§ 1942.361 - Grant limitations.

(a) Grant funds may not be used to:

(1) Finance facilities which are not modest in size, design, and cost.

(2) Pay loan or grant finder's fees.

(3) Pay for the construction of any new combined storm and sanitary sewer facilities.

(4) Pay any annual recurring costs, including purchases or rentals that are generally considered to be operating and maintenance expenses.

(5) Reduce user costs to a level not less than similar system user cost.

(6) Construct or repair electric generating plants, electric transmission lines, or gas distribution lines to provide services for commercial sale.

(7) Purchase fire trucks, hoses, and other fire fighting equipment, or construct housing for such equipment.

(8) Pay rental for the use of equipment or machinery owned by the grantee.

(9) Pay for salesrooms or other purposes not directly related to operating and maintenance of the facility being installed or improved.

(10) Purchase existing systems.

(11) Refinance existing indebtedness.

(12) Pay interest.

(13) Pay any portion of the cost of a facility which is not located in a rural area.

(14) Pay any costs of a project when the median household income of the service area is above the poverty line and more than 100 percent of the nonmetropolitan median household income of the State.

(15) Pay project costs when other funding is not at reasonable rates and terms.

(16) Pay project costs when other funding is a guaranteed loan obtained in accordance with subpart I of part 1980 of this chapter.

(17) To pay that portion of project costs normally provided by a business or industrial user, such as wastewater pretreatment, etc.

(b) Grants may not be made in excess of the following percentages (whichever is higher) of the 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 poverty line or below 80 percent (whichever is higher) of the statewide nonmetropolitan median household income.

(2) 55 percent when the median household income of the service area exceeds the 75 percent requirements described in paragraph (b)(1) of this section but is not more than 100 percent of the statewide nonmetropolitan median household income.