more or if the contract requires RUS approval, the borrower must use formal or informal competitive bidding to award the contract.
(3) Where formal or informal competitive bidding is not applicable, or does not result in a responsive bid, multiparty negotiation may be used only after RUS approval is obtained.
(c)
(1)
(2)
(3)
This section includes headquarters buildings such as warehouses and equipment service type buildings. Generating plant buildings are covered under subpart D of this part.
(a)
(b)
(c)
This section covers items such as office furniture and equipment; transportation equipment and accessories, including mobile radio systems, stores and shop equipment, laboratory equipment, tools and test equipment.
(a)
(b)
(c)
This section covers the purchase of microwave and power line carrier communications systems, load control, and supervisory control and data acquisition (SCADA) systems. Mobile radio systems are covered as general plant materials in § 1726.175.
(a)
(b)
(2)
(ii) The borrower must use multiparty negotiation for all other communications and control facilities contract construction, including all contracts requiring RUS approval. The amount of contracts bid using the multiparty negotiation procedure do not apply to the cumulative total stipulated in paragraph (b)(2)(i) of this section.
(iii) An amendment which increases the scope by adding a project is not considered competitively bid, therefore, the amount of that amendment does apply to the cumulative total stipulated in paragraph (b)(2)(i) of this section.
(3)
The borrower must use the procedures described in this subpart where such procedures are required under subparts B through F of this part. The borrower must ensure that arrangements prior to announcement of the award of the contract are such that all bidders are treated fairly and no bidder is given an unfair advantage over other bidders.
Formal competitive bidding is used for distribution, transmission, and headquarters facilities, and may be used for generation facilities. The borrower must use the following procedure for formal competitive bidding:
(a)
(b)
(c)
(d)
(e)
(f)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(g)
(h)
(i)
(1) Resolve to award the contract to the lowest evaluated responsive bidder; or
(2) Reject all bids.
(j)
Informal competitive bidding may be used for equipment purchases and generation construction. The borrower must use the following procedure for informal competitive bidding:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(1)
(2)
(h)
(i)
(1) Resolve to award the contract to the lowest evaluated responsive bidder; or
(2) Reject all bids.
(j)
Multiparty negotiation may only be used where permitted under subpart F of this part or where prior RUS approval has been obtained. The borrower must use the following procedure for multiparty negotiation:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(1)
(2)
(h)
(i)
(1) Resolve to award the contract to the selected bidder; or
(2) Reject all bids.
(j)
The borrower or its engineer must contact a sufficient number of suppliers or contractors to assure competition and so that at least three bids will be received. On the basis of written unit price quotations, the borrower will select the supplier or contractor based on the lowest evaluated cost.
The borrower or its engineer must contact a sufficient number of suppliers or contractors to assure competition and so that at least three bids will be received. On the basis of written lump sum quotations, the borrower will select the supplier or contractor based on the lowest evaluated cost.
RUS provides standard forms of contract for the procurement of materials, equipment, and construction and for contract amendments and various related forms for use by RUS borrowers. See § 1726.304 for a listing of these forms and how to obtain them. The standard forms of contract shall be used by the borrowers in accordance with the provisions of this part. RUS will give prior approval to certain modifications to these forms without changing the applicable requirements for RUS approval. Such approved modifications are set forth in this subpart. These are the only modifications given prior RUS approval.
(a)
(b)
(1) Insert new paragraphs in the Notice and Instructions to Bidders as follows:
“Proposals are invited on the basis of firm prices (or prices with a stated maximum percentage escalation) or on the basis of nonfirm prices to be adjusted as provided for below or on both bases. The owner may award the contract on either basis.
A proportion of __ percent [the borrower will enter the appropriate percentage amount] of the contract price shall be deemed to represent labor cost and shall be adjusted based on changes in the Bureau of Labor Statistics, Average Hourly Earnings Rate__ [the borrower will enter the appropriate BLS index] from the month in which the bids are opened to the month in which the labor is incorporated in the equipment or materials. The adjustment for labor costs shall be obtained by applying the percentage of increase or decrease in such index, calculated to the nearest one-tenth of one percent, to the percentage of the contract prices deemed to represent labor costs. A portion of __ percent [the borrower will enter the appropriate percentage amount] of the contract price shall be deemed to represent material costs and shall be adjusted based on changes in the Bureau of Labor Statistics, material index __ [the borrower will enter the appropriate BLS index] for the period and in a manner similar to the labor cost adjustment.”
(2) Insert the following in the contract documents under the “Proposal” section:
(3) For equipment that uses a large quantity of insulating oil, the borrower may insert the following in the contract documents under the “Proposal” section:
“The price for insulating oil shall be adjusted upward or downward based on the change in the Bureau of Labor Statistics Refined Petroleum Rate (057) from the month in which the bids are opened to the month in which the oil is purchased by the equipment supplier. Contracts shall be evaluated based on an estimated cost of __ cents per gallon [the borrower will enter the appropriate cost] for oil. Such adjustment, if any, shall not change the contract amount for purpose of applying any other adjustments to the contract prices.”
(c)
(1) Insert new paragraphs in the “Notice and Instructions” to Bidders as follows:
“Proposals are invited on the basis of firm prices (or prices with a stated maximum percentage escalation) or on the basis of nonfirm prices to be adjusted as provided for below or on both bases. The owner may award the contract on either basis.
A proportion of __ percent [the borrower will enter the appropriate percentage amount] of the contract price shall be deemed to represent shop labor costs and shall be adjusted based on changes in the Bureau of Labor Statistics, Average Hourly Earnings Rate __ [the borrower will enter the appropriate BLS index] from the month in which bids are opened to the month in which the work is accomplished. The adjustment for shop labor costs shall be obtained by applying the percentage increase or decrease in such index, to the percentage of each partial payment deemed to represent shop labor costs. A portion of __ percent [the borrower will enter the appropriate percentage amount] of the contract prices shall be deemed to represent material costs and shall be adjusted based on changes in the Bureau of Labor Statistics, Producer Price Index, __ [the borrower will enter the appropriate BLS index] for the period and in a manner similar to the shop labor costs adjustment. A portion of __ percent [the borrower will enter the appropriate percentage amount] of the contract price shall be deemed to represent field labor costs and
(2) Insert the following in the contract documents under the “Proposal” section:
This section applies only to transmission equipment purchases and generation contracts. Where the borrower anticipates difficulty in obtaining responsive bids on RUS standard contract forms due to a lack of limitation with respect to special and consequential damages, and where the borrower believes that such a modification will encourage competition through the receipt of an alternative bid which limits the bidder's liability for special and consequential damages, the borrower may make the following approved phrase modifications in the RUS standard contract form on which the borrower solicits bids:
(a) Insert new paragraphs in the “Notice and Instructions to Bidders” as follows:
“Proposals are invited on the basis of alternative Liability Clause Numbers 1 and 2. The Owner will determine on which Liability Clause basis the award will be made. Any other liability clauses in the proposal or any other modifications will be considered not responsive and unacceptable. These Liability Clauses are defined as follows:
“Except for the Bidder's willful delay or refusal to perform the contract in accordance with its terms, the Bidder's liability to the Owner for special or consequential damages on account of breach of this contract shall not exceed in total an amount equal to __ percent [the borrower will insert an appropriate percentage between 0 and 100 percent, inclusive] of the contract price.”
(b) Insert the following in the contract documents under the “Proposal” section:
(c) Insert the following in the acceptance section of the standard contract form:
“This contract is based on Liability Clause Number____.”
When construction is to be performed over an extended period of time, but large quantities of material are to be purchased by the contractor at the beginning of the project (e.g., cable for URD installations), the borrower may allow alternative bids providing for payment to the contractor of 90 percent of the cost of such materials within 30 days of delivery of those materials at the job site. The borrower will retain the right to award the contract with or without the alternative payment provision, however, the contract still must be awarded on the basis of the lowest evaluated responsive bid for the alternative accepted.
(a) As an alternative to the indemnification provision required in RUS standard construction contract forms in those jurisdictions requiring specific language concerning the requirement that the indemnitor indemnify the indemnitee for the indemnitee's own negligence, the borrower may add the words “otherwise this provision shall apply to any alleged negligence or condition caused by the Owner” so that the first paragraph reads as follows:
“i. To the maximum extent permitted by law, Bidder shall defend, indemnify, and hold harmless Owner and Owner's directors, officers, and employees from all claims, causes of action, losses, liabilities, and expenses (including reasonable attorney's fees) for personal loss, injury, or death to persons (including but not limited to Bidder's employees) and loss, damage to or destruction of Owner's property or the property of any other person or entity (including but not limited to Bidder's property) in any manner arising out of or connected with the Contract, or the materials or equipment supplied or services performed by Bidder, its subcontractors and suppliers of any tier. But nothing herein shall be construed as making Bidder liable for any injury, death, loss, damage, or destruction caused by the sole negligence of Owner, otherwise this provision shall apply to any negligence or condition caused by the Owner.”
(b) As an alternative to the indemnification provision required in RUS standard construction contract forms in those jurisdictions that have a legal prohibition against one party indemnifying another for the other's negligence, the borrower may replace the words “defend, indemnify, and hold harmless” with the words “ shall pay on behalf of” so that the first paragraph reads as follows:
“i. To the maximum extent permitted by law, Bidder shall pay on behalf of Owner and Owner's directors, officers, and employees from all claims, causes of action, losses, liabilities, and expenses (including reasonable attorney's fees) for personal loss, injury, or death to persons (including but not limited to Bidder's employees) and loss, damage to or destruction of Owner's property or the property of any other person or entity (including but not limited to Bidder's property) in any manner arising out of or connected with the Contract, or the materials or equipment supplied or services performed by Bidder, its subcontractors and suppliers of any tier. But nothing herein shall be construed as making Bidder liable for any injury, death, loss, damage, or destruction caused by the sole negligence of Owner, otherwise this provision shall apply to any negligence or condition caused by the Owner.”
(c) If the alternative indemnification provision in paragraph (a) or (b) of this section is chosen by the borrower, the language of paragraph (a) or (b) of this section would be inserted in lieu of paragraph (i) of the section indicated in the RUS standard construction contract forms as follows:
(1) RUS Form 198, Equipment Contract, article IV, section 1(d).
(2) RUS Form 200, Construction Contract—Generating, article IV, section 1(d).
(3) RUS Form 257, Contract to Construct Buildings, article IV, section 1(d).
(4) RUS Form 786, Electric System Communications and Control Equipment Contract, article IV, section 1(d).
(5) RUS Form 790, Electric System Construction Contract—Non-Site Specific Construction, article IV, section 1(g).
(6) RUS Form 830, Electric System Construction Contract—Project Construction, article IV, section 1(g).
(a)
(b)
(a)
(b)
(c)
(d)
(e)
(a)
(b)
RUS may, from time to time, undertake to promulgate new contract forms or revise or eliminate existing contract forms. In so doing, RUS shall publish notice of rulemaking in the
(a)
(b)
(c) List of required contract forms.
(1) RUS Form 168b, Rev. 2-04, Contractor's Bond. This form is used to obtain a surety bond and is used with RUS Forms 200, 257, 786, 790, and 830.
(2) RUS Form 168c, Rev. 2-04, Contractor's Bond (less than $1 million). This form is used in lieu of RUS Form 168b to obtain a surety bond when contractor's surety has accepted a Small Business Administration guarantee.
(3) RUS Form 187, Rev. 2-04, Certificate of Completion, Contract Construction. This form is used for the closeout of RUS Forms 200, 257, 786, and 830.
(4) RUS Form 198, Rev. 4-04, Equipment Contract. This form is used for equipment purchases.
(5) RUS Form 200, Rev. 2-04, Construction Contract—Generating. This form is used for generating plant construction or for the furnishing and installation of major items of equipment.
(6) RUS Form 213, Rev. 2-04, Certificate (“Buy American”). This form is used to document compliance with the “Buy American” requirement.
(7) RUS Form 224, Rev. 2-04, Waiver and Release of Lien. This form is used for the closeout of RUS Forms 198, 200, 257, 786, 790, and 830.
(8) RUS Form 231, Rev. 2-04, Certificate of Contractor. This form is used for the closeout of RUS Forms 198, 200, 257, 786, 790, and 830.
(9) RUS Form 238, Rev. 2-04, Construction or Equipment Contract Amendment. This form is used for amendments.
(10) RUS Form 254, Rev. 2-04, Construction Inventory. This form is used for the closeout of RUS Form 830. Minor electronic modifications are acceptable for RUS Form 254.
(11) RUS Form 257, Rev. 2-04, Contract to Construct Buildings. This form is used to construct headquarters buildings and other structure construction.
(12) RUS Form 307, Rev. 2-04, Bid Bond. This form is used to obtain a bid bond.
(13) RUS Form 786, Rev. 2-04, Electric System Communications and Control Equipment Contract (including installation). This form is used for delivery and installation of equipment for system communications.
(14) RUS Form 790, Rev. 2-04, Electric System Construction Contract—Non-Site Specific Construction. This form is used for limited distribution construction accounted for under work order procedure.
(15) RUS Form 792b, Rev. 2-04, Certificate of Construction and Indemnity Agreement. This form is used for the closeout of RUS Form 790.
(16) RUS Form 830, Rev. 2-04, Electric System Construction Contract—Project Construction. This form is used for distribution and transmission line project construction.
(d) List of guidance contract forms. RUS does not currently publish any guidance forms for electric borrowers.
As needed, a final contract amendment will be prepared and processed in accordance with § 1726.24(b) prior to or in conjunction with the closeout of the contract.
(a)
(b)
(c)
This section is applicable to contracts executed on RUS Form 198.
(a)
(b)
(i) Certification by the project engineer in accordance with paragraph (a) of this section.
(ii) All guarantees or warranties.
(iii) A “Buy American” certificate, RUS Form 213, from the supplier or manufacturer.
(2) Closeout documents for materials contracts need not be submitted to RUS unless specifically requested by RUS.
(c)
This section is applicable to contracts executed on RUS Forms 200, 257, 786, and 830.
(a)
(b)
(c)
(i) RUS Form 187, Certificate of Completion, Contract Construction.
(ii) RUS Form 213, “Buy American” certificate.
(iii) RUS Form 224, Waiver and Release of Lien, from each manufacturer, supplier, and contractor which has furnished material or services or both in connection with the construction.
(iv) RUS Form 231, Certificate of Contractor.
(v) RUS Form 254, Construction Inventory, including all supporting documents, such as RUS Forms 254a-c, construction change orders, and amendments for contracts executed on RUS Form 830.
(vi) Certification by the project architect or engineer in accordance with § 1726.403(a), if applicable.
(vii) Final design documents, as outlined in part 1724 of this chapter.
(2)
(ii) For contracts subject to RUS approval, the borrower will submit the following closeout documents for RUS approval (through the GFR except for generation projects):
(A) RUS Form 187, Certificate of Completion, Contract Construction.
(B) RUS Form 231, Certificate of Contractor.
(C) RUS Form 254, Construction Inventory, including all supporting documents, such as RUS Forms 254a-c and construction change orders, for contracts executed on RUS Form 830.
(iii) For contracts not subject to RUS approval, the closeout is not subject to RUS approval. The borrower will send one copy of RUS Form 187 to RUS for information prior to or in conjunction with the applicable RUS Form 219, Inventory of Work Orders. The remaining closeout documents need not be sent to RUS unless specifically requested by RUS.
(d)
(2)(i) Upon receipt of final payment by the contractor, the borrower will obtain from the contractor a certification of receipt of final payment in the following form:
“The undersigned acknowledges receipt of the final contract payment of $__ as satisfaction in full of all claims of the undersigned under the construction contract between the undersigned and __ (borrower), dated as amended, and as complete performance by the latter of all obligations to be performed by it pursuant thereto. The total amount received under this contract is shown above.”
(ii) The certification in paragraph (d)(2)(i) of this section is to be executed for the contractor by: the sole owner, a partner, or an officer of the corporation. Where this certification is executed for the corporation by a person other than the president, a certified copy of the authorization from the corporate board must be included with the certification. This certification is not a replacement for itemized invoices.
This section is applicable to contracts executed on RUS Form 790.
(a)
(b)
(c)
(i) RUS Form 792b, Certificate of Contractor and Indemnity Agreement
(ii) RUS Form 213, “Buy American” certificate.
(iii) Certification by the project engineer in accordance with paragraph (a) of this section, if applicable.
(iv) Final design documents, as outlined in part 1724 of this chapter.
(2)
(ii) For contracts not subject to RUS approval, the closeout is not subject to
Upon completion of the contract closeout, the borrower shall complete RUS Form 219, Inventory of Work Orders, in accordance with part 1717, Post-Loan Policies and Procedures Common to Insured and Guaranteed Electric Loans, of this chapter.
7 U.S.C. 901
(a) The requirements of this part are based on contractual provisions between RUS and the organizations which receive financial assistance from RUS.
(b) RUS will establish certain specifications and standards for materials, equipment, and construction units that will be acceptable for RUS financial assistance for the electric program. Materials and equipment purchased by the electric borrowers or accepted as contractor-furnished material must conform to RUS standards and specifications where they have been established and, if included in RUS Bulletin 43-5, “List of Materials Acceptable for Use on Systems of RUS Electrification Borrowers” (List of Materials), must be selected from that list or must have received technical acceptance from RUS. RUS, through its Technical Standards Committees, will evaluate certain materials, equipment and construction units, and will determine acceptance.
(a)
(b)
(c)
(a)
(b)
(c)
(d)
(i) Accept an item for listing without conditions (domestic items only),
(ii) Reject an item (domestic or nondomestic),
(iii) Accept an item for listing with conditions (domestic items only),
(iv) Table an item for a time period sufficient to allow the sponsor to be notified and furnish additional information (domestic or nondomestic),
(v) Grant technical acceptance with or without conditions for a period of one year from the date of notification by RUS (nondomestic items only).
(2) All committee decisions regarding the actions listed above must be unanimous. If the vote is not unanimous, the item shall be referred to Technical Standards Committee “B.” Written notice of Technical Standards Committee “A's” decision, stating the basis for the decision, will be provided to the sponsor.
(3) Items accepted without conditions by the Technical Standards Committees will be considered to be accepted on a general basis. No restrictions as to quantity or application will be placed on items which have received general acceptance. Items accepted subject to certain conditions, such as limited use to gain service experience, or limited use appropriate to certain areas and conditions, will be considered to be accepted on a conditional basis. The conditions will be cited as a part of the listing provided for in § 1728.60, or as part of the technical acceptance for nondomestic items.
(e)
(f)
(g)
(h)
(a)
(b)
(c)
(d)
(a)
(b)
(c)
(d)
(e)
(1) Order the immediate removal of the item from the listing, or technical acceptance,
(2) Condition the item's continued listing, or technical acceptance,
(3) Recommend a basis of settlement which will adequately protect the interest of the Government, or
(4) Delay the effectiveness of its decision for a time period sufficient to allow the sponsor to appeal to Technical Standards Committee “B.”
(f)
(g)
(h)
(1) Order the immediate removal of the item from listing, or technical acceptance,
(2) Condition the item's continued listing, or technical acceptance,
(3) Recommend a basis of settlement which adequately protects the interests of the Government, or
(4) Delay the effectiveness of its decision for a time period sufficient to allow the sponsor to appeal to the Administrator of RUS.
(i)
(j)
(1) Order the immediate removal of the item from the listing, or technical acceptance,
(2) Condition its continued listing, or technical acceptance, or
(3) Recommend a basis of settlement which adequately protects the interests of the Government.
(a)
(b)
(c)
(a)
(b)
(c)
(2) RUS will also determine, on a case-by-case basis, whether to allow use of an unlisted item in emergency situations and for experimental use or to meet a specific need. For purposes of this part 1728, an emergency shall mean a situation wherein the supply of listed material and equipment from the industry is not readily available, or the standard designs are not applicable to the borrower's specific problem under consideration.
(3) RUS will make arrangements for test or experimental use of newly developed items requiring limited trial use. RUS, working with the borrower and the manufacturer, will establish test locations for the items to facilitate installation and observation.
(a) The following electric bulletins have been approved for incorporation by reference by the Director of the Office of the Federal Register. The bulletins containing construction standards (50-4 and 1728F-803 to 1728F-811), may be purchased from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. The bulletins containing specifications for materials and equipment (50-15 to 50-99 and 1728F-700) may be obtained from the Rural Utilities Service, Program Development and Regulatory Analysis, Stop 1522, Room 4028-S, Washington, DC 20250-1522. The terms “RUS form”, “RUS standard form”, “RUS specification”, and “RUS bulletin” have the same meanings as the terms “REA form”, “REA standard form”, “REA specification”, and “REA bulletin”, respectively unless otherwise indicated. The bulletins are available for inspection at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(b)
(a)
(2) Each RUS electric borrower shall require each contractor to agree in writing to furnish only materials produced in accordance with the specification in this section.
(3) This specification describes the minimum acceptable quality of wood distribution crossarms and transmission crossarms (hereinafter called crossarms) that are purchased by or for RUS borrowers. Where there is conflict between this specification and any other specification referred to in this section, this specification shall govern.
(4) Various requirements relating to quality control and inspection are contained in § 1728.202 of this part, RUS Specification for Quality Control and Inspection of Timber Products. Section 1728.201 of this part and the American National Standards Institute (ANSI) 05.2, 1983, American National Standard for Wood Products—Structural Glued Laminated Timber for Utility Structures, shall be followed exactly and
(5) The borrower shall purchase from producers only material that meets the requirements of this specification. Each purchaser shall use a written purchase order to purchase material for use in RUS financed systems in order to insure compliance with the standards and specifications of this part. The written purchase order shall contain a provision that specifically requires the producer to comply with the provisions of this part. The purchase order shall contain a provision that specifically requires the producer to make the treating plant, and storage areas available, during normal business hours, in order for representatives of either the purchaser or RUS to inspect such to determine compliance with the standards and specifications of this part.
(6) The borrower shall insure that the producer provides the inspectors with full information (drawings, etc.) relating to the requirements contained in purchase order which is supplementary to this specification.
(7) The borrower shall insure that the producer maintains, or has access to, adequate laboratory facilities at or very near the treating plant. All chemical tests, assays or analyses associated with the treatment shall be independently performed in this laboratory by both the quality control designee and the borrower's inspector. If acceptable to RUS on a case-by-case basis, the producer may use a central laboratory.
(8) Inspection and treatment of all timber products produced under this specification should be performed after receipt of the order from the purchaser, except as provided for reserve treated stock.
(9) The borrower shall insure that each inspection agency maintains its own central laboratory with qualified staff capable of completely analyzing the preservative and treatments. If acceptable to RUS, this central laboratory may be used for the independent inspector's routine assays, with results made available the next working day.
(10) The testing and inspection of the lamination process shall be in accordance with American Institute of Timber Construction (AITC) 200-83, Inspection Manual.
(11) With the exception of reserve treated stock, all invoices for treated timber products shall be accompanied, in duplicate, by a copy of the producer's Certificate of Compliance and a copy of either the Independent Inspection Report or a Quality Assurance Plan Certificate. The certificate shall be presented to the purchaser with the invoice. For reserve treated stock, inspection reports shall be available from the inspection agency. When shipped from reserve stock, the invoice shall bear an endorsement and a further certification by the producer that the material meets the requirements of this specification and any supplementary requirements cited in the purchase order under which it is purchased.
(12) Crossarms shall be warranted to conform to this specification. If any crossarm is determined to be defective or does not conform to this specification within 1 year after shipment to the borrower, it shall be replaced as promptly as possible by the producer. In the event of failure to do so, the purchaser may make such replacement and the cost of the crossarm, at destination, recoverable from the producer.
(b)
(c)
(1) West Coast Lumber Inspection Bureau, Standard No. 17, Grading Rules for West Coast Lumber, September 1, 1991, available from West Coast Lumber Inspection Bureau, P.O. Box 23145, Portland, Oregon 97223, telephone (503) 639-0651, Fax (503) 684-8928.
(2) Southern Pine Inspection Bureau, Standard Grading Rules for Southern Pine Lumber, October 15, 1991, available from Southern Pine Inspection Bureau, 4709 Scenic Highway, Pensacola, Florida 32504, telephone (904) 434-2611.
(i) Southern Pine Inspection Bureau, Special Product Rules for Structural, Industrial, and Railroad-Freight Car Lumber, October 15, 1991, available from Southern Pine Inspection Bureau, 4709 Scenic Highway, Pensacola, Florida 32504, telephone (904) 434-2611.
(ii) [Reserved]
(3) American Wood Preservers' Association (AWPA), Book of Standards, 1991 edition, available from AWPA, P.O. Box 286, Woodstock, Maryland 21163-0286.
(i) A1-91, Standard Methods for Analysis of Creosote and Oil-Type Preservatives.
(ii) A2-91, Standard Methods for Analysis of Waterborne Preservatives and Fire-Retardant Formulations.
(iii) A3-91, Standard Methods for Determining Penetration of Preservatives and Fire Retardants.
(iv) A5-91, Standard Methods for Analysis of Oil-Borne Preservatives.
(v) A6-89, Method for the Determination of Oil-Type Preservatives and Water in Wood.
(vi) A7-75, Standard Wet Ashing Procedure for Preparing Wood for Chemical Analysis.
(vii) A9-90, Standard Method for Analysis of Treated Wood and Treating Solutions by X-Ray Spectroscopy.
(viii) A11-83, Standard Method for Analysis of Treated Wood and Treating Solutions by Atomic Absorption Spectroscopy.
(ix) C1-91, All Timber Products—Preservative Treatment by Pressure Processes.
(x) C4-91, Poles—Preservative Treatment by Pressure Processes.
(xi) C8-91, Western Red Cedar and Alaska Yellow Cedar Poles—Preservative Treatment by the Full-Length Thermal Process.
(xii) C10-91, Lodgepole Pine Poles—Preservative Treatment by the Full-Length Thermal Process.
(xiii) C12-90, Western Larch Poles—Full-Length Preservative Treatment by Thermal Process.
(xiv) M1-90, Standard for the Purchase of Treated Wood Products.
(xv) M2-91, Standard for Inspection of Treated Timber Products.
(xvi) M3-81, Standard Quality Control Procedures for Wood Preserving Plants.
(xvii) M4-91, Standard for the Care of Preservative-Treated Wood Products.
(xviii) P1/P13-91, Standard for Coal Tar Creosote for Land and, Fresh Water and Marine (Coastal Water Use).
(xix) P5-91, Standards for Waterborne Preservatives.
(xx) P8-91, Standards for Oil-Borne Preservatives.
(xxi) P9-91, Standards for Solvents and Formulations for Organic Preservative Systems.
(4) American Institute of Timber Construction (AITC) 200-83, Inspection Manual, 1987 edition, available from AITC, 333 West Hampden Avenue, Englewood, Colorado 80110, telephone (303) 761-3212.
(5) American National Standards Institute (ANSI) 05.2-1983, American National Standard for Wood Products—Structural Glued Laminated Timber for Utility Structures, available from ANSI, 1430 Broadway, New York, New York 10018.
(6) American Society for Testing and Materials (ASTM) D9-87 (1992), Standard Terminology Relating to Wood, available from ASTM, 1916 Race Street, Philadelphia, PA 19103-1187, telephone number (215) 299-5585.
(d)
(1) The borrower has the prerogative to contract directly with the inspection agency for service. The borrower should, where practical, select the inspection agency so that continual employment is dependent only on performance acceptable to the borrower and in accordance with this specification. The selected inspection agency shall not subcontract the service to any other inspection agency without the prior written consent by the borrower.
(2) The producer shall not be a party to the selection of the inspection agency by the borrower and shall not interfere with the work of the inspector, except to provide notification of the readiness of material for inspection. To obtain the inspection services for reserve stock, the producer may deal directly with the inspection agency. Under the Independent Inspection Plan, the producer shall not treat material before it has been properly inspected in the white, as evidenced by the inspector's hammer mark.
(3) The methods of inspection described in this section and in § 1728.202 of this part shall be used no matter which plan crossarms are produced under, i.e., Independent Inspection Plan, or Quality Assurance Plans, as described in this section. The number of crossarms actually inspected by monitors of quality control under a Quality Assurance Plan may vary from the number of crossarms inspected under the Independent Inspection Plan.
(e)
(f)
(i) Douglas-fir which conforms to the applicable crossarm provisions of paragraphs 170 and 170a, or the applicable transmission arm provisions of paragraphs 169 and 169a of the 1991 Standard Grading Rules for West Coast Lumber No. 17. All references to Douglas-fir shall be of coastal origin;
(ii) Southern Yellow Pine which conforms to the provisions of Dense Industrial Crossarm 65, as described in paragraph 31.2 in Southern Pine Inspection Bureau 1991 Special Product Rules for Southern Pine; or
(iii) Laminated wood crossarms shall conform to ANSI 05.2-1983, and have at least the same load carrying capacity as the solid sawn arm it replaces. The load carrying capacity of the laminated arms shall be determined by one of the procedures outlined in ANSI 05.2.
(2) Borrowers may use alternative wood crossarms that are listed in RUS Bulletin 1728C-100, List of Materials Acceptable for Use on Systems of RUS Electrification Borrowers.
(3)
(i) Slightly decayed knots are permitted, except on the top face, provided the decay extends no more than 3/4 of an inch (1.91 cm) into the knot and provided the cavities will drain water when the arm is installed. For knots to be considered well spaced, the sum of the sizes of all knots in any 6 inches (15.24 cm) of length of a piece shall not exceed twice the size of the largest knot permitted. More than one knot of maximum permissible size shall not be in the same 6 inches (15.24 cm) of length. Slightly decayed, firm, or sound “Pin knots” (3/8 of an inch (0.95 cm) or less) are not considered in size, spacing, or zone considerations.
(ii) Knots are subject to the following limits on size and location:
(iii) Knot clusters shall be prohibited unless the entire cluster, measured on the worst face, is equal to or less than the round knot allowed at the specific location.
(iv) Spike knots shall be prohibited in deadend arms. Any spike knot across the top face shall be limited to the equivalent displacement of a knot 3/8 of an inch (0.95 cm) deep on one face and the maximum round knot for its particular location on the worst face, with a maximum width of 1 inch (2.54 cm) measured at the midpoint of the spiked section. Elsewhere across the bottom or side faces, spike knots shall not exceed 1/2 the equivalent displacement of a round knot permitted at that location, provided that the depth of the knot on the worst face shall not exceed the maximum round knot allowed at that location.
(v) Loose knots and knot holes shall drain water when the arm is normally
(vi) All knots except those “spike” knots intersecting a corner shall be measured on the least diameter of the knot.
(vii) A knot shall be considered to occupy a specific zone or section if the center of the knot (i.e. pith of knot) is within the zone or on the zone's boundary.
(viii) If a round or oval knot appears on two faces and is in two zones, each face shall be judged independently. When this does not occur, average the least dimension showing on both faces. Knots which occur on only one face of a free of heart center (FOHC) arm shall be permitted to be 25 percent larger than the stated size.
(ix)
(x) Knots which have a maximum of 5/8 inch (1.59 cm) diameter may intersect pin holes in the center section. One inch (2.54 cm) diameter knots may intersect pin holes elsewhere.
(4)
(ii) Shakes shall be prohibited.
(iii)
(iv) Compression wood shall be prohibited on any face. It is permitted if wholly enclosed in the arm, more than six annual rings from the surface, and not over 3/8 of an inch (0.95 cm) in width.
(v) Insect holes larger than 3/32 of an inch (0.24 cm) shall be prohibited. Pin holes (i.e. holes not over 1/16 of an inch (0.16 cm) diameter) shall be allowed if scattered and not exceeding 10 percent of the arm girth.
(vi) Wane shall be allowed on one edge, limited to approximately 1 inch (2.54 cm), measured across the corner. Outside of the top center section, an aggregate length not to exceed 2 feet may have wane up to 1-1/2 inches (3.81 cm) on an occasional piece on one or both edges. Bark shall be removed.
(vii) Prior to preservative treatment, crook, bow, or twist shall not exceed 1/2 of an inch (1.27 cm) in 8 foot arms (2.4 m) and 5/8 of an inch (1.59 cm) in 10 foot (3.0 m) arms.
(g)
(2) Lamination techniques shall comply with ANSI 05.2-1983.
(3) Pin and bolt holes shall be smoothly bored without undue splintering where drill bits break through the surface. The center of any hole shall be within 1/8 of an inch (0.32 cm) of the center-line locations on the face in which it appears. The holes shall be perpendicular to the starting and finishing faces.
(4)
(5)
(6)
(h)
(2) Moisture content levels shall be measured at about 1/4 the length and at a depth of about 1/5 the crossarm's thickness. Additionally, the moisture content gradient between the shell (i.e. 1/4 of an inch (0.64 cm) deep) and the core (i.e. about 1 inch (2.54 cm) deep) shall not exceed 5 percentage points.
(3) A minimum of at least 20 solid sawn crossarms per treating charge shall be measured to verify moisture content and shall be duly recorded by the quality control designee or independent inspector.
(4) The moisture content of lumber used in laminating shall, at the time of gluing, be within the range of 8 to 12 percent, inclusive.
(i)
(i) Creosote which conforms to the requirements of AWPA Standard P1 when analyzed in accordance with the methods in AWPA Standard A1, sections 2, 3, 4, either 5 or 9, and 6;
(ii) Pentachlorophenol which contains not less than 95 percent chlorinated phenols and conforms to AWPA Standard P8 when analyzed in accordance with AWPA Standard A5 or A9. The hydrocarbon solvents for introducing the preservative into the wood shall meet the requirements of AWPA Standard P9 Type A; or
(iii) Waterborne preservatives, which may only be one of the following:
(A) Ammoniacal Copper Arsenates (ACA) and Ammoniacal Copper Zinc Arsenate (ACZA) which shall meet the requirements of AWPA Standard P5, when analyzed in accordance with methods in AWPA Standards A2, A9, or A11; and
(B) Chromated Copper Arsenates (CCA) which shall meet the requirements of one of the formulations given in AWPA Standard P5, sections 4, 5 or 6, and 10. Tests to establish conformity shall be made in accordance with AWPA Standards A2, A9, or A11.
(1) The pH of treating solutions of the waterborne preservatives shown in AWPA Standard P5, section 10, shall be determined in accordance with AWPA Standard A2, section 8.
(2) Waterborne preservatives are available either as oxides, which form non-ionizing chemical compounds in the wood, or as salts, which leave ionizing compounds as well as non-ionizing compounds in the wood. Salt formulations of a waterborne preservative are more corrosive to metal than the oxide formulation and may cause surface deposits. Unless otherwise specified in the purchase order, the oxide formulations of waterborne preservatives shall be supplied.
(3) Douglas-fir crossarms shall not be treated with CCA preservatives.
(4) Materials treated with waterborne preservatives shall be free of visible surface deposits.
(iv) Copper Naphthenate (CuN) concentrate used to prepare wood preserving solutions shall contain not less than 6 percent nor more than 8 percent copper in the form of Copper Naphthenate and shall conform to AWPA Standard P8 when analyzed in accordance with AWPA Standard A5. The hydrocarbon solvents for introducing the preservative into the wood shall meet the requirements of AWPA Standard P9 Type A.
(2) [Reserved]
(j)
(2) These materials may be further conditioned by steaming, or by heating in hot oil (Douglas-fir), within the following limits:
(3) A final steam or hot oil bath may be used only to meet cleanliness requirements of paragraph (k) of this section. Total duration of the final steam bath shall not exceed 2 hours and the temperature shall not exceed 240 degrees Fahrenheit (115.6C).
(k)
(2)
(3) Penetration by the preservative, as determined in accordance with AWPA Standard A3, shall be 100 percent of the sapwood in crossarms. In the heartwood of Douglas-fir crossarms, the penetration shall be not less than 3 inches (7.62 cm) longitudinally from the edge of holes and ends, and at least 3/16 inch (0.45 cm) from the surface of any face.
(4) Retention of preservative in the outer 6/10 of an inch (1.52 cm) for Douglas-fir and one inch (2.54 cm) for Southern Yellow Pine assay zones at the treating plant shall be not less than:
(5) Cleanliness of lengthwise surfaces of all crossarms shall be free from tarry, greasy, or sticky material, and from oil exudation and pentachlorophenol crystallization (blooming).
(6) Re-treatment of materials which do not meet the penetration and retention requirements of this specification may be done only twice. Initial treatment steaming time plus re-treatment steaming time, combined, shall not exceed time allowed in paragraph (i) of this section.
(l)
(2) The letters and figures shall be not less than 1/2 of an inch (1.27 cm) in height. The top of the brand shall be oriented to the top of the arm.
(3) The brand or die-stamp shall include:
(i) The manufacturer's identification symbol;
(ii) Month and year of manufacture;
(iii) Species of timber such as DF for Douglas-fir and SP for Southern Yellow Pine; and
(iv) The preservative notated with a C for creosote, P for penta, S for salts, or N for Copper Naphthenate.
(4) An example is:
(5) The brand or stamp shall be placed on either of the wide surfaces of the arms, oriented with letters right side up towards the top of the arm and preferably about 1 foot (30.48 cm) from the midpoint of the arm.
(6) The mark should be approximately the same location on each type of crossarm of each producer.
(7) Brands, inspection marks, or quality assurance marks shall be removed from arms that do not meet these specifications
(m)
(2) RUS shall acknowledge, by letter, each notification of intent to treat material for reserve stock under the RUS specification.
(3) RUS's letter acknowledging the plant's advance notice of intent to treat material for reserve treated stock for the calendar year in question shall be evidence of compliance with the notification requirements.
(4) Producers shall notify RUS of:
(i) The locations of all storage or distribution yards where reserve treated stock will be maintained;
(ii) The designation of the RUS-approved plan;
(iii) The name of the selected inspection agency, where applicable; and
(iv) Any changes that occur during the year.
(5) Crossarms treated with oil-borne preservatives which have been held in storage for more than 1 year before shipment to the borrower, shall be reassayed before shipment and shall be re-treated if found nonconforming for retention on orders placed in accordance with this section.
(6) The crossarms shall meet the assay after re-treatment in accordance with paragraph (k) of this section.
(7) Crossarms which are held in storage after final acceptance shall be stacked in piles or on skids in such a manner as to assure good ventilation. The stacks shall be covered or stored indoors for protection from the sun and weather to reduce checking, bending, and loss of preservative.
(8) Borrowers or their contractors shall not purchase reserve treated stock from plants that fail to comply with the notification requirements.
(n)
(2) Purchase orders shall indicate the type required.
(3) Crossarms shall be furnished in accordance with the details of these drawings or in accordance with drawings attached to the purchase order
(4) Technical drawings for transmission crossarms are published in RUS Bulletin 1728F-T805B (formerly 50-1), Electric Transmission Specifications and Drawings, 115kV through 230kV, and RUS Bulletin 1728F-T805A (formerly 50-2), Electric Transmission Specification and Drawings, 34.5kV through 69kV.
(5) Appropriate drawings for transmission arms are to be specified and included with purchase orders.
(o)
(2) Using the average shrinkage allowances for Douglas-fir and Southern Yellow Pine as 1 percent size change for each four point moisture content change below the fiber saturation point, calculations can be made to determine if the arm met the minimum size at time of manufacture, when the arm was to meet the average moisture content.
(a)
(b)
(1) American Wood-Preservers' Association (AWPA), Book of Standards, 1991 edition, available from AWPA, P.O. Box 286, Woodstock, Maryland 21163-0286.
(i) A1-91, Standard for Coal Tar Creosote for Land and Fresh Water Use.
(ii) A2-91, Standard Methods for Analysis of Waterborne Preservatives and Fire-Retardant Formulations.
(iii) A3-91, Standard Methods for Determining Penetration of Preservatives and Fire Retardants.
(iv) A5-91, Standard Methods for Analysis of Oil-Borne Preservatives.
(v) A6-89, Method for the Determination of Water and Oil-Type Preservatives in Wood.
(vi) A7-75, Wet ashing Procedure for Preparing Wood for Chemical Analysis.
(vii) A9-90, Standard Method for Analysis of Treated Wood and Treating Solutions by X-Ray Emission Spectroscopy.
(viii) A11-83, Analysis of Treated Wood and Treating Solutions by Atomic Absorption Spectroscopy.
(ix) C1-91, Standard for Preservative Treatment by Pressure Processes All Timber Products.
(x) C4-91, Standard for the Preservative Treatment of Poles by Pressure Processes.
(xi) C8-91, Standard for the Full-Length Thermal Process Treatment of Western Red Cedar Poles.
(xii) C10-91, Lodgepole Pine Poles—Preservative Treatment by the Full-Length Thermal Process.
(xiii) C12-90, Western Larch Poles—Full-Length preservative Treatment by Thermal Process.
(xiv) M1-90, Standard for the Purchase and Preservation of Forest Products.
(xv) M2-91, Standard Instructions for the Inspection of Preservative Treatment of Wood.
(xvi) M3-81, Standard Quality Control Procedures for Wood Preserving Plants.
(xvii) M4-91, Standard for the Care of Preservative-Treated Wood Products.
(xviii) P1/P13-91, Standard for Coal Tar Creosote for Land and, Fresh Water and Marine (Coastal Water Use).
(xix) P5-91, Standards for Water-Borne Preservatives.
(xx) P8-91, Standards for Oil-Borne Preservatives.
(xxi) P9-91, Standards for Solvents for Organic Preservative Systems.
(2) American Institute of Timber Construction (AITC) 200-83, Inspection Manual, 1987 edition, available from AITC, 333 West Hampden Avenue, Englewood, Colorado 80110.
(3) American National Standards Institute (ANSI) 05.2-1983, American National Standard for Wood Products—Structural Glued Laminated Timber for Utility Structures, available from ANSI, 1430 Broadway, New York, New York 10018.
(4) American National Standards Institute/American Institute of Timber Construction (ANSI/AITC) A190.1-1983, American National Standard for Wood Products—Structural Glued Laminated Timber, available from ANSI, 1430 Broadway, New York, New York 10018.
(5) American Society for Testing and Materials (ASTM) D9-87 (1992), Standard Terminology Relating to Wood, available from ASTM, 1916 Race Street, Philadelphia, Pennsylvania 19103-1187, telephone number (215) 299-5585.
(c)
(2) Ultimate quality control is the responsibility of the producer's management; however, a member of the producer's staff shall be designated quality control designee and charged with the responsibility for the exercise of proper quality control procedures. The requirements in American Wood Preservers' Association (AWPA) Standard M3, covering records, adequate laboratory, plant gauges, and other plant facilities including proper storage, shall be followed.
(3) The methods of inspection described in this section shall be used no matter which plan timber products are purchased under, i.e., Insured Warranty Plan, Independent Inspection Plan, or Quality Assurance Plans as described in § 1728.201 of this part or RUS Bulletin 1728F-700. The number of poles and crossarms actually inspected by monitors for quality control under a Quality Assurance Plan or the Insured Warranty Plan may vary from the number of poles and crossarms inspected under the Independent Inspection Plan. Under the Independent Inspection Plan, each pole and a sample number of crossarms shall be inspected.
(4) Under the Independent Inspection Plan, the RUS borrower should designate in the purchase order which inspection agency it has selected. Unless the RUS borrower contracts for inspection as a separate transaction, the treating company shall obtain the services of the RUS borrower's designated inspection agency. For reserve treated stock for purchase under the Independent Inspection Plan, the treating company shall obtain the services of an inspection agency. Selection of and changes in inspection agencies for reserve treated stock shall be promptly reported to the Director, Electric Staff Division, Rural Utilities Service, Washington, DC 20250-1500, in accordance with RUS Bulletin 1728F-700, and § 1728.201.
(5) Individual inspectors in the employ of Independent Inspection Agencies shall be experienced and competent. The inspector shall perform all phases of the inspection personally and in the proper sequence. The primary responsibility of the inspector is to determine, for the borrower, by careful inspection and verification, that the timber products, preservative, and treatment meet the requirements of RUS Bulletin 1728F-700 and Bulletin 1728H-701 and that the methods, storage facilities, and production equipment conform to applicable RUS specifications. For details of the recommended inspector's qualifications see appendix A of this section.
(6) Laminated materials for use on RUS borrower systems shall follow manufacturing and quality control requirements as specified in ANSI 05.2—1983, American National Standard for Wood Products—Structural Glued Laminated Timber for Utility Structures, and ANSI/AITC A190.1-1983, American National Standard for Wood Products—Structural Glued Laminated Timber. The product shall be marked and certified.
(i) Laminated material shall be inspected by a qualified inspection and testing agency.
(ii) Quality control of material shall be performed to determine conformance with § 1728.201 of this part and AITC 200-83, Inspection Manual.
(d)
(1) Poles can be purchased under any of the three purchase plans. These
(i) Ample space and assistance shall be provided by the treating plant for handling and turning to insure that the surfaces of all items can be adequately inspected.
(ii) Under the Independent Inspection Plan, all poles shall be inspected for conformance to the requirements of RUS Bulletin 1728F-700. If a pole is rejected and the cause of rejection is corrected, the rejected pole may be offered again for inspection as new material.
(iii) Dimensions, length, and circumference shall be measured by a standard steel pole tape to determine that they are in agreement with the details for class and length in the brand and butt stamp. If it is obvious by visual comparison with a measured pole that the brand information is correct, individual poles need not be measured. Pole circumference dimensions made prior to treatment shall govern acceptance. Reduction in dimension due to treatment and shipping shall be not more than 2 percent below the minimum for the pole class.
(iv) If 15 percent of the poles in a lot offered for inspection are defective, the inspector shall terminate the inspection. Re-examination of an entire lot by plant quality control shall be required when the number of rejected poles equals or exceeds 15 percent of the lot inspected. All defective or nonconforming poles either shall be removed from the lot or marked out.
(v) Poles in a lot inspected for decay shall be of the same seasoning condition. If the independent inspector suspects that decay has occurred, he shall cut a slice from both ends for closer examination. If 5 percent of the inspected poles in a lot shows evidence of decay, the entire lot shall be unconditionally rejected without further sorting.
(vi) Moisture content, when limited by the purchaser, as stated on the borrower's purchase order, shall be measured by calibrated electric moisture meter. Calibration of the meter shall include not only the zero settings for the X and Y readings, but also two resistance standards for 12 and 22 percent moisture content.
(vii) Material failing to conform for moisture content may be retested upon request after a recalibration of the instrument. The results of the second test shall govern disposition of the lot.
(viii) Re-examination for any mechanical damage or deterioration and for original acceptance shall be conducted on timber products not treated within 10 days after original inspection.
(2) Crossarms can be purchased only under either of two purchase plans. These plans are the Independent Inspection Plan or Quality Assurance Plans. Under the Independent Inspection Plan, crossarms are to be inspected prior to manufacture, during manufacture, and after treatment. Under a Quality Assurance Plan, crossarms are monitored according to the terms of the quality assurance program acceptable to RUS.
(i) Inspection prior to treatment shall include:
(A) Surface inspection of all ends of all arms. This is usually done on the stacks of arms prior to manufacture. Particular attention shall be paid to defects commonly found in the ends, such as compression wood, red heart and other forms of decay, shakes, splits, through checks, scantiness, honeycomb, and low density, determined by rings per inch (centimeter) and percent of summerwood. Whenever the number of nonconforming arms is found to exceed 0.5 percent of the lot or one arm, whichever is greater, the entire lot shall be rejected for excess number of defective ends. After the producer has removed or marked out the defective material, the arms may be resubmitted for inspection.
(B) Surface inspection of the lengthwise sides performed on a random representative sample. The sample size shall equal 20 percent of a lot size or 200 arms, whichever is smaller. The inspector shall examine side surfaces as they are slowly rotated. When necessary, the rotation may be stopped for
(C) Check of moisture content of the random sample by a calibrated moisture meter.
(D) Check of crossarm dimensions of the random sample measured after surfacing.
(ii) Inspection during manufacture shall consist of:
(A) Checking bolt and insulator pin holes for squareness and excessive splintering;
(B) Checking brands for completeness, location, and legibility; and
(C) Checking arms for conformance.
(iii) Under the Independent Inspection Plan, there shall be a final inspection during and after treatment for preservative retention and penetration and for damage.
(3) Structural glued laminated timber shall be tested and inspected in accordance with AITC 200-83, Inspection Manual. Grade of lumber shall be inspected by a qualified grader for specified quality, and so marked, in accordance with grading rules of the American Lumber Standards. Adhesives used for all structural arms shall meet requirements of ANSI 05.2-83, paragraph 5.2. Melamine urea adhesives shall not be used. End joint spacings and limitations shall be in accordance with ANSI 05.2-83.
(e)
(i) Each occasional charge, all material treated in a cylinder at one time, shall be analyzed.
(ii) The first charge and one of every five charges randomly selected in consecutive charges shall be analyzed.
(2) Solutions of waterborne preservatives shall be analyzed for components in accordance with AWPA Standards A2, A9, or A11, and shall meet the requirements of P5 for composition. AWPA A2 shall be used as a referee method.
(3) Pentachlorophenol shall contain not less than 95 percent chlorinated phenols and conform to AWPA Standard P8 in hydrocarbon solvent AWPA P9 Type A.
(4) Copper Naphthenate in hydrocarbon solvent (AWPA P9 Type A) shall contain not less than 6 percent nor more than 8 percent copper in the form of Copper Naphthenate and conform to AWPA Standard P8 when analyzed in accordance with AWPA Standard A5.
(f)
(2) Under the Independent Inspection Plan, the inspector shall be present during the treatment procedure, except at times when it may be impractical, such as during late night or early morning treatments. At such times, temperature, pressure, and vacuum data shall be taken from the recording charts.
(3) Recording instruments shall be checked with indicating gauges and thermometers. Inaccuracies shall be referred to the treating company for prompt correction. In the event of an inaccuracy, indicating possible damage to the material, the inspector shall reject the charge.
(g)
(i) Western red and northern white cedars and western larch poles shall be bored at any point of the periphery approximately 6-12 inches (15.24-30.48 cm) above ground line and all other species approximately 1 foot (30.48 cm) above or below the brand.
(ii) Penetration shall be determined in accordance with AWPA Standard A3. Chrome Azurol S and Penta-Check shall be used to determine penetration of copper containing preservatives and penta, respectively.
(iii)
(B) Retention samples shall be taken from 20 poles in charges of 20 or more poles.
(C) Retention samples for Alaska yellow, western red, and northern white cedars shall be comprised of a minimum of 30 assay zones for creosote and waterborne preservatives. For penta charges of fewer than 30 poles, the sample shall contain the assay zone from each pole in the lot.
(D) Retention samples shall be comprised of borings, representative of pole volumes for each class and length in the charge. Further selection and marking of poles of mixed seasoning, volume, and location on the tram shall be made as illustrated in the following table:
(iv) When material in a lot consists of fewer pieces than the designated minimum number of samples for assay, additional borings shall be taken so as to make up at least the minimum sample, and in such manner that the sample is representative of the lot of material with respect to any variations in size, seasoning condition, or other features that might affect the results of treatment.
(v) Analyses for preservative retention shall be performed.
(A) Creosote shall be analyzed by AWPA Standard A6.
(B) Penta shall be analyzed by AWPA Standard A5 or A9. Copper pyridine method is required when timber may have been in contact with salt water and for all species native to the Pacific coast region, unless the raw material invoice specifically states that the material either has not been in contact with salt water or has been shown by analysis to have contained no additional chlorides before treating.
(C) Copper Naphthenate shall be analyzed by tests in accordance with AWPA Standards A5 or A9.
(D) Waterborne preservatives shall be analyzed by tests in accordance with AWPA Standards A2, A7, A9, or A11.
(E) Prior to unloading a tram, the inspectors may take their own samples and analyze them concurrently with the quality control designee, but each shall work independently, and quality control data shall be presented before acceptance of the charge.
(vi)
(
(
(
(B) Group B poles consist of poles with circumference greater than 37.5 inches (95.25 cm) at 6 feet (1.8 m) from the butt.
(
(
(vii) All holes (nominal 0.2 of an inch (0.05 cm) diam. bit) shall be promptly filled with treated, tight-fitting wood plugs.
(2) Under the Independent Inspection Plan, all treating charges of crossarms shall be tested for retention and penetration. Plant quality control inspectors and independent inspectors shall do their analyses
(i) The penetration and retention sample shall consist of 20 (48 for creosote) outer 6/10 of an inch (1.52 cm) for Douglas-fir and 1 inch (2.54 cm) for Southern Yellow Pine zones from borings taken from any face except the top face at a location as close to the end as possible being at least 3 inches (7.62 cm) from the end of the arm and no closer than 3 inches from the edge of any holes. For laminated material, borings shall be taken from laminates on a random basis.
(ii) Penetration shall be tested by taking not less than 20 borings from 20 crossarms in each charge, determined in accordance with AWPA Standard A3. Chrome Azurol S and Penta-Check shall be used to determine penetration of copper containing preservatives and penta, respectively.
(3) Laminated material shall be checked for any evidence of delamination due to treatment and for the identifying quality stamp of AITC or American Plywood Association (APA).
(4) When x-ray fluorescence (XRF) instruments are used to analyze preservative or retention, Periodic Instrument Checks (PIC) shall be made by the treating plant and any outside inspection agency using the treating plant's instrument or its own. Appendix B of this section outlines a recommended procedure.
(5) At a minimum, treating plants shall perform the PIC weekly and record the results in the instrument's log, which shall be stored with the instrument. Independent inspection agencies shall use their own samples to perform the PIC on treater's instrument once per visit, not to exceed one PIC per week. Inspection agencies shall record their results in the instrument's log and state the date of its latest PIC on all treating reports.
(6) XRF instruments shall be accurate and reliable, and they shall generate reproducible results. Instruments shall have thorough instructions which should include recommendations on drying techniques, equipment, and density calculations. These drying recommendations shall be followed when using these instruments.
(h)
(i)
(i) The total pieces in the lot, number of and causes for rejection;
(ii) The conditioning of the material prior to treatment;
(iii) The analyses of preservative identified by the analyst's signature or certification;
(iv) The details of treatment; and
(v) The results of treatment. These results shall include the following:
(A) The depth of penetration for retention sample and a summary of all
(B) Worksheets for retention analyses, each identified by quality control designee and independent inspector;
(C) The number of pieces offered and rejected, together with the cause(s) for rejection;
(D) The date of latest Periodic Instrument Check.
(2) On each inspection report the independent inspector and the plant quality control designee shall certify, in writing, that the material listed on the report has been inspected before, during, and after treatment, and that the preservative used was analyzed in accordance with the requirements of this section.
(3) Each inspector or inspection agency shall retain for a period of 1 year a copy or transcript of each report of inspection, together with laboratory worksheets covering retention by assay and preservative analyses for the purchaser, and on request shall furnish a copy or transcript of any of these reports to the Director, Electric Staff Division, Rural Utilities Service, Washington, DC 20250-1500.
(j)
(k)
(a) Inspection agencies should see that inspectors assigned to the inspection of timber products and treatment for RUS borrowers are competent and experienced.
(b)
(1) Three years' experience as an inspector of timber and the preservative treatment of timber.
(2) Three years' experience in timber treating plant quality control work.
(3) Under the direct supervision of an experienced, well-qualified inspector, who has performed the following:
(i) Inspected at least 2,500 poles and/or crossarms “in the white.”
(ii) Checked preservative penetration results on at least 500 poles and crossarms.
(iii) Made at least 35 wood assays for preservative retention.
(iv) Made at least 25 analyses of each type preservative used on material the person is assigned to inspect.
(v) In both (b)(1) and (b)(2) of this appendix A, the experience should be not less than that required in (b)(3)(i), (b)(3)(ii), (b)(3)(iii), and (b)(3)(iv).
(4) Inspectors experienced in the inspections of one product, such as poles, should not be qualified to inspect another product, such as crossarms, until the above experience is gained.
(5) The inspector should be especially well informed in wood preservation and the operation of a timber treating plant, and be competent in preservative analysis and other laboratory work.
(6) In all cases, an inspector should be thoroughly instructed in the application of RUS specifications and the standards pertaining thereto before being permitted to independently inspect timber products and the treatments applied to them. Knowledge of these specifications and standards, as well as the inspector's proficiency, may be checked routinely by members of the RUS staff.
(a)
(b)
(1)
(2)
(ii) Record any user correction factors.
(iii) Stabilize and standardize the instrument.
(iv) Run the salt solution five times using the PENTA-OIL calibration mode.
(v) Record the average and standard deviation of the values for percent penta. The average value will now be considered the nominal value.
(3)
(c)
7 U.S.C. 901
(a) This part contains the policies and procedures of the Rural Utilities Service (RUS) related to electric borrowers' operation and maintenance practices and RUS' review and evaluation of such practices.
(b) The policies and procedures included in this part apply to all electric borrowers (both distribution borrowers and power supply borrowers) and are intended to clarify and implement certain provisions of the security instrument and loan contract between RUS and electric borrowers regarding operations and maintenance. This part is not intended to waive or supersede any provisions of the security instrument and loan contract between RUS and electric borrowers.
(c) The Administrator may waive, for good cause, on a case by case basis, certain requirements and procedures of this part.
It is RUS policy to require that all property of a borrower be operated and maintained properly in accordance with the requirements of each borrower's loan documents. It is also RUS policy to provide financial assistance only to borrowers whose operations and maintenance practices and records are satisfactory or to those who are taking corrective actions expected to make their operations and maintenance practices and records satisfactory to RUS.
(a) Persons wishing to obtain forms referred to in this part should contact: Program Support and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, Stop 1522, 1400 Independence Ave., SW., Washington, DC 20250-1522, telephone (202) 720-8674. Borrowers or others may reproduce any of these forms in any number required.
(b) Documents required to be submitted to RUS under this part are to be sent to the office of the borrower's assigned RUS General Field Representative (GFR) or such other office as designated by RUS.
Terms used in this part have the meanings set forth in 7 CFR Part 1710.2. References to specific RUS forms and other RUS documents, and to specific sections or lines of such forms and documents, shall include the corresponding forms, documents, sections and lines in any subsequent revisions of these forms and documents. In addition to the terms defined in 7 CFR Part 1710.2, the term
Each electric program distribution, transmission and generation borrower (as defined in § 1710.2) shall operate and maintain its system in compliance with prudent utility practice, in compliance with its loan documents, and in compliance with all applicable laws, regulations and orders, shall maintain its systems in good repair, working order and condition, and shall make all needed repairs, renewals, replacements, alterations, additions, betterments and improvements, in accordance with applicable provisions of the borrower's security instrument. Each borrower is responsible for on-going operations and maintenance programs, individually or regionally performing a system security Vulnerability and Risk Assessment (VRA), establishing and maintaining an Emergency Restoration Plan (ERP), maintaining records of the physical, cyber and electrical condition and security of its electric system and for the quality of services provided to its customers. The borrower is also responsible for all necessary inspections and tests of the component parts of its system, and for maintaining records of such inspections and tests. Each borrower shall budget sufficient resources to operate and maintain its system and annually exercise its ERP in accordance with the requirements of this part. An actual manmade or natural event on the borrowers system in which a borrower utilizes a significant portion of its ERP shall count as an annual exercise for that calendar year, provided that after conclusion of the event, the borrower verifies accuracy of the emergency points-of-contact (POC) and the associated contact numbers as listed in their ERP. For portions of the borrower's system that are not operated by the borrower, if any, the borrower is responsible for ensuring that the operator is operating and maintaining the system properly in accordance with the operating agreement.
(a) Each borrower shall conduct all necessary inspections and tests of the component parts of its electric system, annually exercise its ERP, and maintain records of such inspections and tests. For the purpose of this part, “Exercise” means a borrower's Tabletop execution of, or actual implementation of, the ERP to verify the operability of the ERP. Such Exercise may be performed singly by an individual borrower, or as an active participant in a multi-party (to include utilities, government agencies and other participants or combination thereof) Tabletop execution or actual full implementation of the ERP. For the purpose of this part, “Tabletop” means a hypothetical emergency response scenario in which participants will identify the policy, communication, resources, data, coordination, and organizational elements associated with an emergency response.
(b) The frequency of inspection and testing will be determined by the borrower in conformance with applicable laws, regulations, national standards, and Prudent Utility Practice. The frequency of inspection and testing will be determined giving due consideration to the type of facilities or equipment,
(c) Inspections of facilities must include a determination of whether the facility complies with the National Electrical Safety Code, National Electrical Code (as applicable), and applicable State or local regulations and whether additional security measures are considered necessary to reduce the vulnerability of those facilities which, if damaged or destroyed, would severely impact the reliability and security of the electric power grid, cause significant risk to the safety and health of the public and/or impact the ability to provide service to consumers over an extended period of time. The electric power grid, also known as the transmission grid, consists of a network of electrical lines and related facilities, including certain substations, used to connect distribution facilities to generation facilities, and includes bulk transmission and subtransmission facilities as defined in § 1710.2 of this title. Any serious or life-threatening deficiencies shall be promptly repaired, disconnected, or isolated in accordance with applicable codes or regulations. Any other deficiencies found as a result of such inspections and tests are to be recorded and those records are to be maintained until such deficiencies are corrected or for the retention period required by paragraph (b) of this section, whichever is longer.
(a) Each borrower shall periodically analyze and document its security, operations and maintenance policies, practices, and procedures to determine if they are appropriate and if they are being followed. The records of inspections and tests are also to be reviewed and analyzed to identify any trends which could indicate deterioration in the physical or cyber condition or the operational effectiveness of the system or suggest a need for changes in security, operations or maintenance policies, practices and procedures. For portions of the borrower's system that are not operated by the borrower, if any, the borrower's written analysis would also include a review of the operator's performance under the operating agreement.
(b) When a borrower's security, operations and maintenance policies, practices, and procedures are to be reviewed and evaluated by RUS, the borrower shall:
(1) Conduct the analysis required by paragraph (a) of this section not more than 90 days prior to the scheduled RUS review;
(2) Complete RUS Form 300, Review Rating Summary, and other related forms, prior to RUS' review and evaluation; and
(3) Make available to RUS the borrower's completed RUS Form 300 (including a written explanation of the basis for each rating) and records related to the operations and maintenance of the borrower's system.
(c) For those facilities not included on the RUS Form 300 (e.g., generating plants), the borrower shall prepare and complete an appropriate supplemental form for such facilities.
RUS Form 300 in Appendix A shall be used when required by this part.
RUS will initiate and conduct a periodic review and evaluation of the operations and maintenance practices of each borrower for the purpose of assessing loan security and determining borrower compliance with RUS policy as outlined in this part. This review will normally be done at least once every three years. The borrower will make available to RUS the borrower's
(a) For any items on the RUS Form 300 rated unsatisfactory (i.e., 0 or 1) by the borrower or by RUS, the borrower shall prepare a corrective action plan (CAP) outlining the steps (both short term and long term) the borrower will take to improve existing conditions and to maintain an acceptable rating. The CAP must include a time schedule and cost estimate for corrective actions, and must be approved by the borrower's Board of Directors. The CAP must be submitted to RUS for approval within 90 days after the completion of RUS' evaluation noted in § 1730.24.
(b) The borrower must periodically report to RUS in writing progress under the CAP. This report must be submitted to RUS every six months until all unsatisfactory items are corrected unless RUS prescribes a different reporting schedule.
(a)
(b)
(a) Each borrower with an approved RUS electric program loan as of October 12, 2004 shall perform an initial VRA of its electric system no later than July 12, 2005. Additional or periodic VRA's may be necessary if significant changes occur in the borrower's system, and records of such additional assessments shall be maintained by the borrower.
(b) Each applicant that has submitted an application for an RUS electric program loan or grant prior to October 12, 2004, but whose application has not been approved by RUS by such date, shall perform an initial VRA of its electric system in accordance with § 1730.27(a).
(c) Each applicant that submits an application for an RUS electric program loan or grant between October 12, 2004 and July 12, 2005 shall perform an initial VRA of its electric system in accordance with § 1730.27(a).
(d) Each applicant that submits an application for an RUS electric program loan or grant on or after July 12, 2005 shall include with its application package a letter certification that such applicant has performed an initial VRA of its electric system. Additional or periodic VRA's may be necessary if significant changes occur in the borrower's system, and records of such additional assessments shall be maintained by the borrower.
(e) The VRA shall include identifying:
(1) Critical assets or facilities considered necessary for the reliability and security of the electric power grid as described in § 1730.21(c);
(2) Facilities that if damaged or destroyed would cause significant risk to the safety and health of the public;
(3) Critical assets or infrastructure owned or served by the borrower's electric system that are determined, identified and communicated as elements of national security by the consumer, State or Federal government;
(4) External system impacts (interdependency) with loss of identified system components;
(5) Threats to facilities and assets identified in paragraphs (e)(1), (e)(2), (e)(3), and (e)(4) of this section;
(6) Criticality and risk level of the borrower's system;
(7) Critical asset components and elements unique to the RUS borrower's system; and
(8) Other threats, if any, identified by an individual borrower.
(a) Each borrower with an approved RUS electric program loan as of October 12, 2004 shall have a written ERP no later than January 12, 2006. The ERP should be developed by the borrower individually or in conjunction with other electric utilities (not all having to be RUS borrowers) through the borrower's unique knowledge of its system, prudent utility practices (which includes development of an ERP) and the borrower's completed VRA. If a joint electric utility ERP is developed, each RUS borrower shall prepare an addendum to meet the requirements of paragraphs (e), (f), and (g) of this section as it relates to its system.
(b) Each applicant that has submitted an application for an RUS electric program loan or grant prior to October 12, 2004, but whose application has not been approved by RUS by such date, shall have a written ERP in accordance with § 1730.28(a).
(c) Each applicant that submits an application for an RUS electric program loan or grant between October 12, 2004 and January 12, 2006, shall have a written ERP in accordance with § 1730.28(a).
(d) Each applicant that submits an application for an RUS electric program loan or grant on or after January 12, 2006 shall include with its application package a letter certification that such applicant has a written ERP.
(e) The ERP shall include:
(1) A list of key contact emergency telephone numbers (emergency agencies, borrower management and other key personnel, contractors and equipment suppliers, other utilities, and others that might need to be reached in an emergency);
(2) A list of key utility management and other personnel and identification of a chain of command and delegation of authority and responsibility during an emergency;
(3) Procedures for recovery from loss of power to the headquarters, key offices, and/or operation center facilities;
(4) A Business Continuity Section describing a plan to maintain or re-establish business operations following an event which disrupts business systems (computer, financial, and other business systems); and
(5) Other items, if any, identified by the borrower as essential for inclusion in the ERP.
(f) The ERP must be approved and signed by the borrower's Manager or Chief Executive Officer, and approved by the borrower's Board of Directors.
(g) Copies of the most recent approved ERP must be made readily available to key personnel at all times.
(h) The ERP shall be Exercised at least annually to ensure operability and employee familiarity. Completion of the first exercise of the ERP must occur on or before January 12, 2007.
(i) If modifications are made to an existing ERP:
(1) The modified ERP must be prepared in compliance with the provisions of paragraphs (e), (f), and (g) of this section; and
(2) Additional Exercises may be necessary to maintain employee operability and familiarity.
(j) Each borrower shall maintain records of such Exercises.
For the purposes of this part, the terms “borrower” shall include recipients of RUS electric program grants, and “applicant” shall include applicants for such grants. References to “security documents” shall, with respect to recipients of RUS electric program grants, include grant agreements and other grant-related documents.
Each electric program distribution borrower (as defined in § 1710.2) is responsible for establishing and maintaining a written standard policy relating to the Interconnection of Distributed Resources (IDR) having an installed capacity of not more than 10 megavolt amperes (MVA) at the point of common coupling.
The Distributed Resource facility must not cause significant degradation of the safety, power quality, or reliability on the borrower's electric power system or other electric power systems interconnected to the borrower's electric power system. The Agency encourages borrowers to consider model policy templates developed by knowledgeable and expert institutions, such as, but not limited to the National Association of Regulatory Utility Commissioners, the Federal Energy Regulatory Commission and the National Rural Electric Cooperative Association. The Agency encourages all related electric borrowers to cooperate in the development of a common Distributed Resource policy.
“Distributed resources” as used in this subpart means sources of electric power that are not directly connected to a bulk power transmission system, having an installed capacity of not more than 10 MVA, connected to the borrower's electric power system through a point of common coupling. Distributed resources include both generators and energy storage technologies.
“Responsible party” as used in this subpart means the owner, operator or any other person or entity that is accountable to the borrower under the borrower's interconnection policy for Distributed Resources.
(a)
(2) All costs to be recovered from the applicant regarding the application process or the actual interconnection and the process to determine the costs are to be clearly explained to the applicant and authorized by the applicant prior to the borrower incurring these costs. The borrower may require separate non-refundable deposits sufficient to insure serious intent by the applicant prior to proceeding either with the application or actual interconnection process.
(3) IDR policies must be approved by the borrower's Board of Directors.
(4) The borrower may establish a new rate classification for customers with Distributed Resources.
(5) IDR policies must provide for reconsideration and updates every five years or more frequently as circumstances warrant.
(b)
(2) IDR policies must incorporate the Institute of Electrical and Electronic Engineers (IEEE): IEEE 1547
(3) IDR policies must provide for appropriate electric power system disconnect facilities, as determined by the borrower, which shall include a lockable disconnect and a visible open, that are readily accessible to and operable by authorized personnel at all times.
(4) IDR policies must provide for borrower access to the Distributed Resources facility during normal business hours and all emergency situations.
(c)
(1) A Responsible Party must agree to maintain appropriate liability insurance as outlined in the borrower's interconnection policy.
(2) A Responsible Party must be responsible for the Distributed Resources compliance with all national, State, local government requirements and electric utility standards for the safety of the public and personnel responsible for utility electric power system operations, maintenance and repair.
(3) A Responsible Party must be responsible for the safe and effective operation and maintenance of the facility.
(4) Only Responsible Parties may apply for interconnection and the Responsible Party must demonstrate that the facility will be capably developed, constructed and operated, maintained, and repaired.
Nothing in this subpart requires the borrower to enter into purchase power arrangements with the owner of the Distributed Resources.
(a) All electric program borrowers with an approved electric program loan as of July 8, 2009 shall have an IDR policy board approved and in effect no later than July 8, 2011.
(b) All other electric program borrowers that have pending applications or submit an application to the Agency for financial assistance on or after July 8, 2009 shall provide a letter of certification executed by the General Manager that the borrower meets the requirements of this subpart before such loan may be approved.
The Administrator may waive in all or part, for good cause, the requirements and procedures of this subpart.
The Information collection requirements in this part are approved by the Office of Management and Budget and assigned OMB control number 0572-0141.
Ratings on form are:
Rating: ____
Rating: ____
Rating: ____
Rating: ____
Rating: ____
Rating: ____
For Previous 2 Years:
For Present Year:
For Future 3 Years:
14. Budgeting:
15. Date Discussed with Board of Directors ____
7 U.S.C. 901
(a) Subparts A through E of this part set forth the general policies, types of loans and loan requirements under the Telephone loan program.
(b) The standard RUS security documents (see 7 CFR 1744 subpart D or RUS Bulletins 320-4, 320-22, 321-2, 322-2, 323-1, 326-1) contain provisions regarding acquisitions, mergers, and consolidations. Subparts F through J of this part implement those provisions by setting forth the policies, procedures, and requirements for telephone borrowers planning to acquire existing telephone lines, facilities, or systems with RUS loan or other funds, or planning to merge or consolidate with another system. This part supersedes all RUS Bulletins that are in conflict with it.
(c) Subparts F through J of this part also detail RUS's requirements with respect to mergers and acquisitions involving RUS loan funds.
As used in this part:
(1) Federal government securities purchased in the name of the borrower;
(2) Other securities issued by an institution whose senior unsecured debt obligations are rated in any of the top three categories by a nationally recognized rating organization; or
(3) Cash.
(2) Comparable service provided through a system of switches, transmission equipment, or other facilities (or combination thereof) by which a subscriber can originate and terminate a telecommunications service.
(1) Message telegram service;
(2) Community antenna television system services or facilities other than those intended exclusively for educational purposes; or
(3) Radio broadcasting services or facilities within the meaning of section 3(o) of the Communications Act of 1934, as amended.
Single copies of RUS forms and publications cited in this part are available from Program Support Regulatory Analysis, Rural Utilities Service, STOP 1522, 1400 Independence Ave., SW., Washington, DC 20250-1522. These RUS forms and publications may be reproduced. The terms “RUS form”, “RUS standard form”, and “RUS specification” have the same meanings as the terms “REA form” “REA standard form”, and “REA specification”, respectively, unless otherwise indicated.
(a) The Rural Utilities Service (RUS) makes loans to furnish and improve telephone service in rural areas. Loans made or guaranteed by the Administrator of RUS will be made in conformance with the Rural Electrification Act of 1936 (RE Act), as amended (7 U.S.C. 901
(b) RUS will not make hardship loans, RUS cost-of-money loans, or RTB loans for any wireline local exchange service or similar fixed-station voice service that, in RUS' opinion, is inconsistent with the borrower achieving the requirements stated in the State's telecommunication modernization plan within the time frame stated in the plan (see 7 CFR part 1751, subpart B), unless RUS has determined that achieving the requirements as stated in such plan is not technically or economically feasible.
(c) A borrower receiving a loan to provide mobile telecommunications services or special telecommunications services shall be considered to be participating in the state telecommunications plan (TMP) with respect to the particular loan so long as the loan funds are not used in a manner that, in RUS' opinion, is inconsistent with the borrower achieving the goals set forth in the plan, except that a borrower must comply with any portion of a TMP made applicable to the borrower by a state commission with jurisdiction.
(d) RUS will not deny or reduce a loan or an advance of loan funds based on a borrower's level of general funds.
(e) No fees or charges are assessed for any type of loan or guarantee provided by RUS or the Rural Telephone Bank (RTB).
(f) The Administrator may use consultants funded by the borrower for financial, legal, engineering, and other technical advice in connection with the review of a borrower's loan application.
Borrowers must make adequate telephone service available to the widest practical number of rural subscribers during the life of the loan. Both the nature of the service area and the cost per subscriber must be fully considered. The borrower must seek to provide service to all interested potential subscribers in the service area. Borrowers are not required to extend service in situations where the costs would be exorbitant. The loan contract shall
(a) In states having a state regulatory body with authority to regulate telephone service and to require certificates of convenience and necessity, the borrower must obtain such a certificate before RUS will make a loan. Facilities or services not specifically covered by such certificate will be subject to the provisions of § 1735.12(b).
(b) In states where there is no such regulatory body, a loan will not be made unless the Administrator determines that no duplication of lines, facilities, or systems already providing reasonably adequate services shall result from such a loan.
(c) RUS shall consider the following criteria for any wireline local exchange service or similar fixed-station voice service provided by a local exchange carrier (LEC) in determining whether such service is reasonably adequate:
(1) The LEC is providing area coverage as described in § 1735.11.
(2) The LEC is providing all one-party service or, if the State commission has mandated a lower grade of service, the LEC is eliminating that service in accordance with the requirements of the Telecommunications Act of 1996, 47 U.S.C. 151
(3) The LEC's network is capable of providing transmission and reception of data at a rate of at least 1,000,000 bits per second (1 Mbps) with reasonable modification to any subscriber who requests it.
(4) The LEC makes available custom calling features (at a minimum, call waiting, call forwarding, abbreviated dialing, and three-way calling).
(5) The LEC is able to provide E911 service to all subscribers, when requested by the government entity responsible for this service.
(6) The LEC is able to offer local service with blocked toll access to those subscribers who request it.
(7) The LEC's network is capable of accommodating Internet access at speeds of at least 28,800 bits per second (28.8 Kbps) via modem dial-up from any subscriber location.
(8) There is an absence of frequent service interruptions.
(9) The LEC is interconnected with the public switched network.
(10) No Federal or State regulatory commission having jurisdiction has determined that the quality, availability, or reliability of the service provided is inadequate.
(11) Services are provided at reasonably affordable rates.
(12) Any other criteria the Administrator determines to be applicable to the particular case.
(d) RUS shall consider the following criteria for any of mobile telecommunications service in determining whether such service is reasonably adequate:
(1) The extent to which area coverage is being provided as described in 7 CFR 1735.11.
(2) Clear and reliable call transmission is provided with sufficient channel availability.
(3) The mobile telecommunications service signal strength is at least −85dBm (decibels expressed in miliwatts).
(4) The mobile telecommunications service is interconnected with the public switched network.
(5) Mobile 911 service is available to all subscribers, when requested by the local government entity responsible for this service.
(6) No Federal or State regulatory commission having jurisdiction has determined that the quality, availability, or reliability of the service provided is inadequate.
(7) Mobile telecommunications service is not provided at rates which render the service unaffordable to a significant number of rural persons.
(8) Any other criteria the Administrator determines to be applicable to the particular case.
(e) RUS does not consider mobile telecommunications service a duplication of existing wireline local exchange service or similar fixed-station voice service. RUS may finance mobile telecommunications systems designed to provide eligible services in rural areas under the Rural Electrification Act even though the services provided by the system may incidentally overlap
(f) RUS shall consider the following criteria for any provider of a specialized telecommunications service in determining whether such service is reasonably adequate:
(1) The provider of a specialized telecommunications service is providing area coverage as described in § 1735.11.
(2) An adequate signal strength is provided throughout the largest practical portion of the service area.
(3) There is an absence of frequent service interruptions.
(4) The quality and variety of service provided is comparable to that provided in nonrural areas.
(5) The service provided complies with industry standards.
(6) No Federal, State, or local regulatory commission having jurisdiction has determined that the quality, availability, or reliability of the service provided is inadequate.
(7) Services are provided at reasonably affordable rates.
(8) Any other criteria the Administrator determines to be applicable to the particular case.
(a) When it is determined by the Administrator to be necessary in order to furnish or improve telephone service in rural areas, loans may be made for the improvement, expansion, construction, acquisition, and operation of telephone lines, facilities, or systems without regard to their geographical location.
(b) To the greatest extent practical, loans are limited to providing telephone facilities that serve subscribers in rural areas. In order to furnish and improve service to rural subscribers it may at times be necessary to provide loan funds to finance telephone facilities which (1) will also serve nonrural subscribers, or (2) are located in nonrural areas. Loans may be approved to finance such facilities if the Administrator determines, on a case-by-case basis, that (i) the primary purpose of the loan is to provide service to rural areas and (ii) the financing of facilities for nonrural subscribers is necessary and incidental to furnishing or improving telephone service in rural areas.
(c) Loan funds may be approved for facilities to serve nonrural subscribers only if (1) the principal purpose of the loan is to furnish and improve rural service and (2) the use of loan funds to serve nonrural subscribers is necessary and incidental to the principal purpose of the loan. The following are examples of purposes for which such loans may be made (such loans are not limited to these examples):
(1) In the case of construction of a new system, if the loan would not be economically feasible and self-liquidating unless the nonrural as well as the rural portions of the telephone service area are included in the proposed system, the loan may include funds for both portions.
(2) Where the acquisition of an existing system located in and serving a nonrural area is necessary to serve as the nucleus of an expanded system to furnish area coverage service in rural areas, the loan may include funds to finance the acquisition.
(3) When a system is being converted to modern service for rural subscribers, the loan may include funds for the conversion of the nonrural facilities, if the rural service will be improved as a result of such nonrural improvements and it is impractical to finance and serve the nonrural and rural areas separately.
(4) A loan may include funds to serve nonrural subscribers located in community centers frequently called by the rural subscribers if the construction to serve such nonrural subscribers will be incidental to, and contribute substantially to, the provision of adequate service for the rural subscribers.
(d) RUS may also approve financing for facilities to serve nonrural areas if, at the time financing was first approved by RUS:
(1) The nonrural area had a population of 1,500 or less when first financed by RUS and that financing was approved prior to November 1, 1993; or
(2) The nonrural area had a population of 5,000 or less when first financed by RUS and that financing was approved on or after November 1, 1993.
(a) RUS makes loans to:
(1) Entities providing, or who may hereafter provide, telephone service in rural areas;
(2) Public bodies providing telephone service in rural areas as of October 28, 1949; and
(3) Cooperative, nonprofit, limited dividend or mutual associations.
(b) RUS does not make loans to individuals.
(c) RUS gives preference to those borrowers (including initial loan applicants) already providing telephone service in rural areas, and to cooperative, nonprofit, limited dividend, or mutual associations. To be eligible for a loan, a borrower:
(1) Must have sufficient authority to carryout the purposes of the RE Act; and
(2) Must be incorporated or a limited liability company.
Borrowers are required to comply with certain regulations on nondiscrimination and equal employment opportunity. See RUS Bulletin 320-19 and RUS Bulletin 320-15, respectively.
Recognizing plant costs, the borrower's cost of system design, and RUS's administrative costs, RUS will not consider applications for loans of less than $50,000.
(a) RUS makes hardship and guaranteed loans to finance the improvement, expansion, construction, acquisition, and operation of systems or facilities (including station apparatus owned by the borrower, headquarters facilities, and vehicles not used primarily in construction) to furnish and improve telephone service in rural areas, except as noted under paragraph (c) of this section.
(b) RUS makes concurrent RUS cost-of-money and RTB loans to finance the improvement, expansion, construction, and acquisition of systems or facilities (excluding station apparatus owned by the borrower, headquarters facilities, and vehicles not used primarily in construction) to furnish and improve telephone service in rural areas, except as noted under paragraph (c) of this section.
(c) RUS will not make any type of loan to finance the following items:
(1) Station apparatus (including PBX and key systems) not owned by the borrower and any associated inside wiring;
(2) Certain duplicative facilities, see § 1735.12;
(3) Facilities to provide service other than 1-party; and
(4) System designs or facilities to provide service that cannot withstand or are not designed to minimize damage caused by storms and other natural catastrophes, including, but not limited to hurricanes, floods, tornadoes, mudslides, lightning, windstorms, hail, fire, and smoke, unless an alternate design or facility for modern telecommunications is more economically or technically feasible. Economic and technical feasibility will be determined using total long range economic costs and risk analysis.
(d) Generally, RUS will not make a loan to another entity to provide the same telecommunications service in an area served by an incumbent RUS telecommunications borrower providing such service. RUS may, however, consider an application for a loan to provide the same type of service being provided by an incumbent RUS borrower if the Administrator determines that the incumbent borrower is unable to meet its obligations to the government, including the obligation to provide service set forth in its loan documents and to repay its loans.
(e) If an unadvanced loan, or portion thereof, is rescinded, a new loan shall not be made for the same purposes as
If determined by the Administrator to be necessary for loan security, a borrower applying for an initial loan shall increase its net worth as a percentage of assets to the highest level recorded, not to exceed 40 percent, at the end of any calendar quarter in the period beginning 2 years prior to the receipt by RUS of the borrower's loan application form (RUS Form 490). This restoration to the higher level of net worth shall take place before RUS will determine the feasibility of the proposed loan.
RUS does not make loans for the sole purpose of merging or consolidating telephone organizations. After a merger or consolidation, RUS will consider making loans to the telephone system to finance the improvement or extension of telephone service in rural areas. See RUS Bulletins 320-4, 321-2, 325-1, and 326-1.
(a) RUS finances the acquisition by a borrower of another system, lines, or facilities only when the acquisition is necessary and incidental to furnishing or improving rural telephone service. See 7 CFR 1735.13.
(b) RUS determines the amount it will lend for each acquisition. If the acquisition price exceeds this amount, the borrower shall provide the remainder.
(c) For additional policies on acquisitions, see subpart F through J of this part.
(a) Hardship loans and guaranteed loans may include funds to refinance outstanding indebtedness of corporations furnishing telephone service when such refinancing is necessary and incidental to furnishing or improving telephone service in rural areas. Refinancing may not constitute more than 40 percent of the loan.
(b) Loans for refinancing are not made solely to enable borrowers to obtain a lower interest rate or a longer amortization period. RUS requires borrowers, to the greatest extent possible, to liquidate outstanding indebtedness through the use of nonloan funds.
(c) If deemed necessary by RUS to provide itself with adequate security, RUS will consider loans for refinancing outstanding indebtedness secured by a lien on property offered as security for the loan, if the property covered by the lien is integral to the operation of the system.
(d) RUS will consider loans for refinancing when the borrower would otherwise be unable to meet payments on both the outstanding indebtedness and the loan as they become due.
(e) RUS may consider loans for refinancing in other situations.
(a) RUS makes loans only if, in the judgment of the Administrator, the security therefor is reasonably adequate and the loan will be repaid within the time agreed. See 7 CFR 1735.18 and 7 CFR 1735.51.
(b) RUS generally requires that borrowers provide it with a first lien on all of the borrower's property. See 7 CFR 1735.46.
(c) In the case of loans that include the financing of telephone facilities that do not constitute self-contained operating systems or units (such as lines switched by other systems), the borrower shall, in addition to the mortgage lien on all of the borrower's telephone facilities, furnish adequate assurance, in the form of contractual or other security arrangements, that continuous and efficient telephone service will be rendered.
(d) The borrower shall provide RUS with a satisfactory Area Coverage Survey. See 7 CFR 1737.30 and 1737.31.
(e) RUS makes loans only if the borrower's entire system, including the facilities to be constructed with the proceeds of the loan, is economically feasible, as determined by RUS. In addition, RUS considers a system to be feasible only if the system, in addition to being feasible in all other respects, is year 2000 compliant or if the borrower provides RUS with a certification, satisfactory to RUS, that the system will be year 2000 compliant at a reasonable time before December 31, 1999.
(f) For purposes of determining compliance with TIER requirements, unless a borrower whose existing mortgage contains TIER maintenance requirements notifies RUS in writing differently, RUS will apply the requirements described in paragraph (g) of this section to the borrower regardless of the provisions of the borrower's existing mortgage.
(g) For Loans approved after December 22, 2008, the borrower shall be required to maintain a TIER, at the end of the Forecast Period, at least equal to the projected TIER determined by the feasibility study prepared in connection with the loan, which shall be at least 1.0 and not greater than 1.5.
(h) Nothing in this section shall affect any rights of supplemental lenders under the RUS mortgage, or other creditors of the borrower, to limit a borrower's TIER requirement to a level above that established in paragraph (g) of this section.
(i) A borrower will not be required to raise its TIER as a condition for receiving a loan. Additional financial, investment, and managerial controls appear in the loan contract and mortgage required by RUS.
(a) RUS makes hardship loans under section 305(d)(1) of the RE Act. These loans bear interest at a rate of 5 percent per year. To qualify for a hardship loan on or after November 1, 1993, a borrower must meet each of the following requirements:
(1) The average number of proposed subscribers per mile of line in the service area of the borrower is not more than 4;
(2) The borrower has a projected TIER (including the proposed loan or loans) of at least 1.0, but not greater than 3.0, as determined by the feasibility study prepared in connection with the loan, see 7 CFR part 1737, subpart H; and
(3) The Administrator has approved and the borrower is participating in a telecommunications modernization plan for the state, see 7 CFR part 1751, subpart B.
(b)(1) Hardship loan funds shall not be used to finance facilities located in any exchange of the borrower that has:
(i) More than 1,000 existing subscribers; and
(ii) An average number of proposed subscribers per mile of line greater than 17.
(2) Those facilities may, however, be financed with concurrent RUS cost-of-money and RTB loans or a guaranteed loan if the borrower is eligible for such financing.
(c) The Administrator may waive the TIER requirement in paragraph (a)(2) of this section in any case in which the Administrator determines, and sets forth the reasons therefor in writing, that the requirement would prevent emergency restoration of the telephone system of the borrower or result in severe hardship to the borrower.
(d) In order to fairly and equitably approve hardship loans to ensure that borrowers most in need receive hardship financing first, RUS will prioritize for approval all applications qualifying for hardship loans. The criteria in this paragraph will be used by the Administrator to rank, from high to low, applications that have been determined to
(1)
(i)
(ii)
(iii)
(iv)
(A) Providing digital switching capabilities where those capabilities did not previously exist; and/or
(B) Upgrading to equal access; and/or
(C) Conversion of service to 1-party making an entire exchange all 1-party service.
(v)
(vi)
(2)
(e)
(1) Expedite restoration of service outages due to natural disasters; or
(2) Maximize the use of all available hardship funds appropriated for loans in that fiscal year.
(f) On request of any borrower who is eligible for a hardship loan for which funds are not available, the borrower shall be considered to have applied for concurrent RUS cost-of-money and RTB loans under sections 305 and 408, respectively, of the RE Act.
(g) Hardship loans may be made simultaneously with concurrent RUS cost-of-money and RTB loans or guaranteed loans.
(a) RUS makes cost-of-money loans, under section 305(d)(2) of the RE Act, concurrently with RTB loans made under section 408 of the RE Act. To qualify for concurrent RUS cost-of-money and RTB loans on or after November 1, 1993, a borrower must meet each of the following requirements:
(1) The average number of proposed subscribers per mile of line in the service area of the borrower is not more than 15, or the borrower has a projected TIER (including the proposed loans) of at least 1.0, but not greater than 5.0, as determined by the feasibility study prepared in connection with the loans, see 7 CFR part 1737, subpart H; and
(2) The Administrator has approved and the borrower is participating in a telecommunications modernization plan for the state, see 7 CFR part 1751, subpart B.
