[Federal Register Volume 73, Number 222 (Monday, November 17, 2008)]
[Rules and Regulations]
[Pages 67778-67791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-26584]
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DEPARTMENT OF THE INTERIOR
Bureau of Reclamation
43 CFR Part 404
RIN 1006-AA54
Reclamation Rural Water Supply Program
AGENCY: Bureau of Reclamation, Interior.
ACTION: Interim final rule.
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SUMMARY: Reclamation is issuing this interim final rule to establish
programmatic criteria for the Reclamation Rural Water Supply Program
(Rural Water Supply Program), including criteria governing
prioritization, eligibility, and the evaluation of appraisal
investigations and feasibility studies. Title I of the Reclamation
Rural Water Supply Act of 2006, Public Law 109-451 (Act), authorized
Reclamation to establish the Rural Water Supply Program and requires
publication of programmatic criteria in the Federal Register. This rule
is intended to define for potential participants how the Rural Water
Supply Program authorized by the Act will be administered.
DATES: This rule is effective December 17, 2008. Submit comments on the
rule by January 16, 2009. The incorporation by reference of certain
publications listed in the rule is approved by the Director of the
Federal Register as of December 17, 2008. This interim final rule
serves as a 60-day Federal Register notice to the public allowing them
to comment on our information collection. Comments on the information
collection must be received by January 16, 2009.
ADDRESSES: You may submit comments on this rule, identified by the
number 1006-AA54, by one of the following methods:
--Use of the Federal rulemaking Web site: http://www.regulations.gov.
Follow the instructions for submitting comments. This rule has been
assigned Docket Identification number BOR-2008-0002.
--By mail to: Bureau of Reclamation, Denver Federal Center, P.O. Box
25007, Building 67, Denver, CO 80225, Attention: Avra Morgan, Mail Code
84-52000. Please include the number 1006-AA54 in your correspondence.
The Office of Management and Budget (OMB) has approved the
information collection requirements contained in this rule under an
emergency submission. The assigned OMB control number is 1006-0029.
Please submit comments on the information collection to the Bureau of
Reclamation, Attention: Avra Morgan, P.O. Box 25007, Denver, CO 80225
or by e-mail to [email protected].
FOR FURTHER INFORMATION CONTACT: Avra Morgan at 303-445-2906 or James
Hess at 202-513-0543.
SUPPLEMENTARY INFORMATION:
I. Background
The Rural Water Supply Program
Title I of the Act authorizes the Secretary of the Interior
(Secretary) to create the Rural Water Supply Program to address rural
water needs in the Reclamation States. Authority and responsibility for
implementing the provisions of the Act are delegated to Reclamation.
Reclamation's rulemaking will establish comprehensive criteria and
program requirements governing the implementation of the Rural Water
Supply Program.
Reclamation has significant experience in the development of rural
water projects. Since 1980, Congress has directed Reclamation to
undertake 10 specific rural water projects, and Reclamation has a
century of experience developing and managing water delivery systems in
the West. However, prior to the passage of the Act in 2006, Reclamation
did not have a formal rural water program. The program to be
implemented by this rule will allow Reclamation to be involved in
planning and prioritizing rural water projects to ensure that the
projects selected are cost-effective and that they are in the Federal
interest.
The Act specifically authorizes the Secretary to undertake the
following activities in implementing the Rural Water Supply Program:
(a) Investigate opportunities to ensure safe and adequate rural water
supply projects for domestic, municipal, and industrial use in small
communities and rural areas of the Reclamation States; (b) plan the
design and construction of rural water supply projects through the
conduct of appraisal investigations and feasibility studies; and (c)
oversee, as appropriate, the construction of rural water supply
projects that are recommended for construction by Reclamation in a
feasibility report developed under the Rural Water Supply Program, and
subsequently authorized by Congress.
[[Page 67779]]
Reclamation's Rural Water Supply Program is focused on planning
rural water supply projects that incorporate a regional or watershed
approach to water management. This means focusing on projects that will
provide water to geographically dispersed localities distributed across
a region or a watershed, in order to take advantage of economies of
scale and to foster opportunities for partnerships. In carrying out
this program, Reclamation will take into account the interconnectedness
of water and land resources, encourage the active participation of all
interested groups, and use the full spectrum of technical disciplines
in activities and decision-making.
Reclamation has demonstrated expertise and experience in planning
and constructing larger water supply projects that address the needs of
more than one community. Reclamation's focus on regional water systems
will complement, rather than duplicate, the existing Federal programs
that support the delivery of potable water for rural areas in the
United States. This will not only meet a clearly identified need in the
western United States, but will also leverage Federal, state, and local
funding to maximize the support provided to rural areas and ensure the
most effective use of Federal dollars.
Overview of the Rule
This rule has the following five subparts: (1) Subpart A provides
an overview of the Rural Water Supply program; (2) Subpart B covers
cost-sharing requirements; (3) Subpart C describes how an appraisal
investigation will be evaluated under the program; (4) Subpart D
describes how a feasibility study will be evaluated under the program;
and (5) Subpart E describes miscellaneous requirements.
Subpart A of the rule contains eligibility criteria, criteria for
prioritizing requests for assistance under the program, definitions,
and the process for requesting assistance under the program. Section
404.6 of the rule describes who is eligible to participate in the
program, and Sec. 404.7 describes the types of projects that are
eligible for consideration. These eligibility requirements closely
track the requirements in Title I of the Act.
Section 404.11 of the rule describes the types of assistance
available under the program, including: (1) Technical assistance from
Reclamation to conduct an appraisal investigation or feasibility study;
(2) financial assistance to enable a non-Federal entity to conduct an
appraisal or feasibility study themselves with Reclamation oversight;
and (3) Reclamation review and approval of a completed appraisal or
feasibility study.
Subpart A of the rule describes in detail the process by which
Reclamation will announce opportunities for assistance under the
program (Sec. 404.14), how to request assistance (Sec. 404.15), and
how such requests will be prioritized and reviewed by Reclamation
(Sec. Sec. 404.17, 404.22 and 404.27). Section 404.13 of the rule
contains the criteria that Reclamation will use to prioritize all
requests for assistance under the program. This section further
emphasizes the focus of Reclamation's Rural Water Supply Program on
projects that will apply a regional or watershed perspective to water
resources management.
Subpart B of the rule describes all cost-sharing requirements
related to the Rural Supply Water Program. This includes the non-
Federal cost-share requirements for completing appraisal investigations
and feasibility studies (Sec. Sec. 404.30 and 404.33, respectively),
and the non-Federal cost-share requirements for the construction of
rural water projects once construction authorization is provided by
Congress (Sec. 404.37). An important part of Reclamation's role in
evaluating a feasibility study under the program is to consider the
non-Federal entity's capability to pay at least 25 percent of the cost
of constructing a rural water project (Sec. 404.39).
Subparts C and D of the rule describe the criteria that Reclamation
will use to evaluate appraisal investigations and feasibility studies
completed under the program (Sec. Sec. 404.44 and 404.49,
respectively). These criteria closely track the provisions in Title I
of the Act. The requirements in Subparts C and D of the rule will
enable Reclamation to ensure that all appraisal and feasibility studies
completed under the program meet Reclamation's standards, whether the
studies are completed by Reclamation or by the non-Federal entity.
Subpart E of the rule contains several miscellaneous requirements.
Among these is the requirement that title to projects constructed
subsequent to participation in the Rural Water Supply Program shall be
held by the non-Federal entity (Sec. 404.54). Another important
requirement in Subpart E, among others, is the provision that rural
water projects authorized before passage of the Act (Sec. 404.58) do
not have to comply with the requirements in this rule.
Waiver of Notice of Proposed Rulemaking
Ordinarily, a notice of proposed rulemaking is published in the
Federal Register and the public is invited to comment on the proposed
rule in accordance with the Administrative Procedure Act (APA), as
codified in 5 U.S.C. 553(b). The notice of proposed rulemaking includes
a reference to the legal authority under which the rule is proposed,
and the terms and substances of the proposed rule or a description of
the subjects and issues involved. This procedure can be waived,
however, if an agency finds good cause that a notice and comment
procedure is impracticable, unnecessary, or contrary to the public
interest and incorporates a statement of the finding and its reasons in
the rule issued.
This rule is required as a result of the enactment of Title I of
the Act, which provides that the Secretary will develop three sets of
criteria for the Rural Water Supply Program within specified
timeframes. Section 103 of the Act requires the promulgation of
programmatic eligibility and prioritization criteria within 1 year of
the date of enactment; Sec. 105 requires criteria for the evaluation
of appraisal investigations to be developed within 1 year of the date
of enactment; and Sec. 106 requires the promulgation of criteria for
the evaluation of feasibility studies within 18 months of the date of
enactment.
Current data indicate that millions of Americans still live without
safe drinking water, a basic necessity of life. The Bureau of
Reclamation has significant experience and technical capabilities in
the planning, design and construction of rural water supply projects.
