Title 7

TITLE 7 > CHAPTER 50 > Sec. 1926.

Sec. 1926. - Water and waste facility loans and grants
(a) In general
(1)
The Secretary is also authorized to make or insure loans to
associations, including corporations not operated for profit, Indian tribes
on Federal and State reservations and other federally recognized Indian
tribes, and public and quasi-public agencies to provide for the application
or establishment of soil conservation practices, shifts in land use, the
conservation, development, use, and control of water, and the
installation or improvement of drainage or waste disposal facilities,
recreational developments, and essential community facilities including
necessary related equipment, all primarily serving farmers, ranchers,
farm tenants, farm laborers, rural businesses, and other rural residents,
and to furnish financial assistance or other aid in planning projects for
such purposes. The Secretary may also make loans to any borrower to
whom a loan has been made under the Rural Electrification Act of 1936
(7 U.S.C. 901 et seq.), for the conservation, development, use, and
control of water, and the installation of drainage or waste disposal
facilities, primarily serving farmers, ranchers, farm tenants, farm
laborers, rural businesses, and other rural residents. When any loan
made for a purpose specified in this paragraph is sold out of the
Agricultural Credit Insurance Fund as an insured loan, the interest or
other income thereon paid to an insured holder shall be included in gross
income for purposes of chapter 1 of title 26. With respect to loans of less
than $500,000 made or insured under this paragraph that are evidenced
by notes and mortgages, as distinguished from bond issues, borrowers
shall not be required to appoint bond counsel to review the legal validity
of the loan whenever the Secretary has available legal counsel to
perform such review.
(2)
The Secretary is authorized to make grants aggregating not to
exceed $590,000,000 in any fiscal year to such associations to finance
specific projects for works for the development, storage, treatment,
purification, or distribution of water or the collection, treatment, or
disposal of waste in rural areas. The amount of any grant made under
the authority of this paragraph shall not exceed 75 per centum of the
development cost of the project to serve the area which the association
determines can be feasibly served by the facility and to adequately serve

the reasonably foreseeable growth needs of the area. The Secretary shall
fix the grant rate for each project in conformity with regulations issued
by the Secretary that shall provide for a graduated scale of grant rates
establishing higher rates for projects in communities that have lower
community population and income levels.
(3)
No grant shall be made under paragraph (2) of this subsection in
connection with any project unless the Secretary determines that the
project
(i)
will serve a rural area which, if such project is carried out, is
not likely to decline in population below that for which the
project was designed,
(ii)
is designed and constructed so that adequate capacity will or
can be made available to serve the present population of the
area to the extent feasible and to serve the reasonably
foreseeable growth needs of the area, and
(iii)
is necessary for an orderly community development
consistent with a comprehensive community water, waste
disposal, or other development plan of the rural area.
(4)
(A)
The term ''development cost'' means the cost of construction
of a facility and the land, easements, and rights-of-way, and water
rights necessary to the construction and operation of the facility.
(B)
The term ''project'' shall include facilities providing central
service or facilities serving individual properties, or both.
(5) Application requirements. -

Not earlier than 60 days before a preliminary application is filed for
a loan under paragraph (1) or a grant under paragraph (2) for a water or
waste disposal purpose, a notice of the intent of the applicant to apply
for the loan or grant shall be published in a general circulation
newspaper. The selection of engineers for a project design shall be done
by a request for proposals by the applicant.
(6)
The Secretary may make grants aggregating not to exceed
$30,000,000 in any fiscal year to public bodies or such other agencies as
the Secretary may determine having authority to prepare comprehensive
plans for the development of water or waste disposal systems in rural
areas which do not have funds available for immediate undertaking of
the preparation of such plan.
(7) Definition of rural and rural areas. For the purpose of water and waste disposal grants and direct and
guaranteed loans provided under paragraphs (1) and (2), the terms
''rural'' and ''rural area'' mean a city, town, or unincorporated area that
has a population of no more than 10,000 inhabitants.
(8)
In each instance where the Secretary receives two or more
applications for financial assistance for projects that would serve
substantially the same group of residents within a single rural area, and
one such application is submitted by a city, town, county or other unit of
general local government, he shall, in the absence of substantial reasons
to the contrary, provide such assistance to such city, town, county or
other unit of general local government.
(9) Conformity with state drinking water standards. No Federal funds shall be made available under this section for a
water system unless the Secretary determines that the water system will
make significant progress toward meeting the standards established
under title XIV of the Public Health Service Act (commonly known as the
''Safe Drinking Water Act'') (42 U.S.C. 300f et seq.).
(10) Conformity with federal and state water pollution control standards. No Federal funds shall be made available under this section for a
water treatment discharge or waste disposal system unless the Secretary
determines that the effluent from the system conforms with applicable