(b) The loan amounts from each program (RUS cost-of-money and RTB, including amounts for class B stock) will be proportionate to the total amount of funds appropriated for the fiscal year for RUS cost-of-money loans and RTB loans. To determine the RUS cost-of-money portion, the total loan amount will be multiplied by the ratio of RUS cost-of-money funds appropriated for the fiscal year to the sum of RUS cost-of-money and RTB funds appropriated for the fiscal year in which the loan is approved. The same method would be used to calculate the RTB portion (see 7 CFR 1610.6(b)). If during the fiscal year the amount of funds appropriated changes, the ratio will be adjusted accordingly and applied only to those loans approved afterwards.
(c) The RUS cost-of-money loan shall bear interest as described in paragraphs (c)(1) and (c)(2) of this section (the actual rate of interest on the RTB loan shall be determined as provided in 7 CFR 1610.10):
(1) Each advance of funds included in RUS cost-of-money loans shall bear interest at a rate (the “Cost of Money Interest Rate”) equal to the current cost of money to the Federal Government for loans of a similar maturity. The Cost of Money Rate is determined when the funds are advanced to the borrower but cannot exceed 7 percent per year.
(2) RUS shall use the Federal Treasury Statistical Release (the “Statistical Release”) issued by the United States Treasury to determine the interest rate for each advance of RUS cost-of-money loan funds. Generally, the Statistical Release is issued each Monday to cover the preceding week. RUS shall determine the Cost of Money Interest Rate as follows:
(i) Each advance shall bear the interest rate stated in the applicable Statistical Release for Treasury constant maturities with a maturity similar to that of the advance.
(ii) RUS shall determine the interest rate for an advance bearing a maturity other than those stated in the applicable Statistical Release by straight-line interpolation between the next higher and next lower stated maturities.
(iii) The first Statistical Release published after the date of an advance shall apply to that advance.
(iv) If the interest rate determined under paragraph (c)(2)(i) or (c)(2)(ii) of this section is higher than 7 percent, then the advance shall bear interest at the rate of 7 percent per year.
(v) Advances with maturities greater than 30 years shall bear interest at the rate stated in the applicable Statistical Release for 30-year maturities.
(vi) RUS may use an alternative method to determine the Cost of Money Interest Rate if the Treasury ceases to issue the Statistical Release or changes its format or frequency of issue so that it is no longer appropriate for use in the manner described in paragraph (c)(2) of this section. In this
(vii) Refer to § 1735.43(a) for additional information on maturities of RUS loans.
(viii) RUS shall provide borrowers with prompt written confirmation of the Cost of Money Interest Rate borne by each advance of funds included in a RUS cost-of-money loan.
(d) Generally, no more than 10 percent of lending authority from appropriations in any fiscal year for RUS cost-of-money and RTB loans may be loaned to a single borrower. RUS will publish by notice in the
(e) On request of any borrower who is eligible for concurrent RUS cost-of-money and RTB loans for which funds are not available, the borrower shall be considered to have applied for a loan guarantee under section 306 of the RE Act.
(f) Concurrent RUS cost-of-money and RTB loans may be made simultaneously with hardship loans or guaranteed loans.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(1) Determining that all prerequisites to each advance of loan funds by the lender under the terms of the contract of guarantee, all financing documents, and all related security instruments have been fulfilled. Such determinations may be met by obtaining RUS approval of each advance.
(2) Billing and collecting loan payments from the borrower.
(3) Notifying the Administrator promptly of any default in the payment of principal and interest on the loan and submitting a report, as soon as possible thereafter, setting forth its views as to the reasons for the default, how long it expects the borrower will be in default, and what corrective actions the borrower states it is taking to achieve a current debt service position.
(4) Notifying the Administrator of any known violations or defaults by the borrower under the lending agreement, contract of guarantee, or related security instruments, or conditions of which the lender is aware which might lead to nonpayment, violation, or other default.
(k)
(l)
After June 10, 1991, and prior to November 1, 1993, RUS made certain variable rate loans at interest rates less than 5 percent but not less than 2 percent. For those borrowers that received variable rate loans, this section describes the method by which interest rates are adjusted. The interest rate used in determining feasibility is the rate charged to the borrower until the end of the Forecast Period for that
Terms and conditions of loans are set forth in a mortgage, note, and loan contract. Provisions of the mortgage and loan contract are implemented by provisions in RUS Bulletins and Regulations. Forms of the mortgage, note, and loan contract can be obtained from RUS.
Loans are represented by one or more notes. Interest accrues only on funds advanced. There are no loan commitment fees or charges. See RUS Bulletin 320-12 for additional information. This CFR part supersedes those portions of RUS Bulletin 320-12 “Loan Payments and Statements” with which it is in conflict.
(a) Except as described in this paragraph (a), RUS loans approved after October 6, 1997 must be repaid with interest within a period that, rounded to the nearest whole year, equals the expected composite economic life of the facilities to be financed, as calculated by RUS; expected composite economic life means the depreciated life plus three years. The expected composite economic life shall be based on the depreciation rates for the facilities financed by the loan. In states where the borrower must obtain state regulatory commission approval of depreciation rates, the depreciation rates used shall be the rates currently approved by the state commission or rates for which the borrower has received state commission approval. In cases where a state regulatory commission does not approve depreciation rates, the expected composite economic life shall be based on the most recent median depreciation rates published by RUS for all borrowers (see 7 CFR 1737.70). Borrowers may request a repayment period that is longer or shorter than the expected composite economic life of the facilities financed. If the Administrator determines that a repayment period based on the expected composite economic life of the facilities financed is likely to cause the borrower to experience hardship, the Administrator may agree to approve a period longer than requested. A shorter period may be approved as long as the Administrator determines that the loan remains feasible.
(b) Borrowers with RTB loans approved after October 6, 1997 with a maturity that exceeds the expected composite economic life of the facilities to be financed by the loan by a period of more than three years, release of funds included in the loan shall be conditioned upon the borrower establishing and maintaining, pursuant to a plan approved by RUS, a funded reserve in such an amount that the balance of the reserve plus the value of the facilities
(c) Borrowers that have demonstrated to the satisfaction of the Administrator an inability to maintain the funded reserve or net plant to secured debt ratio requirements, if any, contained in their mortgage, may elect to replace notes with an original maturity that exceeded the composite economic life of the facilities financed with notes bearing a shorter maturity approximating the expected composite economic life of the facilities financed, if this will result in a shorter maturity for the loan. The principal balance of the notes (hereinafter in this section called the “refunding notes”) issued to refund and substitute for the original notes would be the unpaid principal balance of the original notes. The refunding notes would mature at a date no later than the remaining economic life of the facilities financed by the loan, plus three years, as determined by the original feasibility study prepared in connection with the loan. Interest on the original note must continue to be paid through the closing date. All other payment terms, including the rate of interest on the refunding notes, would remain unchanged. Disposition of funds in the funded reserve will be determined by RUS at the closing date. RUS will notify the borrower in writing of the amendment of loan payment requirements and the terms and conditions thereof.
(d) A borrower qualifying under paragraph (c) of this section shall not be required to pay a prepayment premium on such portion of the payments under its new notes as exceeds the payments required under the notes being replaced.
(e) To apply for refunding notes, borrowers must send to the Area Office the following:
(1) A certified copy of a board resolution requesting an amendment of loan payment requirements and that certain notes be replaced;
(2) If applicable, evidence of approval by the regulatory body with jurisdiction over the telecommunications service provided by the borrower to issue refunding notes; and
(3) Such other documents as may be required by the RUS.
(f) Principal and interest will be repaid in accordance with the terms of the notes. Generally, interest is payable each month as it accrues. Principal payments on each note generally are scheduled to begin 2 years after the date of the note. After this deferral period, interest and principal payments on all funds advanced during this 2-year period are scheduled in equal monthly installments. Principal payments on funds advanced 2 years or more after the date of the note will begin with the first billing after the advance. The interest and principal payments on each of these advances will be scheduled in equal monthly installments. This CFR part supersedes those portions of RUS Bulletin 320-12, “Loan Payments and Statements” with which it is in conflict.
The loan documents normally provide that RUS insured loans may be repaid in full at any time without prepayment premiums. Depending upon the lender, there may be prepayment premiums on loans guaranteed by RUS. See 7 CFR part 1610 for prepayment premiums on RTB loans. See RUS Bulletin 320-12 for additional information. This CFR part supersedes those portions of RUS Bulletin 320-12, “Loan Payments and Statements”, with which it is in conflict.
RUS may extend the time of payment of principal or interest on a loan. Under section 12 of the Rural Electrification Act, as amended, this extension may be up to 5 years after such payment is due. Under section 236 of the Disaster Relief Act of 1970 (Pub. L. 91-606) payment may be deferred by the Secretary of Agriculture as long as necessary in disaster situations so long as the final maturity date is not later than 40 years after the date of the loan.
(a) Loans are to be repaid according to their terms. RUS generally obtains a first lien on all assets of the borrower. This lien shall be in the form of a mortgage by the borrower to the Government or a deed of trust made by and between the borrower and a trustee, satisfactory to the Administrator, together with such security agreements, financing statements, or other security documents as RUS may deem necessary in a particular case. Where a borrower is unable by reason of pre-existing encumbrances, or otherwise, to furnish a first mortgage lien on its entire system the Administrator may, if he determines such security to be reasonably adequate and the form and nature thereof otherwise appropriate, accept other forms of security. See RUS Bulletins 320-4, 320-22, 321-2, 322-2, 323-1, and 326-1 for details. See 7 CFR part 1744, subpart B for information on lien accommodations and subordinations.
(b) Loan security documents of borrowers with loans approved after October 6, 1997 will provide limits on allowable cash distributions in any calendar year as follows:
(1) No more than 25 percent of the prior calendar year's net earnings or margins if the borrower's net worth is at least 1 percent of its total assets after the distribution is made;
(2) No more than 50 percent of the prior calendar year's net earnings or margins if the borrower's net worth is at least 20 percent of its total assets after the distribution is made;
(3) No more than 75 percent of the prior calendar year's net earnings or margins if the borrower's net worth is at least 30 percent of its total assets after the distribution is made; or
(4) No limit on distributions if the borrower's net worth is at least 40 percent of its total assets after the distribution is made.
(c) Borrowers that have not received a loan after October 6, 1997 may request the Administrator to apply these requirements to them. Borrowers may request in writing that RUS substitute the new requirements described in paragraphs (b)(1) through (b)(4) of this section. Upon request by the borrower, the provisions of the borrower's loan documents restricting cash distributions or investments shall not be enforced to the extent that such provisions are inconsistent with this section.
(d) Rural development investments meeting the criteria set forth in 7 CFR part 1744, subpart D, will not be counted against a borrower's allowable cash distributions in any calendar year (7 U.S.C. 926).
(e) References to a borrower's mortgage in this section include deeds of trust and any other loan document applying the same requirements to a borrower.
(f) This section does not limit the rights of any parties to the mortgage other than RUS or RTB.
(a) Rescission of a loan may be requested by a borrower at any time. To rescind a loan, the borrower must demonstrate to RUS that:
(1) The purposes of the loan being rescinded have been completed;
(2) Sufficient funds are available from sources other than RUS, RTB or FFB to complete the purposes of the loan being rescinded; or
(3) The purposes of the loan are no longer required to extend or improve telephone service in rural areas.
(b) Borrowers submitting loan applications containing purposes previously covered by a loan that has been rescinded shall include in the application an explanation, satisfactory to RUS, of the change of conditions since the rescission that re-establishes the need for those purposes.
(c) RUS shall not initiate the rescission of a loan unless all of the purposes for which telephone loans have been made to the borrower under the Act have been accomplished with funds provided under the Act.
The RE Act requires that the Administrator make certain findings to approve a telephone loan or loan guarantee. The borrower shall provide the evidence determined by the Administrator to be necessary to make these findings. Details on the information required to support these findings are included in 7 CFR part 1737.
(a)
(1) Self-liquidation of the loan within the loan amortization period; this requires that there be sufficient revenues from the borrower's system, in excess of operating expenditures (including maintenance and replacement), to repay the loan with interest.
(2) Reasonable assurance of achieving the telephone market projections upon which the loan is based.
(3) Economic feasibility (based on projected revenues, expenses, net income, maximum debt service, and rate of return on investment) for the proposed system using local service rate schedules appropriate for the area served.
(4) Impact of the proposed loan and construction on the ratio of the borrower's secured debt to assets.
(5) Projected growth in the borrower's equity.
(6) Satisfactory experience and reputation of the system's principal owners and manager.
(7) A first lien on the borrower's total system or other adequate security.
(8) Fair market value of the borrower's assets as represented in its financial reports to RUS.
(9) Appropriate financial and managerial controls included in the loan documents.
(10) Other factors determined to be relevant by RUS.
(b)
(c)
(a)
(b)
(a) The standard form of RUS mortgage contains certain provisions concerning mergers and acquisitions:
(1) Article II, section 4(a) requires the borrower to obtain the written approval of the majority noteholders before taking any action to reorganize, or to consolidate with or merge into any other corporation.
(2) Article II, section 4(b), if made applicable, provides certain exceptions to the requirements of section 4(a).
(b) Similar provisions are contained in other forms of documents executed by borrowers that have not entered into the standard form of mortgage.
(c) Mortgages and loan contracts may contain other provisions concerning mergers and acquisitions.
(a) If a borrower is required by the terms of its mortgage or loan contract to obtain RUS approval of a merger or acquisition, the borrower shall request RUS approval and shall provide RUS with such data as RUS may request.
(b) If loan funds are requested, the borrower shall comply with subpart G of this part. If no additional loan funds are involved, the borrower shall comply with subpart H of this part.
(c) In considering whether to approve the request, RUS will take into account, among other matters:
(1) Whether the operation, management, and the economic and loan-repayment feasibility characteristics of the proposed system are satisfactory;
(2) Whether the merger or acquisition may result in any relinquishment, impairment, or waiver of a right or power of the Government;
(3) Whether the proposed merger or acquisition is in the best interests of the Government as note holder; and
(4) Whether the proposed purchase price and terms of an acquisition are reasonable, regardless of the source of funds used to pay for the purchase. RUS will consider the purchase price unreasonable if, in RUS's opinion, it will endanger financial feasibility.
(a) If a proposal is unsatisfactory to RUS, then RUS shall inform the borrower in writing of those features it considers objectionable and, as appropriate, recommend corrective action.
(b) If a proposal is satisfactory to RUS, then RUS shall inform the borrower in writing of its approval and any conditions of such approval. Among the conditions of approval are the following:
(1) RUS shall require a compensating benefit in return for any relinquishment, impairment, or waiver of its rights or powers.
(2) If the survivor is an affiliate of another company, RUS shall require any investments in, advances to, accounts receivable from, and accounts payable to the affiliated company contrary to mortgage provisions shall be eliminated in a manner satisfactory to the Administrator.
(3) RUS requires that the borrower agree not to extend credit to, perform services for, or receive services from any affiliated company unless specifically authorized in writing by the Administrator or pursuant to contracts satisfactory in form and substance to the Administrator.
(4) RUS may require the borrower to execute additional mortgages, loan agreements, and associated documentation.
(a) See 7 CFR part 1735 and 1737 for RUS's general loan policies and requirements.
(b) RUS will finance an acquisition by a borrower only when the acquisition is necessary and incidental to furnishing or improving rural telephone service and the service area is eligible for RUS assistance.
(c) RUS does not make loans for the sole purpose of merging or consolidating telephone organizations. After a merger or consolidation, RUS will consider making loans to the telephone system to finance the improvement or extension of telephone service in rural areas.
(d) Generally, RUS will not make a loan for the acquisition of an existing borrower unless, in addition to all other requirements, such acquisition will improve the likelihood of repayment of an outstanding RUS loan and all outstanding balances of the previous RUS loans are paid in full.
(e) In determining the amount it will lend for each acquisition, RUS shall place a valuation on all telephone facilities that are to be acquired with loan funds. RUS may consider fair market value, the original cost less depreciation of the facilities, income generating potential, any improvement in the financial strength of the borrower as a result of the acquisition, and any other factors deemed relevant by RUS to determine the reasonableness of the acquisition price and the amount of loan funds RUS will provide for an acquisition. RUS shall not consider the acquisition price reasonable or approve a loan if, in the Administrator's opinion, the acquisition price will endanger financial feasibility. If the acquisition price exceeds the amount RUS will lend, the borrower provides the remainder.
(f) When a borrower intends to request RUS loan funds for an acquisition, it shall present a proposal in writing to the Area Office as soon as possible. The borrower must either obtain RUS approval prior to making any binding commitments with the seller or make the commitments subject to RUS's approval. Failure to comply with these requirements will disqualify the borrower from obtaining an RUS loan for the acquisition unless the Administrator determines there were extenuating circumstances.
Loan funds may be approved for the acquisition and improvement of facilities to serve nonrural subscribers only if the principal purpose of the loan is to furnish and improve rural service and only if the use of loan funds to serve nonrural subscribers is necessary and incidental to the principal purpose of the loan. For example, when the acquisition of an existing system located in and serving a nonrural area is necessary to serve as the nucleus of an expanded system to furnish area coverage service in rural areas, the loan may include funds to finance the acquisition. Approval for the use of loan funds in these circumstances shall be made only on a case by case basis by the Administrator.
When borrowers are seeking RUS financing, acquisition agreements between the borrower and the seller must be in form and substance satisfactory to RUS and shall be expressly conditioned on approval of the agreement by RUS and on obtaining an RUS loan. Normally, the acquisition agreement will not be approved by RUS until the loan has been approved.
When loan funds are requested for an acquisition, details of the proposed acquisition shall be included in the Loan Design. See 7 CFR part 1737.
(a) RUS will not approve any acquisition, other than of toll facilities (see subpart J of this part), financed in whole or in part with loan funds until the borrower submits the following data to the GFR:
(1) For any nonborrowers involved, their most recent balance sheets, operating statements, detail of plant accounts, reports to the state commission, and audits, if available.
(2) Completed RUS Form 507, “Report on Telephone Acquisition,” which provides system data, including the type
(3) A map (such as a road map) showing county lines, the boundaries of the proposed acquisition and the borrower's existing service territory, and the names of other telephone companies serving adjoining areas.
(4) A brief statement of the plans for incorporating the acquired facilities into the borrower's existing system.
(5) The number of subscribers currently receiving service in the area to be acquired and the number of new subscribers that will be served over the next 5 years as a result of the acquisition.
(6) The proposed purchase price.
(7) Two copies of any options, bills of sale, or deeds, and four copies of any acquisition agreements. All of these documents are subject to RUS approval. If the acquisition agreement is approved by RUS, two copies of it shall be returned to the borrower.
(8) An appraisal by the borrower's consulting engineer or other qualified person of the physical plant to be acquired. The appraisal shall include the following:
(i) Inspection of each central office, noting the age and condition of the switch and associated equipment, and the extent and quality of maintenance of the equipment and premises.
(ii) Inspection of the outside plant, noting the general age and condition of cable and wire, poles and related hardware, pedestals, and subscriber drops. Any joint use or ownership shall be explained.
(iii) Inspection of miscellaneous items such as commercial office facilities, vehicles, furniture, tools and work equipment, and materials and supplies in stock, noting age and condition.
(iv) Inspection of all buildings and other structures (such as radio towers), noting age and condition.
(v) Detailed description of all real estate including the present market value that local real estate dealers, bankers, insurance agents, etc., place on the property.
(vi) Any widely accepted method, approved by RUS, may be used to estimate the condition of the facilities in paragraphs (a)(8)(i) through (a)(8)(iv) of this section. The “percent condition” method is recommended, but is not required.
(9) Copies of deeds to real estate to be acquired, with an explanation of the proposed use of the land.
(10) Copies of leases to be acquired.
(11) Copies of any existing mortgages with parties other than RUS, indentures, deeds of trust, or other security documents or financing agreements relating to the property to be acquired and any contracts or other rights or obligations to be assumed as part of the acquisition.
(12) A list of all counties in which the proposed system will have facilities.
(13) If the borrower is a cooperative-type organization, a description of its plans for taking subscribers in as members, membership fees, equity payments required because of the acquisition, and extent of membership support.
(14) A certification, signed by the president of the borrower, that the borrower is participating in the State's telecommunications modernization plan (for information concerning the plan, see 7 CFR part 1751, subpart B). This certification is not required if the borrower is seeking a guaranteed loan.
(15) Any other data deemed necessary by the Administrator for an evaluation of the acquisition.
(b) For stock acquisitions, the borrower shall submit the following in addition to the items listed in (a) of this section:
(1) A list of all stockholders of the company to be acquired and the number of shares each owns.
(2) Guarantees and indemnifications to be obtained from the sellers of the stock.
(a) A borrower may submit a written request for RUS approval of interim financing if it is necessary to close an acquisition before the loan to finance the acquisition is approved. Loan funds
(b) RUS will approve interim financing of acquisitions only in cases where loan funds cannot be made available in time for the closing.
(c) RUS will not approve interim financing unless the following information is acceptable:
(1) A written request for approval of interim financing, including a brief description of the acquisition, an explanation of the urgency of proceeding with the acquisition, and the source of funds to be used.
(2) A completed RUS Form 490, “Application for Telephone Loan or Loan Guarantee.” See 7 CFR part 1737.
(3) The portions of the Loan Design that cover the proposed acquisition, including cost estimates and information on any investments in nonrural areas. See 7 CFR 1737.
(4) The information required in § 1735.74 (a)(1) through (a)(8), (a)(14) and (b)(1).
(5) Any other data deemed necessary by the Administrator to approve the interim financing of the acquisition.
(d) Furthermore, RUS will not approve interim financing if, in RUS's judgment, the proposed acquisition will not qualify for RUS financing or the proposed interim financing presents unacceptable loan security risks to RUS.
(e) Because RUS approval of interim financing is not a commitment to make a loan, RUS will not approve interim financing unless the borrower is prepared to assume responsibility for financing all obligations incurred.
(f) If the borrower plans to proceed with the closing after receiving RUS approval of interim financing, it must first receive preliminary approval from RUS. See § 1735.90
(g) See 7 CFR part 1737 for regulations on interim financing for construction.
(h) See 7 CFR part 1744, subpart B for conditions under which RUS will provide shared first lien and/or a lien accommodation for non-RUS lenders.
A borrower shall not use RUS loan funds to acquire any stock or any telephone plant of an affiliate.
(a) RUS will not approve the advance of loan funds until the borrower has fulfilled all loan contract provisions to the extent deemed necessary by RUS.
(b) The first advance of loan funds pursuant to the loan contract normally shall provide funds needed for the acquisition. Unless the borrower has received approval of interim financing, it must submit the requisition in time for the advance to be made by the closing date.
(c) After the borrower has closed the acquisition, it shall furnish RUS all documents necessary to demonstrate to RUS's satisfaction that the transaction has been closed.
(d) Advances for improvements or expansion of the acquired facilities will not be approved until RUS has determined that the transaction has been closed and the borrower has obtained satisfactory title to the acquired facilities.
(e) See 7 CFR part 1737 (or RUS Bulletin 320-4) for additional requirements for releases of loan funds and 7 CFR part 1744, subpart C for additional requirements for requisitions and advances.
When a borrower is not requesting loan funds for an acquisition or merger, the borrower shall first notify RUS and submit for review by RUS the documents and information listed in (a) through (l) of this section required by RUS.
(a) For any nonborrowers involved, their most recent balance sheets, operating statements, detail of plant accounts, reports to the state commission, and audits, if available.
(b) Completed RUS Form 507, “Report on Telephone Acquisition.”
(c) A map (such as a road map) showing county lines, the boundaries of the proposed acquisition and the borrower's existing service territory, and the names of other telephone companies serving adjoining areas.
(d) A brief statement of the plans for incorporating the acquired facilities into the borrower's existing system.
(e) The number of subscribers currently receiving service in the areas involved in the acquisition or merger and the number of new subscribers that will be served over the next 5 years as a result of the acquisition or merger.
(f) Copies of deeds of real estate to be acquired, with an explanation of the proposed use of the land.
(g) Copies of security documents of any other lenders involved and any contracts or other rights of obligations to be assumed by the survivor.
(h) A list of all counties in which the proposed system will have facilities.
(i) If Article II, section 4(b) of the standard mortgage has not been made applicable, plans for operating the unified system.
(j) In the case of a merger, the proposed articles of merger that are to be used.
(k) In the case of an acquisition, the proposed purchase price, plus two copies of any options, bills of sale, or deeds, and two copies of any acquisition agreements. All of these documents are subject to RUS approval. If the acquisition agreement is approved by RUS, two copies of it shall be returned to the borrower.
(l) Any other data deemed necessary by the Administrator for an evaluation of the acquisition or merger.
(a) In cases where the borrower's schedule for completion of the proposed action leaves insufficient time for RUS to prepare and process the required documentation, including new mortgages and replacement notes, the borrower may request RUS to give preliminary approval to the acquisition or merger. However, the borrower may not obtain additional loan funds until the documentation is completed to RUS's satisfaction.
(b) Consideration of preliminary approvals generally will not be practicable in cases in which compensating benefits are required.
(c) RUS will not give preliminary approval when the lien of the mortgage on after-acquired property may be affected.
(d) Before RUS will grant preliminary approval, the borrower shall submit:
(1) Merger or acquisition documents required by state law;
(2) Acquisition agreements covering the transaction;
(3) Any required franchises, licenses, and permits;
(4) All required regulatory body approvals;
(5) All required corporate actions;
(6) Leases, contracts, and evidence of titles to be assigned to the purchaser; and
(7) The latest audited financial statements for any nonborrowers involved.
(e) If the information in (d) of this section is acceptable to RUS, the borrower may proceed with the closing.
Telephone facilities to be acquired must be located so that they can be efficiently operated by the borrower and
(a) Proper accounting shall be applied to all acquisitions and mergers, as required by the regulatory commission having jurisdiction, or in the absence of such a commission, as required by RUS based on Generally Accepted Accounting Principles or other accounting conventions as deemed necessary by RUS.
(b) If RUS determines that the plant accounts are not properly depreciated, the borrower should adjust its depreciation rates. Depending upon the characteristics of the case, commission jurisdiction and requirements, and similar factors, one of the following actions shall be taken:
(1) In states where commission approval of depreciation rates is required, a covenant shall be included in the loan contract that requires the borrower to:
(i) Have the consulting engineer make an original cost less depreciation inventory and appraisal of retained plant as part of the final inventory, and
(ii) Request commission approval of adjustments to its records on the basis of this inventory.
(2) In states where commission approval is not required, informal discussions between RUS and the borrower may be undertaken to reach satisfactory voluntary adjustments. If this does not resolve the situation to RUS's satisfaction, a covenant similar to that in paragraph (b)(1)(i) of this section shall be included in the loan contract and the borrower shall agree to submit evidence satisfactory to the Administrator that it has adjusted its records on the basis of the inventory.
Substitute notes may be required in the case of an acquisition or merger, regardless of the source of funds.
(a) Legal documents relating to the acquisition or merger, including copies of required franchises, commission orders, permits, licenses, leases, title evidence, corporate proceedings, and contracts to be assigned to the purchaser shall be forwarded to the Area Office prior to closing.
(b) The Administrator will not give final approval to any acquisition or merger until all RUS requirements relating to the transactions are satisfied.
(c) Following the Administrator's final approval of the proposal, the Area Office shall inform the borrower in writing of the necessary legal and other actions required for the advance of loan funds to finance the acquisition, including the submission, in form and substance satisfactory to the Administrator, of (1) all information and documents necessary to demonstrate that the transaction has been completed, and (2) all loan contracts, notes, mortgages, and related documents and materials required by RUS.
(d) Deeds reflecting the change in ownership, executed bills of sale, and opinions of counsel shall be forwarded to the Area Office following closing.
(e) RUS will not advance loan funds to furnish or improve service in the acquired or merged areas until the Administrator has given final approval and the transaction has been closed. RUS may, however, advance funds if it determines that loan security will not be jeopardized.
(f) At the discretion of RUS, a GFR may be present at the closing to assist the borrower and protect the interests of RUS. Under certain circumstances the closing may take place prior to RUS granting final approval for the transaction and the execution of amended loan security documents.
(a) The unadvanced loan funds of a borrower that will not be a survivor of an acquisition or merger shall be advanced only to the survivor and only under the following circumstances.
(1) If the funds are to be used for purposes approved in prior loans, the funds shall be advanced after the effective date of the proposed action only when all loan contract prerequisites have been met and documents have been submitted in form and substance satisfactory to the Administrator.
(2) If the funds are to be used for new purposes, then in addition to the requirements in (a)(1) of this section, RUS must also approve the change in purpose.
(b) No loan or other money in the construction fund shall be used to finance facilities outside areas to be served by projects approved by RUS.
An acquisition of toll line facilities financed with loan funds must be necessary and incidental, as determined by the Administrator, to furnishing or improving telephone service in rural areas. The borrower shall submit to RUS the acquisition agreement, the original cost less depreciation of the facilities, any concurrences with the connecting companies involved, and a detailed inventory of the facilities to be purchased. The borrower must submit to RUS evidence, satisfactory to the Administrator, of the borrower's ownership of the toll line facilities before loan funds for improvement of those facilities will be advanced.
When an acquisition is limited to toll line facilities and loan funds are not involved, RUS approval of the acquisition is not required. The borrower, however, shall submit to RUS for its approval all concurrences with the connecting companies involved and any other proof of ownership of the toll facilities required by RUS.
7 U.S.C. 901
(a) This part prescribes policies, procedures and responsibilities relating to applications for RUS loans to finance the improvement and extension of telephone service in rural areas. Requirements for both initial and subsequent loans are discussed, with differences pointed out.
(b) This part sets forth the policies, procedures, and requirements of RUS during the period from the receipt of a completed loan application until the advance of funds. This part sets forth the factors RUS considers in determining the characteristics of a loan, such as the amount of the loan, and conditions to the advance of funds. Involved in this determination are:
A loan budget, feasibility study, characteristics letter, loan recommendation, and release of funds. This CFR part supersedes all RUS Bulletins that are in conflict with it.
(c) See 7 CFR part 1735 on general loan policies, 7 CFR part 1737 for details on submitting a loan application, and 7 CFR part 1744 on the advance of funds.
As used in this part:
(1) Message telegram service;
(2) Community antenna television system services or facilities other than those intended exclusively for educational purposes; or
(3) Radio broadcasting services or facilities within the meaning of section 3(o) of the Communications Act of 1934, as amended.
Single copies of RUS forms and publications cited in this part are available from Administrative Services Division, Rural Utilities Service, United States Department of Agriculture, Washington, DC 20250. These RUS forms and publications may be reproduced. The terms “RUS form”, “RUS standard form”, and “RUS specification” have the same meanings as the terms “REA form” “REA standard form”, and “REA specification”, respectively, unless otherwise indicated.
Initial loan applicants seeking assistance should write the Rural Utilities Service, United States Department of Agriculture, Washington, DC 20250. A field representative will be assigned by
Before submitting an application to RUS, the borrower should consider the following:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(a) The completed loan application consists of four parts:
(1) A completed RUS Form 490.
(2) A market survey called the Area Coverage Survey (ACS).
(3) The plan and associated costs for the proposed construction, called the Loan Design (LD).
(4) Various supplementary information specified in 7 CFR 1737.22.
(b) The RUS field representative assists the borrower in assembling this information. Certain information is required from initial loan applicants but usually not from borrowers seeking subsequent loans. Borrowers are to submit all information in paragraph (a) of this section to their RUS field representatives, who will review and then forward the packages to RUS headquarters.
(c) RUS will make a determination of completeness of the application package and will notify the borrower of this determination within 10 working days of receipt of the information at RUS headquarters. If the application package is not complete, RUS will notify the borrower of what information is needed in order to complete the application package. If the information required to complete the application package is not received by RUS within 90 working days from the date the borrower was notified of the information needed, RUS may return the application package to the borrower. Returned applications are without prejudice and
RUS requires additional information in support of the loan application form. The information listed in paragraphs (a), (b), and (c) of this section must be submitted as part of the loan application as specified in 7 CFR 1737.21.
(a) The following must be submitted by all initial loan applicants. Borrowers seeking subsequent loans must submit any changes in these items since they were last submitted.
(1) Name of attorney and manager, and certified copies of board resolutions selecting them.
(2) Certified copy of articles of incorporation showing evidence of filing with the Secretary of State and in county records.
(3) Certified copies of bylaws and board minutes showing their adoption.
(4) Certified sample stock certificates.
(5) Amounts of common and preferred stock issued and outstanding.
(6) Names, addresses, business affiliations, and stockholdings of the manager, officers, directors, and other principal stockholders (those owning at least 20 percent of borrower's voting stock).
(7) Certified copies of real estate deeds showing all recording information.
(8) Service agreements, such as for management or system maintenance.
(9) Certified copies of existing leases, except those for vehicles, furniture and office equipment, and computer equipment.
(10) Certified copies of existing franchises.
(11) Information on any franchises required as a result of the proposed loan project.
(12) Federal Communications Commission (FCC) authorizations.
(13) Certified copy of a certificate of convenience and necessity (or its equivalent), or information demonstrating the nonduplication of reasonably adequate facilities, for all areas in the loan project.
(14) For toll, operator office, traffic, and EAS agreements, the names of all parties to the agreement, the type of agreement, and the effective and termination dates of the agreement and annexes, and the exchanges involved.
(15) Copies of rate schedules. (A copy of the tariff must be available for review by the RUS field representative.)
(16) Executed copy of RUS Form 291, “Certification of Nonsegregated Facilities”.
(17) A sketch or map showing the existing and proposed service areas.
(18) Executed assurance that the borrower will comply with the Uniform Relocation Assistance and Real Property Acquisitions Policies Act of 1970, as amended (see 49 CFR 24.4).
(19) A certification (which is included on RUS Form 490, “Application for Telephone Loan or Guarantee”) that the borrower has been informed of the collection options listed below that the Federal government may use to collect delinquent debt. RUS and other government agencies are authorized to take any or all of the following actions in the event that a borrower's loan payments become delinquent or the borrower defaults (OMB Circular A-129 defines “delinquency” for direct or guaranteed loans as debt more than 31 days past due on a scheduled payment):
(i) Report the borrower's delinquent account to a credit bureau.
(ii) Assess additional interest and penalty charges for the period of time that payment is not made.
(iii) Assess charges to cover additional administrative costs incurred by the Government to service the borrower's account.
(iv) Offset amounts owed to the borrower under other Federal programs.
(v) Refer the borrower's debt to the Internal Revenue Service for offset against any amount owed to the borrower as an income tax refund.
(vi) Refer the borrower's account to a private collection agency to collect the amount due.
(vii) Refer the borrower's account to the Department of Justice for litigation in the courts.
(20) A certification, signed by the president of the borrower, that the borrower is participating in the State's telecommunications modernization plan (for additional information concerning the plan, see 7 CFR part 1751, subpart B). This certification is not required if the borrower is seeking a guaranteed loan.
(b) The following must be submitted by all initial loan applicants and borrowers seeking subsequent loans:
(1) Certified financial statements for the last 3 years.
(2) Toll settlement statements and related data.
(3) Present exchange rates and any pending changes.
(4) Borrower's Environmental Report (BER)—See 7 CFR part 1794.
(5) A “Certification Regarding Lobbying” for loans, or a “Statement for Loan Guarantees and Loan Insurance” for loan guarantees, and when required, an executed Standard Form LLL, “Disclosure of Lobbying Activities,” (see section 319, Public Law 101-121 (31 U.S.C. 1352)).
(6) Executed copy of Form AD-1047, “Certification Regarding Debarment, Suspension, and Other Responsibility Matters—Primary Covered Transactions” (see appendix A to 7 CFR part 3017).
(7) Borrower's determination of loan maturity, including information noted in § 1735.43(a) of this chapter as required.
(8) Approved depreciation rates for items under regulatory authority jurisdiction.
(9) A statement that the borrower is or is not delinquent on any Federal debt, such as income tax obligations or a loan or loan guarantee from another Federal agency. If delinquent, the reasons for the delinquency must be explained and RUS will take such explanation into consideration in deciding whether to approve the loan. RUS Form 490, “Application for Telephone Loan or Guarantee,” contains a section for providing the required statement and any appropriate explanation.
(10) Any other supporting data required by the Administrator.
(c) The following must be submitted for all borrowers requesting funds for refinancing:
(1) Copies of all bonds, notes, mortgages, and contracts covering outstanding indebtedness proposed to be refinanced.
(2) For each note or bond, the name of the creditor, original amount of debt and amount as of last year-end, purpose of debt, dates incurred and due, interest rates, and repayment terms.
(3) Justification for refinancing and evidence that the use of loan funds is necessary and incidental to furnishing or improving rural telephone service. See 7 CFR 1735.21.
(d) Borrowers requesting loan funds for acquisitions should refer to RUS bulletins 320-4, 321-2, 325-1, and 326-1 for requirements.
In support of a loan application, the borrower shall prepare and submit to RUS: (a) A market forecast to determine service requirements (the Area Coverage Survey) and (b) engineering studies to determine the system design that provides service most efficiently (the Loan Design). The RUS field representative confers with the borrower and its engineer to schedule the completion and submission of these studies.
(a) The Area Coverage Survey (ACS) is a market forecast of service requirements of subscribers in a proposed service area.
(b) The objective of the ACS is to determine the location, number and telephone service requirements of subscribers in a service area. RUS will use the ACS to appraise the proposed plan for area coverage and to determine the largest practical number of rural subscribers which can be served on an economically feasible basis. Preparation of the ACS requires:
(1) A field survey of the service area to locate and identify on maps all business and residential establishments, whether currently served or not. The location and identification of future establishments are also recorded on the maps.
(2) A forecast of the number of telephone subscribers, in the entire service area, by exchange, grade and class of service, projected for the end of the 5-year study period.
(c) The results of the survey and forecast shall be:
(1) Shown on maps (maps for those service areas previously financed by RUS do not have to be included in the ACS provided that the borrower's records contain sufficient information as to subscriber development to enable cost estimates for the proposed facilities to be prepared);
(2) Tabulated on RUS Form 569 “Area Coverage Survey Report,” or its equivalent; and
(3) supported by a narrative (see § 1737.32(f)(1)(ii)) containing information on the bases for the service requirement forecasts in each exchange.
(d) Guidelines on preparing an ACS are provided in RUS Telecommunications Engineering and Construction Manual section 205.
(e) The RUS field representative reviews and approves the borrower's ACS. The borrower should make sure this is done before proceeding with the Loan Design in order to prevent unnecessary expense should the ACS not be approved. The borrower's engineer must use the RUS-approved ACS in preparing the Loan Design.
(a) A loan application requires supporting data collectively called a “Loan Design.” The LD contains a forecast of service requirements and a narrative with supporting exhibits. Most of the items included in the LD are similar for all loan applications. However, as noted below, there are certain additional requirements for initial loans and for any exchange areas not previously financed by RUS, and other additional requirements for subsequent loans for areas previously financed by RUS. The LD must conform to the borrower's state telecommunications modernization plan unless the borrower is seeking a guaranteed loan (for additional information concerning the plan, see 7 CFR part 1751, subpart B).
(b) Because of the importance and complexity of the engineering studies necessary for the LD, it should be prepared by a competent experienced telecommunications engineer. While the LD is subject to RUS approval, the borrower's selection of an engineer to perform preloan work is not. Note: The borrower's selection of an engineer to perform postloan work
(c) An LD for initial loans or for any exchange areas not previously financed by RUS requires an Outside Plant Design that provides:
(1) The most economical and practical design for a telephone system that meets immediate service demands; and
(2) The basis for orderly expansion of the system to serve the widest practical number of rural establishments.
(d) The LD for a subsequent loan (which only includes areas previously financed by RUS) does not require a detailed Outside Plant Design. The detailed Outside Plant Design for these subsequent loans may be completed for RUS review and approval after loan approval, but before staking is started
(e) Guidelines on preparing an LD are provided in RUS Telecommunications Engineering and Construction Manual section 205.
(f) The LD shall include a narrative, several exhibits, and a certification, as explained below:
(1)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(B) For subsequent loans, the borrower must fully discuss as specified in paragraph (f)(1)(viii)(A) of this section proposed improvements or expansions in an exchange serving a community over 5,000 population which had a population of more than 5,000 at the time the facilities to serve the community were first financed by RUS. The population determination is based on the corporate limits or boundaries of unincorporated areas in existence at the time the facilities to serve the community were first financed by RUS.
(C) For subsequent loans, the borrower shall state whether the population of a community, which is currently more than 5,000, was considered rural at the time RUS first financed the facilities to serve the community. Detailed cost estimates are not required if the population was considered rural at the time RUS first financed facilities to serve the community, see 7 CFR 1735.13(d).
(ix)
(x)
(xi)
(2)
(ii) An RUS Form 495, “Construction Cost Estimates,” or its equivalent shall be prepared for each exchange in which system improvements or additions are proposed. An explanation of the method used in developing these cost estimates must be included.
(iii) RUS Form 494, “Loan Design Summary,” or its equivalent shall be prepared for each loan. This must show all expected 5-year construction costs, loan and nonloan.
(iv) A schematic trunking diagram shall be included showing the number and type, length, ownership and makeup of existing and proposed toll and EAS trunks, plus transmission and traffic data for each trunk group.
(v) Detailed outside plant design maps must be submitted for all central office areas of initial loan applicants and for areas not previously served by existing borrowers or financed by RUS. These design maps must be in sufficient detail to substantiate the construction cost estimates.
(vi) For subsequent loans only, if a change in system boundaries is proposed, a map must be furnished showing present and proposed boundaries, and existing establishments and subscribers in the new areas.
(vii) Any other special exhibits needed to support particular items in the loan proposal must be included.
(3)
We, the undersigned, certify that the data in this Loan Design are correct to the best of our knowledge and belief and reasonably reflect the cost to serve the subscribers as proposed on the Forms 569, “Area Coverage Survey Report,” which are integral parts hereof, and that this Loan Design adheres to RUS engineering and construction standards and practices.
(g) The RUS field representative shall review and make a recommendation on each LD.
(1) After completion of the LD, the borrower arranges a meeting with its engineer and RUS's field representative to review:
(i) Design and cost estimates.
(ii) Reserves available from prior loans, if any, or internally generated funds which may be applied against the requirements of the current application.
(2) One copy of RUS Form 567, “Checklist for Review of Loan Design,” completed and signed by the borrower's engineer must be attached to the LD submitted to the RUS field representative.
(3) The RUS field representative recommends acceptance of the LD as the basis for RUS financing.
(4) Three copies of the final LD with the RUS field representative's recommendation are then sent to the relevant Area Office in RUS. A fourth copy is retained by the RUS field representative.
(5) A transmittal letter from the borrower must accompany the LDs, requesting that the application previously submitted be amended so as to be consistent with the approved LD.
(6) Final approval of the LD is given by the relevant Area Office in RUS. To be approved, the LD must be cost effective, include appropriate technology, and provide area coverage.
(7) Upon receipt of the LD and any other required information, RUS makes a preliminary analysis of the loan proposal. Before final consideration of the loan, RUS reviews the results of its preliminary analysis with the borrower.
(a) Under special circumstances a borrower may request that RUS approve interim financing for interim construction. This subpart describes the circumstances in which RUS will consider approving interim financing of construction, the information to be submitted to RUS to support the borrower's request, RUS's requirements relating to interim construction, and related matters.
(b) For a borrower to preserve the option of obtaining loan funds for reimbursement of interim financing, it must obtain prior RUS approval of its interim financing plan and follow the procedures in 7 CFR 1737.41 and 7 CFR 1737.42.
(c) RUS will approve interim financing only for projects which must be performed immediately.
(d) RUS approval of interim financing is not a commitment that RUS will make loan funds available.
(e) Equal employment opportunity requirements apply to interim construction. See RUS Bulletin 320-15.
(a) The borrower shall submit to the RUS Area Office a written request for approval of interim financing. This request shall include:
(1) A description of the construction proposed under interim financing.
(2) An explanation of the urgency of proceeding with the proposed construction.
(3) An estimate of the cost.
(4) The source of funds to be used for interim financing.
(b) RUS will not approve interim financing until it has reviewed and found acceptable:
(1) All of the information required under § 1737.21; or
(2) The following documents:
(i) The loan application (RUS Form 490) clearly marked “in support of interim financing request.”
(ii) The Loan Design (LD), or the portion thereof that covers the proposed construction if the completed LD is not available. See 7 CFR 1737.32.
(iii) Evidence that the borrower has satisfied the requirements of 7 CFR part 1794 applying to the proposed interim construction.
(iv) A statement that the borrower is or is not delinquent on any Federal debt, such as income tax obligations or a loan guarantee from another Federal agency. If delinquent, the reasons for the delinquency must be explained and RUS will take such explanation into consideration in deciding whether to approve the interim financing, see 7 CFR 1737.22(b)(9).
(v) A “Certification Regarding Lobbying” for loans, or a “Statement for Loan Guarantees and Loan Insurance” for loan guarantees, and when required, an executed Standard Form LLL, “Disclosure of Lobbying Activities,” (see section 319, Pub. L. 101-121 (31 U.S.C. 1352)).
(vi) Executed copy of Form AD-1047, “Certification Regarding Debarment, Suspension, and Other Responsibility Matters—Primary Covered Transactions” (see appendix A to 7 CFR part 3017).
(vii) Any other supporting data required by the Administrator.
(c) RUS will not approve a borrower's request for approval of interim financing if, in RUS's judgment:
(1) The proposed interim financing does not comply with the requirements of this subpart.
(2) The proposed interim construction will not qualify for RUS financing.
(3) The proposed interim financing presents unacceptable loan security risks to RUS, or otherwise is not in the best interests of RUS.
(a) If RUS approves the interim financing, interim construction shall be conducted in accordance with 7 CFR Part 1753, 7 CFR 1788, RUS Bulletin 320-15, and RUS Bulletins 381-1, 381-2, 381-4, 381-7, 381-8, 381-9, 381-10, 381-11, 381-
(1) All sellers and contractors invited to bid must be informed that funds from sources other than RUS will be used to pay for construction.
(2) Contracts involving the interim construction must contain a provision, in form and substance satisfactory to RUS, stating that RUS is not committed to lend or advance funds to finance the project.
(3) Contracts will not be approved by RUS until the borrower demonstrates to RUS's satisfaction that funds from sources other than RUS will be available when needed to pay invoices submitted in accordance with contract payment terms.
(4) The borrower shall not begin interim construction until all necessary licenses, permits, and other governmental approvals have been obtained.
(b) After RUS loan funds are released, the borrower can obtain reimbursement for interim financing by submitting a Financial Requirement Statement. See 7 CFR part 1744, subpart C (or RUS Bulletin 327-1).
(1) The first advance of loan funds to a borrower that has received interim financing approval generally will be limited to funds to repay any interim financing indebtedness and such additional amounts as RUS deems necessary. RUS will make no further advances of loan funds until the borrower has submitted evidence, in form and substance satisfactory to the Administrator, that (i) any indebtedness created by the interim financing and any liens associated therewith have been fully discharged of record and (ii) the borrower has satisfied all other conditions on the advance of additional loan funds.
(2) If the source of funds for interim financing is the borrower's internally generated funds, the borrower may request reimbursement of those funds along with advances for other purposes on the first Financial Requirement Statement.
(a) The completed loan application consists of:
(1) A completed RUS Form 490, “Application for Telephone Loan or Loan Guarantee;”
(2) A completed certification Form AD-1047, “Certification Regarding Debarment, Suspension, and Other Responsibility Matters—Primary Covered Transactions,” (see appendix A to 7 CFR part 3017);
(3) A market survey called the Area Coverage Survey (ACS);
(4) The plan and associated costs for the proposed construction, called the Loan Design (LD);
(5) Evidence that the borrower is participating in a telecommunications modernization plan in the state where the proposed construction will occur, unless the borrower is seeking a guaranteed loan; and
(6) Various supplementary information.
(b) RUS shall review the completed loan application, particularly noting subscriber data, grades of service, extended area service (EAS), connecting company commitments, commercial facilities, system and exchange boundaries, and proposed acquisitions. RUS shall review the LD to determine that the system design is acceptable to RUS, that the design is technically correct, that the cost estimates are reasonable, and that the design provides for area coverage service. RUS shall also review the population and incorporation status of all communities served or to be served by the borrower to determine if any nonrural areas are served and if municipal franchises are required. Any RUS lending for nonrural areas must be in accordance with 7 CFR part 1735. RUS shall also check the “List of Parties Excluded from Federal Procurement of Nonprocurement Programs”, compiled, maintained and distributed by General Services Administration, to determine
(c) RUS will notify the borrower if RUS recommends major changes in subscriber projections, design, cost estimates, or other significant matters. RUS will not continue loan processing until RUS and the borrower agree on all major changes.
RUS shall notify the borrower when the preloan data concerning the system design and costs and subscriber projections have been approved. If found acceptable, RUS will approve the LD with any required changes. A copy of the approved LD, with any significant changes, as determined by RUS, will be returned to the borrower.
(a) RUS shall prepare a “Telephone Loan Budget” (RUS Form 493) showing all costs for the proposed project and the amount of loan and nonloan funds to be used. The budget shall show, as applicable, amounts for central offices, outside plant and station equipment, right-of-way procurement, land, buildings, removal costs, special projects, engineering, vehicles and work equipment, office equipment, operating funds, refinancing with loan funds, debt retirement with nonloan funds, acquisitions, and contingencies. The amounts budgeted, exclusive of prior loan reserves, generally shall be rounded to the nearest $1,000.
(1) If the loan is to be made by the Rural Telephone Bank (RTB) or concurrently with RTB, the budget shall include the amount required for the purchase of RTB Class B stock. This is 5 percent of the amount to be borrowed from RTB for all purposes other than the purchase of RTB Class B stock. The borrower may elect to use nonloan funds for all or part of this requirement.
(2) The amount of funds included in any loan shall be limited for certain items:
(i) Operating funds for working capital or current operating deficiencies shall be included only in cases of financial hardship as determined by the Administrator.
(ii) Contingencies shall not exceed 3 percent of the total amount of loan funds to be used for construction, engineering, operating equipment and operating funds.
(b) RUS shall prepare the cost estimates based on the data in RUS Form 494, “Loan Design Summary,” and RUS Form 495, “Construction Cost Estimates,” or their equivalents, and other parts of the LD submitted by the borrower, and on other pertinent information. See subpart D of this part. The amounts included in the proposed budget shall be the estimated costs, less the value of materials and supplies on hand or acquired that can be used in the proposed construction. The cost estimates in the LD may be adjusted by RUS in consultation with the borrower. See § 1737.50(c).
(c) Generally, the new loan shall be reduced by any required equity funds and funds available in reserves no longer needed for prior loan purposes to determine the proposed loan requirement.
(d) When amounts are available in reserves no longer needed for prior loan purposes, RUS may, at its option, deny further advances of these funds if they will be used to finance projects in the proposed loan.
(e) The budget shall also show, if applicable, the reserves for each budget item as of the date of the latest RUS Form 481, “Financial Requirement Statement,” submitted by the borrower. To ensure that sufficient funds are included in the budget to finance all proposed construction, RUS includes in the budget any funds deposited by the borrower for approved interim financing.
(a) Pursuant to the requirements in 7 CFR part 1735, if loan funds are proposed for facilities to serve subscribers in nonrural areas, RUS shall allocate
(1) The costs of facilities associated directly with particular subscribers shall be allocated to those subscribers.
(2) The costs of facilities that serve both rural and nonrural subscribers shall be allocated based on the relative number of rural and nonrural subscribers receiving service from those facilities.
(3) When a borrower's exchange that includes a nonrural community will have an extended area of service (EAS) with other exchanges of the borrower, the breakdown of subscribers and funds in the allocation for rural and nonrural areas included in the proposed loan shall show the number of rural and nonrural subscribers and the costs to serve each group, as determined per paragraphs (a)(1) and (a)(2) of this section, in the subject exchange and in all exchanges connected by EAS.
(b) If RUS determines that costs cannot be adequately allocated using the procedures in paragraphs (a)(1) through (a)(3) of this section, RUS shall, on a case by case basis, allocate costs between the rural and nonrural subscribers using whatever methodology it deems reasonable. All allocations in paragraphs (a) and (b) of this section shall be documented.
(a) In connection with each loan RUS shall prepare a feasibility study that includes sections on consolidated loan estimates, operating statistics, projected telecommunications, plant, projected retirement computations, and projected revenue and expense estimates (including detailed estimates of depreciation and amortization expense, scheduled debt service payments, toll and access charge revenues, and local service revenues). Normally, projections will be for a 5-year period and used to determine the ability of the borrower to repay its loans in accordance with the terms thereof. RUS will not require borrowers to raise local service rates. Local service revenue projections will be based on the borrower's existing local service rates or regulatory body approved rates not yet in effect but to be implemented within the Forecast period. In the latter case, if a borrower is not required to obtain regulatory body approval for the implementation of such rates, RUS will require a resolution of the board of directors indicating when those rates will be in effect.
(b) RUS makes loans only to rural telephone systems that are financially feasible. RUS shall consider the factors discussed in paragraphs (c) through (j) of this section in determining feasibility.
(c) The revenue and expense estimates for the feasibility study generally will be based on the borrower's operating experience provided that:
(1) Adjustments are made for any nonrecurring revenues and expenses that are not representative of the borrower's past operations and would thus make the borrower's experience data inappropriate for the forecast; and
(2) Adjustments are made for any special or new characteristics or other considerations deemed necessary by the Administrator.
(d) [Reserved]
(e) Depreciation expense will be determined using depreciation rates appropriate to the normal operation of the borrower, based on:
(1) The borrowers regulatory body approved depreciation rates; and
(2) Where such rates as described in paragraph (e)(1) of this section do not exist for items which the borrower is seeking financing, the most recent median depreciation rates published by RUS for all borrowers. RUS will publish such depreciation rates annually in RUS's “Statistical Report, Rural Telephone Borrowers.”
(f) Projected scheduled debt service payments will generally be based on all
(g) The financial and statistical data are derived from RUS Form 479, “Financial and Statistical Data for Telephone Borrowers,” or for initial loans, the data may be obtained from the borrower's financial statements and other reports, and from other information supplied with the completed loan applications (see 7 CFR 1737.21 and 1737.22).
(h) When, in RUS's opinion, the borrower's operating experience is not adequate or the borrower's current operations are not representative, the estimates in the feasibility study normally will be developed from state and regional standards based on the experience of RUS borrowers. These standards are included in the Borrower's Statistical Profile (BSP), which is revised annually by RUS. If the borrower's operating experience is not the basis for one or more per-subscriber estimates used in the feasibility study, the estimates generally may not vary from the standard by more than 20 percent to reflect the particular characteristics of the loan applicant. Any variation from the standard shall be documented.
(i) In cases where these per-subscriber standards do not represent a reasonable forecast of a particular borrower's operations (for example, when a variation greater than 20 percent is necessary), estimates based upon a special analysis of the borrower's projected operations shall be used. The special analysis will accompany the feasibility study.
(j) When it is reasonably expected that a subscriber, classified as a special project, may discontinue service, a second feasibility study will be prepared, for comparison purposes, omitting revenues and expenses from this subscriber.
(k) RUS may obtain and review commercially available credit reports on applicants for a loan or loan guarantee to verify income, assets, and credit history, and to determine whether there are any outstanding delinquent Federal or other debts. Such reports will also be reviewed for parties that are or propose to be joint owners of a project with a borrower.
(l) If it is determined that loan feasibility cannot be proven as described in this section, the loan application will be returned to the borrower with an explanation. A borrower whose application has been returned will have 90 working days, from the date the application was returned, to revise and resubmit its application. If a revised application is not received by RUS within the 90-day period described above, the application will be canceled and a new application will need to be submitted if the borrower wishes further consideration.
(a) For purposes of determining the creditworthiness of a borrower for concurrent RUS cost-of-money and RTB loans, the Administrator shall assume that the loans, if made, would bear interest at the Treasury rate on the date of determination as described in paragraph (b) of this section. If the Treasury rate exceeds 7 percent, the interest rate used to determine eligibility for the RUS cost-of-money loan will be 7 percent.
(b) The 30-year Treasury rate will be used in all feasibility studies for loans with a final maturity of at least 30 years. A straight-line interpolation between other Treasury rates will be used to determine the rate used in feasibility studies for loans with final maturities of less than 30 years.
(c) The Treasury rate will be obtained each Tuesday, or as soon as possible thereafter, from the Federal Reserve. The rate for the current week, from the column labeled “This week” in the Federal Reserve statistical release, will be used from that Wednesday through the following Tuesday.
(d) As used in this section, the “date of determination” means the date of the feasibility study used in support of the loan recommendation.
(a) After all of the studies and exhibits for the proposed loan have been prepared, but before the loan is recommended, RUS shall inform the borrower, in writing, of the characteristics of the proposed loan. The purpose of the characteristics letter is to inform the borrower and obtain its concurrence, before further consideration by RUS of the loan approval and the preparation of legal documents relating to the loan, in such matters as the amount of the proposed loan, its purposes, rate of interest, loan security requirements, and other prerequisites to the advance of loan funds. The letter, whether or not concurred in by the borrower, does not commit RUS to approve the loan on these or any other terms.
(b) The Forecast of Revenues and Expenses and a copy of RUS Form 493, “Telephone Loan Budget,” shall be enclosed with the characteristics letter. This copy of the budget shall be subject to change by RUS with the borrower's agreement.
(a) In addition to requirements set forth in 7 CFR part 1735, 7 CFR part 1737 and other applicable parts of 7 CFR chapter XVII, the following are certain additional requirements that must be met before RUS will approve a loan:
(1) If the borrower had 100 or more employees as of the prior December 31, it must submit the current annual Employer Information Report EEO-1, Standard Form 100, as required by the Department of Labor; see 29 CFR 1602.7 through 1602.14.
(2) The borrower must be in compliance with regulations on nondiscrimination. See 7 CFR part 1790 (or RUS Bulletin 320-19).
(3) For subsequent loans, RUS must determine whether the borrower's accounting records are adequate. If the records are not adequate, as determined by RUS based on Generally Accepted Accounting Principles or other accounting conventions as deemed necessary by RUS, a provision will be included in the loan contract requiring the borrower to improve its records to an adequate level.
(4) The borrower must not have any receivables, loans, guarantees, investments, or other obligations that are contrary to the mortgage provisions or any RUS regulations including, but not limited to, 7 CFR part 1758 (or RUS Bulletins 320-4, 320-22, 321-2, 322-2, 323-1, or 326-1). If the borrower has any of these items, the loan contract shall contain a provision requiring that they be eliminated prior to the release of funds. See 7 CFR part 1744 for conditions under which RUS will provide a shared first lien and/or a lien accommodation for non-RUS lenders.
(5) RUS must make a determination on flood insurance requirements. In accordance with the National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1973, as amended (the “Flood Insurance Act”), RUS shall not approve financial assistance for the acquisition, construction, repair or improvement of any building or any machinery, equipment, fixtures or furnishings contained or to be contained in any such building located in an area which has been identified by the Director of the Federal Emergency Management Agency (the “Director of FEMA”) pursuant to the Flood Insurance Act as an area having special flood hazards unless:
(i) Flood insurance has been made available, pursuant to the Flood Insurance Act, in the area in which the acquisition, construction, repair or improvement is proposed to occur; and
(ii) The borrower has obtained flood insurance coverage with respect to such building, machinery, equipment, fixtures or furnishings as may be required pursuant to the Flood Insurance Act.
(6) All environmental requirements must be met (see 7 CFR part 1794).
(b) [Reserved]
(a) A loan is approved when the Administrator, or whoever is delegated authority, signs the administrative findings and the letter to the borrower announcing the loan.
(b) If the loan is not approved, RUS shall notify the borrower, in writing, of the reasons.
Following approval of the loan, RUS shall forward the necessary loan documents to the borrower for execution, delivery, recording, and filing, as directed by RUS. See 7 CFR part 1758 for details (or RUS Bulletins 320-4, 320-22, 321-2, 322-2, 323-1, or 326-1).
(a) Standard prerequisites to the advance of funds, generally applied to all loans, are set forth in Article II of the form of loan contract attached as appendix A to 7 CFR part 1758. Additional prerequisites may be added on a case by case basis to the loan contract.
(b) Before any loan funds can be advanced, RUS must approve a release of funds.
(c) RUS approves the release of funds only after it determines that all prerequisites to the advance of loan funds have been met or funds should be advanced even though certain loan contract prerequisites remain unsatisfied.
(d) Following release approval, loan funds and related nonloan funds may be advanced in accordance with 7 CFR part 1744.
(e) The borrower may be required to discharge indebtedness and/or to close acquisitions before advances are made for construction purposes. In such cases, the borrower shall submit evidence that these actions have been completed. If the evidence is satisfactory to RUS, RUS shall allow the remaining loan funds to be advanced in accordance with 7 CFR part 1744.
If the borrower desires to credit amounts spent for preloan activities against any equity or general funds required by the loan contract, it shall submit an itemized statement of such expenditures to the Area Office. These expenditures will be accounted for on RUS Form 503, “Release of Telephone Loan Funds,” if RUS determines that the amounts spent are reasonable based on normal industry practice and that the procedures set forth in 7 CFR part 1737, subpart D, have been complied with. Statements of preloan expenditures will be verified as to accuracy by loan fund audits.
Pub. L. 107-171, 7 U.S.C. 901
(a) This part sets forth the general policies, types of loans and loan guarantees, and program requirements under the Rural Broadband Access Loan and Loan Guarantee Program to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities.
(b) Additional information regarding the Rural Broadband Access Loan and Loan Guarantee Program can be found in RUS Bulletin 1738-1, “Rural Broadband Access Loan and Loan Guarantee Application Guide” and RUS Bulletin 1738-2, “Rural Broadband Access Loan and Loan Guarantee Advance and Construction Procedures Guide”.
(c) When reference is made in this part to existing RUS regulations, an applicant or borrower under this part will follow the requirements applicable to an RUS telecommunications borrower.
As used in this part:
(1) “United States” to include its territories and insular possessions (including the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau);
(2) “Area” to mean any identifiable place that has no more than 20,000 inhabitants based on the most recent available information of the Bureau of the Census; and
(3) “An incorporated city or town with a population in excess of 20,000 inhabitants” to mean any incorporated city or town with a population in excess of 20,000 inhabitants based on the most recent available information of the Bureau of the Census.
(a) The purpose of the Rural Broadband Access Loan and Loan Guarantee Program is to provide loans to provide funds, on a technology neutral basis, for the costs of construction,
(b) The proceeds of any loan made under this part may be used to refinance an outstanding obligation on another telecommunications loan made or guaranteed under the RE Act if the use of the proceeds will further the construction, improvement, or acquisition of facilities in eligible rural communities.
(1) Funds used for refinancing may not constitute more than 40 percent of the loan. The remainder of the proceeds shall only be used for the construction or improvement of facilities and equipment for broadband services.
(2) In calculating the expected composite economic life under § 1738.41 of this part, the economic life of any loan refinanced under this section will be based on the remaining economic life of the assets underlying that loan.
(c) RUS will not assess fees or charges for any loan made under this part.
(d) Loans will only be made under this part if the applicant's financial operations, taking into account the impact of the facilities financed with the proceeds of the loan and the associated debt, are economically feasible, as determined by RUS.
(a) As provided in § 1738.15 of this part, priority will be given to loans to finance service to eligible rural communities in which broadband service is not available to residential customers in the applicant's proposed service area.
(b) RUS shall consider the following criteria in determining whether broadband service is not available to residential customers:
(1) Broadband service is not being provided to residential customers in the applicant's proposed service area and no entity is committed to provide such service before the service would reasonably be expected to be available pursuant to the loan application;
(2) Broadband service is not provided at rates comparable to those of similar services in neighboring urban and suburban areas, as determined by RUS; and
(3) The quality of existing service, including, but not limited to, the availability of specified data rates, system latency, and data rate restrictions, is not satisfactory as determined by RUS.
(c) All applicants, as part of submitting a completed application, shall:
(1) Certify to RUS the extent to which paragraphs (b)(1) through (b)(3) of this section, apply to residential customers in the proposed service area, and
(2) Publish legal notice stating the applicant's intent to offer broadband service in a particular community.
(i) The notice must set forth the applicant's proposed service area, and request any incumbent broadband service provider to submit to RUS within 30 days:
(A) The number of residential customers receiving broadband service in the applicant's proposed service area, the rates of data transmission, and the cost of each level of service, or proof of commitment to provide service in the proposed service area, and
(B) A map of its service territory.
(ii) The notice must satisfy all other requirements to constitute legal notice within the areas proposed to be served.
(iii) The notice must be published in state and local newspapers covering the applicant's proposed service area if such publication is not included in the legal notice requirement.
RUS will make broadband loans for facilities which RUS determines are necessary to serve subscribers located in eligible rural communities. RUS may determine that it is necessary for facilities financed with loan funds to be located outside of eligible rural communities.
(a) On October 1, of each fiscal year, or as soon as possible after funds become available, RUS will:
(1) Establish a national reserve for broadband loans, and
(2) Allocate amounts in the reserve to each State, territory, and insular possession, based on the ratio of the
(b) To be considered eligible for funding from the State reserve during the fiscal year, an application, determined by RUS to be complete, must be postmarked no later than January 31 of the fiscal year.
(c) On April 1 of each fiscal year, RUS will return all unobligated amounts in each state's reserve to the national reserve and will make the national reserve available to eligible entities in any state.
(d) To be considered eligible for funding from the national reserve during the current fiscal year, a completed application, satisfactory to RUS, must be postmarked no later than July 31 of the fiscal year.
(e) Completed applications that are economically and technically feasible, as determined by RUS, will be considered for funding in accordance with the priority requirements set forth in § 1738.15 of this part.
(a) Each application that was submitted and remains unfunded from the broadband pilot program will be given a one-time priority for funding for a loan under this part.
(b) Each applicant will be given 30 days from the date of publication of this part in the
(c) Completed applications submitted within the 30-day time-frame will be considered for financing:
(1) First, where broadband service is not available to residential customers, as set forth in § 1738.11 of this part.
(i) Completed applications will be funded on a first-in, first-out basis, as long as funds remain available in the applicable state's reserve.
(ii) When the state reserve is not adequate to fund the next completed application on a first-in, first-out basis, RUS will consider subsequent completed applications for that state for funding on a first-in, first-out basis. All unfunded, completed applications will be carried forward for consideration for funding from the national reserve.
(2) Second, where broadband service is available to residential customers:
(i) On January 1, 2003, after all new applications submitted under this part proposing to provide service where none is available have been considered under § 1738.15(b) of this part, all completed applications will be considered for funding on a first-in, first-out basis, as long as funds remain available in the applicable state's reserve.
(ii) When the state reserve is not adequate to fund the next completed application on a first-in, first-out basis, RUS will consider subsequent completed applications for that state for funding on a first-in, first-out basis. All unfunded, completed applications will be carried forward for consideration for funding from the national reserve.
Subject to the one-time priority set forth in § 1738.14 of this part, in making loans under this part, priority will be given to eligible entities submitting completed applications for the construction, improvement, or acquisition of facilities and equipment for broadband service in eligible rural communities as follows:
(a) As of October 1 of the fiscal year, completed applications remaining unfunded from the previous fiscal year where broadband service is not available to residential customers, as set forth in § 1738.11(b)(1) of this part, will be considered for funding on a first-in, first-out basis, as long as funds remain available in the applicable state's reserve. When the state reserve is not adequate to fund the next completed application on a first-in, first-out basis, RUS will consider subsequent completed applications for that state for funding on a first-in, first-out basis. All unfunded, completed applications
(b) New completed applications proposing to provide service where none is available to residential customers, as set forth in § 1738.11 of this part, will be considered for funding, from the state reserve prior to April 1 and the national reserve after April 1, on a first-in, first-out basis, as long as funds remain available. As applications are processed using the first-in, first-out process, RUS may expedite for consideration for funding applications proposing to provide service where none is available, as set forth in § 1738.11(b)(1). When funds are not adequate to fund the next completed application on a first-in, first-out basis, RUS will consider subsequent completed applications for funding on a first-in, first-out basis.
(c) On January 1, March 30, April 1, July 1 and September 30 of the fiscal year, all unfunded, completed applications on hand will be prioritized and considered for funding, from the state reserve prior to April 1 and the national reserve after April 1, as follows:
(1) First, where broadband service is not available to residential customers, as set forth in § 1738.11(b)(1) of this part, on a first-in, first-out basis, as long as funds remain available.
(2) Second, where broadband service is not available to residential customers, as set forth in § 1738.11(b)(2) and (3) of this part, on a first-in, first-out basis, as long as funds remain available.
(3) Third, where broadband service is available to residential customers, on a first-in, first-out basis, so long as funds remain available.
(a) RUS makes broadband loans to legally organized entities providing, or proposing to provide, broadband services in eligible rural communities.
(1) Types of eligible entities include cooperative, nonprofit, limited dividend or mutual associations, limited liability companies, commercial organizations and Indian tribes and tribal organizations as defined in 25 U.S.C. 450b (b) and (c). Individuals or partnerships of individuals are not eligible entities.
(2) An entity is not eligible if it serves more than 2 percent of the telephone subscriber lines installed in the United States.
(3) To be eligible, an entity must have sufficient authority to enter into a contract with RUS and to carry out the purposes of the proposed loan.
(b) A State or local government, including any agency, subdivision, or instrumentality thereof (including consortia thereof) shall be eligible for a broadband loan only if, not later than April 30, 2003, no other eligible entity is already offering or has committed to offer broadband services to the eligible rural community. RUS will determine whether the commitment is sufficient for purposes of this paragraph.
Applicants are required to comply with certain regulations on nondiscrimination and equal employment opportunity. See RUS Bulletin 1790-1, “Nondiscrimination Among Beneficiaries of RUS Programs” and RUS Bulletin 20-15:320-15, “Equal Employment Opportunity in Construction Financed with RUS Loans”; 7 CFR parts 15 and 15b and 45 CFR part 90.
Recognizing plant costs, the applicant's cost of system design, and RUS' administrative costs, RUS will not consider applications for loans or loan guarantees of less than $100,000. Maximum loan amounts apply only to an applicant for a direct 4-percent broadband loan, as provided for in § 1738.30(b)(2) of this part.
(a) RUS makes broadband loans to finance the construction, improvement, and acquisition of facilities and equipment to provide broadband service in eligible rural communities.
(b) RUS makes broadband loans to finance broadband facilities leased under the terms of a capital lease as defined in generally accepted accounting principles. RUS will not make a broadband loan to finance facilities leased under the terms of an operating lease as defined in generally accepted accounting principles.
(c) RUS makes broadband loans to finance an acquisition by an eligible entity only when the acquisition is necessary and incidental to furnishing or improving rural broadband service.
(d) RUS will not approve the use of broadband loans to acquire any stock or any facilities or equipment of an affiliate of the applicant.
(e) RUS will not make a broadband loan to finance the following items:
(1) Customer terminal equipment (including modems) not owned by the applicant during its economic life and any associated inside wiring;
(2) Vehicles not used primarily in construction; and
(3) Operating expenses.
(f) RUS will not make a broadband loan to finance systems or facilities that have not been designed and constructed to RUS' satisfaction.
(g) Prior to October 1, 2004, RUS will not make a broadband loan under this part to provide broadband service in an area receiving local exchange telephone service from an RUS telecommunications borrower to any entity other than the incumbent RUS telecommunications borrower if, not later than 90 days after RUS receives an application proposing to provide broadband service in the borrower's local exchange service territory, the incumbent RUS telecommunications borrower submits to RUS a letter of intent to provide or begin to construct residential broadband service in its local exchange service territory prior to October 1, 2004. The incumbent RUS telecommunications borrower must provide, prior to October 1, 2004, support of their intent to provide broadband service through submitting either a loan application to construct broadband facilities or proof that construction of broadband facilities has begun. Thereafter, unless the RUS telecommunications borrower has constructed or begun to construct broadband facilities in its service area, RUS will consider an application for a loan under this part to provide the broadband service in an area served by an RUS telecommunications borrower according to the criteria for determining broadband availability in § 1738.11(b) of this part.
(h) RUS will not approve loans to more than one applicant to provide broadband service within the same eligible rural community, nor to an applicant proposing to provide service in a community served by a borrower using funds under this part regardless of the definition of broadband service at the time of loan approval.
(i) If an unadvanced loan, or a portion thereof, is rescinded, a new loan shall not be made to the same applicant for the same purposes as in the rescinded loan.
(a) To be eligible for a loan, RUS will require an applicant to provide credit support in an amount equal to 20 percent of the requested loan amount.
(b) The applicant must have, as part of the minimum 20 percent requirement, cash or, in the case of State and local governments, cash equivalents in an amount equal to operating expenses for the first full year of providing service, as determined by a feasibility study satisfactory to RUS. This cash requirement will be waived for applicants operating as telecommunications companies which have positive cash flow for the two calendar years immediately preceding the date of application.
(c) The remainder of the minimum requirement can be met by undepreciated assets which would normally be financed as part of a loan under this part, additional cash or cash equivalents, licenses, or an unconditional letter of credit, or the equivalent, satisfactory to RUS.
(d) For purposes of this section, assets and licenses will be valued based on the lower of cost or market value, net of liens or other obligations of payments for those assets and licenses.
(a) Upon notification by RUS that an applicant's application is considered complete, the applicant may enter into an interim financing agreement with a lender other than RUS or use its own internally generated funds for interim construction.
(b) For an applicant to preserve the option of obtaining loan funds for reimbursement of interim financing, the following procedures must be followed:
(1) Interim construction shall be conducted in accordance with RUS Bulletin 1738-2 and 7 CFR part 1788, except that the applicant shall not begin interim construction until all necessary licenses, permits, and other governmental approvals have been obtained;
(2) Equal employment opportunity requirements apply to interim construction. See RUS Bulletin 20-15: 320-15; and
(3) Interim construction shall be covered by an Environmental Report prepared in accordance with 7 CFR part 1794 and approved by RUS.
(c) RUS approval of interim financing is not a commitment that RUS will make loan funds available.
(a) RUS makes loans only if, in the judgment of the Administrator, the security therefore is reasonably adequate and the loan will be repaid within the time agreed.
(b) RUS generally requires that an applicant provide RUS with a first lien, in form and substance satisfactory to RUS, on all of the applicant's property and such additional security as RUS may require. If necessary, RUS will share in the first lien with another lender provided the RUS loan is adequately secured and will be repaid within the time agreed.
(c) Unless otherwise approved by RUS, the applicant shall purchase and own the collateral for the loan free from liens or security interests, other than those securing the RUS loan.
(d) In the case of loans that include the financing of broadband facilities that do not constitute self-contained operating systems or units, the applicant shall, in addition to the mortgage lien on all of the applicant's facilities financed by RUS, furnish adequate assurance, in the form of contractual or other arrangements, satisfactory to RUS, that continuous and efficient broadband service will be rendered.
(e) Beginning with the first calendar year following the end of the forecast period, RUS will require the recipient of a broadband loan to maintain, at a minimum, a TIER at least equal to the projected TIER determined by the feasibility study prepared in connection with the loan, but at least 1.25 and not greater than 2.0.
(f) Additional financial, investment, operational, and managerial controls appear in the loan documents required by RUS.
(a) Direct cost-of-money broadband loans shall bear interest at a rate (the “Cost of Money Interest Rate”) equal to the cost of borrowing to the Department of Treasury for obligations of comparable maturity. The Cost of Money Interest Rate will be provided by RUS when the funds are advanced to the borrower.
(b) Direct 4 percent broadband loan.
(1) To be eligible for a direct loan bearing an interest rate of 4 percent, the applicant must be proposing to serve:
(i) A community that:
(A) Has a population of less than 2,500 inhabitants;
(B) Is not currently receiving broadband service as set forth in § 1738.11(b)(1) of this part, and
(C) Is located in a county with per capita personal income that is less than or equal to that percent of the national average per capita personal income which RUS will publish in the
(ii) A service area with a certain maximum population density, calculated as the total number of persons in the service area divided by the square miles of the service area. The maximum population density requirement will be published by RUS in the
(2) The total amount of financing made available by RUS, in each fiscal year, for direct loans bearing an interest rate of 4 percent and the maximum of any one loan will be published by RUS in the
(3) When an approved application exceeds the maximum amount of 4 percent financing that may be made available to the borrower, a direct loan made at 4 percent may be made simultaneously with a “Cost-of-Money Interest Rate” loan.
(4) A 4 percent direct loan may be made simultaneously with a Cost-of-Money Interest Rate loan or a private loan guarantee.
(c) Private loan guarantees. A private loan guarantee shall bear interest at a rate set by the lender consistent with the current applicable market rate for a loan of comparable maturity.
(1) A private loan guarantee is available to any legally organized lending agency which includes commercial banks, trust companies, mortgage banking firms, insurance companies, and any other institutional investor authorized by law to loan money, hereafter referred to as “lender”. At the time of application, applicants must provide RUS the name of the lender who will be providing the funding and a commitment from that lender to provide the funds.
(i) The lender shall be subject to credit examination and supervision by a Federal or state agency unless RUS determines that alternative examination and supervisory mechanisms are adequate.
(ii) The lender shall demonstrate to RUS the capability to adequately service guaranteed loans. The lender shall also be in good standing with its licensing authority and meet the loan making, loan servicing, and other requirements of the jurisdiction in which the lender makes loans guaranteed under this part.
(2) The lender selected by the borrower shall provide evidence satisfactory to RUS of its qualification under this part, along with the name of the authority that supervises such lender.
(3) The lender may establish charges and fees for the loan provided they are not greater than those normally charged other applicants for the same type of loan in the ordinary course of business. RUS will not guarantee any portion of the loan used to pay lender charges and fees.
(4) Loans are guaranteed for no more than 80 percent of the amount of principal except for those purposes in § 1738.30(c)(3) of this part for which RUS will not provide a guarantee. RUS' guarantee is limited to the loan repayment obligation of the borrower and does not extend to guaranteeing that a lender will remit to a holder loan payments made by the borrower.
(5) The interest rate must be fixed and must be the same for the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be, and Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion Amount or the respective Unguaranteed-Amount Equivalent, as the case may be.
(6) The entire loan will be secured by the same security with equal lien priority for the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be, and Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion Amount or the respective Unguaranteed-Amount Equivalent, as the case may be. The Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion Amount or the respective Unguaranteed-Amount Equivalent, as the case may be, will neither be paid first nor given any preference or priority over the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be.
(7) All loan documents, including, but not limited to, a loan guarantee agreement between RUS and the lender, the loan note guarantee, the guaranteed loan note, and the mortgage will be prepared by RUS. Contact RUS for copies of forms of the loan documents. The guaranteed loan agreement between
(8) Once a private loan guarantee is approved, the lender will be required to fully service the loan including:
(i) Determining that all prerequisites to each advance of loan funds by the lender under the terms of the contract of guarantee, all financing documents, and all related security documents have been fulfilled. The lender must obtain RUS approval to advance funds prior to each advance of funds.
(ii) Billing and collecting loan payments from the borrower.
(iii) Notifying the Administrator promptly of any default in the payment of principal and interest on the loan and submit a report, as soon thereafter as possible, setting forth its views as to the reasons for the default, how long it expects the borrower will be in default, and what corrective actions the borrower states it is taking to achieve a current debt service position.
(iv) Notifying the Administrator of any known violations or defaults by the borrower under the lending agreement, contract of guarantee, or related security instruments, or conditions of which the lender is aware which might lead to nonpayment, violation, or other default.
(9) Upon notice to the lender, RUS may assume loan servicing responsibilities for the loan or the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be, or require the lender to assign such responsibilities to a different entity, if the lender fails to perform its loan servicing responsibilities under the loan guarantee agreement, or if the lender becomes insolvent, makes an admission in writing of its inability to pay its debts generally as they become due, or becomes the subject of proceedings commenced under the Bankruptcy Reform Act of 1978 (11 U.S.C. 101
(10)(i) The Guarantee shall cease to be effective with respect to any Guaranteed Loan Amount or any Guaranteed Loan Portion Amount or any Guaranteed-Amount Equivalent to the extent that:
(A) The Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be, is separated at any time from the Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion Amount or the respective Unguaranteed-Amount Equivalent, as the case may be, in any way, directly or through the issuance of any Guaranteed-Amount Equity Derivative or any Guaranteed-Amount Debt Derivative; or
(B) Any holder of the Guaranteed Loan Note or any Guaranteed Loan Portion Note or any Derivative, as the case may be, having a claim to payments on the Guaranteed Loan receives more than its pro-rata percentage of any payment due to such holder from payments made under the Guarantee at any time during the term of the Guaranteed Loan.
(ii) The assignment by the lender requires prior written approval from RUS.
(iii) The assignment shall entitle the holder to all of the lender's rights. However, the lender shall remain responsible for servicing the entire loan.
(iv) The borrower, its principal officers, members of the borrower's board of directors and members of the immediate families of said officials shall not be a holder of the borrower's loan.
(11) RUS will not guarantee any loan under this subpart that provides for:
(i) A balloon payment of principal or interest at the final maturity date of the loan; or
(ii) The payment of interest on interest.
(12) For purposes of this subsection:
(i) Derivative means any right, interest, instrument or security issued or traded on the credit of the Guaranteed
(A) Any participation share of, or undivided ownership or other equity interest in, the Guaranteed Loan or any Guaranteed Loan Portion;
(B) Any note, bond or other debt instrument or obligation which is collateralized or otherwise secured by a pledge of, or security interest in, the Guaranteed Loan or any Guaranteed Loan Portion; or
(C) Any such interest in such an interest or any such instrument secured by such an instrument.
(ii) Guaranteed-Amount Debt Derivative means any note, bond or other debt instrument or obligation which is collateralized or otherwise secured by a pledge of, or security interest in, the Guaranteed Loan Note or any Guaranteed Loan Portion Note or any Derivative, as the case may be, which has an exclusive or preferred claim to the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be.
(iii) Guaranteed-Amount Equity Derivative means any participation share of, or undivided ownership or other equity interest in, the Guaranteed Loan or any Guaranteed Loan Portion or any Derivative, as the case may be, which has an exclusive or preferred claim to the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be.
(iv) Guaranteed-Amount Equivalent means:
(A) With respect to any Derivative which is equal in principal amount to the Guaranteed Loan or any Guaranteed Loan Portion, that amount of payment on account of such Derivative which is equal to the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount, as the case may be; or
(B) With respect to any Derivatives which in the aggregate are equal in principal amount to the Guaranteed Loan or any Guaranteed Loan Portion, that amount of payment on account of such derivatives which is equal to the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount, as the case may be.
(v) Guaranteed Loan Amount means that amount of payment on account of the Guaranteed Loan which is guaranteed under the terms of the Guarantee.
(vi) Guaranteed Loan Portion Amount means that amount of payment on account of any Guaranteed Loan Portion which is guaranteed under the terms of the Guarantee.
(vii) Guaranteed Loan Note means, collectively, the note or notes executed and delivered by the Borrower to evidence the Guaranteed Loan.
(viii) Guaranteed Loan Portion means any portion of the Guaranteed Loan.
(ix) Guaranteed Loan Portion Note means any note executed and delivered by the Borrower to evidence a Guaranteed Loan Portion.
(x) Unguaranteed-amount equivalent means all amounts of payment on account of any Derivative other than the respective Guaranteed-Amount Equivalent.
(xi) Unguaranteed loan amount means all amounts of payment on account of the Guaranteed Loan other than the Guaranteed Amount.
(xii) Unguaranteed loan portion Amount means all amounts of payment on account of any Guaranteed Loan Portion other than the respective Guaranteed Loan Portion Amount.
Loan guarantees made under this part are supported by the full faith and credit of the United States.
Terms and conditions of loans are set forth in a mortgage, note, and loan contract. Provisions of the mortgage and loan contract are implemented by provisions in RUS bulletins and regulations. Standard forms of the mortgage, note, and loan contract can be obtained from RUS. However, RUS reserves the right to establish terms and conditions, including security requirements, on a case-by-case basis.
(a) Broadband loans must be repaid with interest within a period that, rounded to the nearest whole year, equals the expected composite economic life of the facilities to be financed, as calculated by RUS.
(1) The expected composite economic life shall be based upon the depreciation rates for the facilities financed by the loan.
(2) The depreciation rates used shall be the rates currently in place, as long as RUS finds them to be reasonable for the telecommunications industry.
(b) Applicants may request a repayment period that is shorter than the expected composite economic life of the facilities financed. A shorter period may be approved as long as the Administrator determines that the loan remains feasible.
(c) Interest is payable on funds advanced each month as it accrues beginning with the first billing after the advance, as defined in the note. Principal payments on each note are scheduled to begin one year after the date of the first advance. After this deferral period, interest and principal payments on all funds advanced during this one-year period shall be made in equal monthly installments. Principal payments on funds advanced 1 year or more after the date of the first advance will begin with the first billing after the advance. The interest and principal payments on each of these advances shall be made in equal monthly installments.
Title III, Pub. L. 108-199, 118 Stat. 3.
(a) The provision of broadband transmission service is vital to the economic development, education, health, and safety of rural Americans. The purpose of the Community Connect Grant Program is to provide financial assistance in the form of grants to eligible applicants that will provide, on a “community-oriented connectivity” basis, broadband transmission service that fosters economic growth and delivers enhanced educational, health care, and public safety services. The Agency will give priority to rural areas that it believes have the greatest need for broadband transmission services, based on the criteria contained herein.
(b) Grant authority will be used for the deployment of broadband transmission service to extremely rural, lower-income communities on a “community-oriented connectivity” basis. The “community-oriented connectivity” concept will stimulate practical, everyday uses and applications of broadband by cultivating the deployment of new broadband transmission services that improve economic development and provide enhanced educational and health care opportunities in rural areas. Such an approach will also give rural communities the opportunity to benefit from the advanced technologies that are necessary to achieve these goals.
(a) The Agency will publish, annually in the
(b) Notwithstanding paragraph (a) of this section, the Agency may, in response to a surplus of qualified eligible applications which could not be funded from the previous fiscal year, decline to publish a NOFA for the following fiscal year and fund said applications without further public notice.
As used in this subpart:
To be eligible for a grant, the applicant must:
(a) Be legally organized as an incorporated organization, an Indian tribe or tribal organization, as defined in
(b) Have the legal capacity and authority to own and operate the broadband facilities as proposed in its application, to enter into contracts and to otherwise comply with applicable federal statutes and regulations.
To be eligible for a grant, the Project must:
(a) Serve a Rural Area where Broadband Transmission Service does not currently exist, to be verified by the Agency prior to the award of the grant;
(b) Serve one Community recognized in the latest U.S. Census or the latest edition of the Rand McNally Atlas;
(c) Deploy Basic Broadband Transmission Service, free of all charges for at least 2 years, to all Critical Community Facilities located within the proposed Service Area;
(d) Offer Basic Broadband Transmission Service to residential and business customers within the proposed Service Area; and
(e) Provide a Community Center with at least ten (10) Computer Access Points within the proposed Service Area, and make Broadband Transmission Service available therein, free of all charges to users for at least 2 years.
Grant funds may be used to finance:
(a) The construction, acquisition, or leasing of facilities, including spectrum, to deploy Broadband Transmission Service to all participating Critical Community Facilities and all required facilities needed to offer such service to residential and business customers located within the proposed Service Area;
(b) The improvement, expansion, construction, or acquisition of a Community Center that furnishes free access to broadband Internet service, provided that the Community Center is open and accessible to area residents before, during, and after normal working hours and on Saturday or Sunday. Grant funds provided for such costs shall not exceed the greater of five percent (5%) of the grant amount requested or $100,000;
(c) End-User Equipment needed to carry out the Project;
(d) (1) Operating expenses incurred in providing Broadband Transmission Service to Critical Community Facilities for the first 2 years of operation and in providing training and instruction. In order to qualify as eligible costs for grant coverage or as matching fund contributions, operating expenses for providing broadband transmission service to Critical Community Facilities must:
(i) Be incurred for the purpose of providing broadband service to the Critical Community Facilities and be for costs incurred during the first two years of operation; and
(ii) Be for the following purposes subject to the specified maximum amounts:
(A) Salary for operations manager, not to exceed $30,000 per year.
(B) Salary for technical support staff, not to exceed $30,000 per year.
(C) Salary for community center staff, not to exceed $25,000 per year.
(D) Bandwidth expenses, not to exceed $25,000 per year.
(E) Training courses on the use of the Internet, not to exceed $15,000 per year.
(2) The operating costs to be funded by the grant or used as matching contributions cannot exceed in the aggregate $250,000. No other operating expenses are eligible for grant funding or to be considered as matching funds; and
(e) The purchase of land, buildings, or building construction needed to carry out the Project.
(a) Grant funds may not be used to finance the duplication of any existing Broadband Transmission Service provided by another entity.
(b) Facilities financed with grant funds cannot be utilized, in any way, to provide local exchange telecommunications service to any person or entity already receiving such service.
(a) The grant applicant must contribute a Matching Contribution which is at least fifteen percent (15%) of the grant amount requested and shall be in the form of:
(1) Cash for eligible grant purposes.
(2) In-kind contributions for purposes that could have been financed with grant funds under this part. In-kind contributions must be new or non-depreciated assets with established monetary values. Manufacturers' or service providers' discounts shall not be considered as a Matching Contribution.
(3) The rental value of space provided within an existing building to be used as the Community Center, provided that the space is free of charge to the applicant, for the first 2 years of operation.
(b) Costs incurred by the applicant, or by others on behalf of the applicant, for facilities, installed equipment, or other services rendered prior to submission of a completed application shall not be considered as an Eligible Grant Purpose or Matching Contribution.
