To
provide basic human amenities, alleviate health hazards and promote
the orderly growth of the rural areas of the nation by meeting the
need for new and improved rural water and waste disposal facilities.
TYPES
OF ASSISTANCE:
Project Grants. Place Cursor Here for Definition
Direct Loans. Place Cursor Here for Definition
Guaranteed/Insured Loans. Place Cursor Here for Definition
USES
AND USE RESTRICTIONS:
Funds
may be used for the installation, repair, improvement, or expansion
of a rural water facility including distribution lines, well pumping
facilities and costs related thereto, and the installation, repair,
improvement, or expansion of a rural waste disposal facility including
the collection, and treatment of sanitary, storm, and solid wastes.
Grant funds may not be used to pay: Interest on loans, operation
and maintenance costs, or to acquire or refinance an existing system.
No maximum loan amount is established by statute. The maximum term
on all loans is 40 years. However, no repayment period will exceed
any statutory limitation or the organization's borrowing authority
nor the useful life of the improvement or facility to be financed.
There are currently three interest rates for direct loans: A 4.5
percent rate when the loan is required to meet health or sanitary
standards and the median household income of the service area is
below the higher of the poverty line or 80 percent of the statewide
Nonmetropolitan median household income; the intermediate rate,
halfway between 4.5 percent and market rate, if the median household
income of the service area is not more than 100 percent of the nonmetropolitan
median household income of the State; and market rate for those
applicants that do not qualify for 4.5 percent or intermediate rate.
The interest rate on guaranteed loans is negotiable between the
applicant and the lender.
ELIGIBILITY
REQUIREMENTS:
Applicant
Eligibility: Municipalities, counties, and other
political subdivisions of a State, such as districts and authorities,
associations, cooperatives, corporations operated on a not-for-profit
basis, Indian tribes on Federal and State reservations and other
Federally recognized Indian tribes. Facilities shall primarily serve
rural residents and rural businesses. The service area shall not
include any area in any city or town having a population in excess
of 10,000 inhabitants according to the latest decennial census of
the United States. The applicant must: (1) Be unable to finance
the proposed project from its own resources or through commercial
credit at reasonable rates and terms; and (2) have the legal authority
necessary for constructing, operating, and maintaining the proposed
facility or service, and for obtaining, giving security for, and
repaying the proposed loan. Plans and specifications must be developed
to comply with State and local health and pollution regulations
and other requirements. Grants are made only when necessary to reduce
the average annual benefited user charges to a reasonable level.
Normally, grants are considered only when the debt service portion
of the cost to grant eligible users exceeds the following percentages
of median household incomes (MHI) for the applicant service area;
0.5 percent when the MHI of the service area is below the poverty
line or below 80 percent (whichever is higher) of the State's non-metropolitan
household income (NMHI); 1.0 percent when the NMHI of the service
area exceeds the 0.5 percent requirement but is not more than 100
percent of the State's NMHI; no RUS grant funds will be used in
any project when the MHI of the service area is above the poverty
line and more than 100 percent of the State's NMHI. The RUS grant
may not exceed 75 percent of the eligible project development cost
when the MHI of the service area is below the poverty line or below
80 percent (whichever is higher) of the State's NMHI and the project
is necessary to alleviate a health or sanitary problem; 45 percent
when the MHI of the service area exceeds the 75 percent requirements,
but is not more than 100 percent of the State's NMHI. Assistance
is authorized for eligible applicants in rural areas of the United
States, Puerto Rico, the Virgin Islands, Guam, Commonwealth of Northern
Mariana Islands, American Samoa, and to the extent the Secretary
determines feasible and appropriate, the Trust Territory of the
Pacific Islands.
Beneficiary
Eligibility: Farmers, ranchers, rural residents,
rural businesses and other users in eligible applicant areas.
Credentials/Documentation:
Evidence of legal capacity, economic feasibility and financial
responsibility relative to the activity for which assistance is
requested. Costs will be determined in accordance with OMB Circular
No. A-87 for State and local governments.
Pre-application
Coordination: The standard application forms
as furnished by the Federal agency and required by OMB Circular
No. A-102 must be used for this program. An environmental assessment
is required for this program. This program is eligible for coverage
under E.O. 12372, "Intergovernmental Review of Federal Programs."
An applicant should consult the office or official designated as
the single point of contact in his or her State for more information
on the process the State requires to be followed in applying for
assistance, if the State has selected the program for review.
Application
Procedure: USDA Rural Development (RD) offices
administers the program on the local level. Application Form SF-424
is filed at the local RD Office from which assistance may be obtained.