Federal and State water pollution control standards.
(11) Rural business opportunity grants. (A) In general. The Secretary may make grants, not to exceed $1,500,000
annually, to public bodies, private nonprofit community
development corporations or entities, or such other agencies as
the Secretary may select to enable the recipients (i)
to identify and analyze business opportunities, including
opportunities in export markets, that will use local rural
economic and human resources;
(ii)
to identify, train, and provide technical assistance to existing
or prospective rural entrepreneurs and managers;
(iii)
to establish business support centers and otherwise assist in
the creation of new rural businesses, the development of
methods of financing local businesses, and the enhancement
of the capacity of local individuals and entities to engage in
sound economic activities;
(iv)
to conduct regional, community, and local economic
development planning and coordination, and leadership
development; and
(v)
to establish centers for training, technology, and trade that
will provide training to rural businesses in the utilization of
interactive communications technologies to develop
international trade opportunities and markets.
(B) Criteria. In awarding the grants, the Secretary shall consider, among

other criteria to be established by the Secretary (i)
the extent to which the applicant provides development
services in the rural service area of the applicant; and
(ii)
the capability of the applicant to accomplish the activities
described in the relevant clauses of subparagraph (A).
(C) Coordination. The Secretary shall ensure, to the maximum extent
practicable, that assistance provided under this paragraph is
coordinated with and delivered in cooperation with similar services
or assistance provided to rural residents by the Cooperative State
Research, Education, and Extension Service or other Federal
agencies.
(D) Authorization of appropriations. There are authorized to be appropriated to carry out this
paragraph $7,500,000 for each of fiscal years 1996 through 2002.
(12)
(A)
The Secretary shall, in cooperation with institutions eligible to
receive funds under the Act of July 2, 1862 (12 Stat. 503-505, as
amended; 7 U.S.C. 301-305, 307 and 308), or the Act of August
30, 1890 (26 Stat. 417-419, as amended; 7 U.S.C. 321-326 and
328), including the Tuskegee Institute and State, substate, and
regional planning bodies, establish a system for the dissemination
of information and technical assistance on federally sponsored or
funded programs. The system shall be for the use of institutions
eligible to receive funds under the Act of July 2, 1862 (12 Stat.
503-505, as amended; 7 U.S.C. 301-305, 307, and 308), or the
Act of August 30, 1890 (26 Stat. 417-419, as amended; 7 U.S.C.
321-326 and 328), including the Tuskegee Institute and State,
substate, and regional planning bodies, and other persons
concerned with rural development.
(B)

The informational system developed under this paragraph
shall contain all pertinent information, including, but not limited to,
information contained in the Federal Procurement Data System,
Federal Assistance Program Retrieval System, Catalogue of Federal
Domestic Assistance, Geographic Distribution of Federal Funds,
United States Census, and Code of Federal Regulations.
(C)
The Secretary shall obtain from all other Federal departments
and agencies comprehensive, relevant, and applicable information
on programs under their jurisdiction that are operated in rural
areas.
(D)
Of the sums authorized to be appropriated to carry out the
provisions of this chapter, not more than $1,000,000 per year may
be expended to carry out the provisions of this paragraph.
(13)
In the making of loans and grants for community waste disposal
and water facilities under paragraphs (1) and (2) of this subsection the
Secretary shall accord highest priority to the application of any
municipality or other public agency (including an Indian tribe on a
Federal or State reservation or other federally recognized Indian tribal
group) in a rural community having a population not in excess of five
thousand five hundred and which, in the case of water facility loans, has
a community water supply system, where the Secretary determines that
due to unanticipated diminution or deterioration of its water supply,
immediate action is needed, or in the case of waste disposal, has a
community waste disposal system, where the Secretary determines that
due to unanticipated occurrences the system is not adequate to the
needs of the community. The Secretary shall utilize the Soil Conservation
Service in rendering technical assistance to applicants under this
paragraph to the extent he deems appropriate.
(14) Rural water and wastewater technical assistance and training programs. (A) In general. The Secretary may make grants to private nonprofit
organizations for the purpose of enabling them to provide to
associations described in paragraph (1) of this subsection technical

assistance and training to (i)
identify, and evaluate alternative solutions to, problems
relating to the obtaining, storage, treatment, purification, or
distribution of water or the collection, treatment, or disposal
of waste in rural areas;
(ii)
prepare applications to receive financial assistance for any
purpose specified in paragraph (2) of this subsection from
any public or private source; and
(iii)
improve the operation and maintenance practices at any
existing works for the storage, treatment, purification, or
distribution of water or the collection, treatment, or disposal
of waste in rural areas.
(B) Selection priority. In selecting recipients of grants to be made under
subparagraph (A), the Secretary shall give priority to private
nonprofit organizations that have experience in providing the
technical assistance and training described in subparagraph (A) to
associations serving rural areas in which residents have low
income and in which water supply systems or waste facilities are
unhealthful.
(C) Funding. Not less than 1 nor more than 3 percent of any funds
appropriated to carry out paragraph (2) of this subsection for any
fiscal year shall be reserved for grants under subparagraph (A)
unless the applications, qualifying for grants, received by the
Secretary from eligible nonprofit organizations for the fiscal year
total less than 1 per centum of those funds.
(15)
In the case of water and waste disposal facility projects serving
more than one separate rural community, the Secretary shall use the
median population level and the community income level of all the
separate communities to be served in applying the standards specified in

