[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: 7CFR1780.10]

[Page 1036]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1780--WATER AND WASTE LOANS AND GRANTS--Table of Contents
 
              Subpart A--General Policies and Requirements
 
Sec. 1780.10  Limitations.

    (a) Loan and grant funds may not be used to finance:
    (1) Facilities which are not modest in size, design, and cost;
    (2) Loan or grant finder's fees;
    (3) The construction of any new combined storm and sanitary sewer 
facilities;
    (4) Any portion of the cost of a facility which does not serve a 
rural area;
    (5) That portion of project costs normally provided by a business or 
industrial user, such as wastewater pretreatment, etc.;
    (6) Rental for the use of equipment or machinery owned by the 
applicant;
    (7) For other purposes not directly related to operating and 
maintenance of the facility being installed or improved; and
    (8) A judgment which would disqualify an applicant for a loan or 
grant as provided for in Sec. 1780.7(g).
    (b) Grant funds may not be used to:
    (1) Reduce EDU costs to a level less than similar system cost;
    (2) Pay any costs of a project when the median household income of 
the service area is more than 100 percent of the nonmetropolitan median 
household income of the State;
    (3) Pay project costs when other loan funding for the project is not 
at reasonable rates and terms; and
    (4) Pay project costs when other funding is a guaranteed loan 
obtained in accordance with 7 CFR part 1779 of this title.
    (c) Grants may not be made in excess of the following percentages of 
the RUS eligible project development costs. Facilities previously 
installed will not be considered in determining the development costs.
    (1) 75 percent when the median household income of the service area 
is below the higher of the poverty line or 80% of the state 
nonmetropolitan median income and the project is necessary to alleviate 
a health or sanitary problem.
    (2) 45 percent when the median household income of the service area 
exceeds the 80 percent requirements described in paragraph (c)(1) of 
this section but is not more than 100 percent of the statewide 
nonmetropolitan median household income.
    (3) Applicants are advised that the percentages contained in 
paragraphs (c)(1) and (c)(2) of this section are maximum amounts and may 
be further limited due to availability of funds or the grant 
determination procedures contained in Sec. 1780.35 (b).

[62 FR 33478, June 19, 1997, as amended at 64 FR 29946, June 4, 1999; 66 
FR 23151, May 8, 2001]