7 CFR part 1777 - Section 306C WWD Loans & Grants

Rural Utilities Service, USDA

§ 1777.4

other authorized uses must be deposited in accounts in banks or other financial institutions. Such accounts
must be fully covered by Federal deposit insurance or fully collateralized
with U.S. Government obligations, and
must be interest bearing. Any interest
earned thereon remains a part of the
revolving loan fund.

PART 1777—SECTION 306C WWD
LOANS AND GRANTS
Sec.
1777.1 General.
1777.2 [Reserved]
1777.3 Objective.
1777.4 Definitions.
1777.5–1777.10 [Reserved]
1777.11 Making, processing, and servicing
loans and grants.
1777.12 Eligibility.
1777.13 Project priority.
1777.14–1777.20 [Reserved]
1777.21 Use of funds.
1777.22–1777.30 [Reserved]
1777.31 Rates.
1777.32–1777.40 [Reserved]
1777.41 Individual loans and grants.
1777.42 Delegation of authority.
1777.43 Bulletins.
1777.44–1777.99 [Reserved]
1777.100 OMB control number.
AUTHORITY: 5 U.S.C. 301; 7 U.S.C. 1989; 16
U.S.C. 1005.

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SOURCE: 62 FR 33473, June 19, 1997, unless
otherwise noted.

§ 1777.1 General.
(a) This part outlines Rural Utilities
Service (RUS) policies and procedures
for making Water and Waste Disposal
(WWD) loans and grants authorized
under section 306C of the Consolidated
Farm and Rural Development Act (7
U.S.C. 1926(c)), as amended.
(b) Agency officials will maintain liaison with officials of other Federal,
State, regional, and local development
agencies to coordinate related programs to achieve rural development
objectives.
(c) Agency officials shall cooperate
with appropriate State agencies in
making loans and/or grants that support State strategies for rural area development.
(d) Funds allocated in accordance
with this part will be considered for
use by Indian tribes within the State
regardless of whether State develop-

ment strategies include Indian reservations within the State’s boundaries. Indians residing on such reservations
must have an equal opportunity to participate in this program.
(e) Federal statutes provide for extending the Agency’s financial programs without regard to race, color, religion, sex, national origin, marital
status, age, or physical/mental handicap (provided the participant possesses
the capacity to enter into legal contracts).
§ 1777.2

[Reserved]

§ 1777.3

Objective.

The objective of the Section 306C
WWD Loans and Grants program is to
provide water and waste disposal facilities and services to low-income rural
communities whose residents face significant health risks.
§ 1777.4

Definitions.

Applicant. Entity that receives the
Agency loan or grant under this part.
The entities can be public bodies such
as municipalities, counties, districts,
authorities, or other political subdivisions of a State, and organizations operated on a not-for-profit basis such as
associations, cooperatives, private corporations, or Indian tribes on Federal
and State reservations, and other Federally recognized Indian tribes.
Colonia. Any identifiable community
designated in writing by the State or
county in which it is located; determined to be a colonia on the basis of
objective criteria including lack of potable water supply, lack of adequate
sewage systems, and lack of decent,
safe, and sanitary housing, inadequate
roads and drainage; and existed and
was generally recognized as a colonia
before October 1, 1989.
Cooperative. A cooperative formed
specifically for the purpose of the installation, expansion, improvement, or
operation of water supply or waste disposal facilities or systems.
Individual. Recipient of a loan or
grant through the applicant to facilitate use of the applicant’s water and/or
waste disposal system.

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§§ 1777.5–1777.10

7 CFR Ch. XVII (1–1–10 Edition)

Rural areas. Includes unincorporated
areas and any city or town with a population not in excess of 10,000 inhabitants according to the most recent decennial census of the United States.
They can be located in any of the 50
States, the Commonwealth of Puerto
Rico, the Western Pacific Territories,
Marshall Islands, Federated States of
Micronesia, Republic of Palau, and the
U.S. Virgin Islands.
Statewide
Nonmetropolitan
Median
Household Income (SNMHI). Median
household income of the State’s nonmetropolitan counties and portions of
metropolitan counties outside of cities,
towns or places of 50,000 or more population.
[62 FR 33473, June 19, 1997, as amended at 69
FR 65519, Nov. 15, 2004]

§§ 1777.5–1777.10

[Reserved]