paragraph (2) of this subsection and section 1927(a)(3)(A) of this title.
(16)
Grants under paragraph (2) of this subsection may be used to pay
the local share requirements of another Federal grant-in-aid program to
the extent permitted under the law providing for such grant-in-aid
program.
(17)
(A)
In the approval and administration of a loan made under
paragraph (1) for a water or waste disposal facility, the Secretary
shall consider fully any recommendation made by the loan
applicant or borrower concerning the technical design and choice
of materials to be used for such facility.
(B)
If the Secretary determines that a design or materials, other
than those that were recommended, should be used in the water
or waste disposal facility, the Secretary shall provide such
applicant or borrower with a comprehensive justification for such
determination.
(18)
In making or insuring loans or making grants under this subsection,
the Secretary may not condition approval of such loans or grants upon
any requirement, condition or certification other than those specified
under this chapter.
(19) Community facilities grant program. (A) In general. The Secretary may make grants, in a total amount not to
exceed $10,000,000 for any fiscal year, to associations, units of
general local government, nonprofit corporations, Indian tribes (as
such term is defined under section 450b(e) of title 25), [1] and
federally recognized Indian tribes to provide the Federal share of
the cost of developing specific essential community facilities in
rural areas.

(B) Federal share. (i) In general. Except as provided in clauses (ii) and (iii), the Secretary
shall, by regulation, establish the amount of the Federal
share of the cost of the facility under this paragraph.
(ii) Maximum amount. The amount of a grant provided under this paragraph for a
facility shall not exceed 75 percent of the cost of developing
the facility.
(iii) Graduated scale. The Secretary shall provide for a graduated scale for the
amount of the Federal share provided under this paragraph,
with higher Federal shares for facilities in communities that
have lower community population and income levels, as
determined by the Secretary.
(20) Community facilities grant program for rural communities with extreme
unemployment and severe economic depression. (A) Definition of not employed rate. In this paragraph, the term ''not employed rate'', with respect
to a community, means the percentage of individuals over the age
of 18 who reside within the community and who are ready, willing,
and able to be employed but are unable to find employment, as
determined by the department of labor of the State in which the
community is located.
(B) Grant authority. The Secretary may make grants to associations, units of
general local government, nonprofit corporations, and Indian tribes
(as defined in section 450b of title 25) in a State to provide the
Federal share of the cost of developing specific essential
community facilities in rural communities with respect to which the
not employed rate is greater than the lesser of (i)
500 percent of the average national unemployment rate on
November 9, 2000, as determined by the Bureau of Labor

Statistics; or
(ii)
200 percent of the average national unemployment rate
during the Great Depression, as determined by the Bureau of
Labor Statistics.
(C) Federal share. Paragraph (19)(B) shall apply to a grant made under this
paragraph.
(D) Authorization of appropriations. There are authorized to be appropriated to carry out this
paragraph $50,000,000 for fiscal year 2001 and such sums as are
necessary for each subsequent fiscal year, of which not more than
5 percent of the amount made available for a fiscal year shall be
available for community planning and implementation.
(21) Community facilities grant program for rural communities with high levels
of out-migration or loss of population. (A) Grant authority. The Secretary may make grants to associations, units of
general local government, nonprofit corporations, and Indian tribes
(as defined in section 450b of title 25) in a State to provide the
Federal share of the cost of developing specific essential
community facilities in any geographic area (i)
that is represented by (I)
any political subdivision of a State;
(II)
an Indian tribe on a Federal or State reservation; or
(III)

other federally recognized Indian tribal group;
(ii)
that is located in a rural area (as defined in section 2009 of
this title);
(iii)
with respect to which, during the most recent 5-year period,
the net out-migration of inhabitants, or other population
loss, from the area equals or exceeds 5 percent of the
population of the area; and
(iv)
that has a median household income that is less than the
nonmetropolitan median household income of the United
States.
(B) Federal share. Paragraph (19)(B) shall apply to a grant made under this
paragraph.
(C) Authorization of appropriations. There are authorized to be appropriated to carry out this
paragraph $50,000,000 for fiscal year 2001 and such sums as are
necessary for each subsequent fiscal year, of which not more than
5 percent of the amount made available for a fiscal year shall be
available for community planning and implementation.
(b) Curtailment or limitation of service prohibited
The service provided or made available through any such association shall
not be curtailed or limited by inclusion of the area served by such association
within the boundaries of any municipal corporation or other public body, or by
the granting of any private franchise for similar service within such area during
the term of such loan; nor shall the happening of any such event be the basis
of requiring such association to secure any franchise, license, or permit as a
condition to continuing to serve the area served by the association at the time
of the occurrence of such event.

(c) Repealed. Pub. L. 91-606, title III, Sec. 302(2), Dec. 31, 1970, 84 Stat. 1759
(d)
Carryover of unused authorizations for appropriations
Any amounts appropriated under this section shall remain available until
expended, and any amounts authorized for any fiscal year under this section
but not appropriated may be appropriated for any succeeding fiscal year

[1] So in original.