(c) Rental values of space provided must be substantiated by rental agreements documenting the cost of space of a similar size in a similar location.
(d) Any financial assistance from federal sources shall not be considered as a Matching Contribution unless there is a federal statutory exception specifically authorizing the federal financial assistance to be considered as such.
A completed application must include the following documentation, studies, reports and information in form satisfactory to the Agency. Applications should be prepared in conformance with the provisions of this part and applicable USDA regulations including 7 CFR parts 3015, 3016, and 3019. Applicants must use the Agency's Application Guide for this program, found at
(a)
(b)
(1) A description of why the Project is needed;
(2) A description of the applicant;
(3) An explanation of the total Project cost;
(4) A general overview of the broadband telecommunications system to be developed, including the types of equipment, technologies, and facilities to be used;
(5) Documentation describing the procedures used to determine the unavailability of existing Broadband Transmission Service; and
(6) A description of the participating Critical Community Facilities.
(c)
(d)
(1) A narrative discussing the proposed Community Center, all costs of the Project, all existing and proposed facilities that are a part of the Project, the services to be provided by the Project, and the proposed Service Area;
(2) Engineering design studies providing an economical and practical engineering design of the Project, including a detailed description of the facilities to be funded, technical specifications, data rates, and costs; and
(3) A map of the proposed Service Area reflecting the proposed location of the Community Center and all participating Critical Community Facilities.
(e)
(1) The specific activities and services to be performed under the Project;
(2) Who will carry out the activities and services;
(3) The time-frames for accomplishing the Project objectives and activities; and
(4) A budget for all capital and administrative expenditures reflecting the line item costs for Eligible Grant Purposes, the Matching Contribution, and other sources of funds necessary to complete the Project.
(f)
(1) A listing of all participating Critical Community Facilities to be connected. For those Critical Community Facilities in the Service Area which will not be included in the Project, an explanation of why they are not being included should be provided. The applicant must also provide documentation that it has consulted with agents of all Critical Community Facilities in the Service Area, and must provide statements as to their willingness to participate, or not to participate, in the proposed Project;
(2) A description of the services available to local residents through the use of the Community Center;
(3) A listing of the proposed Telecommunications Terminal Equipment, telecommunications transmission facilities, data terminal equipment, interactive video equipment, computer hardware and software systems, and components that process data for transmission via telecommunications, computer network components, communication satellite ground station equipment, or any other elements of the Project designed to further the deployment and use of Broadband Transmission Service, that the applicant intends to build or fund using the Agency's grant funds and the Matching Contribution; and
(4) If other telecommunications carriers (including interexchange carriers, cable television operators, enhanced service providers, providers of satellite services and telecommunications equipment manufacturers and distributors) are participating in the delivery of services, a description of the consultations and the anticipated role of such providers in the proposed Project.
(g)
(1) Certified financial statements, if available; otherwise, the most current income statement and balance sheet for existing operations; and
(2) Pro-forma financial information for 5 years, evidencing the sustainability of the Project.
(h)
(i)
(j)
(k)
(1) 7 CFR part 15, subpart A—Nondiscrimination in Federally Assisted Programs of the Department of Agriculture—Effectuation of Title VI of the Civil Rights Act of 1964.
(2) 7 CFR part 3015—Uniform Federal Assistance Regulations.
(3) 7 CFR part 3017—Governmentwide Debarment and Suspension (Non-procurement).
(4) 7 CFR part 3018—New Restrictions on Lobbying.
(5) 7 CFR part 3021—Governmentwide Requirements for Drug-Free Workplace (Financial Assistance).
(6) Certification regarding Architectural Barriers.
(7) Certification regarding Flood Hazard Precautions.
(8) An environmental report, in accordance with 7 CFR 1794.
(9) Certification that grant funds will not be used to duplicate lines, facilities, or systems providing Broadband Transmission Service.
(10) Federal Obligation Certification on Delinquent Debt.
(a) All applications for grants must be delivered to the Agency at the address and by the date specified in the NOFA (see § 1739.2) to be eligible for funding. The Agency will review each application for conformance with the provisions of this part. The Agency may contact the applicant for additional information or clarification.
(b) Incomplete applications as of the deadline for submission will not be considered. If an application is determined to be incomplete, the applicant will be notified in writing and the application will be returned with no further action.
(c) Applications conforming with this part will then be evaluated competitively by a panel of the Agency's employees selected by the Administrator of the Agency, and will be awarded points as described in the scoring criteria in § 1739.17. Applications will be ranked and grants awarded in rank order until all grant funds are expended.
(d) Regardless of the score an application receives, if the Agency determines that the Project is technically or financially infeasible, the Agency will notify the applicant, in writing, and the application will be returned with no further action.
(a) All eligible applications will receive points for the following scoring criteria:
(1) The rurality of the Project (up to 40 points);
(2) The economic need of the Project's Service Area (up to 30 points); and
(3) The “community-oriented connectivity” benefits derived from the proposed service (up to 30 points).
(b) Scoring criteria:
(1)
(i) This criterion will be used to evaluate the rurality of the Community served by the Project, in accordance with the following method of scoring. If a Community is identified in the latest decennial Census, the applicant must use the Census information. If a Community is not identified in the Census but is identified in the latest edition of the Rand McNally Atlas, the applicant will use the Rand McNally Atlas information. Rurality shall be determined by the following criteria:
(A) The 2000 population data contained in the U.S. Bureau of the Census at
(B) The population data contained in the latest edition of the Rand McNally Atlas. If no population data is contained in the Rand McNally Atlas for a community that is recognized in the Atlas, then that community is not eligible for a grant.
(ii) The following categories are used in the evaluation of rurality:
(A) Level 1 means any Community having a population of less than 500 inhabitants.
(B) Level 2 means any Community having a population of at least 500 and not in excess of 1,000 inhabitants.
(C) Level 3 means any Community having a population over 1,000 and not in excess of 2,000 inhabitants.
(D) Level 4 means any Community having a population over 2,000 and not in excess of 3,000 inhabitants.
(E) Level 5 means any Community having a population over 3,000 and not in excess of 4,000 inhabitants.
(F) Level 6 means any Community having a population over 4,000 and not in excess of 5,000 inhabitants.
(G) Level 7 means any Community having a population over 5,000 and not in excess of 10,000 inhabitants.
(H) Level 8 means any Community having a population over 10,000 and not in excess of 20,000 inhabitants.
(iii) Each application will receive points based on the location of the facilities financed using the definitions in paragraphs (b)(1)(i) and (b)(1)(ii) of this section.
(A) For a Service Area that includes a Level 1 Community, it will receive 40 points.
(B) For a Service Area that includes a Level 2 Community, it will receive 35 points.
(C) For a Service Area that includes a Level 3 Community, it will receive 30 points.
(D) For a Service Area that includes a Level 4 Community, it will receive 25 points.
(E) For a Service Area that includes a Level 5 Community, it will receive 20 points.
(F) For a Service Area that includes a Level 6 Community, it will receive 15 points.
(G) For a Service Area that includes a Level 7 Community, it will receive 10 points.
(H) For a Service Area that includes a Level 8 Community, it will receive 5 points.
(2)
(i) MHI is 75 percent or greater of state MHI; 0 points;
(ii) MHI is less than 75 percent and greater than or equal to 70 percent of state MHI; 5 points;
(iii) MHI is less than 70 percent and greater than or equal to 65 percent of state MHI; 10 points;
(iv) MHI is less than 65 percent and greater than or equal to 60 percent of the state MHI; 15 points;
(v) MHI is less than 60 percent and greater than or equal to 55 percent of the state MHI; 20 points;
(vi) MHI is less than 55 percent and greater than or equal to 50 percent of the state MHI; 25 points;
(vii) MHI is less than 50 percent of the state MHI; 30 points;
(3)
(i) This criterion will be used to score applications based on the documentation in support of the need for services, benefits derived from the services proposed by the Project, and local community involvement in planning and implementation of the Project. Applicants may receive up to 30 points for documenting the need for services and benefits derived from service as explained in this section.
(ii) The Agency will consider:
(A) The extent of the applicant's documentation explaining the economic, education, health care, and public safety issues facing the community and the applicant's proposed plan to address these challenges on a community-wide basis;
(B) The extent of the Project's planning, development, and support by local residents, institutions, and community facilities will be considered. This includes evidence of community-wide involvement, as exemplified in community meetings, public forums, and surveys. In addition, applicants
(C) The extent to which the Community Center will be used for instructional purposes including Internet usage, Web-based curricula, and Web page development; and
(D) Web-based community resources enabled or provided by the applicant, such as community bulletin boards, directories, and public web-hosting.
The terms and conditions of grants shall be set forth in grant documents prepared by the Agency. The documents shall require the applicant to own all equipment and facilities financed by the grant. Among other matters, the Agency may prescribe conditions to the advance of funds that address concerns regarding the Project feasibility and sustainability. The Agency may also prescribe terms and conditions applicable to the construction and operation of the Project and the delivery of Broadband Transmission Service to Rural Areas, as well as other terms and conditions applicable to the individual Project.
(a) A project performance activity report will be required of all recipients on an annual basis until the Project is complete and the funds are expended by the applicant. Recipients are to submit an original and one copy of all project performance reports, including, but not limited to, the following:
(1) A comparison of actual accomplishments to the objectives established for that period;
(2) A description of any problems, delays, or adverse conditions which have occurred, or are anticipated, and which may affect the attainment of overall Project objectives, prevent the meeting of time schedules or objectives, or preclude the attainment of particular Project work elements during established time periods. This disclosure shall be accompanied by a statement of the action taken or planned to resolve the situation; and
(3) Objectives and timetable established for the next reporting period.
(b) A final project performance report must be provided by the recipient. It must provide an evaluation of the success of the Project in meeting the objectives of the program. The final report may serve as the last annual report.
(c) The Agency will monitor recipients, as it determines necessary, to assure that Projects are completed in accordance with the approved scope of work and that the grant is expended for Eligible Grant Purposes.
(d) Recipients shall diligently monitor performance to ensure that time schedules are being met, projected work within designated time periods is being accomplished, and other performance objectives are being achieved.
A grant recipient shall provide the Agency with an audit for each year, beginning with the year in which a portion of the financial assistance is expended, in accordance with the following:
(a) If the recipient is a for-profit entity, an existing Telecommunications or Electric Borrower with the Agency, or any other entity not covered by the following paragraph, the recipient shall provide an independent audit report in accordance with 7 CFR part 1773, “Policy on Audits of the Agency's Borrowers.”
(b) If the recipient is a State or local government, or non-profit organization, the recipient shall provide an audit in accordance with 7 CFR part 3052, “Audits of States, Local Governments, and Non-Profit Organizations.”
The information collection requirements in this part are approved by the Office of Management and Budget (OMB) and assigned OMB control number 0572-0127.
Consolidated Appropriations Act, 2005; Title III: Rural Development Programs; Rural Utilities Service; Distance Learning, Telemedicine, and Broadband Program; Public Law 108-447.
The purpose of the Rural Utilities Service (RUS) Public Television Station Digital Transition Grant Program (Grant Program) is to enable public television stations serving rural areas to transition from broadcasting in analog to digital, as required under the Federal Communications Commission rules, by awarding grants through a competitive process.
Eligibility for grants is limited to public television stations that serve rural areas, regardless of whether urban areas are additionally served.
The maximum grant amount shall be announced in each fiscal year's Notice of Funds Availability.
No matching funds are required in this program.
Grants shall be made to enable applicants to perform digital transitions of television broadcasting serving rural areas, regardless of the location of their main transmitter. Grant funds may be used to acquire, lease, and/or install facilities and software necessary to the digital transition. Specific purposes include:
(a) Digital transmitters, translators, and repeaters, including all facilities required to initiate DTV broadcasting. All broadcast facilities acquired with grant funds shall be capable of delivering DTV programming and HDTV programming, at both the interim and final channel and power authorizations. There is no limit to the number of transmitters or translators that may be included in an application;
(b) Power upgrades of existing DTV transmitter equipment;
(c) Studio-to-transmitter links;
(d) Equipment to allow local control over digital content and programming, including master control equipment;
(e) Digital program production equipment, including cameras, editing, mixing and storage equipment;
(f) Multicasting and datacasting equipment;
(g) Cost of the lease of facilities, if any, for up to three years; and
(h) Associated engineering and environmental studies necessary to implementation.
(a) Grant funds shall not be used to fund ongoing operations or for facilities that will not be owned by the applicant, except for leased facilities as provided in § 1740.6.
(b) Costs of salaries, wages, and employee benefits of public television station personnel are not eligible for funding under this program unless they are for construction or installation of eligible facilities.
(c) Facilities for which other grant funding from any source has been approved are not eligible for funding under this program.
(d) Expenditures made prior to this deadline are not eligible for funding. To be an eligible grant purpose, an expenditure must be made after the application deadline specified in the Notice of Funds Available.
(a) After an application is found to be eligible, it will be scored in three categories: the rurality of the applicant's core coverage area, the average National School Lunch Program eligibility ratio in the applicant's core coverage area, and the critical need for the project.
(b)(1)(i) Scoring in this program is based on a simplified representation of the project's digital coverage area. To find a transmitter's simplified coverage area, go to the FCC TV Query Web site (
(ii) In the case of translators, where a coverage contour area does not exist, the applicant shall define a coverage contour area and explain how coverage
(2) When an application covers more than one transmitter or translator, the core coverage area of the application is the sum of the core coverage areas of all transmitters and translators included in the application.
(c) Rurality is a measure of the degree to which a project benefits rural areas. Up to fifty (50) points are available in this category. Urban areas bisected by the computed contour line are disregarded, since they represent fringe viewers. The Rurality score is computed as follows:
(1) The rural population of a core coverage area must be calculated. The rural population of a county is calculated by subtracting the county's urban population(s) from the total county population. If the core coverage area consists of multiple counties, the rural population is the sum of all included counties' rural populations. Urban area and county populations may be found at the American Factfinder Web site
(2) The Rurality score is computed by multiplying the rural population for the core coverage area by one hundred (100), and subtracting fifty (50) from it. If this calculation results in a negative number, the Rurality score is zero. The formula is:
(3) If an applicant has no urban communities within the core coverage area, the computation would deliver a score of 50.
(d) Economic Need will be measured by the ability of the public in an area to support Public Television financially. Up to 25 points are available in this category.
(1) The score for Economic Need is computed from the average of the National School Lunch Program (NSLP) eligibility percentages for all school districts within the core coverage area. NSLP eligibility percentage information may be obtained from the state or local agency that administers the program, and the application must include a certification from this organization that the percentages provided are correct. Please note that the score for Economic Need is computed from the eligibility percentage, not the participation percentage. The score is computed by multiplying the average eligibility percentage by 100 (to convert percentage to a whole number), subtracting 25, dividing the quotient by two, and limiting the result to 25 points. A negative result yields a score of zero.
(2) [Reserved]
(e) Critical Need will be measured by the urgency and importance of the project to the rural community the applicant serves. Up to 25 points are available in this category. Critical Need evaluates factors not captured in the Rurality and Economic Need scoring categories, such as:
(1) Geographic or coverage characteristics of the public television station's digital television coverage area that make the digital transition unusually expensive;
(2) A severe lack of specialized human resources (such as teachers) for which digital educational television will compensate;
(3) Geographic isolation of communities which will be overcome with public television station services;
(4) Non-traditional community needs (such as adult vocational retraining) that may be met only with digital public television station broadcast capabilities;
(5) Historical events that have placed the public television station in severe financial stress; and
(6) The degree to which the project purposes will specifically benefit the rural public.
The grant application must include the following:
(a) An application for federal assistance, Standard Form 424.
(b) An executive summary, not to exceed two pages, describing the public television station, its service area and offerings, its current digital transition status, and the proposed project.
(c) Evidence of the applicant's eligibility to apply under this Notice, proving that the applicant is a Public Television Station as defined in this Part, and that it is required by the FCC to perform the digital transition.
(d) A spreadsheet showing the total project cost, with a breakdown of items sufficient to enable RUS to determine individual item eligibility.
(e) A coverage contour map showing the digital television coverage area of the applicant. This map must show the counties (or county) comprising the core coverage area by shading and by name. Partial counties included in the applicant's core coverage area must be identified as partial and must contain an attachment with the applicant's estimate of the percentage that its coverage contour comprises the total area of the county (total area is available from American Factfinder, referenced in § 1740.8 (c)(1)). If the application is for a translator, the coverage area may be estimated by the applicant through computer modeling or some other reasonable method, and this estimate is subject to acceptance by RUS.
(f) The applicant's own calculation of its Rurality score, supported by a worksheet showing the population of its core coverage area, and the urban and rural populations within the core coverage area. The data source for the urban and rural components of that population must be identified. If the application includes computations made by a consultant or other organization outside the public television station, the application shall state the details of that collaboration.
(g) The applicant's own calculation of its Economic Need score, supported by a worksheet showing the National School Lunch Program eligibility levels for all school districts within the core coverage area and averaging these eligibility percentages. The application must include a statement from the state or local organization that administers the NSLP program certifying the school district scores used in the computations.
(h) If applicable, a presentation not to exceed five pages demonstrating the Critical Need for the project.
(i) Evidence that the FCC has authorized the initiation of digital broadcasting at the project sites. In the event that an FCC construction permit has not been issued for one or more sites, the RUS may include those sites in the grant, and make advance of funds for that site conditional upon the submission of a construction permit.
(j) Compliance with other Federal statutes. The applicant must provide evidence or certification that it is in compliance with all applicable Federal statutes and regulations, including, but not limited to the following:
(1) Executive Order (E.O.) 11246, Equal Employment Opportunity, as amended by E.O. 11375 and as supplemented by regulations contained in 41 CFR part 60;
(2) Architectural barriers;
(3) Flood hazard area precautions;
(4) Assistance and Real Property Acquisition Policies Act of 1970;
(5) Drug-Free Workplace Act of 1998 (41 U.S.C. 701);
(6) E.O.s 12549 and 12689, Debarment and Suspension; and
(7) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352).
(k) Environmental impact and historic preservation. The applicant must provide details of the digital transition's impact on the environment and historic preservation, and comply with 7 CFR part 1794, which contains RUS' policies and procedures for implementing a variety of Federal statutes, regulations, and executive orders generally pertaining to the protection of the quality of the human environment. This must be contained in a separate section entitled “Environmental Impact of the Digital Transition,” and must include the Environmental Questionnaire/Certification, available from RUS, describing the impact of its digital transition. Submission of the Environmental Questionnaire/Certification alone does not constitute compliance with 7 CFR part 1794.
The terms and conditions of each grant shall be set forth in standard grant documents prepared by RUS. These documents shall require that the
(a) Once grant documents have been executed, funds may be requested for eligible purposes up to the amounts in the grant. Funds may either be requested in anticipation of known obligations, or may be requested to reimburse disbursements made by the grantee.
(b) Requests for funds shall be submitted on Standard Form 270 (Request for Advancement or Reimbursement).
(c) All requests for funds shall be supported by invoices or receipts.
7 U.S.C. 901
(a) Recent changes in the telecommunications industry, including deregulation and technological developments, have caused Rural Utilities Service (RUS) borrowers and other organizations providing telecommunications services to consider undertaking projects that provide new telecommunications services and other telecommunications services not ordinarily financed by RUS. Although some of these services may not be eligible for financing under the Rural Electrification Act of 1936 (RE Act), these services may nevertheless advance RE Act objectives where the borrower obtains financing from private lenders. The borrower's financial strength and the assurance of repayment of outstanding Government debt may be improved as a result of providing such telecommunications services.
(b) To facilitate the financing of new services and other services not ordinarily financed by RUS, RUS is willing to consider accommodating the Government's lien on telecommunications borrowers' systems or accommodating or subordinating the Government's lien on after-acquired property of telecommunications borrowers. To expedite this process, requests for lien accommodations meeting the requirements of § 1744.30 will receive automatic approval from RUS.
(c) This subpart establishes RUS policy with respect to all requests for lien accommodations and subordinations for loans from private lenders. For borrowers that do not qualify for automatic lien accommodations in accordance with § 1744.30, RUS will consider lien accommodations for RE Act purposes under § 1744.40 and non-Act purposes under § 1744.50.
The following definitions apply to this subpart:
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
All references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).
(a)
(b)
(c)
(1) No default has occurred and is continuing under the Government mortgage;
(2) The borrower has delivered to the Administrator, at least 10 business days before the private lender notes are to be executed, a certification and agreement executed by the President of the borrower's Board of Directors, such
(i) No default has occurred and is continuing under the Government mortgage;
(ii) The principal amount of such refinancing or refunding notes will not be greater than 112 percent of the then outstanding principal balance of the notes being refinanced or refunded;
(iii) The weighted-average life of the private loan evidenced by the private lender notes will not exceed the weighted-average remaining life of the notes being refinanced or refunded;
(iv) The private lender notes will provide for substantially level debt service or level principal amortization over a period not less than the original remaining years to maturity;
(v) Except as provided in the Government mortgage, the borrower has not agreed to any restrictions or limitations on future loans from RUS; and
(vi) If the private lender determines that a supplemental mortgage is necessary, the borrower will comply with those procedures contained in paragraph (h) of this section for the preparation, execution, and delivery of a supplemental mortgage and take such additional action as may be required to secure the notes under the Government mortgage.
(d)
(1) The borrower has achieved a TIER of not less than 1.5 and a DSC of not less than 1.25 for each of the borrower's two fiscal years immediately preceding the issuance of the private lender notes;
(2) The ratio of the borrower's net plant to its total long-term debt at the end of any calendar month ending not more than 90 days prior to execution of the private lender notes is not less than 1.2, on a pro-forma basis, after taking into account the effect of the private lender notes and additional plant on the total long-term debt of the borrower;
(3) The borrower's equity percentage, as of the most recent fiscal year-end, was not less than 25 percent;
(4) No default has occurred and is continuing under the Government mortgage;
(5) The borrower has delivered to the Administrator, at least 10 business days before the private lender notes are to be executed, a certification by an independent certified public accountant that the borrower has met each of the requirements in paragraphs (d)(1) and (d)(3) of this section, such certification to be substantially in the form in Appendix B of this subpart; and
(6) The borrower has delivered to the Administrator, at least 10 business days before the private lender notes are to be executed, a certification and agreement executed by the President of the borrower's Board of Directors, such certification and agreement to be substantially in the form in Appendix C of this subpart: provided, that:
(i) The borrower has met each of the requirements in paragraphs (d)(2) and (d)(4) of this section;
(ii) The proceeds of the private lender notes are to be used for the construction or purchase of the plant and materials and supplies to provide telecommunications services in accordance with this section and such construction or purchase is expected to be completed not later than 4 years after execution of such notes;
(iii) The weighted-average life of the private loan evidenced by the private lender notes does not exceed the weighted-average remaining useful life of the assets being financed;
(iv) The private lender notes will provide for substantially level debt service or level principal amortization over a period not less than the original remaining years to maturity;
(v) All of the assets financed by the private loans will be purchased or otherwise procured in bona fide arm's length transactions;
(vi) The financing agreement with the private lender will provide that the private lender shall cease the advance of funds upon receipt of written notification from RUS that the borrower is in default under the RUS loan documents;
(vii) Except as provided in the Government mortgage, the borrower has not agreed to any restrictions or limitations on future loans from RUS; and
(viii) If the private lender determines that a supplemental mortgage is necessary, the borrower will comply with those procedures set forth in paragraph (h) of this section for the preparation, execution, and delivery of a supplemental mortgage and take such additional action as may be required to secure the notes under the Government mortgage.
(e)
(1) The borrower has achieved a TIER of not less than 2.5 and a DSC of not less than 1.5 for each of the borrower's two fiscal years immediately preceding the issuance of the private lender notes;
(2) The ratio of the borrower's net plant to its total long-term debt at the end of any calendar month ending not more than 90 days prior to execution of the private lender notes is not less than 1.6, on a pro-forma basis, after taking into account the effect of the private lender notes and additional plant on the total long-term debt of the borrower;
(3) The borrower's equity percentage, as of the most recent fiscal year-end, was not less than 45 percent;
(4) No default has occurred and is continuing under the Government mortgage;
(5) The borrower has delivered to the Administrator, at least 10 business days before the private lender notes are to be executed, a certification by an independent certified public accountant that the borrower has met each of the requirements in paragraphs (e)(1) and (e)(3) of this section, such certification to be substantially in the form in Appendix D of this subpart; and
(6) The borrower has delivered to the Administrator, at least 10 business days before the private lender notes are to be executed, a certification and agreement executed by the President of the borrower's Board of Directors, such certification and agreement to be substantially in the form in Appendix E of this subpart; providing that:
(i) The borrower has met each of the requirements in paragraphs (e)(2) and (e)(4) of this section;
(ii) The proceeds of the private lender notes are to be used for the construction or purchase of the tangible plant and materials and supplies to provide telecommunications services in accordance with this section and such construction or purchase is expected to be completed not later than 4 years after execution of such notes;
(iii) The weighted-average life of the private loan evidenced by the private lender notes does not exceed the weighted-average remaining useful life of the assets being financed;
(iv) The private lender notes will provide for substantially level debt service or level principal amortization over a period not less than the original remaining years to maturity;
(v) All of the assets financed by the private loans will be purchased or otherwise procured in bona fide arm's length transactions;
(vi) The proceeds of the private lender notes will be lent to a wholly-owned subsidiary of the borrower pursuant to terms and conditions agreed upon by the borrower and subsidiary;
(vii) The borrower will, whenever requested by RUS, provide RUS with a copy of the financing or guarantee
(viii) The borrower will promptly report to the Administrator any default by the subsidiary or other actions that impair or may impair the subsidiary's ability to repay its loans;
(ix) The financing agreement with the private lender will provide that the private lender shall cease the advance of funds upon receipt of written notification from RUS that the borrower is in default under the RUS loan documents;
(x) Except as provided in the Government mortgage, the borrower has not agreed to any restrictions or limitations on future loans from RUS; and
(xi) If the private lender determines that a supplemental mortgage is necessary, the borrower will comply with those procedures contained in paragraph (h) of this section for the preparation, execution, and delivery of a supplemental mortgage and take such additional action as may be required to secure the notes under the Government mortgage.
(f)
(1) The board resolution cited in § 1744.55(b)(1) and the opinion of counsel cited in § 1744.55(b)(2);
(2) The applicable certification or certifications required by paragraph (c)(2); paragraphs (d)(5) and (d)(6); or paragraphs (e)(5) and (e)(6), respectively, of this section, in substantially the form contained in the applicable appendices to this subpart.
(g)
(h)
(1) The private lender preparing the supplemental mortgage shall execute and forward the completed document to RUS. Upon ascertaining the correctness of the form and the information concerning RUS, RUS will execute and forward the supplemental mortgage to the borrower.
(2) When requested by the borrower, RUS will expeditiously prepare the supplemental mortgage, using the form in Appendix F to this subpart, upon submission by the private lender of:
(i) The name of the private lender;
(ii) The Property Schedule for inclusion as supplemental mortgage Schedule B, containing legally sufficient description of all real property owned by the borrower; and
(iii) The amount of the private lender note.
(3) The government is not responsible for ensuring that the supplemental mortgage has been executed by all parties and is a valid and binding instrument enforceable in accordance with its terms, and recorded and filed in accordance with applicable law. If the private lender determines that additional security instruments or other documents are required or that RUS must take additional actions to secure the private lender notes under the mortgage, the private lender shall follow the procedures established in §§ 1744.40 or 1744.50, as appropriate. Except for the actions of the government expressly established in § 1744.40, the government undertakes no obligation to effectuate an automatic lien accommodation. When processing of the supplemental mortgage has been completed to the satisfaction of the private lender, the borrower shall provide RUS with the following:
(i) A fully executed counterpart of the supplemental mortgage, including
(ii) Copies of all opinions rendered by borrower's counsel to the private lender.
(i)
(2) To the extent that the borrower's existing mortgage requires RUS approval before the borrower can make an investment in an affiliated company, approval is hereby given for all investments made in affiliated companies with the proceeds of private lender notes qualifying for an automatic lien accommodation under paragraph (e) of this section. Any reference to an approval by RUS under the mortgage shall apply only to the rights of RUS and not to any other party.
(a) Borrowers are encouraged to submit requests for accommodation of the Government's lien on the borrower's system in order to facilitate obtaining financing from private lenders for purposes provided in the RE Act.
(b) The Administrator will consider requests for the subordination of the Government's lien on after-acquired property which will enable borrowers to obtain financing from private lenders for purposes provided in the Act: Provided, however, that property integral to the operation of projects financed with loans made or guaranteed by RUS shall be financed with funds obtained through lien accommodations instead of lien subordinations, unless the Administrator determines that it is in the Government's interest to do otherwise.
(a) The Administrator will consider requests for the accommodation of the Government's lien on the borrower's system or the subordination of the Government's lien on after-acquired property which will enable the borrowers to obtain financing from private lenders for the purpose of providing new telecommunication services which may not be eligible for financing under the Act if the Administrator is satisfied that:
(1) The borrower will have the ability to repay its existing and proposed indebtedness;
(2) The security for outstanding Government loans and guarantees is reasonably adequate and will not be adversely affected by the accommodation or subordination; and
(3) Approval of the request is in the interests of the Government with respect to the financial soundness of the borrower and other matters, such as assuring that the borrower's system is constructed cost-effectively using sound engineering practices.
(b) In determining that the security for outstanding Government loans and guarantees is reasonably adequate and will not be adversely affected by the accommodation or subordination the Administrator will consider, among other matters, when applicable, the following:
(1) Market forecasts for the project;
(2) Projected revenues, expenses and net income of the borrower's existing system and the project;
(3) Maximum debt service on indebtedness of both the borrower's system and the project;
(4) Projected rate of return on the borrower's investment in the project;
(5) Fair market value of property acquired by the borrower as part of the project;
(6) Impact of the project on the ratio of the borrower's secured debt to assets;
(7) Projected growth in borrower's system and project equity; and
(8) Amount of funds available for plant additions, replacements and other similar costs of the system and the project.
(c) In determining whether the accommodation or subordination is in the interests of the Government, the Administrator may consider, among other matters, whether the project will improve the borrower's financial strength and the assurance of repayment of Government debt.
(a) Requests for information regarding applications for lien accommodations or subordination under this part should be addressed to the Assistant Administrator, Telecommunications Program, Rural Utilities Service, Washington, DC 20250-1590.
(b) An application for a lien accommodation or subordination shall include the following supporting information:
(1) A board Resolution from the applicant requesting the lien accommodation or subordination and stating the general purpose for which the funds from the private lender will be used, the proposed amount of the loan, and the proposed terms and conditions of the loan;
(2) An opinion from counsel representing the applicant that the applicant has the authority under its articles of incorporation, bylaws, and under applicable state law to undertake the project;
(3) Engineering and pertinent studies related to the projects or purposes to be financed, when applicable;
(4) Feasibility studies with pro forma financial statements showing the ability to repay the loan and provide an appropriate margin or net income;
(5) Any other information or documentation deemed pertinent by the borrower or the Administrator in support of the application.
(c) When the Administrator makes a determination that an application for an accommodation or subordination will not be approved the Administrator shall set forth the reasons therefor in writing and furnish such determination and reasons to the borrower within 30 days of the determination.
(a) The standard loan documents (as defined in 7 CFR part 1758) contain provisions regarding advances and disbursements of loan funds by telephone borrowers. This part implements certain of the provisions by setting forth requirements and procedures to be followed by borrowers in obtaining advances and making disbursements of loan and nonloan funds.
(b) This part supersedes any sections of RUS Bulletins with which it is in conflict.
RUS is under no obligation to make or approve advances of loan funds unless the borrower is in compliance with all terms and conditions of the loan documents. The borrower shall use funds in its construction fund only to make disbursements approved by RUS.
When the loan is made, RUS provides the borrower a Telephone Loan Budget, RUS Form 493. This budget divides the loan into budget accounts such as “Engineering.” When a contract or other document is approved by RUS, funds are encumbered from the appropriate budget account. See 7 CFR part 1753.
(a) If more funds are required than are available in a budget account, the borrower may request RUS's approval of a budget adjustment to use funds from another account. The request shall include an explanation of the change, the budget account to be used, and a description of how the adjustment will affect loan purposes. RUS will not approve a budget adjustment that affects other loan purposes unless the borrower satisfies RUS that the additional funds are available from another source, requests a deficiency loan, or scales back the project.
(b) RUS may make a budget adjustment without a formal request by the borrower when a budget account is insufficient to encumber funds for a contract that otherwise would be approved by RUS. See 7 CFR part 1753.
(a) The construction fund is used by the borrower primarily to hold advances until disbursed.
(b) All advances shall be deposited in the construction fund.
(c) RUS may require that other funds be deposited in the construction fund. These may include equity or general fund contributions to construction, service termination payments, proceeds from the sale of property, amounts recovered from insurance for losses during the construction period, and interest received on loan funds in savings or interest bearing checking accounts, and similar receipts. Deposit slips for any deposit to the construction fund shall show the source and amount of funds deposited and be executed by an authorized representative of the bank.
(d) Funds shall be disbursed only up to the amount approved for advance on the FRS as described in § 1744.66. No funds may be withdrawn from the fund except for loan purposes approved by RUS.
(e) The disbursement of nonloan funds requires the same RUS approvals as loan funds.
(f) Disbursements must be evidenced by canceled checks. The invoices and supporting documentation needed for construction contracts are specified in the contracts and in 7 CFR part 1753. Disbursements to reimburse the borrower's general funds shall be documented by a reimbursement schedule,
(a) To request advances, the borrower must submit to RUS an FRS, a description of the advances desired, and other information related to the transactions when required by RUS.
(b) The FRS is used by RUS and the borrower to record and control transactions in the construction fund. Approved contracts and other items are shown on the FRS under “Approved Purposes.” Except as noted below, the amount approved for advance is 100 percent of the amount encumbered for that item. Funds are approved for advance as follows:
(1)
(ii)
(iii)
(iv)
(v)
(vi)
(2)
(ii)
(iii)
(3)
(4)
(ii)
(iii)
(iv)
(5)
(ii)
(6)
(7)
(c) Funds other than loan funds deposited in the construction fund, which shall include proceeds from the sale of property on which RUS has a lien, (lines 10 and 11 on the FRS) are reported as a credit under total disbursements. Disbursements of these funds are subject to the same RUS approvals as loan funds.
(d) The borrower shall request advances as needed to meet its obligations promptly. Generally, RUS does not approve an advance requested more than 60 days before the obligation is payable.
(e) Funds should be disbursed for the item for which they were advanced. If the borrower needs to pay an invoice for which funds have not been advanced, and disbursement of advanced funds for another item has been delayed, the latter funds may be disbursed to pay the invoice up to the amount approved for advance for that item on the FRS. The borrower shall make erasable entries on the next FRS showing the changes under “Total Advances to Date” and shall explain the changes in writing before RUS will process the next FRS.
(f) Advances will be rounded down to the nearest thousands of dollars except for final amounts.
(g) The certification on each of the three copies of the FRS sent to RUS shall be signed by a corporate officer of manager authorized by resolution of the board of directors to sign such statements. At the time of such authorization a certified copy of the resolution and one copy of RUS Form 675, Certificate of Authority, shall be submitted to RUS.
(h) The documentation required for the FRS transactions are the deposit slips, the canceled construction fund checks and the supporting invoices or reimbursement schedules. These shall be kept in the borrower's files for periodic audits by RUS.
(a) When unanticipated events delay the borrower's disbursement of advanced funds, the funds may be used as follows:
(1) With RUS loan funds for loans approved prior to November 1, 1993, or hardship loan funds, the borrower may invest the funds in 5 percent Treasury Certificates of Indebtedness—RUS Series.
(2) With RUS cost-of-money, FFB or RTB loan funds, the following apply:
(i) The borrower may invest the funds in short term securities issued by the United States Treasury.
(ii) If permitted by state law, the borrower may deposit the funds in savings accounts, including certificates of deposit, of federally insured savings institutions.
(3) Funds advanced by a guaranteed lender other than the FFB may, if so permitted by such lender, be invested under the terms and conditions described above for FFB advances.
(4) Any security or investment made under this authorization shall identify the borrower by its corporate name followed by the words “Trustee, Rural Utilities Service.”
(5) All temporary investments and all income derived from them shall be considered part of the construction fund and be subject to the same controls as cash in that account.
(6) Securities and other investments shall have maturity dates or liquidating provisions that ensure the availability of funds as required for the completion of projects and the payment of obligations.
(7) Any instrument evidencing a security or other investment herein authorized to be purchased or made, may not be sold, discounted, or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose.
(8) The Administrator may, at his sole discretion, require a borrower to pledge any security or other evidence of investment authorized hereby by forwarding to him all pertinent instruments and related documentation as he may reasonably require.
(9) Borrowers shall be responsible for the safekeeping of securities and other investments.
(b) All interest and income received from investments of temporary excess funds, as described in this section, shall be deposited in the Construction Fund.
(c) The borrower shall account for investment proceeds on the next FRS submitted to RUS. RUS will make the necessary adjustments on budgetary records.
(d) The Administrator reserves the right to suspend any borrower's authorization to invest temporary excess funds contained herein if the borrower does not comply with the requirements.
(e) For RUS loans approved prior to October 1, 1991, the borrower may return advanced funds to RUS as a refund of an advance. Interest stops accruing on the refunded advance upon receipt by RUS. A refunded advance may be readvanced. A refund of an advance shall be sent to the Rural Utilities Service, United States Department of Agriculture, Collections and Custodial Section, Washington, DC, 20250. The borrower should clearly indicate that this is a refund of an advance, and not a loan payment or prepayment.
(a) Borrowers may specify the sequence of advances of funds under any combination of approved telephone loans from RUS, RTB, or FFB, except that for all loans approved on or after November 1, 1993, the borrower may use loan funds:
(1) Only for purposes for which that type of loan (i.e. Hardship, RUS cost-of-money, RTB, or FFB) may be made; and
(2) Only in exchanges that qualify for the type of loan from which the funds are drawn.
(b) The first or subsequent advances of loan funds may be conditioned on the satisfaction of certain requirements stated in the borrower's loan contract.
(c) Normally, only one payment is made by the Automatic Clearing House (ACH) for an advance of funds.
(d) Borrowers of RUS and RTB funds may request advances by wire service only for amounts greater than $500,000 or for advances to borrowers outside the Continental United States. FFB advances in any amount over $100,000 can be sent by wire service.
(e) The following information shall be included with the FRS:
(1) Name and address of borrower's bank.
(2) If borrower's bank is not a member of the Federal Reserve System, the name and address of its correspondent bank that is a member of the Federal Reserve System.
(3) American Bankers Association (ABA) nine digit identifier of the receiving banks (routing number and check digit).
(4) Borrower's bank account title and number.
(5) Any other necessary identifying information.
(a) RUS telephone borrowers are encouraged to utilize their own funds to participate in the economic development of rural areas, provided that such activity does not impair a borrower's ability to provide modern telecommunications services at reasonable rates or to repay its indebtedness to RUS and other lenders. When considering loans, investments, or guarantees, borrowers are expected to act in accordance with prudent business practices and in conformity with the laws of the jurisdictions in which they serve.
(b) This subpart E applies to both RUS and RTB borrowers. For the purposes of RTB borrowers, as used in this subpart E, if a borrower has received a loan from the RTB, RUS means RTB, and Administrator means Governor unless the text indicates otherwise.
As used in this subpart:
(1) Guarantees of payment or collection on a note or other debt instrument;
(2) Issuing performance bonds or completion bonds; or
(3) Cosigning leases or other obligations of third parties.
(a) A borrower that equals or exceeds the minimum total assets ratio may make a qualified investment, defined in paragraph (b) of this section without prior written approval of the Administrator.
(b) A qualified investment is a rural development investment, defined in paragraph (d) of this section meeting the following criteria:
(1) Unless the borrower's commitment is a guarantee, extension of credit, or advance, the borrower receives any financial return accruing to such investment, or the borrower's proportionate share of such return;
(2) Unless the borrower's commitment is a guarantee, extension of credit, or advance, the borrower retains title to any asset acquired with such investment, or the borrower's proportionate share of such title; and
(3) The funds committed are the borrower's own funds. As used in this subpart, the term own funds shall not include proceeds of loans made, guaranteed or lien accommodated by RUS; funds necessary to make timely payments of principal and interest on loans made, guaranteed or lien accommodated by RUS; and funds on deposit in the cash construction fund-trustee account, as defined in the borrower's loan contract with RUS.
(c) A rural development investment will not be considered to be a qualified investment to the extent that the amount of such investments exceeds the borrower's maximum investment ratio.
(d) A rural development investment is an investment, extension of credit, advance, or guarantee by a borrower for a period longer than one year and for one or more of the following purposes:
(1) Improve the economic well-being of rural residents and alleviate the
(2) Improve the business and employment opportunities, occupational training and employment services, health care services, educational opportunities, energy utilization and availability, housing, transportation, community services, community facilities, water supplies, sewage and solid waste management systems, credit availability, and accessibility to and delivery of private and public financial resources in the maintenance and creation of jobs in rural areas;
(3) Improve state and local government management capabilities, institutions, and programs related to rural development and expand educational and training opportunities for state and local officials, particularly in small rural communities;
(4) Strengthen the family farm system; or
(5) Maintain and protect the environment and natural resources of rural areas.
(e) As used in paragraph (d) of this section, the term rural development investment shall include investments by a borrower in its own name, in affiliated companies, and in entities not affiliated with the borrower.
For purposes of determining whether a rural development investment is within the limits of the borrower's maximum investment ratio or the minimum total assets ratio, the amount of the qualified investment shall be the total amount of funds committed to the rural development project as of the date of determination. The total amount of funds committed to the rural development project includes:
(a) The principal amount of loans and advances made by the borrower;
(b) Guarantees made by the borrower; and
(c) A reasonable estimate of the amount the borrower is committed to provide to the rural development project in future years.
(a) Each borrower is authorized to make investments other than qualified investments only in accordance with the provisions of the borrower's mortgage with RUS. Without RUS's approval, the portion of any investment of funds or commitment to invest funds for any rural development investment that will exceed the borrower's maximum investment ratio or cause the borrower to fall below the minimum total assets ratio, must comply with the provisions of the RUS mortgage.
(b) RUS will consider, on a case-by-case basis, requests for approval of rural development investments not constituting qualified investments. RUS may condition such approval, if granted, on such requirements and restrictions as RUS may determine to be in the best interests of the Government, including, without limitation, the borrower's agreement to limit dividends or distributions of capital by an amount specified by RUS. Requests for such approvals must be submitted in writing to the relevant RUS regional office and shall include:
(1) A description of the rural development project and the type of investment to be made, such as a loan, guarantee, stock purchase or equity investment;
(2) A reasonable estimate of the amount the borrower is committed to provide to the rural development project including investments that may be required in the future; and
(3) A pro forma balance sheet and cash flow statement for the period covering the borrower's future commitments to the rural development project.
(c) In determining whether to approve a rural development investment that may cause the borrower to exceed the maximum investment ratio or to fall below the minimum total assets ratio in the future, RUS will consider annual increases to the borrower's net worth and total assets as might be reasonably anticipated from the borrower's normal operations.
(a) RUS will not include qualified investments, including qualified investments in affiliated companies, in calculating the amount of dividend or capital distributions a borrower may make under its RUS mortgage.
(b) A borrower's investment in its net plant shall not be considered a rural development investment for purposes of calculating the maximum investment ratio or the minimum total assets ratio.
(c) The borrower's net worth and total assets shall be determined using the balances of the respective accounts of the borrower as of December 31 of the last complete calendar year preceding the date on which the borrower's maximum investment ratio and minimum total assets ratio are calculated.
(d) All determinations required to be made under 7 U.S.C. 926 or this subpart will be made in accordance with the Uniform System of Accounts (USoA)(47 CFR part 32). References to specific USoA accounts shall include revised or replacement accounts.
If an expenditure constitutes a qualified investment under the terms of this subpart, it does not cease to be a qualified investment merely because subsequently the borrower fails to maintain the maximum investment ratio or the minimum total assets ratio.
A borrower shall not make a qualified investment or a rural development investment which jeopardizes:
(a) The security of loans made or guaranteed by RUS; or
(b) The borrower's ability to repay such loans under the terms and conditions as agreed.
All investments made by a borrower shall be subject to the provisions of this subpart, regardless of when the investment was made or whether it has been approved by RUS. Any restrictions required by RUS as a condition to approving a rural development investment before November 28, 1990, shall continue to be in effect to the extent that such investment exceeds the maximum investment ratio or causes the borrower to fall below the minimum total assets ratio.
(a) The records of borrowers, including records relating to qualified investments, shall be subject to the auditing procedures prescribed in part 1773 of this chapter. RUS reserves the right to review the records of the borrower relating to qualified investments to determine if the borrower is in compliance with this subpart.
(b) Borrowers shall report to RUS on the end-of-year operating report, RUS Form 479, the current status and principal amount of each qualified investment it has made or is committed to make pursuant to § 1744.202.
(a) Except as expressly provided in this subpart, the borrower shall comply with all provisions of its loan contract with RUS, its notes issued to RUS, and the RUS mortgage, including all provisions thereof relating to investments not covered by this subpart.
(b) Nothing in this subpart shall affect any rights of supplemental lenders under the RUS mortgage, or other creditors of the borrower, to limit a borrower's investments, loans and guarantees to levels below those permitted in § 1744.202.
(c) As used in paragraph (b) of this section, supplemental lender means a creditor of the borrower, other than RUS, whose loan to the borrower is secured by the RUS mortgage.
7 U.S.C. 901
As used in this subpart:
(a) It is the policy of RUS that every State have a Modernization Plan which provides for the improvement of the State's telecommunications network.
(b) A proposed Modernization Plan must be submitted to RUS for approval. RUS will approve the proposed Modernization Plan if it conforms to the provisions of this subpart. Once obtained, RUS's approval of a Modernization Plan cannot be rescinded.
(c) The Modernization Plan shall not interfere with RUS's authority to issue such other telecommunications standards, specifications, requirements, and procurement rules as may be promulgated from time to time by RUS including, without limitation, those set forth in 7 CFR part 1755.
(d) The Modernization Plan must, at a minimum, apply to RUS Borrowers' wireline service areas. If a Modernization Plan is developed by the PUC, RUS encourages, but does not require, that the Modernization Plan's requirements apply to the rural service areas of all providers of telecommunications services in the State. A PUC's decision not to include non-RUS Borrowers will not prejudice RUS approval of that PUC's Modernization Plan. The PUC may also, at its option, extend coverage of the Modernization Plan to all service areas of all providers of telecommunications services in the State. In addition, while the requirements and goals contained in § 1751.106 apply only to wireline services, the PUC, at its discretion, may extend coverage of Modernization Plans to wireless or other communications services in the State as it deems appropriate. Borrower-developed Modernization Plans apply only to Borrowers.
(a) Each PUC is eligible until February 13, 1996 to develop a proposed Modernization Plan and deliver it to RUS. RUS will review and consider for approval all PUC-developed Modernization Plans received by RUS within this one year period. The review and approval, if any, may occur after the one year period ends even though the PUC is no longer eligible to submit a proposed Modernization Plan.
(b) The PUC must notify all Telecommunications Providers in the State and other interested parties of its intent to develop a proposed Modernization Plan. The PUC is encouraged to consider all Telecommunications Providers' and interested parties' views and incorporate these views into the Modernization Plan. In the event that the PUC does not intend to develop a proposed Modernization Plan, RUS requests that the PUC inform RUS of this decision as soon as possible.
(c)(1) If the PUC is no longer eligible to develop a Modernization Plan or has informed RUS that it will not develop a Modernization Plan, as described in
(i) All Borrowers shall be given reasonable notice of and shall be encouraged to attend and contribute to all meetings and other proceedings relating to the development of the Modernization Plan; and
(ii) Borrowers developing a Modernization Plan are encouraged to solicit the views of other providers of telecommunications services and interested parties in the State.
(2) There is no time limit placed on Borrowers to develop a Modernization Plan. Borrowers should be aware that certain types of loans may be restricted until a Modernization Plan is approved. See § 1751.103.
(a) For information about loan eligibility requirements in relation to the Modernization Plan, see 7 CFR part 1735. In particular, beginning February 13, 1996, RUS will make RUS hardship loans, RUS cost-of-money loans, and RTB loans for facilities and other RE Act purposes in a State only if:
(1) The State has an RUS approved Modernization Plan; and
(2) The Borrower to whom the loan is to be made is participating in the Modernization Plan for the State. A Borrower is considered to be participating if, in RUS's opinion, the purposes of the loan requested by the Borrower are consistent with the Borrower achieving the requirements stated in the Modernization Plan within the timeframe stated in the Modernization Plan unless RUS has determined that achieving the requirements is not technically or economically feasible.
(b) With regard to the three types of loans discussed in paragraph (a), only loans approved after the date the State has an RUS approved Modernization Plan are subject to complying with the Modernization Plan.
(c) For loans subject to complying with the Modernization Plan, advances will not be made if, in RUS's opinion, the advances are not consistent with achieving the requirements of the Modernization Plan.
(a) To obtain RUS approval of a proposed Modernization Plan, the Plan Developer must submit the following to RUS:
(1) A certified copy of the statute or PUC order, if the PUC is the Plan Developer, or a written request for RUS approval of the proposed Modernization Plan signed by an authorized representative of the Plan Developer, if a majority of Borrowers is the Plan Developer; and
(2) Three copies of the proposed Modernization Plan.
(b) Generally, RUS will review the proposed Modernization Plan within (30) days and either:
(1) Approve the Modernization Plan if it conforms to the provisions of this subpart in which case RUS will return a copy of the Modernization Plan with notice of approval to the Plan Developer; or
(2) Not approve the proposed Modernization Plan if it does not conform to the provisions of this subpart. In this event, RUS will return the proposed Modernization Plan to the Plan Developer with specific written comments and suggestions for modifying the proposed Modernization Plan so that it will conform to the provisions of this subpart. If the Plan Developer remains eligible, RUS will invite the Plan Developer to submit a modified proposed Modernization Plan for RUS consideration. This process can continue until the Plan Developer gains approval of a proposed Modernization Plan unless the Plan Developer is a PUC whose eligibility has expired. If a PUC's eligibility has expired, RUS will return the proposed Modernization Plan unapproved. Because RUS does not have authority to extend the term of a PUC's eligibility, RUS recommends that the PUC submit a proposed Modernization Plan at least 90 days in advance of February 13, 1996 to allow time for this process.
(a) RUS understands that changes in standards, technology, regulation, and the economy could indicate that an RUS-approved Modernization Plan should be amended.
(b) The Plan Developer of the Modernization Plan may amend the Modernization Plan if RUS finds the proposed changes continue to conform to the provisions of this subpart.
(c) The procedure for requesting approval of an amended Modernization Plan is identical to the procedure for a proposed Modernization Plan except that there are no time limits on the eligibility of the Plan Developer.
(d) The existing Modernization Plan remains in force until RUS has approved the proposed amended Modernization Plan.
(e) RUS may from time to time revise these regulations to incorporate newer technological and economic standards that RUS believes represent more desirable goals for the future course of telecommunications services. Such revisions will be made in accordance with the Administrative Procedure Act. These revisions shall not invalidate Modernization Plans approved by RUS but shall be used by RUS to determine whether to approve amendments to Modernization Plans presented for RUS approval after March 15, 1995.
(a) The requirements for a Modernization Plan as stated in RELRA are:
(1) The plan must provide for the elimination of party line service.
(2) The plan must provide for the availability of telecommunications services for improved business, educational, and medical services.
(3) The plan must encourage and improve computer networks and information highways for subscribers in rural areas.
(4) The plan must provide for—
(i) Subscribers in rural areas to be able to receive through telephone lines—
(A) Conference calling;
(B) Video images; and
(C) Data at a rate of at least 1,000,000 bits of information per second; and
(ii) The proper routing of information to subscribers.
(5) The plan must provide for uniform deployment schedules to ensure that advanced services are deployed at the same time in rural and nonrural areas.
(6) The plan must provide for such additional requirements for service standards as may be required by the Administrator.
(b) To implement the requirements of the law described in paragraph (a) of this section, RUS has set minimum requirements as described in paragraphs (i) and (j) of this section. They are grouped into short-term and medium-term requirements. RUS has also included long-term goals which are not requirements. The Modernization Plan must meet all of the statutory requirements of RELRA and shall provide that short- and medium-term requirements be implemented as set forth in this section of the regulation except that the PUC, if it is the Plan Developer, or RUS, if a majority of Borrowers is the Plan Developer, may approve extensions of time if the required investment is not economically feasible or if the best available telecommunications technology lacks the capability to enable the Telecommunications Provider receiving the extension to comply with the Modernization Plan. Extensions shall be granted only on a case-by-case basis and generally shall not exceed a total of five years from the first such extension granted to the Telecommunications Provider.
(c) Each State's Modernization Plan shall be a strategic development proposal for modernizing the telecommunications network of the Telecommunications Providers covered by the Modernization Plan. In addition to implementing the requirements described in paragraphs (a), (i), and (j) of this section, the Modernization Plan shall include a short engineering description of the characteristics of a future telecommunications structure that would enable all Telecommunications Providers to achieve the requirements and goals of the Modernization Plan.
(d) Within the scope of § 1751.101(d), if the Plan Developer is the PUC, the
(e) The Modernization Plan must require that the design of the network provided by Telecommunications Providers allow for the expeditious deployment and integration of such emerging technologies as may from time to time become commercially feasible.
(f) The Modernization Plan must provide guidelines to Telecommunications Providers for the development of affordable tariffs for medical links and distance learning services.
(g) With regard to the uniform deployment requirement of the law restated in paragraph (a)(5) of this section, if services cannot be deployed at the same time, only the minimum feasible interval of time shall separate availability of the services in rural and nonrural areas.
(h) The Modernization Plan must make provision for reliable powering of ordinary voice telephone service operating over those portions of the telecommunications network which are not network powered. In the event of electric utility power outages, an alternative source of power must be available to ensure reliable voice service.
(i)
(2) All New Facilities providing Wireline Service after the short-term requirements start date, even if the construction began before such date, shall be constructed so that:
(i) Every subscriber can be provided 1-party service.
(ii) The New Facilities are suitable, as built or with additional equipment, to provide transmission and reception of data at a rate no lower than 1 Mb/sec.
(3) All switching equipment installed by a Telecommunications Provider after the short-term requirements start date shall be capable of:
(i) Providing custom calling features. At a minimum, custom calling features must include call waiting, call forwarding, abbreviated dialing, and three-way calling; and
(ii) Providing E911 service for areas served by the Telecommunication Provider when requested by the government responsible for this service.
(j)
(2) All New Facilities providing Wireline Service after the medium-term requirements start date, even if the construction began before such date, shall be capable, as built or with additional equipment, of transmitting video to a subscriber. The video must be capable of depicting a reasonable representation of motion. The frame rate, resolution, and other measures of audio and video quality shall be determined by the Plan Developer.
(3) No later than the medium-term requirements start date, all switching equipment of Telecommunications Providers covered by the Modernization Plan must be capable of providing E911 service when requested by the government responsible for this service.
(4) No later than five years after the medium-term requirements start date, one-party service must be provided upon demand to any subscriber of a Telecommunications Provider covered by the Modernization Plan.
(k)
(1) The elimination of party line service.
(2) For subscribers that desire the service, universal availability of:
(i) Digital voice and data service (56-164 kb/sec).
(ii) Service that provides transmission and reception of high bit rate (no less than 1 Mb/sec) data.
(iii) Service that provides reception of video as described in paragraph (j)(2) of this section.
5 U.S.C. 501, 7 U.S.C. 901
(a) The standard RUS Telecommunications Loan Documents contain provisions regarding procurement of materials and equipment and construction of telecommunications facilities by telecommunications borrowers. This part implements certain of the provisions by setting forth requirements and procedures. Borrowers shall follow these requirements and procedures whenever using loan funds to purchase materials and equipment or perform construction, unless they have received the Administrator's written approval to do otherwise.
(b) The typical procedure followed in constructing a project financed by an RUS loan begins with the prospective borrower obtaining the necessary preloan engineering and developing a complete loan application, including an LD (See 7 CFR part 1737). If a loan
(1) RUS's general requirements with respect to steps to be taken after the loan is approved and before construction begins (See § 1753.3),
(2) RUS requirements with respect to methods of construction (See §§ 1753.5 and 1753.6),
(3) RUS requirements regarding sealed competitive bidding and negotiated bidding of construction contracts (See §§ 1753.6 and 1753.9),
(4) RUS standards for materials, equipment, and construction financed with loan funds (See § 1753.7), and
(5) RUS requirements for subcontracts and contract amendments covering construction financed with loan funds (See §§ 1753.10 and 1753.12).
(c) Each borrower is responsible for the construction of its facilities and for the procurement of materials and equipment that are best suited to its needs.
(d) If contracts, P&S, or other methods of procurement are subject to RUS approval pursuant to the provisions of the loan contract, as implemented by this part, RUS will review the documents or proposals submitted and notify the borrower in writing of approval or disapproval. RUS may withhold approval if, in RUS's judgment:
(1) The P&S or contract will not accomplish loan purposes.
(2) Provisions of the P&S or contract will add unnecessary expense to the project.
(3) The proposal, method of procurement, or P&S do not conform to RUS engineering criteria or construction standards, or if they present unacceptable loan security risks to RUS.
(4) The P&S or contract have been modified.
(e) The requirements and procedures covering procurement of architectural and engineering services are described in subpart B of this part.
(f) Single copies of RUS forms cited in this part are available from Administrative Services Division, Rural Utilities Service, United States Department of Agriculture, Washington, DC 20250-1500. These RUS forms may be reproduced.
For the purpose of this part 1753:
(a) Advance RUS approval must be obtained for any construction that does not conform to RUS standards and specifications or the approved LD, such as construction of extensions to serve subscribers in areas not included in the LD (See 7 CFR part 1737). For loans approved after RUS approval of the modernization plan in the borrower's state, the proposed construction must conform to the modernization plan, as required by 7 CFR part 1751, subpart B. To obtain approval, the borrower shall submit a written proposal containing:
(1) A description of the work, indicating any deviations from the approved LD or RUS standards and specifications.
(2) An engineering study covering the deviations if there are changes in the design.
(3) A cost estimate for labor, engineering, materials, and overheads.
(4) If applicable, a brief analysis from the borrower demonstrating that the proposed changes conform to the modernization plan.
(b) Before any construction, including interim construction, is initiated, the GFR shall meet with the borrower to review the LD to determine if any significant changes have occurred since its approval by RUS. It is important that the design and construction of the proposed facilities be based on the latest information on subscriber needs.
(c) If the borrower and GFR agree that there have been no significant changes, the borrower may proceed.
(d) If the GFR finds that the LD is no longer satisfactory, the borrower shall prepare an amendment to the LD incorporating the necessary revisions (See 7 CFR part 1737). The borrower must obtain RUS approval of the LD amendment before proceeding with engineering activities on any project to be financed with loan funds.
RUS's general requirements for construction are set forth in this subpart A. Additional requirements and procedures for different types of major construction are presented in subparts D, E, F, G, and H (OMB control number 0572-0062). The requirements and procedures for minor construction are presented in subpart I. Borrowers may, at their option, follow the procedures in subparts D, E, F, G, and H for any minor construction.
(a) All major construction projects financed by loan funds shall be performed pursuant to a contract approved by RUS and awarded through sealed competitive bidding unless
(1) A specific exception is granted in subparts D, E, F, G, or H, or
(2) Written RUS approval is obtained.
(b)
(2) RUS approval of the borrower's award of the contract is required for all other competitively-bid and for negotiated major construction contracts.
(3) The requirements and procedures for sealed competitive bidding are presented in § 1753.8(a). The requirements and procedures for negotiation are presented in § 1753.8(b).
(c)
(a) Materials, equipment, and construction financed with loan funds must meet the standards and specifications established by RUS. 7 CFR part 1755 lists the RUS Bulletins containing the standards and specifications for telephone facilities. Materials and equipment meeting these standards are included on the List of Material Acceptable for Use on Telecommunications Systems of RUS Borrowers, I.P. 300-4. This bulletin may be obtained by subscription from the Superintendent of Documents, Government Printing Office, Washington, DC 20402.
(b) The borrower may use RUS loan funds to finance nonstandard construction materials or equipment only if approved by RUS in writing prior to purchase or commencement of construction.
(c) Only new materials and equipment may be financed with loan funds, unless otherwise approved by RUS. The materials and equipment must be year 2000 compliant, as defined in 7 CFR 1735.22(e).
(d) All materials and equipment financed with loan funds are subject to the “Buy American” provision (7 U.S.C. 901
(e) All software, software systems, and firmware financed with loan funds must be year 2000 compliant, as defined in 7 CFR 1732.22(e).
(a) The P&S consist of an RUS contract form, the appropriate RUS specifications, and such additional information and documents needed to provide a clear, accurate, and complete understanding of what is included in the construction.
(b) 7 CFR 1755.93 provides a list of the RUS forms of telecommunications contracts for use in purchasing telephone materials and equipment and for constructing telephone facilities with loan funds. Also listed is the source where copies may be obtained.
(c) The appropriate standards and specifications listed in 7 CFR part 1755 shall be included in the P&S. When RUS has not prepared standards and specifications, the borrower shall use general engineering requirements and specifications prepared by the borrower's engineer. The specifications prepared by the borrower's engineer and based on general engineering requirements shall be subject to review and approval by RUS for all major construction, including major projects which would be exempted from RUS approval under paragraph (e) of this section.
(d) The P&S shall be based on the LD approved by RUS. Section 1753.3 presents the requirements and procedures for obtaining RUS approval for construction that does not conform to the LD approved by RUS.
(e) RUS approval of P&S is required for construction that is estimated to cost over $500,000 or 25% of the total loan, whichever is less, and for all building construction. P&S for all other construction are exempt from RUS review and approval except that, at the time of contract approval, RUS will examine the plans and specifications for conformity with the loan purposes and to determine that they comply with other requirements of this part.
(f) RUS will approve only contracts that will provide for at least the following requirements.
(1)
(2)
(ii) The liquidated damages must be based upon the borrower's best estimate of the damages it would incur as a result of the contractor's default.
(3)
(ii) A contractor's bond shall be furnished as required by 7 CFR part 1788.
(iii) The borrower is responsible for ensuring that its contractor complies with the insurance and bond requirements.
(4) Telecommunications software license provision. If the borrower is required to enter into a software license agreement in order to use the equipment, the contract must contain the RUS prepared Software License Agreement as an Addendum.
(a)
(2)
(3)
(4)
(5)
(6)
(7)
(i) The bid guarantees are adequate.
(ii) All minor errors or irregularities made through inadvertence are corrected or waived. Failing this, the bid shall be rejected as nonresponsive.
(iii) In the event of non-minor errors or irregularities, the bid is rejected and the bid price not disclosed.
(8)
(9)
(10)
(i) All bids if quoted prices are not acceptable or if the specifications were ambiguous and resulted in bidders having different interpretations of the requirements.
(ii) Any bid that is not responsive, or is incomplete, or submitted by an unqualified bidder, or unbalanced between labor and materials or other respects.
(11)
(ii) If an award is made, the borrower shall award the contract to the lowest responsive bidder. The borrower may award the contract immediately upon determination of the lowest responsive bidder if the following conditions are met:
(A) The project is included in an approved loan and adequate funds were budgeted in the loan and are available.
(B) All applicable RUS procedures were followed, including those in the Notice and Instructions to Bid in the standard forms of contract.
(iii) If RUS approval of the award of contract is required under this paragraph (a)(11), the borrower shall send to RUS for consideration of approval of the award:
(A) Two copies of the low bid.
(B) The engineer's recommendation and the tabulation of all bids.
(C) Evidence of acceptance of the low bid by the borrower, such as:
(
(
(iv) If RUS approval of the award of contract is not required under this paragraph (a)(11), the borrower shall keep a file available for inspection by RUS. The file shall be kept for at least two years and shall include:
(A) One copy of all received bids.
(B) The engineer's recommendation and tabulation of all bids including “Buy American” evaluations, if any, and all other evaluations required by law.
(C) Evidence of acceptance of the low bid by the borrower, such as a copy of the board resolution certified by the Secretary of the board.
(12)
(ii) If RUS approves the contract, it shall return one copy to the borrower and send one copy to the contractor.
(b)
(2) For negotiated purchases, borrowers shall use RUS contract forms, standards, and specifications.
(3) For all contract forms except RUS Form 773:
(i) After a satisfactory negotiated proposal has been obtained, the borrower shall submit it to RUS for approval, along with the engineer's recommendation, and evidence of acceptance by the borrower.
(ii) If RUS approves the negotiated proposal, the borrower shall submit three copies of the contract, executed by the contractor and borrower, to RUS for approval.
(iii) If RUS approves the contract, RUS shall return one copy of the contract to the borrower and one copy to the contractor.
(4) For RUS Form 773, the borrower is responsible for negotiating a satisfactory proposal, executing contracts, and closing the contract. See subparts F and I of this part for requirements for major and minor construction, respectively, on Form 773.
(a) RUS construction contract Forms 257, 397, 515, and 525 contain provisions for subcontracting. Reference should be made to the individual contracts for the amounts and conditions under which a contractor may subcontract work under the contract.
(b) RUS Form 282, Subcontract, shall be used for subcontracts under construction and installation contracts.
(1) Minor modifications or additions may be made to the subcontract form, as long as they do not change the intent of the primary contract. Any alterations to the subcontract shall be initialed and dated by the persons executing the subcontract.
(2) Subcontracts shall be prepared in quadruplicate and all copies executed by the contractor and subcontractor and consented to by the borrower and surety, if any.
(3) Four executed copies of the subcontract shall be forwarded to RUS for approval. Upon approval, one copy each will be sent to the borrower, contractor, and subcontractor.
(c) As stated in contract Forms 257, 397, 515, and 525, the contractor shall bear full responsibility for the acts and omissions of the subcontractor and is not relieved of any obligations to the borrower and to the Government under the contract.
(d) As stated in the contract, construction shall not be performed by the subcontractor before approval of the subcontract by RUS.
The borrower shall conduct a conference, attended by the borrower, contractor, and resident engineer prior to the beginning of construction to provide an opportunity to discuss and agree on responsibilities, procedures, practices, and methods before the work begins. The borrower shall provide each participant with a copy of the conference results. The GFR shall be invited to attend this conference.
(a) The borrower must obtain RUS approval before execution of any amendment to a contract if
(1) The amendment alters the terms and conditions of the contract or changes the scope of the project covered by the contract regardless of the amount of the contract before amendment,
(2) The amendment increases the amount to be paid under the contract by 20% or more, or
(3) The amendment causes an unbonded contract to require a contractor's performance bond. This would occur when a contract that is executed in an amount below that requiring a performance bond by 7 CFR part 1788, subpart C, is amended to an amount above that amount.
(b) Advance RUS approval to execute other contract amendments is not required. These amendments may be submitted to RUS at any time prior to closeout. If a borrower wishes to receive an advance of funds based on an amended contract amount (i.e., amendments that increase a contract by less than 20%), the borrower may initiate an increase in the amount approved for advance by submitting three copies of the amendment to RUS for approval.
(c) For each amendment executed, the borrower shall make certain that:
(1) The contractor's bond covers the additional work to be performed. If the amendment by itself (or together with preceding amendments) increases the original contract price by 20% or more, a bond extension will be required to bring the penal sum of the bond to the total amended contract price.
(2) If an amendment covers construction in a county or state not included in the original contract, the borrower and contractor are licensed to do business in that location.
(d) Upon execution of any amendment that causes the amended contract amount to exceed the original contract amount by 20% or more, three copies of the amendment shall be submitted to RUS for approval.
(a)(1) The standard RUS loan documents contain provisions regarding engineering and architectural services performed by or for RUS telecommunications borrowers. This part implements certain of the provisions by setting forth the requirements and procedures to be followed by borrowers in selecting architects and engineers and obtaining architectural and engineering services by contract or by force account.
(2) Borrowers shall obtain architectural and engineering services only from persons or firms which are not affiliated with, and have not represented, a contractor, vendor or manufacturer who may provide labor, materials, or equipment to the borrower under any current loan.
(3) Preloan architectural and engineering services may be provided by qualified personnel on the borrower's staff or by consultants. Neither the selection of a preloan architect or engineer by a borrower, nor the contractual arrangements with them, requires RUS approval.
(4) Postloan architectural and engineering services shall be obtained by borrowers from registered architects and engineers licensed in the State in which the facilities will be located, except where RUS has approved the borrower to provide these services by the force account method. When the extent of the proposed major or minor construction is such that the postloan engineering involved is within the capabilities of employees on the borrower's staff, the borrower may request RUS approval to provide such services. This method of providing engineering services is referred to as force account engineering. Refer to § 1753.17(c).
(5)(i) For major construction, services provided by architects and engineers not on the borrower's staff must be provided under Form 220, Architectural Service Contract, or Form 217, Postloan Engineering Service Contract—Telecommunications. These contracts require RUS approval.
(ii) For minor construction, borrowers may use the contracts in paragraph (a)(5)(i) of this section for postloan architectural or engineering services or any other form of contract, such as Form 245, Engineering Service Contract, Special Services—Telephone. RUS approval of contracts for postloan architectural or engineering services associated with minor construction, except for buildings covered in paragraph (a)(6) of this section, is not required.
(6) For buildings to be constructed with RUS funds, postloan architectural or engineering services shall be obtained if (1) the construction cost exceeds $50,000 (prefab buildings using manufacturer's specifications approved by RUS are exempt from this requirement) or (2) soil or seismic conditions require special design considerations.
(b) For the purpose of this subpart B:
(1)
(2)
(3)
(4)
(c) Single copies of RUS forms and publications cited in this part are available free from Administrative Services Division, Rural Utilities Service, United States Department of Agriculture, Washington, DC 20250-1500. These forms and publications may be reproduced.
(d)(1) All outside architects and engineers employed by RUS telephone borrowers shall have insurance coverage as required by 7 CFR part 1788.
(2) Borrowers shall ensure that their architects and engineers comply with the insurance requirements of their contracts. See 7 CFR 1788.54.
(e)(1) Borrowers shall make prompt payments to architects and engineers as required by the contract.
(2) RUS shall not make loan funds available for late payment interest charges.
(a) The borrower shall be responsible for selecting an architect to perform the architectural services required in the design and construction of buildings.
(b)(1) The borrower shall use Form 220 when contracting for architectural services for major construction, except that the borrower may use either Form 220 or Form 217 if the building is an unattended central office building.
(2) The borrower and the architect negotiate the fees for services under Form 220.
(3) Reasonable modifications or additions to the terms and provisions in Form 220 may be made, subject to RUS approval, to obtain the specific services needed for a building.
(4)(i) Three copies of Form 220, executed by the borrower and the architect, shall be sent to GFR to be forwarded to RUS for approval. RUS will review the contract terms and conditions. RUS will not approve the contract if, in RUS's judgment:
(A) Unacceptable modifications have been made to the contract form.
(B) The contract will not accomplish loan purposes.
(C) The architectural service fees are unreasonable.
(D) The contract presents unacceptable loan security risk to RUS.
(ii) If RUS approves the contract, RUS will send one copy to the architect and one copy to the borrower.
(5) Loan funds will not be available to pay for the preliminary architectural services if a loan is not made for the construction project, or if the construction project is abandoned.
(6) Subpart D of 7 CFR part 1753 sets forth the requirements and procedures to be followed by borrowers constructing central office, warehouse, and garage buildings with RUS loan funds.
(c)(1) RUS telephone borrowers shall obtain two copies of a completed Form 284, Final Statement of Architect's Fees, when all services and obligations required under the architectural services contract have been completed. All fees shown on the statement shall be supported by detailed information where appropriate. For example: out-of-pocket expense, cost plus, and per diem types of compensation shall be listed separately with labor, transportation, etc., itemized for each service involving these types of compensation.
(2) If Form 284 and supporting data are satisfactory, the borrower shall approve the statement, sign both copies, and send one copy to the GFR.
(3) Upon approval of Form 284 by RUS, the borrower shall promptly make final payment to the architect.
(a)(1) All engineering services required by a borrower to support its application for a loan shall be rendered by a qualified engineer selected by the borrower or by qualified employees on the borrower's staff. The selection of the preloan engineer, the form of preloan engineering service contract, and the contract itself, are not subject to RUS approval. Borrowers, however, should discuss their proposed method of obtaining preloan engineering services with the GFR before proceeding with any arrangements.
(2) Form 835, Preloan Engineering Service Contract, Telephone System Design, is a suggested form of preloan engineering service contract. While use of this form of contract is not required, it will be helpful in determining the tasks to be performed. Any form of contract used shall specify that preloan engineering services conform to RUS requirements for preloan studies. See subpart D of 7 CFR part 1737.
(b)(1)
(ii) RUS will review the contract terms and conditions. RUS will not approve the contract if, in RUS's judgement:
(A) Unacceptable modifications have been made to the contract form.
(B) The contract will not accomplish loan purposes.
(C) The engineering service fees are unreasonable.
(D) The contract presents unacceptable loan security risk to RUS.
(E) The consulting engineering firm is affiliated with or has represented a contractor, vendor, or manufacturer who may provide labor, materials, or equipment to the borrower under any current loan.
(2)
(c)(1)
(i) The request shall include:
(A) A description of services to be performed.
(B) The name and qualifications of the employee to be in charge. RUS requires this employee to meet the State experience requirements for registered engineers. In the absence of specific State experience requirements, the employee must have at least eight years experience in the design and construction of telecommunication facilities, with at least two years of the work experience at a supervisory level. RUS does not require professional registration of this employee, but this does not relieve the borrower from compliance with applicable State registration requirements which may require a licensed individual to perform such services.
(C) The names, qualifications, and responsibilities of other principal employees who will be associated with providing the engineering services.
(D) A letter signed by an authorized representative of the borrower authorizing the engineering services to be performed by force account and certifying the information supporting the request.
(ii) RUS shall notify the borrower by letter of approval or disapproval to perform force account engineering. The letter shall set forth any conditions associated with an approval or the reasons for disapproval.
(iii) RUS's approval of force account engineering for major construction shall be only for the specific projects named in the notice of approval.
(2)
(A) A copy of the employee's qualifications and experience record, unless previously submitted. RUS requires a minimum of four years of construction
(B) A letter signed by an authorized representative of the borrower authorizing the performance of these services by the employee, subject to RUS approval, and certifying the supporting information.
(ii) RUS shall notify the borrower by letter of approval or disapproval of the borrower's staff employee to perform the inspection and certification of construction. The approval shall be limited to the employee's area of expertise.
(d)(1) Subject to the requirements of this part and other applicable regulations, RUS will make loan funds available for the architectural and engineering services up to the amounts included in the approved loan.
(2) Advance of funds shall be requested on an FRS as set forth in 7 CFR part 1744 subpart C.
(e) The borrower shall obtain status of contract and force account proposal reports from the engineer once each month. The report shall show for each contract or FAP the approved contract or FAP amount, the date of approval, the scheduled date construction was to begin and the actual date construction began, the scheduled completion date, the estimated or actual completion date, the estimated or actual date of submission of closeout documents, and an explanation of delays or other pertinent data relative to progress of the project. One copy of this report shall be submitted to the GFR.
(f)(1) Upon completion of all services required under the engineering service contract Form 217, the borrower shall obtain from the engineer four copies of the Final Statement of Engineering Fee, Form 506.
(2) If the statement is satisfactory, the borrower shall sign all copies and send three to the GFR.
(3) After RUS approval of Form 506, one copy shall be sent to the borrower and one copy sent to the engineer.
(4) The borrower shall promptly make final payment to the engineer.
A certification of completion and inspection of construction signed by the borrower and countersigned in accordance with accepted professional engineering and architectural practice, by the engineer or architect, shall be prepared as evidence of completion of a major construction project. This certification shall make reference to the contract number and contract amount, and shall include the following:
(a) A statement that the construction is complete and was done in accordance with the RUS approved system design or layout or subsequent RUS approved changes.
(b) A statement that the construction was for loan purposes.
(c) A statement that construction used RUS-accepted materials and was in accordance with specifications published by RUS covering the construction which were in effect when the contract was executed, or in the absence of such specifications, that it meets other applicable specifications and standards (specify), and that it meets all applicable national and local code requirements as to strength and safety.
(d) A statement that the construction complies with the “Buy American” provision (7 U.S.C. 903 note) of the Rural Electrification Act of 1936 (7 U.S.C. 901
(e) A statement that all necessary approvals have been obtained from regulatory bodies and other entities with jurisdiction over the project.
(f) A statement that all closeout documents required by this part have been examined and found complete such that the Contractor has fulfilled all obligations under the contract except for warranty coverage.
(g) A statement that the engineer or architect is not affiliated with and does not represent the contractor, vendor, or manufacturer who is a participant in the contract.
(a) This subpart implements and explains the provisions of the Loan Documents setting forth the requirements and the procedures to be followed by borrowers in constructing headquarters, commercial office, central office, warehouse, and garage buildings with loan funds.
(b) Terms used in this subpart are defined in § 1753.2.
(c) All plans and specifications for buildings to be constructed with loan funds are subject to the approval of RUS. In addition, preliminary plans and specifications for headquarters and commercial office buildings to be constructed with loan funds are subject to RUS approval.
(d) RUS Form 257, Contract to Construct Buildings, shall be used for the construction of all headquarters, commercial office, central office, warehouse, and garage buildings with loan funds. Refer to § 1753.26 for further instructions.
(e) The borrower shall use the sealed competitive bid procedure for all building construction, except for:
(1) Minor construction using subpart I procedures.
(2) Major construction, where the borrower has received advanced approval to perform the construction by force account.
Refer to §§ 1753.27 and 1753.29 for further instructions.
(f) The site location, design, and construction of the facilities must comply with all applicable laws and regulations, including:
(1) Pub. L. 90-480 (42 U.S.C. 4151) (Access to Physically Handicapped), which requires certain buildings financed with Federal funds be designed and constructed to be accessible to the physically handicapped.
(2) Pub. L. 91-596 (29 U.S.C. 651) the Occupational Safety and Health Act of 1970. OSHA issues rules and regulations covering occupational safety and health standards for buildings. These regulations are codified in 29 CFR chapter XVII.
(3) 7 CFR part 1794, which provides for compliance with the National Environmental Policy Act (NEPA) and Council on Environmental Quality (CEQ) regulations (40 CFR parts 1500-1508) implementing the procedural provisions of NEPA, as well as RUS's conformance with other laws, regulations, and Executive Orders regarding environmental protection.
(4) 7 CFR part 1792, subpart C, which requires that the building design comply with applicable seismic design criteria. Prior to the design of buildings, borrowers shall submit to RUS a written acknowledgement from the architect or engineer that the design will comply.
(g) All construction pertaining to the building structure shall be performed under one contract. Separate contracts may be used for planting shrubbery, surfacing of roads and parking areas, and other identifiable parts of the project not pertaining to the building structure. These separate contracts shall also be subject to RUS approval as described in this subpart D.
(h) The borrower is responsible for submitting evidence, satisfactory to RUS, establishing that clear title to the building site has been obtained. RUS will not approve the construction contract until it has given title clearance.
(a) For headquarters and commercial office buildings only, the borrower shall prepare preliminary P&S showing the floor plan and general architectural details of the building to be constructed using loan funds. In particular, the preliminary P&S shall address the requirements of § 1753.25(f) and the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601
(b) The borrower shall prepare P&S for construction of all buildings. Each set of P&S shall include:
(1) RUS Contract Form 257, Contract to Construct Buildings, completed to the extent explained in (c) of this section.
(2) Complete and detailed specifications covering materials and workmanship.
(3) A detailed building plan. Where the building is to house electronic apparatus, the detailed plan or specifications shall include the equipment environmental requirements and special equipment required.
(4) A site plan for each building showing the building location and giving the legal description of the site. Sufficient information must be provided for the site so that it can be identified as the same property on which title opinion was submitted to RUS. The legal description shall be typed on the site plan. The borrower shall also furnish topographical information and a description of any proposed site development work and show proposed connections for public utilities.
(c) RUS Contract Form 257 shall be completed as follows:
(1)
(2)
(3)
(d) The plans and specifications shall show the identification and date of the model code used for seismic safety design considerations, and the seismic factor used. See 7 CFR part 1792, subpart C.
(e) Two sets of the building plans and specifications shall be prepared and submitted to the GFR.
Upon RUS approval of the P&S, the borrower shall proceed as follows:
(a) Bid documents shall consist of a copy of the approved P&S, including RUS Contract Form 257, completed in accordance with the instructions on the cover of the form and the plot plans showing site development details. For contracts in amounts of $100,000 or less, the borrower must specify in the Notice and Instructions to Bidders whether the contractor will be required to furnish a performance bond or a builder's risk policy.
(b) The borrower shall determine that title to the real estate has been approved by RUS before the invitations to bid are released.
(c) The borrower shall set the time for opening of bids, allowing ample time for bidders to prepare bids.
(d) The borrower shall solicit bids as set forth in § 1753.8(a)(2). Invitations shall be sent to at least six prospective bidders.
(e) The borrower shall conduct bid opening and award of contract in accordance with the procedure set forth in § 1753.8(a).
(a) The general requirements for contract amendments are set forth in § 1753.11.
(b) The borrower shall prepare construction contract amendments on RUS Contract Form 238, Construction or Equipment Contract Amendments. See 7 CFR 1755.93 to obtain copies of Form 238.
(a) The borrower must obtain RUS approval of the force account method of construction of buildings in advance in order to obtain RUS financing.
(b) The borrower shall prepare the P&S in accordance with § 1753.26.
(c) Prior to any construction activity or the purchase of materials or equipment, the borrower shall submit the FAP in duplicate to RUS, accompanied by a resolution indicating approval of the board of directors of the borrower or a letter signed by an authorized corporate official. The proposal shall include:
(1) A Copy of the P&S.
(2) An itemized list of all items of materials required for construction.
(3) A construction schedule showing the estimated construction period for each major construction item.
(4) An estimate of the material and labor and other costs for any construction item not provided for in the approved loan.
(d) Force Account construction to be financed with loan funds shall not be started until RUS approval has been received by the borrower.
(a) This section outlines the procedure to be followed to close out RUS Contract Form 257 (Contract to Construct Buildings) and construction or rehabilitation performed by the force account method.
(b)
(2) Upon completion of the project, the borrower shall obtain certifications from the architect or engineer that the project and all required documentation are satisfactory and complete. The requirements for this certification are contained in § 1753.18.
(3) The engineer's or architect's contract closeout certification and the final amendment shall be submitted to RUS as a basis for the final advance of funds for the contract.
(4) After all required RUS approvals are obtained, final payment is made in accordance with article III of RUS Form 257 once the borrower has received the architect's or engineer's certifications regarding satisfactory completion of the project.
(c) Upon completion of force account construction, the borrower shall:
(1) Arrange with its architect or engineer and the GFR for final inspection of the project.
(2) Complete, with the assistance of its architect or engineer, the documents listed in the following table that are required for the closeout of force account construction.
(3) Make distribution of the completed documents as indicated in the table in this section.
(d) Final payment shall not be made until RUS has approved the closeout documents.
(a) This subpart implements and explains the provisions of the Loan Documents setting forth the requirements and the procedures to be followed by borrowers in purchasing and installing central office equipment financed with loan funds.
(b) Terms used in this subpart are defined in § 1753.2 and RUS Contract Forms 525 and 545.
(c) Borrowers shall use RUS Contract Form 525, Central Office Equipment Contract (Including Installation), when the firm supplying the equipment will install it and RUS Contract Form 545, Central Office Equipment Contract (Not Including Installation) when the supplier of the equipment will not be installing it. In either case the appropriate specifications shall be included in the contract.
(d) Alternates, if any, specified in the P&S shall be kept to a minimum.
(e) The borrower shall take sealed competitive bids for all central office equipment to be purchased under RUS Contract Form 525 or 545 using the procedure set forth in § 1753.38(a), unless RUS approval to negotiate is obtained.
(f) The borrower may request permission to negotiate with a single supplier for additional central offices to standardize equipment on a system basis. RUS approval to negotiate must be obtained before release of the plans and specifications to the supplier. Except for remote switching terminals associated with an existing central office, RUS will not approve negotiation with a non-domestic manufacturer for the purpose of standardization because such a purchase does not meet the RE Act “Buy American” provisions.
(g) Materials and equipment must meet the standards and general specifications approved by RUS. Materials and equipment included in I.P. 300-4, “List of Materials Acceptable for Use on Telecommunications Systems of RUS Borrowers”, have been accepted as meeting these requirements. If the equipment is not included in the “List of Materials” but has been approved for field trial installation, the borrower must in each instance obtain field trial approval from RUS prior to entering into any agreement with a supplier.
(h) Only new equipment shall be purchased unless otherwise approved by RUS.
(i) All purchases of materials and equipment are subject to the “Buy American” requirements.
(j) If the sealed competitive bid procedure is followed, negotiation after bid opening will not be permitted.
(a)
(2) The P&S shall specify the delivery and completion time required for each exchange.
(3) The P&S shall provide for a complement of spare parts to be provided to the borrower. The quantity and type of spare parts shall be determined in accordance with the provisions in RUS Form 522 “General Specification for Digital, Stored Program Controlled Central Office Equipment.”
(4) P&S for equipment to be provided under a Form 545 contract shall require the supplier to provide specific installation information and a detailed bonding and grounding plan to be utilized by the engineer. borrower, and others responsible for the installation of the equipment.
(b)
(2) Guidelines for the preparation of the detailed equipment specifications are contained in the Telecommunications Engineering and Construction Manual (TE&CM), which is available from RUS.
(c) RUS review of P&S is required for construction estimated to cost over $500,000 total or estimated to cost more than 25% of the total loan, whichever is less.
(1) If RUS review is required, the borrower shall submit one copy of the P&S to the GFR for RUS review.
(2) RUS will review the P&S and notify the borrower in writing of approval or disapproval.
(a)
(1)
(ii) The “Notice” must set forth the method of evaluating bids and must require the submission of equipment lists and traffic calculations with the bids.
(iii) RUS Contract Forms 525 or 545 shall be used, except that the “Notice” shall state that prior to the bid opening a technical session will be conducted with each supplier to resolve any questions related to the technical proposal submitted by the supplier. The suppliers' technical proposals should be requested for presentation 30 days in advance of the bid opening to enable sufficient time to make the technical evaluation.
(iv) The borrower shall solicit bids as set forth in § 1753.8(a)(2). The “Notice” shall be sent to at least three prospective bidders. A copy of the “Notice” and a list of such bidders shall be sent to RUS.
(v) At the request of an invited supplier, the borrower shall provide two copies of the P&S.
(2)
(A) Lists of equipment, material and software.
(B) Proposed floor plan.
(C) Power and heat dissipation calculations.
(D) List of exceptions to plans and specifications.
(E) Protection and grounding requirements.
(F) Description of how office administration, maintenance and traffic collection are handled with step-by-step examples and printouts.
(G) Explanation of processor and/or memory expansion required to meet ultimate size. This shall include discussions of software, processor memory, and hardware additions needed for line additions and the introduction of various future services; the relative costs of installing the necessary hardware and software initially as compared with the anticipated cost if installed at
(H) Description of how special equipment such as loop tests, volunteer fire alarm circuit, line load control, etc., will function.
(I) Description of method for translating initial office administration information into machine language, and proposal as to whether it will be done by the borrower or by the supplier.
(J) A software license agreement (if required by the manufacturer) in the form indicated in § 1753.38(c).
(K) Any other items pertinent to the technical proposal, such as information regarding changes that have been made in hardware and software of the equipment that is of like manufacture to that presently in operation in the borrower's system. This shall include requirements for additional spare parts or training which have developed as a result of significant change in system device technology.
(ii) The borrower shall review in detail all exceptions to the P&S. No exceptions will be accepted unless all bidders are notified, in writing, of the change in the specifications and permitted to incorporate the change in their proposal.
(iii) If the technical proposal is not responsive, the borrower shall notify the supplier, in writing, that its proposal will not be given further consideration and why.
(iv) Changes in the P&S resulting from the technical sessions shall be subject to RUS's review and approval.
(v) After evaluation of the technical proposals and RUS approval of the changes to P&S (required only for projects that are expected to exceed $500,000 or 25% of the loan, whichever is less), sealed bids shall be solicited from only those bidders whose technical proposals meet P&S requirements. When fewer than three bidders are adjudged qualified by the borrower to bid, RUS approval must be obtained to proceed. Generally, RUS will grant such approval only if the borrower can demonstrate to the satisfaction of RUS that a good faith effort was made to obtain at least three competitive bids. This would be demonstrated if all suppliers currently listed in I.P. 300-4 were invited to submit technical proposals.
(vi) The borrower shall invite the GFR to attend the technical sessions.
(3)
(ii) The bid opening and award of contract shall be conducted in accordance with the procedure set forth in § 1753.8(a).
(iii) The spare parts bid shall always be priced separately and added to the base bid when determining the low bidder.
(b)
(1) After RUS approval of the P&S and equipment requirements (required only for contracts expected to exceed $500,000 or 25% of the loan, whichever is less), the borrower shall send two complete copies of the approved P&S to the supplier and request that a proposal be submitted.
