Source: https://www.federalregister.gov/articles/2005/05/19/05-10003/household-water-well-system-grant-program
Timestamp: 2016-06-24 23:50:20
Document Index: 730039072

Matched Legal Cases: ['art 1776', 'ART 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776', '§ 1776']

Federal Register | Household Water Well System Grant Program
Dates: This rule will become effective June 20, 2005.
-28791 (6 pages)
0572-AC00
Document Number: 05-10003
Shorter URL: https://federalregister.gov/a/05-10003 Related Topics
The Rural Utilities Service (RUS) issues regulations to establish the Household Water Well System (HWWS) Program. This action establishes a grant program as authorized by Section 306E of the Consolidated Farm and Rural Development Act (CONACT). The HWWS Program will provide grants to private non-profit organizations, which, in turn, will use the funds to set up a loan program, making loans to eligible individuals for household water well systems. Eligible individuals may use the loans to construct, refurbish, and service individual household water well systems that they own or will own in rural areas. Additionally, the rule outlines the process by which applicants can apply for the program and describes how RUS will administer the grant program.
This rule will become effective June 20, 2005.
This final rule has been determined to be not significant under Executive Order 12866, Regulatory Planning and Review. Therefore, it has not been reviewed by the Office of Management and Budget (OMB).
This rule has been reviewed under Executive Order 12988, Civil Justice Reform. RUS has determined that this rule meets the applicable standards provided in section 3 of the Executive Order. In accordance with the Executive Order and the rule: (1) All state and local laws and regulations that are in conflict with this rule will be preempted; (2) no retroactive effect will be given to the rule; and (3) administrative appeal procedures, if any, must be exhausted before litigation against the Department or its agencies may be initiated in accordance with section 212(e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912).
The information collection and recordkeeping requirements contained in this rule have been cleared under OMB control number 0572-0139 in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).
The program described by this rule is listed in the Catalog of Federal Domestic Assistance Programs under number 10.862. This catalog is available electronically through the free CFDA website on the Internet at http://www.cfda.gov. The print edition may be purchased by calling the Superintendent of Documents at 202-512-1800 or toll free at 866-512-1800, or ordering it online at http://bookstore.gpo.gov.
This rule contains no Federal mandates (under the regulatory provision of Title II of the Unfunded Mandates Reform Act of 1995) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of section 202 and 205 of the Unfunded Mandates Reform Act of 1995.
On May 13, 2002, the Farm Security and Rural Investment Act of 2002 (Farm Bill) was signed into law as Public Law 107-171. Section 6012 of the Farm Bill amended the CONACT by adding a grant program of which the proceeds would be used to establish a lending program. Under the Household Water Well System Program, the Secretary may make grants to private non-profit organizations to establish a revolving loan program. Loans may be made to eligible individuals to construct, refurbish, and service individual household water well systems that they own or will own in rural areas. The loans will be serviced through the USDA Centralized Servicing Center to enhance standardized servicing and minimize related servicing fees.
The CONACT defines an “eligible individual” to mean “an individual who is a member of a household the members of which have a combined income (for the most recent 12-month period for which the information is available) that is not more than 100 percent of the median nonmetropolitan household income for the State or territory in which the individual resides, according to the most recent decennial census of the United States.”
This program is authorized to be appropriated $10,000,000 for each of the fiscal years (FY) 2003 through 2007. There was no funding appropriated in FY 2003, but $1,000,000 was appropriated in each fiscal year 2004 and 2005. The appropriations were authorized by the Consolidated Appropriations Act, 2004, Public Law 108-199 (Jan. 23, 2004; 118 Stat.3); and the Consolidated Appropriations Act, 2005, Public Law 108-447 (Dec. 8, 2004, 118 Stat. 2809).
To reduce duplicative promulgation of specific rules regarding grants and loans hereunder, RUS has referenced existing USDA rules to the extent practicable, including references to specific regulations and standard forms.
RUS published a notice of inquiry, requesting comments on the grant program, in the Federal Register on February 10, 2004 (69 FR 6251). It published regulations for the HWWS Program in a direct final rule on October 6, 2004 (69 FR 59764). The direct final rule would have been effective on November 22, 2004. However, since RUS received written adverse comments by November 5, 2004, the rule was withdrawn. RUS published a notice of withdrawal in the Federal Register on November 17, 2004 (69 FR 67263). Based on the parallel proposed rule also published on October 6, 2004 (69 FR 59836), RUS stated that it would publish this final rule and address the adverse comments made. RUS will not institute a second comment period on this action.
