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

   1. (1) capital investments to upgrade or replace infrastructure in order to continue providing the public with safe drinking water, including projects to replace aging infrastructure;
   2. (2) projects to correct exceedances of the health standards established by the Act;
   3. (3) projects to consolidate 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; and
   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.
2. (b) Projects proposed for public water systems for which applicants do not have the technical, managerial, and financial capacity to maintain the system are not eligible for assistance unless the use of the assistance will ensure compliance and the owner or operator of the system to be funded agrees to undertake feasible and appropriate changes in operations (including ownership, management, accounting, rates, maintenance, consolidation, alternative water supply, or other procedures) that are necessary to ensure that the system has the technical, managerial, and financial capacity to comply with national primary or secondary drinking water regulations over the long term.
3. (c) 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 §371.13 adopted to be effective March 18, 1997, 22 TexReg 2502; amended to be effective August 6, 1997, 22 TexReg 7057; amended to be effective October 13, 1997, 22 TexReg 9893; amended to be effective June 10, 1998, 23 TexReg 5980; amended to be effective January 6, 1999, 24 TexReg 163.