(a) In general

The Secretary shall provide grants in accordance with this section to assist the residents of rural areas and small communities to secure adequate quantities of safe water -

(1)

after a significant decline in the quantity or quality of water available from the water supplies of such rural areas and small communities; or

(2)

when repairs, partial replacement, or significant maintenance efforts on established water systems would remedy -

(A)

an acute shortage of quality water; or

(B)

a significant decline in the quantity or quality of water that is available.

(b) Priority

In carrying out subsection (a) of this section, the Secretary shall -

(1)

give priority to projects described in subsection (a)(1) of this section; and

(2)

provide at least 70 percent of all such grants to such projects.

(c) Eligibility

To be eligible to obtain a grant under this section, an applicant shall -

(1)

be a public or private nonprofit entity; and

(2)

in the case of a grant made under subsection (a)(1) of this section, demonstrate to the Secretary that the decline referred to in such subsection occurred within 2 years of the date the application was filed for such grant.

(d) Uses

(1) In general

Grants made under this section may be used for waterline extensions from existing systems, laying of new waterlines, repairs, significant maintenance, digging of new wells, equipment replacement, hook and tap fees, and any other appropriate purpose associated with developing sources of, or treating, storing, or distributing water, and to assist communities in complying with the requirements of the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.) or the Safe Drinking Water Act (42 U.S.C. 300f et seq.).

(2) Joint proposals

Nothing in this section shall preclude rural communities from submitting joint proposals for emergency water assistance, subject to the restrictions contained in subsection (e) of this section. Such restrictions should be considered in the aggregate, depending on the number of communities involved.

(e) Restrictions

(1) Maximum population and income

No grant provided under this section shall be used to assist any rural area or community that -

(A)

includes any area in any city or town with a population in excess of 10,000 inhabitants according to the most recent decennial census of the United States; or

(B)

has a median household income in excess of the State nonmetropolitan median household income according to the most recent decennial census of the United States.

(2) Set-aside for smaller communities

Not less than 50 percent of the funds allocated under this section shall be allocated to rural communities with populations that do not exceed 3,000 inhabitants.

(f) Maximum grants

Grants made under this section may not exceed -

(1)

in the case of each grant made under subsection (a)(1) of this section, $500,000; and

(2)

in the case of each grant made under subsection (a)(2) of this section, $75,000.

(g) Full funding

Subject to subsection (e) of this section, grants under this section shall be made in an amount equal to 100 percent of the costs of the projects conducted under this section.

(h) Application

(1) Nationally competitive application process

The Secretary shall develop a nationally competitive application process to award grants under this section. The process shall include criteria for evaluating applications, including population, median household income, and the severity of the decline in quantity or quality of water.

(2) Timing

The Secretary shall make every effort to review and act on applications within 60 days of the date that such applications are submitted.

(i) Authorization of appropriations

There are authorized to be appropriated to carry out this section $35,000,000 for each of fiscal years 1996 through 2002.