Changes Proposed for Distance Learning & Telemedicine Program

The U.S. Department of Agriculture (USDA) Rural Utilities Service has issued a direct final rule incorporating a series of changes for the popular Distance Learning & Telemedicine Loan and Grant Program (DLT). The rule will become effective on May 10, 1999 unless the agency receives written adverse comments on or before April 26, 1999.

The DLT program provides financial assistance for schools, libraries and rural medical services to acquire equipment and telecommunications facilities for optimal service delivery.

Since the DLT program was created in 1993, USDA has funded 252 projects in 43 states and two US territories, totaling $62.5 million in grants and $3 million in loans.

The amendments to the DLT program were designed to: clarify the requirements for the different types of financial assistance offered; streamline policies and procedures for obtaining loans; expand the purposes for which loan funds can be used to include land acquisition, facility construction and operating costs; award grants on a competitive basis; and provide additional offices for application submission.

There are three funding mechanisms to the DLT program: a matching grant of up to 70 percent of a project's cost, a repayable loan, and a combination loan/grant. Under the new regulations, each mechanism will have its own separate application process, allowing the USDA to target entities that are appropriate for each type of financing. In the past, the agency found many applicants seeking financial assistance (schools and libraries) were unable to enter into extended term loan agreements, or did not have the means to repay the loan.

Grants now will be awarded to the neediest applicants on a competitive, point-based system, which is outlined in the new rule. Other selection criteria include: need for the service, comparative rurality of the project service area, applicant's ability to leverage funding, innovativeness of the project, project cost effectiveness, and participation in EZ/EC zones and champion communities. Applicants will be able to submit additional indicators addressing the economic disparity of the community to be served by the project. Combin-ation loan/grant awards will be made only to those entities able to enter into a loan agreement. The USDA anticipates awarding $1 of grant funds for every $10 loaned to a project.

The loan and loan/grant combination selection process will be on a first-in, first-out basis, based on the amount of funding available.

A copy of the new regulation can be obtained through the DLT web site at http://www.usda.gov/ rus/dlt/dlml.htm. Interested parties are directed to contact Jonathan Claffey, USDA Rural Utilities Services Deputy Assistant Administrator, at 202/720-9556 for further information.