(2) The borrower shall schedule a time and date for a technical session by the supplier and request that the items listed in § 1753.38(a)(2)(i) be available at the technical session. In addition to these items, the supplier shall be requested to provide a description of the exact differences in hardware and software between the borrower's existing equipment and the proposed equipment so that the borrower can determine spare parts interchangeability, need for retraining, and the compatibility of administration of the old and new equipment.
(3) If the contract is expected to exceed $500,000 or 25% of the loan, whichever is less, changes in the P&S resulting from the technical session shall be subject to RUS review and approval.
(4) The submitted proposal shall be based on the agreed-upon results of the technical evaluation and must be complete, dated, and signed.
(5) The borrower shall obtain an award recommendation from its engineer.
(6) The following shall be sent to RUS for review and approval:
(i) A copy of the engineer's recommendation to the borrower, and
(ii) Evidence of acceptance of the proposal by the borrower, such as
(A) A certified copy of the board resolution, or
(B) A letter to RUS signed by an authorized corporate official.
(7) RUS approval of the proposal will be conditioned upon the borrower obtaining prices that are consistent with current competitive prices. Upon RUS approval of the proposal, three copies of the contract shall be prepared with all specifications and proposal documents, and performance bonds, to be executed by the supplier and borrower.
(8) The three complete, executed contracts shall be sent to the RUS Area Engineering Branch Chief for approval.
(9) If RUS approves the contract, one copy will be returned to the borrower and one copy will be sent to the supplier.
(10) Installation of the central office equipment and materials provided under RUS Contract Form 545 may be made in accordance with subpart I, if applicable, or by an approved Force Account Proposal (FAP).
(c)
(1)
(2)
(i) The Licensee's right to use the Licensed Software is non-exclusive and limited to use or operation in the United States of America, including its Territories, the Federated States of Micronesia, the Marshall Islands, Palau and the Commonwealth of Puerto Rico, with the System for which the Licensed Software is provided by the Licensor. The Licensee may reuse the equipment and its accompanying Licensed Software at another location within the Licensee's System without obtaining additional approvals from Licensor, provided, however, that the Licensee notify the Licensor, within ten (10) days, of the change in location of the equipment and Licensed Software.
(ii) The Licensee and any successor to the Licensee's title in the System may, without further consent of the Licensor, transfer the Licensed Software and all of the Licensee's rights and interests under this Software License to any transferee who acquires legal title to the System, provided that such transferee first agrees in writing to the Licensor to abide by all of the terms and conditions of this License including, without limitation, the territorial limitation stated in section (2)(i) and the restrictions on decompiling or reverse assembly stated in section (2)(iii). Licensee shall give Licensor
(iii) The Licensee shall take reasonable steps to protect the confidentiality of the Licensed Software and shall not decompile or reverse assemble all or any part of the Licensed Software to generate source code. The Licensee shall not make the Licensed Software available to any person except on a need to know basis. The obligations of the Licensee hereunder shall not extend to any information or data relating to the Licensed Software which is now available to the general public or becomes available by reason of the acts of the Licensor or third parties.
(iv) The Licensee may reproduce or copy the Licensed Software and related materials solely for the purpose of archival backup, in-house training and operating, maintaining, and administering the System provided under this Contract. In such reproduction, the Licensee shall include, upon all such copies of the Licensed Software, all proprietary notices, including the copyright notice within the Licensed Software program and related documentation in the form in which it is received from the Licensor.
(v) The Licensee acknowledges that the Licensed Software program is the property of the Licensor, and shall not do, or cause to be done, anything to activate any of the subsisting nonactivated computer instruction steps therein unless authorized in writing by the Licensor. The Licensor shall have the exclusive right to activate, or authorize the activation of, the subsisting nonactivated program instruction steps in the Licensed Software. In this event Licensee shall pay any additional Right-To-Use Fee(s) agreed to by Licensee and Licensor.
(vi) In the event the Licensor develops significant improvements to the Licensed Software, the Licensor may market the improvements as a separate offering requiring payment of an additional Right-to-Use Fee.
(vii) The Licensee shall not modify or otherwise change the Licensed Software other than at the direction of the Licensor. This provision shall not apply to:
(A) Changes to the Licensed Software which are necessary to preserve or restore service. Licensee shall use all reasonable efforts to contact Licensor before making any such changes. If the Licensor is unable to make the necessary changes promptly to the Licensed Software to preserve or restore service, then the Licensee may make only such changes to the Licensed Software as are necessary to preserve or restore service. In such event, Licensee shall promptly notify Licensor of the changes made by Licensee.
(B) Changes made by the Licensee to its own database; and
(C) Changes made by the Licensee in connection with the exercise of its rights under section (2)(xi).
(viii) Within thirty (30) days after written notice that a program or a release thereof has been discontinued and is no longer required for the operation of the System and the Licensor has furnished the Licensee with a new program that is fully satisfactory to the Licensee, the Licensee agrees to return the original and all copies of the discontinued program and specified related documents. If such return is impossible or impractical, the Licensee shall destroy said program and documents and provide the Licensor with a written notice of such destruction.
(ix) The Licensor warrants to the Licensee that any Software licensed under this Software License shall function for a period of five (5) years from the warranty start date defined in the Contract in accordance with the Specifications and any written or printed technical material provided by the Licensor to explain the operation of the Licensed Software and aid in its use. The Licensor shall correct all deficiencies within thirty (30) days from the date of receipt by the Licensor of written notice of such deficiencies from the Licensee. An extension of this thirty (30) day period may be allowed only if agreed upon by the Licensee and RUS. It shall be the Licensor's obligation to insert and thoroughly test, at no charge to the Licensee, any software amendment or alteration provided to satisfy the obligations of this section (2)(ix). If a deficiency is detected or a correction made within the final ninety (90) days of the warranty, the warranty shall be extended to a date ninety (90) days after the deficiency has been corrected.
(x) The Licensor shall hold harmless and indemnify the Licensee from any and all claims, suits, and proceedings for the infringement of any patent, copyright, trademark, or violation of trade secrets covering any Licensed Software used with the System, except for items of the Licensee's design or selection. If the Licensee's use of the Licensed Software is enjoined, the Licensor shall promptly, at its own expense, place the Licensee in a position where it is able to use the System in accordance with the Specifications, whether by:
(A) Modifying the Licensed Software or portion thereof so that it no longer infringes but remains functionally equivalent,
(B) Replacing the Licensed Software with noninfringing equivalent software,
(C) Obtaining for the Licensee a license or other right to use, or
(D) Such other actions as may be required. This shall be in addition to any other rights or claims which the Licensee may have. The Licensor shall, at its own expense, (and the
(xi) In the event the Licensor becomes unwilling or unable to furnish support required by the Contract for the Licensed Software, the Licensor shall, upon written request of the Licensee, provide with the greatest possible dispatch all Licensed Software back-up documentation including proprietary information other than agreed excluded documentation. In this event, (1) the Licensee shall be permitted full use of all Licensed Software and documentation as long as the System is operational and (2) the Licensee may modify, or have modified, the Licensed Software for feature enhancement or proper equipment operation and becomes the owner of such modifications for all purposes, including patenting, copywriting, sale, or license thereof. Agreed excluded documentation is Licensed Software back-up documentation described in the first sentence of this section (2)(xi) which (A) is proprietary information of a third party, (B) was specifically described at the pre-bid technical session and individually identified in an attachment to the Bid, and (C) RUS and the Licensee agree, before bids are opened, may be excluded from the requirements of this section (2)(xi). In the event the Licensor furnishes agreed excluded documentation and the Licensee exercises its rights under this section (2)(xi), the Licensor shall use its best efforts to provide such agreed excluded information to the Licensee, or obtain continuing support agreements from the parties retaining legal rights to the excluded documentation. Licensor agrees that certain Licensed Software cannot be excluded from the requirements of this section (2)(xi) including, but not limited to, software, the absence or improper operation of which would significantly impair the operation of the System, would significantly impair the ability of the Licensee to generate revenue, or would pose a risk to RUS loan security.
(xii) A breach of this License by the Licensor is a breach of the Contract. Therefore, the remedies specified in the Contract shall apply.
(xiii) The Licensee shall have thirty (30) days after receipt of written notice from the Licensor to correct any breach of this License. Damages payable by the Licensee for its breach of this License shall not exceed the total Contract price. The Licensor shall not terminate this License unless:
(A) The Licensor has given RUS sixty (60) days notice before termination; and
(B) RUS agrees with the Licensor that termination is the only method available to prevent significant harm to the Licensor from additional Licensee defaults.
(xiv) The obligations of Licensee and Licensor and any successors in title under this Agreement shall survive the termination of this Agreement and continue after any termination of rights granted hereunder.
(xv) Licensee and Licensor agree that it will not, without the prior written permission of the other party, use in advertising, publicity, packaging, labeling, or otherwise, any trade name, trademark, trade device, service mark, symbol, or any other identification or any abbreviation, contraction, or simulation thereof owned by the other party or any of its affiliates or used by the other party or any of its affiliates to identify any of their products or services, unless otherwise agreed by the parties.
(xvi) This Software License Agreement shall prevail notwithstanding any conflicting terms or legends which may appear on or in the Licensed Software.
(xvii) If any Section or part thereof, in this Agreement shall be held to be invalid or unenforceable in any jurisdiction in which this Agreement is being performed, then the meaning of such section or part shall be construed so as to render it enforceable, to the extent feasible; and if no feasible interpretation would save such section or part, it shall be severed from this Agreement and the remainder shall remain in full force and effect. However, in the event such section or part is considered an essential element of this Agreement, the parties shall promptly negotiate a replacement therefor.
(xviii) This Software License and any amendments thereto, or revisions thereof, are subject to RUS approval.
(d)
(2) Equipment contract amendments shall be prepared on RUS Contract Form 238, Construction or Equipment Contract Amendments.
(e)
(1) A proposal shall be requested from the supplier.
(2) The borrower shall prepare a plan containing an outline of the proposed use of the equipment, the proposal from the supplier and an estimate of the installation cost. If the total cost exceeds $500,000, RUS approval of the award of contract is required. The borrower shall in this case submit its plan and the supplier's proposal to GFR. If the cost does not exceed $500,000, the borrower's award of contract is not subject to RUS approval.
(3) If RUS approval was required by paragraph (e)(2) of this section, upon RUS approval the purchase may be made using RUS Contract Form 525, or 545, or when applicable, the procedures contained in subpart I of this part.
(4) If the purchase is to be made by contract, three executed copies of the contract with attachments are to be submitted to the RUS.
(5) Installation of the central office equipment and materials procured by RUS Contract Form 545 may be made in accordance with subpart I, if applicable, or by an approved FAP.
(f)
Closeout of RUS Contract Form 525, Central Office Equipment Contract (Including Installation), and RUS Contract Form 545, Central Office Equipment Contract (Not Including Installation), shall be conducted as follows:
(a)
(b)
(c)
(d)
(e)
(1) Obtain from the engineer a certification of partial closeout.
(2) Submit one copy of the summary to RUS with an FRS.
(f)
(1) The borrower shall:
(i) Immediately following completion of the last central office equipment installation, arrange with the contractor's installer, connecting company (where necessary), and the GFR for performance of the acceptance tests of offices not previously tested. The date for testing should be established so that the installer will not be required to return to the site for the sole purpose of assisting in these tests. Acceptance tests shall be performed within 30 days of completion of the installation, unless otherwise requested in writing by the contractor and approved in writing by the borrower.
(ii) When the acceptance tests have been satisfactorily completed and the contractor has corrected all the discrepancies:
(A) Prepare and assemble the documents listed in the table in this section, Documents Required to Close Out Central Office Equipment Contracts.
(B) Notify the GFR that the project is ready for final RUS inspection.
(iii) Make the documents listed in the table available for GFR review on the date of final inspection.
(iv) Distribute the documents as indicated in the table. The documents listed for RUS shall be retained by the borrower for inspection by RUS for at least two years from the date of the engineer's contract closeout certificate.
(2) The documents required and the procedure to be used for equipment purchased and/or installations made using the method of minor construction are set forth in subpart I.
(g) Once RUS approval has been obtained for any required amendments, the borrower shall obtain certifications from the engineer that the project and all required documentation are satisfactory and complete. The requirements for the final contract certification are contained in § 1753.18.
(h) Once these certifications have been received, final payment shall be made according to the payment terms of the contract. Copies of the certifications shall be submitted with the FRS, requesting the remaining funds on the contract.
(a) This subpart implements and explains the provisions of the loan documents setting forth the requirements and procedures to be followed by borrowers when outside plant major construction by contract is financed by loan funds. Terms used in this subpart are defined in § 1753.2 and RUS Contract Form 515.
(b) The contract method for major construction is described in § 1753.5(b).
(c) The two contract forms which may be used for major outside plant construction are Form 515 and Form 773. Limitations on the applicability of these forms shall be as follows:
(1) Form 515 shall be used for major outside plant construction projects which will be competitively bid. The contract contains plans and specifications and has no dollar limitation. See §§ 1753.47, 1753.48 and 1753.49.
(2) Contract Form 515, which is for $250,000 or less, may, at the borrower's option, be negotiated. See § 1753.48(b).
(3) RUS Form 773 may be used for minor outside plant projects which are not competitively bid because they cannot be designed and staked at the time of contract execution. Projects of this nature include routine line extensions and placement of subscriber drops. See subpart I of this part.
(a)
(i) A review shall be made of the outside plant requirements, and the Loan Design (LD) shall be revised to reflect any needed changes (See § 1753.3).
(ii) Deviations from the approved LD (7 CFR part 1737) must be approved by RUS (See § 1753.3).
(2) The standard RUS specifications required for construction of outside plant facilities are:
(i) RUS Form 515a (Bulletin 345-150)—Specifications and Drawings for Construction of Direct Buried Plant.
(ii) RUS Form 515c (Bulletin 345-151)—Specifications and Drawings for Conduit and Manhole Construction.
(iii) RUS Form 515d (Bulletin 345-152)—Specifications and Drawings for Underground Cable Installation.
(iv) RUS Form 515f (Bulletin 345-153)—Specifications and Drawings for Construction of Pole Lines and Aerial Cables.
(v) RUS Form 515g (Bulletin 345-154)—Specifications and Drawings for Service Entrance and Station Protector Installation.
(b)
(1) RUS Contract Form 515, “Telephone System Construction Contract (Labor and Materials).”
(2) The specifications described in paragraph (a)(2) of this section as specified by the borrower in the RUS Contract Form 515.
(3) Description of special assembly units and guide drawings, if any.
(4) Key, detail, and cable layout maps.
(5) RUS Contract Form 787, “Supplement A to Construction Contract, RUS Contract Form 515,” when the borrower proposes to provide any materials to the contractor. The borrower shall not order materials for a contractor without RUS approval. In such cases the borrower must attach Form 787 and a “List of Owner's Materials on Hand” and/or a “List of Materials Ordered by Owner but Not Delivered” to contract Form 515 (See § 1753.48(f) of this part). Any materials furnished under Supplement A shall be listed in RUS Bulletin 344-2 unless special RUS approval has been received by the borrower to use unlisted materials.
(c)
(2) If the project exceeds $500,000 or 25% of the loan, whichever is less, RUS approval of P&S is required. Two sets of P&S shall be furnished to GFR. RUS will return one set to the borrower upon notice of approval. The borrower may then proceed with procurement in accordance with § 1753.48.
(a)
(ii) RUS Form 274 or its equivalent, supplemented by RUS Form 276, shall be used for the submission of bidders' qualifications for all types of construction and for the required information on the bidder and subcontractors.
(2)
(3)
(ii) The purpose of the pre-bid conference is to acquaint the bidders with the scope and special considerations of the project and to clarify any concerns the bidders may have.
(iii) No proposals shall be considered from bidders that do not attend the pre-bid conference unless the bidder has been notified by the engineer that such bidder's attendance has been waived. Attendance can be waived if, in the judgment of the engineer, the bidder would gain no additional understanding of the construction project by attending the pre-bid conference.
(iv) The borrower shall obtain from the engineer the minutes of the pre-bid conference and shall distribute them to all potential bidders.
(v) When fewer than three bidders have been qualified to submit bids, RUS written approval must be obtained to proceed with requesting bids.
(4)
(ii) If § 1753.8 requires RUS approval of award of the bid, the borrower shall submit to RUS two copies of the assembly unit sections of the apparent lowest responsive bid accepted by the borrower.
(b)
(2) The procedures to be followed are contained in § 1753.8(b) and paragraphs (3) and (4) of this section.
(3)
(ii) The purpose of the negotiation conference is to acquaint the contractor with the scope and special considerations of the project and to answer any questions.
(iii) The borrower shall obtain from the engineer notes covering the negotiation conference and shall distribute them to all attendees.
(4) Two copies of the assembly unit sections of the negotiated contractor's proposal shall be sent to the GFR for approval.
(c)
(d)
(e)
(f)
(1) Materials on hand to be furnished by the borrower shall be released to the contractor at the start of construction. Materials on order but not received shall be provided to the contractor as they become available. The borrower shall obtain from the contractor a written receipt for all such materials delivered.
(2) Materials on hand, until released to the contractor, shall be covered by fire and either wind-storm or extended coverage insurance, exclusive of materials stored in the open and not within 100 feet of any building. Poles, wherever stored, shall be covered by fire insurance. All insured values must be at least 80 percent of the cash value of the property insured.
(3) Subject to adjustment at the time of final settlement, the borrower shall obtain from the contractor monthly invoices that show credit to the borrower, at the prices quoted in Form 787, Supplement A, for all materials furnished by the borrower and installed by the contractor during the preceding month.
(4) Any materials furnished by the borrower remaining as surplus at the completion of construction shall be returned to the borrower. For such materials, the borrower shall furnish a written receipt to the contractor and credit the contractor at the prices quoted in Supplement A.
(g)
(2) When the changes or corrections have been made, the borrower shall have the contractor complete the form, itemizing the costs in accordance with the terms of the contract, and return three copies to the borrower's engineer. A copy of each change order shall be attached to each copy of the construction inventory required to close out the contract.
(a)
(b)
(c)
(2)
(ii) The borrower shall prepare and distribute the final inventory documents in accordance with the tables contained in this section. The documents listed for RUS shall be retained by the borrower for inspection by RUS for at least two years from the date of the engineer's contract closeout certification.
(iii) When the total inventory price exceeds the maximum contract by more than 20 percent, an extension to the contractor's bond is required.
(iv) The borrower shall submit the engineer's contract closeout certification with FRS for the final advance of funds.
(3) Final payment shall be made according to the payment provisions of article III of RUS Form 515, except that certificates and other documents required to be submitted to or approved by the Administrator shall be submitted to and approved by the Owner.
(a) This subpart implements and explains the provisions of the loan documents setting forth the requirements and the procedures to be followed by borrowers for outside plant major construction by the force account method with RUS loan funds. Terms used in this subpart are defined in § 1753.2 and RUS Contract Form 515.
(b) A borrower shall not use the force account method for construction financed with loan funds unless prior RUS approval has been obtained.
(c) Generally, RUS will not approve the force account method for major
(d) The Force Account Proposals (FAPs) are subject to review and approval by RUS.
(e) The FAP is approved by RUS on the basis of estimated labor and material costs. The FAP is closed based on the borrower's actual cost of performing the construction. RUS will provide loan funds only up to the amount determined by the completed assembly units priced at the unit prices in the approved FAP.
(a)
(i) The scope of the construction to be undertaken, stating briefly the facilities and equipment to be installed and other pertinent data.
(ii) The name and qualifications of the construction supervisor who will be directly in charge of construction, the names and qualifications of the construction foremen, and the availability of qualified construction personnel. The construction supervisor must have at least 5 years outside plant construction experience with at least 2 years at the supervisory level on RUS financed projects. Construction foremen must have at least 3 years of outside plant construction experience.
(iii) The availability of equipment for construction, exclusive of equipment needed for normal operation and maintenance.
(2) [Reserved]
(b)
(1) The RUS Contract Form 515 and appropriate supporting attachments that normally would be provided as plans and specifications for contract construction. See § 1753.47.
(2) The cost estimate, using Form 515 as a convenient means of showing the following:
(i) The quantity and cost estimates of the various assembly units required. “Labor and other” cost will not include the cost of engineering, legal, and other professional services, interest during construction, preliminary survey and investigation charges, and right-of-way easement procurement costs.
(ii) A list identifying materials or construction for which loan funds will not be requested.
(3) The estimated completion time.
(c)
(d)
(2)
(3)
(ii) Maintain records on all expenditures for materials, labor, transportation, and other costs of construction, in order that all costs may be fully accounted for upon completion of construction.
(iii) Ensure that all the required inspections and tests are made.
(4)
(ii) Require timely corrections and cleanup.
(iii) Perform acceptance tests as construction is completed.
(iv) Provide “as built” staking sheets of completed construction when the final inspections are made.
(v) Maintain accurate and current inventories of completed construction.
(5)
(ii) Maintain an accurate inventory of completed construction.
(iii) Perform cleanup as construction is completed.
(iv) Perform all the inspections and acceptance tests a contractor would be required to make under the construction contract.
(v) Promptly perform cleanup required after final inspection.
(a)
(2) The period between the completion of construction and submission of the closeout documents to RUS should not exceed 60 days.
(b)
(c)
(2) The GFR shall be invited to make the final inspection accompanied by the engineer and the borrower.
(3) The borrower shall correct all deficiencies found during the final inspection.
(4) The borrower may request the assistance of an RUS field accountant to review the borrower's record of construction expenditures and assist the borrower with any accounting problems in connection with construction expenditures.
(5) After inspection, the final inventory documents shall be assembled as indicated in the table in this section. RUS Forms 817, 817a, and 817b are to be submitted to GFR only if the amount of the closeout exceeds the original force account proposal by 20% or more. Otherwise, the final inventory documents are to be assembed and retained by the borrower for at least two years.
(6) Upon approval of the closeout documents, RUS will notify the borrower of approval and of any adjustments to be made in funds advanced in connection with the construction.
(d) The above are not intended to be a complete description of the requirements of the documents relating to RUS's closeout procedure. Refer to the documents for additional requirements.
(a) This subpart implements and explains the provisions of the Loan Documents setting forth the requirements and the procedures to be followed by borrowers in purchasing and installing special equipment financed with loan funds.
(b) Terms used in this subpart are defined in § 1753.2 and RUS Contract Forms 397 and 398.
(c) Special equipment purchased with loan funds must be included in the List of Materials Acceptable for Use on Telephone Systems of RUS Borrowers (See Bulletin 344-2) and meet RUS's standards and specifications (See 7 CFR part 1755) unless otherwise approved by RUS.
(d) Borrowers must obtain RUS review and approval of the LD for their telephone systems. Applications of special equipment not included in an approved LD must conform to the modernization plan as required by 7 CFR part 1751, subpart B, and must be submitted to RUS for review and approval.
(e) RUS Form 397 and applicable specifications shall be used for the purchase of special equipment for major construction on a furnish and install basis.
(f) RUS Form 398 and applicable specifications shall be used for the purchase of equipment for major construction on a furnish only basis. The procedures provided in subpart I, if applicable, or a FAP approved by RUS may be used for the installation of special equipment purchased with a Form 398 contract.
(g) For special equipment purchases for minor construction, the borrower may at its option use the Methods of Minor Construction procedures contained in subpart I or the purchase procedures contained in this subpart H.
(h) Some types of special equipment contain software. See subpart E for RUS software licensing requirements.
(a) Special Equipment Contract, RUS Form 397 shall be used to purchase equipment on a furnish and install basis.
(b) Special Equipment Contract, RUS Form 398 shall be used to purchase equipment on a furnish only basis.
(c) The equipment specifications must accompany the selected contract form.
(1) Each specification consists of performance specifications, installation requirements (if applicable) and application engineering requirements.
(2) RUS specifications for the Special Equipment Contract are listed in 7 CFR part 1755.
(a)
(i) An initial equipment purchase is a first time purchase by a borrower of a complete system of special equipment.
(ii) Equipment additions to existing systems are additions of components to complete operating systems to increase system capacity that require components made by the manufacturer of the existing system.
(iii) New system additions are purchases of complete systems of special equipment when the purpose can be accomplished either with equipment of the same type and manufacture as other complete operating systems in the borrower's system, or with complete systems of special equipment from other manufacturers.
(iv) Where equipment is obtained under a Form 398 Contract, the borrower shall require the supplier to provide a detailed proposed bonding and
(2) For initial equipment purchases that qualify as major construction, the borrower shall obtain proposals from at least three suppliers of equipment of different manufacturers.
(3) For equipment additions to increase the capacity of existing systems, the borrower may negotiate for equipment of a specific type and manufacture. RUS approval to negotiate in this instance is not required if these additions were specifically described in the LD approved by RUS
(4) For new system additions, the borrower may request RUS approval to negotiate for additional equipment for the purpose of standardization on a system basis, provided RUS approved the procurement method used for the initial equipment purchase. RUS approval to negotiate must be obtained before release of the P&S to the seller.
(5) RUS will not approve negotiation with a seller of non-domestic equipment for the purpose of standardization, because such a purchase does not meet the “Buy American” provision.
(6) RUS recommends, but does not require, that borrowers include installation by the seller for initial installations of special equipment that qualify as major construction.
(7) Special equipment may be installed by the borrower if it has qualified personnel and test equipment available to install the equipment and make the required acceptance tests, and written approval is given by RUS.
(8) Installations, whether by the borrower or the seller, must meet the installation requirements of Form 397 specifications. A copy of the acceptance tests results must be attached to the closeout documents or work order summary.
(9) Detailed considerations and guidelines for the preparation of the specifications for the various applications of special equipment can be found in RUS Telecommunications Engineering and Construction Manuals.
(10) The borrower must obtain authorization from the Federal Communications Commission (FCC) to construct and operate radio transmitting equipment. Evidence of FCC authorization is required for RUS contract approval. Where required, the borrower must obtain approval of state regulatory bodies regarding tariffs and related matters.
(b)
(2)
(ii) For projects estimated to exceed $500,000 or 25% of the loan, whichever is less, RUS will either approve P&S in writing or notify the borrower of the reasons for withholding approval.
(iii) For projects estimated to cost less than $500,000 or 25% of the loan, whichever is less, the borrower may proceed with procurement upon completion of the P&S.
(iv) If the borrower has employed full competitive bidding in the selection, a contract may be executed with the successful bidder and the borrower may proceed to paragraph (b)(2)(vi) of this section.
(v) If the borrower did not follow a fully competitive bidding process as described in § 1753.8, the selection, along with a summary of all proposals and an engineer's recommendation, shall be sent to RUS. RUS shall approve the proposal selection in writing or notify the borrower of any reason for withholding approval.
(vi) The borrower sends three executed contracts including specifications to RUS for approval.
(vii) After RUS approval of the contract, one copy will be returned to the borrower and one copy will be sent to the seller.
(3)
(4)
(ii) RUS notifies the borrower in writing as to whether the borrower may negotiate for specific equipment. If P&S were required to be submitted to RUS under paragraph (b)(4)(i) of this section, RUS notifies the borrower in writing of P&S approval (or notifies the borrower of the reasons for withholding approval).
(iii) The remainder of the purchase procedure for new system additions is the same as for initial equipment purchase.
(c)
(2) The borrower shall prepare any required amendments to the special equipment contract, arrange for the execution by all parties, and submit these amendments to RUS in accordance with § 1753.11(d). RUS Form 238, Construction or Equipment Contract Amendment, shall be used for this purpose.
(d)
(ii) The borrower shall obtain from the contractor, in writing, the results of all inspections and tests made by the contractor as required in the specifications. The borrower will analyze the test results and determine whether the performance of the equipment meets the contract specifications.
(2)
(3)
(i) Assembles and distributes the documents listed in the following table that are required for the closeout of the special equipment contract. The documents listed for RUS shall be retained by the borrower for inspection by RUS for at least two years from the date of the engineer's contract closeout certification.
(ii) Obtains certifications from the engineer that the project and all required documentation are satisfactory and complete. Requirements for this contract closeout certification are contained in § 1753.18.
(iii) Submits copies of the engineer's certifications to RUS with the FRS requesting the remaining funds on the contract.
(iv) Makes final payment in accordance with the payment terms of the contract.
(a) This subpart implements and explains the provisions of the Loan Documents containing the requirements and procedures to be followed by borrowers for minor construction of telecommunications facilities using RUS loan funds. Terms used in this subpart are defined in § 1753.2.
(b) [Reserved]
Minor construction may be performed by contract using RUS Contract Form 773, “Miscellaneous Construction Work and Maintenance Services”, by RUS Contract Form 515, or by work order construction. The rules for using Form 515 for minor construction are contained in subpart F of this part.
(a) RUS Form 773 shall be used for minor construction by contract. Compensation may be based upon unit prices, hourly rates, or another basis agreed to in advance by the borrower and the contractor. A single work project may require more than one contractor.
(b) The borrower shall prepare the contract form and attach any diagrams, sketches and tabulations necessary to specify clearly the work to be performed and who shall provide which materials. Neither the selection of the contractor nor the contract requires RUS approval.
(c) Borrowers are urged to obtain quotations from several contractors before entering into a contract to be assured of obtaining the lowest cost. The
(d) Upon completion and final inspection of the construction the borrower shall obtain from the Contractor a final invoice and an executed copy of RUS Form 743, Certificate of Contractor and Indemnity Agreement.
(e) RUS Contract Form 773 may also be used to contract for the maintenance and repair of telephone equipment and facilities. Generally, RUS will not finance maintenance and repair contracts.
The borrower shall require that:
(a) Minor construction by the force account method be supervised by a competent foreman. The work shall be performed in accordance with all regulatory and safety codes.
(b) Daily time and material reports, referenced by the work project number, shall be kept to record labor and materials used as construction is performed.
(c) The construction foreman shall maintain a tabulation of all construction units installed.
(a) If the borrower performs minor construction financed with loan funds, the borrower's regular work order procedure shall be used to administer construction activities that may be performed entirely by a contractor under Form 773 contract, by work order, or jointly by work order and one or more contractors under Form 773 contracts.
(b) RUS financing under Form 773 contracts dated in the same calendar year is limited to the following amounts for the following discrete categories of minor construction. The date of the Form 773 contract is the date the Form 773 contract is executed.
(1) For outside plant construction, the limit is $500,000 or ten per cent (10%) of the borrower's previous calendar year's outside plant total construction, whichever is greater.
(2) For central office equipment, the limit is $500,000.
(3) For special equipment and buildings, the limit is $250,000 in each category.
(c) A single minor construction project may be a discrete element of a somewhat larger overall project, such as the provision and installation of a standby power generator or heating/air conditioning equipment in connection with a building modification or expansion project or the splicing on a major cable placement project. It cannot be a portion, by dividing into smaller segments, of a discrete major construction project, such as the placement of a continuous cable facility.
(d) RUS approval must be obtained in advance for minor construction unless all of the following conditions are met:
(1) RUS has approved the engineering design.
(2) All standard RUS procedures are followed, including use of new materials listed in the List of Materials for Use on Telephone Systems of RUS Borrowers (Bul. 344-2) and the application of RUS construction practices. (See § 1753.6)
(3) The Standard Form 773 contract is used without modification.
(e) The borrower shall determine the scope of each proposed construction project and decide how it will be constructed. A work project number shall be assigned to which all charges for that project are referenced.
(f) The borrower shall maintain accounting and plant records sufficient to document the cost and location of all construction and to support loan fund advances and disbursements.
(g) Normally the borrower will finance minor construction with general funds and obtain reimbursement with loan funds when construction is completed and executed Form 771 has been submitted to RUS. If a borrower satisfies RUS of its inability to finance the construction temporarily with general funds, RUS may establish, on a case by case basis, a work order fund for specific construction projects. The work order fund will be closed upon receipt of an FRS and the executed Forms 771
(h) RUS will advance funds to finance minor construction work projects only if all necessary documents, including an FRS and supporting data covering the project, are received within one year of the date construction of the project is completed.
(a) Upon completion and prior to closeout, minor construction must be inspected and certified to be in compliance with RUS construction standards, to be reasonable in cost, and to meet applicable codes. The certification is made by an experienced telephone engineer who is either licensed in the state where the inspection will be performed, or is a borrower's staff engineer, who meets the requirements of the “employee in charge” of force account engineering as described in subpart B of this part. The GFR will periodically audit the inspection of minor construction to ensure integrity of the procedure. RUS borrowers with less than 2000 subscribers may use the above procedure or have construction inspection performed by the GFR.
(b) Engineering services for minor construction may be contracted using RUS Form 245, Engineering Service Contract—Special Services. Costs for these services may be included in the costs for construction on the Form 771. (See subpart B of this part.
(c) Upon completion of construction, the borrower shall obtain the engineer's certification on RUS Form 771. An official of the borrower, designated by the board of directors, shall also execute the borrower's certification on Form 771.
(a) For minor construction inspected by the borrower's engineer, an original and two copies of Form 771 shall be sent to the GFR. The GFR will initial and return the original and one copy.
(b) When funds are requested for minor construction, the original Form 771 signed or initialed by the GFR, shall be submitted with the FRS. Forms 771 should be submitted only with the FRS which they support. RUS does not encumber funds pursuant to Forms 771 unless an advance is made to the borrower. (See 7 CFR part 1744 subpart C).
(a) This subpart implements and explains the provisions of the loan documents setting forth the requirements and procedures to be followed by borrowers accepting nomination for the construction certification program. Terms used in this subpart are defined in § 1753.2.
(b) [Reserved]
(a) It is RUS policy that, as borrowers gain in experience and maturity, the advice and assistance rendered by RUS shall progressively diminish. Prior to approval of a loan, RUS may nominate certain borrowers to fulfill the responsibilities for administration and construction of projects financed with RUS loans. Borrowers who accept this nomination will be known as “certification borrowers,” and the program in which they participate will be known as the “certification program.”
(b) Generally, initial loan borrowers are not eligible for the certification program.
(c) Generally, the factors which RUS will consider in selecting borrowers for the certification program will include:
(1) The experience of the staff of the borrower.
(2) The RUS assessment of the borrower's ability to handle the certification program requirements considering the size and complexity of the proposed construction in the LD.
(3) The history of the borrower in following RUS's policies and procedures.
(4) Other factors deemed relevant by RUS.
(d) Except as specifically stated in this subpart, certification borrowers must comply with all requirements applicable to other borrowers.
(e) RUS reserves the right at any time to require submission of construction documents or to remove the borrower from the certification program.
(a)
(2) Approval of P&S.
(3) Approval of price quotations and bids, except where the low price bid is not accepted.
(4) Approval of award of construction contracts and amendments.
(5) Approval of FAP's if RUS has approved the force account method of construction for the construction project.
(6) Inspection and certification of construction.
(7) Approval of closeout documents.
(8) Other responsibilities as may be specifically granted in writing by RUS.
(b)
(2) Approval of use of loan funds for projects other than those included in the loan construction budget. See 7 CFR part 1744 subpart C.
(3) Approval of use of loan funds in excess of amounts included in the loan budget.
(4) Approval of force account methods of engineering and construction.
(5) Approval to make significant deviations from the work plan approved by RUS.
(6) Approval of interim construction.
(7) Approval to use materials not listed in the List of Materials Acceptable for Use on Telephone Systems of RUS Borrowers.
(8) Approval of field trials.
(9) Approval to modify or alter standard forms and contracts.
(10) Approval to open bids when fewer than the required number have been received.
(11) Approval of outside plant layouts.
(12) “Buy American” determinations.
(13) Other responsibilities not specifically transferred by this subpart or in writing by RUS.
(a) Certification borrowers shall appoint three certification officials. These appointments shall be subject to RUS approval.
(1) The “Certifying Officer” shall be an officer or employee of the borrower who is authorized to execute binding agreements. This officer shall sign all contracts, amendments, closeout documents and the certification on RUS Form 158, Certification of Contract or Force Account Proposal Approval, and RUS Form 159, Summary of Completed Construction.
(2) The “Construction Certifier” shall be an experienced telephone engineer who is either licensed in the state where the inspection will be performed, or is a borrower's staff engineer who meets the requirements of the “employee in charge” of force account engineering as described in subpart B of this part. RUS may determine that it will accept the certification only for matters within the staff engineer's area of specialization. In such cases the position of “Construction Certifier” shall be filled by more than one engineer. This official is responsible for certifying that the construction complies with all technical and code requirements.
(3) The “Certification Coordinator” shall administer the certification program and serve as the official point of contact for RUS. The certifying officer or construction certifier may also serve as the certification coordinator.
(b) Certification borrowers, shall submit and obtain RUS approval of a work plan before construction and related engineering begin.
(1) The work plan shall provide a description of the proposed construction and methods of purchasing in such detail as to enable RUS to monitor the
(2) The work plan shall include the following:
(i) The names and qualifications of the proposed certification officials defined in § 1753.94(a).
(ii) A listing of the proposed work projects to accomplish the loan purposes showing the estimated cost, method of performing the construction, and the proposed commencement and completion dates for each work project. The proposed work projects shall be summarized on RUS Form 157, Construction Work Plan and Cost Distribution, or a form providing essentially the same information.
(iii) The proposed source of funds for meeting cost overruns if the total estimated cost of work projects exceeds the loan budget.
(iv) A statement signed by the borrower's certification officials and the GFR that the work plan is accurate and complete.
(c) Under the certification program, the borrower shall follow all standard RUS postloan engineering and construction procedures except that the approvals shown in § 1753.93(a) will be made by certification officials rather than RUS. The approvals noted in § 1753.93(a)(1), (4) and (5) will be reported immediately to RUS using RUS Form 158. Approval of closeouts, § 1753.93(a) (6) and (7), will be reported immediately on RUS Form 159.
(d) As the construction program progresses, the certification borrower shall request, by letter, RUS approval of any significant changes in work plan schedules and budgets and in certification officials.
Advance of loan funds needed to meet the certification borrower's current financial obligations are to be requested on RUS Form 481 for construction and engineering items supported by appropriate RUS Forms 158 and 159. For items other than construction or engineering, other supporting data shall be submitted. (See 7 CFR part 1744 subpart C.)
The certification borrower shall modify standard RUS forms of contract for use under the certification program by inserting an executed copy of the following certification addendum in each copy of the contract.
Permission has been obtained by the Owner to proceed with this contract under 7 CFR part 1753 subpart J, pursuant to which the references in the RUS construction document requiring approvals and other actions of the RUS Administrator will not apply unless RUS gives specific notice in writing to the affected parties that designated approval(s) or action(s) will be required. Certifications by the Contractor of amounts due and certifications of completions of work under the contract are to be construed to be rendered for the purpose of inducing the Rural Utilities Service or Rural Telephone Bank to advance funds to the Owner to make, or reimburse the Owner for, payments under this contract.
7 U.S.C. 901
(a) Except as covered in Bulletin 345-3, no loan funds shall be advanced for any product if any item to be included in the project is not included in the “List of Materials Acceptable for Use on Telephone Systems of RUS Borrowers,” RUS Bulletin 344-2. When new items of materials or equipment are considered for acceptance by RUS or when a previously accepted item has been subjected to such major modifications that its suitability cannot be determined based on laboratory data and/or field experience, a field trial shall be required if RUS so determines. This field trial consists of limited field installations of the materials or equipment in closely monitored situations designed to determine, to RUS's satisfaction, their operational effectiveness under actual field conditions. Field trials are to be used only as a means for determining, to RUS's satisfaction, the operational effectiveness of a new or revised product under actual field conditions. Both the manufacturer and borrower are responsible for assuring that the field trial is carried out and that the required information on the product's performance is received by RUS in a timely manner. The use of materials or equipment derived from new inventions or concepts untried within the telephone industry is defined as “an experiment” and shall be handled as a special case using procedures considered appropriate by RUS to meet the individual experiment.
(b) To qualify for a field trial, the new and improved materials and equipment must appear to RUS to offer one or more of the following benefits:
(1) Improved performance.
(2) Decreased cost.
(3) Broader application.
(c) The item of material or equipment subject to field trial may be only
(d) A borrower may participate in a field trial only if, in RUS's opinion, the borrower possesses:
(1) Adequate financial resources so that no delay in the project will result from lack of funds.
(2) The financial stability to overcome difficulties which may result from an unsuccessful field trial. The borrower must be able to restore and maintain service until the manufacturer meets its financial obligations with respect to the field trial.
(3) Qualified personnel to enable it to discharge its responsibilities.
(4) A record satisfactory to RUS for maintaining equipment and plant facilities and for providing RUS with information when requested.
(5) Willingness to participate in the field trial and awareness of the effort and responsibility this entails.
(e) The test site for the field trial shall be, in RUS's opinion, readily accessible and provide the conditions, such as temperature extremes, high probability of lightning damage, etc., for which the product is being evaluated. The material or equipment involved shall be covered by an RUS specification or a suitable standard acceptable to RUS. The supplier is required to submit test data to show conformance with the applicable specification or standard. Further testing shall be performed if required by RUS personnel.
(f) A field trial shall normally continue for a minimum of six months, or for a longer period of time determined by RUS to be required to obtain conclusive data that the item either fulfills all requirements or is unacceptable. Either the borrower or supplier may terminate a field trial at any time, in accordance with their contractual agreement. Such termination, if prior to the time required by RUS, shall constitute withdrawal of the product from consideration by RUS. RUS has authority to terminate field trials based on its determination that the equipment is not performing satisfactorily and that this lack of performance may, in RUS's opinion, cause service degradation or hazards to life or property.
(g) Field trials shall be conducted in accordance with the instructions set forth in this regulation and the agreement relating to the specific application. Both the supplier and the borrower shall agree, and obtain RUS approval before the start of the trial, on the following:
(1) The specific purpose of the field trial;
(2) Ownership of items during trial;
(3) Starting date and duration;
(4) Responsibility for costs and removal of items in the event of noncompliance with the specification or purpose intended and arrangements for service continuity or restoration;
(5) Responsibility for testing, test equipment and normal operation and maintenance during the trial period;
(6) Availability of test equipment on site during the trial period; and
(7) Responsibility for spare parts and components consumed during the trial period.
(h) Both the supplier and the borrower shall keep RUS informed of the status of a field trial. These reports shall not be limited to details of problems of failures encountered during installation and subsequent operation but shall include information on progress of the field trial. If these reports are not received in accordance with the requirements of the RUS Form 399b, RUS shall have the authority to deny or suspend loan funds related to these products until the delinquent reports are received.
(i) Before a borrower purchases materials or equipment that require a field trial, prior approval must be obtained from RUS and RUS Form 399b, RUS Telecommunications Equipment Field
(j) Procedures for establishing field trials for the various categories of equipment after RUS has approved the 399b:
(1)
(i) Voice frequency repeaters;
(ii) Trunk carriers;
(iii) Subscriber carrier;
(iv) Point-to-point radio (Microwave);
(v) Coaxial cable system electronics;
(vi) Fiber optic cable system electronics;
(vii) Multiplex equipment;
(viii) Mobile and fixed radiotelephone; and
(ix) Other items of electronic equipment associated with transmission.
(2)
(i) Central office dial equipment;
(ii) Direct distance dialing equipment;
(iii) Automatic number identification equipment;
(iv) Line concentrators;
(v) Remote switching equipment; and
(vi) All other items of equipment associated with switching equipment, such as loop extenders.
(3) Protection equipment and materials, outside plant equipment and materials, and all other equipment and materials, which includes all items not covered in paragraph (j) (1) or (2) of this section, shall be handled as described in Bulletin 344-1 “Methods of Purchasing Materials and Equipment for Use on Systems of Telephone Borrowers” except that the borrower's purchase order form is to be used for purchasing materials and equipment in these categories. In addition, the borrower and supplier shall execute three copies of the “Supplemental Agreement to Equipment Contract for Field
(k) For all items except Electronic Central Office Equipment, suppliers and manufacturers must furnish warranties or guarantees satisfactory to RUS against the failure of the material and equipment used in the field trial. Terms of this warranty must not be less than the provisions of the standard warranty included in the “Telephone System Construction Contract”, RUS Form 515, or the warranty provided for similar materials and equipment included in the “List of Materials Acceptable for Use on Telephone Systems of RUS Borrowers”, RUS Bulletin 344-2. In lieu of a warranty, materials and equipment are sometimes furnished to RUS borrowers on a reduced or no cost basis. Terms of such arrangements are subject to RUS approval and should be fully covered in field trial proposals forwarded by borrowers to the Chief, Area Engineering Branch for review and approval. For the purchase of electronic central office equipment, suppliers and manufacturers are to provide warranties as provided in the applicable RUS contract form: RUS Form 397 for electronic equipment and RUS Form 525 for central office equipment. Forms 399 and 399a, which apply to field trials of these devices, specify that the term of the warranty does not begin until the satisfactory conclusion of the field trial.
(a) The standard loan agreement between RUS and its borrowers provides that, in accordance with applicable RUS regulations, borrowers shall use standard contract forms promulgated by RUS for construction, procurement, engineering services, and architectural services financed by a loan or guaranteed by RUS. This part implements these provisions of the RUS loan agreement and prescribes the procedures that RUS follows in promulgating standard contract forms that borrowers are required to use. Part 1753 prescribes when and how borrowers are required to use these standard forms of contracts.
(b)
(a)
(b)
(2) The borrower may use electronic reproductions of a contract form if the contract documents submitted for RUS approval are exact reproductions of the RUS form and include the following certification by the borrower: I (Insert name of the person.), certify that the attached (Insert name of the contract form.), between (Insert name of the parties.), dated (Insert contract date.) is an exact reproduction of RUS Form
(c)
(d)
(e)
(a)
(b)
RUS may, from time to time, promulgate new contract forms or revise or eliminate existing contract forms. In so doing, RUS shall publish a notice of rulemaking in the
(a)
(b)
(c)
(2) RUS Form 158, issued 10-77, Certification of Contract or Force Account Approval.
(3) RUS Form 159, issued 10-77, Summary of Completed Construction.
(4) RUS Form 168b, issued 2-04, Contractor's Bond.
(5) RUS Form 168c, issued 2-04, Contractor's Bond.
(6) RUS Form 181a, issued 3-66, Certificate of Completion (Force Account Construction).
(7) RUS Form 187, issued 2-04, Certificate of Completion, Contract Construction.
(8) RUS Form 213, issued 2-04, Certificate (Buy American).
(9) RUS Form 216, issued 7-67, Construction Change Order.
(10) RUS Form 217, issued 3-97, Postloan Engineering Services Contract—Telecommunications Systems.
(11) RUS Form 220, issued 6-98, Architectural Services Contract.
(12) RUS Form 224, issued 2-04, Waiver and Release of Lien.
(13) RUS Form 231, issued 2-04, Certificate of Contractor.
(14) RUS Form 238, issued 2-04, Construction or Equipment Contract Amendment.
(15) RUS Form 242, issued 11-58, Assignment of Engineering Service Contract.
(16) RUS Form 245, issued 11-75, Engineering Services Contract, Special Services—Telephone.
(17) RUS Form 257, issued 2-04, Contract to Construct Buildings.
(18) RUS Form 257a, issued 10-69, Contractor's Bond.
(19) RUS Form 274, issued 6-81, Bidder's Qualifications.
(20) RUS Form 276, issued 5-59, Bidder's Qualifications for Buried Plant Construction.
(21) RUS Form 281 issued 5-61, Tabulation of Materials Furnished by Borrower.
(22) RUS Form 282, issued 11-53, Subcontract (Under Construction or Equipment Contracts).
(23) RUS Form 284, issued 4-72, Final Statement of Cost for Architectural Service and Certificate of Architect.
(24) RUS Form 307, issued 2-04, Bid Bond.
(25) RUS Form 396, issued 3-64, Certificate of Completion—Special Equipment Contract (Including Installation).
(26) RUS Form 396a, issued 3-64, Certificate of Completion—Special Equipment Contract (Not Including Installation).
(27) RUS Form 397, issued September 25, 2000, Special Equipment Contract (Including Installation).
(28) RUS Form 397f, issued 2-63, Contractor's Bond (Special Telephone Equipment).
(29) Addendum No. 1 to RUS Form 397, issued 7-78, Special Equipment Contract (Including Installation).
(30) RUS Form 398, issued 11-62, Special Equipment Contract (Not Including Installation).
(31) RUS Form 399, issued 8-82, Supplemental Agreement to Equipment Contract for Field Trial.
(32) RUS Form 399a, issued 8-82, Supplemental Agreement to Equipment Contract for Field Trial (Secondary-Delivery, Installation, Operation).
(33) RUS Form 506, issued 3-97, Statement of Engineering Fee—Telecommunications.
(34) RUS Form 515, issued September 17, 2001, Telecommunications Systems Construction Contract (Labor and Materials).
(35) RUS Form 517, issued 9-64, Results of Acceptance Tests
(36) RUS Form 525, issued 7-94, Central Office Equipment Contract (Including Installation).
(37) Addendum to RUS Form 525, issued 7-94, Central Office Equipment Contract (Including Installation) and RUS Form 545 Central Office Equipment Contract (Not Including Installation).
(38) RUS Form 525a, issued 10-62, Contractor's Bond (Central Office Equipment).
(39) RUS Form 526, issued 8-66, Construction Contract Amendment.
(40) RUS Form 527, issued 3-71, Statement of Construction, Telephone System “ Outside Plant.
(41) RUS Form 545, issued November 4, 1999, Central Office Equipment Contract (Not Including Installation).
(42) RUS Form 553, issued 5-67, Check List for Review of Plans and Specifications.
(43) RUS Form 724 issued 10-63, Final Inventory, Telephone Construction Contract.
(44) RUS Form 724a issued 4-61, Final Inventory, Telephone Construction—Telephone Construction Contract (Labor and Materials), columns 1-8.
(45) RUS Form 724b issued 3-61, Final Inventory, Telephone Construction Contract (Labor and Materials), columns 9-14.
(46) RUS Form 744, issued 2-62, Certificate of Contractor and Indemnity Agreement.
(47) RUS Form 752a, issued 5-66, Certificate of Completion Central Office Equipment-Not Including Installation.
(48) RUS Form 754, issued 6-66, Certificate of Completion and Certificate of Contractor and Indemnity Agreement.
(49) RUS Form 771, Issued 10-75, Summary of Work Orders (Inspected by RUS Field Engineer).
(50) RUS Form 771a, issued 10-75, Summary of Work Orders (Inspected by Licensed Engineer or Borrower's Staff Engineer).
(51) RUS Form 773, issued 12-90, Miscellaneous Construction Work and Maintenance Services Contract.
(52) RUS Form 787, issued 8-63, Supplement A to Construction Contract.
(53) RUS Form 817, issued 6-60, Final Inventory, Telephone Force Account Construction.
(54) RUS Form 817a, issued 6-60, Final Inventory, Telephone Force Account Construction, columns 1-8.
(55) RUS Form 817b, issued 6-60, Final Inventory, Telephone Force Account Construction, Columns 9-14.
(56) RUS Form 835, issued 3-66, Preloan Engineering Service Contract, Telephone System Design.
The following telecommunications bulletins have been approved for incorporation by reference by the Director of the Office of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. These bulletins contain construction standards and specifications for materials and equipment and may be obtained from the Rural Utilities Service, Program Development and Regulatory Analysis, 1400 Independence Ave., SW, Stop 1522, Room 4028 South Building, Washington, DC 20250-1522. The bulletins are available for inspection at RUS, at the address above, and at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
For
The following specifications are included throughout 7 CFR chapter XVII. These specifications are not incorporated by reference elsewhere in the chapter. The terms “RUS form,” “RUS standard form,” “RUS specification,” and “RUS bulletin” have the same meaning as the terms “REA form,” “REA standard form,” “REA specification,” and “REA bulletin,” respectively, unless otherwise indicated. The list of specifications follows:
(a)
(2) American National Standard Institute/National Fire Protection Association (ANSI/NFPA) 70, 1993 National Electrical Code (NEC) referenced in this section is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. A copy of the ANSI/NFPA 1993 NEC standard is available for inspection during normal business hours at RUS, room 2845, U.S. Department of Agriculture, Washington, DC 20250-1500, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(3) American National Standard Institute/Institute of Electrical and Electronics Engineers, Inc. (ANSI/IEEE), 1993 National Electrical Safety Code (NESC) referenced in this section is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. A copy of the ANSI/IEEE 1993 NESC standard is available for inspection during normal business hours at RUS, room 2845, U.S.
(b)
(2) The installation instructions provided by the manufacturer of splicing materials shall be followed except where those instructions conflict with the procedures specified in this section.
(3) Precautions shall be taken to prevent the ingress of moisture and other contaminants during all phases of the splicing installation. When an uncompleted splice must be left unattended, it shall be sealed to prevent the ingress of moisture and other contaminants.
(4) Minor sheath damage during construction may be repaired if the repair is completed immediately and approved by the borrower's resident project representative. Minor damage is typically repaired by:
(i) Scuffing the cable sheath associated with the damaged area;
(ii) Applying several layers of DR tape over the scuffed and damaged area;
(iii) Applying several layers of plastic tape over the DR tape; and
(iv) If damage is severe enough to rupture the cable shield, a splice closure shall be installed.
(5) All splice cases installed on RUS toll trunk and feeder cables shall be filled, whether aerial, buried, or underground.
(c)
(2)
(3)
(ii) Caution shall be exercised to avoid damaging the conductor insulation when cutting through the cable shield and removing the shield. Sharp edges and burrs shall be removed from the cut end of the shield.
(4)
(5)
(ii) The standard insulation color code used to identify individual cable pairs within 25-pair binder groups shall be as shown in Table 1:
(iii) The standard binder ribbon color code used to designate 25-pair binder groups within 600-pair super units shall be as shown in Table 2:
(iv) Super-unit binder groups shall be identified in accordance with Table 3:
(v) Service pairs in screened cables shall be identified in accordance with Table 4:
(6)
(7)
(8)
(ii) Specialized connectors are available for splicing operations such as butt splices, in line splices, bridge taps, clearing and capping, and multiple pair splicing operations. The splice connector manufacturer's recommendations shall be followed concerning connector selection and use.
(iii) Caution shall be exercised to maintain conductor and pair association both during and after splicing operations.
(iv) Splicing operations that involve pairs containing working services shall utilize splice connectors that permit splicing without the interruption of service.
(9)
(10)
(11)
(12)
(13)
(14)
(ii) Only filled terminal blocks having RUS acceptance shall be used on aerial service wire connections.
(15)
(16)
(d)
(ii) Fixed count terminals shall restrict service technician access to the cable core. Predetermined cable pairs shall be spliced to the terminal leads or
(2)
(3)
(ii) A treated plank or equivalent shall be placed 15 cm (6 in.) above the buried splice case to prevent damage to the splice case from future digging. Where a firm base for burying a splice cannot be obtained, a treated plank or equivalent shall be placed beneath the splice case.
(iii) Each buried splice shall be identified for future locating. One method of marking the splice point is the use of a warning sign. Another method is the burying of an electronic locating device.
(4)
(ii) The recommended splice capacities for BD-type pedestals are shown in Table 5. However, larger size pedestals are permissible if service requirements dictate their usefulness. Table 5 is as follows:
(iii) Special distribution pedestals having a divider plate for mounting filled terminal blocks are available. Distribution pedestals are also equipped with service wire channels for installation of buried service wires without disturbing the cabling and gravel inside the base of the pedestal. Distribution pedestals are recommended in locations where the connection of service wires is required.
(5)
(6)
(7)
(8)
(9)
(10)
(ii) Tip cables should be spliced in a cable vault. However, as a last resort, tip cables may be spliced inside a central office if flame retardant splice cases or a noncombustible central office splice housing is used to contain the splice.
(iii) Splices inside the central office shall be made as close as practical to
(e)
(2)
(3)
(ii) Undesirable splice losses are caused by poor splicing techniques including splicing irregularities such as improper cleaves and dirty splices. Typical cleave problems are illustrated in Figure 8:
(4)
(i) Avoid damaging the cable during handling operations prior to splicing. Minor damage may change the transmission characteristics of the fibers to the extent that the cable section will have to be replaced;
(ii) The cable manufacturer's recommendations concerning pulling tension shall be observed. The maximum pulling tension for most fiber optic cable is 2669 newtons (600 pound-force);
(iii) The cable manufacturer's recommendations concerning bending radius shall be observed. Unless the cable manufacturer's recommendation is more stringent, the minimum bending radius for fiber optic cable shall be 20 times the cable diameter;
(iv) The cable manufacturer's recommendations concerning buffer tube bending radius shall be observed. Unless the cable manufacturer's recommendation is more stringent, the minimum bending radius for buffer tubes is usually between 38 millimeters (mm) (1.5 in.) and 76 mm (3.0 in.). The bending limitations on buffer tubes are intended to prevent kinking. Buffer tube kinking may cause excessive optical loss or fiber breakage; and
(v) Handle unprotected glass fibers carefully to avoid introducing flaws such as scratched or broken fibers.
(5)
(i) Safety glasses shall be worn when handling glass fibers;
(ii) Never view open-ended fibers with the naked eye or a magnifying device. Improper viewing of a fiber end that is transmitting light may cause irreparable eye damage; and
(iii) Dispose of bare scrap fibers by using the sticky side of a piece of tape to pick up and discard loose fiber ends. Fiber scraps easily penetrate the skin and are difficult to remove.
(6)
(ii) Both fusion and mechanical splicing techniques are permitted on RUS financed projects. When using the mechanical splicing technique, only RUS accepted mechanical fiber optic splice connectors can be used.
(iii) Fusion splicing machines shall be kept in proper working condition. Regular maintenance in accordance with the machine manufacturer's recommendations shall be observed.
(iv) Mechanical splicing tools shall be in conformance with the tool manufacturer's recommendations.
(v) An optical time domain reflectometer (OTDR) shall be used for testing splices. The OTDR shall be stationed at the central office or launch point for testing individual splices as they are made and for end-to-end signature tests for the fiber optic link.
(vi) An optical power meter shall be used for end-to-end cable acceptance tests.
(vii) A prerequisite for the successful completion of a fiber optic splicing endeavor is the presence of a talk circuit between the splicing technician in the splicing vehicle and the operator of the OTDR in the central office. The splicing technician and the OTDR operator shall have access to communications with each other in order to inform each other as to:
(A) Which splices meet the loss objectives;
(B) The sequence in which buffer tubes and fibers are to be selected for subsequent splicing operations; and
(C) The timing required for the performance of OTDR testing to prevent making an OTDR test at the same time a splice is being fused.
(7)
(ii) The splice case manufacturer's recommendations concerning the amount of cable sheath to be removed shall be followed to facilitate splicing operations. The length of the sheath opening shall be identified with a wrap of plastic tape.
(iii) If the cable contains a rip cord, the cable jacket shall be ring cut approximately 15 cm (6 in.) from the end and the 15 cm (6 in.) of cable jacket shall be removed to expose the rip cord. The rip cord shall be used to slit the jacket to the tape mark.
(iv) If the cable does not contain a rip cord, the cable jacket shall be slit using a sheath splitter. No cuts shall be made into the cable core nor shall the buffer tubes be damaged.
(v) If the cable contains an armor sheath, the outer jacket shall be opened along the slit and the jacket shall be removed exposing the armor sheath. The armor shall be separated at the seam and pulled from the cable exposing the inner jacket. The armor shall be removed making allowances for a shield bond connector. The inner sheath shall be slit using a sheath splitter or rip cord. The cable core shall not be damaged nor shall there be any damage to the buffer tubes. The jacket shall be peeled back and cut at the end of the slit. The exposed buffer tubes shall not be cut, kinked, or bent.
(vi) After the cable sheath has been removed, the binder tape shall be removed from the cable. The cable shall not be crushed or deformed.
(vii) The buffer tubes shall be unstranded one at a time. The buffer tubes shall not be kinked.
(viii) If the cable is equipped with a strength member, the strength member shall be cut to the length recommended by the splice case manufacturer.
(ix) Each buffer tube shall be inspected for kinks, cuts, and flat spots. If damage is detected, an additional length of cable jacket shall be removed and all of the buffer tubes shall be cut off at the point of damage.
(x) The cable preparation sequence shall be repeated for the other cable end.
(8)
(9)
(10)
(ii) Experiment with a scrap buffer tube to determine the cutting tool adjustment required to ring cut a buffer tube without damaging the fibers.
(iii) Buffer tubes shall be removed by carefully ring cutting and removing approximately 15 to 46 cm (6 to 18 in.) of buffer tube at a time. The process shall be repeated until the required length of buffer tube has been removed, including the tape identification marker.
(11)
(ii) A tissue or cotton ball shall be soaked in the recommended cleaning solvent and the coated fibers shall be carefully wiped one at a time using a clean tissue or cotton ball for each coated fiber. Caution shall be exercised to avoid removing the coloring agent from the fiber coating.
(12)
(ii) The recommended length of fiber coating shall be removed only on the two fibers to be spliced. Fiber coating removal shall be performed on a one-fiber-at-a-time basis as each splice is prepared.
(13)
(14)
(15)
(16)
(ii) Each spliced fiber shall be routed through the organizer tray one at a time as splices are completed. The fibers shall be organized one at a time to prevent tangled spliced fibers. The splice case manufacturer's recommendation shall be followed concerning the splice tray selection.
(17)
(18)
(f)
(2)
(3)
(4)
(ii) As a first choice, the outside plant fiber optic cable shall be spliced to an all-dielectric fire retardant cable in a cable vault with the all-dielectric cable extending into the central office and terminating inside a fiber patch panel.
(iii) As a second choice, the outside plant cable may be spliced inside the central office if a flame retardant fiber optic splice case or a noncombustible central office splice housing equipped with organizer trays is used to contain the splice.
(iv) In cases referenced in paragraphs (f)(4)(ii) and (f)(4)(iii) of this section, as a minimum the fire retardant all-dielectric cable used to provide the connection between the cable entrance splice and the fiber patch panel shall be listed as Communication Riser Cable (Type CMR) in accordance with Sections 800-50 and 800-51(b) of the 1993 National Electrical Code.
(v) Splices inside the central office shall be made as close as practicable to
(g)
(2)
(ii)(A) Shield bonding conductors shall be either stranded or braided tinned copper wire equivalent to a minimum No. 6 American Wire Gauge (AWG) and shall be RUS accepted. The conductor connections shall be tinned or of a compatible bimetallic design to avoid corrosion problems associated with dissimilar metals. The number of shield bond connectors required per pair size and gauge shall be as shown in Table 8:
(B) It is permissible to strap across the shield bond connectors of several cables with a single length of braided wire. However, both ends of the braid shall be terminated on the pedestal ground bracket to provide a bonding loop. Shield bond connection methods for individual cables are shown in Figures 13 through 15, and the bonding of several cables inside a pedestal using the bonding loop is shown in Figure 16:
(3)
(4)
(ii) Shield bonding conductors shall be either stranded or braided tinned copper wire equivalent to a minimum No. 6 American Wire Gauge (AWG) and shall be RUS accepted. The conductor connections shall be tinned or of a compatible bimetallic design to avoid corrosion problems associated with dissimilar metals.
(5)
(ii) The conductor used for grounding metallic telephone hardware shall be a minimum No. 6 AWG solid, bare, copper conductor.
(iii) For copper and fiber optic cable plant, all cable shields, all metallic strength members, and all metallic hardware shall be:
(A) Grounded at each splice location to a driven grounding electrode (ground rod) of:
(
(
(B) Bonded to a multi-grounded power system neutral when the splice is within 1.8 meters (6 feet) of access to the grounding system of the multi-grounded neutral system. Bonding to the multi-grounded neutral of a parallel power line may help to minimize telephone interference on long exposures with copper cable plant. Consideration, thus, should be given to completing such bonds, at least four (4) times each mile, when splices are greater than 1.8 meters (6 feet) but less than 4.6 meters (15 feet) from access to the multi-grounded neutral.
(6)
(ii) Buried splice cases installed in either handholes or pedestals shall be grounded such that the cable shield grounds are attached to a common ground connection that will allow the lifting of a ground on the cable shield in either direction to permit efficient cable locating procedures. As a first choice, buried grounding conductor(s) shall be bare. However, if two or more grounding conductors are buried in the s they shall be insulated to avoid shorts when a locating tone is applied.
(iii) A typical bonding and grounding method for fiber optic splices is shown in Figure 19:
(7)
(a) RUS incorporates by reference ASTM A475-78, Standard Specification for Zinc-Coated Steel Wire Strand, issued May 1978. All seven wire galvanized steel strand purchased after April 1, 1990, for use on telecommunications systems financed by RUS loan funds must conform to this standard. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51 on January 19, 1990). Copies of ASTM A475-78 are available for inspection during normal business hours at the National Archives and Records Administration (NARA) and the Rural Utilities Service, Administrative Services Division, room 0175-S, U.S. Department of Agriculture, Washington, DC 20250, telephone 202-382-9551. For information on the availability of this material at NARA, call 202-741-6030, or go to:
(b) In addition to the requirements of ASTM 475-78, all coils and reels having Class B or C coatings shall be marked with a 3-inch wide and 6-inch long deep-colored stripe, green or orange, respectively, to identify the class of galvanized coating of the strand. This marking shall be applied to the exposed convolutions of the strand in the eye of the coils and located near the midpoint on the outside layer of strand on the reels. The marking shall not cover any welded joint markings.
(a)
(i) The conductors are solid copper, individually insulated with an extruded solid insulating compound.
(ii) The insulated conductors are twisted into pairs which are then stranded or oscillated to form a cylindrical core.
(iii) For high frequency applications, the cable core may be separated into compartments with screening shields.
(iv) A moisture resistant filling compound is applied to the stranded conductors completely covering the insulated conductors and filling the interstices between pairs and units.
(v) The cable structure is completed by the application of suitable core wrapping material, a flooding compound, a shield or a shield/armor, and an overall plastic jacket.
(2) The number of pairs and gauge size of conductors which are used within the RUS program are provided in the following table:
(3) Screened cable, when specified, must meet all requirements of this section. The pair sizes of screened cables used within the RUS program are referenced in paragraph (e)(2)(i) of this section.
(4) All cables sold to RUS borrowers for projects involving RUS loan funds under this section must be accepted by RUS Technical Standards Committee “A” (Telephone). For cables manufactured to the specification of this section, all design changes to an accepted design must be submitted for acceptance. RUS will be the sole authority on what constitutes a design change.
(5) Materials, manufacturing techniques, or cable designs not specifically addressed by this section may be allowed if accepted by RUS. Justification for acceptance of modified materials, manufacturing techniques, or cable designs must be provided to substantiate product utility and long-term stability and endurance.
(6) The American National Standard Institute/Insulated Cable Engineers Association, Inc. (ANSI/ICEA) S-84-608-1988 Standard For Telecommunications Cable, Filled, Polyolefin Insulated, Copper Conductor Technical Requirements referenced throughout this section is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of ANSI/ICEA S-84-608-1988 are available for inspection during normal business hours at RUS, room 2845, U.S. Department of Agriculture, Washington, DC 20250, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(7) American Society for Testing and Materials specifications (ASTM) A 505-87, Standard Specification for Steel, Sheet and Strip, Alloy, Hot-Rolled and Cold-Rolled, General Requirements For; ASTM B 193-87, Standard Test Method for Resistivity of Electrical Conductor Materials; ASTM B 224-80, Standard Classification of Coppers; ASTM B 694-86, Standard Specification for Copper, Copper Alloy, and Copper-Clad Stainless Steel Sheet and Strip for Electrical Cable Shielding; ASTM D 4565-90a, Standard Test Methods for Physical and Environmental Performance Properties of Insulations and Jackets for Telecommunications Wire and Cable; and ASTM D 4566-90, Standard Test Methods for Electrical Performance Properties of Insulations and Jackets for Telecommunications Wire and Cable referenced in this section are incorporated by reference by RUS. These incorporations by references were approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of the ASTM standards are available for inspection during normal business hours at RUS, room 2845, U.S. Department of Agriculture, Washington, DC 20250, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(b)
(2) Each conductor must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 2.1.
(3) Factory joints made in conductors during the manufacturing process must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 2.2.
(4) The raw materials used for conductor insulation must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 3.1 through 3.1.3.
(5) The finished conductor insulation must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 3.2.1 and 3.3.
(6) Insulated conductors must not have an overall diameter greater than 2 millimeters (mm) (0.081 inch (in.)).
(7) A permissible overall performance level of faults in conductor insulation must average not greater than one fault per 12,000 conductor meters (40,000 conductor feet) for each gauge of conductor.
(i) All insulated conductors must be continuously tested for insulation faults during the twinning operation with a method of testing acceptable to RUS. The length count and number of faults must be recorded. The information must be retained for a period of 6 months and be available for review by RUS when requested.
(ii) The voltages for determining compliance with the requirements of this section are as follows:
(8) Repairs to the conductor insulation during manufacture are permissible. The method of repair must be accepted by RUS prior to its use. The repaired insulation must be capable of meeting the relevant electrical requirements of this section.
(9) All repaired sections of insulation must be retested in the same manner as originally tested for compliance with paragraph (b)(7) of this section.
(10) The colored insulating material removed from or tested on the conductor, from a finished cable, must meet the performance requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 3.4.1, 3.4.2, 3.4.4, 3.4.5, and 3.4.6.
(c)
(i) The tip and ring conductor of each pair; and
(ii) Each pair in the completed cable.
(2) The colors to be used in the pairs in the 25 pair group, together with the pair numbers must be in accordance with the table specified in ANSI/ICEA S-84-608-1988, paragraph 3.5.
(3) Positive identification of the tip and ring conductors of each pair by marking each conductor of a pair with the color of its mate is permissible. The method of marking must be accepted by RUS prior to its use.
(4) Other methods of providing positive identification of the tip and ring conductors of each pair may be employed if accepted by RUS prior to its use.
(5) The insulated conductors must be twisted into pairs.
(6) In order to provide sufficiently high crosstalk isolation, the pair twists must be designed to enable the cable to meet the capacitance unbalance and crosstalk loss requirements of paragraphs (k)(5), (k)(6), and (k)(8) of this section.
(7) The average length of pair twists in any pair in the finished cable, when measured on any 3 meter (10 foot) length, must not exceed the requirement specified in ANSI/ICEA S-84-608-1988, paragraph 3.5.
(d)
(2) When desired for lay-up reasons, the basic group may be divided into two or more subgroups called units.
(3) Each group, or unit in a particular group, must be enclosed in bindings of the colors indicated for its particular pair count. The pair count, indicated by the colors of insulation, must be consecutive as indicated in paragraph (d)(6) of this section through units in a group.
(4) The filling compound must be applied to the cable core in such a way as to provide as near a completely filled core as is commercially practical.
(5) Threads and tapes used as binders must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 4.2 and 4.2.1.
(6) The colors of the bindings and their significance with respect to pair count must be as follows:
(7) The use of the white unit binder in cables of 100 pairs or less is optional.
(8) When desired for manufacturing reasons, two or more 25 pair groups
(9) Color binders must not be missing for more than 90 meters (300 feet) from any 25 pair group or from any subgroup used as part of a super-unit. At any cable cross-section, no adjacent 25 pair groups and no more than one subgroup of any super-unit may have missing binders. In no case must the total number of missing binders exceed three. Missing super-unit binders must not be permitted for any distance.
(10) Any reel of cable which contains missing binders must be labeled indicating the colors and location of the binders involved. The labeling must be applied to the reel and also to the cable.
(e)
(2) At the option of the user or manufacturer, identified service pairs providing for voice order and fault location may be placed in screened cables.
(i) The number of service pairs provided must be one per twenty-five operating pairs plus two for a cable size up to and including 400 pairs, subject to a minimum of four service pairs. The pair counts for screened cables are as follows:
(ii) The service pairs must be equally divided among the compartments. The color sequence must be repeated in each compartment.
(iii) The electrical and physical characteristics of each service pair must meet all the requirements set forth in this section.
(iv) The colors used for the service pairs must be in accordance with the requirements of paragraph (b)(5) of this section. The color code used for the service pairs together with the service pair number are shown in the following table:
(3) The screen tape must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 5.1 through 5.4.
(4) The screen tape must be tested for dielectric strength by completely removing the protective coating from one end to be used for grounding purposes.
(i) Using an electrode, over a 30 centimeter (1 foot) length, apply a direct current voltage at the rate of rise of 500 volts/second until failure.
(ii) No breakdown should occur below 8 kilovolts.
(f)
(2) The filling compound must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 4.4 through 4.4.4.
(3) The individual cable manufacturer must satisfy RUS that the filling compound selected for use is suitable for its intended application. The filling compound must be applied to the cable in such a manner that the cable components will not be degraded.
(g)
(2) If required for manufacturing reasons, white or colored binders of nonhygroscopic and nonwicking material may be applied over the core and/or wrap. When used, binders must meet the requirements specified in paragraph (d)(5) of this section.
(3) Sufficient filling compound must be applied to the core wrap so that voids or air spaces existing between the core and the inner side of the core wrap are minimized.
(h)
(2) The flooding compound must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 4.5 and the jacket slip test requirements of appendix A, paragraph (III)(5) of this section.
(3) The individual cable manufacturer must satisfy RUS that the flooding compound selected for use is acceptable for the application.
(i)
(2) For unarmored cable the shield overlap must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.2. Core diameter is defined as the diameter under the core wrap and binding.
(3) For cables containing the coated aluminum shield/coated steel armor (CACSP) sheath design, the coated aluminum shield must be applied in accordance with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.2, Dual Tape Shielding System.
(4) General requirements for application of the shielding material are as follows:
(i) Successive lengths of shielding tapes may be joined during the manufacturing process by means of cold weld, electric weld, soldering with a nonacid flux, or other acceptable means.
(ii) Shield splices must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.3.
(iii) The corrugations and the application process of the coated aluminum and copper bearing shields must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.1.
(iv) The shielding material must be applied in such a manner as to enable the cable to pass the cold bend test specified in paragraph (l)(3) of this section.
(5) The following is a list of acceptable materials for use as cable shielding. Other types of shielding materials may also be used provided they are accepted by RUS prior to their use.
(i) The 8-mil aluminum tape must be plastic coated on both sides and must comply with the requirements of ANSI/ICEA S-84-608-1988, paragraph 6.2.2.
(ii) The 5-mil copper tape must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.2.3.
(iii) The 10-mil copper tape must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.2.4.
(iv) The 6-mil copper clad stainless steel tape must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.2.5.
(v) The 5-mil copper clad stainless steel tape must be in the fully annealed condition and must conform to the requirements of American Society for Testing and Materials (ASTM) B 694-86, with a cladding ratio of 16/68/16.
(A) The electrical conductivity of the clad tape must be a minimum of 28 percent of the International Annealed Copper Standard (IACS) when measured per ASTM B 193-87.
(B) The tape must be nominally 0.13 millimeter (0.005 inch) thick with a minimum thickness of 0.11 millimeter (0.0045 inch).
(vi) The 5-mil copper clad alloy steel tape must be in the fully annealed condition and the copper component must conform to the requirements of ASTM B 224-80 and the alloy steel component must conform to the requirements of ASTM A 505-87, with a cladding ratio of 16/68/16.
(A) The electrical conductivity of the copper clad alloy steel tape must comply with the requirement specified in paragraph (i)(5)(v)(A) of this section.
(B) The thickness of the copper clad alloy steel tape must comply with the requirements specified in paragraph (i)(5)(v)(B) of this section.
(vii) The 6-mil and 7-mil 194 copper alloy tapes must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.2.6.
(6) The corrugation extensibility of the coated aluminum shield must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.4.
(7) When the jacket is bonded to the plastic coated aluminum shield, the bond between the jacket and shield must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 7.2.6.
(8) A single plastic-coated steel corrugated armor must be applied longitudinally directly over the coated aluminum shield listed in paragraph (i)(5) of this section with an overlap complying with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.2, Outer Steel Tape.
(9) Successive lengths of steel armoring tapes may be joined during the manufacturing process by means of cold weld, electric weld, soldering with a nonacid flux, or other acceptable means. Armor splices must comply with the breaking strength and resistance requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.3.
(10) The corrugations and the application process of the coated steel armor must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.1.
(i) The corrugations of the armor tape must coincide with the corrugations of the coated aluminum shield.
(ii) Overlapped portions of the armor tape must be in register (corrugations must coincide at overlap) and in contact at the outer edge.
(11) The armoring material must be so applied to enable the cable to pass the cold bend test as specified in paragraph (l)(3) of this section.
(12) The 6-mil steel tape must be electrolytic chrome-coated steel (ECCS) plastic coated on both sides and must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.2.8.
(13) When the jacket is bonded to the plastic-coated steel armor, the bond between the jacket and armor must comply with the requirement specified in ANSI/ICEA-S-84-608-1988, paragraph 7.2.6.
(j)
(2) The raw materials used for the cable jacket must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 7.2.1.
(3) Jacketing material removed from or tested on the cable must meet the performance requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 7.2.3 and 7.2.4.
(4) The thickness of the jacket must comply with the requirements specified
(k)
(2)
(ii) The resistance unbalance between tip and ring conductors shall be random with respect to the direction of unbalance. That is, the resistance of the tip conductors shall not be consistently higher with respect to the ring conductors and vice versa.
(3)
(4)
(ii) When measuring screened cable, the inner and outer pairs must be selected from both sides of the screen.
(5)
(ii)
(A) Between pairs adjacent in a layer in an individual compartment;
(B) Between pairs in centers of 4 pairs or less in an individual compartment; and
(C) Between pairs in adjacent layers in an individual compartment when the number of pairs in the inner (smaller) layer is 6 or less. The center is counted as a layer.
(iii) In cables with 25 pairs or less, the root-mean-square (rms) value must include all the pair-to-pair unbalances measured for each compartment separately.
(iv) In cables containing more than 25 pairs, the rms value must include the pair-to-pair unbalances in the separate compartments.
(6)
(ii) When measuring pair-to-ground capacitance unbalance all pairs except the pair under test are grounded to the shield and/or shield/armor except when measuring cables containing super units in which case all other pairs in the same super unit must be grounded to the shield.
(iii) The screen tape must be left floating during the test.
(iv) Pair-to-ground capacitance unbalance may vary directly with the length of the cable.
(7)
(ii) For T1C type cables over 12 pairs, the maximum average attenuation of all pairs on any reel must not exceed the values listed below when measured at a frequency of 1576 kilohertz at or corrected to a temperature of 20 ±1 °C. The test must be conducted in accordance with ASTM D 4566-90.
(8)
(ii) The near-end power sum crosstalk loss (NEXT) as measured on completed cable must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 8.8, NEXT Table.
(iii)
(B) For T1C screened cable the NEXT as measured on the completed cable must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 8.9 and 8.9.2.
(9)
(10)
(ii) In each length of completed cable, the dielectric between the shield and/or armor and conductors in the core must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 8.13, Single Jacketed, Solid Column. In screened cable the screen tape must be left floating.
(iii)
(B) In this test, the cable shield and/or armor must be left floating.
(11)
(ii) The maximum number of pairs in a cable which may vary as specified in paragraph (k)(11)(iii) of this section from the electrical parameters given in this section are listed below. These pairs may be excluded from the arithmetic calculation.
(iii)
(B)
(C)
(l)
(2)
(3)
(4)
(5)
(6)
(m)
(2) When a sheath slitting cord is used it must be nonhygroscopic and nonwicking, continuous throughout a length of cable and of sufficient strength to open the sheath without breaking the cord.
(n)
(2) The markings must be printed on the jacket at regular intervals of not more than 0.6 meter (2 feet).
(3) The completed cable must have sequentially numbered length markers in accordance with ANSI/ICEA S-84-608-1988, paragraph 10.1.5. The color of the ink used for the initial outer jacket marking must be either white or silver.
(o)
(2) The splicing modules must meet the requirements of RUS Bulletin 345-54, PE-52, RUS Specification for Telephone Cable Splicing Connectors (Incorporated by reference at § 1755.97), and be accepted by RUS prior to their use.
(p)
(2) For initial acceptance, the manufacturer must submit:
(i) An original signature certification that the product fully complies with each section of the specification;
(ii) Qualification Test Data, per appendix A of this section;
(iii) To periodic plant inspections;
(iv) A certification that the product does or does not comply with the domestic origin manufacturing provisions of the “Buy American” requirements of the Rural Electrification Act of 1938 (7 U.S.C. 901
(v) Written user testimonials concerning field performance of the product; and
(vi) Other nonproprietary data deemed necessary by the Chief, Outside Plant Branch (Telephone).
(3) For requalification acceptance, the manufacturer must submit an original signature certification that the product fully complies with each section of the specification, excluding the Qualification Section, and a certification that the product does or does not comply with the domestic origin manufacturing provisions of the “Buy American” requirements of the Rural Electrification Act of 1938 (7 U.S.C. 901
(4) Initial and requalification acceptance requests should be addressed to:
(5)
(ii) The screen tape of each length of screened cable must be tested for continuity in accordance with ANSI/ICEA S-84-608-1988, paragraph 8.16.
(iii) Dielectric strength between conductors and shield and/or armor must be tested to determine freedom from grounds in accordance with paragraph (k)(10)(ii) of this section.
(iv) Dielectric strength between conductors and screen tape must be tested to determine freedom from grounds in accordance with paragraph (k)(10)(iii) of this section.
(v) Each conductor in the completed cable must be tested for continuity in accordance with ANSI/ICEA S-84-608-1988, paragraph 8.16.
(vi) Dielectric strength between conductors must be tested to insure freedom from shorts and crosses in each length of completed cable in accordance with paragraph (k)(10)(i) of this section.
(vii) Each conductor in the completed preconnectorized cable must be tested for continuity.
(viii) Each length of completed preconnectorized cable must be tested for split pairs.
(ix) The average mutual capacitance must be measured on all cables. If the average mutual capacitance for the first 100 pairs tested from randomly selected groups is between 50 and 53 nanofarad/kilometer (nF/km) (80 and 85 nanofarad/mile), the remainder of the pairs need not be tested on the 100 percent basis (See paragraph (k)(3) of this section).
(6)
(i) Performance requirements for conductor insulation, jacketing material, and filling and flooding compounds;
(ii) Bonding properties of coated or laminated shielding and armoring materials and performance requirements for screen tape;
(iii) Sequential marking and lettering;
(iv) Capacitance difference, capacitance unbalance, crosstalk, and attenuation;
(v) Insulation resistance, conductor resistance and resistance unbalance;
(vi) Cable cold bend and cable impact tests;
(vii) Water penetration and compound flow tests; and
(viii) Jacket notch and cable torsion tests.
(q)
(2) Measurements and computed values must be rounded off to the number of places or figures specified for the requirement according to ANSI/ICEA S-84-608-1988, paragraph 1.3.
(r)
(2) Minor defects in jackets (defects having a dimension of 3 millimeters (0.125 inch) or less in any direction) may be repaired by means of heat fusing in accordance with good commercial practices utilizing sheath grade compounds.
(s)
(2) The thermal wrap must comply with the requirements of ANSI/ICEA S-84-608-1988, paragraph 10.3. When a thermal reel wrap is supplied, the wrap must be applied to the reel and must be suitably secured in place to minimize thermal exposure to the cable during
(3) The outer end of the cable must be securely fastened to the reel head so as to prevent the cable from becoming loose in transit. The inner end of the cable must be securely fastened in such a way as to make it readily available if required for electrical testing. Spikes, staples, or other fastening devices which penetrate the cable jacket must not be used. The method of fastening the cable ends must be accepted by RUS prior to its use.
(4) Each length of cable must be wound on a separate reel unless otherwise specified or agreed to by the purchaser.
(5) The arbor hole must admit a spindle 63 millimeters (2.5 inches) in diameter without binding. Steel arbor hole liners may be used but must be accepted by RUS prior to their use.
(6) Each reel must be plainly marked to indicate the direction in which it should be rolled to prevent loosening of the cable on the reel.
(7) Each reel must be stenciled or labeled on either one or both sides with the information specified in ANSI/ICEA S-84-608-1988, paragraph 10.4 and the RUS cable designation:
(8) When cable manufactured to the requirements of this section is shipped, both ends must be equipped with end caps acceptable to RUS.
(9) When preconnectorized cables are shipped, the splicing modules must be protected to prevent damage during shipment and handling. The protection method must be acceptable to RUS and accepted prior to its use.
(10) All cables ordered for use in underground duct applications must be equipped with a factory-installed pulling-eye on the outer end in accordance with ANSI/ICEA S-84-608-1988, paragraph 10.5.2.
(I) The test procedures described in this appendix are for qualification of initial designs and major modification of accepted designs. Included in (V) of this appendix are suggested formats that may be used in submitting the test results to RUS.
(II)
(a) Length A shall be 10 ±0.2 meters (33 ±0.5 feet) long and must be maintained at 23 ±3 °C. One length is required.
(b) Length B shall be 12 ±0.2 meters (40 ±0.5 feet) long. Prepare the test sample by removing the jacket, shield or shield/armor and core wrap for a sufficient distance on both ends to allow the insulated conductors to be flared out. Remove sufficient conductor insulation so that appropriate electrical test connections can be made at both ends. Coil the sample with a diameter of 15 to 20 times its sheath diameter. Three lengths are required.
(c) Length C shall be one meter (3 feet) long. Four lengths are required.
(d) Length D shall be 300 millimeters (1 foot) long. Four lengths are required.
(e) Length E must be 600 millimeters (2 feet) long. Four lengths are required.
(f) Length F shall be 3 meters (10 feet) long and must be maintained at 23 ±3 °C for the duration of the test. Two lengths are required.
(2)
(III)
(b)
(i) Water Immersion Test outlined in (III)(2) of this appendix;
(ii) Water Penetration Test outlined in (III)(3) of this appendix;
(iii) Insulation Compression Test outlined in (III)(4) of this appendix; and
(iv) Jacket Slip Strength Test outlined in (III)(5) of this appendix.
(c)
(ii) The attenuation at 150 and 772 kilohertz may be calculated from open circuit admittance (Yoc) and short circuit impedance (Zsc) or may be obtained by direct measurement of attenuation.
(iii) Record on suggested formats in (V) of this appendix or on other easily readable formats.
(d)
(ii) At the end of this period note any exudation of cable filler. Measure and calculate the parameters given in (III)(1)(c) of this appendix. Record on suggested formats in (V) of this appendix or on other easily readable formats.
(iii) Cut away and discard a one meter (3 foot) section from each end of length B.
(e)
(ii) The stability of the electrical parameters after completion of this test must be within the following prescribed limits:
(A)
(B) The change in average mutual capacitance must be less than 5 percent over frequency 1 to 150 kilohertz; and
(C)
(2)
(b)
(c)
(i) Remeasure the mutual capacitance after the cables have been submerged for 24 hours and again after 30 days.
(ii) Record each sample separately on suggested formats in (V) of this appendix or on other easily readable formats.
(d)
(ii) The average mutual capacitance must be within 5 percent of its original value.
(3)
(b) Test per Option A or Option B—(i)
(ii)
(4)
(b)
(5)
(b)
(c)
(6)
(b) Immediately after completing the measurements, expose the test sample to 100 temperature cyclings. Relative humidity within the chamber must be maintained at 90 ±2 percent. One cycle consists of beginning at a stabilized chamber and test sample temperature of 52 ±1 °C, increasing the temperature to 57 ±1 °C, allowing the chamber and test samples to stabilize at this level, then dropping the temperature back to 52 ±1 °C.
(c) Repeat steps (III)(1)(d)(ii) through (III)(5)(c) of this appendix.
(7)
(b) Immediately after completing the measurements, subject the test sample to the 10 cycles of temperature between a minimum of −40 °C and +60 °C. The test sample must be held at each temperature extreme for a minimum of 1 1/2 hours during each cycle of temperature. The air within the temperature cycling chamber must be circulated throughout the duration of the cycling.
(c) Repeat steps (III)(1)(d)(ii) through (III)(5)(c) of this appendix.
(IV)
(2) Repeat steps (III)(2) through (III)(5)(c) of this appendix except use length A instead of length B.
(3)
(b) The samples must be capable of withstanding without damage, a single surge voltage of 20 kilovolts peak between conductors, and a 35 kilovolts peak surge voltage between conductors and the shield or shield/armor as hereinafter described. The surge voltage must be developed from a capacitor discharged through a forming resistor connected in parallel with the dielectric of the test sample. The surge generator constants must be such as to produce a surge of 1.5 × 40 microsecond wave shape.
(c) The shape of the generated wave must be determined at a reduced voltage by connecting an oscilloscope across the forming resistor with the cable sample connected in parallel with the forming resistor. The capacitor bank is charged to the test voltage and then discharged through the forming resistor and test sample. The test sample will be considered to have passed the test if there is no distinct change in the wave shape obtained with the initial reduced voltage compared to that obtained after the application of the test voltage.
(V) The following suggested formats may be used in submitting the test results to RUS:
(a)
(i) Terminating subscriber lines at a location remote from the serving central office;
(ii) Concentrating the subscriber lines over a few transmission and supervisory paths to the serving central office; and
(iii) Terminating the lines at the central office without loss of individual identity. A subscriber connected to a line concentrator shall be capable of having essentially the same services as a subscriber connected directly to the central office equipment (COE). Intra-unit calling among subscribers connected to the concentrator may be provided, but is not required.
(2) Industry standards, or portions thereof, referred to in this paragraph (a) are incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552 (a) and 1 CFR part 51. Copies of these standards are available for inspection during normal business hours at RUS, room 2838, U.S. Department of Agriculture, Washington, DC 20250, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(3) American National Standards Institute (ANSI) standards are available from ANSI Inc., 11 West 42nd Street, 13th floor, New York, NY 10036, telephone 212-642-4900.