The adverse comments primarily challenged the program's matching or cost sharing requirements and the agency's position to not permit in-kind contributions to count towards satisfying the requirements. The following paragraphs briefly summarize and respond to the comments received.
Comment: Either eliminate the requirement that grant applicants must provide matching funds in order to be considered eligible for consideration or modify the requirement.
Response: A matching requirement is in the best interests of the HWWS program. It is an essential support mechanism in establishing the loan program. A cash match combined with the HWWS grant will make more funds available to start up the revolving loan fund so that a greater number of rural residents may benefit from the program. RUS has lowered the minimum eligibility percentage from 26 percent to 10 percent of the total project costs. Any applicant that does not offer at least a 10 percent match will be ineligible for the HWWS Program.
Comment: Eliminate the 26 percent match requirement for eligibility and establish a new scale to award priority points for matching funds as one criterion to consider in selecting grant recipients.
Response: The minimum level of matching funds for which an applicant receives priority points has been revised downward to 10 percent. Compared to the minimum matching levels of other Rural Development programs which range from 5 to 20 percent, the level is reasonable. The smaller percentage will allow small non-profits to compete with large national non-profit organizations. The priority points will be awarded as follows:
Withdrawn regulation
1Ineligible.
Comment: Permit in-kind contributions to qualify as matching funds and broadly define them.
Response: The RUS water and waste programs that use in-kind contributions to supplement federal funds are technical assistance programs that do not have a revolving loan fund component to them. The thrust of the HWWS Program is to provide low interest loans to the greatest number of eligible individuals possible, using a grant recipient as an intermediary for the loans. The most effective way to realize that goal is to have a revolving loan fund that is capitalized with as much money as possible. Consequently, RUS is requiring a matching cash contribution, which may include funds contributed by grant recipients, funds donated from third parties, or other federal grant funds specifically authorized by law to be used to match funds. In-kind contributions will not be considered in satisfying the HWWS Program's matching requirement. This policy is in line with other Rural Development programs that feature a re-lending program but do not allow in-kind contributions as a matching requirement.
Comment: Allow the grant recipient discretion in the use of matching funds. The requirement that each loan recipient's project be made up of HWWS grant funds and matching funds should be changed. HWWS grant funds and any matching funds should go into the revolving loan fund and that fund should be used to issue loans and to pay for administrative costs related to the HWWS purpose, without distinction as to whether those payments are from HWWS grant or matching funds.
Response: The grant recipient has discretion in using matching funds the same as federal funds as long as they are for authorized grant purposes. Authorized grant purposes include establishing a loan program for household water well systems, making loans to eligible well owners, and paying for administrative expenses related to operating the loan program. The expenses must be allowable costs in accordance with federal cost principles. There is no requirement that an individual loan recipient's project be made up entirely of HWWS grant funds and matching funds.
Grant funds and matching funds must be placed into the revolving loan fund. The recipient may transfer additional assets into the fund where they would become part of the fund and be available for authorized grant purposes. Loans may be made and the administrative expenses may be paid from the revolving loan fund as authorized grant purposes. As long as any part of the HWWS grant remains available for lending and loans made from the revolving loan fund have an outstanding balance, the grant recipient must use funds in the revolving loan fund for authorized grant purposes.
Comment: Maintain the character of purpose of the revolved funds.
Response: The HWWS regulation places enough controls on the revolved funds so that they are not subject to non-programmatic uses. First, section 1776.17(g) states that the revolved funds are a part of the revolving loan fund. Second, under section 1776.17(h), the revolved funds would be used for authorized purposes before any grant funds that might be in the revolving loan fund would be used. Third, section 1776.17(k), requires that cash in the revolving fund from any source must be available for additional loans if the cash is not required for debt service, approved administrative costs, or reasonable reserves. Since the revolved funds would be repayments of loans and the loans would have a balance, any funds in the revolving loan fund must be used for programmatic purposes in accordance with the opening paragraph of section 1776.17.
Comment: Delay application process until the final rule is revised to reflect the above comments, and start a new application process based on the revised rule.