Until now, however, Reclamation has never had a structured program for
developing or funding rural water projects. Delaying the enactment of
this rule in order to provide notice and comment would delay the
implementation of a program to address water supply needs of rural
communities. Furthermore, this rule closely tracks the detailed
requirements of the Act.
Procedural Requirements
1. Regulatory Planning and Review (Executive Order (E.O.) 12866)
This document is a significant rule and OMB has reviewed this rule
under Executive Order 12866. We have made the assessments required by
E.O. 12866 and the results are given below.
(a) This rule will not have an annual effect of $100 million or
more on the economy. It will not adversely affect in
[[Page 67780]]
any material way the economy, productivity, competition, jobs,
environment, public health or safety, or state, local, and tribal
governments or communities. On the contrary, the Rural Water Supply
Program addressed by this rule will facilitate the planning of rural
water systems that are urgently needed in order to maintain the
economies and the public health and safety of the communities that they
will serve. Moreover, the criteria established in this rule will ensure
that the rural water projects planned under this program address a
documented need, are economically feasible, and are affordable to the
intended beneficiaries. The evaluation of rural water projects planned
under this program will also take into account changes in regional
economic activity associated with each project, as measured by regional
income and employment.
As explained in the rule, Reclamation will only recommend a rural
water project to Congress for construction if the project is determined
to be economically feasible, among other requirements. Economic
feasibility means that the estimated national economic benefits of a
project exceed the costs. Analysis of rural water projects that have
been authorized in the past indicates that they have not met the
economic feasibility criteria. Therefore, the planning process set
forth in the rule will result in rural water projects with potentially
greater economic benefits. Implementation of this program will allow
for the development of projects with a greater economic return to the
Nation.
The Act requires an analysis documenting the ability of the project
sponsor to pay 100 percent of operation, maintenance, and replacement
costs as well as a portion of construction costs (minimum of 25
percent). This provision will reduce the risk of financial failure of a
project due to the inability of water users to pay their portion of
project costs in the future.
The Act authorizes appropriations of $15 million annually.
Therefore, we expect our expenditures on the program over the next 4
fiscal years, including administrative costs, to be $15 million or
less, annually. Authority to make appropriations under the program
expires on September 30, 2016. Subsequent to that expiration, limited
administrative costs would continue as previously authorized appraisal
and feasibility studies are completed.
(b) This rule would not create a serious inconsistency or otherwise
interfere with an action taken or planned by another agency. The rule
requires all potential applicants to demonstrate that they have
investigated other opportunities for funding and places a higher
priority on funding projects that are not eligible for full assistance
under any other rural water program. Rural water supply projects that
incorporate a regional or watershed approach to water management
planning are also prioritized higher under the program. In contrast,
other rural water programs are focused on smaller rural water systems
and do not provide assistance for these larger, more complex, types of
rural water projects. This rule further requires Reclamation to consult
and cooperate with other Federal agencies, tribes, states, and local
governments whenever an appraisal investigation or feasibility study is
conducted under the program. Reclamation has consulted with the United
States Department of Agriculture (USDA) regarding the details of USDA's
related programs, and will continue to do so.
(c) This rule does not alter the budgetary effects of entitlements,
grants, user fees, concessions, loan programs, water contracts,
management agreements, or the rights and obligations of their
recipients; all of these will continue unaffected by the approval of
any assistance under these rules.
(d) OMB has determined that this rule raises novel legal or policy
issues. The rule, which implements the Act, establishes criteria for a
new rural water program to be administered by Reclamation. While
Reclamation has been involved in the construction of rural water
projects for over 20 years, it has never had a formal rural water
program. The program will allow Reclamation to be involved early on in
the planning stages of creating a rural water project, and to
prioritize the projects that it recommends for construction.
2. Regulatory Flexibility Act
The Department of the Interior certifies that this document will
not have a significant economic effect on a substantial number of small
entities under the Regulatory Flexibility Act (5 U.S.C. 601, et seq.).
This rule does not impose any new requirements for small businesses to
report or keep records on any of the requirements contained in this
rule. Entities seeking financial assistance under the rule will be
subject to those reporting and recordkeeping requirements (government-
wide uniform administrative requirements) that normally apply to
financial assistance agreements pursuant to 43 CFR 12. The entities
eligible for assistance under this program may include small entities
defined in the Regulatory Flexibility Act. However, application for
assistance is strictly voluntary, and these entities may continue to
rely on their own financing capabilities as they currently do. One of
the purposes of this rule is to provide these entities with the
requirements they must follow if they choose to apply for assistance
from Reclamation. An Initial Regulatory Flexibility Analysis is not
required and, accordingly, a Small Entity Compliance Guide is not
required.
3. Small Business Regulatory Enforcement Fairness Act (SBREFA)
This rule is not a major rule under the Small Business Regulatory
Enforcement Fairness Act (5 U.S.C. 804(2)). This rule:
(a) Does not have an annual effect on the economy of $100 million
or more. The Act authorizes appropriations of $15 million annually.
Therefore, we expect our expenditures on the program over the next 4
fiscal years, including administrative costs, to be $15 million or
less, annually. Authority to make appropriations under the program
expires on September 30, 2016. Subsequent to that expiration, limited
administrative costs would continue as previously authorized appraisal
and feasibility studies are completed.
(b) Will not cause a major increase in costs or prices for
consumers, individual industries, Federal, state, local, or tribal
government agencies, or geographic regions. Entities planning to
construct a rural water supply project, including state, local or
tribal government entities, would most likely conduct appraisal
investigations and feasibility studies regardless of whether they
participate in the program implemented under this rule. Because the
rule provides that Reclamation will pay 100 percent of the cost of an
appraisal investigation up to $200,000, and 50 percent of the cost of a
feasibility study, the rule actually decreases the cost to state,
tribal and local governments that want to plan a rural water supply
project.
The Federal cost-share requirement for studies conducted under the
Rural Water Supply Program will increase the cost to Reclamation
because Reclamation has not previously been involved in preparing these
types of planning studies for rural water supply projects. However,
pursuant to the limitation on appropriations under the Act,
Reclamation's cost may not exceed $15 million per year.
(c) This rule is not likely to have any effect on competition,
employment, investment, productivity, innovation, or the ability of
United States-based enterprises to compete with foreign-
[[Page 67781]]
based enterprises. As mentioned in (b), the effect of the Federal cost-
share requirement included under the rule will likely be to reduce the
cost of appraisal investigations and feasibility studies to entities
participating in the program. The rule encourages competition by
allowing interested entities to either request financial assistance (a
grant or cooperative agreement) to perform an appraisal investigation
or feasibility study themselves, or request Reclamation to perform the
investigation or study for them. The rule requires an entity requesting
financial assistance to demonstrate the cost-effectiveness of its
proposal, compared to the cost of Reclamation performing the
investigation or study.
4. Unfunded Mandates Reform Act
This rule does not impose an unfunded mandate or a requirement to
expend monies on the part of state, local, or tribal governments or
communities, or the private sector of $100 million or more annually.
This rule does not have a significant or unique effect on state, local,
or tribal governments or communities, or the private sector. Requests
from any of these entities for assistance under this rule are strictly
voluntary. Reclamation is not imposing a duty, requirement, or mandate
on state, local, or tribal governments or communities, or the private
sector to request such assistance. Therefore, a statement containing
information required by the Unfunded Mandates Reform Act (2 U.S.C.
1541, et seq.) is not required.
5. Takings (E.O. 12630)
Under the criteria in E.O. 12630, this rule does not have any
significant takings implications. This rule sets forth the requirements
for requesting assistance from Reclamation for planning eligible rural
water supply projects that are urgently needed by the project
beneficiaries. While there are cost-share requirements for receiving
assistance under the program, participation in the program is strictly
voluntary, and the beneficiaries may choose instead to conduct an
appraisal investigation or feasibility study on their own, financing
the complete cost themselves. A Takings Implication Assessment is
therefore not required.
6. Federalism (E.O. 13132)
Under the criteria in E.O. 13132, this rule does not have any
federalism implications to warrant the preparation of a Federalism
Assessment. The rule is not associated with, nor will it have
substantial direct effects on the states, on the relationship between
the National Government and the states, or on the distribution of power
and responsibilities among the various levels of government. A
Federalism Assessment is therefore not required.
7. Civil Justice Reform (E.O. 12988)
This rule complies with the requirements of E.O. 12988.
Specifically, this rule:
(a) Does not unduly burden the judicial system;
(b) Meets the criteria of section 3(a) requiring that all
regulations be reviewed to eliminate errors and ambiguity and be
written to minimize litigation; and
(c) Meets the criteria of section 3(b)(2) requiring that all
regulations be written in clear language and contain clear legal
standards.
