[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1779.20]

[Page 1012]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1779--WATER AND WASTE DISPOSAL PROGRAMS GUARANTEED LOANS--Table of Contents
 
Sec. 1779.20  Eligibility.

    (a) Availability of credit from other sources. The Agency must 
determine that the borrower is unable to obtain the required credit 
without the loan guarantee from private, commercial, or cooperative 
sources at reasonable rates and terms for loans for similar purposes and 
periods of time. The Agency must also determine if an outstanding 
judgment obtained by the United States in a Federal Court (other than 
the U.S. Tax Court) has been entered against the borrower or if the 
borrower has an outstanding delinquent debt with any Federal agency. 
Such judgment or delinquency shall cause the potential borrower to be 
ineligible to receive a loan guarantee until the judgment is paid in 
full or otherwise satisfied or the delinquency is cured.
    (b) Legal authority and responsibility. (1) Each borrower must have, 
or will obtain, the legal authority necessary to construct, operate, and 
maintain the proposed facility and services. They must also have legal 
authority for obtaining, giving security for, and repaying the proposed 
loan.
    (2) The borrower shall be responsible for operating, maintaining, 
and managing the facility and services, and providing for the continued 
availability and use of the facility and services at reasonable rates 
and terms.
    (c) Applicant. Eligible entities are:
    (1) A public body such as a municipality, county, district, 
authority, or other political subdivision of a State located in a rural 
area.
    (2) An organization operated on a not-for-profit basis, such as an 
association, cooperative, or private corporation. The organization must 
be an association controlled by a local public body or bodies, or have a 
broadly based ownership by or membership of people of the local 
community; or
    (3) Indian tribes on Federal and State reservations and other 
federally recognized Indian tribes.
    (d) Facility location. Facilities must be located in rural areas, 
except: For utility services such as drinking water, sanitary sewer, 
solid waste disposal or storm drainage facilities serving both rural and 
non-rural areas. In such cases, Agency funds may be used to finance only 
that portion serving rural areas, regardless of facility location.
    (e) Facilities for public use. All facilities financed under the 
provisions of this part shall be for public purposes.
    (1) Facilities will be installed to serve any user within the 
service area who desires service and can be feasibly and legally served.
    (2) In no case will boundaries for the proposed service area be 
chosen in such a way that any user or area will be excluded because of 
race, color, religion, sex, marital status, age, disability, or national 
origin.
    (3) The lender will determine that, when feasible and legally 
possible, inequities within the proposed project's service area for the 
same type service proposed will be remedied by the owner on, or before, 
completion of the project. Inequities are defined as unjustified 
variations in availability, adequacy, or quality of service. User rate 
schedules for portions of existing systems or facilities that were 
developed under different financing, rates, terms, or conditions do not 
necessarily constitute inequities.