1. (a) Eligible projects. Projects are eligible for assistance if they facilitate compliance with the primary or secondary drinking water regulations applicable to the public water systems or otherwise significantly further the health protection objectives of the Act. Eligible projects include:

   1. (1) upgrade or replacement of infrastructure in order to continue providing the public with safe drinking water, including projects to replace aging infrastructure;
   2. (2) correction of exceedances of the health standards established by the Act;
   3. (3) consolidation of water supplies where the water supply is contaminated or the system is unable to maintain compliance with the national primary drinking water regulations for financial or managerial reasons and the consolidation will achieve compliance;
   4. (4) purchase of capacity in another system if the purchase is part of a consolidation plan and is cost-effective considering buy-in fees and user fees;
   5. (5) ensuring that the system has the technical, managerial, and financial capacity to comply with the national primary drinking water regulations and applicable state drinking water regulations over the long term or, where the owner or operator of the system to be funded agrees to undertake all feasible and appropriate changes in operations (including ownership, management, accounting, rates, maintenance, consolidation, alternative water supply, or other procedures) to ensure compliance; and
   6. (6) projects which qualify as green projects based upon information provided within the submitted project information form, the application, and if necessary, the business case.
2. (b) Ineligible projects. Projects are not eligible to receive DWSRF funds if the primary purpose of the project is to supply or attract growth. If the primary purpose is to solve a compliance or public health problem, the entire project, including the portion necessary to accommodate a reasonable amount of growth over its useful life, is eligible.

Source Note:The provisions of this §371.2 adopted to be effective August 4, 2010, 35 TexReg 6680.