areas for persons of very low, low, and moderate income. No downpayment is required from nonprofit organizations. A 3 or 5 percent downpayment is required from other applicants. The maximum term is 50 years, and the interest rate may be reduced to 1 percent to make rents affordable to very low and low income families. Rental assistance may be available to defray rent paid by very low income families.

Farm Labor Housing Loans and Grants Farm labor housing loans and grants enable farmers, public or private nonprofit organizations, or units of local government to build, buy, or rehabilitate farm labor housing. The interest rate is 1 percent and is repaid over 33 years. Grants may be made in connection with a loan to a public/private nonprofit organization or unit of government to ensure affordability of the units to farm workers.

Housing Preservation Grants These grants are made to a public body or public/private nonprofit organization to provide assistance to homeowners and landlords to repair and rehabilitate housing for very low and low income families in rural areas. Financial assistance provided by grantees may include loans, grants, interest reduction on commercial credit, or similar assistance. Up to 20 percent of the grant may be used for program administration. Housing the Homeless The Service offers SFH inventory property to nonprofit organizations or public bodies for transitional housing for the homeless. Qualifying organizations may lease nonprogram property if they can show a documented need in the community for the type of housing use proposed and the financial ability to meet proposed housing costs.

Community Program Loans Direct and guaranteed loans are authorized to public and quasi-public bodies, nonprofit associations, and certain Indian tribes for essential community facilities such as health care, public safety, and public services. Necessary related equipment may also be purchased. The interest rate is set quarterly for direct loans and is based on yields of

municipal bonds. Guaranteed loans bear an interest rate negotiated by the lender and the borrower. The Service guarantees a lender against losses up to 90 percent of principal and interest. Community facility loans may be made in towns populated up to 20,000. Nondiscrimination in employment and Occupancy is required.

For further information, contact Rural Development, Office of Communication, Public Affairs, Room 5037-S, Department of Agriculture, Fourteenth Street and Independence Avenue SW., Washington, DC 20250-0320. Phone, 202-7206903.

Rural Utilities Service

The Rural Utilities Service (RUS) is a credit agency that assists rural electric and telephone utilities in obtaining financing and administers a nationwide water and waste loan and grant program to improve the quality of life and promote economic development in rural America. A total of 890 rural electric and 900 rural telephone utilities in 47 States, Puerto Rico, the Virgin Islands, Guam, the Republic of the Marshall Islands, the Northern Mariana Islands, and the Federated States of Micronesia have received financial assistance. Approximately 7,200 sural communities are currently served through financial assistance received from water and waste loans and grants.

Electric Program The Rural Electrification Act of 1936, as amended (7 U.S.C. 901-950b), authorizes RUS to provide loans for improving electric service to persons in rural areas, as defined by the Bureau of the Census.

The Act requires that preference be given to nonprofit and cooperative associations and to public bodies. With RUS assistance, rural electric utilities have obtained financing to construct electric generating plants and transmission and distribution lines to provide reliable electric service. Telecommunications Program In 1949, RUS (then the Rural Electrification Administration) was authorized to make loans to provide telephone service in rural areas. Congress directed that the rural telephone program be conducted to "assure the availability of adequate

telephone service to the widest practicable number of rural users of such service." About 75 percent of the telephone systems financed by the agency are commercial companies, and about 25 percent are subscriber-owned cooperatives.

Loans Loans are made in accordance with the Act and are subject to the provisions of the Federal Credit Reform Act of 1991. By law, RUS direct loans are made or insured at a municipal rate, but not greater than 7 percent. In cases of hardship, the Administrator may approve loans at an interest rate of 5 percent.

