[Federal Register Volume 65, Number 179 (Thursday, September 14, 2000)]
[Notices]
[Page 55501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23619]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service


Title Evidence Requirements for Real Property--Electric Program

AGENCY: Rural Utilities Service, USDA.

ACTION: Policy statement.

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SUMMARY: Rural Electrification Administration (REA) Bulletin 20-3, July 
1956, ``Obtaining Adequate Right-of-way and Submission of Title 
Evidence by REA Electric Borrowers'' (Bulletin 20-3), is rescinded 
because it has not been updated to reflect subsequently published Rural 
Utilities Service (RUS) regulations and is obsolete.

DATES: Effective September 14, 2000.

FOR FURTHER INFORMATION CONTACT: Gail P. Salgado, Management Analyst, 
Office of the Assistant Administrator, Electric Program, Rural 
Utilities Service, U.S. Department of Agriculture, Room 4024-S, Stop 
1560, 1400 Independence Avenue, SW, Washington, DC 20250-1560. 
Telephone: 202-205-3660. FAX: 202-690-0717. E-mail: 
[email protected].

SUPPLEMENTARY INFORMATION: In 1995, RUS as the successor to REA 
developed and published new model forms of the electric distribution 
loan contract, set forth at 7 CFR Part 1718, Appendix A to Subpart C, 
and mortgage, set forth at 7 CFR part 1718, Appendix A to Subpart B. 
These contemporary documents are designed to provide the government 
with the assurance of reasonably adequate security for loans to 
electric distribution borrowers. Among other matters, the documents 
require that the borrower have good and marketable title to all 
mortgaged property including any real property owned or acquired for 
use in the construction and operation of the borrower's utility system 
(See 7 CFR part 1718, Appendix A to Subpart C, Model Form of Loan 
Contract, Section 2.1, Representations and Warranties). In the case of 
power supply borrowers, the requirements for loan security are 
generally set forth in 7 CFR 1710.113. Title requirements for mortgaged 
property are typically already set forth with greater specificity in 
the individual loan documents used by each power supply borrower. See 
also, Sec. 1710.401(a)(7), setting out mortgage information required to 
be submitted as part of the loan application process.
    RUS has determined that it will no longer routinely require the 
submission of detailed title evidence in connection with the 
construction of distribution, transmission, and headquarters 
facilities. However, RUS is retaining the right to require additional 
evidence of title in unusual individual cases. In such cases, RUS will 
request the borrower to submit any such additional necessary title 
evidence as part of its application for assistance. RUS will continue 
to require title evidence for generation projects.
    It is expected that as a prudent utility, each borrower will comply 
with the provisions of its loan documents and continue obtaining 
sufficient and adequate right-of-way authorizations and title to any 
real estate it requires for the construction and operation of its 
facilities.
    Effective September 14, 2000, REA Bulletin 20-3, July 1956, 
``Obtaining Adequate Right-of-way and Submission of Title Evidence by 
REA Electric Borrowers'' (Bulletin 20-3), is rescinded and borrowers 
are no longer required to submit title documents to RUS as required by 
its provisions. However, RUS does retain the right to require 
additional evidence in unusual individual cases.

    Dated: September 6, 2000.
Christopher A. McLean,
Administrator, Rural Utilities Service.
[FR Doc. 00-23619 Filed 9-13-00; 8:45 am]
BILLING CODE 3410-15-P