(i) ANSI Standard S1.4-1983, Specification for Sound Level Meters, including Amendment S1.4A-1985.
(ii) [Reserved]
(4) American Society for Testing Materials (ASTM) are available from 1916 Race Street, Philadelphia, PA 19103, telephone 215-299-5400.
(i) ASTM Specification B33-91, Standard Specifications for Tinned Soft or Annealed Copper Wire for Electrical Purposes.
(ii) [Reserved]
(5) Bell Communications Research (Bellcore) standards are available from Bellcore Customer Service, 8 Corporate Place, Piscataway, NJ 08854, telephone 1-800-521-2673.
(i) TR-TSY-000008, Issue 2, August 1987, Digital Interface between the SLC 96 Digital Loop Carrier System and a Local Digital Switch.
(ii) Bell Communications Research (Bellcore) document TR-TSY-000057, Issue 1, April 1987, including Revision 1, November 1988, Functional Criteria for Digital Loop Carrier Systems.
(iii) Bell Communications Research (Bellcore) Document TR-NWT-000303, Issue 2, December 1992, including Revision 1, December 1993, Integrated Digital Loop Carrier System Generic Requirements, Objectives, and Interface.
(6) Federal Standard H28, Screw-Thread Standards for Federal Services, March 31, 1978, including Change Notice 1, May 28, 1986; Change Notice 2, January 20, 1989; and Change Notice 3, March 12, 1990. Copies may be obtained from the General Services Administration, Specification Section, 490 East L'Enfant Plaza SW, Washington, DC 20407, telephone 202-755-0325.
(7) IEEE standards are available from IEEE Service Center, 445 Hoes Lane,
(i) IEEE Standard 455-1985, Standard Test Procedure for Measuring Longitudinal Balance of Telephone Equipment Operating in the Voice Band.
(ii) [Reserved]
(8) RUS standards are available from Publications and Directives Management Branch, Administrative Services Division, Rural Utilities Service, room 0180, South Building, U.S. Department of Agriculture, Washington, DC 20250-1500.
(i) RUS Bulletin 345-50, PE-60 (Sept 1979), RUS Specification for Trunk Carrier Systems.
(ii) [Reserved]
(b)
(2) The concentrator system shall communicate with standard T1 digital transmission format at a minimum between the concentrator and central office terminals. Analog conversion functions at remote and central office terminals shall be capable of being eliminated to accommodate end-to-end digital transmission.
(3) The LC shall operate properly as an integral part of the telephone network when connected to physical or carrier derived circuits and central offices meeting RUS specifications and other generally accepted telecommunications practices, such as Bellcore documents TR-NWT-000303, Integrated Digital Loop Carrier System Generic Requirements, Objectives and Interface; TR-TSY-000008, Digital Interface between the SLC 96 Digital Loop Carrier System and a Local Digital Switch; and TR-TSY-000057, Functional Criteria for Digital Loop Carrier Systems.
(4) For RUS acceptance consideration of a LC, the manufacturer must certify and demonstrate that all requirements specified in this section are available and in compliance with this section.
(5) Certain requirements are included in this section for features which may not be needed for every application. Such features are identifiable by the inclusion in the requirements of some such phrase as “when specified by the owner” or “as specified by the owner.” In some cases where an optional feature will not be required by an owner, either now or in the future, a system which does not provide this feature shall be considered to be in compliance with the specification for the specific installation under consideration, but not in compliance with the entire specification.
(6) The owner may properly request bids from any supplier of an RUS accepted LC whose system provides all the features which will be required for a specific installation.
(7) When required by the owner, the supplier shall state compliance to the Carrier Serving Area (CSA) requirements, as stated in Bell Communications Research (Bellcore) Standard TR-TSY-000057, Functional Criteria for Digital Loop Carrier Systems.
(c)
(2) The line concentrator terminal units shall be designed such that there will be no more than 4 hours of total outages in 20 years.
(d)
(e)
(f)
(ii) There should be provisions for such types of lines as ground start, loop start, regular subscriber, pay stations, etc.
(2)
(ii)
(iii)
(3)
(ii) When ringing generators are provided in the LC on an ancillary basis, they shall be accepted or technically accepted by RUS.
(iii) Where ringing is generated at the remote end, the ringing system shall provide sufficient ringing on a bridged basis over the voltage and temperature limits of this specification and over subscriber loops within the limits stated by the manufacturer. The manufacturer shall state the minimum number (not less than two) of main station ringers that can be used for each ringing option available.
(g)
(ii) Service to customers served by a traffic sensitive LC should not be noticeably different than the service to customers served by the dedicated physical pairs from the central office so that uniform grade of service will be provided to all customers in any class of service. Reference § 1755.522(p)(1)(i), RUS General Specification for Digital, Stored Program Controlled Central Office Equipment.
(2)
(3) When required, traffic data will be stored in electronic storage registers or a block of memory consisting of one or more traffic counters for each item to be measured. The bidder shall indicate what registers are to be supplied, their purpose and the means for displaying the information locally (or at a remote location when available).
(h)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(ii) Due to possible loss of the least significant bit on direct digital connections, a signal to distortion degradation of up to 2 dB may be allowed where adequately justified by the bidder.
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(ii) The output of a digital-to-digital port shall be Pulse Code Modulation (PCM), encoded in eight-bit words using the mu-255 encoding law and D3 encoding format, and arranged to interface with a T1 span line.
(iii) Signaling shall be by means of Multifrequency (MF) or Dual Pulsing (DP) and the system which is inherent in the A and B bits of the D3 format. In the case where A and B bits are not used for signaling or system control, these bits shall only be used for normal voice and data transmission.
(iv) When a direct digital interface between the span line and the host central office equipment is to be implemented, the following requirements shall be met:
(A) The span line shall be terminated in a central office as a minimum a DS1 (1.544Mb/s) shall be provided;
(B) The digital central office equipment shall be programmed to support the operation of the digital port with the line concentrator subscriber terminal;
(C) The line concentrator subscriber terminal used with a direct digital interface shall be interchangeable with the subscriber terminal used with a central office terminal.
(i)
(j)
(ii) Equipment must pass laboratory tests, simulating a hostile electrical environment, before being placed in the field for the purpose of obtaining field experience. For acceptance consideration RUS requires manufacturers to submit recently completed results (within 90 days of submittal) of data obtained from the prescribed testing. Manufacturers are expected to detail how data and tests were conducted. There are five basic types of laboratory tests which must be applied to exposed terminals in an effort to determine if the equipment will survive. Figure 2 of this section, Summary of Electrical Requirements and Tests, identifies the tests and their application as follows:
(iii) Electrical protection requirements for line concentrator equipment can be summarized briefly as follows:
(A) Current surge tests simulate the stress to which a relatively low impedance path may be subjected before main frame protectors break down. Paths with a 100 Hz impedance of 50 ohms or less shall be subjected to current surges, employing a 10×1000 microsecond waveshape as defined in Figure 3 of this section, Surge Waveshape. For the purpose of determining this impedance, arresters which are mounted within the equipment are to be considered zero impedance. The crest current shall not exceed 500A; however, depending on the impedance of the test specimen this value of current may be lower. The crest current through the sample, multiplied by the sample's 100 Hz impedance, shall not exceed 1000 V. Where sample impedance is less than 2 ohms, peak current shall be limited to 500A as shown in Figure 4 of this section, Current Surge Tests. Figures 3 and 4 follow:
(B) Sixty Hertz (60 Hz) current carrying tests shall be applied to simulate an ac power fault which is conducted to the unit over the cable pairs. The test shall be limited to 10 amperes Root Mean Square (rms) of 60 Hz ac for a period of 11 cycles (0.1835 seconds) and shall be applied longitudinally from line to ground.
(C) AC power service surge voltage tests shall be applied to the power input terminals of ac powered devices
(D) Voltage surge tests which simulate the voltage stress to which a relatively high impedance path may be subjected before primary protectors break down and protect the circuit. To ensure coordination with the primary protection while reducing testing to the minimum, voltage surge tests shall be conducted at a 1000 volts with primary arresters removed for devices protected by carbon blocks, or the +3 sigma dc breakdown voltage of other primary arresters. Surge waveshape should be 10×1000 microseconds.
(E) Arrester response delay tests are designed to stress the equipment in a manner similar to that caused by the delayed breakdown of gap type arresters when subjected to rapidly rising voltages. Arresters shall be removed for these tests, the peak surge voltage shall be the +3 sigma breakdown voltage of the arrester in question on a voltage rising at 100 V per microsecond, and the time for the surge to decay to half voltage shall equal at least the delay time of the tube as explained in Figure 5 of this section, Arrester Response Delay Time as follows:
(iv) Tests shall be conducted in the following sequence. As not all tests are required in every application, non-applicable tests should be omitted:
(A) Current Impulse Test;
(B) Sixty Hertz (60 Hz) Current Carrying Tests;
(C) AC Power Service Impulse Voltage Test;
(D) Voltage Impulse Test; and
(E) Arrester Response Delay Time Test.
(v) A minimum of five applications of each polarity for the surge tests and three for the 60 Hz Current Carrying Tests are the minimum required. All tests shall be conducted with not more than 1 minute between consecutive applications in each series of three or five applications to a specific configuration so that heating effects will be cumulative. See Figure 6 of this section, 60 Hz Current Surge Tests as follows:
(vi) Tests shall be applied between each of the following terminal combinations for all line operating conditions:
(A) Line tip to ring;
(B) Line ring to ground;
(C) Line tip to ground; and
(D) Line tip and ring tied together to ground.
(2)
(ii) Direct current potentials shall be applied between all line terminals and the equipment chassis and between these terminals and grounded equipment housings in all instances where the circuitry is dc open circuit from the chassis, or connected to the chassis through a capacitor. The duration of all dielectric strength tests shall be at least 1 second. The applied potential shall be at a minimum equal to the plus 3 sigma dc breakdown voltage of the arrester, provided by the line concentrator manufacturer.
(3)
(4)
(ii) Printed circuit boards or similar equipment employing electronic components should be self-protecting against external grounds applied to the connector terminals. Board components and coatings applied to finished products shall be of such material or so treated that they will not support combustion.
(iii) Every precaution shall be taken to protect electrostatically sensitive components from damage during handling. This shall include written instructions and recommendations.
(k)
(2)
(i) 6 turns of 30 gauge;
(ii) 6 turns of 26 gauge;
(iii) 6 turns of 24 gauge; or
(iv) 5 turns of 22 gauge.
(3)
(4)
(5)
(ii) To the extent practicable, the following temperature range objectives shall be met:
(A) For equipment mounted in central office and subscriber buildings, the carrier equipment shall operate satisfactory within an ambient temperature range of 32 °F to 120 °F (0 °C to 49 °C) and at 80 percent relative humidity between 50 °F and 100 °F (10 °C and 38 °C); and
(B) Equipment mounted outdoors in normal operation (with cabinet doors closed) shall operate satisfactorily within an ambient temperature range (external to cabinet) of −40 °F to 140 °F (−40 °C to 60 °C) and at 95 percent relative humidity between 50 °F to 100 °F (10 °C to 38 °C). As an alternative to the (60 °C) requirement, a maximum ambient temperature of 120 °F (49 °C) with equipment (cabinet) exposed to direct sunlight may be substituted.
(6)
(7)
(8)
(9)
(ii) In order to limit corrosion, all metal parts of the housing and mounting frames shall be constructed of suitable corrosion resistant materials or materials protectively coated to render them adequately resistant to corrosion under the climatic and atmospheric conditions existing in the area in which the housing is to be installed.
(10)
(ii) The distributing frame shall provide terminals for terminating all incoming cable pairs. Arresters shall be provided for all incoming cable pairs, or for a smaller number of pairs if specified.
(iii) The current carrying capacity of each arrester and its associated mounting shall coordinate with a #22 gauge copper conductor without causing a self-sustaining fire or permanently damaging other arrester positions. Where all cable pairs entering the housing are #24 gauge or finer, the arresters and mountings need only coordinate with #24 gauge cable conductors.
(iv) Remote terminal protectors may be mounted and arranged so that outside cable pairs may be terminated on the left or bottom side of protectors (when facing the vertical side of the MDF) or on the back surface of the protectors. Means for easy identification of pairs shall be provided.
(v) Protectors shall have a “dead front” (either insulated or grounded) where live metal parts are not readily accessible.
(vi) Protectors shall be provided with an accessible terminal of each incoming conductor which is suitable for the attachment of a temporary test lead. They shall also be constructed so that auxiliary test fixtures may be applied to open and test the subscriber's circuit in either direction. Terminals shall be suitable for wire wrapped connections or connectorized.
(vii) If specified, each protector group shall be furnished with a factory assembled tip cable for splicing to the outside cable; the tip cable shall be 20 feet (6.1 m) in length, unless otherwise
(viii) Protector makes and types used shall be RUS accepted.
(l)
(2)
(ii) Where equipment is dc powered, it must operate satisfactorily over a range of 50 volts ±6 volts dc.
(iii) Where equipment is ac powered, it must operate satisfactorily over a range of 120±10 volts or 220±10 volts ac.
(3)
(ii) The batteries shall have an ampere hour load capacity of no less than 8 busy hours. When an emergency ac supply source is available, the battery reserve may be reduced to 3 busy hours.
(iii) The batteries shall be sealed when they are mounted in the cabinet with the concentrator equipment.
(iv) When specified by the owner, battery heaters shall be supplied in a bidder-furnished housing.
(4)
(ii) Charging shall be on a full float basis. The rectifiers shall be of the full wave, self-regulating, constant voltage, solid-state type and shall be capable of being turned on and off manually.
(iii) When charging batteries, the voltage at the battery terminals shall be adjustable and shall be set at the value recommended for the particular battery being charged, provided it is not above the maximum operating voltage of the central office switching equipment. The voltage shall not vary more than ±0.02 volt dc per cell between 10% load and 100% load. Between 3% and 10% load, the output voltage shall not vary more than ±0.04 volt dc per cell. Beyond full load current the output voltage shall drop sharply. The above output voltage shall be maintained with input line voltage variations of plus or minus 10 percent. Provision shall be made to manually change the output voltage of the rectifier to 2.25 volts per cell to provide an equalization charge on the battery.
(iv) The charger noise, when measured with a suitable noise measuring set and under the rated battery capacitance and load conditions, shall not exceed 22 dBrnC. See Figure 7 of this section, Charger Noise Test as follows:
(v) The charging equipment shall be provided with a means for indicating a failure of charging current whether due to ac power failure, an internal failure in the charger, or to other circumstances which might cause the output voltage of the charger to drop below the battery voltage. Where a supplementary constant current charger is used, an alarm shall be provided to indicate a failure of the charger.
(vi) Audible noise developed by the charging equipment shall be kept to a minimum. Acoustic noise resulting from operation of the rectifier shall be expressed in terms of dB indicated on a sound level meter conforming to American National Standards Institute S1.4, and shall not exceed 65 dB (A-weighting) measured at any point 5 feet (1.5m) from any vertical surface of the rectifier.
(vii) The charging equipment shall be designed so that neither the charger nor the central office equipment is subject to damage in case the battery circuit is opened for any value of load within the normal limits.
(5)
(ii) Power panels, cabinets and shelves, and associated wiring shall be designed initially to handle the line concentrator terminal when it reaches its ultimate capacity as specified by the owner.
(iii) The power panel shall be of the “dead front” type.
(6)
(7)
(8)
(m)
(ii) Design precautions shall be taken to prevent the possibility of equipment damage arising from the insertion of an electronic package into the wrong connector or the removal of a package from any connector or improper insertion of the correct card in its connector.
(2)
(n)
(ii) When required, a jack or other connector shall be provided to connect a fault or trouble recorder (printer or display).
(2)
(ii) The maintenance system shall be arranged to provide the ability to determine trouble to an individual card, functional group of cards, or other equipment unit.
(o)
(p)
(2) Three complete sets of legible drawings shall be provided for each central office to be accessed. Each set shall include all of the following:
(i) Drawings of major equipment items such as frames, with the location of major component items of equipment shown therein;
(ii) Wiring diagrams indicating the specific method of wiring used on each item of equipment and interconnection wiring between items of equipment;
(iii) Maintenace drawings covering each equipment item that contains replaceable parts, appropriately identifying each part by name and part number; and
(iv) Job drawings including all drawings that are individual to the particular line concentrator involved such as mainframe, power equipment, etc.
(3) The following information shall also be furnished:
(i) A complete index of required drawings;
(ii) An explanation of electrical principles of operation of overall concentrator system;
(iii) A list of tests which can be made with each piece of test equipment furnished and an explanation of the method of making each test;
(iv) A sample of each form recommended for use in keeping records;
(v) The criteria for analyzing results of tests and determining appropriate corrective action;
(vi) A set of general notes on methods of isolating equipment faults to specific printed circuit cards in the equipment;
(vii) A list of typical troubles which might be encountered, together with general indications as to probable location of each trouble; and
(viii) All special line concentrator system grounding requirements.
(4) When installation is to be done by the bidder a complete set of drawings shall be provided by the owner, such as floor plans, lighting, grounding and ac power access.
(q)
(2)
(i) Allow the bidder and its employees free access to the premises and facilities at all hours during the progress of the installation;
(ii) Provide access to the remote site and any other site for development work needed during the installation;
(iii) Take such action as necessary to ensure that the premises are dry and free from dust and in such condition as not to be hazardous to the installation personnel or the material to be installed (not required when remote terminal is not installed in a building);
(iv) Provide heat or air conditioning when required and general illumination in rooms in which work is to be performed or materials stored;
(v) Provide suitable openings in buildings to allow material to be placed in position (not required when a remote terminal is not installed in a building);
(vi) Provide the necessary conduit and commercial and dc-ac inverter output power to the locations shown on the approved floor plan drawings;
(vii) Provide 110 volts a.c., 60 Hz commercial power equipped with a secondary arrester and a reasonable number of outlets for test, maintenance and installation equipment;
(viii) Provide suitable openings or channels and ducts for cables and conductors from floor to floor and from room to room;
(ix) Provide suitable ground leads, as designated by the bidder (not required when remote terminal is not installed in a building);
(x) Provide the necessary wiring, central office ground and commercial power service, with a secondary arrester, to the location of an exterior remote terminal installation based on the voltage and load requirements furnished voltage and load requirements furnished by the bidder;
(xi) Test at the owners expense all lines and trunks for continuity, leakage and loop resistance and ensure that all lines and trunks are suitable for operation with the central office and remote terminal equipment specified;
(xii) Make alterations and repairs to buildings necessary for proper installation of material, except to repair damage for which the bidder or its employees are responsible;
(xiii) Connect outside cable pairs on the distributing frame (those connected to protectors);
(xiv) Furnish all line, class of service assignment, and party line assignment information to permit bidder to program the data base memory within a reasonable time prior to final testing;
(xv) Release for the bidder's use, as soon as possible, such portions of the
(xvi) Make prompt inspections as it deems necessary when notified by the bidder that the equipment, or any part thereof, is ready for acceptance;
(xvii) Provide adequate fire protection apparatus at the remote terminal, including one or more fire extinguishers or fire extinguishing systems of the gaseous type, that has low toxicity and effect on equipment;
(xviii) Provide necessary access ports for cable, if underfloor cabling is selected;
(xix) Install equipment and accessory plant devices mounted external to the central office building and external to the repeater and other outside housings including filters, repeater housings, splicing of repeater cable stubs, externally mounted protective devices and other such accessory devices in accordance with written instructions provided by the bidder; and
(xx) Make all cross connections (at the MDF or Intermediate Distribution Frame IDF) between the physical trunk or carrier equipment and the central office equipment unless otherwise specified in appendix A of this section.
(3)
(i) Allow the owner and its representatives access to all parts of the building at all times;
(ii) Obtain the owner's permission before proceeding with any work necessitating cutting into or through any part of the building structure such as girders, beams, concrete or tile floors, partitions or ceilings (does not apply to the installation of lag screws, expansion bolts, and similar devices used for fastening equipment to floors, columns, walls, and ceilings);
(iii) Be responsible for and repair all damage to the building due to carelessness of the bidder's workforce, exercise reasonable care to avoid any damage to the owner's switching equipment or other property, and report to the owner any damage to the building which may exist or may occur during its occupancy of the building;
(iv) Consult with the owner before cutting into or through any part of the building structure in all cases where the fireproofing or moisture proofing may be impaired;
(v) Take necessary steps to ensure that all fire fighting apparatus is accessible at all times and all flammable materials are kept in suitable places outside the building;
(vi) Not use gasoline, benzene, alcohol, naphtha, carbon tetrachloride or turpentine for cleaning any part of the equipment;
(vii) Be responsible for delivering the CO and remote terminal equipment to the sites where they will be needed;
(viii) Install the equipment in accordance with the specifications for the line concentrator;
(ix) Have all leads brought out to terminal blocks on the MDF (or IDF if stated in appendix A of this section) and have all terminal blocks identified and permanently labeled;
(x) Use separate shielded type leads grounded at one end only unless otherwise specified by the owner or bidder or tip cables meeting RUS cable crosstalk requirements for carrier frequencies inside the central office;
(xi) Group the cables to separate carrier frequency, voice frequency, signaling, and power leads;
(xii) Make the necessary power and ground connections (location as shown in appendix A of this section) to the purchaser's power terminals and ground bus unless otherwise stated in appendix A of this section (ground wire shall be 6 AWG unless otherwise stated);
(xiii) Place the battery in service in compliance with the recommendations of the battery manufacturer;
(xiv) Make final charger adjustments using the manufacturer's recommended procedure;
(xv) Run all jumpers, except line and trunk jumpers (those connected to protectors) unless otherwise specified in appendix A of this section;
(xvi) Establish and update all data base memories with subscriber information as supplied by the owner until an agreed turnover time;
(xvii) Give the owner notice of completion of the installation at least one week prior to completion;
(xviii) Permit the owner or its representative to conduct tests and inspections after installation has been completed in order that the owner may be assured the requirements for installation are met;
(xix) Allow access, before turnover, by the owner or its representative, upon request, to the test equipment which is to be turned over as a part of the delivered equipment, to permit the checking of the circuit features which are being tested and to permit the checking of the amount of connected equipment to which the test circuits have access;
(xx) Notify the owner promptly of the completion of work of the central office terminals, remote terminals or such portions thereof as are ready for inspection; and
(xxi) Correct promptly all defects for which the bidder is responsible.
(4)
(i) Two copies of the equipment list and the traffic calculations from which the quantities in the equipment list are determined;
(ii) Two copies of the traffic tables from which the quantities are determined, if other than the Erlang B traffic tables;
(iii) A block diagram of the line concentrator and associated maintenance equipment will be provided;
(iv) A prescribed method and criteria for acceptance of the completed line concentrator which will be subject to review;
(v) This special grounding requirements including the recommended configuration, suggested equipment and installation methods to be used to accomplish them;
(vi) The special handling and equipment requirements to avoid damage resulting from the discharge of static electricity (see paragraph (j)(4)(iii) of this section) or mechanical damage during transit installation and testing;
(vii) The location of technical assistance service, its availability and conditions for owner use and charges for the service by the bidder; and
(viii) The identification of the subscriber loop limits available beyond the line concentrator.
(5)
(ii) All multiple and associated wiring shall be continuous, free from crosses, reverses, and grounds and shall be correctly wired at all points.
(iii) An inspection shall be made by the owner or its representatives prior to performing operational and performance tests on the equipment, but after all installing operations which might disturb apparatus adjustments have been completed. The inspection shall be of such character and extent as to disclose with reasonable certainty any unsatisfactory condition of apparatus or equipment. During these inspections, or inspections for apparatus adjustments, or wire connections, or in testing of equipment, a sufficiently detailed examination shall be made throughout the portion of the equipment within which such condition is observed, or is likely to occur, to disclose the full extent of its existence, where any of the following conditions are observed:
(A) Apparatus or equipment units failing to compare in quantity and type to that specified for the installation;
(B) Apparatus or equipment units damaged or incomplete;
(C) Apparatus or equipment affected by rust, corrosion or marred finish; and
(D) Other adverse conditions resulting from failure to meet generally accepted standards of good workmanship.
(6)
(ii) All equipment shall be tested to ensure proper operation with all components connected in all possible combinations and each line shall be tested for proper ring, ring trip and supervision.
(iii) All fuses shall be verified for continuity and correct rating. Alarm indication shall be demonstrated for each equipped fuse position. An already failed fuse compatible with the fuse position may be used.
(iv) Each alarm or signal circuit shall be checked for correct operation.
(v) A sufficient quantity of locally originating and incoming calls shall be made to demonstrate the function of the line concentrator including all equipped transmission paths. When intra-link calling is supplied, all intra-link transmission paths shall be demonstrated.
(7)
(A) A detailed cross connect drawing of alarm to power board, central office battery to physical trunks or carrier system, wiring options used in terminals, channels, filters, repeaters, etc., marked in the owner's copy of the equipment manual or supplied separately;
(B) The measured central office supply voltages applied to the equipment terminals or repeaters at the time the jack and test point readings are made and ac supply voltages where equipment is powered from commercial ac sources;
(C) A list of all instruments, including accessories, by manufacturer and type number, used to obtain the data; and
(D) The measurements at all jack or test points recommended by the manufacturer, including carrier frequency level measurements at all carrier terminals and repeaters where utilized.
(ii) Data in the form of a checklist or other notations shall be supplied showing the results of the operational tests.
(iii) The bidder shall furnish to the owner a record of the battery cell or multicell unit voltages measured at the completion of the installation of the switching system before it is placed in commercial service. This is not required at a site where the owner furnishes dc power.
(8)
(A) The owner shall review the acceptance test data and compare it to the requirements of this section.
(B) Sample measurements shall be made on all systems installed under this contract. Test methods should follow procedures described in paragraph (g)(5) of this section.
(C) A check shall be made of measured test point and jack readings for compliance with the manufacturer's specifications. This applies also to channels, terminals, carrier frequency repefault locating circuits.
(ii) In the event that the measured data or operational tests show that equipment fails to meet the requirements quirements of this section, the deficiencies are to be resolved as set forth in Article II of the 397 Special Equipment Contract. (Copies are available from RUS, room 0174, U.S. Department of Agriculture, Washington, DC 20250-1500.) The reports of the bidder and the owner shall be detailed as to deficiencies, causes, corrective action necessary, corrective action to be taken, completion time, etc.
1.1Notwithstanding the bidder's equipment lists, the equipment and materials furnished by the bidder must meet the requirements of paragraphs (a) through (p) of this section, and this appendix A.
1.2Paragraph (a) through (p) of this section cover the minimum general requirements for line concentrator equipment.
1.3Paragraph (q) of this section covers the requirements for installation, inspection and testing when such service is included as part of the contract.
1.4This appendix A covers the technical data for application engineering and detailed equipment requirements insofar as they can be established by the owner. This appendix A shall be filled in by the owner.
1.5Appendix B of this section covers detailed information on the line concentrator equipment, information on system reliability and traffic capacity as proposed by the bidder. Appendix B of this section is to be filled in by the bidder and must be presented with the bid.
3.1Number of non-pay station lines having a loop resistance, including the telephone set as follows:
3.1.1For physical trunks between the remote and the office units, the loop resistance is to include the resistance of the trunk.
3.1.2Number of pay station lines having a loop resistance, excluding the telephone set, greater than:
When physical trunks are used, these resistances include that of the facility between the CO and the remote.
3.1.3Range extension equipment, if required, is to be provided:
4.1Average combined originating and terminating hundred call seconds (CCS) per line in the busy hour:
4.2Percent Intra-Calling ____
4.3Total Busy Hour Calls ____
5.2 Minimum ringing generator capacity to be supplied shall be sufficient to serve ____ lines (each frequency).
6.1COE will be:
6.1.1COE Manufacturer
6.1.2 ____ See digital central office specification for the switchboard at __________ .
6.2Interface will be:
6.3Mounting rack for line concentrator furnished by:
6.4Equipment to be installed in existing building:
7.1Transmission facilities between the central office and remote terminals shall be:
7.1.1Type:
7.1.2Utilizes physical plant
Unless otherwise stated, physical plant will be supplied by the owner.
7.1.3Terminal equipment for transmission facility to be supplied by:
7.1.3.1Carrier e/w voice terminations ____ Yes ____ No
7.1.3.2Digital span line (DS1) supplied by
7.1.3.3Number of repeaters (per span line) ____
7.1.3.4Diverse (alternate) span line routing required
7.1.3.5Span line terminations only ____ Yes ____ No
7.1.3.6Span line power required (CO and Remote Terminals) ____ Yes ____ No
7.1.3.7Physical facility between CO and remote Loop Resistance ____ ohms, Length ____ meters
8.1Central Office Terminal
8.1.1Owner-furnished −48 volt dc power ____ Yes ____ No
8.1.2Other (Describe)
8.1.3Standby power is available ____ Yes ____ No
8.2Remote Terminal
8.2.1Owner-furnished −48 vdc power ____ Yes ____ No
8.2.2Bidder-furnished power supply ____ Yes ____ No
8.2.3 AC power available at site:
8.2.4A battery reserve of ____ busy hours shall be provided for this line concentrator terminal when it reaches ____ lines at the traffic rates specified.
8.2.5Batteries supplied shall be:
8.2.6Standby power is available ____ Yes ____ No
9.1Mounting
9.1.1____ Outside Housing (To be furnished by bidder)
9.1.2____ Concrete Slab to be furnished by owner (Bidder to supply construction details after award.)
9.1.3____ Manhole, environmentally controlled (Describe in Item 11)
9.1.4____ Pedestal Mounting
9.1.5____ Pole Mounting (Owner-furnished installed pole)
9.1.6____ Prefab Building (Owner-furnished site)
9.2Equipment is to be installed in an existing building.
9.3Other (Describe)
1.1The equipment and materials furnished by the bidder must meet the requirements of paragraphs (a) through (p) of this section.
1.2Paragraph (a) through (p) of this section cover the minimum general requirements for line concentrator equipment.
1.3Paragraph (q) of this section covers requirements for installation, inspection and testing when such service is included as part of the contract.
1.4Appendix A of this section covers the technical data for application engineering and detailed equipment requirements insofar as they can be established by the owner. Appendix A of this section is to be filled in by the owner.
1.5This appendix B covers detailed information on the line concentrator equipment, information as to system reliability and
2.1Reliability (See paragraph (c) of this section)
2.2Busy Hour Load Capacity and Traffic Delay (See Paragraph (g) of this section)
3.1Transmission Facilities between the Central Office and Remote Terminals
Power required for heating or cooling equipment in remote bidder-furnished housing
Sections 1755.400 through 1755.407 cover the requirements for acceptance tests and measurements on installed copper and fiber optic telecommunications plant and equipment.
(a) Acceptance tests outlined in §§ 1755.400 through 1755.407 are applicable to plant constructed by contract or force account. This testing standard provides for the following:
(1) Specific types of tests or measurements for the different types of telecommunications plant and equipment;
(2) The method of measurement and types of measuring equipment;
(3) The expected results and tolerances permitted to meet the acceptable standards and objectives;
(4) Suggested formats for recording the results of the measurements and tests; and
(5) Some probable causes of nonconformance and methods for corrective action, where possible.
(b) Alternative methods of measurements that provide suitable alternative results shall be permitted with the concurrence of the Rural Utilities Service (RUS).
(c) For the purpose of this testing standard, a “measurement” shall be defined as an evaluation where quantitative data is obtained (e.g., resistance in ohms, structural return loss in decibels (dB), etc.) and a “test” shall be defined as an evaluation where no quantitative data is obtained (e.g., a check mark indicating conformance is usually the result of the test).
(d) The sequence of tests and measurements described in this standard have been prepared as a guide. Variations from the sequence may be necessary on an individual application basis.
(e) There is some overlap in the methods of testing shown; also, the extent of each phase of testing may vary on an individual basis. The borrower shall determine the overall plan of testing, the need and extent of testing, and the responsibility for each phase of testing.
(a) The resistance of the central office (CO) and the remote switching terminal (RST) ground shall be measured before and after it has been bonded to the master ground bar (MGB) where it is connected to the building electric service ground.
(b) The ground resistance of electronic equipment such as span line repeaters, carrier terminal equipment, concentrators, etc. shall be measured.
(c)
(d)
(e)
(2) For electronic equipment, the ground resistance shall not exceed 25 ohms. Where the measured ground resistance exceeds 25 ohms, the borrower shall determine what additional grounding, if any, shall be provided.
(3) When ground resistance measurements exceed the ground resistance requirements of paragraphs (e)(1) and (e)(2) of this section, refer to RUS Bulletin 1751F-802, “Electrical Protection Grounding Fundamentals,” for suggested methods of reducing the ground resistance.
(f)
(g)
(a)
(2) Measurement techniques outlined here for verification of shield or shield/armor continuity are applicable to buried cable plant. Measurements of shield continuity between splices in aerial cable plant should be made prior to completion of splicing. Conclusive results cannot be obtained on aerial plant after all bonds have been completed to the supporting strand, multigrounded neutral, etc.
(3)
(ii) Cable shield or shield/armor continuity within pedestals or splices shall be measured with a cable shield splice continuity test set. The step-by-step measurement procedure outlined in the manufacturer's operating instructions for the specific test equipment being used shall be followed.
(4)
(ii) A cable shield splice continuity tester shall be used to measure shield or shield/armor continuity within pedestals or splices.
(5)
(ii) All values of shield and shield/armor resistance provided in Tables 1 and 2 in (a)(5)(i) of this section are considered approximations. If the measured value corrected to 68 °F (20 °C) is within #30 percent (%) of the value shown in Table 1 or 2, the shield and shield/armor shall be assumed to be continuous.
(iii) To correct the measured shield resistance to the reference temperature of 68 °F (20 °C) use the following formulae:
(iv) The temperature coefficients (A) for the shield tapes to be used in the formulae referenced in paragraph (a)(5)(iii) of this section are as follows:
(A) 5 and 10 mil copper = 0.0021 for English units and 0.0039 for Metric units;
(B) 8 mil coated aluminum and 8 mil coated aluminum/6 mil coated steel = 0.0022 for English units and 0.0040 for Metric units;
(C) 5 mil copper clad stainless steel and 5 mil copper clad alloy steel = 0.0024 for English units and 0.0044 for Metric units;
(D) 6 mil copper clad stainless steel = 0.0019 for English units and 0.0035 for Metric units; and
(E) 6 and 7 mil alloy 194 = 0.0013 for English units and 0.0024 for Metric units.
(v) When utilizing shield continuity testers to measure shield and shield/armor continuity within pedestals or splices, refer to the manufacturer's published information covering the specific test equipment to be used and for anticipated results.
(6)
(7)
(b)
(c)
(2)
(ii) IR tests are normally made from the MDF with all CO equipment disconnected at the MDF, but this test may be made on new cables at field locations before they are spliced to existing cables. The method of measurement shall be as shown in Figure 3 as follows:
(iii) If the IR of the conductor cannot be measured because of breakdown of lightning arresters by the test voltage, the arrester units shall be removed and the conductor IR retested. If the IR then meets the minimum requirements, the conductor will be considered satisfactory. Immediately following the IR tests, all arrester units which have been removed shall be reinstalled.
(3)
(ii) The IR test set shall have an output voltage not to exceed 500 volts dc and shall be of the hand cranked or battery operated type.
(iii) The dc bridge type megohmmeter, which may be alternating current (ac) powered, shall have scales and multiplier which make it possible to accurately read IR from 1 megohm to 1 gigohm. The voltage applied to the conductors under test shall not exceed “250 volts dc” when using an instrument having adjustable test voltage levels. This will help to prevent breakdown of lightning arresters.
(4)
(ii) The megohm-mile (megohm-km) value for a conductor may be computed by multiplying the actual scale reading in megohms on the test set by the length in miles (km) of the conductor under test.
(iii) The objective insulation resistance may be determined by dividing 500 by the length in miles (805 by the length in km) of the cable or wire conductor being tested. The resulting value shall be the minimum acceptable meter scale reading in megohms.
(iv) Due to the differences between various insulating materials and filling compounds used in manufacturing cable or wire, it is impractical to provide simple factors to predict the magnitude of variation in insulation resistance due to temperature. The variation can, however, be substantial for wide excursions in temperature from the ambient temperature of 68 °F (20 °C).
(v) Borrowers should be certain that tip and ring IR measurements of each pair are approximately the same. Borrowers should also be certain that IR measurements are similar for cable or wire sections of similar length and cable or wire type. If some pairs measure significantly lower, borrowers should attempt to improve these pairs in accordance with cable manufacturer's recommendations.
Only the megohm-mile (megohm-km) requirement shall be cause for rejection, not individual measurement differences.
(5)
(6)
(ii) Should the cable or wire fail to meet the 500 megohm-mile (805 megohm-km) requirement when the temperature is known to be approximately 68 °F (20 °C) there is not yet justification for rejection of the cable or wire. Protectors, lightning arresters, etc., may be a source of low insulation resistance. These devices shall be removed from the cable or wire and the cable or wire IR measurement shall be repeated. If the result is acceptable, the cable or wire shall be considered acceptable. The removed devices which caused the low insulation resistance value shall be identified and replaced, if found defective.
(iii) When the cable or wire alone is still found to be below the 500 megohm-mile (805 megohm-km) requirement after completing the steps in paragraph (c)(6)(i) and/or paragraph (c)(6)(ii) of this section, the test shall be repeated to measure the cable or wire in sections to isolate the piece(s) of cable or wire responsible. The cable or wire section(s) that is found to be below the 500 megohm-mile (805 megohm-km) requirement shall be either repaired in accordance with the cable or wire manufacturer's recommended procedure or shall be replaced as directed by the borrower.
(d)
(2) Dc loop resistance and dc resistance unbalance measurements shall be made on all cable pairs used as subscriber loop circuits when:
(i) Specified by the borrower;
(ii) A large number of long loops terminate at one location (similar to trunk circuits); or
(iii) Circuit balance is less than 60 dB when computed from noise measurements as described in paragraph (e) of this section.
(3) Dc resistance unbalance is controlled to the maximum possible degree by the cable specification. Allowable random unbalance is specified between tip and ring conductors within each reel. Further random patterns should occur when the cable conductor size changes. Cable meeting the unbalance requirements of the cable specification may under some conditions result in unacceptable noise levels as discussed in paragraph (d)(6)(iii) of this section.
(4)
(5)
(6)
(ii) The calculated dc loop resistance is computed as follows:
(A) Multiply the length of each different gauge by the applicable resistance per unit length as shown in Table 3 as follows:
(B) Add the individual resistances for each gauge to give the total calculated dc loop resistance at a temperature of 68 °F (20 °C).
(C) Correct the total calculated dc loop resistance at the temperature of 68 °F (20 °C) to the measurement temperature by the following formulae:
(D) Compare the calculated dc loop resistance at the measurement temperature to the measured dc loop resistance to determine compliance with the requirement specified in paragraph (d)(6)(i) of this section.
(iii) Resistance varies directly with temperature change. For copper conductor cables, the dc resistance changes by ±1% for every ±5 °F (2.8 °C) change in temperature from 68 °F (20 °C).
(iv) The dc resistance unbalance between the individual conductors of a pair shall not exceed that value which will result in a circuit balance of less than 60 dB when computed from noise measurements as described in paragraph (e) of this section. It is impractical to establish a precise limit for overall circuit dc resistance unbalance due to the factors controlling its contribution to circuit noise. These factors include location of the resistance unbalance in relation to a low impedance path to ground (close to the central office) and the magnitude of unbalance in short lengths of cable making up the total circuit length. The objective is to obtain the minimum unbalance throughout the entire circuit when it is ascertained through noise measurements that dc resistance unbalance may be contributing to poor cable balance.
(v) Pairs with poor noise balance may be improved by reversing tip and ring conductors of pairs at cable splices. Where dc resistance unbalances are systematic over the total trunk circuit or loop circuit length, tip and ring reversals may be made at frequent intervals. Where the unbalances are concentrated in a shorter section of cable, only one tip and ring reversal should be required. Concentrated dc resistance unbalance produces maximum circuit noise when located adjacent to the central office. Concentrated dc resistance unbalance will contribute to overall circuit noise at a point approximately two-thirds (
(vi) A systematic dc resistance unbalance can sometimes be accompanied by other cable parameters that are marginal. Among these are pair-to-pair capacitance unbalance, capacitance unbalance-to-ground, and 150 kilohertz (kHz) crosstalk loss. Engineering judgment has to be applied in each case. Rejection of cable for excessive dc resistance unbalance shall only apply to a single reel length, or shorter.
(7)
(8)
(e)
(2) At a minimum, insertion loss and frequency response of subscriber loop plant shall be measured at 1,000, 1,700, 2,300, and 2,800 Hertz (Hz). When additional testing frequencies are desired, the additional frequencies shall be specified in the applicable construction contract.
(3) Measurements of insertion loss and noise shall be made on five percent or more of the pairs. A minimum of five pairs shall be tested on each route. Pairs shall be selected on a random basis with greater consideration in the selection given to the longer loops. Consideration shall be given to measuring a large percentage, up to 100 percent, of all loops.
(4)
(ii)
(5)
(ii) There should be no measurable transmission loss when testing through loop extenders.
(6)
(B) For H88 loaded cables (a specific loading scheme using an 88 millihenry inductor spaced nominally at 6,000 ft [1,829 m] intervals) measured at a point one-half section length beyond the last load point, the measured nonrepeatered insertion loss shall be within ±10% at 1000, 1700, and 2300 Hz, ±15% at 2800 Hz, and ±20% at 3400 Hz of the calculated insertion loss at the same frequencies and temperature.
(C) For nonloaded cables, the measured insertion loss shall be within ±10% at 1000, 1700, 2300, and 2800 Hz, ±15% at 3400 Hz and ±20% at 4000 Hz of the calculated insertion loss at the same frequencies and temperature.
(D) For loaded cables, the calculated loss at each desired frequency shall be computed as follows:
(
(
(
(E) For nonloaded cables, the calculated loss at each desired frequency shall be computed by multiplying the length in miles (km) of each different gauge by the applicable dB/mile (dB/km) value shown in Table 6 and then adding the individual losses for each gauge to determine the total calculated insertion loss for the nonloaded loop.
(F) The attenuation information in Tables 4, 5, and 6 are based on a cable temperature of 68 °F (20 °C). Insertion loss varies directly with temperature. To convert measured losses for loaded cables to a different temperature, use the following value for copper conductors: For each ±5 °F ( ±2.8 °C) change in the temperature from 68 °F (20 °C), change the insertion loss at any frequency by ±1%. To convert measured losses for nonloaded cables to a different temperature, use the following value for copper conductors: For each ±10 °F (±5.6 °C) change in the temperature from 68 °F (20 °C), change the insertion loss at any frequency by ±1%. Tables 4, 5, and 6 are as follows:
(G) For loaded subscriber loops, the 1 kHz loss shall be approximately 0.45 dB per 100 ohms of measured dc loop resistance. This loss shall be the measured loss less the net gain of any voice frequency repeaters in the circuit. Testing shall also be conducted to verify that the loss increases gradually as the frequency increases. The loss on H88 loaded loops should be down only slightly at 2.8 kHz but drop rapidly above 2.8 kHz. The loss on D66 loaded loops shall be fairly constant to about 3.4 kHz and there shall be good response at 4.0 kHz. When voice frequency repeaters are in the circuit there will be some frequency weighting in the build-out network and the loss at the higher frequencies will be greater than for nonrepeatered loops.
(H) For nonloaded subscriber loops, the 1 kHz loss shall be approximately 0.9 dB per 100 ohms of measured dc loop resistance. Testing shall also be conducted to verify that the loss is approximately a straight line function with no abrupt changes. The 3 kHz loss should be approximately 70% higher than the 1 kHz loss.
(ii)
(7)
(8)
(ii)
(f)
(2) For loaded loops, open circuit measurements shall be made using one of the following methods:
(i) Impedance or pulse return pattern, with cable pair trace compared to that of an artificial line of the same length and gauge. For best results, a level tracer or fault locator with dual trace capability is required;
(ii) Return loss using a level tracer, with cable pair compared to an artificial line of the same length and gauge connected in lieu of a Precision Balance Network (PBN). This method can be made with level tracers having only single trace capability; or
(iii) Open circuit structural return loss using a level tracer. This method can be made with level tracer having only single trace capability.
(3) Of the three methods suggested for loaded loops, the method specified in paragraph (f)(2)(ii) of this section is the preferred method because it can yield both qualitative and quantitative results. The methods specified in paragraphs (f)(2)(i) and (f)(2)(iii) of this section can be used as trouble shooting tools should irregularities be found during testing.
(4) For nonloaded loops, open circuit measurements shall be made using the method specified in paragraph (f)(2)(i) of this section.
(5)
(i)
(ii)
(iii)
(6)
(7)
(ii) For loaded loops, results for return loss measurements using a level tracer, with artificial line, in lieu of a PBN (paragraph (f)(5)(ii) of this section) shall meet the following requirements:
(A) For D66 and H88 loaded cables the structural return loss (SRL) values shall range between 28 and 39 dB, respectively, at the critical frequency of structural return loss (CFSRL) within the pass band of the loading system being used. The minimum SRL value for uniform gauge shall be 25 dB CFSRL. These SRL values apply for loaded cables of uniform gauge for the
(B) For mixed gauge loaded cables the SRL values shall be 25 and 27 dB CFSRL, respectively, and the minimum SRL value shall be 22 dB CFSRL; and
(C) The two traces in the pulse return pattern should be essentially identical. The degree of comparison required of the two traces is determined by experience.
(iii) For loaded loops, the results of open circuit structural return loss measurements using a level tracer (paragraph (f)(5)(iii) of this section) shall meet the following requirements. For D66 and H88 loaded cables with uniform or mixed gauges, the worst value allowed for measured open circuit structural return loss between 1,000-3,500 Hz and 1,000-3,000 Hz, respectively, shall be approximately 0.9 dB (round trip) for each 100 ohms outside plant dc loop resistance including the resistance of the load coils. The value of 0.9 dB per 100 ohms for the round trip loss remains reasonably accurate as long as:
(A) The subscriber end section of the loaded pair under test is approximately 2,250 ft (685 m) for D66 loading or 3,000 ft (914 m) for H88 loading in length; and
(B) The one-way 1,000 Hz loss does not exceed 10 dB.
(iv) For loaded loops, the measured value of open circuit structural return loss can only be as accurate as the degree to which the dc loop resistance of the loaded pair under test is known. Most accurate results shall be obtained when the dc loop resistance is known by actual measurements as described in paragraph (d) of this section. Furthermore, where the dc loop resistance is measured at the same time as the open circuit structural return loss, no correction for temperature is needed because the loss is directly proportional to the loop resistance. Where it is not practical to measure the dc loop resistance, it shall be calculated and corrected for temperature as specified in paragraph (d)(6)(ii) of this section. When measuring existing plant, care shall be taken to verify the accuracy of the records, if they are used for the calculation of the dc loop resistance. For buried plant, the temperature correction shall be based at the normal depth of the cable in the ground. (Temperature can be measured by boring a hole to cable depth with a ground rod, placing a thermometer in the ground at the cable depth, and taking and averaging several readings during the course of the resistance measurements.) For aerial cable it shall be based on the temperature inside the cable sheath.
(v) For loaded loops, the best correlation between the measured and the expected results shall be obtained when the cable is of one gauge, one size, and the far end section is approximately 2,250 ft (685 m) for D66 loading or 3,000 ft (914 m) for H88 loading. Mixing gauges and cable sizes will result in undesirable small reflections whose frequency characteristics and magnitude cannot be accurately predicted. In subscriber loop applications, cable gauge may be somewhat uniform but the cable pair size most likely will not be uniform as cable pair sizes taper off toward the customer access location and a downward adjustment of 1 dB of the allowed value shall be acceptable. “Long” end sections (as defined in TE&CM Section 424, “Guideline for Telecommunications Subscriber Loop Plant”) lower the expected value, a further downward adjustment of 3 dB in the allowed value shall be acceptable.
(vi) For loaded loops, the limiting factor when making open circuit structural return loss measurements is when the 1,000 Hz one-way loss of the loaded cable pair under test becomes 10 dB or greater; it becomes difficult to detect the presence of irregularities beyond the 10 dB point on the loop. To overcome this difficulty, loaded loops having a one-way loss at 1,000 Hz greater than 10 dB shall be opened at some convenient point (such as a pedestal or ready access enclosure) and loss measurements at the individual portions measuring less than 10 dB one-way shall be made separately. When field mounted voice frequency repeaters are used, the measurement shall be made at the repeater location in both directions.
(8)
(ii) When performing open circuit return loss measurements using the return loss balanced to an artificial line or return loss using a level tracer on loaded loops, the value of the poorest (lowest numerical value) SRL and its frequency in the proper column between 1,000 and 3,500 Hz for D66 loading or between 1,000 and 3,000 Hz for H88 loading shall be recorded. A suggested format similar to Format I for subscriber loops in § 1755.407 or a format specified in the applicable construction contract may be used.
(9)
(g)
(2)
(3)
(4)
(ii) The measured insertion loss of the cable shall be within ±10% of the calculated loss in dB when the loss is corrected for temperature.
(iii) The calculated insertion loss is computed as follows:
(A) Multiply the length of each different gauge by the applicable dB per unit length as shown in Table 7 or 8 as follows:
(B) Add the individual losses for each gauge to give the total calculated insertion loss at a temperature of 68 °F (20 °C);
(C) Correct the total calculated insertion loss at the temperature of 68 °F (20 °C) to the measurement temperature by the following formulae:
(D) Compare the calculated insertion loss at the measurement temperature to the measured insertion loss to determine compliance with the requirement specified in paragraph (g)(4)(ii) of this section. (
(iv) If the measured value exceeds the ±10% allowable variation, the cause shall be determined and corrective action shall be taken to remedy the problem.
(5)
(6)
(a)
(2) Measurement techniques outlined here for verification of armor continuity are applicable to buried fiber optic cable plant. Measurements of armor continuity between splices in aerial, armored, fiber optic cable should be made prior to completion of splicing. Conclusive results cannot be obtained on aerial plant after all bonds have been completed to the supporting strand, multigrounded neutral, etc.
(3)
(4)
(5)
(6)
(7)
(b)
(2)
(ii) CO splice loss measurements shall be made at 1310 and/or 1550 nanometers for single mode fibers and in accordance with Figure 15. Two splice loss measurements shall be made between the end termination points. The first measurement shall be from termination point A to termination point B. The second measurement shall be from termination point B to termination point A.
(3)
(4)
(ii) When specified in the applicable construction contract, the splice loss of each field splice at 1310 and/or 1550 nanometers shall not exceed the limit specified in the contract.
(iii) When no limit is specified in the applicable construction contract, the splice loss of each field splice shall not exceed 0.2 dB at 1310 and/or 1550 nanometers.
(iv) The splice loss for each single mode CO splice shall be the bi-directional average of the two OTDR reading. To calculate actual splice loss, substitute the OTDR reading, maintaining the sign of the loss (+) or apparent gain (−), into the equation specified in paragraph (b)(4)(i) of this section.
(v) When specified in the applicable construction contract, the splice loss of each central office splice at 1310 and/or 1550 nanometers shall not exceed the limit specified in the contract.
(vi) When no limit is specified in the applicable construction contract, the splice loss of each central office splice shall not exceed 1.2 dB at 1310 and/or 1550 nanometers.
(5)
(6)
(i) Proper end preparation of the fibers;
(ii) End separation between the fiber ends;
(iii) Lateral misalignment of fiber cores;
(iv) Angular misalignment of fiber cores;
(v) Fresnel reflection;
(vi) Contamination between fiber ends;
(vii) Core deformation; or
(viii) Mode-field diameter mismatch.
(c)
(2)
(3)
(4)
(5)
(6)
(i) Excessive field or central office splice loss;
(ii) Excessive cable attenuation; or
(iii) Damage to the fiber optic cable during installation.
(d)
(2)
(3)
(4)
(5)
(6)
(a) The data transmission measurements listed in this section shall be used to determine the acceptability of trunk and nonloaded subscriber loop circuits for data modem transmission.
(b)
(2) S/CNN is the logarithmic ratio expressed in dB of a 1,004 Hz holding tone signal compared to the C-message weighted noise level. S/CNN is one of the most important transmission parameters affecting the performance of data transmission because proper modem operation requires low noise relative to received power level. Since modulated carriers are used in data communication systems, noise measurements need to be performed with power on the connection to activate equipment having signal-level-dependent noise sources. For 4 kHz channels, a 1,004 Hz holding tone is used to activate the signal-dependent equipment on the channel or connection.
(3)
(4)
(5)
(6)
(7)
(c)
(2) S/IMD is a measure of the distortion produced by extraneous frequency cross products, known as intermodulation products, when a multi-tone tone signal is applied to a system.
(3) Intermodulation distortion (IMD) is caused by system nonlinearities acting upon the harmonic frequencies produced from an input of multiple tones. The products resulting from IMD can be more damaging than noise in terms of producing data transmission errors.
(4) IMD is measured as a signal to distortion ratio and is expressed as the logarithmic ratio in dB of the composite power of four resulting test frequencies to the total power of specific higher order distortion products that are produced. The higher order products are measured at both the 2nd order and 3rd order and are designated R2 and R3, respectively. The four frequency testing for IMD is produced with four tones of 857, 863, 1,372, and 1,388 Hz input at a composite power level of −13 dBm0.
(5)
(6)
(7)
(8)
(9)
(d)
(2) EDD is a measure of the linearity or uniformity of the phase versus frequency characteristics of a transmission facility. EDD is also known as relative envelope delay (RED).
(3) EDD is specifically defined as the delay relative to the envelope delay at the reference frequency of 1,704 Hz. EDD is typically measured at two frequencies, one low and one high in the voiceband. The low frequency measurement is made at 604 Hz. The high frequency measurement is made at 2,804 Hz.
(4)
(5)
(6)
(7)
(8)
(e)
(2) AJ is any fluctuation in the peak amplitude value of a fixed tone signal at 1,004 Hz from its nominal value. AJ is expressed in peak percent amplitude modulation.
(3) AJ is measured in two separate frequency bands, 4-300 Hz and 20-300 Hz. The 4-300 Hz band is important for modems employing echo canceling capabilities. The 20-300 Hz band is used for modems that do not employ echo cancelers.
(4) Amplitude modulation can affect the error performance of voiceband data modems. The measurement of amplitude jitter indicates the total effect on the amplitude of the holding tone of incidental amplitude modulation and other sources including quantizing and message noise, impulse noise, gain hits, phase jitter, and additive tones such as single-frequency interference.
(5)
(6)
(7)
(8)
(9)
(f)
(2) PJ is any fluctuation in the zero crossings of a fixed tone signal (usually 1,004 Hz) from their nominal position in time within the voiceband. PJ is expressed in terms of either degrees peak-to-peak (° p-p) or in terms of a Unit Interval (UI). One UI is equal to 360° p-p.
(3) PJ measurements are typically performed in two nominal frequency bands. The frequency bands are 20-300 Hz band and either the 2-300 Hz band or the 4-300 Hz band. The 20-300 Hz band is important to all phase-detecting modems. The 4-300 Hz band or the 2-300 Hz band is important for modems employing echo canceling capabilities.
(4) Phase jitter can affect the error performance of voiceband data modems that use phase detection techniques. The measurement of phase jitter indicates the total effect on the holding tone of incidental phase modulation and other sources including quantizing and message noise, impulse noise, phase hits, additive tones such as single-frequency interference, and digital timing jitter.
(5)
(6)
(7)
(8)
(9)
(g)
(2) Impulse noise is a measure of the presence of unusually large noise excursions of short duration that are beyond the normal background noise levels on a facility. Impulse noise is typically measured by counting the number of occurrences beyond a particular noise reference threshold in a given time interval. The noise reference level is C-message weighted.
(3)
(4)
(5)
(6)
(7)
(a) Shield or armor ground resistance measurements shall be made on completed lengths of copper cable and wire plant and fiber optic cable plant.
(b)
(2) The method of measurement using either an insulation resistance test set or a dc bridge type megohmmeter shall be as shown in Figure 18 as follows:
(c)
(2) The insulation resistance test set should have an output voltage not to exceed 500 volts dc and may be hand cranked or battery operated.
(3) The dc bridge type megohmmeter, which may be ac powered, should have
(4) Commercially available fault locators may be used in lieu of the above equipment, if the devices are capable of detecting faults having resistance values of 50,000 ohms to 10 megohms. Operation of the devices and method of locating the faults should be in accordance with manufacturer's instructions.
(d)
(2) Shield or armor ground resistance varies inversely with length and temperature. In addition other factors which may affect readings could be soil conditions, faulty test equipment and incorrect test procedures.
(3) For the resistance test method and dc bridge type megohmmeter, the ohm-mile (ohm-km) value for the shield or armor ground resistance shall be computed by multiplying the actual scale reading in ohms on the test set by the length in miles (km) of the cable or wire under test.
(4)(i) The objective shield or armor ground resistance may be determined by dividing 100,000 by the length in miles (161,000 by the length in km) of the cable or wire under test. The resulting value is the minimum acceptable meter scale reading in ohms. Examples for paragraphs (d)(3) and (d)(4) of this section are as follows:
(ii) Since the 33,333 ohms (32,857 ohms) is the minimum acceptable meter scale reading and the meter scale reading was 75,000 ohms, the cable is considered to have met the 100,000 ohm-mile (161,000 ohm-km) requirement.
(5) Due to the differences between various jacketing materials used in manufacturing cable or wire and to varying soil conditions, it is impractical to provide simple factors to predict the magnitude of variation in shield or armor to ground resistance due to temperature. The variations can, however, be substantial for wide excursions in temperature from the ambient temperature of 68 °F (20 °C).
(e)
(f)
(2) When the resistance value of the cable or wire is still found to be below 100,000 ohm-mile (161,000 ohm-km) requirement after completion of the steps listed in paragraph (f)(1) of this
(3) Once the fault or faults have been isolated, the cable or wire jacket shall be repaired in accordance with § 1755.200, RUS Standard for Splicing Copper and Fiber Optic Cables or the entire cable or wire section may be replaced at the request of the borrower.
The following suggested formats listed in this section may be used for recording the test data:
(a) Sections 1755.501 through 1755.510 cover service installations at permanent or mobile home customer access locations. Sections 1755.501 through 1755.510 do not cover service installations at customer access locations associated with boat yards or marinas.
(b) Service installations for customer access locations in boat yards or marinas shall be performed in accordance with Article 800, Communications Circuits, of the American National Standards Institute/National Fire Protection Association (ANSI/NFPA) 70-1999,
For the purpose of this section and §§ 1755.502 through 1755.510, the following terms are defined as follows:
(1)
(2)
(ii) In multiunit premises in which wiring is installed after August 13, 1990, including additions, modifications, and rearrangements of wiring existing prior to that date, the telecommunications company may establish a reasonable and nondiscriminatory practice of placing the demarcation point at the minimum point of entry. If the telecommunications company does not elect to establish a practice of placing the demarcation point at the minimum point of entry, the multiunit premises owner shall determine the location of the demarcation point or points. The multiunit premises owner shall determine whether there shall be a single demarcation point for all customers or separate such locations for each customer. Provided, however, that where there are multiple demarcation points within the multiunit premises, a demarcation point for a customer shall not be further inside the customer's premises than a point 12 in. (305 mm) from where the wiring enters the customer's premises.
(1) Final assembly or manufacture of the equipment is completed in the United States, its territories and possessions, or in an eligible country;
(2) The cost of components within the material or equipment manufactured in the United States, its territories and possessions, or in an eligible country is more than 50 percent of the total cost of all components used in the material or equipment; and
(3) The material or equipment is suitable for use on systems of RUS telecommunications borrowers.
(1) Final assembly or manufacture of the equipment is not completed in the United States, its territories and possessions, or in an eligible country; and
(2) The cost of components within the material or equipment manufactured in the United States, its territories and possessions, or in an eligible country is 50 percent or less than the total cost of all components used in the material or equipment.
(a) Sections 1755.503 through 1755.510 cover approved methods of making service installations at customer access locations in telecommunications systems of RUS borrowers.
(b) Requirements in §§ 1755.503 through 1755.510 cover facilities of the type described in the FCC rules in 47 CFR part 68 for one and multi-party customer owned premises wiring.
(a) For the purposes of this section and §§ 1755.504 through 1755.510, a NID shall be as defined in § 1755.501 and shall contain both a fuseless primary station protector and a modular plug and jack for each conductor pair, up to a maximum of 11 pairs, and shall be provided by the telecommunications company and used by customers.
(b) For the purposes of this section and §§ 1755.504 through 1755.510, BET shall be as defined in § 1755.501 and shall contain both primary station protectors and connector terminals for each conductor pair, of 12 or more pairs, and shall be provided by the telecommunications company and used by customers. The primary station protectors may be either fuseless or fused.
(c) The requirements provided in this section and §§ 1755.504 through 1755.510 have been designed to coordinate with the provisions of the ANSI/NFPA 70-1999,
(d) RUS borrowers shall make certain that all construction financed with RUS loan funds comply with:
(1) The provisions of this section and §§ 1755.504 through 1755.510 and the ANSI/NFPA 70-1999,
(2) The provisions of this section and §§ 1755.504 through 1755.510 with borrower added adjustments to bring construction into compliance with any more stringent local codes.
(e) This section and §§ 1755.504 through 1755.510 are intended primarily for the installer who will perform the work. It assumes that decisions regarding the selection of grounding electrodes, locations, and types of equipment have been made by the RUS borrower or the engineer delegated by the RUS borrower.
(f) Only a
(g) This section and §§ 1755.504 through 1755.509 contain information which is normally not provided on the
(h) All work shall be conducted in a careful and professional manner. Service wire and cable shall not be trampled on, run over by vehicles, pulled over or around abrasive objects or otherwise subjected to abuse.
(i) When situations not covered by this section and §§ 1755.504 through 1755.510 arise, the RUS borrower or the engineer delegated by the borrower, shall specify the installation procedure to be used. The requirements of paragraph (j) of this section shall be complied with in every installation.
(j) NIDs, BETs, and fused primary station protectors shall be installed and grounded to meet the requirements of the ANSI/NFPA 70-1999,
(k) Battery polarity and conductor identification shall be maintained throughout the system as indicated on construction drawings 815 and 815-1 contained in § 1755.510. Color codes and other means of conductor identification of buried and aerial service wires shall conform to the requirements of this section and §§ 1755.504 through 1755.510.
(l) All materials for which RUS makes acceptance determinations, such as service wires and cables, ground rods, ground rod clamps, etc., used in service entrance installations shall be RUS accepted or RUS technically accepted. Borrowers shall require contractors to obtain the borrower's approval before RUS technically accepted materials are to be used in service entrance installations. Borrower's shall also ensure that the cost of the RUS technically accepted materials are at least 6 percent less than the cost of equivalent RUS accepted materials, as specified in “Buy American” Requirement of the Rural Electrification Act of 1938, as amended (7 U.S.C. 903 note). Materials used in service entrance installations which are of the type which RUS does not make acceptance determinations shall be of a suitable quality for their intended application as determined by the RUS borrower or the engineer delegated by the RUS borrower.
(m) On completion of an installation, borrowers shall require the installer to make all applicable tests required by §§ 1755.400 through 1755.407, RUS standard for acceptance tests and measurements of telecommunications plant.
(a) The demarcation point (DP) provides the physical and electrical interface between the telecommunications company's facilities and the customer's premises wiring.
(b) The Federal Communications Commission (FCC) rules in 47 CFR part 68 require telecommunications providers to establish a “DP” which marks a separation of the provider's facilities from the customer's (owned) premises wiring and equipment.
(c) RUS borrowers shall observe the FCC DP requirement by installing NIDs, BETs, or fused primary station protectors when required by section 800-30(a)(2) of ANSI/NFPA 70-1999,
(d) For all customer access locations of less than 12 pairs, RUS borrowers shall establish DPs by using either NIDs or fused primary station protectors when required by section 800-
(a) Buried services of two or three pairs shall consist of Service Entrance Buried (SEB) assembly units, in accordance with RUS Bulletin 1753F-153 (RUS Form 515d), Specifications and Drawings for Service Installations at Customer Access Locations. The wire used for buried services shall conform to the requirements of § 1755.860, RUS specification for filled buried wires, and shall be RUS accepted or RUS technically accepted. The conductor size for two and three pair buried service wires shall be 22 American Wire Gauge (AWG). Copies of RUS Bulletin 1753F-153 are available upon request from RUS/USDA, 1400 Independence Avenue, SW., STOP 1522, Washington, DC 20250-1522, FAX (202) 690-2268.
(b) Buried services of six or more pairs shall be RUS accepted or RUS technically accepted 22 AWG filled buried cable conforming to the requirements of § 1755.390, RUS specification for filled telephone cables.
(c) Buried service wire or cable shall be terminated in buried plant housings using either splicing connectors or filled terminal blocks in accordance with the applicable paragraphs of § 1755.200, RUS standard for splicing copper and fiber optic cables.
(d) Buried service wire or cable shall be identified at buried plant housings in accordance with construction drawing 958 contained in § 1755.510.
(e) Buried service wire or cable shall be installed up to the building in the same general manner as buried exchange cable but in addition must meet the following requirements:
(1) Light weight lawn plows or trenchers shall be used;
(2) The shortest feasible route commensurate with the requirements of § 1755.508(i), (j), and (k), and paragraph (f)(1) of this section shall be followed;
(3) Buried service wire or cable shall be plowed or trenched to a depth of 12 in. (305 mm) or greater where practicable in soil, 36 in. (914 mm) in ditches, or 3 in. (76 mm) in rock. Depths shall be measured from the top of the wire or cable to the surface of the ground or rock;
(4) In the case of a layer of soil over rock either the minimum depth in rock measured to the surface of the rock, or the minimum depth in soil measured to the surface of the soil may be used; and
(5) Where adequate advance planning has been done, burial of telecommunications services jointly with electric power services may be feasible. If a decision has been reached by management to provide joint occupancy services, the services may be installed using the recommendations in RUS Bulletin 1751F-640, “Design of Buried Plant—Physical Considerations.” Copies of RUS Bulletin 1751F-640 are available upon request from RUS/USDA, 1400 Independence Avenue, SW., STOP 1522, Washington, DC 20250-1522, FAX (202) 720-4120.
(f) Buried service wire or cable shall be installed on or in buildings as follows:
(1) Each buried service wire or cable shall contact the building as close to the NID, BET, or fused primary station protector as practicable. Service wire or cable runs on buildings shall normally consist of a single vertical run held to the minimum practical length. Horizontal and diagonal runs shall not be permitted.
(2) Buried service wire or cable shall be located so as to avoid damage from lawn mowers, animals, gardening operations, etc.
(3) Buried service wire or cable shall be installed against a foundation wall or pillar to provide adequate support and mechanical protection.
(4) Where it is likely that the service wire or cable shall be subjected to mechanical damage, the wire or cable shall be enclosed in a guard in accordance with assembly unit drawing BM83 contained in § 1755.510.
(5) The first above-ground attachment for a buried service wire or cable, unless it is enclosed in a guard, shall not be more than 4 in. (100 mm) above final grade.
(6) Uninsulated attachment devices may be used to attach buried service wire and cable to masonry and other types of noncombustible buildings and on any type of building if fuseless primary station protectors incorporated in NIDs or BETs are used and installations fully comply with section 800-30(a)(1) of ANSI/NFPA 70-1999,
(7) Insulated attachments shall be used to separate service wires or cables from woodwork where section 800-30(a)(2) of ANSI/NFPA 70-1999,
(8) Minimum separation between buried service wire or cable and other facilities shall be as listed in Table 1, as follows:
(9) Wire and cable attachments to buildings for outside mounted NIDS, BETs, or fused primary station protectors shall be in accordance with construction drawing 962 contained in § 1755.510.
(10) Appropriate devices for attaching service wire or cable on or in buildings vary with the type of building construction and the wire or cable size. Figures 1 and 2 illustrate various types of anchoring devices and their applications. The size and type of fastening device for the wire or cable size and type of surface shall be in accordance with the manufacturer's recommendation; Figures 1 and 2 are as follows:
(11) Experience indicates that there are objections from many owners of buildings covered with aluminum or vinyl siding to the drilling of holes in the siding for the attachment of wires or cables, and NIDs, BETs, or fused primary station protectors. It is, therefore, important to obtain permission from the owner before drilling holes in such siding.
(12) If the NID, BET, or fused primary station protector must be mounted inside (not recommended by RUS), the service entrance into the building shall be installed in accordance with section 800-12(c) of ANSI/NFPA 70-1999,
(13) If the customer requests an all buried installation for an alarm system or objects to above-ground facilities because of appearance and one-party service is involved, the entrance hole shall be made below grade as shown in sketch C of construction drawing 510-2 contained in § 1755.510. Care shall be exercised to prevent damage to the building foundation. The hole shall be sealed as specified in paragraph (f)(12) of this section. The installation shall comply with all the requirements of section 800-12(c) of ANSI/NFPA 70-1999,
(g) When the NID, BET, or fused primary station protector is to be installed inside the building, the installation shall comply with section 800-12(c) of ANSI/NFPA 70-1999,
(h) An inside NID, BET, or fused primary station protector installation may also be made without use of a rigid metal or intermediate metal conduit provided that the ingress of the outside plant wire or cable complies with section 800-12(c) of ANSI/NFPA 70-1999,
(1) The NID, BET, or fused primary station protector is located as close as practicable to the point where the outside plant wire or cable emerges through an exterior wall. The length of outside plant wire or cable exposed within the building shall be as short as practicable but in no case shall it be longer than 50 feet (ft) (15.2 meters (m)) in accordance with the allowable exception No. 3 of section 800-50 of ANSI/NFPA 70-1999,
(2) Where the NID, BET, or fused primary station protector must be located within the building remote from the entrance point and the entrance point of the outside plant wire or cable cannot be designed to be closer to the NID, BET, or fused primary station protector location, the outside plant wire or cable shall be spliced, as close as practicable to the point where the outside plant wire or cable emerges through an outside wall, to an inside wiring cable that is “Listed” as being suitable for the purpose in accordance with part E of article 800 of ANSI/NFPA 70-1999,
(i) The polarity of buried wire or cable “tip” and “ring” conductors shall be maintained by making the connections in accordance with Table 2, as follows:
(a) Aerial services of one through six pairs shall consist of Service Entrance Aerial (SEA) assembly units, in accordance with RUS Bulletin 1753F-153 (RUS Form 515d), Specifications and Drawings for Service Installations at Customer Access Locations. The wire used for aerial services shall conform to the requirements of §§ 1755.700 through 1755.704, RUS specification for aerial service wires, and shall be RUS accepted or RUS technically accepted. Copies of RUS Bulletin 1753F-153 are available upon request from RUS/USDA, 1400 Independence Avenue, SW., STOP 1522, Washington, DC 20250-1522, FAX (202) 720-4120.
(b) If aerial wire services are to be connected to aerial cable pairs, the NIDs or fused primary station protectors and grounds shall be installed and connected before the aerial service wires are attached to the customer's structure.
(c) Kinks or splices shall not be permitted in aerial service wire spans.
(d) Aerial service wires shall be run in accordance with the construction drawings contained in § 1755.510 and shall conform to all clearance requirements of the ANSI/NFPA 70-1999,
(e) Aerial service wire shall be installed using the maximum practicable sag consistent with the required ground clearance and good construction practices. In no event shall the minimum sags be less than the values shown on construction drawing 505 contained in § 1755.510 for various span lengths and loading areas provided. Span lengths shall not exceed 250 ft (76 m).
(f) To reduce vibration and galloping, aerial service wire shall be twisted one complete turn for each 10 ft (3 m) of span length at the time of installation.
(g) The methods of attaching aerial service wires at poles shall be as illustrated in construction drawings 503-2 and 504 contained in § 1755.510.
(h) Horizontal and vertical climbing spaces on poles used jointly with power circuits shall be provided in conformance with the requirements of Rule 236 of ANSI/IEEE C2-1997, NESC.
(i) Not more than four aerial service wires shall be distributed from any one 7/16 in. (10 mm) drive hook, or more than two aerial service wires from any one 5/16 in. (8 mm) drive hook. Aerial service wires and drive hooks shall be arranged so that the load does not pull the drive hook out of the pole. When more than one drive hook is required, the drive hooks shall be staggered with a minimum separation of 1 in. (25.4 mm) horizontally on centers and 1.5 in. (40 mm) vertically on centers. If drive hooks are placed within 3 in. (76 mm) of the top of the pole and on the opposite side of the pole's circumference, a vertical separation of at least 3 in. (76 mm) shall be provided. A drive hook shall not be placed on the top of a pole or stub pole.
(j) When connecting aerial service wires to cable pairs at terminals, sufficient slack shall be provided so that each aerial service wire shall reach any binding post position as shown on construction drawing 312-1 contained in § 1755.510.
(k) Aerial service wire attachments on utility poles and the manner of placing bridle rings and entering cable terminals shall be as shown on construction drawing 503-2 contained in § 1755.510.
(l) Not more than two conductors shall be connected to any terminal binding post. Where it is necessary to bridge more than two aerial service wires at the same closure, the aerial service wires shall be terminated in aerial service wire terminals connected in parallel with a No. 20 AWG bridle wire which shall be terminated on the binding posts of the filled terminal block.
(m) Where aerial service wire is attached to aerial plastic cable, it shall be brought directly into a ready-access closure and shall be terminated on the binding posts of the filled terminal block as shown on construction drawing 503-2 contained in § 1755.510.
(n) The conductor of copper coated steel reinforced aerial service wires identified by tracer ridges shall be used as the ring (negative battery) conductor of the pair, and shall normally be connected to the right or lower binding post of a pair on filled terminal blocks and NIDs or fused primary station protectors.
(o)
(2) The ring (negative battery) conductor of the pair shall normally be connected to the right or lower binding post of a pair on filled terminal blocks and NIDs or fused primary station protectors.
(p) When it is necessary to avoid intervening obstacles between a pole and a building, span clamp attachments shall be used to support the aerial service wires at points between the poles that are supporting the cable on the suspension strand as indicated by construction drawings 501-1 and 501-2 contained in § 1755.510.
(q) Aerial service wire strung from pole to pole shall be placed entirely below or entirely above any existing wire or cable. When adequate ground clearance can be obtained, preference shall be given to placing aerial service wire below wire and cable.
(r) When more than one aerial service wire is installed from pole to pole, the first aerial service wire shall be sagged in accordance with construction drawing 505 contained in § 1755.510. Succeeding aerial service wires shall be sagged with 2 in. (50.8 mm) more sag for each aerial service wire.
(s) Aerial service wire spans from pole lines to buildings shall follow the shortest feasible route commensurate with the requirements of paragraph (t) of this section and shall be sagged in accordance with construction drawing 505 contained in § 1755.510. The route shall avoid trees and other obstructions to the extent practicable. Where trees cannot be avoided, tree trimming permission shall be obtained from the owner or the owner's representative, and all limbs and foliage within 2 ft (600 mm) of the finally sagged wire shall be removed. If tree trimming permission cannot be obtained, the matter shall be referred to the borrower for resolution before proceeding with the installation.
(t) Aerial service wires shall contact buildings as closely as practicable at a point directly above the NID, or fused primary station protector. Generally, horizontal drop wire runs on buildings shall not exceed 20 ft (6 m). The warning given in § 1755.505(f)(11) regarding drilling holes in aluminum and vinyl siding applies also to attaching aerial service wires.
(u) The point of the first building attachment shall be located so that the aerial service wire will be clear of roof drainage points.
(v) Where practicable, aerial service wires shall pass under electrical guys, power distribution secondaries and services, tree limbs, etc.
(w) Aerial service wire shall not pass in front of windows or immediately above doors.
(x) Aerial service wires shall be routed so as to have a minimum clearance of 2 ft (600 mm) from any part of a short wave, ham radio, etc. antenna mast and a television antenna mast in its normal vertical position and of the possible region through which it sweeps when being lowered to a horizontal position.
(y) Aerial service wires shall be installed such that all clearances and separations comply with either section 237 of ANSI/IEEE C2-1997, NESC, or ANSI/NFPA 70-1999,
(z) Aerial service wire attachments to buildings shall be as follows:
(1) First attachments on buildings shall be made in accordance with construction drawings 506, 507, or 508-1 contained in § 1755.510, as applicable;
(2) Intermediate attachments on buildings shall be made in accordance with construction drawings 510 or 510-1 contained in § 1755.510; and
(3) Uninsulated attachments shall be permitted to be used as follows:
(i) Wherever NIDS are used as permitted by section 800-30(a)(1) of the ANSI/NFPA 70-1999,
(ii) On masonry and other types of nonflammable buildings.
(aa) Insulated attachments shall be used on wooden frame, metallic siding and other types of combustible buildings where fused primary station protectors are used, as required by section 800-30(a)(2) of ANSI/NFPA 70-1999,
(bb) Aerial service wire runs on buildings shall be attached vertically and horizontally in a neat and most inconspicuous possible manner. See construction drawing 513 contained in § 1755.510. Horizontal runs on buildings are undesirable and shall be kept to a minimum. Diagonal runs shall not be made.
(cc) Aerial service wire runs on buildings shall be located so as not to be subjected to damage from passing vehicles, pedestrians, or livestock.
(dd) Minimum separation between aerial service wires and other facilities on or in buildings shall be in accordance with § 1755.505(f)(8), Table 1.
(ee) Appropriate devices for attaching aerial service wires to buildings vary with the type of building construction and with the type of customer access location equipment. Table 4 lists various types of attachments and their application with respect to construction, customer access location equipment, and proper mounting devices. Construction drawings 506 through 513 contained in § 1755.510 illustrate requirements with respect to various angles of service wire contacts and uses of various attachments. Table 4 is as follows:
1. Screw dimensions are minimum. Where appropriate, either or both dimensions shall be increased. All wood screws for exterior use shall be stainless steel. All other exterior metal devices shall be stainless steel, zinc coated steel, silicon bronze, or corrosion resistant aluminum alloy.
2. Toggle bolt dimensions are minimum. Where appropriate, either or both dimensions shall be increased.
3. All devices should be attached to studding.
4. Screw-type devices shall be secured by means of expansion-type anchors. Equivalent manual or machine-driven devices may be used. Where toggle bolts are specified equivalent devices may be used.
5. Pilot holes shall be provided for screws and bridle rings in shingles and dropsiding.
6. Attachment device not applicable.
7. Attachment device applicable but no separate fastening device required.
8. To convert English units to Metric units use 1 in. = 25.4 mm.
(ff) Fastener spacings for vertical and horizontal runs on frame or masonry buildings shall not be more than 6 ft (2 m) apart. Fasteners should be spaced close enough to prevent the aerial service wire from “slapping” against the building during windy conditions.
(gg) When it is necessary to pass behind or around obstructions such as downspouts and vertical conduits, the aerial service wire shall be supported firmly with attachment devices placed not more than 6 in. (152 mm) from the obstruction as illustrated in Figures 4 and 5 of paragraph (hh) of this section. Preferably, the aerial service wire should be routed behind obstructions to minimize the possibility of mechanical damage to the aerial service wire in the event repair work to the obstruction is required.
(hh) When passing around building projections of masonry or wood or around corners, aerial service wires shall be installed as illustrated in Figures 5 and 6. Figures 4, 5, and 6 are as follows:
(ii) In areas where ice and snow conditions are severe, aerial service wires shall be located so that ice and snow falling from the roof will not strike the wires. However, where aerial service wires must pass under the sloping part of the roof, first attachments shall be made as close as practicable to the eaves.
(jj) If two aerial service wire spans are required to the same building, the first attachment shall be such that both aerial service wires can be attached at the same attachment device. Refer to construction drawing 508-1 contained in § 1755.510. Where more than two aerial service wires are required, additional attachment devices
(kk) When two or more aerial service wire runs are required on the same building they shall share the same type of attachment devices.
(ll) Aerial service wire entrances to buildings shall conform to sketch B of construction drawing 510-2 contained in § 1755.510, unless the entrance is made through a conduit.
(mm) When the aerial service wire approaches the entrance hole from above, a 1.5 in. (40 mm) minimum drip loop shall be formed in accordance with sketch B of construction drawing 510-2 contained in § 1755.510.
(nn) If an entrance conduit which slopes upward from outside to inside is available and suitably located, it shall be used for the aerial service wire entrance.
(a) Where more than six pairs are needed initially, and where an aerial service is necessary, the service shall consist of 22 AWG filled aerial cable of a pair size adequate for the ultimate anticipated service needs of the building. The cable shall comply with the requirements of § 1755.390, RUS specification for filled telephone cables, and shall be RUS accepted or RUS technically accepted.
(b) Aerial cable services shall be constructed in accordance with specific installation specifications prepared by the RUS borrower or the engineer delegated by the borrower.
(c) Unless otherwise specified in the installation specifications, aerial cable service installations shall meet the following requirements:
(1) Strand supported lashed construction shall be used.
(2) Where practicable a
(3) Construction on poles shall comply with applicable construction drawings for regular line construction. Aerial service cable shall be spliced to the main cable in accordance with § 1755.200, RUS standard for splicing copper and fiber optic cables.
(4) Where practicable, aerial cable shall pass under electrical guys, distribution secondaries, and services.
(5) The suspension strand shall be attached to the building by wall brackets as indicated in Figure 7 as follows:
(i) If taut spans are necessary, appropriate size strand may be used if the pull is in line with one wall of the building, or within 20 degrees of being in line as illustrated in sketch A of Figure 7. If the angle of pull is greater than 20 degrees from the building, the wall bracket shall be reinforced against pullout by an arrangement equivalent to sketch B of Figure 7. Taut spans may be strung using the recommendations in RUS Bulletin 1751F-630, Design of Aerial Plant. The same tension as would be used in normal line construction so as not to exceed 60 percent of the breaking strength of the strand under maximum loading shall be used. Taut spans shall
(ii) When an attachment must be made to the face of a building wall away from a corner, a “U” type wall bracket shall be used as indicated in sketch C of Figure 7. Only slack span construction with
(6) Aerial cable shall be located on the rear or side of the building and shall be run only in a horizontal or a vertical direction. The cable route shall be selected so as to avoid building projections and obstructions to the extent practicable.
(7) Cable attachment devices shall be located on solid masonry or on studs of wood frame buildings. Cable attachment devices may be installed on sheet surface materials only when such materials are reinforced with a backing material which allows penetration and firm holding of the attachment devices through the backing material.
(8) The minimum separation on or in buildings between cable and other facilities shall be as indicated in § 1755.505(f)(8), Table 1.
(9) On horizontal runs, cable clamps shall be placed so that the attachment is below the cable. On vertical runs, cable clamps shall be placed so that the attachment is on the same side as horizontal runs. Cable clamps shall be placed on the inside of cable bends.
(10) On horizontal runs, cable clamps shall be placed not more than 16 in. (400 mm) apart for cable diameters equal to or greater than 1 in. (25.4 mm) and 24 in. (600 mm) apart for cable diameters less than 1 in. (25.4 mm).
(11) On vertical runs, cable clamps shall be approximately 24 in. (600 mm) apart for all sizes of cable.
(12) For the cable entrance, holes shall be bored slightly larger in diameter than the cable and shall slope upward from outside to inside. A duct sealer having RUS acceptance or RUS technical acceptance shall be applied to both ends of the hole after the cable is pulled in.
(13) Section 1755.505(g) and (h) shall also apply to aerial cable services.
(a) All customer access locations shall be protected.
(b) Customer access location protection shall consist of installing the telecommunications facilities with proper clearances and insulation from other facilities, providing primary voltage limiting protection, fuse links, NIDs, BETs, or fused primary station protectors, if required, and adequate bonding and grounding.
(c) All NIDs shall be RUS accepted or RUS technically accepted or the RUS borrower shall obtain RUS regional office approval on a case by case basis as applicable.
(d) All BETs shall be RUS accepted or RUS technically accepted.
(e) All fused primary station protectors shall be RUS accepted or RUS technically accepted.
(f) NIDs, BETs, or fused primary station protectors shall be mounted outside for all applications except for those described in paragraphs (g)(1) through (g)(3) of this section.
(g) NIDs, BETs, or fused primary station protectors may be mounted inside when:
(1) Large buildings are to be served and the customer requests an inside installation;
(2) Buried alarm circuits are requested by the subscriber; or
(3) The customer requests an all buried installation for appearance or to prevent the drilling of holes in aluminum or vinyl siding.
(h) Outside mounted NIDs, BETs, or fused primary station protectors shall be easily accessible and shall be located between 3 to 5 ft (1 to 1.5 m) above final grade.
(i) The locations of NIDs, BETs, or fused primary station protectors shall be selected with emphasis on utilizing the shortest primary station protector
(j) If access to the building electric service grounding system, as referenced in paragraph (i) of this section, is not possible or is not reasonable (telecommunications primary station protector grounding conductor will be longer than 10 ft (3 m)), the NID, BET, or fused primary station protector shall be located as close as practicable to electrodes (a) or (b) cited in section 800-40(b)(1) of ANSI/NFPA 70-1999,
(k) In addition, the NID, BET, or fused primary station protector shall be located in, on, or immediately adjacent to the structure or building to be served as close as practicable to the point at which the telecommunications service wire attaches to the building, making sure that the telecommunications primary station protector grounding conductor is connected to the closest, existing, and accessible electrode, of the electrodes cited in paragraph (i) or (j) of this section.
(l) For the preferred customer access location installation, the ANSI/NFPA 70-1999,
(1) Connections to metallic conduits shall be made by ground straps clamped over a portion of the conduit that has been cleaned by sanding down to bare metal.
(2) Connections to metallic service equipment closures shall be made by attaching a connector which is listed for the purpose by some organization acceptable to the local authority (State, county, etc.) per article 100 of ANSI/NFPA 70-1999,
(m) Where it is not possible to accomplish the objective of paragraphs (i), (j), and (k) of this section, interior metallic pipes may be used to the maximum practicable extent to gain access to the electric service ground as shown in Figure 9. Note that the water pipe in Figure 9 is electrically continuous between electric and telecommunications bonds to the cold water pipe and it is used only as a portion of a bonding conductor and, therefore, does not have to be “acceptable” as a ground electrode but may be floating (isolated from ground by a plastic pipe section). ANSI/NFPA 70-1999,
(n) Where the telecommunications premises system at a customer's access location is grounded to a separate electrode (of any type) this telecommunications grounding electrode must be bonded to the electric grounding system with a No. 6 AWG or larger copper insulated grounding conductor. Bonding of separate electrodes is a requirement of the ANSI/NFPA 70-1999,
(o) The NID, BET, or fused primary station protector pair size shall be selected for the number of lines anticipated within five years.
(p) When lightning damage is considered probable or customer access locations are remote from the borrower's headquarters, use of maximum duty gas tube primary station protectors incorporated in NIDs, BETs, or fused primary station protectors should be considered. (See RUS TE&CM 823, Electrical Protection by Use of Gas Tube Arresters). Copies of RUS TE&CM 823 are available upon request from RUS/USDA, 1400 Independence Avenue, SW., STOP 1522, Washington, DC 20250-1522, FAX (202) 720-4120.
(q) NIDs or BETs incorporating fuseless station protectors shall always be used in preference to fused station protectors or BETs incorporating fused protectors, when in the judgment of the RUS borrower or the engineer delegated by the RUS borrower, the requirements of ANSI/NFPA 70-1999,
(r) A fuse link consisting of a copper conductor two gauges (AWG) finer (numerically higher) conductivity than the aerial service wire shall be provided between the cable and aerial service wire where NIDs or BETs incorporating fuseless station protectors are used. Thus for a 22 AWG drop, a fuse link of No. 24 AWG or finer copper wire shall be provided. If the cable circuit is No. 24 gauge or finer, the cable conductors serve as the fuse link for the 22 AWG aerial service wire and no separate fuse link is necessary. (Note: The fuse link or the facilities serving as the fuse link must be located between the telecommunications facilities that are exposed to possible power cross and the customer drop where there is no exposure to possible power cross.)
(s) RUS's buried plant practices require buried main line plant to be protected against power contacts to aerial plant extensions and aerial inserts by No. 24 AWG fuse links at every buried-aerial junction.
(t) In aerial cable plant, fuse links are usually provided by No. 24 AWG leads on filled terminal blocks regardless of the gauge of the cable conductors. This practice is acceptable if the ampacity of the aerial service wire is sufficiently higher than the fuse link's ampacity.
(u) The grounding and bonding of each NID, BET, or fused primary station protector shall be selected by consulting paragraphs (i) through (n) of this section. The “first choice” assembly unit shall be selected whenever the prevailing conditions make its use practicable. The NID, BET, or fused primary station protector assembly unit selected shall be installed in accordance with the appropriate construction drawing specified in RUS Bulletin 1753F-153 (RUS Form 515d), Specifications and Drawings for Service Installations at Customer Access Locations (Incorporated by reference at § 1755.97). Copies of RUS Bulletin 1753F-153 are available upon request from RUS/USDA, 1400 Independence Avenue, SW., STOP 1522, Washington, DC 20250-1522, FAX (202) 720-4120.
