The following words and terms, when used in this subpart, shall have the following meanings unless the context clearly indicates otherwise:

1. (1) “Hardship criteria”. The “hardship criteria” used to determine if a project is eligible for a hardship grant is made up of three (3) parts:

   1. (A) The community must:

      1. (i) Lack centralized wastewater treatment or collection systems;
      2. (ii) Be extending service to an unsewered part of their area; or
      3. (iii) Need improvements to onsite wastewater treatment systems (i.e., septic tanks, mound system, etc.);
   2. (B) The state must determine that assistance will improve public health or reduce an environmental risk; and
   3. (C) The community must demonstrate that it is economically distressed as defined by the United States Environmental Protection Agency in the final regulations for the hardship grant program; and
2. (2) “Small rural community” means a public entity of more than one (1) household but no more than three thousand (3,000) inhabitants and that is not a remote area within the corporate boundaries of a larger city.