8. Consultation With Indian Tribes (E.O. 13175)
Under the criteria of E.O. 13175, Reclamation has evaluated this
rule and determined that it would have no substantial effects on
federally recognized Indian tribes. While many tribal entities may be
eligible for assistance with planning a rural water supply project
under this rule, such application is strictly voluntary.
9. Paperwork Reduction Act
This rule contains information collection requirements, and a
submission under the Paperwork Reduction Act (PRA) is required.
Participation in the application process and the submission of
information through that process is voluntary. This rule will not
require the use of any forms other than those forms required for
Reclamation to provide financial assistance under the program,
including SF-424A and SF-424B, titles already approved by OMB.
Following are further details regarding the information collection:
Title: Reclamation Rural Water Supply Program 43 CFR Part 404.
OMB Control No.: 1006-0029.
Frequency: One-time voluntary application.
Respondents for Program Assistance Applications: Eligible entities
(described in Sec. 404.6 of the rule) that desire to obtain assistance
from Reclamation under the program.
Estimated Total Number of Respondents: 56.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 2,100 hours.
OMB has approved the information collection requirements contained
in this rule under an emergency submission. The assigned OMB Control
Number is 1006-0029, which expires on May 31, 2009. Under OMB
Guidelines at 5 CFR 1320.13, we requested emergency processing of the
information collection request. The Rural Water Supply Program will
address rural water needs in the western United States by assisting
rural communities to plan the design and construction of rural water
projects. Eligible entities interested in participating in the program
will be requested to submit information to allow Reclamation to
evaluate and prioritize requests for financial or technical assistance.
According to the emergency processing procedures, we have determined
that:
(1) This information collection will be published in the Federal
Register concurrent with the rulemaking.
(2) Delaying the enactment of this rule would delay the
implementation of a program to address water supply needs of rural
communities. Additionally, the information collected is general
information about the water supply needs of the applicants and
therefore, will be readily available to the applicants.
We have not formally consulted with potential respondents on the
impact of this burden due to time constraints. Our estimate of the
annual burden hours is based on Reclamation's experience with similar
application processes for other programs. As part of our continuing
effort to reduce paperwork and respondent burdens, Reclamation invites
the public and other Federal agencies to comment on any aspect of the
reporting and recordkeeping burden. In particular, comments are invited
on:
(a) Whether the proposed collection of information is necessary for
the proper performance of our functions, including whether the
information will have practical use;
(b) The accuracy of our burden estimate for the proposed collection
of information, including the validity of the methodology and
assumptions used;
(c) Ways to enhance the quality, usefulness, and clarity of the
information collected; and
(d) Ways to minimize the burden of the collection of information on
respondents.
Please refer to the DATES and ADDRESSES sections for deadlines and
instructions on submitting comments. You may obtain a copy of the
supporting statement for this new collection of information by
contacting the Bureau of Reclamation at 303-445-2906.
[[Page 67782]]
10. National Environmental Policy Act of 1969 (NEPA)
This rule does not constitute a major Federal action and would not
have a significant effect on the quality of the human environment.
While the individual feasibility studies for which assistance may be
sought under this interim final rule require NEPA compliance, the
requirement for such compliance would not be dependent on whether
financial assistance is granted under this rule. Therefore, this rule
does not require the preparation of an environmental assessment or
environmental impact statement under the requirements of NEPA.
11. Information Quality Act
In developing this rule, there was no need to conduct or use a
study, experiment, or survey requiring peer review under the
Information Quality Act (Pub. L. 106-554).
12. Effects on the Energy Supply (E.O. 13211)
This rule is not a significant energy action under the definition
in E.O. 13211. A Statement of Energy Effects is not required.
13. Clarity of This Regulation
We are required by E.O. 12866 and 12988, and by the Presidential
Memorandum of June 1, 1998, to write all rules in plain language. This
means each rule we publish must:
(a) Be logically organized;
(b) Use the active voice to address readers directly;
(c) Use clear language rather than jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
If you believe we have not met these requirements, please send
comments to Reclamation as instructed in the ADDRESSES section. Please
make your comments as specific as possible, referring to specific
sections and how they could be improved. For example, you should tell
us the numbers of the sections or paragraphs that are unclearly
written, which sections or sentences are too long, the sections where
you believe lists or tables would be useful, etc.
14. Public Availability of Comments
Before including your name, address, phone number, e-mail address,
or other personal identifying information in your comment, you should
be aware that your entire comment--including your personal identifying
information--may be made publicly available at any time. While you can
ask us in your comment to withhold your personal identifying
information from public review, we cannot guarantee that we will be
able to do so.
List of Subjects in 43 CFR Part 404
Drinking water, Federal aid programs, Incorporation by reference,
Natural resources, Public utilities, Rural areas, Water supply, and
Watersheds.
Dated: November 3, 2008.
Kameran L. Onley,
Acting Assistant Secretary for Water and Science.
0
For the reasons stated in the preamble, the Bureau of Reclamation
proposes to add a new part 404 to Title 43 of the Code of Federal
Regulations as follows:
PART 404--RECLAMATION RURAL WATER SUPPLY PROGRAM
Subpart A--Overview
Sec.
404.1 What is the purpose of this part?
404.2 What terms are used in this part?
404.3 What is the Reclamation Rural Water Supply Program?
404.4 What are the goals of the program?
404.5 Who is responsible for implementing this rule?
404.6 Who is eligible to participate in the program?
404.7 What types of projects are eligible for consideration under
the program?
404.8 Are there any exceptions that would allow a community with
greater than 50,000 inhabitants to be part of an eligible rural
water supply project?
404.9 What types of infrastructure and facilities may be included in
an eligible rural water supply project?
404.10 Are there certain types of infrastructure and facilities that
may not be included in a rural water supply project?
404.11 What type of assistance is available under the program?
404.12 Can Reclamation provide assistance with the construction of a
rural water supply project under this program?
404.13 What criteria will Reclamation use to prioritize requests for
assistance under the program?
404.14 How will Reclamation provide notice of opportunities for
assistance under the program?
404.15 How can I request assistance under the program?
404.16 What information must I include in my statement of interest?
404.17 How will Reclamation evaluate my statement of interest?
404.18 How can I request assistance to conduct a feasibility study?
404.19 What requirements must be met before I can request assistance
to conduct a feasibility study?
404.20 What information must I include in my full proposal to
conduct an appraisal or a feasibility study?
404.21 What is Reclamation's role in preparing the full proposal?
404.22 How will Reclamation evaluate my full proposal?
404.23 How will Reclamation determine whether you or your contractor
is qualified to conduct an appraisal investigation or a feasibility
study?
404.24 How will Reclamation determine whether it is cost-effective
for me or my contractor to conduct the appraisal investigation or
feasibility study?
404.25 How can I request Reclamation to review an appraisal
investigation or feasibility study that was not completed under this
program?
404.26 Must an appraisal investigation be completed before I can
request Reclamation to review a feasibility study that was not
completed under this program?
404.27 How will Reclamation evaluate my request to review an
appraisal investigation or feasibility study completed without the
support of Reclamation?
404.28 Is it possible to expedite the completion of an appraisal
investigation or feasibility study?
404.29 Can the level of effort needed to complete an appraisal
investigation or feasibility study be scaled to be proportional to
the size and cost of the proposed project?
Subpart B--Cost-Sharing
404.30 How much Federal funding can Reclamation provide for the
completion of an appraisal investigation?
404.31 What forms of non-Federal cost-share payment are acceptable?
404.32 Can Reclamation reduce the non-Federal cost-share required
for an appraisal investigation?
404.33 How much Federal funding can Reclamation provide for the
completion of a feasibility study?
404.34 Can Reclamation reduce the amount of non-Federal cost-share
required for a feasibility study?
404.35 Is there a different non-Federal cost-share requirement for
feasibility studies that involve a community greater than 50,000
inhabitants?
404.36 Will Reclamation reimburse me for the cost of an appraisal
investigation or a feasibility study that was not completed under
Sec. 404.11(a) or (b)?
404.37 How will Reclamation determine the appropriate non-Federal
share of construction costs?
404.38 Are there different requirements for determining the
appropriate non-federal share of construction costs to be paid by
Indian tribes?
404.39 What factors will Reclamation consider in evaluating my
capability to pay 25 percent or more of the construction costs?
404.40 What is the non-Federal share of operation, maintenance, and
replacement costs?
Subpart C--Appraisal Investigations
404.41 How will an appraisal investigation be conducted under this
program?
404.42 How much time is provided to complete an appraisal
investigation?
[[Page 67783]]
404.43 What process will Reclamation follow to determine if an
appraisal investigation is ready for review?
404.44 What criteria will Reclamation apply to determine whether it
is appropriate to recommend that a feasibility study be conducted?
404.45 What will be included in the appraisal report prepared by
Reclamation?
404.46 Who will the appraisal report be provided to?
Subpart D--Feasibility Studies
404.47 How will a feasibility study be conducted under this program?
404.48 What process will Reclamation follow to determine if a
feasibility study is ready for review?