The Service also obtains funds from the Federal Financing Bank (FFB), which it lends to borrowers, primarily for largescale electric and telecommunication facilities, at an interest rate equal to the cost of money paid by FFB, plus oneeighth of 1 percent. The Bank is located within the Department of the Treasury. Supplemental Financing A 1973 statement of congressional policy-not part of the law-said, in part, ". . . that rural electric and telephone systems should be encouraged and assisted in developing their resources and ability to achieve the financial strength needed to enable them to satisfy their credit needs from their own financial organizations and other sources at reasonable rates and terms consistent with the loan applicant's ability to pay and achievement of the act's objectives." When RUS approves electric loans, it requires most borrowers to obtain 30 percent of their loan needs from nonagency sources without an agency guarantee. These nonagency sources include the National Rural Utilities Cooperative Finance Corporation, which is owned by electric cooperatives, and the National Bank for Cooperatives.

Telecommunications borrowers obtain supplemental financing from the Rural Telephone Bank (RTB), a U.S. agency established in 1971. Loans are made to telecommunications systems able to meet RTB requirements. Bank loans are made for the same purposes as loans made to RUS but bear interest at a rate consistent with the Bank's cost of money.

The Rural Telephone Bank is managed by a 13-member board of directors. The Administrator of RUS serves as Governor of the Bank until conversion to private ownership, control, and operation. This will take place when 51 percent of the class A stock issued to the U.S. and outstanding at any time after September 30, 1995, has been fully redeemed and retired. The Bank board holds at least four regularly scheduled meetings a year. Activities of RTB are carried out by RUS employees and the Department's Office of the General Counsel.

Water and Waste Direct and Guaranteed Loan Program Direct loans may be made to develop water and wastewater systems, including solid waste disposal and storm drainage, in rural areas, cities, and towns with a population of 10,000 or less.

Funds are available to public entities, such as municipalities, counties, specialpurpose districts, and Indian tribes. In addition, funds may be made available to nonprofit corporations. Priority is given to public entities in areas with less than 5,500 people to restore a deteriorating water supply or to improve, enlarge, or modify a water facility or an inadequate waste facility. Preference is given to requests which involve the merging of small facilities and those serving low-income communities. Applicants must be unable to obtain funds from other sources at reasonable rates and terms. The maximum term for all loans is 40 years. However, no repayment period will exceed State statutes or the useful life of the facility. Interest rates may be obtained from USDA Rural Development field offices.

Guaranteed loans may be made for the same purpose as direct loans. They are made and serviced by lenders such as banks and savings and loan associations. Normally, guarantees will not exceed 80 percent on any loss of interest or principal on the loan. Water and Waste Disposal Grants Grants may be made to reduce water and waste disposal costs to a reasonable level for users of the system. Grants may be made, in some instances, up to 75 percent of eligible project costs.

Requirements for applicants are the same as for loans.

Emergency Community Water Assistance Grants Grants may be made up to 100 percent of project costs to assist rural communities experiencing a significant decline in quantity or quality of drinking water. Grants can be made to rural cities or towns with populations not exceeding the State's

nonmetropolitan median household income requirement.

Technical Assistance and Training Grants Grants are available for nonprofit organizations to provide rural water and waste system officials with technical assistance and training on a wide range of issues relating to the delivery of water and waste service to rural residents. Legislation requires that at least 1 percent but no more than 3 percent of the funds appropriated for water and waste disposal grants be set aside for these grants.

Solid Waste Management Grants Grants are available for nonprofit organizations and public bodies to provide technical assistance and training to rural areas and towns with populations under 10,000 to reduce or eliminate pollution of water resources

and improve planning and management of solid waste facilities.

Rural Water Circuit Rider Technical Assistance Program Since 1980, the National Rural Water Association has provided, by contract, technical assistance to rural water systems. Circuit riders assist rural water districts with solving operational, financial, and management problems. Currently there are 52 circuit riders covering the 48 continental United States. The assistance may be requested by rural water systems or by RUS. When circuit riders are not working on specific requests, they call on rural water systems to offer assistance. The Association reports monthly to the national office. The program complements loan supervision responsibilities.

Distance Learning and Medical Link Grant Program This program was established by the Rural Economic Development Act of 1990, which gave borrowers authority to defer RUS loan payments to make investments in rural development.

For further information, contact the Rural Utilities Service, Department of Agriculture, Room 4051-S, Fourteenth Street and Independence Avenue SW., Washington, DC 20250-0320. Phone, 202-7201255.

