[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: 7CFR1781.5]

[Page 1072]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1781--RESOURCE CONSERVATION AND DEVELOPMENT (RCD) LOANS AND WATERSHED (WS) LOANS AND ADVANCES--Table of Contents
 
Sec. 1781.5  Eligibility.

    To be eligible for a WS loan, WS advance, or an RCD loan, the 
sponsoring local organization must meet the following requirements as 
applicable. Questions on eligibility will be referred to the Regional 
Attorney, OGC for legal advise prior to development of a loan docket.
    (a) Be named in the WS or RCD plan as a sponsor of the development 
to be financed.
    (b) Be legally organized and established in the WS or RCD area with 
legal authority, responsibility and capability to develop and operate 
the facility for which assistance is requested.
    (c) Have authority under and comply with Federal, State and local 
laws on such matters as:
    (1) Organizing, installing, operating, and maintaining proposed WS 
works of improvement or RCD measures or projects.
    (2) Borrowing money, giving security, levying taxes, making 
assessments or raising revenues for operation and maintenance of the 
facility and repayment of loans.
    (3) Land use zoning.
    (4) Acquiring necessary property, lands, and rights.
    (5) Obtaining approval of construction plans and specifications by 
appropriate Federal, State, and local agencies and construction 
facilities.
    (6) Health and sanitation standards, water pollution control, and 
environmental regulations.
    (7) Design and installation standards.
    (8) Public service commission or similar State public body rules and 
regulations.
    (d) Be financially sound and capable of providing service essential 
to the rural development needs of the area.
    (e) If it is a nonprofit corporation.
    (1) Membership should be broadly based and representative of the 
area benefiting from the facility. Membership on the governing board of 
the corporation will be limited to those living in the area to be 
benefited unless for justifiable reasons the Rural Development State 
Director gives prior approval for other than local residents to serve on 
the board of directors.
    (2) The corporation must propose a facility which will primarily 
serve or generate other substantial, tangible benefits for farmers and 
other residents of the area. In the case of a recreational development 
at least two-thirds of the membership must be farmers and other residing 
in the area.
    (3) Nonprofit corporations will not be formed to serve an area which 
could be served by a public agency which has adequate authority to 
provide the needed service unless prior approval of the National Office 
is obtained.