404.49 What criteria will Reclamation use to determine whether to
recommend that a proposed rural water supply project be authorized
for construction?
404.50 What information will be included in the feasibility report
prepared by Reclamation?
404.51 Are proposed projects under the Rural Water Supply Program
reviewed by the Administration?
404.52 Who will the feasibility report be provided to?
Subpart E--Miscellaneous
404.53 Does this rule provide authority for the transfer of pre-
existing facilities from Federal to private ownership, or from
private to Federal ownership?
404.54 Who will hold title to a rural water project that is
constructed following the completion of an appraisal investigation
or feasibility study under this program?
404.55 Who is responsible for the operation, maintenance, and
replacement costs?
404.56 If a financial assistance agreement is entered into for a
rural water supply project that benefits more than one Indian tribe,
is the approval of each Indian tribe required?
404.57 Does this rule have any effect on state water law?
404.58 Do rural water projects authorized before the enactment of
the Rural Water Supply Act of 2006 have to comply with the
requirements in this rule?
404.59 If the Secretary recommends a project for construction, is
that a promise of Federal funding?
404.60 Does this rule contain an information collection that
requires approval by the Office of Management and Budget (OMB)?
Authority: Public Law 109-451 (43 U.S.C. 2401 et seq.)
Subpart A--Overview
Sec. 404.1 What is the purpose of this part?
The purpose of this part is to explain how the Reclamation Rural
Water Supply Program is implemented. This part describes:
(a) The purpose and priorities of the program;
(b) How to apply for assistance under the program;
(c) How Reclamation will evaluate requests for assistance;
(d) How Reclamation will evaluate an appraisal investigation; and
(e) How Reclamation will evaluate a feasibility study.
Sec. 404.2 What terms are used in this part?
The following terms are used in this part:
Appraisal Investigation means an analysis of domestic, municipal,
and industrial water supply problems, needs, and opportunities in the
planning area, primarily using existing data. An appraisal
investigation includes a preliminary assessment of alternatives to
address the identified water supply problems and needs. The purpose of
an appraisal investigation is to determine if there is at least one
viable alternative that warrants a more detailed investigation through
a feasibility study.
Appraisal Report means the document, prepared by Reclamation,
setting forth the findings and conclusions reached by Reclamation in
its evaluation of a completed appraisal investigation. The purpose of
the appraisal report is for Reclamation to provide a recommendation on
whether a feasibility study should be initiated.
Assistance means the transfer of a thing of value to a non-Federal
project sponsor to carry out a public purpose of support or stimulation
authorized by law. For purposes of this rule, assistance consists of
funds provided by Reclamation through an assistance agreement (grant or
cooperative agreement) and technical assistance performed by
Reclamation, for the purpose of conducting an appraisal investigation
or a feasibility study.
Commissioner means the Commissioner of the Bureau of Reclamation.
Feasibility Report means the document, prepared by Reclamation,
setting forth the findings and conclusions of a completed feasibility
study. The purpose of the feasibility report is to provide an
Administration recommendation to Congress regarding whether the
proposed rural water supply project should be authorized for
construction.
Feasibility Study means a detailed investigation requiring the
acquisition of primary data, and an analysis of a reasonable range of
alternatives, including a preferred alternative, to meet identified
water supply problems, needs, and opportunities in the planning area. A
feasibility study also includes an analysis of the technical and
economic feasibility of the proposed project, the impact of the
proposed project on the environment in compliance with the National
Environmental Policy Act and other applicable environmental laws, and
the financial capability of the non-Federal project sponsor to pay the
non-Federal costs associated with constructing, operating, and
maintaining the rural water supply project. The completed feasibility
study will form the basis for the recommendation to Congress in the
feasibility report regarding whether the proposed rural water supply
project should be authorized for construction.
Incidental Noncommercial Livestock Watering means the supply of
water to pasture taps for the purpose of watering livestock, and other
livestock watering uses that are incidental to the purpose of the
project.
Indian means a person who is a member of an Indian tribe.
Indian Tribe means any Indian tribe, band, nation, or other
organized group, or community, including pueblos, rancherias, colonies
and any Alaska Native Village, or regional or village corporation as
defined in or established pursuant to the Alaska Native Claims
Settlement Act, which is recognized as eligible for the special
programs and services provided by the United States to Indians because
of their status as Indians.
Noncommercial Irrigation of Vegetation means the supply of water to
irrigate lawns, trees, small gardens, and similar vegetation of less
than 1 acre.
Non-Federal Project Sponsor means a non-Federal project entity or
entities meeting the eligibility criteria in Sec. 404.6. A non-Federal
project sponsor is also referred to as project sponsor, project
sponsors, I, me, my, you, or your in this part.
Program means the Reclamation Rural Water Supply Program that is
described in Sec. 404.3.
Reclamation means the Bureau of Reclamation, U.S. Department of the
Interior.
Reclamation States means the states and areas referred to in 43
U.S.C. 391, as amended.
Regional or Watershed Perspective means an approach to rural water
supply planning directed at meeting the needs of geographically
dispersed localities across a region or a watershed that will take
advantage of economies of scale and foster opportunities for
partnerships. This approach also takes into account the
interconnectedness of water and land resources, encourages the active
participation of all interested groups, and uses the full spectrum of
technical disciplines in activities and decision-making.
[[Page 67784]]
Rural Water Supply Project, or project, means:
(a) A project that is designed to serve a community or groups of
communities, each of which has a current population of not more than
50,000 inhabitants, which may include Indian tribes and tribal
organizations, dispersed home sites, or rural areas with domestic,
municipal, and industrial water, including incidental noncommercial
livestock watering and noncommercial irrigation of vegetation.
(b) A rural water supply project may include the following, or any
combination of the following:
(1) The construction or installation of new rural water supply
infrastructure and facilities;
(2) The improvement or upgrade of existing rural water supply
infrastructure and facilities;
(3) The extension of existing rural water supply infrastructure and
facilities to reach an increased service area; and
(4) The inter-connection of existing rural water supply
infrastructure and facilities currently serving individual communities,
dispersed homesites, rural areas, or tribes.
Secretary means the Secretary of the Interior, acting through the
Commissioner of the Bureau of Reclamation.
Tribal Organization means:
(a) The recognized governing body of an Indian tribe; and
(b) Any legally established organization of Indians that is
controlled, sanctioned, or chartered by the governing body, or
democratically elected by the adult members of the Indian community to
be served by the organization.
Sec. 404.3 What is the Reclamation Rural Water Supply Program?
This program addresses domestic, municipal, and industrial water
supply needs in rural areas of the Reclamation States. Reclamation's
experience, technical expertise, and financial resources assist rural
communities to identify their water supply problems and needs, and
evaluate options for addressing those needs. Using a regional or
watershed perspective, Reclamation assists in planning projects that
maximize regional and national benefits.
Through this program, Reclamation works in cooperation with non-
Federal project sponsors in Reclamation States on a cost-share basis
to:
(a) Investigate and identify opportunities to ensure safe and
adequate rural water supplies for domestic, municipal, and industrial
use in rural areas and small communities, including Indian tribes;
(b) Plan the design and construction of rural water supply projects
through the conduct of appraisal investigations and feasibility
studies; and
(c) Oversee, as appropriate, the construction of rural water supply
projects that the Secretary recommends to Congress, which are
subsequently authorized and funded for construction by Congress.
Sec. 404.4 What are the goals of the program?
The goals of the program are to:
(a) Assess and address urgent and compelling rural water supply
needs that are not currently met by other programs;
(b) Promote and apply a regional or watershed perspective to water
resources management in planning rural water supply projects;
(c) Develop solutions to address rural water supply needs that are
cost-effective, and that generate national net economic benefits as
required under the ``Economic Principles and Guidelines for Water and
Related Land Resources'' (Principles and Guidelines). The Principles
and Guidelines, published in 1983 by the Water Resources Council
pursuant to the Water Resources Planning Act of 1965 (Pub. L. 89-80) as
amended, is incorporated by reference into this section with the
approval of the Director of the Federal Register under 5 U.S.C. 552(a)
and 1 CFR part 51. The Principles and Guidelines are intended to ensure
proper and consistent planning by Federal agencies in the formulation
and evaluation of water and related land resources implementation
studies. To enforce any edition other than that specified in this
section, the material must be available to the public and approved by
the Director of the Federal Register. All approved material is
available for inspection at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, call 202-741-6030 or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
Also, a copy of this publication may be obtained and inspected at:
Bureau of Reclamation, Denver Federal Center, Building 67, Denver, CO
80225, Policy and Program Services, 303-445-2906 where copies are on
file, or at the following website: http://intra.gp.usbr.gov/resource_services/planning_process/principles_guidelines.pdf.