As an independent entity within USDA, the Alternative Agricultural Research and Commercialization Center (AARC) provides and monitors financial assistance for the development and commercialization of new nonfood and nonfeed products made from. agricultural/forestry commodities. By law, AARC is administered by a 9member board comprising representatives for processing, financial, producer, and scientific interests.

The Center's mission is to assist the private sector in closing the gap between research results and commercialization of industrial nonfood and nonfeed products made from farm and forestry

materials. It also seeks to expand market opportunities through development of value-added industrial products and promotion of environmentally friendly products. Any private individual or firm may apply for assistance. While most of the Center's clients are small firms, nonprofit organizations and large businesses have also been successful applicants. Universities and similar institutions may participate as well.

The Center can supply financial assistance at the precommercialization stage of a project-that point in a project when the costs are the greatest and the ability to obtain lending from traditional sources is the most difficult. Financial

Food Quality Assurance Under a governmentwide quality assurance program, AMS is responsible for the development and revision of specifications used by Federal agencies in procuring food for military and civilian uses. The Service coordinates and approves certification programs designed to ensure that purchased products conform to the specification requirements.

Section 32 Programs Under section 32 of the act of August 24, 1935, as amended (7 U.S.C. 612c), 30 percent of customs receipts collected during each calendar year are automatically appropriated for expanding outlets for various commodities. Portions of these funds are transferred to the Food and Nutrition Service of USDA and to the Department of Commerce. Remaining funds are used to purchase commodities for the National School Lunch Program and other feeding programs, for diversion to other outlets, and for administering agreement and order programs.

Regulatory Programs The Service administers several regulatory programs designed collectively to protect producers, handlers, and consumers of agricultural commodities from financial loss or personal injury resulting from careless, deceptive, or fraudulent marketing practices. Such regulatory programs encourage fair trading practices in the marketing of fruits and vegetables, require truth in seed labeling and in advertising.

Under the Egg Products Inspection Act (21 U.S.C. 1031-1056), the Service provides voluntary laboratory analyses of egg products, and controls the

disposition of restricted shell eggs-eggs that are a potential health hazard. Marketing Agreements and Orders These programs, under authority of the Agricultural Marketing Agreement Act of 1937 (7 U.S.C. 601 et seq.), help to establish and maintain orderly marketing conditions for certain commodities. Milk marketing orders establish minimum prices that handlers or distributors are required to pay producers. Programs for fruits, vegetables, and related specialty

crops like nuts and spearmint oil help stabilize supplies and market prices. In some cases, they also authorize research and market development activities, including advertising supported by assessments that handlers pay. Through orderly marketing, adjusting the supply to demand, and avoiding unreasonable fluctuations during the marketing season, the income of producers is increased by normal market forces, and consumer interests are protected through quality and quantity control.

Federal marketing orders originate with a request from a producer group to the Secretary of Agriculture. The Secretary can conduct hearings and referenda based on the producer group's proposal for a marketing order. Producer and handler assessments finance their operations.

In carrying out the Government role, the Service ensures that persons interested in the development and operation of the programs have a fair hearing and that each marketing order works according to Federal law and established rules and guidelines. Plant Variety Protection Program Under authority of the Plant Variety Protection Act (7 U.S.C. 2321 et seq.), the Service administers a program that provides for the issuance of "certificates of plant variety protection." These certificates afford developers of novel varieties of sexually reproduced plants exclusive rights to sell, reproduce, import, or export such varieties, or use them in the production of hybrids or different varieties for a period of 18 years.

Research and Promotion Programs The Service monitors certain industrysponsored research, promotion, and information programs authorized by Federal laws. These programs provide farmers with a means to finance and operate various research, promotion, and information activities for cotton, potatoes, eggs, milk and dairy products, beef, pork, wool, mohair, honey, watermelon, limes, mushrooms, soybeans, fresh cut flowers, popcorn, kiwi fruit, and canola and rapeseed.