This program is subject to the provisions of OMB Circular No.
A-110.
Award
Procedure: After the application has been
reviewed at the local level, it is forwarded to the RD State Director
for review and processing instructions. Following completion of
application processing requirements and loan/grant approval, funds
are made available to the applicant.
Deadlines:
None.
Range
of Approval/Disapproval Time: From 30 to 90
days.
Appeals:
If an application is rejected, the reasons for rejection are fully
stated. The applicant may request a review of this decision at
the RD or RUS National level.
Renewals:
Not applicable.
ASSISTANCE
CONSIDERATIONS:
Formula
and Matching Requirements: This program has
no statutory formula. Funds are allocated to States based upon rural
population, number of households in poverty, and unemployment. This
program has no matching requirements.
Length
and Time Phasing of Assistance: A time limitation
is not specified for the use of RUS loan or grant funds. Funds
will be awarded when all RUS requirements are met and the project
can be completed on a timely basis. Funds may be advanced on an
as needed basis by the RUS to cover expenses for a 30-day period.
POST
ASSISTANCE REQUIREMENTS:
Reports:
Periodic reports are to be made to the RD servicing official.
Audits:
In accordance with the provisions of OMB Circular No. A- 133 (Revised,
June 24, 1997), "Audits of States, Local Governments, and Non-Profit
Organizations," non federal entities that expend financial assistance
of $300,000 or more in Federal awards will have a single or a
program-specific audit conducted for that year. Nonfederal entities
that expend less than $300,000 a year in Federal awards are exempt
from Federal audit requirements for that year, except as noted
in Circular No. A-133.
Records:
Records and accounts are required to reflect the operations of
the facility.
FINANCIAL
INFORMATION:
Account
Identification: (Loans) 12-4155-0-3-452; (Grants
and Loans) 12-0400-0-1-452.
Obligations:
(Direct Loans) FY 01 $765,619,417; FY 02 est $885,041,301; and
FY 03 est $900,000,000. (Guaranteed Loans) FY 01 $10,771,835;
FY 02 est $75,000,000; and FY 03 est $75,000,000. (Grants) FY
01 $557,606,000; FY 02 est $572,848,983; and FY 03 est $600,000,000.
Note: Technical Assistance and Training (TAT) and grants earmarked
under Section 306C of the Consolidated Farm and Rural Development
Act to Note: Colonias are included in these estimates.
Range
and Average of Financial Assistance:
(FY 2001) (Direct Loans) $500 to $9,509,000; Average: $854,285;
(Grants) $3,423 to $9,900,000; Average: $657,339.
There were 908 direct loans, 765 grants, and 9 guaranteed loans
made in fiscal year 2001. It is estimated that 1,121 direct, 15
guaranteed loans, and 902 grants will be made in fiscal year 2002.
REGULATIONS,
GUIDELINES, AND LITERATURE:
7 CFR 1780; Water and Waste Loans and Grants, PA 1203, 7 CFR 1980,
Subpart I; Community Programs Guaranteed Loans, PA 1100.
INFORMATION
CONTACTS:
Regional
or Local Office: Consult your local telephone
directory for Rural Development local number. If no listing, get
in touch with the appropriate Rural Development State Office listed
in Appendix IV of the Catalog.
Headquarters
Office: Assistant Administrator, Water and
Environmental Programs, Rural Utilities Service, Department of
Agriculture, Washington, DC 20250. Telephone: (202) 690-2670.
Web
Site Address: http://www.rurdev.usda.gov
EXAMPLES
OF FUNDED PROJECTS:
The following areas received funds for specified projects: Construct
new water system consisting of water lines, pumping stations, wells,
storage tanks and treatment plants; water system improvements consisting
of additional water lines, new water treatment facility and booster
pump; renovation of existing water system which includes new distribution
lines, wells and pressure tanks; construct new waste water collection
and treatment systems; replace waste water treatment plant and improve
waste water collection lines; rehabilitate waste water collection
lines and construct lift station; purchase site for landfill; and
purchase trucks and equipment for solid waste disposal.
CRITERIA
FOR SELECTING PROPOSALS:
In selecting applications for funding, the agency cooperates with
appropriate State agencies. RUS assistance for water and waste disposal
projects will be directed toward truly rural areas and rural communities.
Considerations for available funds emphasize such criteria as: Population;
low income unemployment; and health and sanitary problems. RUS financed
facilities will not be inconsistent with any development plans of
the State, multijurisdictional area, county, or municipality in
which the proposed project is located.