(d) Encourage partnerships among rural communities, Indian tribes
or tribal organizations, states or political subdivisions of a state,
water districts and associations, and other eligible entities, to
address rural water supply issues; and
(e) Complement other existing programs and authorities that address
rural water supply issues, and encourage collaboration between programs
where appropriate.
Sec. 404.5 Who is responsible for implementing this rule?
Authority to implement and make determinations under this rule has
been delegated from the Secretary to the Commissioner. The Commissioner
is authorized to implement this program and may re-delegate that
authority as needed. Questions regarding the program should be directed
to your local Reclamation office.
Sec. 404.6 Who is eligible to participate in the program?
Those eligible to participate in the program include:
(a) A state or political subdivision of a state, including a
department, agency, municipality, county, or other regional or local
authority;
(b) An Indian tribe or tribal organization; or
(c) An entity created under state law that has water management or
water delivery authority, including for example, an irrigation or water
district, canal company, water users association, rural water
association or district, a joint powers authority, or other qualifying
entity; and
(d) Any combination of the entities listed above, which
collectively are referred to as the non-Federal project sponsor, as
defined in Sec. 404.2.
Sec. 404.7 What types of projects are eligible for consideration
under the program?
To be eligible for consideration under the program, a rural water
supply project must:
(a) Meet the definition of a rural water supply project in Sec.
404.2; and
(b) Be located in a Reclamation State, as defined in Sec. 404.2.
Sec. 404.8 Are there any exceptions that would allow a community with
greater than 50,000 inhabitants to be part of an eligible rural water
supply project?
Yes. A town or community with a population in excess of 50,000
inhabitants may participate in or be served by an eligible rural water
supply project under this program if Reclamation determines that the
town or community is a critical partner whose involvement substantially
contributes to the financial viability of the proposed project. Such a
community could be
[[Page 67785]]
expected to bear a greater proportionate share of the planning, design,
and construction costs than other project sponsors, consistent with
their capability to pay and the benefits they derive from the project.
Sec. 404.9 What types of infrastructure and facilities may be
included in an eligible rural water supply project?
A rural water supply project may include, but is not limited to,
the following types of infrastructure and facilities:
(a) Pumps, pipes, wells, surface water intakes and other diversion,
transmission, or distribution systems;
(b) Storage tanks and small impoundments;
(c) Water treatment facilities for potable water supplies,
including desalination facilities;
(d) Buildings necessary to house equipment and serve as a center
for operations;
(e) Power transmission and related facilities required for the
rural water supply project;
(f) Equipment and management tools for water conservation,
groundwater recovery, and water reuse and recycling;
(g) Associated features to mitigate adverse environmental
consequences of a project; and
(h) Appurtenances.
Sec. 404.10 Are there certain types of infrastructure and facilities
that may not be included in a rural water supply project?
Yes. A rural water supply project may not include:
(a) Any infrastructure or facilities that would deliver water for
commercial irrigation; and
(b) The construction of major impoundment structures.
Sec. 404.11 What type of assistance is available under the program?
Under the Reclamation Rural Water Supply Program, you may:
(a) Request Reclamation to conduct an appraisal investigation or
feasibility study for a rural water supply project for you, with your
cooperation;
(b) Request funding through a grant or cooperative agreement to
enable you to conduct an appraisal investigation or feasibility study
for a rural water supply project yourself, or through a contractor; or
(c) Request Reclamation to review and approve an appraisal
investigation or feasibility study completed without assistance from
Reclamation.
Sec. 404.12 Can Reclamation provide assistance with the construction
of a rural water supply project under this program?
Reclamation may provide assistance with the construction of a rural
water supply project developed under this program if Congress
specifically authorizes the project and appropriates funds for
construction.
Sec. 404.13 What criteria will Reclamation use to prioritize requests
for assistance under the program?
All requests for assistance that meet the eligibility requirements
in Sec. Sec. 404.6 and 404.7 will be evaluated by applying the
following prioritization criteria:
(a) Whether there is an urgent and compelling need for a rural
water supply project that would:
(1) Address present or future water supply needs; or
(2) Promote public health and safety by addressing present and
preventing future violations of drinking water standards;
(b) The extent to which a rural water supply project promotes and
applies a regional or watershed perspective to water resources
management as defined in Sec. 404.2;
(c) The financial need of the project sponsors for assistance with
the planning, design, and construction of a rural water supply project,
as demonstrated by readily available local and regional economic
indicators;
(d) The extent to which Reclamation is uniquely qualified to plan,
design, and build the project;
(e) Whether a rural water supply project helps meet applicable
requirements established by law;
(f) The extent to which a rural water supply project serves Indian
tribes that have nonexistent or inadequate water systems;
(g) The extent to which a rural water supply project is ineligible
for comprehensive funding (sufficient to fully fund planning and
construction of the entire project) through other assistance programs;
(h) The extent to which a rural water supply project is identified
as a priority by state, tribal or local governments;
(i) Whether a rural water supply project incorporates an innovative
approach that effectively addresses water supply problems and needs,
either by applying new technology or by employing a creative
administrative or cooperative solution; and
(j) Other criteria that Reclamation deems appropriate.
Sec. 404.14 How will Reclamation provide notice of opportunities for
assistance under the program?
Notice of opportunities for assistance to conduct an appraisal
investigation or a feasibility study under Sec. 404.11(a) or (b) will
be posted as a program announcement on the required government-wide Web
site for announcement of Federal assistance opportunities.
Opportunities for assistance will also be advertised locally by
Reclamation regional and area offices. You are encouraged to contact
your local Reclamation office to find out about upcoming program
announcements and to discuss your interest in the program.
Sec. 404.15 How can I request assistance under the program?
This table summarizes the requirements for requesting assistance
under the program. The requirements are described in more detail in the
sections that follow.
------------------------------------------------------------------------
Type of assistance requested How to request assistance
------------------------------------------------------------------------
1. Request Reclamation to conduct an Submit a statement of interest
appraisal investigation. as described in Sec. 404.16.
Reclamation will then advise
you whether you are eligible
to submit a full proposal.
2. Request funding to conduct an Submit a statement of interest
appraisal investigation yourself or as described in Sec. 404.16.
through a contractor. Reclamation will then advise
you whether you are eligible
to submit a full proposal.
3. Request Reclamation to conduct a Submit a full proposal as
feasibility study. described in Sec. 404.20.
4. Request funding to conduct a Submit a full proposal as
feasibility study yourself or through described in Sec. 404.20.
a contractor.
5. Request Reclamation to review and Submit the investigation or
approve an appraisal investigation or study and a cover letter to
a feasibility study completed without your local Reclamation office,
Reclamation assistance. as described in Sec. 404.25.
------------------------------------------------------------------------
[[Page 67786]]
Sec. 404.16 What information must I include in my statement of
interest?
A statement of interest is a preliminary scope of work that must
include sufficient information to address all of the eligibility
criteria described in Sec. Sec. 404.6 and 404.7 and the prioritization
criteria in Sec. 404.13, as well as any information required by the
program announcement. In general, this may include, but is not limited
to:
(a) Name, organization, and contact information, including the
identification of any partners that may be involved in the appraisal
investigation;
(b) Location map and description of the areas to be served by the
proposed rural water supply project, including:
(1) Geographical scope;
(2) Demographics; and
(3) Existing rural water supply infrastructure, if any;
(c) Type of assistance being requested through this program as
described in Sec. 404.11;
(d) A general description of the problems, needs, and opportunities
that the appraisal investigation is being formulated to address,
supported by data or documentation where appropriate. The information
provided must also address each of the prioritization criteria in Sec.
404.13;
(e) A general description of project alternatives that may be
considered in the investigation, including:
(1) Water supply management alternatives (e.g., types of
infrastructure or facilities to deliver new water supplies), if known;
(2) Water demand management alternatives (e.g., water conservation
and other approaches to reduce water consumption), if known; and
(3) Potential sources of water supply.
(f) A general description of any prior studies on the problems,
needs, and water management alternatives at issue; and,
(g) A general description of existing sources of water supply.
Sec. 404.17 How will Reclamation evaluate my statement of interest?
(a) Reclamation will apply the eligibility requirements in
Sec. Sec. 404.6 and 404.7 and the prioritization criteria in Sec.
404.13, to determine whether the proposed rural water supply project is
eligible for further consideration through a full proposal;
(b) If the proposed project is not eligible for further
consideration, Reclamation will notify you in writing of that outcome;
and,
(c) If the proposed project is eligible for further consideration,
Reclamation will notify you in writing that you are eligible to develop
a full proposal to conduct an appraisal investigation, as described in
Sec. 404.20.
Sec. 404.18 How can I request assistance to conduct a feasibility
study?
To request assistance to conduct a feasibility study under Sec.
404.11(a) or (b), consistent with Reclamation's recommendation in an
appraisal report, you must submit a full proposal to conduct a
feasibility study in response to the program announcement, pursuant to
Sec. 404.20. You are not required to submit a statement of interest.