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§ 1777.11 Making, processing, and servicing loans and grants.
Unless specifically modified by this
part, loans and/or grants will be made,
processed, and serviced in accordance
with part 1780 of this chapter.
§ 1777.12 Eligibility.
(a) The provisions of paragraphs (a)
(1) and (2) of this section do not apply
to a rural area recognized as a colonia.
Otherwise, the facility financed under
this part must provide water and/or
waste disposal services to rural areas
of a county where, on the date
preapplication is received by the Agency, the:
(1) Per capita income of the residents
is not more than 70 percent of the most
recent national average per capita income, as determined by the Department of Commerce; and
(2) Unemployment rate of the residents is not less than 125 percent of the
most recent national average unemployment rate, as determined by the
Bureau of Labor Statistics.
(b) Residents of the rural area to be
served must face significant health
risks due to the fact that a significant
proportion of the community’s residents do not have access to, or are not
served by, adequate, affordable, water
and/or waste disposal systems. The file
should contain documentation to support this determination.

§ 1777.13 Project priority.
Paragraphs (a) through (d) of this
section indicate items and conditions
which must be considered in selecting
preapplications for further development.
When
ranking
eligible
preapplications for consideration for
limited funds, Agency officials must
consider the priority items met by
each preapplication and the degree to
which those priorities are met.
(a)
Preapplications.
The
preapplication and supporting information submitted with it will be used to
determine applicant eligibility and the
proposed project’s priority for available funds. Applicants determined ineligible will be advised of their appeal
rights in accordance with 7 CFR part
11.
(b)
State
Office
review.
All
preapplications will be reviewed and
scored for funding priority at each
State Office using RUS Bulletin 1777–2.
Funds will be requested from the National Office, Attention: Water and
Waste Processing, using RUS Bulletin
1777–3. Eligible applicants that cannot
be funded should be advised that funds
are not available and advised of their
appeal rights as set forth in 7 CFR part
11.
(c) National Office. The National Office will allocate funds on a project-byproject basis as requests are received.
If the amount of funds requested exceeds the amount of funds available,
the total project score will be used to
select projects for funding. The RUS
Administrator may assign up to 35 additional points that will be considered
in the total points for items such as geographic distribution of funds, severity
of health risks, etc.
(d) Selection priorities. The priorities
described below will be used to rate
preapplications
and
in
selecting
projects for funding. Points will be distributed as indicated in paragraphs
(d)(1) through (d)(5) of this section and
will be used in selecting projects for
funding. A copy of RUS Bulletin 1777–2,
used to rate applications, should be
placed in the case file for future reference.
(1) Population. The proposed project
will serve an area with a rural population:
(i) Not in excess of 1,500—30 points.

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Rural Utilities Service, USDA

§ 1777.41

(ii) More than 1,500 and not in excess
of 3,000—20 points.
(iii) More than 3,000 and not in excess
of 5,500—10 points.
(2) Income. The median household income of population to be served by the
proposed project is:
(i) Not in excess of 50 percent of the
statewide
nonmetropolitan
median
household income—40 points.
(ii) More than 50 percent and not in
excess of 60 percent of the statewide
nonmetropolitan median household income—20 points.
(iii) More than 60 percent and not in
excess of 70 percent of the statewide
nonmetropolitan median household income—10 points.
(3) Joint financing. The amount of
joint financing committed to the proposed project is:
(i) Twenty percent or more private,
local, or State funds except Federal
funds channeled through a State agency—10 points.
(ii) Five to 19 percent private, local,
or State funds except Federal funds
channeled through a State agency—5
points.
(4) Colonia. (See definition in § 1777.4).
The proposed project will provide water
and/or waste disposal services to the
residents of a colonia—50 points.
(5) Discretionary. In certain cases, the
State Program Official may assign up
to 15 points for items such as natural
disaster, to improve compatibility/coordination between the Agency’s and
other agencies’ selection systems, to
assist those projects that are the most
cost effective, high unemployment
rate, severity of health risks, etc. A
written justification must be prepared
and attached to RUS Bulletin 1777–2
each time these points are assigned.

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§§ 1777.14–1777.20

[Reserved]

§ 1777.21 Use of funds.
(a) Applicant. Funds may be used to:
(1) Construct, enlarge, extend, or otherwise improve community water and/
or waste disposal systems. Otherwise
improve would include extending service lines to and/or connecting residence’s plumbing to the system.
(2) Make loans and grants to individuals for extending service lines to and/
or connecting residences to the appli-

