§ 1942.367 - Application review, approval, and obligation of funds.

(a) When a grant only (no FmHA or its successor agency under Public Law 103-354 loan) is being made, only those applicable provisions of review and approval procedures outlined in § 1942.5 of subpart A of part 1942 of this chapter will apply which are necessary to assure that:

(1) The proposed development is completed in accordance with approved plans and specifications.

(2) Grant funds are expended for authorized purposes.

(3) The applicant can comply with the terms of the grant agreement.

(4) If the primary use of the facility is by business and the success or failure of the facility is dependent on the business, then the economic viability of that business must be assessed.

(b) When the grant approval official requires an appraisal, Form FmHA or its successor agency under Public Law 103-354 442-10, “Appraisal Report—Water and Waste Disposal Systems,” with appropriate supplements, may be used. Appraisal reports may be prepared by the FmHA or its successor agency under Public Law 103-354 engineer or, if desired by the grant approval official, another qualified appraiser.

(c) The application review and approval procedures outlined in § 1942.5 of subpart A of part 1942 of this chapter will be followed.

(d) Grants will be approved in accordance with this subpart and exhibit B of subpart A of part 1901 of this chapter, which is available in any FmHA or its successor agency under Public Law 103-354 office.

(e) Grants requiring National Office review will be submitted in accordance with § 1942.5(b)(1) of subpart A of part 1942 of this chapter.

(f) Each letter of conditions involving a grant will contain the following:

(1) Paragraphs which read:

(i) “Attached is a copy of Form FmHA or its successor agency under Public Law 103-354 1942-31, ‘Association Water or Sewer System Grant Agreement,’ for your review. You will be required to execute a completed form at the time of grant closing.”

(ii) “The applicant contribution shall be considered as the first funds expended except (insert appropriate exceptions if funds from other sources make an exception necessary). After providing for all authorized costs, any remaining FmHA or its successor agency under Public Law 103-354 project funds will be considered FmHA or its successor agency under Public Law 103-354 grant funds and refunded to FmHA or its successor agency under Public Law 103-354. If the amount of unused FmHA or its successor agency under Public Law 103-354 project funds exceeds the FmHA or its successor agency under Public Law 103-354 grant, that part would be FmHA or its successor agency under Public Law 103-354 loan funds.”

(2) All items contained in § 1942.5(a)(1) of subpart A of part 1942 of this chapter applicable to the grant funding.

(3) Environmental mitigation measures and other relative requirements.

(g) A copy of Form FmHA or its successor agency under Public Law 103-354 1942-51, along with the letter of conditions and Form FmHA or its successor agency under Public Law 103-354 1942-45, “Project Summary—Water and Waste Disposal and Other Utility-Type Projects,” (including the required copy of Forms FmHA or its successor agency under Public Law 103-354 1942-14, “Association Project Fund Analysis,” and FmHA or its successor agency under Public Law 103-354 442-7, “Operating Budget,”) will be submitted to the National Office, Attention: Water and Waste Disposal Division, by the State Director not later than the time the letter of conditions is issued.