Sec. 404.19 What requirements must be met before I can request
assistance to conduct a feasibility study?
All of the following requirements must be met before you can
request assistance to conduct a feasibility study:
(a) An appraisal investigation must be completed, with or without
assistance from Reclamation;
(b) Reclamation must have reviewed any appraisal investigation
prepared without its assistance;
(c) Reclamation must have prepared an appraisal report evaluating
the appraisal investigation; and,
(d) The appraisal report must include a recommendation by
Reclamation, if appropriate, that a feasibility study should be
conducted, as described in Sec. 404.45.
Sec. 404.20 What information must I include in my full proposal to
conduct an appraisal or a feasibility study?
A full proposal to conduct an appraisal investigation or a
feasibility study is a detailed scope of work that must include
sufficient information to address the eligibility criteria described in
Sec. Sec. 404.6 and 404.7, and the prioritization criteria in Sec.
404.13. In general this may include, but is not limited to:
(a) The issues to be addressed in the appraisal investigation or
feasibility study and a plan for addressing those issues. The
information provided must also address each of the prioritization
criteria in Sec. 404.13;
(b) A description of who will conduct the appraisal investigation
or feasibility study, which could include you, your contractor, or
Reclamation;
(c) If you propose that either you or your contractor will conduct
the appraisal investigation or feasibility study, you must include the
information necessary for Reclamation to determine whether you or your
contractor are qualified to conduct the investigation or study, and
whether having you or your contractor conduct it is a cost-effective
alternative, in accordance with the criteria in Sec. Sec. 404.23 and
404.24;
(d) A schedule for conducting the work, identifying specific tasks
and the duration of each task, and major milestones with dates for each
milestone;
(e) A complete budget for conducting the appraisal investigation or
feasibility study, including an itemized tabular summary of known or
expected costs and a narrative description of those costs;
(f) A funding plan that details how the appraisal investigation or
feasibility study will be paid for, taking into consideration
applicable assistance and non-Federal cost-share requirements; and
(g) Any other information requested by Reclamation in the program
announcement.
Sec. 404.21 What is Reclamation's role in preparing the full
proposal?
(a) If you are requesting Reclamation to prepare an appraisal
investigation or feasibility study on your behalf under Sec.
404.11(a), Reclamation will work with you on a collaborative basis to
provide the information requested in Sec. 404.20(a), (b), (d), (e) and
(f).
(b) If you are requesting funding through a grant or cooperative
agreement under Sec. 404.11(b), Reclamation will be available to
provide you with guidance and assistance in preparing your full
proposal, upon request.
Sec. 404.22 How will Reclamation evaluate my full proposal?
(a) Reclamation will evaluate the full proposal to conduct an
appraisal or a feasibility study in order to ensure that it meets the
requirements in Sec. 404.20 and is, therefore, complete. Reclamation
will notify you in writing of the outcome of this determination.
(b) If it is complete, Reclamation will evaluate your proposal
against all other proposals received, using a competitive review
process based on an application of the prioritization criteria in Sec.
404.13.
(c) Full proposals will be selected for award of assistance based
on:
(1) The evaluation process, as described in Sec. 404.22(b); and
(2) The availability of appropriations; and
(3) Other criteria that Reclamation deems appropriate.
(d) Once the proposal evaluation and selection process is complete,
you will be notified in writing of the outcome of your request for
assistance.
[[Page 67787]]
Sec. 404.23 How will Reclamation determine whether you or your
contractor is qualified to conduct an appraisal investigation or a
feasibility study?
If you are requesting funding under Sec. 404.11(b) to conduct an
appraisal investigation or a feasibility study yourself or though a
contractor, Reclamation will evaluate whether you, your technical
staff, or contractor are qualified to perform the appraisal
investigation or feasibility study based on their demonstrated
qualifications and experience in performing or managing similar
activities. Areas of expertise needed may include, but are not limited
to, water management planning, engineering, hydrology, biology,
demography, finance, and economics.
Sec. 404.24 How will Reclamation determine whether it is cost-
effective for me or my contractor to conduct the appraisal
investigation or feasibility study?
Reclamation will take the following steps to determine whether it
is cost-effective for you or your contractor to conduct the appraisal
investigation or feasibility study:
(a) Reclamation will review and evaluate the reasonableness of your
full proposal, including the scope of work, the estimated costs,
anticipated work schedule, and products to be delivered;
(b) At its discretion, Reclamation may also choose to prepare an
independent government cost estimate to analyze whether it would be
more cost-effective for Reclamation to complete the appraisal
investigation or feasibility study;
(c) Reclamation will notify you in writing of its determination
regarding the cost-effectiveness of your proposal and the basis for its
decision.
Sec. 404.25 How can I request Reclamation to review an appraisal
investigation or feasibility study that was not completed under this
program?
(a) To request Reclamation to review an appraisal investigation or
feasibility study that was not completed under this program as provided
under Sec. 404.11(c), you must submit the appraisal investigation or
feasibility study to your local Reclamation office with a cover letter
requesting Reclamation to review it.
(b) Your cover letter must address the eligibility criteria set
forth in Sec. Sec. 404.6 and 404.7 and the prioritization criteria in
Sec. 404.13.
(c) You may make your submittal at any time and are not required to
submit a statement of interest in response to the program announcement,
as required for requests to conduct an appraisal investigation or
feasibility study under Sec. 404.11(a) or (b).
Sec. 404.26 Must an appraisal investigation be completed before I can
request Reclamation to review a feasibility study that was not
completed under this program?
In general, Reclamation must review an appraisal investigation and
prepare an appraisal report recommending that a feasibility study be
conducted before Reclamation can review a feasibility study completed
without Reclamation assistance under Sec. 404.11(c). However,
Reclamation may review a feasibility study without first reviewing and
approving an appraisal investigation, if Reclamation determines that:
(a) No appraisal investigation was prepared for the project;
(b) The feasibility study satisfies the appraisal criteria set
forth in Sec. 404.44; and
(c) Reclamation documents these findings in the feasibility report.
Sec. 404.27 How will Reclamation evaluate my request to review an
appraisal investigation or feasibility study completed without the
support of Reclamation?
(a) Upon receipt of your submittal, Reclamation will apply the
eligibility criteria in Sec. Sec. 404.6 and 404.7 and the
prioritization criteria in Sec. 404.13, to determine whether the
appraisal investigation or feasibility study is eligible to be reviewed
under the program. Reclamation will notify you in writing of the
outcome of this determination.
(b) If the proposed appraisal investigation or feasibility study is
eligible for review, Reclamation will evaluate the investigation or
study in accordance with the process set forth in Sec. 404.43, for an
appraisal investigation, or Sec. 404.48, for a feasibility study.
Sec. 404.28 Is it possible to expedite the completion of an appraisal
investigation or feasibility study?
Yes. If Reclamation determines that a community or groups of
communities to be served by a proposed rural water supply project has
urgent and compelling water needs, Reclamation will, to the maximum
extent practicable, expedite appraisal investigations and reports and
feasibility studies and reports conducted under this program.
Sec. 404.29 Can the level of effort needed to complete an appraisal
investigation or feasibility study be scaled to be proportional to the
size and cost of the proposed project?
Yes. In general, the level of effort for an appraisal investigation
or feasibility study should be scaled to take into consideration the
total size, cost, and complexity of the proposed rural water supply
project in order to reduce the total cost of the investigation or
study. However, the effort to scale the appraisal investigation or
feasibility study must not diminish the quality of the data, the
analysis, or the overall completeness of the investigation or study.
Subpart B--Cost-Sharing
Sec. 404.30 How much Federal funding can Reclamation provide for the
completion of an appraisal investigation?
In general, Reclamation will be responsible for 100 percent of the
cost of an appraisal investigation conducted under Sec. 404.11(a) or
(b), up to $200,000. If the cost of the appraisal investigation exceeds
$200,000, your cost-share will be 50 percent of the amount exceeding
$200,000.
Sec. 404.31 What forms of non-Federal cost-share payment are
acceptable?
The non-Federal cost-share for an appraisal investigation or a
feasibility study may be provided in the form of money or in-kind
services that Reclamation determines are necessary and reasonable for
the conduct and completion of the investigation or study. The
determination of allowability, allocability, and reasonableness is
governed by the Cost Principles of the Office of Management and Budget,
codified at 2 CFR 220, 225, and 230, and in the Federal Acquisitions
Regulations, Part 312.
Sec. 404.32 Can Reclamation reduce the non-Federal cost-share
required for an appraisal investigation?
Yes. Reclamation may reduce the non-Federal cost-share for
appraisal investigations below 50 percent of the costs exceeding
$200,000, if:
(a) Reclamation determines that there is an overwhelming Federal
interest in conducting the appraisal investigation, and you demonstrate
financial hardship. Financial hardship will be determined in accordance
with Reclamation's official policies, guidance and standards, which are
available at your local Reclamation office; and
(b) Reclamation consults with other Federal agencies that are
partners in the project and determines that a reduction in the non-
Federal cost-share is appropriate.