(v) The minimum size grounding conductor that can be used with a single NID; a group of NIDs; a multipair NID; fused protector; or BET shall be in accordance Table 5, as follows:
(w) Grounding conductor runs between the NID, BET, or fused station protector and the ground electrode shall conform to the following:
(1) The shortest, most direct route practicable shall be used;
(2) Sharp bends in the grounding conductor shall be avoided during installation;
(3) No splices shall be made in the grounding conductor;
(4) Grounding conductors shall not be fished through walls, under floors, or placed in bridle rings or any metal conduit unless the grounding conductor is bonded to the conductor at both ends of the metallic conduit;
(5) Grounding conductor runs from an outside mounted NID, BET, or fused station protector to an inside ground electrode shall use the same entrance as the station wire; and
(6) Grounding conductor runs from an outside mounted NID, BET, or fused station protector to an outside ground electrode at the building shall be attached to the exterior surface of the building or buried. If buried, the grounding conductor shall be either plowed or trenched to a minimum depth of 12 in. (300 mm). When trenched, the trenches shall be as close to the side of the building as practicable, backfilled, and tamped to restore the earth to its original condition.
(x) Telecommunications grounding connectors shall be RUS accepted or RUS technically accepted. Grounding and bonding conductors shall be made of copper. Where the grounding and bonding conductors must be connected to aluminum electric service grounding conductors, bimetal grounding connectors shall be used.
(y) Grounding conductor attachments shall conform to the following:
(1) Galvanized nails or clamps, or nickel-copper alloy staples shall be used for grounding conductor attachments in accordance with Table 6 in paragraph (y)(3) of this section;
(2) Grounding conductors, station or buried service wires in parallel runs may share the same fastening device when the device is specifically designed for two wires. See Table 6 in paragraph (y)(3) of this section for station wire and grounding conductor fasteners; and
(3) Grounding conductor fasteners shall be placed 12 to 18 in. (300 to 450 mm) apart on straight runs and 2 to 4 in. (50.8 to 100 mm) apart at corners and at bends. Table 6 is as follows:
1. Screw dimensions are minimum. Where appropriate, either or both dimensions shall be increased. All wood screws for exterior use shall be stainless steel. All other exterior metal devices shall be stainless steel, zinc coated steel, silicon bronze, or corrosion resistant aluminum alloy.
Toggle bolt dimensions are minimum. Where appropriate, either or both dimensions shall be increased.
3. Wall screw anchors may be used in wall board, plaster or tile walls. Screws and nails in masonry shall be secured by means of expansions type anchors. Equivalent manual or machine-driven devices may be used. Where toggle bolts are specified, equivalent devices may be used.
4. Lead holes shall be drilled for screws, nails, and bridle rings in shingles and dropsiding.
5. Sheet metal screws shall be used except where toggle bolts are required. Where wood sheathing under sheet metal siding is encountered, the sheet metal may be drilled or punched and a wood screw used.
6. Machine-driven staples of nickel-copper composition may be used for exterior wiring.
7. Galvanized clamps and wiring nails may be used for exterior and interior wiring. Enameled clamps shall be used for interior wiring only. Where toggle bolts or equivalent devices require holes in the structure larger than the clamp being fastened, a suitable washer of sufficient size to cover the hole must be used under the clamp.
8. Double clamp may be used where two #22 AWG station wires, two #12 AWG grounding conductors, or one #22 AWG station wire and one #12 grounding conductor parallels one another.
9. For converting English units to Metric units use 1 in. = 25.4 mm.
(z) Grounding conductors shall be separated from non-telecommunications company wires in accordance with section 800-12(b) of ANSI/NFPA 70-1999,
(aa) Grounding conductors run through metal conduits shall be bonded to the conduit at each end. RUS accepted and RUS technically accepted pipe type ground clamps and grounding connectors shall be used for bonding.
(bb) Where NID, BET, or fused station protector assembly units require grounding conductor connections to pipe systems, the following apply:
(1) The connection shall be made to a cold water pipe of an operating water system;
(2) The connection point shall be preferably inside the building;
(3) Allow a minimum of 6 in. (152 mm) between the last fastener and the point where the grounding conductor first touches the water pipe;
(4) Leave 2 in. (50.8 mm) of slack in the grounding conductor to avoid breaking the conductor at the terminating point. Tape the grounding conductor to the pipe where possible to avoid movement. In no case, shall the grounding conductor be coiled or wrapped around the pipe;
(5) The pipe shall be cleaned with fine sand paper to make a good electrical connection. Care should be taken to avoid damaging the pipe while cleaning it;
(6) Attach the pipe grounding conductor connector to the cleaned area of pipe and tighten. Care shall be exercised to avoid deforming, crushing, or otherwise damaging the pipe. A simple continuity check with an ohmmeter between the connector and the pipe will indicate whether or not a good electrical contact has been made. Set the ohmmeter to “Rx1” scale to ensure that a low resistance contact is made;
(7) A warning tag shall be attached to the ground clamp with the following or equivalent statement: “Call the telecommunications company if this connector or grounding conductor is loose or must be removed;” and
(8) When the water pipe is used, the ANSI/NFPA 70-1999,
(cc) Bonding conductors shall consist of either copper or tinned copper insulated wires of appropriate sizes.
(1) Bonding conductors shall be run and attached in the same manner as grounding conductors.
(2) Attaching and terminating devices for bonding conductors shall be adequate for the size of wire involved. The No. 6 AWG copper insulated conductor or larger shall not be terminated by bending it around a threaded stud.
(dd) Where NID, BET, or fused station protector assembly units require a driven ground rod the following shall apply to the ground rod installation:
(1) Locate the ground rod at least 1 ft (300 mm) from buildings, poles, trees and other obstruction;
(2) Ground rods shall not be installed within 6 ft (2 m) of electric service ground rods (Note: This minimum separation is provided to avoid mutual impedance effects of multiple grounding electrodes that will deleteriously degrade the effective impedance-to-earth if grounding electrodes are installed any closer than 6 ft (2 m) to one another. This requirement is included for cases where the telecommunications company is not allowed, for some reason, to observe the RUS preferred grounding method of attaching the primary protector grounding conductor directly to an accessible point on the
(3) A hole, 15 in. (350 mm) deep and 6 in. (150 mm) in diameter, shall be dug at the location where the ground rod is to be driven;
(4) Where “slip-on” type ground rod clamps are used instead of “clamp-around” type clamps, the ground rod clamps shall be placed onto the rod prior to driving the rod into the ground (Note there should be one clamp for the NID, BET, or fused station protector grounding conductor and one clamp for the conductor required to bond the telecommunications ground rod to the electric grounding system). However, the clamp shall not be tightened until the rod is completely driven. The end of the rod shall be placed in the bottom of the hole and the rod shall be aligned vertically adjacent to one wall of the hole prior to driving. The rod shall be driven until its tip is 12 in. (300 mm) below final grade. The grounding conductor shall then be attached, the clamp shall be tightened, and hole backfilled. Clamps employed in this manner shall be suitable for direct burial and shall be RUS accepted or RUS technically accepted; and
(5) Where rods are manually driven, a large number of blows from a light hammer (4 lbs (1.8 kg)) shall be used instead of heavy sledgehammer type blows. This should keep the rod from bending.
(ee) Terminations on fuseless primary station protectors incorporated in NIDs and on fused primary station protectors shall be as shown in Figures 10, 11, 12, and 13 of paragraph (ee)(1) of this section, Figure 14 of paragraph (ee)(4) of this section, and Figure 15 of paragraph (ee)(6) of this section. The inner jackets of buried service wires and outer jackets of cables used as service drops shall be extended into the NID or the fused primary station protector. A 10 in. (250 mm) length of each spare wire shall be left in NIDs or fused primary station protectors. The spare wires shall be coiled up neatly and stored in the NID or fused primary station protector housing.
(1) The shields of buried service wires may be connected to the ground binding post using RUS accepted or RUS technically accepted buried service shield bond connectors as shown in Figure 10 for NIDs and Figure 11 for fused primary station protectors. RUS accepted or RUS technically accepted buried service wire harness wires designed for customer access location installations may also be used for terminating buried service wire shields to the ground binding post of the NID as shown in Figure 12 and Figure 13 for fused primary station protectors. Figures 10 through 13 are as follows:
(2) On buried service drops and aerial service drops of more than 6 pairs using RUS accepted or RUS technically accepted cables, the shields shall be terminated with a RUS accepted or RUS technically accepted cable shield bonding connector and extended to the ground binding post of the NID, BET, or fused primary station protector with an RUS accepted or RUS technically accepted bonding harness wire. The installation of the shield bond connector and bonding harness wire shall be in accordance with the manufacturer's instructions.
(3) The shield and other conductors at the fuseless primary station protector incorporated in the NID shall be
(4) The station wire signaling ground conductor, if required, shall be placed above the first flat washer and beneath the second flat washer as indicated in Figure 14 as follows:
(5) The shield and other conductors at the fused primary station protector shall be terminated as shown on Figure 15 in paragraph (ee)(6) of this section. The pronged or cupped washer shall be placed above the shield. The grounding conductor shall be placed around the post on top of the pronged or cupped washer. A flat washer shall be placed above the grounding conductor.
(6) The station wire signaling ground conductor, if required, shall be placed above the first flat washer and beneath the second flat washer as indicated in Figure 15 as follows:
(7) Indoor NIDs or BETs that are equipped with “Quick Connect” type terminals shall not have more than one wire connected per clip. No. 19 AWG copper and No. 18 AWG copper covered-steel reinforced aerial service wire conductors shall not be connected to quick connect terminals. Nonmetallic reinforced aerial service wire using No. 22 AWG copper conductors may be connected to the quick connect terminals.
(8) Tip and ring connections and other connections in multipair NIDs or BETs shall be as indicated in Figure 16 as follows:
(ff) System polarity and conductor identification shall be maintained in NIDs, BETs, or fused primary station protectors in accordance with construction drawings 815 and 815-1 contained in § 1755.510.
(a) Customer access location installations at mobile homes shall be treated the same whether the homes are mounted on permanent foundations or temporary foundations and shall be installed as specified in §§ 1755.500 through 1755.510. For the purpose of this section, mobile homes include manufactured homes, motor homes, truck campers, travel trailers, and all forms of recreational vehicles. Customer access location installations at mobile homes can be considerably different than customer access location installations at regular homes and borrowers shall be certain that the two types of installations are properly applied.
(b) The method of customer access location installation prescribed by the ANSI/NFPA 70-1999,
(c) NIDs shall be installed at mobile homes as follows:
(1) Where the mobile home electric service equipment (power meter, etc.,) or the electric service disconnecting means associated with the mobile home is located within 35 ft (10.7 m) of the exterior wall of the mobile homes it serves, the NID shall be installed in accordance with Figure 17 as follows:
(2) Where the mobile home electric service equipment (power meter, etc.,) or the electric service disconnecting means associated with the mobile home is located more than 35 ft (10.7 m) from the exterior wall of the mobile homes it serves, the NID shall be installed in accordance with Figure 18 as follows:
(d) The service wire and station wire shall be terminated in the NID in accordance with Figure 19 in paragraph (e) of this section.
(e) Installation of the station wire and grounding conductor at the mobile home shall be in accordance with Figure 20. Figures 19 and 20 are as follows:
(a) The construction and assembly unit drawings in this section shall be used by borrowers to assist the installer in making the customer access location installations.
(b) The asterisks appearing on the construction drawings indicate that the items are no longer listed in the RUS Informational Publication (IP) 344-2, “List of Materials Acceptable for Use on Telecommunications Systems of RUS Borrowers.” RUS IP 344-2 can
(c) Drawings BM50, BM83, 312-1, 501-1, 501-2, 503-2, 504, 505, 506, 507, 508-1, 510, 510-1, 510-2, 513, 815, 815-1, 958, and 962 are as follows:
(a)
(2) The output of a digital-to-digital port shall be Pulse Code Modulation (PCM), encoded in eight-bit words using the mu-255 encoding law and D3 encoding format, and arranged to interface with a T1 span line.
(3) American National Standards Institute (ANSI) Standard S1.4-1983, Specification for Sound Level Meters, is incorporated by reference by RUS. This includes S1.4A-1985 that is also incorporated by reference. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be obtained from ANSI Inc., 11 West 42nd Street, 13th Floor, New York, NY 10036, telephone 212-642-4900. Copies may be inspected during normal business hours at RUS, room 2838-S, U.S. Department of Agriculture, Washington, DC 20250, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(4) American Society for Testing Materials (ASTM) Specification B 33-91, Standard Specification for Tinned Soft or Annealed Copper Wire for Electrical Purposes, is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be obtained from ASTM, 1916 Race Street, Philadelphia, PA, telephone 215-299-5400. Copies may be inspected during normal business hours at RUS, room 2838-S, U.S. Department of Agriculture, Washington, DC 20250, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(5) Bell Communications Research (Bellcore) document SR-TSV-002275, BOC Notes on the LEC Networks—1990, March 1991, is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR Part 51. Copies may be obtained from Bellcore Customer Service, 60 New England Avenue, Piscataway, NJ 08854, telephone 1-800-521-2673. Copies may be inspected during normal business hours at RUS, room 2838-S, U.S. Department of Agriculture, Washington, DC 20250, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(6) Bellcore TR-TSY-000508, Automatic Message Accounting, July 1987, is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be obtained from Bellcore Customer Service, 60 New England Avenue, Piscataway, NJ 08854, telephone 1-800-521-2673. Copies may be inspected during normal business hours at RUS, room 2838-S, U.S. Department of Agriculture, Washington, DC 20250, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(7) Federal Standard H28, Screw-Thread Standards for Federal Services, March 31, 1978, is incorporated by reference by RUS. This includes: Change Notice 1, Federal Standard, Screw-Thread Standards for Federal Services, May 28, 1986; Change Notice 2, Federal Standard, Screw-Thread Standards for Federal Services, January 20, 1989; and Change Notice 3, Federal Standard, Screw-Thread Standards for Federal
(8) Institute of Electrical and Electronics Engineers (IEEE) Std 455-1985, IEEE Standard Test Procedure for Measuring Longitudinal Balance of Telephone Equipment Operating in the Voice Band, is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be obtained from IEEE Service Center, 445 Hoes Lane, P. O. Box 1331, Piscataway, NJ 08854, telephone (201) 981-0060. Copies may be inspected during normal business hours at RUS, room 2838-S, U.S. Department of Agriculture, Washington, DC 20250, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(9) Institute of Electrical and Electronics Engineers (IEEE) Std 730-1989, IEEE Standard for Software Quality Assurance Plans, is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be obtained from IEEE Service Center, 445 Hoes Lane, P. O. Box 1331, Piscataway, NJ 08854, telephone (201) 981-0060. Copies may be inspected during normal business hours at RUS, room 2838-S, U.S. Department of Agriculture, Washington, DC 20250, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(10) RUS Bulletin 345-50, PE-60, RUS Specification for Trunk Carrier Systems, September 1979, is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552 (a) and 1 CFR part 51. Copies may be obtained from the Rural Utilities Service, Administrative Services Division, room 0175-S, Washington, DC 20250. The bulletin may be inspected at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(11) RUS Bulletin 345-55, PE-61, Central Office Loop Extenders and Loop Extender Voice Frequency Repeater Combinations, December 1973, is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552 (a) and 1 CFR part 51. Copies may be obtained from the Rural Utilities Service, Administrative Services Division, room 0175-S, Washington, DC 20250. The bulletin may be inspected at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(12) RUS Bulletin 345-87, PE-87, RUS Specification for Terminating (TIP) Cable, December 1983, is incorporated by reference RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552 (a) and 1 CFR part 51. Copies may be obtained from the Rural Utilities Service, Administrative Services Division, room
(b)
(2) The central office switching system shall be designed such that the expected individual line downtime does not exceed 30 minutes per year. This is the interval that the customer is out of service as a result of all failure types, excluding dispatch and travel time, i.e., hardware, software, and procedural errors.
(3) The central office switching system shall be designed such that there will be no more than 1 hour of total outages in 20 years, excluding dispatch and travel time for unattended offices.
(c)
(2) A “completed call” test shall be made part of these system type acceptance tests. There shall be no more than two in 10,000 locally originating and incoming calls misdirected, unsuccessfully terminated, prematurely disconnected or otherwise failing as a result of equipment malfunction and/or equipment failures, or as a result of transients, noise or design deficiencies. This test shall be made with a load box with no less than 10 lines access and 10 subscriber numbers for completion, or equivalent, with no other traffic in the system. If there is a failure in the equipment during this test, the cause shall be repaired and the test restarted at zero calls.
(3) System type acceptance testing applies basically to factory type testing, and not to owner acceptance testing for individual installations. The overall installed and operating system shall also meet these requirements, except for unusual circumstances or where specifically excluded by this or other RUS requirements.
(d)
(2) Optional requirements are those which may not be needed for every office and are identifiable by a phrase such as, “when specified by the owner,” or, “as specified by the owner.”
(3) In some cases where an optional feature specified in paragraph (e) of this section will not be required by an owner, either now or in the future, a system which does not provide this feature will be considered to be in compliance with this section for the specific installation under consideration, but not in compliance with the entire section.
(4) The owner may request bids from any RUS accepted supplier whose system provides all the features which will be required for a specific installation.
(5) The Application Guide, RUS TE&CM 322, provides information about the economic and service factors involved in all optional features, as well as instructions for the completion of appendices A and B of this section.
(e)
(2) Complete flexibility shall be provided for assigning any subscriber directory number to any central office line equipment by the use of internal programmed memory. Thus, any subscriber line and/or directory number may be moved to another terminal to distribute traffic loads, if the line equipment hardware is compatible with the service provided.
(3) The system shall be arranged to interface with interexchange carrier trunks and networks using single digit or multi-digit access codes. The system shall be equipped to handle at least 20-digit subscriber dialed numbers. All subscriber directory numbers in the office shall be seven-digit numbers.
(4) The network and the control equipment shall be comprised of solid-state and integrated circuitry components. Peripheral equipment shall be comprised of solid-state and integrated circuitry components as far as practical and consistent with the state-of-the-art and economics of the subject system.
(5) The basic switching system shall include the provision of software programming and necessary hardware, including memory, for optional custom calling services such as call waiting, call forwarding, three-way calling, and abbreviated dialing. It shall be possible to provide these services to any individual line (single-party) subscriber. The addition of these services shall not reduce the anticipated ultimate engineered line, trunk, and traffic capacity of the switching system as specified in appendix A of this section.
(6) The requirements in this specification apply only to single party lines. Although only single frequency ringing is required, other types may be requested in appendix A of this section.
(7) Provision shall be made for local automatic message accounting (LAMA), and for traffic service position system (TSPS) trunks, or equivalent, to the operator's office when required either initially or in the future.
(8) Tandem switching features shall be provided if specified in appendix A of this section.
(9) The system shall be arranged to serve a minimum of eight All Number Calling (ANC) office codes per office, with discrimination on terminating calls by trunk group, numbering plan, or programmed memory and class mark, if specified in appendix A of this section.
(10) Busy hour load handling capacity is an important feature when an office approaches capacity. The delays which may occur in call completion during busy hour periods may prove to be excessive in some system designs. Accordingly, each bidder shall provide, in appendix C of this section, data satisfactory to RUS regarding the busy hour load handling capacity and traffic delays of the system.
(11) Provision shall be made for hotel-motel arrangements, as required by the owner, to permit the operation of message registers at the subscriber's premises to record local outdial calls by guests (see Item 10.5, appendix A of this section).
(12) Provision shall be made to identify the calling line or incoming trunk on nuisance calls (see paragraph (g)(10) of this section for details).
(13) Full access from every subscriber line to every interoffice trunk shall be provided.
(14) Facilities shall be provided to implement service orders, make traffic studies, and perform switching and transmission tests by means of remote control devices if such operations are specified in Items 11.2 and 11.3 of appendix A of this section.
(15) Provision shall be made for the addition of facilities to record all subscriber originated calls based on dialed directory number, time of day, and duration of conversation. They shall be such that the additional equipment (if any is required) may be added to an in-service system without interruption of service and a minimum of equipment, wiring and software modifications.
(16) The system shall be capable of distributed switching operation where groups of subscriber lines can be remotely located from the central office. The remotely situated units are known as “Remote Switching Terminals” (RST's) (see paragraph (w) of this section). This does not eliminate the use of pair gain devices such as direct digitally connected concentrators, regular concentrators or subscriber carrier equipment, where specifically ordered by the owner and its engineer.
(17) The switching system shall have means to synchronize its clock with switches above it in the network hierarchy, when specified by the owner in item 3, appendix A of this section (see paragraph (j) of this section).
(18) Consistent with system arrangements and ease of maintenance, space shall be provided on the floor plan for an orderly layout of future equipment bays that will be required for anticipated traffic when the office reaches its ultimate size. Readily accessible terminals shall be provided for connection to interbay and frame cables to future bays. All cables, interbay and intrabay (excluding power), if technically feasible, shall be terminated at both ends by use of connectors.
(19) When specified in appendix A of this section, the system shall be capable of processing emergency calls to a 911 service bureau connected either by a group of one-way 911 lines or a trunk group.
(i) It shall be possible to reach the service bureau by dialing 911, 1+911, or a 7-digit number.
(ii) The system shall select an idle 911 line or trunk.
(iii) The system shall provide usual ringing and ringback signal until the called 911 line answers.
(iv) If the calling line goes on-hook first, the system shall hold the connection from the called 911 line and return steady low tone to the service bureau. The system shall then begin a 45-minute timeout, after which the calling line is disconnected and an alarm message is printed on a TTY. If the calling line goes off-hook before timeout, the system shall reestablish the conversation path.
(v) If the calling line does not disconnect, the service bureau attendant shall have the ability to force a disconnect of the established connection with the calling party.
(vi) When the 911 call is answered, the equipment shall be arranged so that coin lines are not charged for the call. Similarly, if some form of local call charging is used, there shall be no charge for the 911 call.
(vii) If the 911 service bureau is holding a calling line, it shall be possible for the 911 line to cause the equipment to ring back the calling line. This is done by providing a flash of on-hook signal from the 911 line lasting from 200 to 1,100 milliseconds. The signal to the calling line shall be ringing current if the line is on-hook, or receiver off-hook (ROH) tone if the line is off-hook.
(viii) Calls shall not be originated from the service bureau via the dedicated 911 lines. If an attempt is made to originate a call, it shall receive reorder tone. After 6 minutes, the system shall print an alarm message.
(ix) If 911 calls pass through intermediate switching, the forced-hold control, emergency ringback, and calling line status monitoring capabilities are lost.
(f)
(ii) In addition to operating on nonloaded cable pairs and subscriber carrier, the equipment shall function properly with D-66 and H-88 loaded cable pairs, including any provisions the equipment must control for the purposes of proper transmission.
(2)
(ii)
(iii)
(B) The receiver shall comply with the operating parameters of the dual-tone multifrequency (DTMF) central office receiver as described in section 6 of Bell Communications Research (Bellcore) document SR-TSV-002275, BOC Notes on the LEC Networks—1990.
(3)
(4)
(ii) The line on lockout shall be reconnected automatically to the central office when the permanent off-hook condition is cleared.
(5)
(6)
(ii) Working limits for subscriber lines with loop extenders are covered in RUS Bulletin 345-55, PE-61, Central Office Loop Extenders and Loop Extender Voice Frequency Repeater Combinations.
(iii) Ringing from RUS accepted loop extenders, or their equivalent, shall be cut off from the called line when the handset at the called station is removed during the ringing or the silent interval.
(7)
(8)
(9)
(g)
(i) Provide dial tone in response to origination of a call by a subscriber, except on special lines where the application of dial tone is not applicable, such as manual and hot lines;
(ii) Remove dial tone immediately after the first digit has been dialed;
(iii) Recognize the class of service of the calling subscriber;
(iv) Register the digits dialed by the calling subscriber where the rotary dial or pushbutton dialing characteristics and the minimum interdigital times are as specified;
(v) Perform the necessary translation functions when the required number of digits have been registered, and select a channel to a proper outgoing trunk, if one is available, to the designated interexchange carrier;
(vi) Provide a transmission path from the calling subscriber line to the selected trunk, if an idle one is found;
(vii) Provide for more than one alternate route to the desired destination when specified by the owner, select an idle outgoing trunk in the first or second choice alternate route trunk group, if all trunks in the higher choice groups are busy, and provide a reorder signal (see paragraph (i)(2)(iv) of this
(viii) Translate the proper part of the registered incoming routing data on tandem calls into an identification of an outgoing trunk group, select an idle trunk in that group, initiate the connection of the incoming trunk to the outgoing trunk, set the trunks in the proper configuration for tandem operation, and transmit information as required to permit completion to the desired destination in the distant office;
(ix) Transmit the proper stored information over the selected trunk to permit completion of outgoing calls to the desired destination by the distant office or offices, and provide multifrequency (MF) outpulsing when specified;
(x) Register all the digital information on calls incoming from a distant office, when dial or MF pulsing characteristics and interdigital times are as specified;
(xi) Translate internally a registered directory number into line equipment location, ringing code and terminating class (such as “PBX hunting”) on incoming or intraoffice calls;
(xii) Test the called line for a busy condition;
(xiii) Connect the incoming trunk or locally originated call to the called line if the called line is idle;
(xiv) Permit any type of ringing voltage available in the central office to be associated with any Subscriber Directory Number (SDN), cause the proper type of ringing voltage to be connected to the called line, and remove ringing from the line upon answer whether in the ringing or silent period; and
(xv) Test and monitor the switching system continually during periods of low traffic using the maintenance and diagnostic subsystem.
(2) The switching system shall offer at least the following originating and terminating class-of-service indications on a per-line basis to subscribers, as specified by the owner:
(i) Flat rate individual line, bridged ringing;
(ii) Flat rate PBX and trunk hunting numbers, bridged ringing;
(iii) Pay station;
(iv) Message rate subscriber line;
(v) Wide Area Telephone Service (WATS);
(vi) Extended Area Service (EAS);
(vii) Data service;
(viii) Hotel-Motel capability;
(ix) Denied originating;
(x) Denied terminating;
(xi) Custom calling features;
(xii) Special interexchange carrier accesses; and
(xiii) Presubscription to designated interexchange carrier.
(3) The switching system shall provide PBX hunting.
(i) At least one trunk hunting group in each 100 SDN's equipped shall be provided. More may be provided as specified by the owner.
(ii) PBX groups shall be of a reasonable size commensurate with the ultimate size of the switching system.
(iii) Any available SDN may be used for PBX trunk hunting.
(iv) Each PBX group shall have the capability of being assigned one or more nonhunting SDN's for night service.
(v) If the called line is a PBX hunting line, the switching system shall test all assigned lines in the hunting group for a busy condition.
(vi) If the called PBX group is busy, line busy tone, as specified in paragraph (i)(2)(iii) of this section, shall be returned to the originating end of the connection.
(4) The switching system shall provide pay stations which may be prepay or semi-postpay. The system shall be arranged so that an operator and emergency service (911) may be reached from prepay or semi-postpay coin lines without the use of a coin, when the proper pay station equipment is provided.
(5) To meet dialing requirements, the switching system shall:
(i) Initiate the line lockout function after a delay, as specified in paragraph (r)(3) of this section, if dial or pushbutton dialing pulses are not received after initiation of a call, preferably routing the subscriber line to a holding circuit for tones and then automatically to lockout;
(ii) Connect 120 interruptions per minute (IPM) paths busy tone, recorded message, or other distinctive
(iii) Register the standard tone calling signals received from a subscriber station arranged for pushbutton dialing if specified by the owner, provide arrangements to function properly with 12-button pushbutton dialing sets, and return a reorder signal to the subscriber upon receipt of signal from the 11th or 12th buttons if neither of these buttons is assigned functions; and
(iv) Connect the incoming trunk to the digit register equipment within 120 milliseconds after seizure where direct dialing is received on calls from a distant office, cancel the bid for a register, and return reorder tone to the calling end if dial pulses are received before a register is attached.
(6) The switching system shall provide for appropriate circuit usage.
(i) To avoid inefficient utilization of the switching network, that portion of the common equipment that establishes the connection on intramachine calls shall not require more than 500 milliseconds, exclusive of ringing and ring trip, to complete its function under no-delay conditions.
(ii) The switching system shall provide for duplication in a load sharing or redundant configuration any circuit elements or components, the failure of which would reduce the grade of service of 100 or more lines by more than 25 percent of the traffic carrying capacity.
(iii) The switching system shall ensure that failure of access to a high choice circuit will not prevent subsequent calls from being served by lower choice circuits, wherever possible.
(iv) Where only two circuits of a type are provided, circuits shall be designed so that failure of one circuit will not permanently block any portion of the system for the duration of the failure.
(v) Where more than two circuits of a type are provided, successive usages should be on a rotational or random basis rather than the step-up selection with the possible exception of a last choice trunk.
(vi) The system shall be designed so that, in the event of a network failure, the system shall immediately or simultaneously use a redundant portion of the network to complete the call.
(7) The switching system shall provide busy verification facilities with the method of access specified by the owner.
(i) Only an operator or a switchman shall be able to override a busy line condition.
(ii) If the called line is busy, off-hook supervision shall be given the operator or switchman.
(iii) The responsibility of restricting subscribers in distant offices from having access to busy verification shall be on the distant office personnel when the toll trunks are used for both toll connecting and verification traffic.
(iv) When a verification code is used, all digits of the code must be dialed before cut-through to the called line can be accomplished.
(8) The switching system shall provide intercept facilities.
(i) All unused numbering plan area codes, home numbering plan area office codes, service codes and subscriber directory numbers (SDN's) shall be routed to intercept. All intercept administration shall be by changes in memory administrable by telephone company personnel. Maximum machine time to place a subscriber on intercept shall be 15 seconds.
(ii) Unequipped SDN's intercept shall be effective if the processor memory does not have information concerning the SDN in question.
(iii) The intercept equipment shall be arranged so that specific SDN's can be routed to a separate intercept circuit for changed numbers.
(iv) When an intercept call is answered, either by an operator or by a recorded announcement, an off-hook or charge supervision signal shall not be returned, even momentarily, to the originating end.
(v) When intercepting service is to be handled over the regular interoffice toll trunks, a distinctive identifying tone shall be transmitted when the operator answers. This tone shall be of the frequency and duration specified in paragraph (i)(2)(x) of this section.
(9) The switching system shall provide nuisance call trap facilities which, when activated, provide a permanent
(10) The switching system shall follow appropriate release procedures.
(i) The office shall be arranged so a connection to a terminating channel other than assistance operator shall be released under control of the calling party so that the channel can be reseized, unless the call is to emergency 911 service or other termination arranged for called party control.
(ii) If the called party disconnects first, the channel used in the originally established connection shall be held until the calling party disconnects or until the timing interval specified in paragraph (r)(7) of this section has elapsed. This feature shall not interfere with the normal operation of calls to intercept, fire alarm, or other special services.
(11) The switching system shall provide line load control facilities, when specified by the owner, to give preference for originating service to a limited group of subscribers during emergencies.
(i) These facilities may be activated manually by input-output (I/O) device or automatically after a manual setting of a key (or equivalent) to put line load control into effect, as determined by the bidder. The automatic procedure is preferable.
(ii) Procedures shall be established to avoid the unauthorized use of the line load control facilities.
(iii) Where automatic activation is provided, service may be provided to small groups of nonemergency subscribers on limited grade of service whenever the office load becomes low enough to permit this to be done safely.
(h)
(ii) Trunks shall not be directly driven from the subscriber's dial on outward calls.
(iii) In order to reduce the spares inventory and minimize incidence of improper maintenance replacement of circuit assemblies, the types of trunk circuits shall be kept to a minimum. Variation in assemblies should be mainly limited to variation in signaling modes.
(iv) Trunk circuits which connect with carrier or 4-wire transmission facilities shall be arranged for 4-wire transmission to avoid an intermediate 2-wire interface between a 4-wire switching system and trunk facilities.
(2)
(3)
(ii) There are no requirements for trunks arranged for manual re-ring by a toll operator, either with the receiver on or off the hook, except to coin stations with the receiver on the hook.
(iii) On calls from subscribers to the assistance operator, the release of the connection shall be under control of the last party to disconnect. An exception is operator control of disconnect that is used on outgoing trunks to a TSP/TSPS system.
(iv) On calls originated by an operator, the release of the connection shall be under control of the operator.
(v) Where trunks with E and M lead signaling are used, the trunk circuits for Type I signaling shall be arranged
(vi) Where answer supervision is used to determine the initiation of the charging interval for a call, such answer supervision shall not be effective for charging until after the elapse of the timing interval listed in paragraph (r)(5) of this section.
(vii) When necessary, provision shall be made for reception of start and stop dial signals on toll trunk equipment.
(viii) When trunks arranged for automatic message accounting (AMA), toll ticketing, or centralized automatic message accounting (CAMA) are specified by the owner, these trunks shall provide the pertinent features described in paragraph (k) of this section applicable to such functions.
(4)
(ii) Each interface circuit shall connect 24 voice channels to the switching system from a 1.544 megabit per second DS1 bit stream. The DS1 bit stream entering or exiting the system shall be in the D3 format and the voice signals shall be encoded in 8 bit mu-255 PCM. The format and processing of the bit stream must be compatible with characteristics of the D3 channel bank such as alarm and maintenance characteristics. Loss of receive signal (DS1) shall be detected and the equivalent of a carrier group alarm shall be executed in 2.5 ±0.5 seconds. Loss of synchronization shall be detected by slips, timing jitter, and wander in accordance with industry standards.
(iii) Signaling shall be by means of MF or dial pulse (DP) and the system which is inherent in the A and B bits of the D3 format. In the case where they are not used for signaling, the A and B bits shall be used only for normal voice and data transmission.
(i)
(2)
(ii) Low tone shall consist of 480 Hz plus 620 Hz at a composite level of −21 dBm0 which equates to −24 dBm0 per frequency.
(iii) Line busy tone shall be low tone interrupted at 60 IPM, with tone on 0.5 seconds and off 0.5 seconds.
(iv) Reorder, all paths busy, and no circuit tone shall be low tone interrupted at 120 IPM, with tone on 0.25 seconds and off 0.25 seconds.
(v) Identifying tone on calls from coin lines shall be uninterrupted low tone.
(vi) High tone shall consist of 480 Hz at −17 dBm0.
(vii) Audible ringback tone shall consist of 440 plus 480 Hz at a composite level of −16 dBm0 which equates to −19 dBm0 per frequency.
(viii) The call progress tones listed in this section are described in Bellcore document SR-TSV-002275, BOC Notes on the LEC Networks—1990, section 6. The 350, 440, 480, and 620 Hz tones shall
(ix) Distinctive tone, when required for alarm calls, or other features, shall consist of high tone interrupted at 200 IPM with tone on 150 ms and off 150 ms.
(x) Identifying tone on intercepted calls shall consist of uninterrupted high tone impressed on the trunk circuit 300 to 600 milliseconds following the operator's answer of intercepted calls.
(xi) An ROH circuit shall have output tones which do not interfere with the pushbutton or multifrequency signaling tones. The ROH tone may be introduced digitally internal to the system near the overload level of +3 dBm0. No power adjustment will be required. The frequency of the output shall be distinctive and urgent in order to attract the subscriber's attention to an off-hook situation. (Warning: In order to determine the signal level, a frequency selective voltmeter must be used to determine the level of each signal component and mathematical power addition used to combine these measurements into a single level value.)
(xii) During application of tones, office longitudinal balance shall be maintained within 15 dB of that specified in paragraph (q)(8) of this section.
(j)
(2) The end office central office system clock shall be a Stratum 3 clock with:
(i) A minimum long-term accuracy of ±4.6 × 10
(ii) A minimum stability of 3.7 × 10
(iii) A “Pull-In Range” for the capability of synchronizing to a clock with accuracy of ±4.6 × 10
(3) The access tandem central office system clock shall be a Stratum 2 clock with:
(i) A minimum long-term accuracy of ±1.6 × 10
(ii) A minimum stability of 1 × 10
(iii) A “Pull-In Range” for the capability of synchronization to a clock with accuracy of ±1.6 × 10
(k)
(2)
(ii) All equipment shall be arranged for Feature Group B given that appendix A of this section requires the equipment of the necessary trunks (Trunk Side Connection).
(iii) The equipment shall be arranged for Feature Group C on the trunk groups specified in appendix A of this section. Even though appendix A of this section specifies Feature Group D or some other trunk group, it shall be possible through software commands available to the owner to use Feature Group C signaling protocols on a trunk group basis until such time that the trunk group in question converts to Feature Group D signaling protocols.
(iv) The equipment shall be arranged for Feature Group D on the trunk groups specified in appendix A of this section.
(v) Calls originating from coin lines toward switched access service shall be arranged either to provide signaling protocols for TSPS, or in the absence of TSPS-type service, such calls shall be blocked.
(vi) The equipment shall be arranged for forwarding routing information, calling party identification, and called party numbers in the proper feature group protocols, by trunk group as specified in appendix A of this section.
(vii) The equipment shall be arranged for AMA data collection as specified in appendix A of this section by trunk group. Unless otherwise specified by the owner, the equipment shall be arranged to collect the billing data in the Bellcore AMA format as described in Bellcore document TR-TSY-000508, Automatic Message Accounting.
(viii) If specified in Item 9.4, appendix A of this section, the equipment shall be arranged to store the billing data in a pollable system. If specified in Item 9.5, appendix A of this section, equipment shall be furnished to poll the pollable systems associated with the contract.
(l)
(ii) Design precautions shall be taken to prevent the possibility of equipment damage arising from the insertion of an electronic package into the wrong connector, the removal of a package from any connector, or the improper insertion of the correct card in its connector.
(2)
(3)
(ii) Printed circuit boards or similar equipment employing electronic components shall be self-protecting against external grounds applied to the connector terminals, where feasible. Board components and coatings applied to finished products shall be of such material or treated so they will not support combustion.
(iii) Every precaution shall be taken to protect electrostatically sensitive components from damage during handling. This shall include written instructions and recommendations (see Item 6.1,h of appendix C of this section).
(m)
(ii) The switching network shall employ time division digital switching and be compatible for connection to D3 type PCM channel banks without conversion to analog.
(iii) Equipment shall be available as required to connect analog lines and trunks, analog or digital service circuits, digital carriers to RST's, D3 channel banks or other digital switching units.
(2)
(n)
(2) Programs shall be modular, flexible and structured. In the interest of more dependable and more easily read programs, it is desirable to use a language which is more person-oriented leaving the detailed machine-oriented problems to a compiler program. Quality assurance of all software programs shall be in accordance with IEEE Std 730-1989, IEEE Standard for Software Quality Assurance Plans, or equivalent.
(3) The office administration program shall have checks within it to
(4) The switching system shall be able to offer, by request, at least the following printouts of its routine stored data for administrative purposes:
(i) A list of all assigned directory numbers, in numerical order, with their assigned class of service and line terminal numbers;
(ii) A list of all directory numbers, in numerical order, associated with a class of service;
(iii) A list of all unassigned line terminals;
(iv) Traffic data in proper form for separation studies in accordance with the revenue separations procedures current at the time of the contract;
(v) All lines on lockout;
(vi) All lines assigned to intercept;
(vii) All available (unassigned) directory numbers in the working thousands group; and
(viii) A list of equipment busied out for maintenance.
(5) The printouts in paragraph (n)(4) of this section may be delayed to times of light traffic.
(6) Maintenance diagnostics shall be performed by a fault recognition system utilizing both software and hardware, each being used where they are most effective for maintenance and reliability. In the economic interests of providing early and efficient fault detection and accurate pinpointing of faulty areas, it is desirable to have a comprehensive person-machine interface supported by extensive automatic fault detection and analysis, involving diagnostic software for fault resolution and automatic recovery mechanisms to maintain continuous service. Maintenance messages may be channeled to a remote maintenance center if so desired.
(7) Information in memory, having no requirement for changes to be introduced in the maintenance or operation of the system, may be stored in memory devices such as programmable read-only memory (PROM) or other devices that cannot be reprogrammed in the field.
(o)
(ii) The alarms shall be classified in accordance with their effect on the system.
(A) Catastrophic alarms demand immediate attention and require notification of the highest level of supervisory personnel. Conditions such as loss of service, loss of one or more remote line switches or line concentrators connected through Direct Digital Interface, loss of network control, and loss of computer program in all processors shall produce catastrophic alarms.
(B) Major alarms demand rapid action. Conditions such as loss of one or more groups of subscribers or trunk ports, blown fuses for common groups of channels, loss of control to groups of channels, failure of one or both redundant units, and total loss of battery charging current for more than 15 minutes shall produce major alarms.
(C) Minor alarms indicate nonemergency conditions which cause degraded service or fault conditions which causes the system to operate within less-than-optimum performance. Conditions discovered in automatic routining which have not shown in the operation of the equipment but require attention and cumulative line lockout (level adjustable) are examples of minor alarm conditions.
(iii) When the office is arranged for unattended operation, facilities shall be provided for extending the alarm indications to an attended point.
(iv) When the use of a separate outside plant facility for alarm sending is
(v) When alarm sending is accomplished over a regular operator office trunk, the operator shall be apprised that the call is an alarm indication by a distinctive tone, as specified by the owner in appendix A of this section. It shall be possible for the operator to determine at any time the presence of a trouble condition by dialing a number set aside for that purpose. This number shall also be accessible from lines classmarked for this feature.
(vi) When the alarm sending circuit seizes an interoffice operator trunk, the operator must dial the alarm checking code over another trunk before the first trunk can be released except where the alarm condition has disappeared first.
(vii) The alarm sending circuit shall have access to two or more trunks if the trunks are used for subscriber traffic.
(viii) An alarm indication of higher priority shall supersede an original alarm indication and reseize an interoffice operator trunk.
(ix) In any group of offices purchased under one contract, the same codes shall be used in each office for alarm checking and test.
(x) When the alarm checking number is dialed, the alarm indications received shall be as follows:
(A) Catastrophic alarm—No tone.
(B) Major alarm—Continuous busy tone 60 IPM, unless alarm is overridden.
(C) Minor alarm—Continuous 1-ring code ringback tone, unless alarm is overridden.
(D) No trouble—Continuous 2-ring code ringback tone, unless alarm is overridden.
(xi) Audible and visual local alarms and transmitted alarms shall be provided as follows:
(xii) The central office alarm circuits shall be arranged to provide optional wiring to transmit either a minor alarm or a major alarm and a printout to accommodate various types of trunk and subscriber carrier systems, microwave, mobile radio, other transmission systems, and environmental protection systems with different priorities when a set of contacts is closed in the equipment of such systems and the alarm checking code is dialed. The alarm relay shall be furnished by the supplier of the carrier multiplex and/or mobile radio equipment. The option or options shall be specified by the owner.
(2)
(B) The fault recorder shall provide a permanent or semi-permanent record of the circuit elements involved whenever a trouble is encountered. It shall be arranged to recognize an existing fault condition and not cause multiple printouts of the same fault, except during test routine.
(ii)
(B) The maintenance system shall provide both specialized maintenance hardware circuits and an extensive software package to enable maintenance to determine trouble to an individual card or functional group of cards.
(C) Maintenance programs may be both on-line and off-line. On-line maintenance programs are activated by system errors and shall be scheduled to execute call tests during low traffic periods and periodic hardware tests at specific time intervals. Programs shall provide diagnostic tools for the maintenance personnel and be initiated by them.
(D) Scheduled periodic hardware tests shall automatically detect faults and alert maintenance personnel via alarm or appropriate input/output device(s) at local and/or remote locations.
(E) Facilities shall be provided so that test calls can be set up using pre-selected items of switching equipment.
(F) The maintenance personnel shall be able to make tests to determine if every trunk and every item of switching equipment are functioning properly. Also, it shall be possible to make each trunk and each SPC equipment, or part thereof, busy to service calls. Where possible, equipment which is made busy to service calls shall still be accessible for test calls.
(iii)
(
(
(
(
(
(
(
(
(
(
(B) An acceptable arrangement for making the tests shown in paragraph (o)(2)(iii)(A) of this section is to have them under software control with results displayed at one of the system's I/O ports.
(C) A howler circuit for maintenance purposes, if ordered by the owner, shall have output tones which do not interfere with the pushbutton or multifrequency signaling tones. The harmonics of the output tones shall be attenuated at least 26 dB below the fundamental frequency for all load conditions. The frequency stability shall be 2 percent or less for all output tones when the unit is operated in the specified load and environmental range. It shall be possible to vary the output voltage (power) of the howler circuit. It shall remove tone and restore the line to service when the telephone instrument receiver is placed on-hook. The frequency of the output shall be chosen to be distinctive and urgent in order to attract the subscriber's attention to an off-hook situation.
(D) When a dial speed test facility is specified by the owner, it shall be accessed by dialing a special code and shall return to the calling station readily identifiable signals to indicate that the dial speed is slow, normal, or fast.
(E) When the office is arranged for pushbutton dialing, optional facilities shall be provided for testing the pushbutton dialing equipment at the subscriber station.
(F) When a system for testing subscriber lines in remote offices from a test position in a centrally located office is specified by the owner, it shall be capable of working with all the central offices and RST's in the remote areas. This testing equipment shall preferably be solid-state with a minimum of electromechanical devices and shall operate from central office battery. It shall be capable of working over any voice grade telephone circuit and shall not require a dedicated trunk. There shall be no interference to or from “in-band” voice channel tones. When used over a network, the verification or access shall be guarded to prevent unauthorized access by subscribers. Access to this system shall only be available to the test operator in all cases.
(3)
(ii) Transmission test circuits are available with a variety of options. These include single frequency and multifrequency tone generators with one or more generator output terminals, quiet terminations, and loop around test arrangements for both one-way and two-way trunks.
(iii) Where multifrequency generators are used, they are usually arranged to provide a minimum of three frequencies. With some equipment, up to seven additional frequencies may be provided if needed. No industry standardization of test frequencies is as yet provided. Therefore, it is important that the selection of frequencies, the order in which they are applied and the time interval for application of each frequency be agreed upon by the connecting company and the RUS borrower and listed in appendix A of this section in those situations where connecting companies request the installation of multifrequency generators in borrowers' central offices.
(iv) The milliwatt generator shall be solid-state and generate the analog or digital equivalent of 1004 Hz. The milliwatt generator shall be assigned to a 4-wire analog test port or be digitally generated. All 2-wire and 4-wire voice frequency ports are at a nominal 0 dBm0 level. The level of the 1004 Hz tone generator shall appear at outgoing 2-wire and 4-wire ports at 0 dBm ±0.5 dB. For direct digital connections, the encoded output shall be the digital equivalent of a 0 dBm0 ±0.5 dB signal.
(v) Reference tone generators can be used individually or they can be part of a loop around test arrangement. If both single frequency and multifrequency reference tone generators are to be provided, only one can be arranged as part of a loop around test. Where a loop around arrangement is provided, the generator output can be obtained by dialing singly one of the two line terminals. By dialing the other line terminal singly, usually a 900 ohm resistor in series with a 2.16 microfarad capacitor is connected to the circuit under test to act as a “quiet termination” for noise measurements and other tests. Whenever both line terminals are held simultaneously, both the milliwatt supply and the quiet termination shall be lifted off and a “loop around” condition established. This permits the overall loss to be determined from the distant office by going out over one trunk, looping around in the end office and returning over the other trunk. The insertion loss of this test arrangement when used in a loop around configuration should not exceed 0.1 dB at the frequencies specified for the milliwatt supply. Unless otherwise specified, continuous off-hook supervision is to be provided on both line terminals to prevent collusive calling without charge. It will be permissible to accomplish the quiet termination by opening the 4-wire path internally and to accomplish the loop around by digital switching.
(vi) Provision shall be made so that the milliwatt supply can be manually patched to circuits.
(vii) Test jack access shall be provided for all interoffice trunks of the voice frequency type. The jack access shall be properly designated for line, drop, monitor, and signaling leads plus any other jacks as requested by the owner. This may be accomplished by a set of jacks located at the maintenance center which have access to each trunk on a switching basis.
(p)
(ii) The traffic capacity for all interoffice trunks shall be based on full availability, even though the distant office itself is not engineered to provide full availability access.
(iii) The Traffic Table may also be used to determine the approximate traffic capacity of high-usage intertoll trunks. The traffic offered to high-usage groups may be read at B.10, signifying that 10 percent of the traffic overflows to the alternate route. This approximates the HU12 table used by AT&T.
(iv) In reading the trunk quantity from the table, the higher quantity shall be used when the CCS load is three or more CCS over the lower quantity. For example, the number of trunks justified for 294 CCS at B.005 is 16, but for 295 CCS 17 trunks are justified.
(v) Limited availability is not permitted.
(vi) The traffic capacity in the following table should be used for small trunk groups such as pay station, special service trunks, intercept, and PBX trunks, unless otherwise specified in appendix A of this section:
(vii) The percentage of lines equipped for pushbutton dialing is to be used to determine the number of tone receivers. Local registers, if required, shall be supplied on the basis of all dial pulse.
(2)
(ii) The number of calls encountering dial tone delay in excess of 3 seconds, measured over the busy hour of the four high-consecutive week (4HW) period, shall not be more than 1.5 percent.
(iii) The average post dialing delay objective for an intraoffice call shall not exceed 1 second. This includes all connect, operate, and translation time.
(iv) The line to line (intraoffice) network matching loss objective shall be 0.02 or less.
(v) The blocking probabilities related to trunks include both “mismatch” probability and probability of “all trunks busy.” It is likely that the “mismatch” will be negligible in that many digital central offices have essentially nonblocking switching characteristics. The objectives for trunk connections are as follows:
(A) Subscriber to outgoing trunk objective 0.01 or less;
(B) Incoming trunk to subscriber objective 0.02 or less; and
(C) Local trunk tandem objective 0.01 or less.
(vi) Groups of common service circuits are to be engineered utilizing the full availability traffic tables that appear in paragraph (p)(1)(i) of this section at the following stipulated probabilities:
(A) Outgoing trunks to 2/6 MF or dial pulse senders at B.001;
(B) Incoming trunks to 2/6 MF receivers at B.001;
(C) Incoming nondelay dial trunks to receivers at B.001; and
(D) Incoming trunks with start dial at B.01.
(vii) Remote Switching Terminals (RST's) shall meet the same grade of service objectives as the host.
(3)
(i) The following average call holding times (HT) may be used.
(ii) The following average subscriber dialing holding times may be used (times used to dial digits do not include machine time).
(iii) The following average incoming register holding times may be used (times for digit registrations do not include machine time).
(iv) The following average sender holding times may be used (does not include machine setup and release time).
(4)
(A)
(B)
(C)
(D)
(E)
(ii) Traffic data shall be stored in electronic storage registers or block of memory consisting of one or more traffic counters for each item to be measured. The registers listed in paragraph (p)(4)(i) of this section shall be associated with the interoffice trunks, switching network and central control equipment in such a manner that the register readings can be used to determine the traffic load and flow to, from and within the system. Two-way
(iii) The measured data shall be shown on a printout. It should be possible to have local or remote printout, or both. Arrangement shall be made for automatic data printout on command for 15-, 30-, or 60-minute intervals as required, and be arranged for automatic start-stop and in accordance with revenue separation procedures current at the time of contract.
(iv) All traffic records shall have dates and times and office identification.
(q)
(2)
(3)
(i)
(ii)
(iii)
(iv)
(4)
(i)
(ii)
(iii)
(5)
(6)
(7)
(ii) Far end test terminations shall be as follows:
(A) Loaded line circuit—1650 ohms in parallel with the series combination of .005 microfarads and 100 ohms;
(B) Nonloaded line circuit—800 ohms in parallel with the series combination of .05 microfarads and 100 ohms;
(C) Special service line circuit including electronic lines and carrier lines—900 ohms in series with 2.16 microfarads;
(D) Two-wire trunk—900 ohms in series with 2.16 microfarads; and
(E) Four-wire trunk—600 ohms.
(iii) For trunk-to-trunk (2-wire or 4-wire) connections the echo return loss (ERL) shall be 27 dB, minimum and the singing return loss (SRL) shall be 20 dB, minimum low and 23 dB, minimum high.
(iv) For trunk-to-line (2-wire or 4-wire) connections the ERL shall be 24 dB, minimum and the SRL shall be 17 dB, minimum low and 20 dB, minimum high.
(v) For line-to-line or line-to-trunk (2-wire or 4-wire) connections the ERL shall be 18 dB, minimum and the SRL shall be 12 dB, minimum low and 15 dB, minimum high.
(8)
(9)
(10)
(11)
(12)
(13)
(ii) Due to the possible loss of the least significant bit on direct digital connections, a signal to distortion degradation of up to 2 dB may be allowed where adequately justified by the bidder.
(14)
(15)
(16)
(17)
(18) Radio and television interference. The central office switching equipment shall be designed and installed so that radiation of high frequency noise will be limited so as not to interfere with radio and television receivers.
(r)
(2)
(3)
(4)
(5)
(6)
(7)
(i) Disconnect signal;
(ii) Wink signal;
(iii) Start dialing signal;
(iv) Pulse delay signal;
(v) Go signal;
(vi) Digit timing; and
(vii) Sender, register, and link attachment timing.
(s)
(2)
(ii) When lead calcium cells are specified, no cell shall differ from the average voltage of the string of fully charged cells by more than ±0.03 volt when measured at a charging rate in amperes equivalent to 10 percent of the ampere hour capacity of the cells. Similarly, when cells are fully charged and floating between 2.30 and 2.33 volts per cell, the cell voltage of any cell in a given string shall not differ more than ±0.03 volt from the average. These requirements are for test purposes only and do not apply to operating conditions.
(iii) Voltage readings shall be corrected by a temperature coefficient of 0.0033 volt per degree F (0.006 per degree C), whenever temperature variations exist between cells in a given string. This correction factor shall also be applied when comparing cell voltages taken at different times and at different temperatures. The correction factor shall be added to the measured voltage when the temperature is above 77 °F (25 °C) and subtracted when the temperature is below 77 °F (25 °C).
(iv) The specific gravity readings of lead antimony cells at full charge shall be 1.210 ±.010 at 77 °F (25 °C) at maximum electrolyte height.
(v) When counter cells are supplied by the bidder, they shall be the dry counter electromotive force (CEMF) type.
(vi) When lead antimony batteries are specified, they shall be designed to last a minimum of 10 years when maintained on a full float operation between 2.15 and 2.17 volts per cell. When lead calcium batteries are specified, they shall be designed to last a minimum of 20 years when maintained on full float operation between 2.17 and 2.25 volts per cell. The battery shall be clearly designated as “antimony” or “calcium” by means of stencils, decals or other devices.
(vii) Each battery cell shall be equipped with an explosion control device.
(viii) The battery size shall be calculated in accordance with standard procedures. The battery in no case shall have a reserve capacity in ampere hours less than four times the current capacity of the largest charger.
(3)
(ii) When charging batteries, the voltage at the battery terminals shall be adjustable and shall be set at the value recommended for the particular battery being charged, providing it is not above the maximum operating voltage of the switching system equipment. The voltage shall not vary more than plus or minus 0.02 volt per cell between 10 percent load and 100 percent load. Between 3 percent and 10 percent load, the output voltage shall not vary more than plus or minus 0.04 volt per cell. Beyond full load current, the output voltage shall drop sharply. The output voltage shall be maintained with the line voltage variations of plus or minus 10 percent. Provision shall be made to change the output voltage of the rectifier manually to 2.25 volts per cell to provide an equalization charge on the battery.
(iii) The charger noise shall not exceed 22 dBrnC when measured with a suitable noise measuring set and under the rated battery capacitance and load conditions as determined in Figure 2.
(30,000 × 100)/25 = 120,000 µF
(iv) The charging equipment shall indicate a failure of charging current, whether due to ac power failure, an internal failure in the charger, or to other circumstances which might cause the output voltage of the charger to drop below the battery voltage. Where a supplementary constant current charger is used, an alarm shall be provided to indicate a failure of the charger.
(v) Audible noise developed by the charging equipment shall be kept to a minimum. Acoustic noise resulting from operation of the rectifier shall be expressed in terms of dB indicated on a sound level meter conforming to ANSI S1.4-1983, Specification for Sound Level Meters, and shall not exceed 65 dB (A-weighting) measured at any point 5 feet (152.4 cm) from any vertical surface of the rectifier.
(vi) The charging equipment shall be designed so that neither the charger nor the central office switching equipment is subject to damage in case the battery circuit is opened for any value of load within the normal limits.
(vii) The charging equipment shall have a capacity to meet the requirements of central office size and special requirements of the owner in appendix A of this section.
(viii) Minimum equipment requirement for chargers is one of the following:
(A) Two chargers either capable of carrying the full office load as specified in Item 12 of appendix A of this section; or
(B) Three chargers each capable of carrying half the office load as specified in Item 12 of appendix A of this section.
(4)
(ii) Power converters required for the purpose of providing various operating voltages to printed circuit boards or similar equipment employing electronic components shall be provided in duplicate with each unit capable of immediately assuming the full operating load upon failure of a unit. An exception to the duplicate power converter requirement permits nonduplicated power converter(s) to be utilized where there is full compliance with the following criteria.
(A) The failure of any single nonduplicated power converter shall not reduce the grade of service of common control and service circuits to any individual line or trunk by more than 50 percent.
(B) The failure of any single nonduplicated power converter shall not reduce the traffic carrying capacity of any interoffice trunk group by more than 50 percent.
(C) In central office switching systems of 400 or more equipped lines, any single nonduplicated power converter failure shall not cause a complete loss of service to more than 100 equipped lines.
(D) In central office switching systems of less than 400 equipped lines, any single nonduplicated power converter failure shall not cause a complete loss of service to more than 25 percent of the total equipped lines.
(5)
(i)
(B) An exception to the redundant ringing equipment requirement permits nonredundant ringing equipment to be utilized where there is full compliance with the following service criteria.
(
(
(ii)
(B) The ringing generator shall obtain its energy from the nominal 48-volt office battery.
(C) The output of each generator shall have three or more voltage taps or a single tap with associated variable control. Taps or control shall be easily accessible as installed in the field. Software control of ringing generator outputs via I/O devices may be provided in lieu of taps. The taps, or equivalent, shall be designated L, M, and H. The variable control shall have a locking device to prevent accidental readjustment. The outputs at the terminals of the generators with a voltage input of 52.1 volts and rated full resistive load shall be as follows for the ringing frequencies provided:
(D) No voltages in excess of the values in column H of the table in paragraph (s)(5)(ii)(C) of this section shall be provided at the output taps. Additional intermediate and/or lower taps may be provided without restriction.
(iii)
(B) The output voltage for resistive, capacitive power factor of 0.8, and inductive power factor of 0.5 from no load to full rated output with input battery variations between 48-56 volts dc shall not vary more than ±10 percent from the output voltage measured at 1/2 rated output and 1.0 power factor with 52.1 volts dc input applied.
(C) The output voltage for resistive, capacitive power factor of 0.8, and inductive power factor of 0.5 loads from no load to full rated output and with input battery variations between 44-56 volts dc shall not vary more than +10/−15 percent from the output voltage measured at 1/2 rated output and 1.0 power factor with 52.1 volts dc input applied.
(iv)
(v)
(vi)
(6)
(ii) The ringing cycle provided by the interrupter equipment shall not exceed 6 seconds in length. The ringing period shall be 2 seconds.
(7)
(ii) Portable or panel mounted frequency meters shall be provided as specified by the owner unless the system is equipped to measure actual ringing generator voltage and frequency outputs internally. If the system is equipped to make such measurements and print the results, the bidder is not required to provide a frequency meter.
(iii) Power panels, cabinets and shelves, and associated wiring shall be designed initially to handle the exchange when it reaches its ultimate capacity as specified by the owner.
(iv) The power panel shall be of the “dead front” type.
(t)
(2) The current carrying capacity of each arrester and its associated mounting shall coordinate with a #22 gauge
(3) Central office protectors shall be mounted and arranged so that outside cable pairs may be terminated on the left side of protectors (when facing the vertical side of the MDF) or on the back surface of the protectors. Means for easy identification of pairs shall be provided.
(4) Protectors shall have a “dead front” (either insulated or grounded) whereby live metal parts are not readily accessible.
(5) Protectors shall be provided with an accessible terminal of each incoming conductor which is suitable for the attachment of a temporary test lead. They shall also be constructed so that auxiliary test fixtures may be applied to open and test the subscriber's circuit in either direction. Terminals shall be tinned or plated and shall be suitable for wire wrapped, insulation displacement or connectorized connections.
(6) If specified in appendix A of this section, each protector group shall be furnished with a factory assembled tip cable for splicing to the entrance cable; the tip cable to be 20 feet (610 cm) in length unless otherwise specified. Factory assembled tip cable shall be #22 gauge and selected from RUS Bulletin 1755I-100, List of Materials Acceptable for Use on Telephone Systems of RUS Borrowers. Tip cable requirements are provided in RUS Bulletin 345-87, PE-87, RUS Specification for Terminating (TIP) Cable. Cables having other kinds of insulation and jackets which have equivalent resistance to fire and which produce less smoke and toxic fumes may be used if specifically approved by RUS.
(7) Protectors shall be mounted on vertical supports, with centers not exceeding 9 inches (22.9 cm). The space between protector units shall be adequate for terminating conductors.
(8) Cable supporting framework shall be provided between the cable entrance and the MDF when overhead cable entrance is specified in Item 14.3.3 of appendix A of this section.
(9) The main distributing frame shall be equipped with a copper ground bus bar having the conductivity of a #6 American Wire Gauge (AWG) copper conductor or a greater conductivity, or may consist of another metal if specifically approved, provided it has adequate cross-sectional area to provide conductivity equivalent to, or better than, bare copper. A guardrail or equivalent shall also be furnished.
(10) Other features not specified in paragraph (t) of this section may be required at the option of the owner, if checked in Item 13.4 of appendix A of this section.
(11) Main frame protector makes and types shall be selected only from RUS Bulletin 1755I-100, List of Materials Acceptable for Use on Telephone Systems of RUS Borrowers. Protectors shall be capable of easy removal.
(u)
(ii) Central office switching equipment shall pass laboratory tests, simulating the hostile electrical environment, before being placed in the field for the purpose of obtaining field experience. There are five basic types of laboratory tests which shall be applied to exposed terminals in an effort to determine if the equipment will survive. Figure 3 summarizes these tests and the minimum acceptable levels of protection for equipment to pass them.
(iii)
Surge Waveshape is defined as follows:
Rise Time × Time to Decay to Half Crest Value
(For example, 10 × 1000 µs)
(B) Sixty Hertz (60 Hz) current-carrying tests should be applied to simulate an ac power fault which is conducted to the unit over the cable pairs. The test should be limited to 10 amperes rms at 60 Hz for a period of 11 cycles (0.1835 seconds) and should be applied longitudinally from line to ground (see Figures 3 and 6 of this section).
(C) AC power service surge voltage tests should be applied to the power input terminals of ac powered devices to simulate switching surges or lightning-induced transients on the ac power system. The test shall employ a 1.2 × 50 microseconds waveshape with a crest voltage of 2500V. Communications line protectors may be left in place for this test. Borrowers are urged to install commercially available surge protectors at the ac service entrance as part of their COE building program.
(D) Voltage surge tests simulate the voltage stress to which a relatively high impedance path may be subjected before primary protectors break down and protect the circuit. To assure coordination with the primary protection while reducing testing to the minimum, voltage surge tests should be conducted at a 1000 volts with primary arresters removed for devices protected by carbon blocks, or the +3 sigma dc breakdown of other primary arresters. Surge waveshape should be 10 × 1000 microseconds.
(E) Arrester response delay tests are designed to stress the equipment in a manner similar to that caused by the delayed breakdown of gap type arresters when subjected to rapidly rising voltages. Arresters shall be removed for these tests, the peak surge voltage should be the +3 sigma breakdown of the arrester in question on a voltage rising at 100V per microsecond and the time for the surge to decay to half voltage shall equal at least the delay time of the tube, as explained in Figure 7.
(iv) Five applications of each polarity for the surge tests and three for the 60 Hz Current Carrying Test are the minimum required. All tests should be conducted with not more than 1 minute between consecutive applications in each series of three or five to a specific configuration so that heating effects will be cumulative. As not all tests are required in every application, nonapplicable tests should be omitted. Tests should be conducted in the following sequence.
(A) Current Impulse Test.
(B) Sixty Hertz (60 Hz) Current Carrying Test.
(C) AC Power Service Impulse Voltage Test.
(D) Voltage Impulse Test.
(E) Arrester Response Delay Test.
(v) Tests should be applied between each of the following terminal combinations for all line operating conditions.
(A) Line tip to ring.
(B) Line ring to ground.
(C) Line tip to ground.
(D) Line tip to ring tied together to ground.
(2)
(3)
(4)
(5)
(ii) The unit equipment shall not be permanently damaged by accidental short circuits of any duration across either the central office side tip and ring or the line side tip and ring. A test is to be made with the unit energized at the highest recommended voltages.
(6)
(v)
(2)
(i) 6 Turns of 30 Gauge.
(ii) 6 Turns of 26 Gauge.
(iii) 6 Turns of 24 Gauge.
(iv) 5 Turns of 22 Gauge.
(3)
(4)
(5)
(6)
(7)
(8)
(w)
(2)
(3)
(ii) As long as the connecting span line is intact, the subscribers served by the RST shall have all features, traffic capacity, and services including busy verification, available to all other subscribers in the system.
(iii) The RST shall have available an emergency call processing option which permits calling among all subscribers and from subscribers to emergency numbers within the RST if control link connections to the host central office are severed or otherwise disabled. The RST shall be capable of rerouting normally used emergency numbers, such as 911, to predetermined line terminations in this emergency stand-alone operating condition. This RST emergency call processing option shall be provided only when specified by the owner in Item 6.1 of appendix B of this section.
(4)
(ii) If tests in paragraph (w)(4)(i) of this section are not requested by the owner for a particular installation, a subscriber loop test set (see paragraph (o)(2)(iii)(A) of this section) shall be supplied at the RST with a means to access all lines.
(5)
(6)
(ii)
(B) An exception to the duplicated ringing source requirement permits nonduplicated ringing source(s) to be utilized where there is full compliance with the following service criteria.
(
(
(iii)
(B) An exception to the duplicate power converter requirement permits nonduplicated power converter(s) to be utilized where there is full compliance with the following criteria.
(
(
(
(
(7)
(x)
(ii) The layout drawings shall also show provision for the ultimate capacity of the central office as specified by the owner.
(iii) After approval by the owner of the tentative floor plan, and within 10 calendar days after approval of the contract by the Administrator, the owner shall furnish the bidder the necessary data on the actual floor plan. Within 20 calendar days after receiving the necessary building data, the bidder shall then supply floor plan drawings showing exact locations of all equipment, both initial and ultimate, including points where connection to commercial power are required, with voltage and wattage indicated at each point. Within 20 calendar days after receiving the floor plan drawings from the bidder, the owner shall approve these drawings or take the necessary steps to have the drawings changed to meet his approval. The layout planning must be so coordinated between the owner and the bidder as not to delay the scheduled equipment installation date.
(2)
(3)
(A) A floor plan showing exact dimensions and location of each equipment frame or item to a convenient scale;
(B) A block schematic drawing showing the various equipment components in the system, and their identifying circuit number (e.g., MDF, line circuits, memory, trunks, etc.);
(C) Drawings of major equipment items such as frames, with the location of major component items of equipment shown;
(D) Individual functional drawings for electrical circuits in the system;
(E) A detailed description of the operation of each circuit down to a circuit package level;
(F) Wiring diagrams indicating the specific method of wiring used on each item of equipment and interconnection wiring between items of equipment;
(G) Sufficient software documentation to maintain and service the system, including drawings showing principal aspects of the software architecture;
(H) Individual maintenance drawings covering each equipment item that contains replaceable parts, appropriately identifying each part by name and part number, or, complete ordering instructions for all replaceable parts if individual item drawings are not provided; and
(I) Job drawings including all drawings that are individual to the particular office involved, such as main frame, power panel, test board, etc.
(ii) The following information shall also be furnished:
(A) Complete index of the required drawings;
(B) Explanation of electrical principles of operation of the overall switching system;
(C) List of tests which can be performed with each piece of test equipment furnished, and explanation of the method of performing each test;
(D) Sample of each form recommended for use in keeping records of tests;
(E) Criteria for analyzing results of tests and determining appropriate corrective action;
(F) General notes on the methods of isolating equipment faults to specific printed circuit cards in the equipment;
(G) List of typical troubles which might be encountered, together with general indications as to the probable location of each trouble;
(H) Special office grounding requirements;
(I) A site specific central office ground system acceptance checklist that is consistent with industry practice; and
(J) A site specific layout of the master ground bar (MGB) showing assignment of P, A, N, and I equipment areas.
(4)
(5)
(6)
(A) “Units” are defined as user replaceable components used in the central office equipment. “Spare Parts” are direct replacements for units. Spare parts are necessary for the maintenance and diagnostic operations where the suspected faulty unit may be removed and a spare part substituted in anticipation that the trouble will be cleared.
(B) Examples of units for which spare parts should be furnished are printed circuit cards; circuit pack assemblies; fuses; and power supplies.
(C) Spare parts are not required as part of this addendum for items such as connectorized cables, nuts, bolts, and similar hardware; nor for items which can be obtained from sources other than the bidder such as battery cells, chargers, powerboards, magnetic tape transport assemblies, disk drives, ringing machines, recorded announcement machines, loop extenders and voice frequency repeaters, fire bars, teletypewriters, and video monitors.
(D) When 100 or more like units are used in the hosts and RST's to be bid, the quantity of spares to be furnished is determined by multiplying the total number of like units in the contract by .05 or .03, as applicable, and rounding off to the next lowest integer. For example, 119 Class 1 units require five spares; 120 require six.
(E) When alternates are required, the price of the spare parts for the alternates shall be included with the price of the alternate.
(F) For equipment in which the line cards consist of a number of plug-in “daughter” boards on a “mother” board, the line card is defined as the “daughter” board unit. In a similar manner for those designs which have line cards backed up by a “control card,” the “control card” is not, by definition, a line card.
(G) The quantities of spare parts determined in paragraph (x)(6)(vi) of this section are a minimum quantity. The bidder may add quantities of spare parts to bring the number of spare parts up to the bidder's list of spare parts necessary for proper operation in the field.
(ii) A Class 1 unit does not have automatic transfer to a redundant or standby pool of identical units, and provides any function for 24 or more lines or trunks or for all trunks in a group. Nonredundant digital trunk interfaces are included in this category.
(iii) A Class 2 unit has automatic transfer to a redundant or standby pool of identical units, and provides any function for 24 or more lines or trunks or for all trunks in a group. Redundant digital trunk interfaces and units of a redundant stored program processor are included in this category.
(iv) A Class 3 unit does not have automatic transfer to a redundant or standby pool of identical units and provides any function for no more than 23 lines or trunks or for less than all trunks in a group. Nonredundant analog trunks are included in this category. Excluded from this category are line cards, which are in Class 4.
(v) A Class 4 unit has automatic transfer to a redundant or standby pool of identical units and provides any function for no more than 23 lines or trunks or for less than all trunks in a group. Also, any line cards are in Class 4.
(vi) The spare parts for all of the hosts and the RST's included in this contract shall be provided as follows:
(vii) As a part of the response to the bid, the supplier shall furnish a list of units used by class and a list of spare parts to be furnished with this contract. This list shall be placed in Item 6.2 of appendix C of this section for only one of the host specifications included in the entire contract.
(7)
(8)
(9)
(y)
(1)
(i) Allow the bidder and its employees free access to the premises and facilities at all hours during the progress of the installation;
(ii) Take such action as necessary to ensure that the premises are dry and free from dust and in such condition as not to be hazardous to the installation personnel or the material to be installed (not required for an RST installed in a self-contained environmentally controlled cabinet);
(iii) Provide heat or air conditioning when required and general illumination in rooms in which work is to be performed or materials stored (not required for an RST installed in a self-contained environmentally controlled cabinet);
(iv) Provide suitable openings in buildings to allow material to be placed in position (not required for an RST installed in a self-contained environmentally controlled cabinet);
(v) Provide the necessary conduit and commercial and dc-ac inverter output power to the locations shown on the approved floor plan drawings; provide 120 volts, 60 Hz commercial power equipped with a secondary arrester and a reasonable number of outlets for test, maintenance and installation equipment; provide suitable openings or channels and ducts for cables and conductors, from floor to floor and from room to room; provide an acceptable central office grounding system and at a ground resistance level that is reasonable for office site conditions (not required for an RST installed in a self-contained environmentally controlled cabinet);
(vi) Provide the necessary wiring, central office grade ground and commercial power service, with a secondary arrester, to the location of an exterior RST installation based on the voltage and load requirements furnished by the bidder;
(vii) Test at the owner's own expense all lines and trunks for continuity, leakage and loop resistance and ensure that all lines and trunks are suitable for operation with the central office equipment specified;
(viii) Make alterations and repairs to buildings necessary for proper installation of material, except to repair damage for which the bidder or its employees are responsible;
(ix) Connect outside cable pairs on the distributing frame and run all line and trunk jumpers (those connected to protectors);
(x) Furnish all trunk, line, and party assignment information to permit the bidder to program the data base memory within a reasonable time prior to final testing;
(xi) Release for the bidder's use such portions of the existing plant as are necessary for the proper completion of such tests as require coordination with existing facilities including facilities for T1 span lines with properly installed repeaters between the central office and the RST installations;
(xii) Make prompt inspections as it deems necessary when notified by the bidder that the equipment, or any part of the equipment, is ready for acceptance;
(xiii) Provide and install adequate fire protection apparatus, including one or more fire extinguishers or fire extinguishing systems of the gaseous type that has low toxicity and effect on equipment; and
(xiv) Provide necessary access ports for cable, if underfloor cable is selected.
(2)
(i) Allow the owner and its representatives access to all parts of the buildings at all times during the installation;
(ii) Obtain the owner's permission before cutting into or through any part of the building structure such as girders, beams, concrete or tile floors, partitions or ceilings (not applicable to the installation of lag screws, expansion bolts, and similar devices used for fastening equipment to floors, columns, walls and ceilings);
(iii) Be responsible for reporting to the owner any damage to the building
(iv) Consult with the owner before cutting into or through any part of the building structure where the fireproofing or moisture proofing may be impaired;
(v) Take necessary steps to ensure that all fire fighting apparatus is accessible at all times and all flammable materials are kept in suitable places outside the building;
(vi) Not use gasoline, benzene, alcohol, naphtha, carbon tetrachloride or turpentine for cleaning any part of the equipment;
(vii) Install the equipment in accordance with the specifications for the office;
(viii) Run all jumpers, except line and trunk jumpers (those connected to protectors);
(ix) Establish and update all data base memories with subscriber and trunk information as supplied by the owner until an agreed turnover time;
(x) Give the owner notice of completion of the installation at least 1 week prior to completion;
(xi) Permit the owner or its representative to conduct tests and inspections after installation has been completed in order that the owner may be assured that the requirements for installation are met;
(xii) Allow access, before turnover, by the owner or its representative, upon request, to the test equipment which is to be turned over as a part of the office equipment, to permit the checking of the circuit features which are being tested and to permit the checking of the amount of connected equipment to which the test circuits have access;
(xiii) Make final charger adjustments using the manufacturer's recommended procedure;
(xiv) Notify the owner promptly of the completion of work of the central office, or such portions as are ready for inspection;
(xv) Correct promptly all defects for which the bidder is responsible;
(xvi) Provide the owner with one set of marked prints, or strapping prints, showing which of the various options and figures are in use on each switching system as specified in paragraph (x)(3)(i) of this section;
(xvii) Place the battery in service in compliance with the recommendations of the battery manufacturer; and
(xviii) Furnish the owner with a record of the cell voltages and specific gravity readings made at the completion of the installation of the switching system and before it is placed in commercial service.
(3)
(ii) All multiple and associated wiring shall be continuous, free from crosses, reverses and grounds and shall be correctly wired at all points.
(iii) An inspection shall be made by the owner or its representatives prior to performing operational and performance tests on the equipment. However, this inspection shall be made after all installing operations which might disturb apparatus adjustments have been completed. The inspection shall be of such character and extent as to disclose with reasonable certainty any unsatisfactory condition of apparatus or equipment. During these inspections, or inspections for apparatus adjustments, or soldering, or in testing of equipment, a sufficiently detailed examination shall be made throughout the portion of the equipment within which such condition is observed, or is likely to occur, to disclose the full extent of its existence, where any of the following conditions are observed:
(A) Apparatus or equipment units failing to compare in quantity and code with that specified for the installation;
(B) Apparatus or equipment units damaged or incomplete;
(C) Apparatus or equipment affected by rust, corrosion or marred finish; or
(D) Other adverse conditions resulting from failure to meet generally accepted standards of good workmanship.
(4)
(ii) A sufficient quantity of overall tests shall be made to ensure proper operation of all specified features.
(iii) A sufficient quantity of locally originating and incoming calls shall be made to prove the switching system can accept and process calls to completion.
(5)
(ii) This single-point grounding system audit is to be conducted by authorized representatives of the supplier and owner, and with the RUS general field representative participating at his discretion.
(iii) The single-point grounding system audit is to be conducted using the checklist contained in appendix D of this section.
(iv) Appendix D of this section shall be the principal single-point grounding system audit guideline document. A supplemental checklist may be prepared and provided by the switching system supplier which recognizes unique grounding requirements related to their particular switching system. The scope of this supplier checklist is to be confined to unique and specific switching system requirements only. Acceptable supplier supplemental grounding checklist must have prior approval of and be on file with the Central Office Equipment Branch of the Telecommunications Standards Division of RUS.
(v) It is the responsibility of the central office supplier to ensure that the grounding system evaluation criteria contained in the combination of the appendix D checklist of this section and their optional supplemental checklist adequately fulfill requirements for warranty coverage.
(vi) All deficiencies in the single-point grounding system are to be corrected prior to the switching system being placed into full service operation. Exceptions are permitted only by mutual agreement of the owner and supplier and with written approval of the RUS general field representative.
(vii) The acceptance statement facesheet of the audit checklist in appendix D of this section shall be signed by authorized representatives of the supplier and owner to indicate mutual approval of the single-point grounding system. Copies of all completed grounding system audit documents are to be provided to the supplier, owner and appropriate RUS telephone program regional offices.
1.1Notwithstanding the bidder's equipment lists, the equipment and materials furnished by the bidder must meet the requirements of paragraphs (a) through (x), Appendix A and Appendix B of § 1755.522.
1.2Paragraphs (a) through (x) of § 1755.522 cover the minimum general requirements for digital, stored program controlled central office switching equipment.
1.3Paragraph (y) of § 1755.522 covers requirements for installation, inspection, and testing when such service is included as part of the contract.
1.4Appendices A and B of § 1755.522 cover the technical data for application engineering and detailed equipment requirements insofar as they can be established by the owner. These appendices are to be filled in by the owner.
1.5Appendix C of § 1755.522 covers detailed information on the switching network equipment and the common control equipment, and information as to system reliability and heavy traffic delays as proposed by the bidder. This appendix is to be filled in by the bidder and must be presented with the bid.
1.6Appendix D of § 1755.522 is the single-point grounding system audit checklist.
2.1This office shall be arranged to serve the following area and office code(s):
If more than one code is to be served, discrimination shall be determined by the following:
2.2This office shall be arranged to provide EAS service to the following:
2.2.1Seven digits shall be dialed for all local and EAS calls.
2.3Additional dialing procedures to be provided include the following:
10XXX Dialing to Interexchange Carriers:
2.4Assistance calls are answered: (Check appropriate items)
2.4.1At the operator office in ________
2.4.1.1By means of the regular interoffice toll trunks ____
2.4.1.2By means of the regular interoffice EAS trunks ____
2.4.1.3By means of a separate special service trunk group ____
2.4.1.4Locally ____
Explain:
3.1This office is to be slave clock synchronized with another office:
3.2This office is to be a master clock office to provide synchronization timing for other offices:
4.1A sketch showing relative location of exchanges, RST's, and number of circuits shall be included, also the office and area codes of the direct trunk points. The diagram should indicate whether toll or EAS trunk groups are “High Usage” or “Final.” Alternate routes should be included. Indicate whether the trunk termination is direct digital or analog.
6.1.8WATS Lines (Give details in Appendix A, Item 16)
6.2.
7.1Originating Line Traffic—Estimated per Busy Hour (Includes all Lines Associated With RST's):
7.2Average Originating CCS per Line per Busy Hour
8.1
8.1.2Pads for 4-Wire Carrier (7dB and 16dB)
Refer to the attached information regarding connecting company trunk circuit drawing numbers and name of manufacturer.
8.2
8.2.1Originating Traffic
8.2.2Terminating Traffic
9.4Billing Data
9.5
9.5.1Polling device to be provided on this contract
9.5.2Pollable system to be backed up by tape or disc standby
9.6.1Bellcore Format
11.1
11.1.1Handled locally __
11.1.2Transmitted to attended point
11.1.2.1Via operator office trunks __
11.1.2.2Via printout or other display service __
11.1.2.3Type of tone to operator
11.1.2.3.1Distinctive tone (see (i)(2)(ix) of § 1755.522) __
11.1.2.3.2Other
11.1.3Alarm checking signals for carrier and mobile radio systems
11.3
11.3.1Furnish reference tone
11.4
11.4.1Automatic line insulation testing
11.4.2Owner supplied equipment
11.4.2.1Vendor supplied interface only
If supplied by owner, explain in Item 16, Appendix A, including manufacturer, model, location.
11.5
11.5.1Remote control of the system shall be provided.
If required, explain in Item 16, Appendix A, including number, type and location.
12.1
12.1.1A battery reserve of __ busy hours shall be provided for this office when it reaches __ lines at the ultimate anticipated traffic rates specified in Item 7.2, Appendix A.
12.1.1.1The owner will furnish a standby generator, permanently installed in this office, with capacity sufficient to power air conditioning equipment required for cooling of the central office equipment and to maintain an adequate dc supply in the event of a failure of the commercial ac supply.
12.1.2
12.1.3Voltmeter (portable 3-60-150 volt scale, 1% accuracy) shall be furnished.
12.1.4Hydrometer in a hydrometer holder with glass or plastic drop cup shall be furnished.
12.1.6Special equipment power requirements (carrier, voice frequency repeaters, etc.). Drain in amperes __
12.1.6.1Supply all necessary equipment to provide the following 48-volt battery taps:
12.2
12.2.1Charging equipment shall be provided capable of charging the office battery on a full float basis when the office reaches __ lines at the ultimate anticipated traffic rates specified in Item 7.2, Appendix A.
12.2.2Charger input rating shall be:
12.3
12.3.1Solid-state ringing equipment in accordance with paragraph (s)(5)(i) of § 1755.522 shall be provided for generating the frequencies specified by check marks in the following table. Ringing generator sets serving the entire office shall each be sized to carry the full office ringing load when the office size reaches __ lines at the ultimate anticipated traffic rates specified in Item 7.2, Appendix A.
12.3.2Ringing frequencies to be supplied:
12.3.3Furnish frequency meter (accurate within 1.3 Hz) and voltmeter (5% accuracy) for ringing measurements (see paragraph (s)(7)(ii) of § 1755.522). Check One:
12.4
The power panel and associated wiring shall be of ample size to meet the load requirements when this office reaches __ lines at the ultimate anticipated traffic rates specified in Item 7.2, Appendix A.
13.4
Is present MDF to be reused?
If “Yes,” Type __
Reused protectors are:
13.4.1Number of pairs of arrester units (switching equipment) __
13.4.2Number of pairs of gas tube arrester units (special equipment) __
13.4.2.1Gas tubes to be:
13.4.2.2Fail shorted/low breakdown failure mode required
13.4.2.3Breakdown voltage of gas tube arresters __
13.4.3Number of terminated pairs to be grounded __
13.4.4Factory assembled tip cable
13.4.4.1Tip cable length [if other than 20 feet (610 cm)]
13.4.4.2Tip cable formed
13.4.5Pairs per vertical __
13.4.6Height of vertical __ feet __ inches
14.1Equipment is to be installed in an existing building (Attach detailed plan.) __
14.2A new building is planned __
14.2.1Tentative plan (
14.3
14.3.1Partition required (to isolate space containing battery, charger, power board, test panel, main distributing frame and subscriber's loop test circuit (wire chief's test desk) from that of the remaining equipment).
14.3.2Vestibule required
14.3.3Cable entrance
14.3.4Additional floor space will be required for the following equipment which is being furnished by the owner or by the connecting company:
14.3.5The office will be arranged for
14.3.6Is earthquake bracing required?
(If “Yes,” explain zone and criteria used for zone in Item 16, Appendix A.)
14.3.7Office ground will be __ ohms or less (Refer to Item 4.6.3 of RUS TE&CM 810.)
14.3.8The office is considered to be in the following category for lightning damage probability based on the Figure 1 map of RUS TE&CM 823 (see paragraph (u)(2) of 1755.522).
14.3.9The following is additional information regarding operating environment conditions which should be considered in determining system protection requirements (tower in vicinity, high exposure, etc.):
16. Explanatory Notes (Include a detailed description of any equipment to be reused, or otherwise supplied by the owner, loop extenders, subscriber carrier, VF repeaters, etc.)
1.1Single-Party: ____ Flat Rate ____ Message Rate.
1.2Semi-Postpay Pay Station ____.
1.3Prepay Pay Station ____.
1.4PABX Lines ____ Loop Start____ Ground Start ____ Restricted at Office ____ Other ____
1.5Number of lines to be pushbutton ________
1.6911 Emergency Lines ____
1.7Anticipated ultimate capacity (20-Year) ____
2.1Originating traffic per line—CCS/BH: ____ Initial ____ Ultimate.
2.2Terminating traffic per line—CCS/BH: ____ Initial ____ Ultimate
2.2.1Terminating will be made equal to originating if it is not known to be different.
3.1Number of subscriber lines having loop resistance, including the telephone set of:
3.2Number of pay station lines having loop resistance, excluding the telephone set, greater than:
4.1If no standby power is available at the site, loop extenders may be required on 1501 to 1900 ohms loops.
4.2
5.1Power Board.
5.1.1The power board and associated wiring shall be of ample size to meet the load requirements when this RST reaches ____ lines at the ultimate anticipated traffic rates specified in Item 2, Appendix B.
5.2
5.2.1Charger shall be capable of charging the RST battery on a full float basis when the RST reaches ____ lines at ultimate traffic rate specified in Item 2, Appendix B.
5.2.2Charger shall be redundant ____.
5.3Battery reserve shall be ____ busy hours when the RST reaches ____ lines at the ultimate anticipated traffic specified in Item 2, Appendix B.
5.4Standby power is available.Yes ___ No ___.
5.5Special equipment power requirements ____ amps.
5.6
5.6.1Type of Ringing.
5.6.3Wattage to be sized for ____ lines.
5.6.4Frequency Meter (see Item 12.3.3, Appendix A). Panel Mounted ___ Not Required ___.
6.1If path to central office is opened, the RST shall be able to complete calls between subscribers in its own system: Yes ___ No ___
Further requirements should be listed under Item 12, Appendix B.
7.1Total number of outside plant cable pairs to be terminated ___.
7.1.1Gauge of outside plant cable pairs ____.
7.2Number of outside plant cable pairs to be protected ____.
7.3Number of additional protector pair units to be provided on MDF ____.
Explain:
7.4
7.4.1Present MDF to be reusedYes___ No___.
If “Yes”, Type ____.
Reused protectors are: ____ (Mfr.) ____ (Type).
7.4.2Number of pairs of arrester units (switching equipment) ____.
7.4.3Number of pairs of gas tube arrester units (special equipment) ____.
7.4.3.1Gas tubes to be: ___ light, ___ medium, ___ heavy, ___ maximum duty units.
7.4.3.2 Failshorted/low breakdown failure mode requiredYes ___ No ___.
7.4.3.3Breakdown voltage of gas tube arresters ____.
7.4.4Number of terminated pairs to be grounded ____.
7.4.5Factory assembled tip cableYes ___ No ___.
7.4.5.1Tip cable length [if other than 20 feet (610 cm)] ___.
7.4.5.2Tip cable formedUp ___ Down ___.
7.4.6Pairs per vertical ____.
7.4.7Height of vertical ____ feet ____ inches.
8.1RST to be mounted in building ___.
8.1.1Earthquake bracing requiredYes ___ No ___ (see Item 14.3.6, Appendix A).
8.1.2Supply building floor plan.
8.2RST to be mounted in cabinet out of doors ___.
8.2.1Cabinet to be mounted ___ on pole ___ on ground.
9.1Remote testing of subscriber lines is requiredYes ___ No ___.
9.2Subscriber loop test set ___.
10.1To be supplied by Owner ___.
10.2To be supplied by Bidder ___.
10.2.1When the bidder is to supply the span lines, an RUS Form 397b, Trunk Carrier
11.1The RST ground will be ___ ohms or less. (Refer to Item 4.6.3 of RUS TE&CM 810.)
11.2This RST is considered to be in the following category for lightning damage probability based on the Figure 1 map of RUS TE&CM 823.____ Very High ____ Higher than Average ____ Average ____ Lower than Average ____ Very Low
11.3The following is additional information regarding operating environment conditions which should be considered in determining system protection requirements (tower in vicinity, high exposure, etc.):
Attended ___Unattended ___
1.1The equipment and materials furnished by the bidder must meet the requirements of paragraphs (a) through (x), Appendix A, and Appendix B of § 1755.522.
1.2Paragraphs (a) through (x) of § 1755.522 cover the minimum general requirements for digital, stored program controlled central office switching equipment.