cant’s system. The approval official
must determine that this is a practical
and economical method of connecting
individuals to the community water
and/or waste disposal system. Loan
funds can only be used for loans, and
grant funds can only be used for
grants.
(3) Make improvements to individual’s residence when needed to allow
use of the water and/or waste disposal
system.
(4) Grants can be made up to 100 percent of eligible project costs.
(b) Individuals. Funds may be used to:
(1) Extend service lines to residence.
(2) Connect service lines to residence’s plumbing.
(3) Pay reasonable charges or fees for
connecting to a community water and/
or waste disposal system.
(4) Pay for necessary installation of
plumbing and related fixtures within
dwellings lacking such facilities. This
is limited to one bathtub, sink, commode, kitchen sink, water heater, and
outside spigot.
(5) Construction and/or partitioning
off a portion of dwelling for a bathroom, not to exceed 4.6 square meters
(48 square feet) in size.
(6) Pay reasonable costs for closing
abandoned septic tanks and water wells
when necessary to protect the health
and safety of recipients of a grant in
paragraphs (b)(1) or (b)(2) of this section and is required by local or State
law.
§§ 1777.22–1777.30
§ 1777.31

[Reserved]

Rates.

(a) Applicant loans will bear interest
at the rate of 5 percent per annum.
(b) Individual loans will bear interest
at the rate of:
(1) Five percent per annum; or
(2) The Federal Financing Bank rate
for loans of a similar term at the time
of Agency loan approval, whichever is
less.
§§ 1777.32–1777.40
§ 1777.41

[Reserved]

Individual loans and grants.

(a) The amount of loan and grant
funds approved by the Agency will be

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§ 1777.42

7 CFR Ch. XVII (1–1–10 Edition)

based on the need shown in the application and an implementation plan submitted by the applicant. The implementation plan will include such
things as: purpose, how funds will be
used, proposed application process,
construction requirements, control and
disbursement of funds, etc. The implementation plan will be attached to
RUS Bulletin 1777–1.
(b) RUS Bulletin 1777–1 is a Memorandum of Agreement which sets forth
the procedures and regulations for
making and servicing loans and grants
made by applicants to individuals. The
State Program Official is authorized to
enter into a Memorandum of Agreement with any applicant providing
loans and/or grants to individuals. The
Memorandum of Agreement can be
amended to comply with State law and
recommendations by the Office of General Counsel. It may also be amended
to eliminate references to loans and/or
grants if no loan and/or grant is involved. The State Program Official is
responsible for:
(1) Ensuring that all provisions of the
Agreement are understood.
(2) Determining that the applicant
has the ability to make and service
loans and/or grants in the manner outlined in the Agreement.
(c) Agency funds remaining after providing individual loans and/or grants
will be returned to the Agency. The
funds should be disbursed to individuals within 1 year from the date water
and/or waste disposal service is available to the individuals. The State Program Official can make an exception to
this 1 year requirement if written justification is provided by the applicant.

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§ 1777.42 Delegation of authority.
The State Program Official is responsible for the overall implementation of
the authorities contained in this part
and may redelegate any such authority
to appropriate Agency employees.
§ 1777.43 Bulletins.
RUS Bulletin 1780–12 referenced in
part 1780 of this chapter and RUS Bulletin 1777–1, 1777–2 and 1777–3 are for use
in administering loans and/or grants
made under this part. Bulletins, instructions and forms are available from
any USDA/Rural Development office or

the Rural Utilities Service, United
States Department of Agriculture,
Washington, DC 20250–1500.
§§ 1777.44–1777.99

[Reserved]

§ 1777.100 OMB control number.
The reporting and recordkeeping requirements contained in this part have
been approved by the Office of Management and Budget and assigned OMB
control number 0570–0001. Public reporting burden for this collection of information is estimated to vary from 5
to 30 hours per response with an average of 17.5 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed,
and completing and reviewing the collection of information. Send comments
regarding this burden estimate or any
other aspect of this collection of information, including suggestions for reducing this burden, to U.S. Department
of Agriculture, Clearance Officer,
OIRM, Room 404–W, Washington, DC
20250; and to the Office of Information
and Regulatory Affairs, Office of Management and Budget, Washington, DC
20503.

PART 1778—EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE GRANTS
Sec.
1778.1 General.
1778.2 [Reserved]
1778.3 Objective.
1778.4 Definitions.
1778.5 [Reserved]
1778.6 Eligibility.
1778.7 Project priority.
1778.8 [Reserved]
1778.9 Uses.
1778.10 Restrictions.
1778.11 Maximum grants.
1778.12 [Reserved]
1778.13 Set-aside.
1778.14 Other considerations.
1778.15–1778.20 [Reserved]
1778.21 Application processing.
1778.22 Planning development and procurement.
1778.23 Grant closing and disbursement of
funds.
1778.24–1778.30 [Reserved]
1778.31 Performing development.
1778.32–1778.33 [Reserved]
1778.34 Grant servicing.
1778.35 Subsequent grants.

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