Sec. 404.33 How much Federal funding can Reclamation provide for the
completion of a feasibility study?
In general, Reclamation will be responsible for 50 percent of the
cost of a feasibility study conducted under Sec. 404.11(a) or (b). You
will be
[[Page 67788]]
responsible to pay for the remaining 50 percent of the cost of the
study using non-Federal funding.
Sec. 404.34 Can Reclamation reduce the amount of non-Federal cost-
share required for a feasibility study?
Yes. Reclamation may reduce the non-Federal cost-share required for
a feasibility study to an amount less than 50 percent of the study
costs if:
(a) Reclamation determines that there is an overwhelming Federal
interest in conducting the feasibility study, and you demonstrate
financial hardship. Financial hardship will be determined in accordance
with Reclamation's standards, which are available at your local
Reclamation office; and
(b) Reclamation consults with other Federal agencies that are
partners in the project and determines that a reduction in the non-
Federal cost-share is appropriate.
Sec. 404.35 Is there a different non-Federal cost-share requirement
for feasibility studies that involve a community greater than 50,000
inhabitants?
Yes. If the feasibility study involves a rural water supply system
that will serve a community with a population in excess of 50,000
inhabitants, pursuant to the exception provided in Sec. 404.8, you may
be required to pay more than 50 percent of the costs of the study.
Determination of the appropriate amount of the non-Federal cost-share
will be based on the same criteria used to evaluate your capability to
pay the non-Federal share of construction costs, set forth in Sec.
404.39.
Sec. 404.36 Will Reclamation reimburse me for the cost of an
appraisal investigation or a feasibility study that was not completed
under Sec. 404.11(a) or (b)?
No. The cost-share provisions described in this rule only apply to
appraisal investigations and feasibility studies that are completed
under the program pursuant to Sec. 404.11(a) or (b). Reclamation will
not reimburse you or provide program funding for any expenses related
to an appraisal investigation or a feasibility study that is completed
without assistance from Reclamation.
Sec. 404.37 How will Reclamation determine the appropriate non-
Federal share of construction costs?
Reclamation will determine the appropriate non-Federal share of
construction costs in the process of developing the feasibility report.
The non-Federal cost-share will be:
(a) At least 25 percent of the total construction costs; and
(b) An additional amount based on your capability to pay, as
appropriate, to be determined by Reclamation based on the factors in
Sec. 404.39.
Sec. 404.38 Are there different requirements for determining the
appropriate non-Federal share of construction costs to be paid by
Indian tribes?
Yes. The appropriate non-Federal share of construction costs to be
paid by Indian tribes will be based on:
(a) Consideration of an Indian tribe's capability to pay at least
25 percent of the construction costs, to be determined in accordance
with the factors in Sec. 404.39; and
(b) If Reclamation determines, based on the analysis in Sec.
404.38(a), that an Indian tribe is not capable of paying at least 25
percent of the construction costs, Reclamation may recommend in its
feasibility report that the collection of all or part of the non-
Federal construction costs apportioned to an Indian tribe be deferred,
unless or until Reclamation determines that the Indian tribe should pay
all or a portion of those costs.
Sec. 404.39 What factors will Reclamation consider in evaluating my
capability to pay 25 percent or more of the construction costs?
Reclamation will consider the following factors:
(a) Economic factors for the project area, relative to the state
average, including:
(1) Per capita income;
(2) Median household income; and
(3) The poverty rate;
(b) The ability of the project sponsor to raise tax revenues or
assess fees such as user fees and ad valorum taxes or issue bonds;
(c) The strength of the project sponsor financial statements in
comparison to other similar entities over the previous 4 years,
including a review of:
(1) Current (includes cash and inventory) and non-current assets
(property, plants etc.);
(2) Net Assets (total assets minus total liabilities);
(3) Changes to net assets;
(4) Operating revenues (water and power sales);
(5) Operating expenses (variable costs and depreciation,
maintenance and repair);
(6) Cash flow from operating activities (positive value from water
sales minus payments to supplies and employees);
(7) Current (current bonds payable and accounts payable) and non-
current liabilities (long term debt payable);
(8) Outstanding debts and all other financial obligations;
(9) Collateral/equity as appropriate;
(10) Cash flows from capital and related financing activities
(negative value from principle paid on bonds and interest payments);
(11) Net cash flow; and
(12) Any non-operating revenues and expenses;
(d) Funding commitments from non-Federal sources, other than the
non-Federal project sponsor, including resources committed by state,
county, or local governments;
(e) The existing cost of water and the cost to develop new water
supplies in the region; and
(f) The impact of the proposed project on water rates;
(g) The projected impact of the proposed project on the non-Federal
project sponsor's ability to raise or generate revenues;
(h) The non-Federal project sponsor's financial history including
their past performance on repaying loans and other debts; and
(i) Any other financial means of the non-Federal project sponsor
that is not captured in this subsection.
Sec. 404.40 What is the non-Federal share of operation, maintenance,
and replacement costs?
You are required to pay 100 percent of the operation, maintenance,
and replacement costs of any rural water supply project planned under
this program.
Subpart C--Appraisal Investigations
Sec. 404.41 How will an appraisal investigation be conducted under
this program?
Appraisal investigations will be conducted in accordance with
Reclamation-approved standards governing the approach, process and
content of the appraisal investigation. You can obtain information
about Reclamation's standards and requirements for conducting an
appraisal investigation by contacting your local Reclamation office.
Sec. 404.42 How much time is provided to complete an appraisal
investigation?
An appraisal investigation must be scheduled for completion not
later than 2 years after the date on which the appraisal investigation
is initiated, unless otherwise agreed to in writing by Reclamation.
Sec. 404.43 What process will Reclamation follow to determine if an
appraisal investigation is ready for review?
(a) Reclamation will evaluate whether the appraisal investigation
adequately addresses all of the items required in Reclamation's
standards for conducting appraisal investigations, and is, therefore
ready for review. Reclamation
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standards and requirements for the content of an appraisal
investigation are available at your local Reclamation office.
Reclamation will notify you in writing of the outcome of this
determination within 90 business days from the date of Reclamation's
receipt of the appraisal investigation;
(b) If the appraisal investigation does not include the required
information, you will be notified in writing of the reasons why, and
you will have an opportunity to make changes and re-submit the
corrected appraisal investigation to Reclamation for additional review.
As appropriate, Reclamation will work with you to suggest approaches to
correct the appraisal investigation;
(c) Once Reclamation determines that the appraisal investigation
includes all of the required information, Reclamation will review the
investigation to determine, based on an application of the criteria set
forth in Sec. 404.44, whether or not it is appropriate to proceed to a
feasibility study. Reclamation will document its findings in an
appraisal report, as described in Sec. 404.45;
(d) Reclamation's review of an appraisal investigation will take no
longer than 180 business days from its receipt of the appraisal
investigation to its completion of the appraisal report, excluding time
when Reclamation is waiting for additional information from the project
sponsor.
Sec. 404.44 What criteria will Reclamation apply to determine whether
it is appropriate to recommend that a feasibility study be conducted?
In reviewing an appraisal investigation, Reclamation will apply the
following criteria to determine whether at least one of the
alternatives identified is appropriate for further analysis through a
feasibility study, or whether the investigation should be terminated
without conducting a feasibility study, including:
(a) Whether a reasonable range of alternatives (structural or non-
structural) have been formulated and evaluated;
(b) Whether the recommendation for further study of one or more
alternatives is clearly supported by the analysis in the appraisal
investigation; and
(c) For each alternative considered in the investigation, whether
the alternative:
(1) Identifies viable water supplies and water rights sufficient to
supply the proposed service area, including all practicable water
sources such as lower quality waters, non-potable waters, and water-
reuse-based water supplies;
(2) Has a positive effect on public and health and safety;
(3) Will meet water demand, including projected future needs;
(4) Provides environmental benefits, including source water
protection;
(5) Applies a regional or watershed perspective and promotes
benefits in the region in which the project is carried out;
(6) Implements an integrated water resources management approach;
(7) Enhances water management flexibility, including providing for
local control of water supplies and, where applicable, encouraging
participation in water banking and markets;
(8) Promotes long-term protection of water supplies;
(9) Includes preliminary cost estimates that are reasonable and
supported;
(10) Is cost-effective and generates national net economic benefits
as required under the Principles and Guidelines (incorporated by
reference at Sec. 404.4);
(11) For each alternative proposed for further evaluation in a
feasibility study, whether the project sponsor has the capability to
pay 100 percent of the costs associated with the operation,
maintenance, and replacement of the facilities constructed or
developed; and
(12) Other factors that Reclamation deems appropriate.