1.3Paragraph (y) of § 1755.522 covers requirements for installation, inspection, and testing when such service is included as part of the contract.
1.4Appendices A and B of § 1755.522 cover the technical data for application engineering and detailed equipment requirements insofar as they can be established by the owner. These appendices are to be filled in by the owner.
1.5Appendix C of § 1755.522 covers detailed information on the switching network equipment and the stored program controlled equipment, and information as to system reliability and heavy traffic delays as proposed by the bidder. This appendix is to be filled in by the bidder and must be presented with the bid.
1.6Appendix D of § 1755.522 is the single-point grounding system audit checklist.
2.1
2.2
3.1
3.1.1Number of Lines.
3.1.1.1The number of lines to be provided shall include the number required for the termination of subscriber lines, Item 7, Appendix A, plus the number required for routine testing plus any additional to meet the minimum switch increment of the selected system.
3.1.1.2The number of lines provided for this office will be ___
3.1.2Number of Ports Used for Trunks
3.1.2.1The number of trunk ports to be provided shall be based on the trunk quantities required (Item 8, Appendix A) as modified by the minimum increment of the selected system. Provision shall be made for at least 5 percent additional inlet and outlet ports over those required initially. The additional ports shall be used for connecting additional trunks that may be required in the future.
3.1.2.2The number of trunk ports provided for this office will be ______
3.1.3Number of Subscriber Directory Numbers
3.1.3.2The number of subscriber directory numbers provided for this office will be ______
4.1Information for RST's must be supplied for each RST to be furnished.
4.2Number of line terminals for this RST will be ______ .
4.3Number of span line terminations to the central office being supplied ______ .
4.4If the emergency operation option is required, it will provide the following service when connection to the main office is severed:
4.5The ac power drain at the remote end will be:
4.6Special environmental requirements for the remote end:
5.1
5.2
5.2.1Operating Temperature Range
5.2.2Operating Humidity Range
6.1The bidder shall accompany its bid with the following information:
a. Two copies of the equipment list and the calculations from which the quantities in the equipment list are determined;
b. Two copies of the traffic tables from which the quantities are determined, other than the full availability tables shown in paragraph (p)(1)(i) of § 1755.522;
c. Two copies of detailed switching diagram showing the traffic on each route, the grade of service, the quantity of circuits, and main distributing frames;
d. Block diagram of stored program control and associated maintenance equipment;
e. A prescribed method and criteria for acceptance of the completed central office, which is subject to review;
f. Location of technical assistance service with 24-hour maintenance, and conditions when owner will be charged for access to the service;
g. Calculations showing the method by which ringing machine sizes were derived;
h. Precautions to be taken against static discharge;
i. Details of central office grounding requirements, recognizing local grounding conditions;
j. Details concerning traffic measurement capabilities and formats; and
k. Details concerning AMA features and formats to be provided.
6.2As a part of the response to the bid, the bidder must also list information concerning the types and quantities of spare parts to be furnished. All units, excluding those units described in paragraph (x)(6)(i)(C) of § 1755.522, must fall into one of the four classes. The information must be in the following format:
2.1This office is considered to be in the following category for probability of lightning damage based on the Figure 1 map in RUS TE&CM 823 (also refer to paragraph (u)(2) of § 1755.522)
2.2Central office ground field (COGF) to be inspected for proper bonding of conductors to ground rods, etc. COGF to earth grounding reading is ____ ohms. (Refer to RUS TE&CM 802, Appendices C and D, Measurement Techniques.) Is this resistance reading acceptable? (Refer to RUS TE&CM 810, Items 1.6, 4.6.2 and 4.6.3 for protection considerations.)
2.3Ground connection to be inspected from the master ground bar (MGB) to the central office ground field (COGF) to ensure it is properly sized and installed by most direct route with no sharp bends. (Refer to RUS TE&CM 810, Item 4.3.2 and section 8.1.)
2.4Building structure grounds (steel rebar in footings, ironwork, etc.) are to be properly bonded and connected to the MGB. (Refer to RUS TE&CM 810, Item 4.3.4.)
2.5Metallic central office door(s) are to be painted with metallic paint with doorknobs left bare. Door(s) and frames are to be grounded to the building structural ground or the MGB.
2.6Metallic fences within 6 feet (183 cm) of the exchange building, storage facilities ground field, etc. are to be properly bonded to the COGF outside of the central office building. Handhole enclosure is to be used for the COGF connection to permit inspection and disconnect for earth resistance testing. (Refer to RUS TE&CM 810, Appendix C, Item 4.6.1.)
2.7Lightning rod systems are to be grounded by a separate dedicated ground field. A bond should be provided between the COGF and the lightning rod ground field. Handhole enclosure is to be used for the COGF connection to permit inspection and disconnect for earth resistance testing. (Refer to RUS TE&CM 810, Item 4.3.2.1.)
2.8Radio/microwave tower ground grid is to be properly bonded to the COGF by a direct outside connection. Handhole enclosure is to be used for the COGF connection to permit inspection and disconnect for earth resistance testing. (Refer to RUS TE&CM 810, Item 4.3.2 and section 10.)
2.9If a qualified metallic water system is present, inspect the MGB connecting conductor to ensure that it is properly sized and installed by the most direct route with no sharp bends and that it is clamped solidly on the water pipes. (Refer to RUS TE&CM 810, Item 4.3.3 for details on metallic water system grounding.)
2.10All power and grounding conductors are to be continuous, end to end, with no splices, size discontinuity or intermediate terminations. If an exception is necessary, unusual care must be taken to assure proper bonding between the two sections. (Refer to RUS TE&CM 810, Appendix C, section 5.)
2.11All ground conductors should be void of sharp bends along their entire lengths. (Refer to RUS TE&CM 810, Item 8.2.2.)
2.12Ground conductors should only be placed in nonmetallic conduit. Those routed through metallic conduit require that both ends of the conduit be bonded to the ground conductor. (Refer to RUS TE&CM 810, Item 8.2.4.)
2.13Ground conductors should not be encircled by metallic clamp. Metallic straps are to be removed and replaced with nonmetallic clamps. (Refer to RUS TE&CM 810, Item 8.2.4.)
2.14If metallic conduit is used, it is to be insulated from all ironwork.
2.15Inspect to determine if the required central office supplier electrostatic discharge plates, wrist wraps, antistatic floor mats, etc. are available and properly installed. (Refer to RUS TE&CM 810, Item 12.3.)
2.16Ground conductors, except green wires, should not be routed close and parallel to other conductors so as to minimize induction on surges into equipment wiring. It is also better not to route these ground conductors through cable racks or troughs, or within the confines of any iron work. (Refer to RUS TE&CM 810, Item 8.2.3.)
3.1The designated P, A, N, and I segments of the master ground bar (MGB) should be clearly identified. (Refer to RUS TE&CM 810, Figure 1 for MGB segmentation arrangement.)
3.2Check for appearance and proper location of following on MGB:
(a) R—Interior radio equipment
(b) C—Cable entrance ground bar
(c) M—MDF ground bar
(d) G—Standby power equipment frame ground
(e) N—Commercial power MGN
(f) B—Building structure ground
(g) L—Central office ground field
(h) W—Water pipe system
(i) N
(j) N
(k) N
(l) I
(m) I
3.3All connections to MGB are to be two-hole bolted down copper crimped or compression type terminal lugs. (NOTE: No solder connections are permitted.)
3.4MGB is to be properly insulated from the mounting surface.
3.5All connections are to be tight.
3.6The MGB is to have an anticorrosion coating of the type which enhances conductivity.
3.7Bar is to be clearly stenciled or legibly labeled “MGB.”
3.8All ground leads are to be properly sized and labeled as to point of origin. (Refer to RUS TE&CM 810, Item 8.3.1 and section 8.1.)
Acceptable: __ Yes__ No
4.1All equipment grounds that originate inside of an Isolated Ground Zone (IGZ) are to be terminated on the GWB which is preferably located physically inside the IGZ and insulated from its support. (Refer to RUS TE&CM 810, Item 5.1.)
Acceptable: __ Yes__ No
4.2Each GWB is to be connected to the MGB by the most direct route with a conductor of 2/0-gauge or coarser, or resistance of less than 0.005 ohms. Parallel conductors for redundancy if required by the supplier. (Refer to RUS TE&CM 810, Item 8.1.2.)
Acceptable: __ Yes__ No
4.3The metal framework grounds of only that switching equipment and associated electrical equipment located inside of the IGZ should be connected to the GWB as required by the central office equipment supplier. (Refer to RUS TE&CM 810, Item 5.5.)
Acceptable: __ Yes__ No
4.4GWB is to be clearly stenciled or labeled “GWB.”
Acceptable: __ Yes__ No
4.5All connections are to be tight.
Acceptable: __ Yes__ No
5.1IGZ areas are to be clearly marked on the floor or in some other easily recognizable manner. (Refer to RUS TE&CM 810, Item 6.1.1)
Acceptable: __ Yes__ No
5.2Confirm that all framework, cabinets, etc., within the IGZ are ground connected only to the GWB. (Refer to RUS TE&CM 810, Item 5.5.)
Acceptable: __ Yes__ No
5.3All cable racks, ground mats, switching and transmission equipment within the IGZ are to have ground leads
Acceptable: __ Yes__ No
5.4Review ac power feed arrangement within the IGZ for acceptable receptacle type and confirm that all green wires are properly connected. (Refer to RUS TE&CM 810, Item 5.5.4.)
Acceptable: __ Yes__ No
5.5All ironwork, metallic conduit, and other equipment associated with the switch are to be properly insulated at the IGZ boundary as stipulated by the supplier. (Refer to RUS TE&CM 810, Item 6.2.)
Acceptable: __ Yes__ No
5.6With the GWB disconnected from the MGB, the resistance reading of ___ ohms between the GWB and the MGB indicates adequate isolation. (CAUTION: Test is to be conducted only with the approval and under the direction of the central office supplier.)
Acceptable: __ Yes__ No
6.1When neither a cable vault nor a splicing trough exists, the outside plant cable should be brought into the central office and spliced to tip cables with a PVC outer jacket (ALVYN
Acceptable: __ Yes__ No
6.2All outside entrance cables and all tip cable shields are to be separated by at least a 3-inch (7.6 cm) gap between shield ends.
Acceptable: __ Yes__ No
6.3All entrance cable shields are to be bonded separately to #6 AWG or larger insulated wire or bonding ribbon and connected
Acceptable: __ Yes__ No
6.4Outside plant cable shields are to be connected only to the CEGB, and the tip cable shields are to be connected only to the Main Distributing Frame Bar (MDFB).
Acceptable: __ Yes__ No
7.1The CEGB is to be properly insulated from the mounting surface. (Refer to TE&CM 810, Item 4.2.1.)
Acceptable: __ Yes__ No
7.2The CEGB is to be located as close as possible to the physical ends of the entrance cable shields.
Acceptable:__ Yes__ No
7.3All connections are to use two-hole bolted down copper crimped or compression type terminal lugs. (NOTE: No solder connections are permitted.)
Acceptable:__ Yes__ No
7.4All connections are to be tight.
Acceptable:__ Yes__ No
7.5Bar is to be clearly stenciled or legibly labeled “CEGB.”
Acceptable:__ Yes__ No
7.6All ground leads are to be properly sized and labeled.
Acceptable:__ Yes__ No
7.7The CEGB is to have an anticorrosion coating of the type which enhances conductivity.
Acceptable:__ Yes__ No
7.8The CEGB is to be connected to the MGB by a properly sized conductor and by the most direct route. (Refer to RUS TE&CM 810, section 8.1.)
Acceptable:__ Yes__ No
8.1RUS strongly recommends that MDF protectors be furnished without heat coils. (Refer to RUS TE&CM 810, section 7.6.)
Acceptable:__ Yes__ No
8.2Incoming cable pairs terminated on MDF protector assemblies should be protected with protector modules. These modules should contain white coded carbon blocks or orange coded gas tube arrestors that are included in the RUS List of Materials. (Refer to RUS TE&CM 810, Item 7.4)
Acceptable:__ Yes__ No
8.3All incoming subscriber cable pairs are to be properly terminated at either a protector equipped terminal or connected to ground.
Acceptable: __ Yes__ No
8.4MDF protector assemblies may be mounted directly on the vertical frame ironwork. Protector assemblies on each vertical are interconnected with each other and the Main Distributing Frame Bar (MDFB) with a #6 copper grounding conductor. Alternative means of connecting to the MDFB are also acceptable which do not rely on the frame ironwork for conducting surge currents to ground. (Refer to RUS TE&CM 810, section 7.)
Acceptable: __ Yes__ No
8.5Protective “ground connections” should be provided between the MDFB and the frame ironwork for personnel protection regardless of the type of protector assembly used. Protective ground leads should be 14-gauge, less than 12 inches (30.5 cm) in length with paint thoroughly removed at point of
Acceptable: __ Yes__ No
8.6The MDFB should be insulated from the frame ironwork in all cases where it is used as a Master Ground Bar (MGB). (Refer to RUS TE&CM 810, Item 7.1.2.)
Acceptable: __ Yes__ No
8.7Where the MDFB is used as the MGB in very small offices the protective “ground connections” should be connected on the N section of the bar. The MDF line protector assembly grounds should be connected to the P section of the bar. (Refer to RUS TE&CM 810, Item 7.1.4.)
Acceptable: __ Yes__ No
8.8The MDFB is to be connected to the MGB by the most direct path with minimum bends and proper conductor size. (Refer to RUS TE&CM 810, Item 8.1.4.)
Acceptable: __ Yes__ No
8.9The MDFB should be free of all other ground leads when not used as an MGB.
Acceptable: __ Yes__ No
8.10Alternative arrangements which insulate the line protector assemblies and MDFB from the frame ironwork may require a direct ground connection of the frame ironwork to the MGB for personnel protection. Conductor is properly sized and tightened with paint removal on main frame ironwork at point of connection.
Acceptable: __ Yes__ No
9.1The ground conductor between the ac power system multigrounded neutral (MGN) at the main ac disconnect panel and the master ground bar (MGB) is to be properly sized and connected. (Refer to RUS TE&CM 810, Items 2.19, 4.3.1 and 8.1.3.)
9.2If there is a non-MGN ac power system, there is to be a properly sized and connected insulated conductor bond between the power service ground electrode and the MGB. (Refer to RUS TE&CM 810, Item 4.3.1.1.)
9.3AC conductors including ground conductors serving 120-volt ac electric convenience receptacles and all direct wire peripheral equipment, located in the IGZ, should be sized in accordance with normal “green wire” criteria. (Refer to RUS TE&CM 810, Items 5.5.4, 5.5.5, and 5.5.6.)
9.4Minimum protection for ac power serving the central office buildings should consist of an RUS accepted secondary arrestor at the service entrance. (Refer to RUS TE&CM 810, section 9.)
9.5A properly sized conductor for ground bonding between the standby power plant framework (not separately derived) and the MGB is to be provided to equalize framework voltages for personnel safety reasons. (Refer to RUS TE&CM 810, Item 4.2.4.)
10.1All non-IGZ equipment frames, relay racks, cable racks and other ironwork are to be properly connected to the MGB. (Refer to TE&CM 810, Item 4.4.)
10.2Shields on high frequency intra-office cables are to be properly isolated and connected only to an isolation ground bar in the relay rack. All shielded cables entering the IGZ should only be referenced at the IGZ termination point as given by the manufacturer. (Refer to RUS TE&CM 810, Item 7.2.1.2.)
10.3Isolation ground bars in the relay racks are to be properly connected to the MGB with appropriate sized conductor with no sharp bends.
10.4All radio equipment cabinet(s) are to be at least 10 feet (305 cm) from the IGZ.
10.5The metal spare parts cabinet is to be grounded with a #6 AWG or larger insulated wire to non-IGZ cable rack, etc. or directly to the MGB.
§§ 1755.701 through 1755.704 cover the requirements for aerial service wires.
(a) This section covers the requirements for aerial service wires intended for aerial subscriber drops.
(b) The aerial service wires can be either copper coated steel reinforced or nonmetallic reinforced designs.
(c) For the copper coated steel reinforced design, the reinforcing members are the conductors.
(1) The conductors are solid copper-covered steel wires.
(2) The wire structure is completed by insulating the conductors with an overall extruded plastic insulating compound.
(d) For the nonmetallic reinforced design, the conductors are solid copper individually insulated with an extruded solid insulating compound.
(1) The insulated conductors are either laid parallel (two conductor design only) or twisted into pairs (a star-quad configuration is permitted for two pair wires).
(2) The wire structure is completed by the application of nonmetallic reinforcing members and an overall plastic jacket.
(e) All wires sold to RUS borrowers for projects involving RUS loan funds under §§ 1755.700 through 1755.704 must be accepted by RUS Technical Standards Committee “A” (Telecommunications). For wires manufactured to the specification of §§ 1755.700 through 1755.704, all design changes to an accepted design must be submitted for acceptance. RUS will be the sole authority on what constitutes a design change.
(f) Materials, manufacturing techniques, or wire designs not specifically addressed by §§ 1755.700 through 1755.704 may be allowed if accepted by RUS. Justification for acceptance of modified materials, manufacturing techniques, or wire designs must be provided to substantiate product utility and long term stability and endurance.
(a)
(2) Factory joints in conductors shall comply with the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 2.1.6.
(b)
(2) The raw materials shall be accepted by RUS prior to their use.
(3) The finished conductor insulation shall be free from holes, splits, blisters, or other imperfections and shall be as smooth as is consistent with best commercial practice.
(4) The finished conductor insulation shall comply with the requirements specified in ANSI/ICEA S-89-648-1993, paragraphs 3.1.5 through 3.1.5.4.
(5) The insulation shall have a minimum spot thickness of not less than 0.9 millimeters (mm) (0.03 inches (in.)) at any point.
(c)
(2) The finished wire assembly shall be either a flat or a notched oval. Other finished wire assemblies may be used provided that they are accepted by RUS prior to their use.
(3) The overall dimensions of the finished wire assembly shall be in accordance with the following requirements:
(d)
(e)
(2)
(3)
(4)
(5)
(ii) The dry dielectric strength between conductors of the completed CCSR aerial service wire shall comply with the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 7.1.7.
(6)
(7)
(f)
(ii) All CCSR aerial service wires manufactured in accordance with this section shall comply with the aged impact test specified in ANSI/ICEA S-89-648-1993, paragraph 8.1.3.
(2)
(3)
(4)
(g)
(ii) All CCSR aerial service wires manufactured in accordance with this section shall comply with the aged cold temperature handling test specified in ANSI/ICEA S-89-648-1993, paragraph 8.2.2.
(2)
(3)
(4)
(5)
(h)
(i)
(2) When sequentially numbered length markings are used, the length markings shall be in accordance with ANSI/ICEA S-89-648-1993, paragraph 9.1.5. The color of the initial marking shall be either white or silver.
(j)
(a)
(2) Factory joints made in the conductors during the manufacturing process shall comply with the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 2.2.2.
(b)
(2) The finished conductor insulation shall comply with the requirements specified in ANSI/ICEA S-89-648-1993, paragraph 3.2.3.
(3) The dimensions of the insulated conductors shall comply with the requirements specified in ANSI/ICEA S-89-648-1993, paragraph 3.2.3.1.
(4) The colors of the insulation shall comply with the requirements specified
(5) A permissible overall performance level of faults in conductor insulation shall comply with the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 3.2.4.6. The length count and number of faults shall be recorded. The information shall be retained for a period of 6 months and be available for review by RUS when requested.
(6) Repairs to the conductor insulation during manufacture are permissible. The method of repair shall be accepted by RUS prior to its use. The repaired insulation shall comply with the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 3.2.3.3.
(7) All repaired sections of insulation shall be retested in the same manner as originally tested for compliance with paragraph (b)(5) of this section.
(8) The colored insulating material removed from or tested on the conductor, from a finished wire shall comply with the requirements specified in ANSI/ICEA S-89-648-1993, paragraphs 3.2.4 through 3.2.4.5.
(c)
(i) The tip and ring conductor of each pair; and
(ii) Each pair in the completed wire.
(2) The colors to be used in the pairs together with the pair numbers shall be in accordance with the table specified in ANSI/ICEA S-89-648-1993, paragraph 4.1.1.
(3) The insulated conductors shall be either layed parallel (two conductor design only) or twisted into pairs.
(4) When using parallel conductors for the two conductor design, the parallel conductors shall be designed to enable the wire to meet the electrical requirements specified in paragraph (g) of this section.
(5) When twisted pairs are used, the following requirements shall be met:
(i) The pair twists shall be designed to enable the wire to meet the electrical requirements specified in paragraph (g) of this section; and
(ii) The average length of pair twists in any pair in the finished wire, when measured on any 3 meter (10 foot) length, shall not exceed the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 4.1.
(6) An alternative method of forming the two-pair wire is the use of a star-quad configuration.
(i) The assembly of the star-quad shall be such as to enable the wire to meet the electrical requirements specified in paragraph (g) of this section.
(ii) The star-quad configuration shall be assembled in accordance with ANSI/ICEA S-89-648-1993, paragraph 4.1.2.
(iii) The average length of twist for the star-quad in the finished wire, when measured on any 3 meter (10 foot) length, shall not exceed the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 4.1.
(iv) The color scheme used to provide identification of the tip and ring conductors of each pair in the star-quad shall comply with the table specified in ANSI/ICEA S-89-648-1993, paragraph 4.1.2.
(d)
(e)
(2) The jacket raw materials shall be accepted by RUS prior to their use.
(f)
(g)
(2)
(ii) The resistance unbalance between tip and ring conductors shall be random with respect to the direction of unbalance. That is, the resistance of
(3)
(4)
(5)
(ii) The wet attenuation of the completed NMR aerial service wire shall comply with the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 7.2.8.
(6)
(ii) The wet insulation resistance of the completed NMR aerial service wire shall comply with the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 7.2.10.
(7)
(8)
(9)
(ii) The input-to-input near-end crosstalk loss (NEXT) for any pair of completed NMR aerial service wire shall comply with the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 7.2.14.
(h)
(ii) All NMR aerial service wires manufactured in accordance with this section shall comply with the aged impact test specified in § 1755.702(f)(1)(ii).
(2)
(3)
(4)
(5)
(i)
(ii) All NMR aerial service wires manufactured in accordance with this section shall comply with the aged cold temperature handling test specified in § 1755.702(g)(1)(ii).
(2)
(3)
(4)
(j)
(2) When a ripcord is used it shall comply with the requirements specified in ANSI/ICEA S-89-648-1993, paragraphs 4.2 through 4.2.3.
(k)
(l)
(2) When sequentially numbered length markings are used, the length markings shall be in accordance with in accordance with § 1755.702(i)(2).
(m)
(a)
(2) For initial acceptance, the manufacturer shall:
(i) Certify that the product fully complies with each paragraph in §§ 1755.700 through 1755.704;
(ii) Agree to periodic plant inspections by RUS;
(iii) Certify whether the product complies with the domestic origin manufacturing provisions of the “Buy American” requirements of the Rural Electrification Act of 1938 (7 U.S.C. 903 note), as amended (the “REA Buy-American provision”);
(iv) Submit at least three written user testimonials concerning field performance of the product; and
(v) Provide any other nonpropriety data deemed necessary by the Chief, Outside Plant Branch (Telecommunications).
(3) In order for RUS to consider a manufacturer's request that a product be requalified, the manufacturer shall certify not later than June 30 of the year in which requalification is required, that the product:
(i) Fully complies with each paragraph in §§ 1755.700 through 1755.704; and
(ii) Does or does not comply with the domestic origin manufacturing provisions of the REA Buy American provisions. The required certifications shall be dated within 90 days of the submission.
(4) Initial and requalification acceptance requests should be addresses to: Chairman, Technical Standards Committee “A” (Telecommunications), Telecommunications Standards Division, Rural Utilities Service, AG Box 1598, Washington, DC 20250-1598.
(b)
(ii) Each conductor in the completed CCSR and NMR aerial service wire shall be tested for shorts in accordance with ANSI/ICEA S-89-648-1993, paragraphs 7.1.1 and 7.2.1, respectively.
(iii) Each length of completed CCSR and NMR aerial service wire shall be tested for insulation imperfections in accordance with § 1755.702(e)(7) and § 1755.703(b)(5), respectively.
(2)
(i) Performance of the conductors;
(ii) Performance of the conductor insulation and jacket material;
(iii) Sequential marking and lettering;
(iv) Mutual capacitance, capacitance unbalance, attenuation, and crosstalk;
(v) Conductor resistance, resistance unbalance, and insulation resistance;
(vi) Dielectric strength and fusing coordination;
(vii) Impact, abrasion, static load, elongation, and plasticizer compatibility tests; and
(viii) Cold temperature handling, light absorption, low temperature separation, and flammability tests.
(c)
(2) Measurements and computed values shall be rounded off to the number of places or figures specified for the requirement according to ANSI/ICEA S-89-648-1993, paragraph 1.3.
(d)
(2) Repairs to the jacket of NMR aerial service wires are not permitted in wires supplied to end users under §§ 1755.700 through 1755.704.
(e)
(f)
(2) When CCSR and NMR aerial service wires are shipped on reels the following provisions shall apply:
(i) The diameter of the drum shall be large enough to prevent damage to the wire from reeling or unreeling. The reels shall be substantial and so constructed as to prevent damage to the wire during shipment and handling;
(ii) A waterproof corrugated board or other suitable means of protection accepted by RUS prior to its use may be applied to the reel. If the waterproof corrugated board or other suitable material is used for protection, it shall be suitably secured in place to prevent damage to the wire during storage and handling. The use of the waterproof corrugated board or other suitable means of protection shall be at the option of the manufacturer unless specified by the end user;
(iii) The outer end of the wire shall be securely fastened to the reel head so as to prevent the wire from becoming loose in transit. The inner end of the wire shall be securely fastened in such a way as to make it readily available if required for electrical testing. Spikes, staples, or other fastening devices which penetrate the conductor insulation of the CCSR aerial service wire and the jacket of the NMR aerial service wire shall not be used. The method of fastening the wire ends shall be accepted by RUS prior to their use;
(iv) Each length of wire shall be wound on a separate reel;
(v) Each reel shall be plainly marked to indicate the direction in which it should be rolled to prevent loosening of the wire on the reel; and
(vi) Each reel shall be stenciled or labeled on either one or both sides with the following information:
(A) Customer order number;
(B) Manufacturer's name and product code;
(C) Factory reel number and year of manufacture;
(D) Gauge of conductors and pair size of wire;
(E) Length of wire; and
(F) RUS designation letter “K.”
(3) When CCSR and NMR aerial service wires are shipped in coils the following provisions shall apply:
(i) The diameter of the coil shall be large enough to prevent damage to the wire from coiling or uncoiling;
(ii) The nominal length of the wire in a coil shall be 305 meters (1,000 feet). No coil shall be less than 290 meters (950 feet) long or more than 460 meters (1,500 feet) long; however, 25 percent of the total number of coils may be less than 305 meters (1,000 feet);
(iii) The coils of wire shall be wound securely with strong tape in four separate evenly spaced places;
(iv) The coils may be protected from damage by wrapping the coil with heavy paper, burlap, or other suitable material accepted by RUS prior to its use. The use of the heavy paper, burlap, or other suitable means of protection shall be at the option of the manufacturer unless specified by the end user; and
(v) Each coil shall be tagged with the following information:
(A) Customer order number;
(B) Manufacturer's name and product code;
(C) Year of manufacture;
(D) Gauge of conductors and pair size of wire;
(E) Length of wire; and
(F) RUS designation letter “K.”
(4) In lieu of wrapping the coil with heavy paper, burlap, or other suitable material, the coil may be packaged in a moisture resistant carton.
(5) When the coils are shipped in moisture resistant cartons, each carton shall be marked with the information specified in paragraphs (f)(3)(v)(A) through (f)(3)(v)(F) of this section.
(6) Other methods of shipment may be used if accepted by RUS prior to their use.
(7) When NMR aerial service wire is shipped, the ends of the wire shall be sealed in accordance with ANSI/ICEA S-89-648-1993, paragraph 9.2.
(a)
(i) The conductors are solid copper, individually insulated with an extruded solid insulating compound.
(ii) The insulated conductors are twisted into pairs (a star-quad configuration is permitted for the two pair wires) which are then stranded or oscillated to form a cylindrical core.
(iii) A moisture resistant filling compound is applied to the stranded conductors completely covering the insulated conductors and filling the interstices between the pairs.
(iv) The wire structure is completed by the application of an optional core wrapping material, an inner jacket, a flooding compound, a shield, a flooding compound, and an overall plastic jacket.
(2) The number of pairs and gauge size of conductors which are used within the RUS program are provided in the following table:
(3) All wires sold to RUS borrowers for projects involving RUS loan funds under this section must be accepted by RUS Technical Standards Committee “A” (Telephone). For wires manufactured to the specification of this section, all design changes to an accepted design must be submitted for acceptance. RUS will be the sole authority on what constitutes a design change.
(4) Materials, manufacturing techniques, or wire designs not specifically addressed by this section may be allowed if accepted by RUS. Justification for acceptance of modified materials, manufacturing techniques, or wire designs must be provided to substantiate product utility and long term stability and endurance.
(5) The American National Standards Institute/Electronic Industries Association (ANSI/EIA) 359-A-84, EIA Standard
(6) American Society for Testing and Materials specifications (ASTM) A 505-87, Standard Specification for Steel, Sheet and Strip, Alloy, Hot-Rolled and Cold-Rolled, General Requirements for; ASTM B 3-90, Standard Specification for Soft or Annealed Copper Wire; ASTM B 193-87, Standard Test Method for Resistivity of Electrical Conductor Materials; ASTM B 224-91, Standard Classification of Coppers; ASTM B 694-86, Standard Specification for Copper, Copper Alloy, and Copper-Clad Stainless Steel Sheet and Strip for Electrical Cable Shielding; ASTM D 150-87, Standard Test Methods for A-C Loss Characteristics and Permittivity (Dielectric Constant) of Solid Electrical Insulating Materials; ASTM D 257-91, Standard Test Methods for D-C Resistance or Conductance of Insulating Materials; ASTM D 1238-90b, Standard Test Method for Flow Rates of Thermoplastics by Extrusion Plastometer; ASTM D 1248-84(1989), Standard Specification for Polyethylene Plastics Molding and Extrusion Materials; ASTM D 1535-89, Standard Test Method for Specifying Color by the Munsell System; ASTM D 3349-86, Standard Test Method for Absorption Coefficient of Carbon Black Pigmented Ethylene Plastic; ASTM D 4101-82(1988), Standard Specification for Propylene Plastic Injection and Extrusion Materials; ASTM D 4565-90a, Standard Test Methods for Physical and Environmental Performance Properties of Insulations and Jackets for Telecommunications Wire and Cable; ASTM D 4566-90, Standard Test Methods for Electrical Performance Properties of Insulations and Jackets for Telecommunications Wire and Cable; ASTM D 4568-86, Standard Test Methods for Evaluating Compatibility between Cable Filling and Flooding Compounds and Polyolefin Cable Materials; ASTM D 4872-88, Standard Test Method for Dielectric Testing of Wire and Cable Filling Compounds; ASTM E 8-91, Standard Test Methods of Tension Testing of Metallic Materials; and ASTM E 29-90, Standard Practice for Using Significant Digits in Test Data to Determine Conformance with Specifications, referenced in this section are incorporated by reference by RUS. These incorporations by references were approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of the ASTM standards are available for inspection during normal business hours at RUS, room 2845, U.S. Department Agriculture, Washington, DC 20250-1500, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(b)
(2) The minimum conductor elongation in the final wire must comply with the following limits when tested in accordance with ASTM E 8-91.
(3) Joints made in conductors during the manufacturing process may be brazed, using a silver alloy solder and nonacid flux, or they may be welded using either an electrical or cold welding technique. In joints made in uninsulated conductors, the two conductor ends must be butted. Splices made in insulated conductors need not be butted but may be joined in a manner acceptable to RUS.
(4)(i) The tensile strength of any section of a conductor containing a factory joint must not be less than 85 percent of the tensile strength of an adjacent section of the solid conductor of equal length without a joint.
(ii)
(5) Each conductor must be insulated with either a colored, solid, insulating grade, high density polyethylene or crystalline propylene/ethylene copolymer or with a solid natural primary layer and a colored, solid outer skin using one of the insulating materials listed in paragraphs (b)(5)(i) through (b)(5)(ii) of this section.
(i) The polyethylene raw material selected to meet the requirements of this section must be Type III, Class A, Category 4 or 5, Grade E9, in accordance with ASTM D 1248-84(1989).
(ii) The crystalline propylene/ethylene raw material selected to meet the requirements of this section must be Class PP 200B 40003 E11 in accordance with ASTM D 4101-82(1988).
(iii) Raw materials intended as conductor insulation furnished to these requirements must be free from dirt, metallic particles, and other foreign matter.
(iv) All insulating raw materials must be accepted by RUS prior to their use.
(6) All conductors in any single length of wire must be insulated with the same type of material.
(7) A permissible overall performance level of faults in conductor insulation must average not greater than one fault per 12,000 conductor meters (40,000 conductor feet) for each gauge of conductor.
(i) All insulated conductors must be continuously tested for insulation faults during the twinning operation with the method of test acceptable to RUS. The length count and number of faults must be recorded. The information must be retained for a period of 6 months and be available for review by RUS when requested.
(ii) The voltages for determining compliance with the requirements of this section are as follows:
(8) Repairs to the conductor insulation during manufacturing are permissible. The method of repair must be accepted by RUS prior to its use. The repaired insulation must be capable of meeting the relevant electrical requirements of this section.
(9) All repaired sections of insulation must be retested in the same manner as originally tested for compliance with paragraph (b)(7) of this section.
(10) Colored insulating material removed from or tested on the conductor, from a finished wire, must be capable of meeting the following performance requirements:
(11)
(i)
(ii)
Quality assurance testing at a jaw separation speed of 500 mm/min (20 in./min) is permissible. Failures at this rate must be retested at the 50 mm/min (2 in./min) rate to determine section compliance.
(iii)
(iv)
(v)
(12) Other methods of testing may be used if acceptable to RUS.
(c)
(i) The tip and ring conductor of each pair; and
(ii) Each pair in the completed wire.
(2) The colors to be used to provide identification of the tip and ring conductor of each pair are shown in the following table:
(3)
(4) Positive identification of the tip and ring conductors of each pair by marking each conductor of a pair with
(5) Other methods of providing positive identification of the tip and ring conductors of each pair may be employed if accepted by RUS prior to its use.
(6) The insulated conductors must be twisted into pairs.
(7) In order to provide sufficiently high crosstalk isolation, the pair twists must be designed to enable the wire to meet the capacitance unbalance and the crosstalk loss requirements of paragraphs (m)(2), (m)(3), and (m)(4) of this section.
(8) The average length of pair twists in any pair in the finished wire, when measured on any 3 meter (m) (10 foot(ft)) length, must not exceed 152 mm (6 in.).
(9) An alternative method of forming the two pair wire is the use of a star-quad configuration.
(i) The assembly of the star-quad must be such as to enable the wire to meet the capacitance unbalance and the crosstalk loss requirements of paragraphs (m)(2), (m)(3), and (m)(4) of this section.
(ii) The four individual insulated conductors must be twisted together to form a star-quad configuration with the tip and ring conductors of each pair diagonally opposite each other in the quad.
(iii) The average length of twist for the star-quad in the finished wire, when measured on any 3 m (10 ft) length, must not exceed 152 mm (6 in.).
(iv) The following color scheme must be used to provide identification of the tip and ring conductor of each pair in the star-quad:
(v) If desired, the blue and orange conductors may contain a white stripe. The stripes in this case must be narrow enough so that the tip and ring identification is obvious.
(d)
(2) The filling compound must be applied to the wire core in such a way as to provide a completely filled core as is commercially practical.
(3) If desired for manufacturing reasons, white or colored binders of nonhygroscopic and nonwicking material may be applied over the core.
(e)
(2) The filling compound must be free from dirt, metallic particles, and other foreign matter. It must be applied in such a way as to fill the space within the wire core.
(3) The filling compound must be nontoxic and present no dermal hazards.
(4) The filling compound must exhibit the following dielectric properties at a temperature of 23 ±3 °C when measured in accordance with ASTM D 150-87 or ASTM D 4872-88.
(i) The dissipation factor must not exceed 0.0015 at a frequency of 1 megahertz (MHz).
(ii) The dielectric constant must not exceed 2.30.
(5) The volume resistivity must not be less than 10
(6) The individual wire manufacturer must satisfy RUS that the filling compound selected for use is suitable for its intended application. The filling compound must be compatible with the wire components when tested in accordance with ASTM D 4568-86 at a temperature of 80 °C.
(f)
(2) The core wrap must provide a sufficient heat barrier to prevent visible evidence of conductor insulation deformation or adhesion between conductors, caused by adverse heat transfer during the inner jacketing operation.
(3) If required for manufacturing reasons, white or colored binders of nonhygroscopic and nonwicking material may be applied over the core wrap.
(4) Sufficient filling compound must be applied to the core wrap that voids or air spaces existing between the core and inner side of the core wrap are minimized.
(g)
(2) The jacket must be free from holes, splits, blisters, or other imperfections and must be as smooth and concentric as is consistent with the best commercial practice.
(3) The inner jacket material and test requirements must be as specified for the outer jacket material per paragraphs (j)(3) through (j)(5)(iv) of this section.
(4) The inner jacket thickness at any point must not be less than 0.5 mm (0.020 in.). The thickness must be determined from measurements on 50 mm (2 in.) samples taken not less than 0.3 m (1 ft) from either end of the wire. The average must be determined from 4 readings taken approximately 90 °apart on any cross section of the samples. The maximum and minimum points must be determined by exploratory measurements. The maximum thickness minus the minimum thickness at any cross section must not exceed 43 percent of the average thickness at that cross section.
(h)
(2) The flooding compound must be compatible with the jacket when tested in accordance with ASTM D 4568-86 at a temperature of 80 °C. The floodant must exhibit adhesive properties sufficient to prevent jacket slip when tested in accordance with the requirements of appendix A, paragraph (III)(5), of this section.
(3) The individual wire manufacturer must satisfy RUS that the flooding compound selected for use is acceptable for the application.
(i)
(i) If the shield is applied longitudinally, it must be corrugated.
(ii) If the shield is applied helically, it must be smooth.
(2) The overlap for longitudinally applied shields must be a minimum of 2 mm (0.075 in.) The overlap for helically applied shields must be a minimum of 23 percent of the tape width.
(3) General requirements for application of the shielding material are as follows:
(i) Successive lengths of shielding tapes may be joined during the manufacturing process by means of cold weld, electric weld, soldering with a nonacid flux, or other acceptable means;
(ii) Where two ends of a metal shield are to be joined together, care shall be taken to clean the metal surfaces in order to provide for a good mechanical and electrical connection;
(iii) The shields of each length of wire must be tested for continuity. A one meter (3 ft) section of shield containing a factory joint must exhibit not more than 110 percent of the resistance of a shield of equal length without a joint;
(iv) The breaking strength of any section of a shield tape containing a factory joint must not be less than 80 percent of the breaking strength of an adjacent section of the shield of equal length without a joint;
(v) The reduction in thickness of the shielding material due to the corrugating or application process must be kept to a minimum and must not exceed 10 percent at any spot; and
(vi) The shielding material must be applied in such a manner as to enable the wire to pass the bend test as specified in paragraph (n)(3) of this section.
(4) The following materials are acceptable for use as wire shielding:
(i) The copper-clad steels and copper alloy 664 shielding tapes must be capable of meeting the following performance requirements prior to application to the wire:
(ii)
(iii)
(iv)
(v)
(j)
(2) The jacket must be free from holes, splits, blisters, or other imperfections and must be as smooth and concentric as is consistent with the best commercial practice.
(3) The raw material used for the outer jacket must be one of the five types listed in paragraphs (j)(3)(i) through (j)(3)(v) of this section. The raw material must contain an antioxidant to provide long term stabilization and the materials must contain a 2.60 ±0.25 percent concentration of furnace black to provide ultraviolet shielding. Both the antioxidant and furnace black must be compounded into the material by the raw material supplier.
(i) Low density, high molecular weight polyethylene (LDHMW) must conform to the requirements of ASTM D 1248-84(1989), Type I, Class C, Category 4 or 5, Grade J3.
(ii) Low density, high molecular weight ethylene copolymer (LDHMW) must conform to the requirements of ASTM D 1248-84 (1989), Type I, Class C, Category 4 or 5, Grade J3.
(iii) Linear low density, high molecular weight polyethylene (LLDHMW) must conform to the requirements of ASTM D 1248-84(1989), Type I, Class C, Category 4 or 5, Grade J3.
(iv) High density polyethylene (HD) must conform to the requirements of ASTM D 1248-84(1989), Type III, Class C, Category 4 or 5, Grade J4.
(v) Medium density polyethylene (MD) must conform to the requirements of ASTM D 1248-84(1989), Type II, Class C, Category 4 or 5, Grade J4.
(vi) Particle size of the carbon selected for use must not average greater than 20 nanometers.
(vii) Absorption coefficient must be a minimum of 400 in accordance with the procedures of ASTM D 3349-86.
(4) The outer jacketing material removed from or tested on the wire must be capable of meeting the following performance requirements:
(5)
(i)
(ii)
(iii)
(iv)
(6)
(7)
(k)
(2) When a sheath slitting cord is used it must be nonhygroscopic and nonwicking, continuous throughout a length of wire, and of sufficient strength to open the sheath without breaking the cord.
(3) Sheath slitting cords must be capable of consistently slitting the jacket(s) and/or shield for a continuous length of 0.6 m (2 ft) when tested in accordance with the procedure specified in appendix B of this section.
(l)
(2) The number of conductor pairs and their gauge size must be marked on the jacket.
(3) The marking must be printed on the jacket at regular intervals of not more than 1.5 m (5 ft).
(4) An alternative method of marking may be used if accepted by RUS prior to its use.
(5) The completed wire must have sequentially numbered length markers in FEET OR METERS at regular intervals of not more than 1.5 m (5 ft) along the outside of the jacket.
(6) The method of length marking must be such that for any single length of wire, continuous sequential numbering must be employed.
(7) The numbers must be dimensioned and spaced to produce good legibility and must be approximately 3 mm (0.125 in.) in height. An occasional illegible marking is permissible if there is a legible marking located not more than 1.5 m (5 ft) from it.
(8) The method of marking must be by means of suitable surface markings producing a clear, distinguishable, contrasting marking acceptable to RUS. Where direct or transverse printing is employed, the characters should be indented to produce greater durability of marking. Any other method of length marking must be acceptable to RUS as producing a marker suitable for the field. Size, shape and spacing of numbers, durability, and overall legibility of the marker will be considered in acceptance of the method.
(9) The accuracy of the length marking must be such that the actual length of any wire section is never less than the length indicated by the marking and never more than one percent greater than the length indicated by the marking.
(10) The color of the initial marking must be white or silver. If the initial marking fails to meet the requirements of the preceding paragraphs, it will be permissible to either remove the defective marking and re-mark with the white or silver color or leave the defective marking on the wire and re-mark with yellow. No further re-marking is permitted. Any re-marking must be on a different portion of the wire circumference than any existing marking when possible and have a numbering sequence differing from any other existing marking by at least 5,000.
(11) Any reel of wire which contains more than one set of sequential markings must be labeled to indicate the color and sequence of marking to be used. The labeling must be applied to the reel and also to the wire.
(m)
(ii) The mutual conductance (corrected for length and gauge) of any pair must not exceed 2 micromhos/kilometer (micromhos/km) (3.3 micromhos/mile) when tested in accordance with ASTM D 4566-90 at a frequency of 1.0 ±0.1 kHz and a temperature of 23 ±3 °C.
(2)
(3)
(ii) When measuring pair-to-ground capacitance unbalance, all pairs, except the pair under test, are grounded to the shield.
(iii) Pair-to-ground capacitance unbalance may vary directly with the length of the wire.
(4)
(5)
(6)
(7)
(A) 5.0 kilovolts for 22-gauge conductors; and
(B) 4.0 kilovolts for 24-gauge conductors.
(ii) In each length of completed wire, the dielectric strength between the shield and all conductors in the core must be tested in accordance with ASTM D 4566-90 and must withstand, for 3 seconds, a dc potential whose value is not less than 20 kilovolts.
(8)
(9)
(ii) The resistance unbalance between tip and ring conductors shall be random with respect to the direction of unbalance. That is, the resistance of the tip conductors shall not be consistently higher with respect to the ring conductors and vice versa.
(n)
(2)
(3)
(4)
(ii) After the one hour period, there must be no water leakage in the sheath interfaces, under the core wrap or between any insulated conductors in the core.
(iii) If water leakage is detected in the first sample, one 3 m (10 ft) additional adjacent sample from the same reel of wire must be tested in accordance with paragraph (n)(4)(ii) of this section. If the second sample exhibits water leakage, the entire reel of wire is to be rejected. If the second sample exhibits no leakage, the entire reel of wire is considered acceptable.
(5)
(o)
(2) For initial acceptance, the manufacturer must submit:
(i) An original signature certification that the product fully complies with each requirement of this section;
(ii) Qualification Test Data, per appendix A of this section;
(iii) To periodic plant inspections;
(iv) A certification that the product does or does not comply with the domestic origin manufacturing provisions of the “Buy American” requirements of the Rural Electrification Act of 1938 (7 U.S.C. 901
(v) Written user testimonials concerning performance of the product; and
(vi) Other nonproprietary data deemed necessary by the Chief, Outside Plant Branch (Telephone).
(3) For requalification acceptance, the manufacturer must submit an original signature certification that the product fully complies with each section of the specification, excluding the Qualification Section, and a certification that the product does or does not comply with the domestic origin manufacturing provisions of the “Buy American” requirements of the Rural Electrification Act of 1938 (7 U.S.C. 901
(4) Initial and requalification acceptance requests should be addressed to: Chairman, Technical Standards, Committee “A” (Telephone), Telecommunications Standards Division, Rural Utilities Service, Washington, DC 20250-1500.
(5) Tests on 100 percent of completed wire. (i) The shield of each length of wire must be tested for continuity using the procedures of ASTM D 4566-90.
(ii) Dielectric strength between all conductors and the shield must be tested to determine freedom from grounds in accordance with paragraph (m)(7)(ii) of this section.
(iii) Each conductor in the completed wire must be tested for continuity using the procedures of ASTM D 4566-90.
(iv) Dielectric strength between conductors must be tested to ensure freedom from shorts and crosses in accordance with paragraph (m)(7)(i) of this section.
(v) The average mutual capacitance must be measured on all wires.
(6)
(i) Performance requirements for conductor insulation and jacket material;
(ii) Performance requirements for filling and flooding compounds;
(iii) Sequential marking and lettering;
(iv) Capacitance unbalance and crosstalk;
(v) Insulation resistance;
(vi) Conductor resistance and resistance unbalance;
(vii) Wire bending and wire breaking strength tests;
(viii) Mutual conductance and attenuation; and
(ix) Water penetration and compound flow tests.
(p)
(2) Measurements and computed values must be rounded off to the number
(q)
(2) Minor defects in the outer jackets (defects having a dimension of 3 mm (0.125 in.) or less in any direction) may be repaired by means of heat fusing in accordance with good commercial practices utilizing sheath grade compound.
(r)
(2) The thermal wrap must comply with the requirements of appendix C of this section. When a thermal reel wrap is supplied, the wrap must be applied to the reel and must be suitably secured in place to minimize thermal exposure to the wire during storage and shipment. The use of the thermal reel wrap as a means of reel protection will be at the option of the manufacturer unless specified by the end user.
(3) The outer end of the wire must be securely fastened to the reel head so as to prevent the wire from becoming loose in transit. The inner end of the wire must be securely fastened in such a way as to make it readily available if required for electrical testing. Spikes, staples, or other fastening devices which penetrate the wire jacket must not be used. The method of fastening the wire ends must be accepted by RUS prior to it being used.
(4) Each length of wire must be wound on a separate reel unless otherwise specified or agreed to by the purchaser.
(5) Each reel must be plainly marked to indicate the direction in which it should be rolled to prevent loosening of the wire on the reel.
(6) Each reel must be stenciled or labeled on either one or both sides with the name of the manufacturer, year of manufacture, actual shipping length, an inner and outer end sequential length marking, description of the wire, reel number and the RUS wire designation:
(7) Both ends of the filled buried wire, manufactured to the requirements of this section, must be equipped with end caps which are acceptable to RUS.
(I) The test procedures described in this appendix are for qualification of initial designs and major modifications of accepted designs. Included in (V) of this appendix are suggested formats that may be used in submitting test results to RUS.
(II)
(a) Length A shall be 10 ±0.2 meters (33 ±0.5 feet) long and must be maintained at 23 ±3 °C. One length is required.
(b) Length B shall be 12 ±0.2 meters (40 ±0.5 feet) long. Prepare the test sample by removing the inner and outer jacket, shield, and core wrap, if present, for a sufficient distance on both ends to allow the insulated conductors to be flared out. Remove sufficient conductor insulation so that appropriate electrical test connections can be made at both ends. Coil the specimen with a diameter of 15 to 20 times its sheath diameter. Three lengths are required.
(c) Length C shall be one meter (3 feet) long. Four lengths are required.
(d) Length D shall be 300 millimeters (1 foot) long. Four lengths are required.
(e) Length E shall be 600 millimeters (2 feet) long. Four lengths are required.
(f) Length F shall be 3 meters (10 feet) long and must be maintained at 23 ±3 °C for the duration of the test. Two lengths are required.
(2)
(III)
(b)
(i) Water Immersion Test outlined in (III)(2) of this appendix;
(ii) Water Penetration Test outlined in (III)(3) of this appendix; .
(iii) Insulation Compression Test outlined in (III)(4) of this appendix; and
(iv) Jacket Slip Strength Test outlined in (III)(5) of this appendix.
(c)
(ii) The attenuation at 150 kilohertz may be calculated from open circuit admittance (Yoc) and short circuit impedance (Zsc) or may be obtained by direct measurement of attenuation.
(iii) Record on suggested formats attached in (V) of this appendix or on other easily readable formats.
(d)
(ii) At the end of this period note any exudation of filling compound. Measure and calculate the parameters given in (III)(1)(c) of this appendix. Record on suggested formats attached in (V) of this appendix or on other easily readable formats.
(iii) Cut away and discard a one meter (3 foot) section from each end of length B.
(e)
(ii) The stability of the electrical parameters after completion of this test must be within the following prescribed limits:
(A)
(B) The change in average mutual capacitance must be less than 5 percent over the frequency range of 1 to 150 kilohertz;
(C)
(D)
(2)
(b)
(c)
(i) Remeasure the mutual capacitance and conductance after the wires have been submerged for 24 hours and again after 30 days.
(ii) Record each sample separately on the suggested formats attached in (V) of this appendix or on other easily readable formats.
(d)
(ii) The stability of the electrical parameters after of the test must be within the following prescribed limits:
(A)
(B)
(3)
(b) Test per Option A or Option B. (i)
(ii)
(4)
(b)
(5)
(b)
(c)
(6)
(b) Immediately after completing the measurements, expose the test sample to 100 temperature cyclings. Relative humidity within the chamber must be maintained at 90 ±2 percent. One cycle consists of beginning at a stabilized chamber and test sample temperature of 52 ±1 °C, increasing the temperature to 57 ±1 °C, allowing the chamber and test samples to stabilize at this level, then dropping the temperature back to 52 ±1 °C.
(c) Repeat steps (III)(1)(d)(ii) through (III)(5)(c) of this appendix.
(7)
(b) Immediately after completing the measurements, subject the test sample to 10 cycles of temperature between −40 °C and +60 °C. The test sample must be held at each temperature extreme for a minimum of 1 1/2 hours during each cycle of temperature. The air within the temperature cycling chamber must be circulated throughout the duration of the cycling.
(c) Repeat steps (III)(1)(d)(ii) through (III)(5)(c) of this appendix.
(IV)
(2) Repeat steps (III)(2) through (III)(5)(c) of this appendix except use length A instead of length B.
(3)
(b) The samples must be capable of withstanding, without damage, a single surge voltage of 20 kilovolts peak between conductors, and 35 kilovolts peak between conductors and the shield as hereinafter described. The surge voltage must be developed from a capacitor discharge through a forming resistor connected in parallel with the dielectric of the test sample. The surge generator constants must be such as to produce a surge of 1.5 × 40 microseconds wave shape.
(c) The shape of the generated wave must be determined at a reduced voltage by connecting an oscilloscope across the forming resistor with the wire sample connected in parallel with the forming resistor. The capacitor bank is charged to the test voltage
(V) The following suggested formats may be used in submitting the test results to RUS:
(I) The test procedures described in this appendix are for qualification of initial and subsequent changes in sheath slitting cords.
(II)
(III)
(2) The prepared test specimens must be maintained at a temperature of 23 ±1 °C for at least 4 hours immediately prior to and during the test.
(3) Wrap the sheath slitting cord around the plier jaws to ensure a good grip.
(4) Grasp and hold the wire in a convenient position while gently and firmly pulling the sheath slitting cord longitudinally in the direction away from the wire end. The angle of pull may vary to any convenient and functional degree. A small starting notch is permissible.
(5) The sheath slitting cord is considered acceptable if the cord can slit the jacket and/or shield for a continuous length of 0.6 meter (2 feet) without breaking the cord.
(I) The test procedures described in this appendix are for qualification of initial and subsequent changes in thermal reel wraps.
(II)
(III)
(2) Tape thermocouples to the jackets of each sample to measure the jacket temperature.
(3) Cover one sample with the thermal reel wrap.
(4) Expose the samples to a radiant heat source capable of heating the uncovered jacket sample to a minimum of 71 °C. A 600 watt photoflood lamp or an equivalent lamp having the light spectrum approximately that of the sun shall be used.
(5) The height of the lamp above the jacket shall be 380 millimeters (15 inches) or a height that produces the 71 °C jacket temperature on the unwrapped sample.
(6) After the samples have stabilized at the temperature, the jacket temperatures of the samples must be recorded after one hour of exposure to the heat source.
(7) Compute the temperature difference between the jackets.
(8) For the thermal reel wrap to be acceptable to RUS, the temperature differences between the jacket with the thermal reel wrap
(a)
(i) The conductors are solid tinned copper, individually insulated with extruded solid dual insulating compounds.
(ii) The insulated conductors are twisted into pairs which are then stranded or oscillated to form a cylindrical core.
(iii) The cable structure is completed by the application of a core wrap, a shield, and a polyvinyl chloride jacket.
(2) The number of pairs and gauge size of conductors which are used within the RUS program are provided in the following table:
(3) All cables sold to RUS borrowers for projects involving RUS loan funds under this section must be accepted by RUS Technical Standards Committee “A” (Telephone). For cables manufactured to the specification of this section, all design changes to an accepted design must be submitted for acceptance. RUS will be the sole authority on what constitutes a design change.
(4) Materials, manufacturing techniques, or cable designs not specifically addressed by this section may be allowed if accepted by RUS. Justification for acceptance of modified materials, manufacturing techniques, or cable designs shall be provided to substantiate product utility and long term stability and endurance.
(5) The American National Standard Institute/Electronic Industries Association (ANSI/EIA) 359-A-84, EIA Standard Colors for Color Identification and Coding, referenced in this section is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of ANSI/EIA 359-A-84 are available for inspection during normal business hours at RUS, room 2845, U.S. Department of Agriculture, Washington, DC 20250-1500, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(6) American Society for Testing and Materials Specifications (ASTM) B 33-91, Standard Specification for Tinned Soft or Annealed Copper Wire for Electrical Purposes; ASTM B 736-92a Standard Specification for Aluminum, Aluminum Alloy and Aluminum-Clad Steel Cable Shielding Stock; ASTM D 1248-84 (1989), Standard Specification for Polyethylene Plastics Molding and Extrusion Materials; ASTM D 1535-89, Standard Test Method for Specifying Color by the Munsell System; ASTM D 2287-81 (Reapproved 1988), Standard Specification for Nonrigid Vinyl Chloride Polymer and Copolymer Molding and Extrusion Compounds; ASTM D 2436-85, Standard Specification for Forced-Convection Laboratory Ovens for Electrical Insulation; ASTM D 2633-82 (Reapproved 1989), Standard Methods of Testing Thermoplastic Insulations and Jackets for Wire and Cable; ASTM D 4101-82 (1988), Standard Specification for Propylene Plastic Injection and Extrusion Materials; ASTM D 4565-90a, Standard Test Methods for Physical and Environmental Performance Properties of Insulations and Jackets for Telecommunications Wire and Cable; ASTM D 4566-90, Standard Test Methods for Electrical Performance Properties of Insulations and Jackets for Telecommunications Wire and Cable;
(7) American National Standards Institute/National Fire Protection Association (ANSI/NFPA), NFPA 70-1993 National Electrical Code referenced in this section is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. A copy of the ANSI/NFPA standard is available for inspection during normal business hours at RUS, room 2845, U.S. Department of Agriculture, Washington, DC 20250-1500, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(8) Underwriters Laboratories Inc. (UL) 1666, Standard Test for Flame Propagation Height of Electrical and Optical-Fiber Cables Installed Vertically in Shafts, dated January 22, 1991, referenced in this section is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. A copy of the UL standard is available for inspection during normal business hours at RUS, room 2845, U.S. Department of Agriculture, Washington, DC 20250-1500, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(b)
(2) Joints made in conductors during the manufacturing process may be brazed, using a silver alloy solder and nonacid flux, or they may be welded using either an electrical or cold welding technique. In joints made in uninsulated conductors, the two conductor ends shall be butted. Splices made in insulated conductors need not be butted but may be joined in a manner acceptable to RUS.
(3) The tensile strength of any section of a conductor, containing a factory joint, shall not be less than 85 percent of the tensile strength of an adjacent section of the solid conductor of equal length without a joint.
(4) Engineering Information: The sizes of wire used and their nominal diameters shall be as shown in the following table:
(5) Each conductor shall be insulated with a primary layer of natural or white solid, insulating grade, high density polyethylene or crystalline propylene/ethylene copolymer and an outer skin of colored, solid, insulating grade, polyvinyl chloride (PVC) using one of the insulating materials listed
(i) The polyethylene raw material selected to meet the requirements of this section shall be Type III, Class A, Category 4 or 5, Grade E9, in accordance with ASTM D 1248-84 (1989).
(ii) The crystalline propylene/ethylene raw material selected to meet the requirements of this section shall be Class PP 200B 40003 E11 in accordance with ASTM D 4101-82 (1988).
(iii) The PVC raw material selected to meet the requirements of this section shall be either Type PVC-64751E3XO, Type PVC-76751E3XO, or Type PVC-77751E3XO in accordance with ASTM D 2287-81 (1988).
(iv) Raw materials intended as conductor insulation furnished to these requirements shall be free from dirt, metallic particles, and other foreign matter.
(v) All insulating raw materials shall be accepted by RUS prior to their use.
(6) All conductors in any single length of cable shall be insulated with the same type of material.
(7) A permissible overall performance level of faults in conductor insulation when using the test procedures in paragraph (b)(8) of this section shall average not greater than one fault per 12,000 conductor meters (40,000 conductor feet) for each gauge of conductor.
(8) The test used to determine compliance with paragraph (b)(7) of this section shall be conducted as follows:
(i) Samples tested shall be taken from finished cables selected at random from standard production cable. The samples tested shall contain a minimum of 300 conductor meters (1,000 conductor feet) for cables sizes less than 50 pairs and 1,500 conductor meters (5,000 conductor feet) for cables sizes greater than or equal to 50 pairs. No further sample need be taken from the same cable production run within 6,000 cable meters (20,000 cable feet) of the original test sample from that run.
(ii) The cable sample shall have its jacket, shield, and core wrap removed and its core shall be immersed in tap water for a minimum period of 6 hours. In lieu of removing the jacket, shield, and core wrap from the core, the entire cable may be tested. In this case, the core shall be completely filled with tap water, under pressure; then the cable assembly shall be immersed for a minimum period of 6 hours. With the cable core still fully immersed, except for end connections, the insulation resistance (IR) of all conductors to water shall be measured using a direct current (dc) voltage of 100 volts to 550 volts.
(iii) An IR value of less than 500 megohms for any individual insulated conductor tested at or corrected to a temperature of 23 °C is considered a failure. If the cable sample is more than 7.5 meters (25 feet) long, all failing conductors shall be retested and reported in 7.5 meter (25 foot) segments.
(iv) The pair count, gauge, footage, and number of insulation faults shall be recorded. This information shall be retained on a 6 month running basis for review by RUS when requested.
(v) A fault rate, in a continuous length in any one reel, in excess of one fault per 3,000 conductor meters (10,000 conductor feet) due to manufacturing defects is cause for rejection. A minimum of 6,000 conductor meters (20,000 conductor feet) is required to develop a noncompliance in a reel.
(9) Repairs to the conductor insulation during manufacturing are permissible. The method of repair shall be accepted by RUS prior to its use. The repaired insulation shall be capable of meeting the relevant electrical requirements of this section.
(10) All repaired sections of insulation shall be retested in the same manner as originally tested for compliance with paragraph (b)(7) of this section.
(11) The colored composite insulating material removed from or tested on the conductor, from a finished cable, shall be capable of meeting the following performance requirements:
(12)
(i)
Quality assurance testing at a jaw separation speed of 500 mm/min (20 in./min) is permissible. Failures at this rate shall be retested at the 50 mm/min (2 in./min) rate to determine specification compliance.
(ii)
(iii)
(iv)
(v)
(13) Other methods of testing may be used if acceptable to RUS.
(c)
(i) The tip and ring conductor of each pair; and
(ii) Each pair in the completed cable.
(2) The colors used to provide identification of the tip and ring conductor of each pair shall be as shown in the following table:
(3)
(4) Positive identification of the tip and ring conductors of each pair by marking each conductor of a pair with the color of its mate is permissible. The method of marking shall be accepted by RUS prior to its use.
(5) Other methods of providing positive identification of the tip and ring conductors of each pair may be employed if accepted by RUS prior to its use.
(6) The insulated conductors shall be twisted into pairs.
(7) In order to provide sufficiently high crosstalk isolation, the pair twists shall be designed to enable the cable to meet the capacitance unbalance and the crosstalk loss requirements of paragraphs (h)(2), (h)(3), and (h)(4) of this section.
(8) The average length of pair twists in any pair in the finished cable, when measured on any 3 meter (m) (10 foot (ft)) length, shall not exceed 152 mm (6 in.).
(d)
(2) When desired for lay-up reasons, the basic group may be divided into two or more subgroups called units.
(3) Each group, or unit in a particular group, shall be enclosed in bindings of the colors indicated for its particular pair count. The pair count, indicated by the color of insulation, shall be consecutive as indicated in paragraph (d)(5) of this section through units in a group.
(4) Threads or tapes used as binders shall be nonhygroscopic and nonwicking. The threads shall consists of a suitable number of ends of each color arranged as color bands. When tapes are used as binders, they shall be colored. Binders shall be applied with a lay of not more than 100 mm (4 in.). The colored binders shall be readily recognizable as the basic intended color and shall be distinguishable from all other colors.
(5) The colors of the bindings and their significance with respect to pair count shall be as shown in the following table:
(6) The use of the white unit binder in cables of 100 pair or less is optional.
(7) When desired for manufacturing reasons, two or more 25 pair groups may be bound together with nonhygroscopic and nonwicking threads or tapes into super-units. The group binders and the super-unit binders shall be colored such that the combination of the two binders shall positively identify each 25 pair group from every other 25 pair group in the cable.
(8) Super-unit binders shall be of the colors shown in the following table:
(e)
(2) The core wrap shall provide a sufficient heat barrier to prevent visible evidence of conductor insulation deformation or adhesion between conductors, caused by adverse heat transfer during the jacketing operation.
(3) Engineering Information: If required for manufacturing reasons, white or uncolored binders of nonhygroscopic and nonwicking material may be applied over the core and/or core wrap.
(f)
(2) The shield may be applied over the core wrap with or without corrugations (smooth) and shall be bonded to the outer jacket.
(3) The shield overlap shall be a minimum of 3 mm (0.125 in.) for cables with core diameters of 15 mm (0.625 in.) or less and a minimum of 6 mm (0.25 in.) for cables with core diameters greater than 15 mm (0.625 in.). The core diameter is defined as the diameter under the core wrap and binding.
(4) General requirements for application of the shielding material shall be as follows:
(i) Successive lengths of shielding tapes may be joined during the manufacturing process by means of cold weld, electric weld, soldering with a nonacid flux, or other acceptable means;
(ii) The metal shield with the plastic coating shall have the coating removed prior to joining the metal ends together. After joining, the plastic coating shall be restored without voids using good manufacturing techniques;
(iii) The shields of each length of cable shall be tested for continuity. A
(iv) The breaking strength of any section of a shield tape containing a factory joint shall not be less than 80 percent of the breaking strength of an adjacent section of the shield of equal length without a joint;
(v) The reduction in thickness of the shielding material due to the corrugating or application process shall be kept to a minimum and shall not exceed 10 percent at any spot; and
(vi) The shielding material shall be applied in such a manner as to enable the cable to pass the bend test as specified in paragraph (i)(1) of this section.
(5) The dimensions of the uncoated aluminum tape shall be 0.2030±0.0254 mm (0.0080±0.0010 in.).
(6) The aluminum tape shall conform to either Alloy AA-1100-0, AA-1145-0, or AA-1235-0 as covered in the latest edition of Aluminum Standards and Data, issued by the Aluminum Association, except that requirements for tensile strength are waived.
(7) The single-sided plastic coated aluminum shield shall conform to the requirements of ASTM B 736-92a, Type I Coating, Class 1 or 2, or Type II Coating, Class 1. The minimum thickness of the Type I Coating shall be 0.038 mm (0.0015 in.). The minimum thickness of the Type II Coating shall be 0.008 mm (0.0003 in.).
(8) The plastic coated aluminum shield shall be tested for resistance to water migration by immersing a one meter (3 ft) length of tape under a one meter (3 ft) head of water containing a soluble dye plus 0.25 percent (%) wetting agent.
(i) After a minimum of 5 minutes, no dye shall appear between the interface of the shield tape and the plastic coating.
(ii) The actual test method shall be acceptable to RUS.
(9) The bond between the plastic coated shield and the jacket shall conform to the following requirements:
(i) Prepare test strips approximately 200 mm (8 in.) in length. Slit the jacket and shield longitudinally to produce 4 strips evenly spaced and centered in 4 quadrants on the jacket circumference. One of the strips shall be centered over the overlapped edge of the shielding tape. The strips shall be 13 mm (0.5 in.) wide. For cable diameters less than 19 mm (0.75 in.) make two strips evenly spaced.
(ii) Separate the shield and jacket for a sufficient distance to allow the shield and jacket to be fitted in the upper and lower jaws of a tensile machine. Record the maximum force required to separate the shield and jacket to the nearest newton (pound-force). Repeat this action for each test strip.
(iii) The force required to separate the jacket from the shield shall not be less than 9 N (2 lbf) for any individual strip when tested in accordance with paragraph (f)(9)(ii) of this section. The average force for all strips of any cable shall not be less than 18 N (4 lbf).
(g)
(2) The jacket shall be free from holes, splits, blisters, or other imperfections and shall be as smooth and concentric as is consistent with the best commercial practice.
(3) The raw material used for the cable jacket shall be one of the following four types:
(i) Type PVC-55554EOXO in accordance with ASTM D 2287-81(1988);
(ii) Type PVC-65554EOXO in accordance with ASTM D 2287-81(1988);
(iii) Type PVC-55556EOXO in accordance with ASTM D 2287-81(1988); or
(iv) Type PVC-66554EOXO in accordance with ASTM D 2287-81(1988).
(4) The jacketing material removed from or tested on the cable shall be capable of meeting the following performance requirements:
(5)
(i)
Quality assurance testing at a jaw separation speed of 500 mm/min (20 in./min) is permissible. Failures at this rate shall be retested at the 50 mm/min (2 in./min) rate to determine specification compliance.
(ii)
(iii)
(6)
(i)
(ii)
(B)
(7) The color of the jacket shall be either black or dark grey in conformance with the Munsell Color System specified in ASTM D 1535-89.
(8) There shall be no water or other contaminants in the finished cable which would have a detrimental effect on its performance or its useful life.
(h)
(ii) The root mean square (rms) deviation of the mutual capacitance of all pairs from the average mutual capacitance of that reel shall not exceed 3.0 % when calculated in accordance with ASTM D 4566-90.
(iii) The mutual conductance (corrected for length and gauge) of any pair shall not exceed 3.7 micromhos/kilometer (micromhos/km) (6.0 micromhos/mile) when tested in accordance with ASTM D 4566-90 at a frequency of 1.0±0.1 kHz and a temperature of 23±3 °C.
(2)
(3)
(ii) When measuring pair-to-ground capacitance unbalance all pairs except the pair under test are grounded to the shield except when measuring cable containing super-units in which case all other pairs in the same super-unit shall be grounded to the shield.
(iii) Pair-to-ground capacitance unbalance may vary directly with the length of the cable.
(4)
(ii) The FEXT crosstalk loss between any pair combination of a cable shall not be less than 58 dB/km (63 dB/1000 ft) at a frequency of 150 kHz. If the loss K
(iii) The near-end crosstalk loss (NEXT) as measured within and between units of a completed cable in accordance with ASTM D 4566-90 at a frequency of 772 kHz shall not be less than the following mean minus sigma (M-S) crosstalk requirement for any unit within the cable:
(5)
(6)
(A) 3.6 kilovolts for 22-gauge conductors; or
(B) 3.0 kilovolts for 24-gauge conductors.
(ii) In each length of completed cable, the dielectric strength between the shield and all conductors in the core shall be tested in accordance with ASTM D 4566-90 and shall withstand, for 3 seconds, a dc potential whose value is not less than 10 kilovolts.
(7)
(8)
(ii) The resistance unbalance between tip and ring conductors shall be random with respect to the direction of unbalance. That is, the resistance of the tip conductors shall not be consistently higher with respect to the ring conductors and vice versa.
(9)
(ii) The maximum number of pairs in a cable which may vary as specified in paragraph (h)(9)(iii) of this section from the electrical parameters given in this section are listed in this paragraph. These pairs may be excluded from the arithmetic calculation:
(iii)
(B)
(C)
RUS recognizes that in large pair count cables (600 pair and above) a cross, short, or open circuit condition occasionally may develop in a pair which does not affect the performance of the other cable pairs. In these circumstances rejection of the entire cable may be economically unsound or repairs may be impractical. In such circumstances the manufacturer may desire to negotiate with the customer for acceptance of the cable. No more than 0.5 percent of the pairs may be involved.
(i)
(2)
(3)
(j)
(2) When a sheath slitting cord is used it shall be nonhygroscopic and nonwicking, continuous throughout a length of cable, and of sufficient strength to open the sheath without breaking the cord.
(3) Sheath slitting cords shall be capable of consistently slitting the jacket and/or shield for a continuous length of 0.6 m (2 ft) when tested in accordance with the procedure specified in appendix B of this section.
(k)
(2) The number of conductor pairs and their gauge size shall be marked on the jacket.
(3) The marking shall be printed on the jacket at regular intervals of not more than 1.5 m (5 ft).
(4) An alternative method of marking may be used if accepted by RUS prior to its use.
(5) The completed cable shall have sequentially numbered length markers in FEET OR METERS at regular intervals of not more than 1.5 m (5 ft) along the outside of the jacket.
(6) The method of length marking shall be such that for any single length of cable, continuous sequential numbering shall be employed.
(7) The numbers shall be dimensioned and spaced to produce good legibility and shall be approximately 3 mm (0.125 in.) in height. An occasional illegible marking is permissible if there is a legible marking located not more than 1.5 m (5 ft) from it.
(8) The method of marking shall be by means of suitable surface markings producing a clear, distinguishable, contrasting marking acceptable to RUS. Where direct or transverse printing is employed, the characters should be indented to produce greater durability of marking. Any other method of length marking shall be acceptable to RUS as producing a marker suitable for the field. Size, shape and spacing of numbers, durability, and overall legibility of the marker shall be considered in acceptance of the method.
(9) The accuracy of the length marking shall be such that the actual length of any cable section is never less than the length indicated by the marking and never more than one percent greater than the length indicated by the marking.
(10) The color of the initial marking for a black colored jacket shall be either white or silver. The color of the initial marking for a dark grey colored jacket shall be either red or black. If the initial marking of the black colored jacket fails to meet the requirements of the preceding paragraphs, it will be permissible to either remove the defective marking and re-mark with the white or silver color or leave the defective marking on the cable and re-mark with yellow. If the initial marking of the dark grey colored jacket fails to meet the requirements of the preceding paragraphs, it will be permissible to either remove the defective marking and re-mark with the red or black color or leave the defective marking on the cable and re-mark with yellow. No further re-marking is permitted. Any re-marking shall be on a different portion of the cable circumference than any existing marking when possible and have a numbering sequence differing from any other existing marking by at least 5,000.
(11) Any reel of cable which contains more than one set of sequential markings shall be labeled to indicate the color and sequence of marking to be used. The labeling shall be applied to the reel and also to the cable.
(l)
(2) The splicing modules shall meet the requirements of RUS Bulletin 345-54, PE-52, RUS Specification for Telephone Cable Splicing Connectors (Incorporated by Reference at § 1755.97), and be accepted by RUS prior to their use.
(m)
(2) For initial acceptance, the manufacturer shall submit:
(i) An original signature certification that the product fully complies with each section of the specification;
(ii) Qualification Test Data, per appendix A of this section;
(iii) To periodic plant inspections;
(iv) A certification that the product does or does not comply with the domestic origin manufacturing provisions of the “Buy American” requirements of the Rural Electrification Act of 1938 (7 U.S.C. 901
(v) Written user testimonials concerning performance of the product; and
(vi) Other nonproprietary data deemed necessary by the Chief, Outside Plant Branch (Telephone).
(3) For requalification acceptance, the manufacturer shall submit an original signature certification that
(4) Initial and requalification acceptance requests should be addressed to: Chairman, Technical Standards Committee “A” (Telephone), Telecommunications Standards Division, Rural Utilities Service, Washington, DC 20250-1500.
(5)
(ii) Dielectric strength between all conductors and the shield shall be tested to determine freedom from grounds in accordance with paragraph (h)(6)(ii) of this section.
(iii) Each conductor in the completed cable shall be tested for continuity using the procedures of ASTM D 4566-90.
(iv) Dielectric strength between conductors shall be tested to ensure freedom from shorts and crosses in accordance with paragraph (h)(6)(i) of this section.
(v) Each conductor in the completed preconnectorized cable shall be tested for continuity.
(vi) Each length of completed preconnectorized cable shall be tested for split pairs.
(vii) The average mutual capacitance shall be measured on all cables. If the average mutual capacitance for the first 100 pairs tested from randomly selected groups is between 50 and 53 nF/km (80 to 85 nF/mile), the remainder of the pairs need not to be tested on the 100 percent basis. (See paragraph (h)(1) of this section).
(6)
(i) Performance requirements for conductor insulation and jacket material;
(ii) Bonding properties of coated or laminated shielding materials;
(iii) Sequential marking and lettering;
(iv) Capacitance unbalance and crosstalk;
(v) Insulation resistance;
(vi) Conductor resistance and resistance unbalance;
(vii) Cable cold bend and cable flame tests; and
(viii) Mutual conductance.
(n)
(2) Measurements and computed values shall be rounded off to the number of places of figures specified for the requirement according to ASTM E 29-90.
(o)
(2) No repairs or defects in the jacket are allowed.
(p)
(2) A waterproof corrugated board or other means of protection acceptable to RUS shall be applied to the reel and shall be suitably secured in place to prevent damage to the cable during storage and shipment.
(3) The outer end of the cable shall be securely fastened to the reel head so as to prevent the cable from becoming loose in transit. The inner end of the cable shall be securely fastened in such a way as to make it readily available if required for electrical testing. Spikes,
(4) Each length of cable shall be wound on a separate reel unless otherwise specified or agreed to by the purchaser.
(5) The arbor hole shall admit a spindle 63 mm (2.5 in.) in diameter without binding. Steel arbor hole liners may be used but shall be acceptable to RUS prior to their use.
(6) Each reel shall be plainly marked to indicate the direction in which it should be rolled to prevent loosening of the cable on the reel.
(7) Each reel shall be stenciled or labeled on either one or both sides with the name of the manufacturer, year of manufacture, actual shipping length, an inner and outer end sequential length marking, description of the cable, reel number and the RUS cable designation:
(8) When preconnectorized cable is shipped, the splicing modules shall be protected to prevent damage during shipment and handling. The protection method shall be acceptable to RUS prior to its use.
(I) The test procedures described in this appendix are for qualification of initial designs and major modifications of accepted designs. Included in paragraph (V) of this appendix are suggested formats that may be used in submitting test results to RUS.
(II)
(a) Length A shall be 12 ±0.2 meters (40 ±0.5 feet) long. Prepare the test sample by removing the jacket, shield, and core wrap for a sufficient distance on both ends to allow the insulated conductors to be flared out. Remove sufficient conductor insulation so that appropriate electrical test connections can be made at both ends. Coil the sample with a diameter of 15 to 20 times its sheath diameter. Two lengths are required.
(b) Length B shall be 300 millimeters (1 foot) long. Three lengths are required.
(c) Length C shall be 3 meters (10 feet) long and shall be maintained at 23 ±3 °C for the duration of the test. Two lengths are required.
(2)
(III)
(b)
(c)
(ii) Record on suggested formats in paragraph (V) of this appendix or on other easily readable formats.
(d)
(ii) At the end of this period. Measure and calculate the parameters given in paragraph (III)(1)(c) of this appendix. Record on suggested formats in paragraph (V) of this appendix or on other easily readable formats.
(e)
(ii) The stability of the electrical parameters after completion of this test shall be within the following prescribed limits:
(A)
(B) The change in average mutual capacitance shall be less than 10 percent over the frequency range of 1 to 150 kilohertz; and
(C)
(2)
(b)
(3)
(b) Immediately after completing the measurements, subject the test samples to 10 cycles of temperature between −40 °C and +60 °C. The test samples shall be held at each temperature extreme for a minimum of 1.5 hours during each cycle of temperature. The air within the temperature cycling chamber shall be circulated throughout the duration of the cycling.
(c) Repeat paragraphs (III)(1)(d)(ii) through (III)(2)(b) of this appendix.
(IV)
(2) Repeat paragraphs (III)(2) through (III)(2)(b) of this appendix.
(3)
(b) The samples shall be capable of withstanding, without damage, a single surge voltage of 20 kilovolts peak between conductors, and 35 kilovolts peak between conductors and the shield as hereinafter described. The surge voltage shall be developed from a capacitor discharge through a forming resistor connected in parallel with the dielectric of the test sample. The surge generator constants shall be such as to produce a surge of 1.5 × 40 microseconds wave shape.
(c) The shape of the generated wave shall be determined at a reduced voltage by connecting an oscilloscope across the forming resistor with the cable sample connected in parallel with the forming resistor. The capacitor bank is charged to the test voltage and then discharged through the forming resistor and test sample. The test sample shall be considered to have passed the test if there is no distinct change in the wave shape obtained with the initial reduced voltage compared to that obtained after the application of the test voltage.
(V) The following suggested formats may be used in submitting the test results to RUS:
(I) This test procedure described in this appendix is for qualification of initial and subsequent changes in sheath slitting cords.
(II)
(III)
(2) The prepared test specimens shall be maintained at a temperature of 23 ±1 °C for at least 4 hours immediately prior to and during the test.
(3) Wrap the sheath slitting cord around the plier jaws to ensure a good grip.
(4) Grasp and hold the cable in a convenient position while gently and firmly pulling the sheath slitting cord longitudinally in the direction away from the cable end. The angle of pull may vary to any convenient and functional degree. A small starting notch is permissible.
(5) The sheath slitting cord is considered acceptable if the cord can slit the jacket and/or shield for a continuous length of 0.6 m (2 ft) without breaking the cord.
(a)
(i) The conductors are solid copper, individually insulated with an extruded cellular insulating compound which may be either totally expanded or expanded with a solid skin coating.
(ii) The insulated conductors are twisted into pairs which are then stranded or oscillated to form a cylindrical core.
(iii) For high frequency applications, the cable core may be separated into compartments with screening shields.
(iv) A moisture resistant filling compound is applied to the stranded conductors completely covering the insulated conductors and filling the interstices between pairs and units.
(v) The cable structure is completed by the application of suitable core wrapping material, a flooding compound, a shield or a shield/armor, and an overall plastic jacket.
(2) The number of pairs and gauge size of conductors which are used within the RUS program are provided in the following table:
(3) Screened cable, when specified, must meet all requirements of this section. The pair sizes of screened cables used within the RUS program are referenced in paragraph (e)(2)(i) of this section.
(4) All cables sold to RUS borrowers for projects involving RUS loan funds under this section must be accepted by RUS Technical Standards Committee “A” (Telephone). For cables manufactured to the specification of this section, all design changes to an accepted design must be submitted for acceptance. RUS will be the sole authority on what constitutes a design change.
(5) Materials, manufacturing techniques, or cable designs not specifically addressed by this section may be allowed if accepted by RUS. Justification for acceptance of modified materials, manufacturing techniques, or cable designs must be provided to substantiate product utility and long-term stability and endurance.
(6) The American National Standard Institute/Insulated Cable Engineers Association, Inc. (ANSI/ICEA) S-84-608-1988, Standard For Telecommunications Cable, Filled, Polyolefin Insulated, Copper Conductor Technical Requirements referenced throughout this section is incorporated by reference by
(7) American Society for Testing and Materials specifications (ASTM) A 505-87, Standard Specification for Steel, Sheet and Strip, Alloy, Hot-Rolled and Cold-Rolled, General Requirements For; ASTM B 193-87, Standard Test Method for Resistivity of Electrical Conductor Materials; ASTM B 224-80, Standard Classification of Coppers; ASTM B 694-86, Standard Specification for Copper, Copper Alloy, and Copper-Clad Stainless Steel Sheet and Strip for Electrical Cable Shielding; ASTM D 4565-90a, Standard Test Methods for Physical and Environmental Performance Properties of Insulations and Jackets for Telecommunications Wire and Cable; and ASTM D 4566-90, Standard Test Methods for Electrical Performance Properties of Insulations and Jackets for Telecommunications Wire and Cable referenced in this section are incorporated by reference by RUS. These incorporations by references were approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of the ASTM standards are available for inspection during normal business hours at RUS, room 2845, U.S. Department of Agriculture, Washington, DC 20250, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(b)
(2) Each conductor must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 2.1.
(3) Factory joints made in conductors during the manufacturing process must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 2.2.
(4) The raw materials used for conductor insulation must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 3.1 through 3.1.3.
(5) The finished conductor insulation must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 3.2.2, 3.2.3, and 3.3.
(6) Insulated conductor must not have an overall diameter greater than 2 millimeters (mm) (0.081 inch (in.)).
(7) A permissible overall performance level of faults in conductor insulation must average not greater than one fault per 12,000 conductor meters (40,000 conductor feet) for each gauge of conductor.
(i) All insulated conductors must be continuously tested for insulation faults during the twinning operation with a method of testing acceptable to RUS. The length count and number of faults must be recorded. The information must be retained for a period of 6 months and be available for review by RUS when requested.
(ii) The voltages for determining compliance with the requirements of this section are as follows:
(8) Repairs to the conductor insulation during manufacture are permissible. The method of repair must be accepted by RUS prior to its use. The repaired insulation must be capable of meeting the relevant electrical requirements of this section.
(9) All repaired sections of insulation must be retested in the same manner as originally tested for compliance with paragraph (b)(7) of this section.
(10) The colored insulating material removed from or tested on the conductor, from a finished cable, must meet the performance requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 3.4.1 through 3.4.6.
(c)
(i) The tip and ring conductor of each pair; and
(ii) Each pair in the completed cable.
(2) The colors to be used in the pairs in the 25 pair group, together with the pair numbers must be in accordance with the table specified in ANSI/ICEA S-84-608-1988, paragraph 3.5.
(3) Positive identification of the tip and ring conductors of each pair by marking each conductor of a pair with the color of its mate is permissible. The method of marking must be accepted by RUS prior to its use.
(4) Other methods of providing positive identification of the tip and ring conductors of each pair may be employed if accepted by RUS prior to its use.
(5) The insulated conductors must be twisted into pairs.
(6) In order to provide sufficiently high crosstalk isolation, the pair twists must be designed to enable the cable to meet the capacitance unbalance and crosstalk loss requirements of paragraphs (k)(5), (k)(6), and (k)(8) this section.
(7) The average length of pair twists in any pair in the finished cable, when measured on any 3 meter (10 foot) length, must not exceed the requirement specified in ANSI/ICEA S-84-608-1988, paragraph 3.5.
(d)
(2) When desired for lay-up reasons, the basic group may be divided into two or more subgroups called units.
(3) Each group, or unit in a particular group, must be enclosed in bindings of the colors indicated for its particular pair count. The pair count, indicated by the colors of insulation, must be consecutive as indicated in paragraph (d)(6) of this section through units in a group.
(4) The filling compound must be applied to the cable core in such a way as to provide as near a completely filled core as is commercially practical.
(5) Threads and tapes used as binders must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 4.2 and 4.2.1.
(6) The colors of the bindings and their significance with respect to pair count must be as follows:
(7) The use of the white unit binder in cables of 100 pairs or less is optional.
(8) When desired for manufacturing reasons, two or more 25 pair groups may be bound together with nonhygroscopic and nonwicking threads or tapes into a super-unit. Threads or tapes must meet the requirements specified in paragraph (d)(5) of this section. The group binders and the super-unit binders must be color coded such that the combination of the two binders must positively identify each 25 pair group from every other 25 pair group in the cable. Super-unit binders must be of the color shown in the following table:
(9) Color binders must not be missing for more than 90 meters (300 feet) from any 25 pair group or from any subgroup used as part of a super-unit. At any cable cross-section, no adjacent 25 pair groups and no more than one subgroup of any super-unit may have missing binders. In no case must the total number of missing binders exceed three. Missing super-unit binders must not be permitted for any distance.
(10) Any reel of cable which contains missing binders must be labeled indicating the colors and location of the binders involved. The labeling must be applied to the reel and also to the cable.
(e)
(2) At the option of the user or manufacturer, identified service pairs providing for voice order and fault location may be placed in screened cables.
(i) The number of service pairs provided must be one per twenty-five operating pairs plus two for a cable size up to and including 400 pairs, subject to a minimum of four service pairs. The pair counts for screened cables are as follows:
(ii) The service pairs must be equally divided among the compartments. The color sequence must be repeated in each compartment.
(iii) The electrical and physical characteristics of each service pair must meet all the requirements set forth in this section.
(iv) The colors used for the service pairs must be in accordance with the requirements of paragraph (b)(5) of this section. The color code used for the service pairs together with the service pair number are shown in the following table:
(3) The screen tape must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 5.1 through 5.4.
(4) The screen tape must be tested for dielectric strength by completely removing the protective coating from one end to be used for grounding purposes.
(i) Using an electrode, over a 30 centimeter (1 foot) length, apply a direct current (dc) voltage at the rate of rise of 500 volts/second until failure.
(ii) No breakdown should occur below 8 kilovolts.
(f)
(2) The filling compound must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 4.4 through 4.4.4.
(3) The individual cable manufacturer must satisfy RUS that the filling compound selected for use is suitable for its intended application. The filling compound must be applied to the cable
(g)
(2) If required for manufacturing reasons, white or colored binders of nonhygroscopic and nonwicking material may be applied over the core and/or wrap. When used, binders must meet the requirements specified in paragraph (d)(5) of this section.
(3) Sufficient filling compound must have been applied to the core wrap so that voids or air spaces existing between the core and the inner side of the core wrap are minimized.
(h)
(2) The flooding compound must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 4.5 and the jacket slip test requirements of appendix A, paragraph (III)(5) of this section.
(3) The individual cable manufacturer must satisfy RUS that the flooding compound selected for use is acceptable for the application.
(i)
(2) For unarmored cable the shield overlap must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.2. Core diameter is defined as the diameter under the core wrap and binding.
(3) For cables containing the coated aluminum shield/coated steel armor (CACSP) sheath design, the coated aluminum shield must be applied in accordance with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.2, Dual Tape Shielding System.
(4) General requirements for application of the shielding material are as follows:
(i) Successive lengths of shielding tapes may be joined during the manufacturing process by means of cold weld, electric weld, soldering with a nonacid flux or other acceptable means.
(ii) Shield splices must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.3.
(iii) The corrugations and the application process of the coated aluminum and copper bearing shields must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.1.
(iv) The shielding material must be applied in such a manner as to enable the cable to pass the cold bend test specified in paragraph (l)(3) of this section.
(5) The following is a list of acceptable materials for use as cable shielding. Other types of shielding materials may also be used provided they are accepted by RUS prior to their use.
(i) The 8-mil aluminum tape must be plastic coated on both sides and must comply with the requirements of ANSI/ICEA S-84-608-1988, paragraph 6.2.2.
(ii) The 5-mil copper tape must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.2.3.
(iii) The 10-mil copper tape must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.2.4.
(iv) The 6-mil copper clad stainless steel tape must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.2.5.