Response: Because the direct final rule was withdrawn, the deadline for the application process was extended until a final rule is published. A new deadline will be set at the time of publication.
List of Subjects in 7 CFR Part 1776 Back to Top
PART 1776—HOUSEHOLD WATER WELL SYSTEM GRANT PROGRAM Back to Top
1776.1 Purpose.
1776.2 Uniform Federal Assistance Provisions.
1776.3 Definitions.
1776.4 [Reserved]
1776.5 Eligibility to receive a HWWS grant.
1776.6 Notice of availability of funds.
1776.7 HWWS grant application process.
1776.8 Methods for submitting applications.
1776.9 Scoring applications.
1776.10 Grant agreement.
1776.11 Revolving loan fund.
1776.12 Use of HWWS grant proceeds.
1776.13 Administrative expenses.
1776.14 Eligibility to receive a HWWS loan.
1776.15 Terms of loans.
1776.16 Loan servicing.
1776.17 Revolving loan fund maintenance.
§ 1776.1 Purpose.
§ 1776.2 Uniform Federal Assistance Provisions.
§ 1776.3 Definitions.
Eligible individual means an individual who is a member of a household the members of which have a combined income (for the most recent 12-month period for which the information is available) that is not more than 100 percent of the median nonmetropolitan household income for the State or territory in which the individual resides, according to the most recent decennial census of the United States.
HWWS grant means a grant awarded by RUS to a grant recipient under this part. HWWS loan means a loan made by a grant recipient to a loan recipient using the direct or indirect proceeds of a HWWS grant awarded under this part.
§ 1776.4 [Reserved]
Subpart B—HWWS Grants Back to Top
§ 1776.5 Eligibility to receive a HWWS grant.
§ 1776.6 Notice of availability of funds.
(a) In Fiscal Year 2005, applications will be accepted for this program from May 19, 2005, until July 18, 2005, at which time the application period will close. An applicant may withdraw, substitute, amend or supplement its application at any time before the application period closes. Once the application period has closed, all applications will be final.
§ 1776.7 HWWS Grant application process.
§ 1776.8 Methods for submitting applications.
(d) The methods of submitting applications may be changed from time to reflect changes in addresses and electronic submission procedures. The applicant should refer to the most recent notice of funding availability for notice of any such changes. In the event of any discrepancy, the notice must be followed.
§ 1776.9 Scoring applications.
§ 1776.10 Grant agreement.
RUS and the grant recipient will enter into an agreement setting forth the terms and conditions governing a particular HWWS grant award. RUS will furnish the form of grant agreement. No funds awarded under this part shall be disbursed to the grant recipient before the grant agreement is binding and RUS has received a fully executed counterpart of the grant agreement.
§ 1776.11 Revolving loan fund.
The grant recipient shall establish and maintain a revolving loan fund for the purposes set forth in § 1776.12. All loans made to loan recipients shall be drawn from the revolving loan fund. The loans shall be serviced, and the revolving loan fund shall be maintained, as set forth in § 1776.17.
§ 1776.12 Use of HWWS grant proceeds.
§ 1776.13 Administrative expenses.
Subpart C—HWWS Loans Back to Top
§ 1776.14 Eligibility to receive a HWWS loan.
§ 1776.15 Terms of loans.
§ 1776.16 Loan servicing.
(a) If RUS determines that HWWS loans may be serviced by CSC, then the grant recipient will enter into an agreement with the Centralized Servicing Center for servicing all HWWS loans made from the revolving loan fund. All HWWS loan payments will be received by and processed at the Centralized Servicing Center. The grant recipient will be charged a fee for this service, and such fee should be included in the projected financial statements and work plan submitted as part of the grant application. This fee may be reimbursed as an administrative expense as provided in § 1776.13.
§ 1776.17 Revolving loan fund maintenance.
As long as any part of the HWWS grant remains available for lending, and loans made from the revolving loan fund have an outstanding balance due, the grant recipient must maintain the revolving loan fund for the purposes set forth in § 1776.13.
(a) All HWWS grant funds received by a grant recipient must be deposited into the revolving loan fund. (b) The grant recipient may transfer additional assets into the revolving loan fund.
[FR Doc. 05-10003 Filed 5-18-05; 8:45 am]