Sec. 404.45 What will be included in the appraisal report prepared by
Reclamation?
The appraisal report prepared by Reclamation will include
Reclamation's finding as to whether or not it is appropriate to proceed
to a feasibility study, based on Reclamation's review of the appraisal
investigation and application of the criteria set forth in Sec.
404.44, and the reasons supporting that finding.
Sec. 404.46 Who will the appraisal report be provided to?
A copy of the appraisal report will be provided to you. Reclamation
will also publish a notice of availability of the appraisal report in
the Federal Register and will make a copy of the report available to
the public upon request.
Subpart D--Feasibility Studies
Sec. 404.47 How will a feasibility study be conducted under this
program?
Feasibility studies will be conducted in accordance with
Reclamation's standards governing the approach, process and content of
the feasibility study, including the Principles and Guidelines
(incorporated by reference at Sec. 404.4). You can obtain information
about Reclamation's standards and requirements for conducting
feasibility studies by contacting your local Reclamation office.
Sec. 404.48 What process will Reclamation follow to determine if a
feasibility study is ready for review?
(a) Reclamation will evaluate whether the feasibility study
adequately addresses all of the items required in Reclamation's
standards for conducting a feasibility study, and is, therefore, ready
for review. Reclamation standards and requirements for the content of a
feasibility study are available at your local Reclamation office.
Reclamation will notify you in writing of the outcome of this
determination within 90 business days from the date of Reclamation's
receipt of the feasibility study;
(b) If the feasibility study does not include the required
information, you will be notified in writing of the reasons why, and
you will have an opportunity to make changes and re-submit the
corrected feasibility study to Reclamation for additional review. Where
appropriate, Reclamation will work with you to suggest approaches to
correct the feasibility study;
(c) Once Reclamation determines that the feasibility study includes
all of the required information, Reclamation will review the study to
determine, based on application of the criteria set forth in Sec.
404.49, whether or not it is appropriate to recommend to Congress that
it authorize construction of the project;
(d) Reclamation's review of the feasibility study will take no
longer than 180 business days from the date that Reclamation determines
that the study includes all of the required information and is ready
for review; and
(e) Reclamation will document its findings in a feasibility report,
as more fully described in section Sec. 404.50.
Sec. 404.49 What criteria will Reclamation use to recommend that a
proposed rural water supply project be authorized for construction?
In reviewing a feasibility study, Reclamation will assure that the
proposed project is consistent with the policies and programs of the
President and will apply the following criteria to evaluate and
determine whether it is appropriate to recommend authorization for
construction:
(a) The degree to which the project meets the prioritization
criteria in Sec. 404.13;
(b) The outcome of the environmental analysis;
(c) Whether there is a Federal interest in the project, including;
[[Page 67790]]
(1) A clearly defined Federal nexus to a proposed project;
(2) The Federal cost of the project in relation to the amount of
Federal resources likely to be available; and
(d) Whether the recommended project alternative is clearly
supported by the feasibility study, based on application of the
following factors, including the extent to which the alternative:
(1) Addresses near and long-term water demand;
(2) Advances public health and safety and consideration of other
benefits of the proposed rural water supply project;
(3) Addresses environmental quality and source water protection
issues;
(4) Addresses opportunities to treat and use low-quality or non-
potable water, water-reuse based supplies, and brackish and saline
waters, through innovative and economically viable treatment
technologies;
(5) Addresses opportunities for water conservation through
structural or non-structural approaches and demonstration technologies
to reduce water use and water system costs;
(6) Addresses opportunities to take advantage of economic
incentives and the use of market-based mechanisms;
(7) Includes a reasonable and supported estimate of construction
costs and operation, maintenance, and replacement costs;
(8) Is consistent with the Principles and Guidelines (incorporated
by reference at Sec. 404.4).
(9) Includes a reasonable and supported operation, maintenance, and
replacement plan to assist the project sponsor in establishing rates
and fees and a schedule identifying how those costs should be allocated
to each non-Federal project sponsor;
(10) Demonstrates your financial capability to pay at least 25
percent of the design and construction costs and 100 percent of the
operation, maintenance, and replacement costs;
(11) Is eligible for guaranteed loans;
(12) Includes adequate administrative and financial controls to
manage construction and operation, maintenance, and replacement of the
project;
(13) Is eligible for assistance under other Federal authorities to
pay for discrete features or portions of the project;
(14) Is technically feasible and can be constructed within industry
standards;
(15) Involves partnerships with other state, local, or tribal
governments or Federal entities; and
(16) In the case of Indian tribes and tribal organizations, the
extent to which the alternative addresses the goal of economic self-
sufficiency;
(17) The degree to which the proposed project demonstrates that it
has clear deliverables, will be accomplished within a reasonable
schedule, within budget, and is well managed; and
(18) Other factors and criteria that Reclamation deems appropriate.
Sec. 404.50 What information will be included in the feasibility
report prepared by Reclamation.
The feasibility report prepared by Reclamation will include:
(a) Reclamation's finding as to whether the proposed rural water
supply project is feasible and the reasons supporting that
determination;
(b) A recommendation to Congress regarding whether or not the
proposed rural water supply project should be authorized for
construction, and the reasons supporting the recommendation. This
recommendation will be based on Reclamation's review of the feasibility
study and its application of the criteria set forth in Sec. 404.49;
and
(c) If the rural water supply project is recommended for
construction, the feasibility report will also include:
(1) The appropriate Federal and non-Federal share of the capital
construction costs for the project and for projects involving multiple
project sponsors, the portion of those costs allocated to each project
sponsor;
(2) What amount of grants, loan guarantees, or combination of
grants and loan guarantees should constitute the Federal share of the
project;
(3) The annual operation, maintenance, and replacement costs, and
the portion of those costs allocated to each project sponsor
participating in the rural water supply project; and
(4) An assessment of the financial capability of each project
sponsor participating in the rural water supply project to pay the
portion of the construction and operation, maintenance, and replacement
costs allocated to it.
Sec. 404.51 Are proposed projects under the Rural Water Supply
program reviewed by the Administration?
Yes. The Administration will review all projects proposed for
funding under the Reclamation's Rural Water Supply program. This
includes review under Executive Order 12322 to determine whether the
project is consistent with the policies and programs of the President.
This review will occur before the feasibility report is finalized.
Sec. 404.52 Who will the feasibility report be provided to?
Upon its completion, Reclamation will:
(a) Provide the feasibility report to you;
(b) Submit the feasibility report to the Committee on Energy and
Natural Resources of the Senate and the Committee on Natural Resources
of the House of Representatives;
(c) Make the report publicly available, along with associated study
documents; and
(d) Publish in the Federal Register a notice of the availability of
the results.
Subpart E--Miscellaneous
Sec. 404.53 Does this rule provide authority for the transfer of pre-
existing facilities from Federal to private ownership, or from private
to Federal ownership?
No. This rule does not authorize the transfer of pre-existing
facilities or pre-existing components of any water system from Federal
to private ownership, or from private to Federal ownership.
Sec. 404.54 Who will hold title to a rural water project that is
constructed following the completion of an appraisal investigation or
feasibility study under this program?
Title to any rural water project planned, designed and recommended
for construction under this program will be held by the non-Federal
project sponsor.
Sec. 404.55 Who is responsible for the operation, maintenance, and
replacement costs?
You will be responsible for 100 percent of the operation,
maintenance, and replacement costs for any rural water facility that is
planned, designed, and recommended for construction under this program.
Sec. 404.56 If a financial assistance agreement is entered into for a
rural water supply project that benefits more than one Indian tribe, is
the approval of each Indian tribe required?
Yes. When a financial assistance agreement is entered into with an
organization to perform services benefiting more than one Indian tribe,
the approval of each such Indian tribe is a prerequisite to entering
into the financial assistance agreement.
Sec. 404.57 Does this rule have any affect on state water law?
No. Neither the Act nor this rule preempts or affects state water
law or any interstate compact governing water. Reclamation will comply
with state water laws in carrying out this rule.
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Sec. 404.58 Do rural water projects authorized before the enactment
of the Rural Water Supply Act of 2006 have to comply with the
requirements in this rule?
No. Neither the Act nor this rule imposes any additional
requirements on rural water supply projects that were authorized for
construction before the date of enactment of the Act.
Sec. 404.59 If the Secretary recommends a project for construction,
is that a promise of Federal funding?
No. Congress must first authorize the project for construction and
Federal funding is subject to the availability of appropriations.
Sec. 404.60 Does this rule contain an information collection that
requires approval by OMB?
Yes. This rule does contain an information collection that is
approved by OMB, under Control Number 1006-0029. The Paperwork
Reduction Act provides that an agency may not conduct or sponsor, and a
person is not required to respond to, a collection of information
unless it displays a valid OMB control number.
[FR Doc. E8-26584 Filed 11-14-08; 8:45 am]
BILLING CODE 4310-MN-P