(v) The 5-mil copper clad stainless steel tape must be in the fully annealed condition and must conform to the requirements of American Society for Testing and Materials (ASTM) B 694-86, with a cladding ratio of 16/68/16.
(A) The electrical conductivity of the clad tape must be a minimum of 28 percent of the International Annealed Copper Standard (IACS) when measured per ASTM B 193-87.
(B) The tape must be nominally 0.13 millimeter (0.005 inch) thick with a minimum thickness of 0.11 millimeter (0.0045 inch).
(vi) The 5-mil copper clad alloy steel tape must be in the fully annealed condition and the copper component must conform to the requirements of ASTM B 224-80 and the alloy steel component must conform to the requirements of ASTM A 505-87, with a cladding ratio of 16/68/16.
(A) The electrical conductivity of the copper clad alloy steel tape must comply with the requirement specified in (5)(v)(A) of this section.
(B) The thickness of the copper clad alloy steel tape must comply with the requirements specified in (5)(v)(B) of this section.
(vii) The 6-mil and 7-mil 194 copper alloy tapes must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.2.6.
(6) The corrugation extensibility of the coated aluminum shield must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.4.
(7) When the jacket is bonded to the plastic coated aluminum shield, the bond between the jacket and shield must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 7.2.6.
(8) A single plastic coated steel corrugated armor must be applied longitudinally directly over the coated aluminum shield listed in paragraph (i)(5) of this section with an overlap complying with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.2, Outer Steel Tape.
(9) Successive lengths of steel armoring tapes may be joined during the manufacturing process by means of cold weld, electric weld, soldering with a nonacid flux or other acceptable means. Armor splices must comply with the breaking strength and resistance requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.3.
(10) The corrugations and the application process of the coated steel armor must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.3.1.
(i) The corrugations of the armor tape must coincide with the corrugations of the coated aluminum shield.
(ii) Overlapped portions of the armor tape must be in register (corrugations must coincide at overlap) and in contact at the outer edge.
(11) The armoring material must be so applied to enable the cable to pass the cold bend test specified in paragraph (l)(3) of this section.
(12) The 6-mil steel tape must be electrolytic chrome coated steel (ECCS) plastic coated on both sides and must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 6.2.8.
(13) When the jacket is bonded to the plastic coated steel armor, the bond between the jacket and armor must comply with the requirement specified in ANSI/ICEA-S-84-608-1988, paragraph 7.2.6.
(j)
(2) The raw materials used for the cable jacket must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 7.2.1.
(3) Jacketing material removed from or tested on the cable must meet the performance requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 7.2.3 and 7.2.4.
(4) The thickness of the jacket must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 7.2.2.
(k)
(2)
(ii) The resistance unbalance between tip and ring conductors shall be random with respect to the direction of unbalance. That is, the resistance of the tip conductors shall not be consistently higher with respect to the ring conductors and vice versa.
(3)
(4)
(ii) When measuring screened cable, the inner and outer pairs must be selected from both sides of the screen.
(5)
(ii)
(A) Between pairs adjacent in a layer in an individual compartment;
(B) Between pairs in centers of 4 pairs or less in an individual compartment; and
(C) Between pairs in adjacent layers in an individual compartment when the number of pairs in the inner (smaller) layer is 6 or less. The center is counted as a layer.
(iii) In cables with 25 pairs or less, the root-mean-square (rms) value is to include all the pair-to-pair unbalances measured for each compartment separately.
(iv) In cables containing more than 25 pairs, the rms value must include the pair-to-pair unbalances in the separate compartments.
(6)
(ii) When measuring pair-to-ground capacitance unbalance all pairs except the pair under test are grounded to the shield and/or shield/armor except when measuring cables containing super units in which case all other pairs in the same super unit must be grounded to the shield.
(iii) The screen tape must be left floating during the test.
(iv) Pair-to-ground capacitance unbalance may vary directly with the length of the cable.
(7)
(ii) For T1C type cables over 12 pairs, the maximum average attenuation of all pairs on any reel must not exceed the values listed below when measured at a frequency of 1576 kilohertz at or corrected to a temperature of 20 ±1 °C. The test must be conducted in accordance with ASTM D 4566-90.
(8)
(ii) The near-end power sum crosstalk loss (NEXT) as measured on completed cable must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 8.8, NEXT Table.
(iii)
(B) For T1C screened cable the NEXT as measured on the completed cable must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraphs 8.9 and 8.9.2.
(9)
(10)
(ii) In each length of completed cable, the dielectric between the shield and/or armor and conductors in the core must comply with the requirements specified in ANSI/ICEA S-84-608-1988, paragraph 8.13, Single Jacketed, Foam and/or Foam-Skin Column. In screened cable the screen tape must be left floating.
(iii)
(B) In this test, the cable shield and/or armor must be left floating.
(11)
(ii) The maximum number of pairs in a cable which may vary as specified in paragraph (k)(11)(iii) of this section from the electrical parameters given in this section are listed below. These pairs may be excluded from the arithmetic calculation.
(iii)
(B)
(C)
(l)
(2)
(3)
(4)
(5)
(6)
(m)
(2) When a sheath slitting cord is used it must be nonhygroscopic and nonwicking, continuous throughout a length of cable and of sufficient strength to open the sheath without breaking the cord.
(n)
(2) The markings must be printed on the jacket at regular intervals of not more than 0.6 meter (2 feet).
(3) The completed cable must have sequentially numbered length markers in accordance with ANSI/ICEA S-84-608-1988, paragraph 10.1.5. The color of the ink used for the initial outer jacket marking must be either white or silver.
(o)
(2) The splicing modules must meet the requirements of RUS Bulletin 345-54, PE-52, RUS Specification for Telephone Cable Splicing Connectors (Incorporated by Reference at § 1755.97), and be accepted by RUS prior to their use.
(p)
(2) For initial acceptance, the manufacturer must submit:
(i) An original signature certification that the product fully complies with each section of the specification;
(ii) Qualification Test Data, per appendix A of this section;
(iii) To periodic plant inspections;
(iv) A certification that the product does or does not comply with the domestic origin manufacturing provisions of the “Buy American” requirements of the Rural Electrification Act of 1938 (7 U.S.C. 901
(v) Written user testimonials concerning field performance of the product; and
(vi) Other nonproprietary data deemed necessary by the Chief, Outside Plant Branch (Telephone).
(3) For requalification acceptance, the manufacturer must submit an original signature certification that the product fully complies with each section of the specification, excluding the Qualification Section, and a certification that the product does or does not comply with the domestic origin manufacturing provisions of the “Buy American” requirements of the Rural Electrification Act of 1938 (7 U.S.C. 901
(4) Initial and requalification acceptance requests should be addressed to:
(5)
(ii) The screen tape of each length of screened cable must be tested for continuity in accordance with ANSI/ICEA S-84-608-1988, paragraph 8.16.
(iii) Dielectric strength between conductors and shield and/or armor must be tested to determine freedom from grounds in accordance with paragraph (k)(10)(ii) of this section.
(iv) Dielectric strength between conductors and screen tape must be tested to determine freedom from grounds in accordance with paragraph (k)(10)(iii) of this section.
(v) Each conductor in the completed cable must be tested for continuity in accordance with ANSI/ICEA S-84-608-1988, paragraph 8.16.
(vi) Dielectric strength between conductors, in each length of completed cable, must be tested to insure freedom from shorts and crosses in each length of completed cable in accordance with paragraph (k)(10)(i) of this section.
(vii) Each conductor in the completed preconnectorized cable must be tested for continuity.
(viii) Each length of completed preconnectorized cable must be tested for split pairs.
(ix) The average mutual capacitance must be measured on all cables. If the average mutual capacitance for the first 100 pairs tested from randomly selected groups is between 50 and 53 nanofarads/kilometer (nF/km) (80 and 85 nanofarad/mile), the remainder of the pairs need not be tested on the 100 percent basis (See paragraph (k)(3) of this section).
(6)
(i) Performance requirements for conductor insulation, jacketing material, and filling and flooding compounds;
(ii) Bonding properties of coated or laminated shielding and armoring materials and performance requirements for screen tape;
(iii) Sequential marking and lettering;
(iv) Capacitance difference, capacitance unbalance, crosstalk, and attenuation;
(v) Insulation resistance, conductor resistance, and resistance unbalance;
(vi) Cable cold bend and cable impact tests;
(vii) Water penetration and compound flow tests; and
(viii) Jacket notch and cable torsion tests.
(q)
(2) Measurements and computed values must be rounded off to the number of places or figures specified for the requirement according to ANSI/ICEA S-84-608-1988, paragraph 1.3.
(r)
(2) Minor defects in jackets (defects having a dimension of 3 millimeters (0.125 inch.) or less in any direction) may be repaired by means of heat fusing in accordance with good commercial practices utilizing sheath grade compounds.
(s)
(2) The thermal wrap must comply with the requirements of ANSI/ICEA S-84-608-1988, paragraph 10.3. When a thermal reel wrap is supplied, the wrap must be applied to the reel and must be suitably secured in place to minimize thermal exposure to the cable during storage and shipment. The use of the thermal reel wrap as a means of reel protection will be at the option of the
(3) The outer end of the cable must be securely fastened to the reel head so as to prevent the cable from becoming loose in transit. The inner end of the cable must be securely fastened in such a way as to make it readily available if required for electrical testing. Spikes, staples, or other fastening devices which penetrate the cable jacket must not be used. The method of fastening the cable ends must be acceptable to RUS and accepted prior to its use.
(4) Each length of cable must be wound on a separate reel unless otherwise specified or agreed to by the purchaser.
(5) The arbor hole must admit a spindle 63 millimeters (2.5 inches) in diameter without binding. Steel arbor hole liners may be used but must be accepted by RUS prior to their use.
(6) Each reel must be plainly marked to indicate the direction in which it should be rolled to prevent loosening of the cable on the reel.
(7) Each reel must be stenciled or labeled on either one or both sides with the information specified in ANSI/ICEA S-84-608-1988, paragraph 10.4 and the RUS cable designation:
(8) When cable manufactured to the requirements of this specification is shipped, both ends must be equipped with end caps acceptable to RUS.
(9) When preconnectorized cables are shipped, the splicing modules must be protected to prevent damage during shipment and handling. The protection method must be acceptable to RUS and accepted prior to its use.
(10) All cables ordered for use in underground duct applications must be equipped with a factory-installed pulling-eye on the outer end in accordance with ANSI/ICEA S-84-608-1988, paragraph 10.5.2.
(I) The test procedures described in this appendix are for qualification of initial cable designs and major modifications of accepted designs. Included in (V) of this appendix are suggested formats that may to be used in submitting test results to RUS.
(II)
(a) Length A must be 10 ±0.2 meters (33 ±0.5 feet) long and must be maintained at 23 ±3 °C. One length is required.
(b) Length B must be 12 ±0.2 meters (40 ±0.5 feet) long. Prepare the test sample by removing the jacket, shield or shield/armor, and core wrap for a sufficient distance on both ends to allow the insulated conductors to be flared out. Remove sufficient conductor insulation so that appropriate electrical test connections can be made at both ends. Coil the sample with a diameter of 15 to 20 times its sheath diameter. Three lengths are required.
(c) Length C must be one meter (3 feet) long. Four lengths are required.
(d) Length D must be 300 millimeters (1 foot) long. Four lengths are required.
(e) Length E must be 600 millimeters (2 feet) long. Four lengths are required.
(f) Length F must be 3 meters (10 feet) long and must be maintained at 23 ±3 °C for the duration of the test. Two lengths are required.
(2)
(III)
(b)
(i) Water Immersion Test outlined in (III)(2) of this appendix;
(ii) Water Penetration Test outlined in (III)(3) of this appendix;
(iii) Insulation Compression Test outlined in (III)(4) of this appendix; and
(iv) Jacket Slip Strength Test outlined in (III)(5) of this appendix.
(c)
(ii) The attenuation at 150 and 772 kilohertz may be calculated from open circuit admittance (Yoc) and short circuit impedance (Zsc) or may be obtained by direct measurement of attenuation.
(iii) Record on suggested formats in (V) of this appendix or on other easily readable formats.
(d)
(ii) At the end of this period note any exudation of cable filler. Measure and calculate the parameters given in (III)(1)(c) of this appendix. Record on suggested formats in (V) of this appendix or other easily readable formats.
(iii) Cut away and discard a one meter (3 foot) section from each end of length B.
(e)
(ii) The stability of the electrical parameters after completion of this test must be within the following prescribed limits:
(A)
(B) The change in average mutual capacitance must be less than 5 percent over frequency 1 to 150 kilohertz; and
(C)
(2)
(b)
(c)
(i) Remeasure the mutual capacitance after the cables have been submerged for 24 hours and again after 30 days.
(ii) Record each sample separately on suggested formats attached or on other easily readable formats.
(d)
(ii) The average mutual capacitance must be within 5 percent of its original value.
(3)
(b) Test per Option A or Option B—(i)
(ii)
(4)
(b)
(5)
(b)
(c)
(6)
(b) Immediately after completing the measurements, expose the test sample to 100 temperature cyclings. Relative humidity within the chamber must be maintained at 90 ±2 percent. One cycle consists of beginning at a stabilized chamber and test sample temperature of 52 ±1 °C, increasing the temperature to 57 ±1 °C, allowing the chamber and test samples to stabilize at this level, then dropping the temperature back to 52 ±1 °C.
(c) Repeat steps (III)(1)(d)(ii) through (III)(5)(c) of this appendix.
(7)
(b) Immediately after completing the measurements, subject the test sample to the 10 cycles of temperature between a minimum of −40 °C and +60 °C. The test sample must be held at each temperature extreme for a minimum of 1 1/2 hours during each cycle of temperature. The air within the temperature cycling chamber must be circulated throughout the duration of the cycling.
(c) Repeat steps (III)(1)(d)(ii) through (III)(5)(c) of this appendix.
(IV)
(2) Repeat steps (III)(2) through (III)(5)(c) of this appendix except use length A instead of length B.
(3)
(b) The samples must be capable of withstanding without damage, a single surge voltage of 15 kilovolts peak between conductors, and a 25 kilovolts peak surge voltage between conductors and the shield or shield/armor as hereinafter described. The surge voltage must be developed from a capacitor discharged through a forming resistor connected in parallel with the dielectric of the test sample. The surge generator constants must be such as to produce a surge of 1.5 × 40 microsecond wave shape.
(c) The shape of the generated wave must be determined at a reduced voltage by connecting an oscilloscope across the forming resistor with the cable sample connected in parallel with the forming resistor. The capacitor bank is charged to the test voltage and then discharged through the forming resistor and test sample. The test sample will be considered to have passed the test if there is no distinct change in the wave shape obtained with the initial reduced voltage compared to that obtained after the application of the test voltage.
(V) The following suggested formats may be used in submitting the test results to RUS:
The following abbreviations and definitions apply to §§ 1755.901 and 1755.902:
(b)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(28)
(29)
(30)
(31)
(32)
(a)
(b) The American National Standards Institute/Institute of Electrical and Electronics Engineers, Inc. ANSI/IEEE C2-2007,
(c) The following Insulated Cable Engineers Association standards are available for purchase from the Insulated Cable Engineers, Inc. (ICEA), P.O. Box 1568, Carrollton, GA 30112 or from Global Engineering Documents, 15 Iverness Way East, Englewood, CO 80112, telephone 1-800-854-7179 (USA and Canada) or 303-792-2181 (International), or online at
(1) ICEA S-110-717-2003,
(2) ANSI/ICEA S-87-640-2006,
(d) The following American Society for Testing and Materials (ASTM) standards are available for purchase from ASTM International, 100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959. Telephone (610) 832-9585, Fax (610) 832-9555, by e-mail at
(1) ASTM A 640-97, (Reapproved 2002)
(2) ASTM B 736-00,
(3) ASTM D 4565-99,
(4) ASTM D 4566-98,
(5) ASTM D 4568-99,
(e) The following Telecommunications Industry Association/Electronics Industries Association (TIA/EIA) standards are available from Electronic Industries Association, Engineering Department, 1722 Eye Street, NW., Washington, DC 20006; or from Global Engineering Documents, 15 Iverness Way East, Englewood, CO 80112, telephone 1-800-854-7179 (USA and Canada) or (303) 792-2181 (International), or online at
(1) TIA/EIA Standard 455-3A,
(2) [Reserved]
(f) The following International Telecommunication Union (ITU) recommendations may be obtained from ITU, Place des Nations, 1211 Geneva 20, Switzerland, telephone +41 22 730 6141 or online at
(1) ITU-T Recommendation G.652,
(2) ITU-T Recommendation G.655,
(3) ITU-T Recommendation G.656,
(4) ITU-T Recommendation G.657,
(5) ITU-T Recommendation L.58,
(a)
(1)
(ii) The optical waveguides are glass fibers having directly-applied protective coatings, and are called “fibers,” herein. These fibers may be assembled in either loose fiber bundles with a protective core tube, encased in several protective buffer tubes, in tight buffer tubes, or ribbon bundles with a protective core tube.
(iii) Fillers, strength members, core wraps, and bedding tapes may complete the cable core.
(iv) The core or buffer tubes containing the fibers and the interstices between the buffer tubes, fillers, and strength members in the core structure are filled with a suitable material or water swellable elements to exclude water.
(v) The cable structure is completed by an extruded overall plastic jacket. A shield or armor or combination thereof may be included under the jacket. The jacket may have strength members embedded in it, in some designs.
(vi) Buried installation requires armor under the outer jacket.
(vii) For self-supporting cable, the outer jacket may be extruded over the support messenger and cable core.
(viii) Cables for mid-span applications for network access must be designed for easy mid-span access to the fibers. The manufacturer may use reversing oscillating stranding (SZ) described in section 6.4 of ITU-T Recommendation L.58,
(2) The normal temperature ranges for cables must meet paragraph 1.1.3 of ANSI/ICEA S-87-640,
(3)
(4)
(5)
(6) The cable is fully color coded so that each fiber is distinguishable from every other fiber. A basic color scheme of twelve colors allows individual fiber identification. Colored tubes, binders, threads, strippings, or markings provide fiber group identification.
(7) Cables must demonstrate compliance with the qualification testing requirements of this section to ensure satisfactory end-use performance characteristics for the intended applications.
(8) Optical cable designs not specifically addressed by this section may be allowed if accepted by the Agency. Justification for acceptance of a modified design must be provided to substantiate product utility and long term stability and endurance. For information on how to obtain Agency product acceptance, refer to the procedures listed at
(9) All cables sold to RUS telecommunications borrowers for projects involving RUS loan funds must be accepted by the Agency's Technical Standards Committee “A” (Telecommunications). Any design change to existing acceptable designs must be submitted to the Agency for acceptance. As stated in paragraph 8 above, refer to the procedures listed at
(10) The Agency intends that the optical fibers contained in the cables meeting the requirements of this section have characteristics that will allow signals having a range of wavelengths to be carried simultaneously.
(b)
(2)
(3)
(4)
(5)
(6) Buyers will normally specify the MFD for the fibers in the cable. When a buyer does not specify the MFD at 1310 nm, the fibers must be manufactured to an MFD of 9.2 µm with a maximum tolerance range of ±0.5 µm (362 ± 20 microinch), unless the end user agrees to accept cable with fibers specified to a different MFD. When the end user does specify a MFD and tolerance conflicting with the MFD maximum tolerance allowed by paragraph (d)(5) of this section, the requirements of paragraph (d)(5) must prevail.
(7) Factory splices are not allowed.
(8)
(9) All optical fibers in any single length of cable must be of the same type, unless otherwise specified by end user.
(10) Optical fiber dimensions and data reporting must be as required by paragraph 7.13.1.1 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(c)
(2) The tubes for single mode loose tube cables must be designed to allow a maximum mid-span buffer tube exposure of 6.096 meters (20 feet). The buyer should be aware that certain housing hardware may require cable designed for 6.096 meters of buffer tube storage.
(3) Optical fibers covered in near contact with an extrusion (tight tube) must have an intermediate soft buffer to allow for thermal expansions and minor pressures. The buffer tube dimension must be established by the manufacturer to meet the requirement of this section. Tight buffer tubes must be removable without damage to the fiber when following the manufacturer's recommended procedures. The tight buffered fiber must be strippable per paragraph 7.20 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(4) Both loose tube and tight tube coverings of each color and other fiber package types removed from the finished cable must meet the following shrinkback and cold bend performance requirements. The fibers may be left in the tube.
(i)
(ii)
Channel cores and similar slotted single component core designs do not need to be tested for cold bend.
(d)
(2) For the following items the colors designated for identification within the cable must comply with paragraphs 4.2.2 and 4.3.2 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)): loose buffer tubes, tight tube buffer fibers, individual fibers in multi-fiber tubes, slots, bundles or units of fibers, and the units in cables with more than one unit.
(e)
(2) Ribbon fiber count must be specified by the end user,
(3) Ribbon dimensions must be as agreed by the end user and manufacturer per paragraph 3.4.4.1 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(4) Ribbons must meet each of the following tests. These tests are included in the paragraphs of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)), indicated in parenthesis below.
(i) Ribbon Dimensions (ANSI/ICEA S-87-640 paragraphs 7.14 through 7.14.2)—measures ribbon dimension.
(ii) Ribbon Twist Test (ANSI/ICEA S-87-640 paragraphs 7.15 through 7.15.2)—evaluates the ability of the ribbon to resist splitting or other damage while undergoing dynamic cyclically twisting the ribbon under load.
(iii) Ribbon Residual Twist Test (ANSI/ICEA S-87-640 paragraphs 7.16 through 7.16.2)—evaluates the degree of permanent twist in a cabled optical ribbon.
(iv) Ribbon Separability Test (ANSI/ICEA S-87-640 paragraphs 7.17 through 7.17.2)—evaluates the ability to separate fibers.
(5) Ribbons must meet paragraph 3.4.4.6 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)), Ribbon Strippability.
(f)
(2) The strength members may be metallic or nonmetallic.
(3) The combined strength of all the strength members must be sufficient to support the stress of installation and to protect the cable in service.
(4) Strength members may be incorporated into the core as a central support member or filler, as fillers between the fiber packages, as an annular serving over the core, as an annular serving over the intermediate jacket, embedded in the outer jacket, or as a combination of any of these methods.
(5) The central support member or filler must contain no more than one splice per kilometer of cable. Individual fillers placed between the fiber packages and placed as annular servings over the core must contain no more than one splice per kilometer of cable. Cable sections having central member or filler splices must meet the same physical requirements as un-spliced cable sections.
(6) In each length of completed cable having a metallic central member, the dielectric strength between the shield
(g)
(2) The standard cylindrical group or core designs commonly consist of 4, 6, 12, 18, or 24 fibers. Cylindrical groups or core designs larger than the sizes shown above must meet all the applicable requirements of this section.
(3) When threads or tapes are used in cables using water blocking elements as core binders, they must be a non-hygroscopic and non-wicking dielectric material or be rendered by the gel or water blocking material produced by the ingress of water.
(4) When threads or tapes are used as unit binders to define optical fiber units in loose tube, tight tube, slotted, or bundled cored designs, they must be non-hygroscopic and non-wicking dielectric material or be rendered by the filling compound or water blocking material contained in the binder. The colors of the binders must be per paragraphs (f)(2) and (f)(3) of this section.
(h)
(2) The materials or elements must be homogeneous and uniformly mixed; free from dirt, metallic particles and other foreign matter; easily removed; nontoxic and present no dermal hazards. The filling compound and water blocking elements must contain a suitable antioxidant or be of such composition as to provide long term stability.
(3) The individual cable manufacturer must satisfy the Agency that the filling compound or water blocking elements selected for use is suitable for its intended application by submitting test data showing compliance with ASTM D 4568 (incorporated by reference at § 1755.901(d)). The filling compound and water blocking elements must be compatible with the cable components when tested per ASTM D 4568 at a temperature of 80 °C (176 °F). The jacket must retain a minimum of 85% of its un-aged tensile and elongation values.
(i)
(2) The flooding compound or water blocking elements must be compatible with the jacket when tested per paragraphs 7.19 and 7.19.1 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)). The aged jacket must retain a minimum of 85% of its un-aged tensile strength and elongation values when tested per paragraph 7.19.2.3. The flooding compound must exhibit adhesive properties sufficient to prevent jacket slip when tested per paragraph 7.30.1 of ANSI/ICEA S-87-640 and meets paragraph 7.30.2 of ANSI/ICEA S-87-640 for minimum sheath adherence of 14 N/mm for armored cables.
(3) The individual cable manufacturer must satisfy the Agency by submitting test data showing compliance with the appropriate cable performance testing requirements of this section that the flooding compound or water blocking elements selected for use is acceptable for the application.
(j)
(2) The core wrap(s) can be used to provide a heat barrier to prevent deformation or adhesion between the fiber tubes or can be used to contain the core.
(k)
(2) For armored and unarmored cable, an inner jacket is optional. The inner jacket may absorb stresses in the cable core that may be introduced by armor application or by armored cable installation.
(3) The inner jacket material and test requirements must be the same as the outer jacket material, except that either black or natural polyethylene may be used and the thickness requirements are included in paragraph (m)(4) of this section. In the case of natural polyethylene, the requirements for absorption coefficient and the inclusion of furnace black are waived.
(4) The inner jacket thickness must be determined by the manufacturer, but must be no less than a nominal jacket thickness of 0.5 mm (0.02 inch) with a minimum jacket thickness of 0.35 mm (0.01 inch).
(l)
(2) The jacket must be free from holes, splits, blisters, or other imperfections and must be as smooth and concentric as is consistent with the best commercial practice.
(3) The jacket must contain an antioxidant to provide long term stabilization and must contain a minimum of 2.35 percent concentration of furnace black to provide ultraviolet shielding measures as required by paragraph 5.4.2 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)), except that the concentration of furnace black does not necessarily need to be initially contained in the raw material and may be added later during the jacket making process.
(4) The raw material used for the outer jacket must be one of the types listed below.
(i)
(ii)
(iii)
(iv)
(5) Particle size of the carbon selected for use must not average greater than 20 nm.
(6) The outer jacketing material removed from or tested on the cable must be capable of meeting the performance requirements of Table 5.1 found in ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(7)
(i)
(ii)
(iii)
(iv)
(v)
(8)
(9)
(m)
(2) The uncoated steel tape must be electrolytic chrome coated steel (ECCS) and must meet the requirements of paragraph B.2.4 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(3) The reduction in thickness of the armoring material due to the corrugating or application process must be kept to a minimum and must not exceed 10 percent at any spot.
(4) The armor of each length of cable must be electrically continuous with no more than one joint or splice allowed in any length of one kilometer of cable. This requirement does not apply to a joint or splice made in the raw material by the raw material manufacturer.
(5) The breaking strength of any section of an armor tape, containing a factory splice joint, must not be less than 80 percent of the breaking strength of an adjacent section of the armor of equal length without a joint.
(6) For cables containing no flooding compound over the armor, the overlap portions of the armor tape must be bonded in cables having a flat, non-corrugated armor to meet the mechanical requirements of paragraphs (t)(1) through (t)(16)(ii) of this section. If the tape is corrugated, the overlap portions of the armor must be sufficiently bonded and the corrugations must be sufficiently in register to meet the requirements of paragraphs (t)(1) through (t)(16)(ii) of this section.
(7) The armor tape must be so applied as to enable the cable to pass the Cable Low (−30 °C (−22 °F)) and High (60 °C (140 °F)) Temperatures Bend Test, as required by paragraph (t)(3) of this section.
(8) The protective coating on the steel armor must meet the Bonding-to-Metal, Heat Sealability, Lap-Shear and Moisture Resistance requirements of Type I, Class 2 coated metals per ASTM B 736 (incorporated by reference in § 1755.901(d)).
(9) When the jacket is bonded to the plastic coated armor, the bond between the plastic coated armor and the outer jacket must not be less than 525 Newtons per meter (36 pound-force) over at least 90 percent of the cable circumference when tested per ASTM D 4565 (incorporated by reference at § 1755.901(d)). For cables with strength members embedded in the jacket, and residing directly over the armor, the area of the armor directly under the strength member is excluded from the 90 percent calculation.
(n)
(i) Any section of a completed strand containing a joint must have minimum tensile strength and elongation of 29,500 Newtons (6,632 pound-force) and 3.5 percent, respectively, when tested per the procedures specified in ASTM A 640 (incorporated by reference in § 1755.901(d)).
(ii) The individual wires from a completed strand which contains joints must not fracture when tested per the
(iii) The support strand must be completely covered with a flooding compound that offers corrosion protection. The flooding compound must be homogeneous and uniformly mixed.
(iv) The flooding compound must be nontoxic and present no dermal hazard.
(v) The flooding compound must be free from dirt, metallic particles, and other foreign matter that may interfere with the performance of the cable.
(2) Other methods of providing self-supporting cable specifically not addressed in this section may be allowed if accepted. Justification for acceptance of a modified design must be provided to substantiate product utility and long term stability and endurance. To obtain the Agency's acceptance of a modified design, refer to the product acceptance procedures available at
(3)
(i) The minimum jacket thickness at any point over the support messenger must meet the requirements of paragraph D.3 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(ii) The web dimension for self-supporting aerial cable must meet the requirements of paragraph D.3 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(o)
(2) When a sheath slitting cord is used it must be capable of slitting the jacket or jacket and armor, at least one meter (3.3 feet) length without breaking the cord at a temperature of 23 ± 5 °C (73 ± 9 °F).
(3) The sheath slitting cord must meet the sheath slitting cord test described in paragraph (t)(1) of this section.
(p)
(2) The color of the initial marking must be white or silver. If the initial marking fails to meet the requirements of the preceding paragraphs, it will be permissible to either remove the defective marking and re-mark with the white or silver color or leave the defective marking on the cable and re-mark with yellow. No further re-marking is permitted. Any re-marking must be done on a different portion of the cable's circumference where the existing marking is found and have a numbering sequence differing from any other marking by at least 3,000. Any reel of cable that contains more than one set of sequential markings must be labeled to indicate the color and sequence of marking to be used. The labeling must be applied to the reel and also to the cable.
(3) Each length of cable must be permanently labeled OPTICAL CABLE, OC, OPTICAL FIBER CABLE, or OF on the outer jacket and identified as to manufacturer and year of manufacture.
(4) Each length of cable intended for direct burial installation must be marked with a telephone handset in compliance with requirements of the Rule 350G of the ANSI/IEEE C2-2007 (incorporated by reference at § 1755.901(b)).
(5) Each length of cable must be identified as to the manufacturer and year of manufacturing. The manufacturer and year of manufacturing may also be indicated by other means as indicated in paragraphs 6.1.2 through 6.1.4 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(6) The number of fibers on the jacket must be marked on the jacket.
(7) The completed cable must have sequentially numbered length markers in METERS or FEET at regular intervals of not more than 2 feet or not more than 1 meter along the outside of the jacket. Continuous sequential numbering must be employed in a single length of cable. The numbers must be
(8) Agreement between the actual length of the cable and the length marking on the cable jacket must be within the limits of +1 percent and −0 percent.
(9)
(q)
(i) The attenuation methods must be per Table 8.4,
(ii) The cable must have a maximum attenuation of 0.1 dB at a point of discontinuity (a localized deviation of the optical fiber loss). Per paragraphs 8.4 and 8.4.1 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)), measurements must be conducted at 1310 and 1550 nm, and at 1625 nm when specified by the end user.
(iii) The cable cutoff wavelength (γ
(2)
(i) The attenuation methods must be per Table 8.4,
(ii) The cable must have a maximum attenuation of 0.1 dB at a point of discontinuity (a localized deviation of the optical fiber loss). Per paragraphs 8.4 and 8.4.1 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)), measurements must be conducted at 1310 and 1550 nm, and at 1625 nm when specified by the end user.
(iii) The cable cutoff wavelength (γ
(3)
(4) Because the accuracy of attenuation measurements for single mode fibers becomes questionable when measured on short cable lengths, attenuation measurements are to be made utilizing characterization cable lengths. Master Cable reels must be tested and the attenuation values measured will be used for shorter ship lengths of cable.
(5) Because the accuracy of attenuation measurements for multimode fibers becomes questionable when measured on short cable lengths, attenuation measurements are to be made utilizing characterization cable lengths. If the ship length of cable is less than one kilometer, the attenuation values measured on longer
(6) Attenuation must be measured per Table 8.4
(7) The bandwidth of multimode fibers in a finished cable must be no less than the values specified in ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)), Table 8.2 per paragraphs 8.3.1 and 8.3.2.
(r)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(i) The specimen must be installed in a commercially available pedestal or closure or in a device that mimics their performance, as follows: A length of cable sheath, equal to the mid-span length, must be removed from the middle of the test specimen so as to allow access to the buffer tubes. All binders, tapes, strength members, etc. must be removed. The buffer tubes must be left intact. The cable ends defining the ends of the mid-span length must be properly secured in the closure to the more stringent of the cable or hardware manufacturer's recommendations. Strength members must be secured with an end stop type clamp and the outer jacket must be clamped to prevent slippage. A minimum of 6.096 meters (20 feet) of cable must extend from the entry and exit ports of the closure for the purpose of making optical measurements. If a device that mimics the performance of pedestals or closures is used, the buffer tubes must be wound in a coil with a minimum width of 3 inches and minimum length of 12 inches.
(ii) The expressed buffer tubes must be loosely constrained during the test.
(iii) The enclosure, with installed cable, must be placed in an environmental chamber for temperature cycling. It is acceptable for some or all of the two 20 feet (6.096 meters) cable segments to extend outside the environmental chamber.
(iv) Lids, pedestal enclosures, or closure covers must be removed if possible to allow for temperature equilibrium of the buffer tubes. If this is not possible, the manufacturer must demonstrate that the buffer tubes are at temperature equilibrium prior to beginning the soak time.
(v) Measure the attenuation of single mode fibers at 1550 ± 10 nm. The supplier must certify the performance of lower specified wavelengths comply with the mid-span performance requirements.
(vi) After measuring the attenuation of the optical fibers, test the cable sample per TIA/EIA Standard 455-3A (incorporated by reference at § 1755.901(e)). Temperature cycling, measurements, and data reporting must conform to TIA/EIA Standard 455-3A. The test must be conducted for at least five complete cycles. The following detailed test conditions must apply:
(A) TIA/EIA Standard 455-3A (incorporated by reference at § 1755.901(e)), Section 4.1—Loose tube single mode optical cable sample must be tested.
(B) TIA/EIA Standard 455-3A (incorporated by reference at § 1755.901(e)), Section 4.2—An Agency accepted 8 to 12 inch diameter optical buried distribution pedestal or a device that mimics their performance must be tested.
(C) Mid-span opening for installation of loose tube single mode optical cable in pedestal must be 6.096 meters (20 feet).
(D) TIA/EIA Standard 455-3A (incorporated by reference at § 1755.901(e)), Section 5.1—3 hours soak time.
(E) TIA/EIA Standard 455-3A (incorporated by reference at § 1755.901(e)), Section 5.2—Test Condition C-2, minimum −40 °C (−40 °F) and maximum 70 °Celsius (158 °F).
(F) TIA/EIA Standard 455-3A (incorporated by reference at § 1755.901(e)), Section 5.7.2—A statistically representative amount of transmitting fibers in all express buffer tubes passing through the pedestal and stored must be measured.
(G) The buffer tubes in the closure or pedestal must not be handled or moved during temperature cycling or attenuation measurements.
(vii) Fiber cable attenuation measured through the express buffer tubes during the last cycle at −40 °C (−40 °F) and +70 °C (158 °F) must not exceed a maximum increase of 0.1 dB and must not exceed a 0.05 dB average across all tested fibers from the initial baseline measurements. At the conclusion of the temperature cycling, the maximum attenuation increase at 23 °C from the initial baseline measurement must not exceed 0.05 dB which allows for measurement noise that may be encountered during the test. The cable must also be inspected at room temperature at the conclusion of all measurements; the cable must not show visible evidence of fracture of the buffer tubes nor show any degradation of all exposed cable assemblies.
(16)
(i)
(ii)
(s)
(2) All connectors must be accepted by the Agency prior to their use. To obtain the Agency's acceptance of connectors, refer to product acceptance procedures available at
(t)
(2)
(i) An original signature certification that the product fully complies with each paragraph of this section;
(ii) Qualification Test Data, per the Appendix to this section;
(iii) A set of instructions for handling the cable;
(iv) OSHA Material Safety Data Sheets for all components;
(v) Agree to periodic plant inspections;
(vi) A certification stating whether the cable, as sold to RUS Telecommunications borrowers, complies with the following two provisions:
(A) Final assembly or manufacture of the product, as the product would be used by an RUS Telecommunications borrower, is completed in the United States or eligible countries (currently, Mexico, Canada and Israel); and
(B) The cost of United States and eligible countries' components (in any combination) within the product is more than 50 percent of the total cost of all components utilized in the product. The cost of non-domestic components (components not manufactured within the United States or eligible countries) which are included in the finished product must include all duties, taxes, and delivery charges to the point of assembly or manufacture;
(vii) Written user testimonials concerning performance of the product; and
(viii) Other nonproprietary data deemed necessary.
(3)
(4)
(5)
(ii) Attenuation for each optical fiber in the cable must be measured.
(iii) Optical discontinuities greater than 0.1 dB must be isolated and their location and amplitude recorded.
(6)
(i) Numerical aperture and bandwidth of multimode fibers;
(ii) Cut off wavelength of single mode fibers;
(iii) Dispersion of single mode fibers;
(iv) Shrinkback and cold testing of loose tube and tight tube buffers, and mid-span testing of cables of a loose tube design with tube storage;
(v) Adhesion properties of the protective fiber coating;
(vi) Dielectric strength between the armor and the metallic central member;
(vii) Performance requirements for the fibers.
(viii) Performance requirements for the inner and outer jacketing materials;
(ix) Performance requirements for the filling and flooding compounds;
(x) Bonding properties of the coated armoring material;
(xi) Sequential marking and lettering; and
(xii) Mechanical tests described in paragraphs (t)(1) through (t)(16)(ii) of this section.
(u)
(2) Measurements and computed values must be rounded off to the number of places or figures specified for the requirement per paragraph 1.3 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(v)
(2) Minor defects in the inner and outer jacket (defects having a dimension of 3 millimeter or less in any direction) may be repaired by means of heat fusing per good commercial practices utilizing sheath grade compounds.
(w)
(2) A circumferential thermal wrap or other means of protection must be secured between the outer edges of the reel flange to protect the cable against damage during storage and shipment. The thermal wrap must meet the requirements included in the
(i)
(ii)
(B) Tape thermocouples to the jackets of each sample to measure the jacket temperature.
(C) Cover one sample with the thermal reel wrap.
(D) Expose the samples to a radiant heat source capable of heating the uncovered sample to a minimum of 71 °C (160 °F). A GE 600 watt photoflood lamp or an equivalent lamp having the light spectrum approximately that of the sun must be used.
(E) The height of the lamp above the jacket must be 380 millimeters (15 inches) or an equivalent height that produces the 71 °C (160 °F) jacket temperature on the unwrapped sample must be used.
(F) After the samples have stabilized at the temperature, the jacket temperatures of the samples must be recorded after one hour of exposure to the heat source.
(G) Compute the temperature difference between jackets.
(H) The temperature difference between the jacket with the thermal reel wrap and the jacket without the reel wrap must be greater than or equal to 17 °C (63 °F).
(3) Cables must be sealed at the ends to prevent entrance of moisture.
(4) The end-of-pull (outer end) of the cable must be securely fastened to prevent the cable from coming loose during transit. The start-of-pull (inner end) of the cable must project through a slot in the flange of the reel, around an inner riser, or into a recess on the flange near the drum and fastened in such a way to prevent the cable from becoming loose during installation.
(5) Spikes, staples or other fastening devices must be used in a manner which will not result in penetration of the cable.
(6) The arbor hole must admit a spindle 63.5 millimeters (2.5 inches) in diameter without binding.
(7) Each reel must be plainly marked to indicate the direction in which it should be rolled to prevent loosening of the cable on the reel.
(8) Each reel must be stenciled or lettered with the name of the manufacturer.
(9) The following information must be either stenciled on the reel or on a tag firmly attached to the reel: Optical Cable, Type and Number of Fibers, Armored or Non-armored, Year of Manufacture, Name of Cable Manufacturer, Length of Cable, Reel Number, 7 CFR 1755.902, Minimum Bending Diameter for both Residual and Loaded Condition during installation.
(a)
(1)
(ii) The optical waveguides are glass fibers having directly-applied protective coatings, and are called “fibers,” herein. These fibers may be assembled in either loose fiber bundles with a protective core tube, encased in several protective buffer tubes, in tight buffer tubes, or ribbon bundles with a protective core tube.
(iii) Fillers, strength members, core wraps, and bedding tapes may complete the cable core.
(iv) The core or buffer tubes containing the fibers and the interstices between the buffer tubes, fillers, and strength members in the core structure are filled with a suitable material or water swellable elements to exclude water.
(v) The cable structure is completed by an extruded overall plastic jacket. A shield or armor or combination thereof may be included under the jacket. This jacket may have strength members embedded in it, in some designs.
(vi) For rodent resistance or for additional protection with direct buried installations, it is recommended the use of armor under the outer jacket.
(vii) For self-supporting cable the outer jacket may be extruded over the support messenger and cable core.
(viii) For detection purposes, the cable may have toning elements embedded or extruded with the outer jacket.
(2) The cable is fully color coded so that each fiber is distinguishable from every other fiber. A basic color scheme of twelve colors allows individual fiber identification. Colored tubes, binders, threads, striping, or markings provide fiber group identification.
(3) Cables manufactured to the requirements of this section must demonstrate compliance with the qualification testing requirements to ensure satisfactory end-use performance characteristics for the intended applications.
(4) Optical cable designs not specifically addressed by this section may be allowed. Justification for acceptance of a modified design must be provided to substantiate product utility and long term stability and endurance. For information on how to obtain Agency's acceptance of such a modified design, refer to the product acceptance procedures available at
(5) The cable must be designed for the temperatures ranges of Table 1-1,
(6)
(7)
(8)
(9) All cables sold to RUS Telecommunications borrowers must be accepted by the Agency's Technical Standards Committee “A” for projects involving RUS loan funds. All design changes to Agency acceptable designs must be submitted to the Agency for acceptance. Optical cable designs not specifically addressed by this section may be allowed, if accepted by the Agency. Justification for acceptance of a modified design must be provided to substantiate product utility and long term stability and endurance. For information on how to obtain the Agency's acceptance of cables, refer to the product acceptance procedures available at
(10) The Agency intends that the optical fibers contained in the cables meeting the requirement of this section have characteristics that will allow signals, having a range of wavelengths, to be carried simultaneously.
(11) The manufacturer is responsible to establish a quality assurance system meeting industry standards described in paragraph 1.8 of ICEA S-110-717 (incorporated by reference at § 1755.901(c)).
(12) The cable made must meet paragraph 1.10 of ICEA S-110-717 (incorporated by reference at § 1755.901(c)).
(b)
(2) Optical fibers must meet the fiber attributes of Table 2,
(i) Additionally, optical ribbon fibers must meet paragraph 3.3,
(ii) [Reserved]
(3)
(4)
(5) Buyers will normally specify the MFD for the fibers in the cable. When a buyer does not specify the MFD at 1310 nm, the fibers must be manufactured to an MFD of 9.2 µm with a maximum tolerance range of ±0.5 µm (362 ± 20 microinch), unless the buyer agrees to accept cable with fibers specified to a different MFD. When the buyer does specify a MFD and tolerance conflicting with the MFD maximum tolerance allowed by paragraph (d)(4) of this section, the requirements of paragraph (d)(4) must prevail.
(6) Factory splices are not allowed.
(7) All optical fibers in any single length of cable must be of the same type unless otherwise specified by end user.
(8) Optical fiber dimensions and data reporting must be as required by paragraph 7.13.1.1 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(c)
(2) The loose tube coverings of each color and other fiber package types removed from the finished cable must meet the following shrinkback and cold bend performance requirements. The fibers may be left in the tube.
(i)
(ii)
(3) Optical fiber coating must meet the requirements of paragraph 2.4,
(i) All protective coverings in any single length of cable must be continuous and be of the same material except at splice locations.
(ii) The protective coverings must be free from holes, splits, blisters, and other imperfections and must be as smooth and concentric as is consistent with the best commercial practice.
(iii) Repairs to the fiber coatings are not allowed.
(d)
(e)
(2) Strength members may be incorporated into the core as a central support member or filler, as fillers between the fiber packages, as an annular serving over the core, as an annular serving over the intermediate jacket, embedded in the outer jacket or as a combination of any of these methods.
(3) The central support member or filler must contain no more than one splice per kilometer of cable. Individual fillers placed between the fiber packages and placed as annular servings over the core must contain no more than one splice per kilometer of cable. Cable sections having central member or filler splices must meet the same physical requirements as un-spliced cable sections.
(4) Notwithstanding what has been indicated in other parts of this document, in each length of completed cable having a metallic central member, the dielectric strength between the optional armor and the metallic center member must withstand at least 15 kilovolts direct current for 3 seconds.
(f)
(2) The standard cylindrical group or core designs must consist of 12 fibers or less.
(3) When threads or tapes are used as core binders, they must be colored either white or natural and must be a non-hygroscopic and non-wicking dielectric material. Water swell-able threads and tapes are permitted.
(g)
(i) Filling compounds must be applied into the interior of the loose fiber tubes and into the interstices of the core. When a core wrap is used, the filling compound must also be applied to the core wrap, over the core wrap and between the core wrap and inner jacket when required.
(ii) Flooding compounds must be sufficiently applied between the optional inner jacket and armor and between the armor and outer jacket so that voids and air spaces in these areas are minimized. The use of floodant between the armor and outer jacket is not required when uniform bonding, per paragraph l(9) of this section, is achieved between the plastic-clad armor and the outer jacket. Floodant must exhibit adhesive properties sufficient to prevent jacket slip when tested per the requirements of paragraphs 7.26 through 7.26.2 of Part 7,
(iii) Water blocking elements must achieve equal or better performance in preventing the ingress and migration of water as compared to filling and flooding compounds. In lieu of a flooding compound, water blocking elements may be applied between the optional inner jacket and armor and between the armor and outer jacket to prevent water migration. The use of the water blocking elements between the armor and outer jacket is not required when uniform bonding, per paragraph (l)(10) of this section, is achieved between the plastic-clad armor and the outer jacket.
(2) The materials must be homogeneous and uniformly mixed; free
(3) The individual cable manufacturer must satisfy the Agency that the filling compound or water blocking elements selected for use is suitable for its intended application.
(i) Filling/Flooding compound materials must be compatible with the cable components when tested per paragraph 7.16,
(ii) Water blocking elements must be compatible with the cable components when tested per paragraph 7.16,
(h)
(2) The core wrap(s) can be used to provide a heat barrier to prevent deformation or adhesion between the fiber tubes or can be used to contain the core.
(3) When core wraps are used, sufficient filling compound must be applied to the core wraps so that voids or air spaces existing between the core wraps and between the core and the inner side of the core wrap are minimized.
(i)
(2) The inner jacket material and test requirements must be the same as for the outer jacket material per paragraph (n) of this section, except that either black or natural polyethylene may be used. In the case of natural polyethylene, the requirements for absorption coefficient and the inclusion of furnace black are waived.
(j)
(2) The uncoated steel tape must be electrolytic chrome coated steel (ECCS) with a thickness of 0.155 ± 0.015 millimeters.
(3) The reduction in thickness of the armoring material due to the corrugating or application process must be kept to a minimum and must not exceed 10 percent at any spot.
(4) The armor of each length of cable must be electrically continuous with no more than one joint or splice allowed per kilometer of cable. This requirement does not apply to a joint or splice made in the raw material by the raw material manufacturer.
(5) The breaking strength of any section of an armor tape, containing a factory splice joint, must not be less than 80 percent of the breaking strength of an adjacent section of the armor of equal length without a joint.
(6) For cables containing no floodant over the armor, the overlap portions of the armor tape must be bonded in cables having a flat, non-corrugated armor to meet the requirements of paragraphs (r)(1) and (r)(2) of this section. If the tape is corrugated, the overlap portions of the armor must be sufficiently bonded and the corrugations must be sufficiently in register to meet the requirements of paragraphs (r)(1) and (r)(2) of this section.
(7) The armor tape must be so applied as to enable the cable to meet the testing requirements of paragraphs (r)(1) and (r)(2) of this section.
(8) The protective coating on the steel armor must meet the Bonding-to-Metal, Heat Sealability, Lap-Shear and Moisture Resistance requirements of Type I, Class 2 coated metals per ASTM B 736 (incorporated by reference at § 1755.901(d)).
(9) When the jacket is bonded to the plastic coated armor, the bond between the plastic coated armor and the outer jacket must not be less than 525 Newtons per meter over at least 90 percent of the cable circumference when tested per ASTM D 4565 (incorporated by reference at § 1755.901(d)). For cables with strength members embedded in the jacket, and residing directly over the armor, the area of the armor directly
(k)
(2) Based on the storm loading districts referenced in Section 25, Loading of Grades B and C, of ANSI/IEEE C2-2007 (incorporated by reference at § 1755.901(b)), and the maximum span and location of cable installation provided by the end user, the manufacturer must provide a cable design with sag and tension tables showing the maximum span and sag information for that particular installation. The information included must be for Rule B,
(l)
(2) The jacket must be free from holes, splits, blisters, or other imperfections, and must be as smooth and concentric as is consistent with the best commercial practice.
(3) Jacket materials must meet the stipulations of paragraph 5.4 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)), except that the concentration of furnace black does not necessarily need to be initially contained in the raw material and may be added later during the jacket making process. Jacket thickness must have a 0.50 mm minimum thickness over the core or over any radial strength member used as the primary strength element(s), 0.20 mm when not used as the primary strength member, and 0.30 mm over any optional toning elements.
(4) Jacket Repairs must meet the stipulations of paragraph 5.5,
(5)
(m)
(2) When a sheath slitting cord is used it must be non-hygroscopic and non-wicking, or be rendered such by the filling or flooding compound, continuous throughout a length of cable and of sufficient strength to open the sheath over at least a one meter length without breaking the cord at a temperature of 23 ± 5 °C.
(n)
(2) Each length of cable intended for direct burial installation must be marked with a telephone handset in compliance with the requirements of the Rule 350G of ANSI/IEEE C2-2007 (incorporated by reference at § 1755.901(b)).
(3) Mark the number of fibers on the jacket.
(4) The identification and date marking must conform to paragraph 6.1, Identification and Date Marking, of ICEA S-110-717 (incorporated by reference at § 1755.901(c)).
(5) The length marking must conform to paragraph 6.3, Length Marking, of ICEA S-110-717 (incorporated by reference at § 1755.901(c)).
(o)
(i) The attenuation methods must be per Table 8.4,
(ii) The cable must have a maximum attenuation of 0.1 dB at a point of discontinuity (a localized deviation of the optical fiber loss). Per paragraphs 8.4 and 8.4.1 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)), measurements must be conducted at 1310 and 1550 nm, and at 1625 nm when specified by the end user.
(iii) The cable cutoff wavelength (γ
(2)
(3) Because the accuracy of attenuation measurements for single mode fibers becomes questionable when measured on short cable lengths, attenuation measurements are to be made utilizing characterization cable lengths. Master Cable reels must be tested and the attenuation values measured will be used for shorter ship lengths of cable.
(4) Because the accuracy of attenuation measurements for multimode fibers becomes questionable when measured on short cable lengths, attenuation measurements are to be made utilizing characterization cable lengths. If the ship length of cable is less than one kilometer, the attenuation values measured on longer lengths of cable (characterization length of cable) before cutting to the ship lengths of cable may be applied to the ship lengths.
(5) Attenuation must be measured per Table 8.4,
(6) The bandwidth of multimode fibers in a finished cable must be no less than the values specified in Table 8.2 per paragraph 8.3.1 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(p)
(2)
(q)
(2) All connectors must be accepted by the Agency prior to their use. For information on how to obtain the Agency's acceptance, refer to the product acceptance procedures available at
(r)
(2) For initial acceptance, the manufacturer must submit:
(i) An original signature certification that the product fully complies with each paragraph of this section;
(ii) Qualification Test Data for demonstrating that the cable meets the requirements of this section;
(iii) A set of instructions for handling the cable;
(iv) OSHA Material Safety Data Sheets for all components;
(v) Agree to periodic plant inspections;
(vi) Agency's “Buy American” Requirements. For each cable for which the Agency acceptance is requested, the manufacturer must include a certification stating whether the cable complies with the following two domestic origin manufacturing provisions:
(A) Final assembly or manufacture of the product, as the product would be used by an Agency's borrower, is completed in the United States or eligible countries. For a list of eligible countries, see
(B) The cost of United States and eligible countries' components (in any combination) within the product is more than 50 percent of the total cost of all components utilized in the product. The cost of non-domestic components (components not manufactured within the United States or eligible countries) which are included in the finished product must include all duties, taxes, and delivery charges to the point of assembly or manufacture;
(vii) Written user testimonials concerning performance of the product; and
(viii) Other nonproprietary data deemed necessary by the Chief, Technical Support Branch (Telecommunications).
(3) For continued Agency product acceptance, the manufacturer must submit an original signature certification that the product fully complies with each paragraph of this section and a certification stating whether the cable meets the two domestic provisions of paragraph (t)(2)(vi) above for acceptance by January every three years. The certification must be based on test data showing compliance with the requirements of this section. The test data must have been gathered within 90 days of the submission and must be kept on files per paragraph (u)(1).
(4) Initial and re-qualification acceptance requests should be addressed to: Chairman, Technical Standards Committee “A” (Telecommunications), STOP 1550, Advanced Services Division, Rural Development Utilities Program, Washington, DC 20250-1550.
(s)
(2) Measurements and computed values must be rounded off to the number of places or figures specified for the requirement per paragraph 1.3 of ANSI/ICEA S-87-640 (incorporated by reference at § 1755.901(c)).
(t)
(2) Minor defects in the inner and outer jacket (defects having a dimension of 3 millimeter or less in any direction) may be repaired by means of heat fusing per good commercial practices utilizing sheath grade compounds.
(3) Buffer tube repair is permitted only in conjunction with fiber splicing.
(u)
(2) For cables shipped on reels a circumferential thermal wrap or other means of protection complying with section (w)(3) of this section must be secured between the outer edges of the reel flange to protect the cable against damage during storage and shipment. This requirement applies to reels weighing more that 75 lbs. The thermal
(3) The thermal wrap must meet the requirements included in the
(i)
(ii)
(B) Tape thermocouples to the jackets of each sample to measure the jacket temperature.
(C) Cover one sample with the thermal reel wrap.
(D) Expose the samples to a radiant heat source capable of heating the uncovered sample to a minimum of 71 °C (160 °F). A GE 600 watt photoflood lamp or an equivalent lamp having the light spectrum approximately that of the sun must be used.
(E) The height of the lamp above the jacket must be 380 millimeters (15 inches) or an equivalent height that produces the 71 °C (160 °F) jacket temperature on the unwrapped sample must be used.
(F) After the samples have stabilized at the temperature, the jacket temperatures of the samples must be recorded after one hour of exposure to the heat source.
(G) Compute the temperature difference between jackets.
(H) The temperature difference between the jacket with the thermal reel wrap and the jacket without the reel wrap must be greater than or equal to 17 °C (63 °F).
(4) Cable must be sealed at the ends to prevent entrance of moisture.
(5) The end-of-pull (outer end) of the cable must be securely fastened to prevent the cable from coming loose during transit. The start-of-pull (inner end) of the cable must project through a slot in the flange of the reel, around an inner riser, or into a recess on the flange near the drum and fastened in such a way to prevent the cable from becoming loose during installation.
(6) Spikes, staples or other fastening devices must be used in a manner which will not result in penetration of the cable.
(7) The minimum size arbor hole must be 44.5 mm (1.75 inch) and must admit a spindle without binding.
(8) Each reel must be plainly marked to indicate the direction in which it should be rolled to prevent loosening of the cable on the reel.
(9) Each reel must be stenciled or lettered with the name of the manufacturer.
(10) The following information must be either stenciled on the reel or on a tag firmly attached to the reel: Optical Cable, Type and Number of Fibers, Armored or Nonarmored, Year of Manufacture, Name of Cable Manufacturer, Length of Cable, Reel Number, REA 7 CFR 1755.903.
Example: Optical Cable, G.657 class A, 4 fibers, Armored. XYZ Company, 1050 meters, Reel Number 3, REA 7 CFR 1755.903.
(11) When pre-connectorized cable is shipped, the splicing modules must be protected to prevent damage during shipment and handling.
(a)
(2) The housing and terminal requirements reflect the best engineering judgment available at the present time and may be subject to change due to advances in technology, economic conditions, or other factors.
(3) The test procedures described in this section are required by RUS to demonstrate the functional reliability
(4) The test procedures specified herein satisfy the requirements of housings as well as the requirements of terminals that may be installed within housings. Some of the requirements are interrelated to several tests designed to determine the performance aspects of terminals and are directly affected by testing required for housings. Therefore, the manufacturer should carefully review all the test requirements in order to develop a testing schedule that is comprehensive, efficient in terms of the number of test specimens required and can be accomplished in an orderly and logical sequence.
(5) The specified tests may require special facilities to comply with Federal, State, or local regulatory requirements. Some test procedures are potentially hazardous to personnel because of the high voltages and mechanical forces involved. Safety precautions are necessary to prevent injury.
(6) Underwriters Laboratories, Inc. (UL) 94, Tests for Flammability of Plastic Materials for Parts in Devices and Appliances, fourth edition, dated June 18, 1991, referenced in this section is incorporated by reference by RUS. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. A copy of the UL standard is available for inspection during normal business hours at RUS, room 2845-S, U.S. Department of Agriculture, Washington, DC 20250-1500, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(7) The American Society for Testing and Materials Specifications (ASTM) A 109-91, Standard Specification for Steel, Strip, Carbon, Cold-Rolled; ASTM A 153-82 (Reapproved 1987), Standard Specification for Zinc Coating (Hot-Dip) on Iron and Steel Hardware; ASTM A 366/A 366M-91, Standard Specification for Steel, Sheet, Carbon, Cold-Rolled, Commercial Quality; ASTM A 525-91b, Standard Specification for General Requirements for Steel Sheet, Zinc-Coated (Galvanized) by the Hot-Dip Process; ASTM A 526/A 526M-90, Standard Specification for Steel Sheet, Zinc-Coated (Galvanized) by the Hot-Dip Process, Commercial Quality; ASTM A 569/A 569M-91a, Standard Specification for Steel, Carbon (0.15 Maximum, Percent), Hot-Rolled Sheet and Strip Commercial Quality; ASTM A 621/A 621M-92, Standard Specification for Steel, Sheet and Strip, Carbon, Hot-Rolled, Drawing Quality; ASTM B 117-90, Standard Test Method of Salt Spray (Fog) Testing; ASTM B 539-90, Standard Test Methods for Measuring Contact Resistance of Electrical Connections (Static Contacts); ASTM B 633-85, Standard Specification for Electrodeposited Coatings of Zinc on Iron and Steel; ASTM D 523-89, Standard Test Method for Specular Gloss; ASTM D 610-85 (Reapproved 1989), Standard Test Method for Evaluating Degree of Rusting on Painted Steel Surfaces; ASTM D 822-89, Standard Practice for Conducting Tests on Paint and Related Coatings and Materials using Filtered Open-Flame Carbon-Arc Light and Water Exposure Apparatus; ASTM D 1535-89, Standard Test Method for Specifying Color by the Munsell System; ASTM D 1654-92, Standard Test Method for Evaluation of Painted or Coated Specimens Subjected to Corrosive Environments; ASTM D 1693-70 (Reapproved 1988), Standard Test Method for Environmental Stress-Cracking of Ethylene Plastics; ASTM D 2197-86 (Reapproved 1991), Standard Test Method for Adhesion of Organic Coatings by Scrape Adhesion; ASTM D 2247-92, Standard Practice for Testing Water Resistance of Coatings in 100% Relative Humidity; ASTM D 2565-92, Standard Practice for Operating Xenon Arc-Type Light-Exposure Apparatus With and Without Water for Exposure of Plastics; ASTM D 2794-92, Standard Test Method for Resistance of Organic Coatings to the Effects of Rapid Deformation (Impact);
(b)
(2) Pedestals are housings primarily intended to house, organize, and protect cable terminations incorporating terminal blocks, splice connectors and modules, ground lugs and load coils. Activities typically performed in a pedestal are cable splicing, shield bonding and grounding, inductive loading, and connection of subscriber drops.
(3) Serving area interface (SAI) cabinets are housings intended to perform some of the same functions as pedestals but are primarily intended to serve as the connecting terminal between feeder cable and distribution cables.
(4) Outside plant housings shall be manufactured in accordance with National Electrical Code (NEC) requirements, Underwriters' Laboratories (UL) requirements, Department of Labor, Occupational Safety and Health Administration Standards (OSHA), and all other applicable Federal, State, and local requirements including, but not limited to, statutes, rules, regulations, orders, or ordinances otherwise imposed by law.
(c)
(ii) When requested by RUS, or an RUS borrower, the manufacturer shall prepare a training package for the purpose of training technicians in the use and installation of the product and its auxiliary equipment.
(iii) The manufacturer shall provide ordering information for repair parts. Repair parts shall be obtainable through a local distributor or shall be easily obtainable. Information describing equivalent parts and their sources should be provided for those parts that may also be obtained from other sources.
(2)
(3)
(ii) For initial acceptance the manufacturer shall:
(A) Submit an original signature certification that the product complies with each section of the specification;
(B) Provide qualification test data;
(C) Provide OSHA Material Safety Data Sheets for the product;
(D) Provide a detailed explanation concerning the intended use and capacity of the product;
(E) Provide a complete set of instructions, recommendations for equipment organization and splicing;
(F) Agree to periodic plant inspections;
(G) Provide a certification that the product does or does not comply with the domestic origin manufacturing provisions of the “Buy American” requirements of the Rural Electrification Act of 1938 (52 Stat. 818);
(H) Provide user testimonials concerning field performance of the product;
(I) Provide product samples if requested by RUS; and
(J) Provide any other data required by the Chief, Outside Plant Branch (Telephone).
(iii) Each requirement of this section must be addressed in submissions for acceptance. The designation N/A may be entered when the requirements do not apply.
(iv) Acceptance requests should be addressed to: Chairman, Technical Standards, Committee “A” (Telephone), Telecommunications Standards Division, Rural Utilities Service, Washington, DC 20250-1500.
(d)
(ii) Housings shall be of sufficient size to permit easily managed installation, operational, testing, and maintenance operations. The general shape of outside plant housings is usually comparable to that of a rectangular column or cylinder, with the shape of any particular housing being left to the manufacturer's discretion. Each design is subject to acceptance by RUS.
(2)
(ii) The classifications of pedestals are the general purpose channel Type (H) and the dome Type (M). The Type H pedestal has either front only access or back and front access while the Type M pedestal has top only access. Pedestals are further designated as follows:
(iii) The minimum volume associated with the pedestal designations shall be as shown in the following table:
(iv) Equipment cabinets intended for use as SAI housings shall be assigned size designations according to their maximum pair termination capacities. The capacity will vary depending on the type of terminating equipment used. SAI cabinets shall be suffix designated with an “A” for pole mounting, “X” for pad mounting, and “S” for stake mounting.
(v) Large pair count splice cabinets are classified according to their splice capacity. Approximately 48 cm
(vi) The minimum volume associated with large pair count splice cabinets shall be as shown in the following table:
(3)
(ii) Type M pedestal housings shall consist of a one piece upper sleeve designed to fit over the base cover trapping air to prohibit water from entering the splice area when installed in locations prone to temporary flooding. Pedestals designed to be mounted extra high on poles for locations susceptible to deep snow shall have a bottom close-off option available to prohibit the ingress of birds, rodents and insects.
(iii) The external housing components on all outside plant housings shall provide reasonable protection against accidental removal or vandalism. Housings shall be equipped with a cover plate retaining bolt and cup washer that may be opened only with an industry accepted socket type can wrench. Housings may be equipped with provisions to allow the purchaser to install a padlock.
(iv) Installed housings shall resist the disassembling force of frost heaving applied to the bottom of ground line cover plates. The base cover must remain stationary to stabilize the contents of the housing cavity.
(v) In an effort to provide protection against dust penetration, blowing snow, rain, and ultraviolet light degradation of internal components, all mechanical gaps shall be restricted. The use of seals, overlaps, gaskets, and/or dovetailing is required to assure satisfactory protection of housed equipment.
(vi) Knockouts, cutouts, or notches designed to accommodate aerial service drops shall not be permitted. A design option for housings intended to accommodate service drops shall include a separate channel or equivalent in the base cover to allow future additions of service drops without the removal of gravel or the moisture barrier in the base of the housing. Service wire channels must be designed to prevent the entry of birds, reptiles, rodents and insects.
(vii) Minimal venting of SAI housings may be necessary to relieve internal pressure and condensation.
(viii) There shall be no aluminum housing components that will become buried in the soil when the housing is properly installed.
(ix) Housing components may be assembled using rivets, welds, glue, bolts and nuts, or other techniques suitable for the materials involved.
(x) Housings and their components that require field assembly must be capable of being assembled with tools normally available to outside plant technicians.
(xi) Hinged doors on SAI housings and large pair count splice housings shall be equipped with a device that restrains the doors in the open position.
(xii) Outside plant housings shall be free of sharp edges, burrs, etc., that could present a safety hazard to personnel involved in installation and use of the product or to the general public. Surfaces inside housings must not allow pinching of conductors during installation of cover plates or the opening and closing of doors.
(xiii) A ground line mark shall be provided, approximately 15 cm (6 in.) below the top edge of the housing base cover plate on housings intended for ground level mounting. Base cover plates shall have a minimum height of 31 cm (12 in.).
(xiv) Any housing, which weighs in excess of 91 kilograms (kg) (200 pounds (lb)), including its contents, shall be equipped with lifting brackets for attaching hoisting cables or chains.
(xv) Housing stakes shall be a minimum of 107 cm (42 in.) in length. If fabricated from steel, they shall have a minimum thickness of No. 13 gauge as measured according to American Society for Testing and Materials (ASTM) A 525-91b. Stakes shall be formed into a “U” channel with a minimum depth of 2 cm (0.75 in.). The stake shall be a single part of suitable design strength for driving 91 cm (36 in.) into the soil with hand tools without damage such as bending or warping. The stake shall have adequate mounting holes having a minimum separation of 15 cm (6 in.) for mounting the housing baseplate. The stake material must resist corrosion and deterioration when exposed to soil and atmospheric conditions.
(xvi) The housing design must permit a logical progression of installation steps that would normally be encountered in typical field installations.
(xvii) Provisions for attaching housings to stakes, poles, walls, other housings, or pads shall be provided for each design intended for those purposes. Locations of holes for mounting attachments may be provided by knockouts on above ground components. Mounting hole locations for below ground components may be predrilled.
(xviii) Pole mounting hardware shall provide at least 1.3 cm (0.5 in.) clearance from the pole to the housing. Pole mounting brackets shall accommodate the wide range of pole sizes used in the telephone industry.
(xix) Pad-mounted housings shall have hardware available for anchoring the housing base to the pad. A template may be provided to assist in the location of mounting attachment details for pad preparation.
(xx) Housings equipped with stub cables shall have strain relief devices to permit shipping and handling of the housing without damage to the housing or stub cables. Only RUS accepted cable shall be used for stub cables. The cable manufacturer's recommendations concerning minimum bend radius shall be observed. The minimum bend radius for most copper cables is 10 times the cable diameter.
(xxi) Cable supports shall be provided near the top of the ground line cover and other appropriate locations within the housing to provide cable stability consistent with the intended use and capacity of the housing. Cable supports shall be capable of holding a minimum load of 23 kg (50 lb).
(xxii) An adequate supply of nonmetallic retainer clips or tie wraps capable of supporting a minimum load of 23 kg (50 lb) shall be provided with the housing. Adequate spaces for installation of the clips or tie wraps must be provided on the housing backplate and cable supports.
(xxiii) Housing chambers designed for splicing operations shall be equipped with insulated supporting straps or rods suitable for supporting splice bundles. The insulation on the straps or rods shall extend for the entire length of the device and shall have a dielectric strength of 15 kilovolts (kv) direct current (dc) minimum. Housings having an “H” frame design where both front and rear covers may be removed may incorporate insulated tie bars to be used as cable supports.
(xxiv) Housings designed to contain equipment in addition to splices shall be equipped with a device for physically separating the splice area from the service area of the housing.
(xxv) A dielectric shield rated at 15 kv dc shall be provided to enclose the cable splice area. The shield shall extend from the lower cable supports to within 2.5 cm (1 in.) of the top of the housing. The shield shall be equipped
(xxvi) Mounting arrangements for a variety of terminal blocks and other equipment shall be provided by means of good housekeeping panels or other devices that may enhance the service aspect of the housing.
(xxvii) Housings designed for SAI cabinets may be shipped with terminal blocks installed and stub cables attached. If this option is exercised, the stub cables and terminal blocks must be RUS accepted. In all cases, SAI cabinets must be equipped with appropriate mounting devices for installing the peripheral equipment required for a serving area interface.
(xxviii) SAI cabinets shall be designed to provide physical separation between the splicing area and the area provided for running cross-connect jumpers.
(xxix) SAI cabinets and large splice housings must have an external feature for attaching a padlock to prevent unauthorized entry.
(xxx) Each housing shall have a tinned or zinc electroplated copper alloy or equivalent connector plate or bar to be used for terminating ground and cable shield bond connections. The device shall be equipped with captive studs and nuts with captive lock washers designed for attaching 6 American Wire Gauge (AWG) copper bonding harness wire or braid and a 6 AWG copper ground wire. Connector plates shall be equipped with enough studs and nuts to provide individual connections equivalent to the maximum number of cable sheaths recommended for the housing. Housings shall incorporate design features that enable the field installation of at least one additional connector plate for service conditions that require numerous connections. A bonding and grounding system capable of providing support and strain relief for service wires shall be provided for housings intended for use as distribution points. The bonding system shall be designed to provide sheath continuity as cable and service wires are installed, and prior to any other operation being performed. The bonding arrangement shall provide electrical continuity between all bonds and the ground connector plate. The bonding and grounding arrangement shall permit the lifting of individual cable ground connections for testing and cable locating activities without jeopardizing the grounding potential of other cables that may enter the housing. The bonding and grounding system shall be capable of conducting a current of 1000 amperes for at least 20 seconds.
(4)
(ii) For pedestals, the sign shall be centered horizontally on the front cover and the top of the sign shall be not more than 10 cm (4 in.) from the top of the housing.
(iii) For SAI cabinets, the sign shall be centered horizontally and vertically on the door. If there are two doors, the sign shall be mounted on the left door.
(iv) Deviations from warning sign location requirements are permitted only for housing design constraints. Alternate sign locations will be considered by RUS.
(v) The RUS standard sign design is shown in Figure 1.
(5)
(ii) All materials are required to have fire resistance ratings consistent with recognized industry standards. External materials must be flame resistant.
(iii) All materials used in the manufacture of housings or component parts must achieve the required strength properties, resist deterioration when exposed to outdoor conditions, and be
(iv) Nonmetallic housing materials shall have a fungus growth rating no greater than one according to ASTM G 21-90.
(v) Metallic components shall be either corrosion resistant or protected against corrosion and must not produce galvanic corrosion in wet or humid conditions on other metals that may be present in the housing environment.
(vi) Mill galvanized steel used in the manufacture of housings shall comply with the appropriate requirements of one of the following standards:
(A) ASTM A 109-91;
(B) ASTM A 366/A 366M-91;
(C) ASTM A 525-91b; or
(D) ASTM A 526/A 526M-90.
(vii) Hot rolled steel shall comply with the appropriate requirements of one of the following standards:
(A) ASTM A 569/A 569M-91a; or
(B) ASTM A 621/A 621M-92.
(viii) Cold rolled steel shall comply with the appropriate requirements of one of the following standards:
(A) ASTM A l09-91; or
(B) ASTM A 366/A 366M-91.
(ix) Steel parts used for internal housing brackets shall be hexavalent chromate coated or zinc plated in accordance with ASTM B 633-85.
(x) Hardware items used for assembling or fastening housing components shall be 300 series or passivated 400 series stainless steel or hot dip galvanized in accordance with ASTM A l53-82 (1987). Other materials will be considered by RUS on an individual basis.
(xi) Aluminum components shall be fabricated from alloy types 5052 or 6061 or other types that have been recognized as having acceptable corrosion resistance and formability and weldability features.
(xii) Nonmetallic parts must be resistant to solvents and stress cracking and shall be compatible with metals and other materials such as conductor insulations and filling compounds used in the manufacture of cable. Plastic materials must be noncorrosive to metals and resist deterioration when exposed to industrial chemical pollutants, ultra-violet rays, road salts, cleaning agents, insecticides, fertilizers, or other detrimental elements normally encountered in the outdoor environment.
(xiii) Housing door seals and gaskets may be manufactured from rubber or synthetic rubber-like elastomer materials. Seals and gaskets shall exhibit a high degree of weatherability with an effective life of at least 30 years in the outdoor environment. The material shall be tear resistant and have a low compression set.
(6)
(ii) There shall be inherent design provisions to prevent objectionable deterioration of the housing such as rusting, exposure of fiber or delamination. Secondary protection, such as galvanizing over steel per ASTM A 526/A 526M-90 or anodizing over aluminum, shall be provided to ensure reliability over the projected 30 year design life of the housing.
(iii) Painted metal housings shall have a minimum gloss of 60 (60 °specular) in accordance with ASTM D 523-89.
(iv) All painted surfaces shall have a uniform color and texture in accordance with ASTM D 3928-89. Nonmetallic housings shall meet recognized industry standards concerning optical appearance for gloss and haze as applicable for the material.
(v) The colors of housings that RUS will consider for acceptance shall be as follows:
(7)
(ii) No special tools or equipment other than that usually carried by outside plant technicians and construction crews must be required for installation of the housing. Security devices are the exception to this requirement.
(iii) Installation hardware shall maintain housings in an erect and stable position when subjected to normal storm loads. Pad-mounted designs must accommodate precast or cast-in-place reinforced concrete or other suitable prefabricated material. Brackets, inserts for fastening, conduit openings, or other items necessary for a pad-mounted installation must be provided. The manufacturer shall provide detailed drawings or a template for locating inserts, conduit openings, or slots for cast-in-place pad construction.
(e)
(ii) Testing shall be performed at a room temperature of 24±3 °C (75±5 °C). Temperatures for testing performed at other than room temperature shall be determined as near the center of the product under test as practical.
(2)
(ii) The typical test sample shall consist of the exterior housing components such as covers, backplates, good housekeeping panels, cap assembly, anchor posts, decals, etc. Interior components must include the bonding and grounding hardware for cables and service wires and the dielectric shield. The housing may include terminal blocks or cross-connect modules, cable splices, or the typical outside plant equipment the housing is designed to contain and protect.
(3)
(ii)
(iii)
(iv)
(v)
(A) To insure complete saturation of the three test panels, soak them for 96 hours in a container of distilled water 22±2 °C (71.6±4 °F);
(B) Lower the temperature of the water and the immersed test panels to −28±2 °C (−18.4±4 °F) and stabilize for 24 hours;
(C) Thaw the water with the samples to 22±2 °C (71.6±4 °F) and stabilize for 24 hours;
(D) Repeat the procedure 24 times. Any cracking, crazing, deforming, or delaminating on any of the three test panels shall be considered a failure; and
(E) Remove the samples from the water and impact test the three panels by delivering a force of 11.3 N-m (100 lb-in.) using a Gardner-Impact Tester to each specimen at 71, 22, and −28±2 °C (159.8, 71.6, and −18.4±4 °F), after stabilizing them at those temperatures for at least two hours. Visual inspection shall reveal no deformation or perforations on any of the test panels.
(vi)
(vii)
(viii)
(A) Industry recognized filling compounds;
(B) Isopar M;
(C) Industry recognized solvents;
(D) Industry recognized encapsulants; and
(E) Commonly used insect, pest, and weed control products and agricultural fertilizers.
(ix)
(
(
(
(
(B) There shall be no swelling, deformation, or softening of the material samples or any discoloration of the solution.
(x)
(xi)
(xii)
(
(
(B)(
(
(
(xiii)
(B) Polymeric materials shall be tested in accordance with the Underwriters Laboratories Publication (UL) 94, dated June 18, 1991. Materials used in housing components shall have a rating of 94V-0 or 94V-1 and shall not sustain combustion when an open flame source is removed.
(4)
(A) The impact force shall be delivered to the front, back, and top surfaces. Circular housings shall be impacted on side surfaces 180 °apart and on the top. The device used to deliver the force shall be spherical and approximately 25 to 31 cm (10 to 12 in.) in diameter. A typical test procedure may include the use of a hard rubber bowling ball, weighing 6 to 7 kg (13 to 16 lb), enclosed in a mesh bag, attached to a rope with a metal ring. The load shall be dropped vertically on the top surface and applied to the sides with a pendulum motion using the appropriate height and extension arm to achieve the required impact force. The housing must be impacted at the approximate mid-point of the surface area.
(B) Housings shall be conditioned for a minimum of eight hours at −40 °C (−40 °F) in an environmental chamber prior to testing. If the chamber is insufficient in size to conduct tests within the chamber, the housing may be removed and shall be tested within 10 minutes after removal.
(C) After impact testing, the housing shall not exhibit fractured or ruptured surfaces sufficient to allow the ingress of moisture or dust. The housing shall not exhibit mechanical damage that would impair the functioning of hinges, latches, locks, etc.
(ii)
(iii)
(iv)
(A) Packaged housings and their contents weighing 91 kg (200 lb) or less
(B) Packaged housings and their contents weighing more than 91 kg (200 lb) shall be capable of enduring a single drop on each of two diagonally opposite corners of the package without significant damage from a height specified as follows:
(
(
(
(
(C) Unpackaged housings and their contents weighing 23 kg (50 lb) or less shall be capable of enduring a single drop on each face and adjacent corners without significant damage from a height specified as follows:
(D)(
(
(v)
(vi)
(vii)
(viii)
(B) There shall be no functional failure of the restraining device nor mechanical damage to the housing.
(ix)
(5)
(6)
(ii)
(iii)
(iv)
(v)
(f)
(2)
(ii) All individual terminals or terminal fields must be enclosed and the terminal enclosure must be totally filled with an encapsulating grease or gel which prevents connection degradation caused by moisture and corrosion. The encapsulant must provide complete encapsulation of terminal metallic connections and surfaces and totally fill all voids and cavities within individual terminal enclosures or terminal field enclosures to prevent ingress of moisture. The encapsulant must not restrict access to the terminal or restrict craft personnel from making connections. The encapsulant must be compatible with the standard materials used in cross-connect hardware and wiring.
(iii) Binding post terminals shall not be susceptible to damage under normal use of standard tools used by outside plant technicians such as screwdrivers and test set clips. In addition, use of other tools such as scissors, diagonal cutters and long nose pliers for tightening and loosening screws shall not result in damage to the terminal.
(iv) Terminals shall be designed so that a typical technician using customary tools shall be able to terminate cross-connect wire on a pair of terminals, or to remove it, without causing an electrical short between any two terminals or any other adjacent terminals.
(v) The terminal count sequence shall be indicated using numerals of at least 0.25 cm (0.10 in.) in height.
(vi) A means shall be provided to distinguish feeder terminals from distribution terminals.
(vii) A means shall be provided to identify tip terminals and ring terminals in a terminal field. The identification convention shall indicate tip on the left with ring on the right for horizontal spacing and tip on the top with ring on the bottom for vertical spacing.
(viii) The preferred height of the highest terminal in the connector field in a ground mounted SAI unit shall be 168 cm (66 in.) or less as measured from the top surface of the mounting pad. The bottom or lowest terminals in the connector field shall be at least 46 cm (18 in.) from the top surface of the pad.
(ix) Pole mounted aerial units shall be 84 cm (33 in.) or less in width. The maximum allowable height of the highest terminals in a pole mounted aerial unit is 168 cm (66 in.) as measured from the top surface of the standard balcony seat used with the interface. For computation purposes, 15 cm (6 in.) shall be allowed for the distance between the bottom of the interface and the top of the balcony seat.
(3)
(ii) A 25 or 50 pair test connector shall be available which can be used to make reliable electrical contact to terminals associated with discrete 25 pair binder groups. The multi-pair test connector shall be provided with a minimum of 1.8 m (6 ft) of suitable cabling terminated to a connector, for interfacing with test sets common to the industry. The multi-pair test connector shall be functional on all terminal groups.
(iii) A special service marker shall be available which must attach to a binding post terminal to identify special circuits and insulate exposed metal
(iv)(A) A supply of twisted pair cross-connect wire shall be supplied with housings that are equipped with cross-connect terminals or that have provisions for mounting cross-connect terminals. The minimum length of cross-connect wire supplied is dependent on the SAI cabinet terminal capacity as follows:
(B) The cabinet shall be equipped to store the length of wire in a manner designed for convenient dispensing. The cross-connect wire supply shall be easily replaceable.
(g)
(2)
(A)
(B)
(ii)
(B) With the cabinet doors open, a spray of tap water at a rate of 3.8 liters per minute (1 gallon per minute) at 276 kilo-pascals (40 pounds per square inch)
(iii)
(A) The test shall consist of eight-hour temperature cycles with one-hour dwells at extreme temperatures of −40 °C to +60 °C (−40 °F to +140 °F), and temperature changes at an average rate of 16 °C (60 °F) per hour between the extremes. The relative humidity shall be maintained at 95±3%. The eight-hour test shall be conducted for 512 cycles. Millivolt drop measurements shall be made initially and after 2, 8, 16, 32, 64, 256, and 512 cycles with the samples at room temperature. The resistance measurement technique must conform to ASTM B 539-90. The measurement method must have an accuracy of at least ±30 microohms for resistances less than 50 milliohms. The change in contact resistance shall not exceed 2 milliohms.
(B) A minimum of 100 terminals equipped with cross-connect wire installed in a manner typical of the industry shall be maintained at 118 °C (245 °F) during the test period, except during disturbance measurement periods where each wire connection to the terminals shall have a 0.23 kg (0.5 lb) force momentarily applied in a manner to stress the connection. Initial millivolt measurements shall be made without disturbing the joints in accordance with paragraph (g)(2)(iii)(A) of this section with the samples at room temperature. After initial measurement each sample shall be disturbed followed by a millivolt drop measurement after 1, 2, 4, 8, 16, and 33 days. The change in contact resistance should be less than 2 milliohms when compared to the initial measurement.
(iv)
(v)
(vi)
(3)
(ii)
(A) Test specimens shall include the terminals along the matrix edge at mid-span locations as well as centrally located terminals. Tests shall be conducted using a torque indicating screwdriver, or wrench, with an accuracy of
(B) The post or stud of the binding post terminal shall not fail before the screw or nut when increasing torque. The faceplate or receptacle restraining the post or stud shall not fail before the screw or nut when increasing torque.
(iii)
(iv)
(v)
(B) A multi-pair test connector shall be attached to the binding post terminal field and tests for opens between the binding post terminals and the test
(vi)
(4)
(5)
(ii) Twenty-five jumper connections shall be made on each of two binding post connectors chosen at random from a representative sample in an assembled interface unit. After exposure to this test, these and adjacent connectors shall be inspected for damage such as cracks or chips in metal or plastic parts. Failure consists of structural damage, open circuits through the connector, or inability to pass the torsional, lateral loading, or axial pullout tests described in paragraphs (g)(3)(ii) through (g)(3)(iv) of this section.
(iii) Select six binding posts at random in a representative interface. On each connector, attach any test cord included with the unit and then remove the test cord as follows. On binding post sample 1, remove the cord normally ten times. On binding post sample 2, remove the cord ten times by jerking the test leads straight out. In these and the remaining tests, do this without releasing any manual attachment mechanisms. On sample 3, remove ten times by jerking downward at 45 °from horizontal; sample 4, upward at 45 °ten times; sample 5, left 45 °ten times; sample 6, right 45 °ten times. Check for opens and damage in the test cord, clips, and connectors. Failure consists of structural damage, open circuits through the connector, or inability of the terminal blocks to pass the torsional, lateral loading, axial pullout, test connector reliability, or dielectric strength tests described in paragraphs (g)(3)(ii) through (g)(3)(v)(B), and paragraph (g)(4) of this section.
(iv) Use craft tools such as scissors, diagonal cutters, and long nose pliers to loosen and tighten screws where the binding post design does not prohibit the possibility. Failure consists of severe structural damage.
(h)
(2)
(ii) The cross-connect module manufacturer shall make available any nonstandard tools and test apparatus which are required for splicing, placing of jumpers, and the performance of maintenance operations.
(iii) The module shall be designed so that a typical outside plant technician using tools shall be able to terminate cross-connect wire on terminals, or to remove them without causing electrical shorts between any other terminals.
(iv) The pair count sequence terminated on a module shall be easily visible and shall have numerals of at least 0.25 cm (0.10 in.) in height.
(v) Feeder terminations shall be easily distinguished from distribution terminations.
(vi) Tip and ring terminations shall be easily visible and shall be identifiable as described in paragraph (f)(2)(vi) of this section.
(vii) The preferred locations for cross-connect modules to be mounted inside a housing is the same as those for terminals and are described in paragraphs (f)(2)(vii) and (f)(2)(viii) of this section.
(3)
(ii) Special service markers shall be available for cross-connect modules as described in paragraph (f)(3)(iii) of this section.
(iii) Housings equipped with, or designed for, cross-connect modules shall contain a supply of cross-connect wire as described in paragraph (f)(3)(iv) of this section.
(i)
(2)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(3)
(ii)
(iii)
(iv)
(v)
(4)
(ii) The dielectric strength of a contact within the cross-connect module to contacts on either side shall be tested. The module shall be tested in a dry environment with an ac power source capable of supplying 8 kv at a rate of increase of 500 volts per second, a circuit breaker to open at breakdown, and a voltmeter to record the breakdown potential. Cross-connect modules shall be prepared in accordance with industry accepted splicing techniques with leads trimmed to approximately 38 cm (15 in.). The dielectric strength of each contact to the contacts on either side shall have an average dielectric strength of approximately 5.0 kv.
(5)
(ii) Twenty-five jumper connections shall be made on each of two contacts chosen at random from a representative sample in an assembled interface unit. After this test, these and surrounding contacts shall be inspected for damage such as cracks or chips in metal or plastic parts. Failure consists of structural damage, open circuits
(iii) Select six contacts at random in a representative interface. On each of these contacts attach any test cord included with the unit as specified under normal use of that cord and then remove the test cord as follows. On sample 1, remove the cord normally ten times. On sample 2, remove the clip ten times by jerking the test leads straight out. In these and the remaining tests, do this without releasing any manual attachment mechanisms. On sample 3, remove ten times by jerking downward at 45 °from horizontal; sample 4, upward 45 °ten times; sample 5, left 45 °ten times; sample 6, right 45 °ten times. Check for opens and damage in the test cord, clips, and cross-connect modules. Failure consists of structural damage, open circuits through the connector, or inability of module to pass the test connector reliability, jumper wire pullout, and dielectric strength tests described in paragraphs (i)(3)(ii), (i)(3)(iv), and (i)(4)(ii) of this section.
(j)
(ii) The date of manufacture, model number, serial number and RUS assigned designations shall be placed on a decal inside housings. The product identification nomenclature must correspond with the nomenclature used in the manufacturer's quality assurance program.
(2)
(ii) The product with all the necessary parts shall be shipped in one container unless significant advantages to the user can be obtained otherwise. Packaging of parts in the carton shall be such that the parts become available in the order in which they are needed. The package should be clearly marked as to which end to open. Packages shall be clearly labeled, and correspond to the names given in the instructions.
(iii) Products packed in shipping containers shall be cushioned, blocked, braced, and anchored to prevent movement and damage.
(iv) All products shall be secured to pallets with non-metallic strapping. The strapping and the manner employed shall be of sufficient quantity, width, and thickness to preclude failure during transit and handling.
(v) The use of shrink or stretch film to secure the load to the pallet is permitted. However, such film must be applied over the required strapping.
(vi) Containers that are too large or heavy to be palletized, such as crates, shall be shipped in their own containers. When practical, these containers shall be provided with skids to facilitate fork-lift handling.
(vii) When packaged, the outer cartons shall meet the requirements of the Uniform Freight Classification and the National Motor Freight Classification.
(3)
(ii) The RUS assigned housing designation shall be stamped or marked on the outside of the package container with letter and number sizes large enough for easy identification.
(iii) Each package shall be marked with its approximate gross weight.
(iv) All containers carrying delicate or fragile items shall be marked to clearly identify this condition.
(v) All marking shall be clear, legible, and as large as space permits.
A list of CFR titles, subtitles, chapters, subchapters and parts and an alphabetical list of agencies publishing in the CFR are included in the CFR Index and Finding Aids volume to the Code of Federal Regulations which is published separately and revised annually.
Table of CFR Titles and Chapters
Alphabetical List of Agencies Appearing in the CFR
List of CFR Sections Affected
All changes in this volume of the Code of Federal Regulations that were made by documents published in the
For the period before January 1, 2001, see the “List of CFR Sections Affected, 1949-1963, 1964-1972, 1973-1985 and 1986-2000” published in 11 separate volumes.