1. (a) After the executive administrator determines the amount of funds available for water system improvements for a fiscal year and assigns all reserves, the remaining funds will be applied to the list of projects designated to receive funding in the intended use plan. The list will be divided into population classes of systems that serve fewer than 10,000 persons and systems that serve 10,000 and over persons. Projects will be listed in priority ranking order with funds required and totaled by class. Except for projects for disadvantaged communities, projects having either identical combined rating factor scores, or identical physical deficiency rating scores, or including rating scores of zero, will be listed in alphabetical order. Funds required by all projects with combined rating factors greater than zero in all classes shall then be totaled. A percentage of the total funds required by each class shall be computed based upon the ratio of funds required by all classes. The portion of the available funds will be assigned to the classes based on this computed percentage. However, to the extent eligible applicants are available, a minimum of 15% of the funds will be made available to small communities (systems serving 10,000 or less).
2. (b) After population class percentages have been assigned and available funds distributed among the classes, a line will be drawn within each class not to exceed the available funds to each class. Project costs will be based on cost estimates, acceptable to the executive administrator, contained in the intended use plan solicitation described in §371.20 of this title (relating to Intended Use Plan) used to establish the project list. The executive administrator may adjust the location of the funding line upward or downward to avoid placing the line within a group of applicants having identical rating scores.
3. (c) Projects above the line shall be eligible for assistance. After the funding line is drawn, the executive administrator shall notify in writing all potential applicants above the funding line of the availability of funds and will invite the submittal of applications.
4. (d) Applicants must submit complete applications within four months of being invited to submit.
5. (e) If, after six months from the date of invitation to submit applications, all available funds are not committed, the executive administrator will return any applications which have not received a commitment and move all projects for which no applications, incomplete applications or complete applications were submitted to the bottom of the prioritized list, where they will be placed in priority order.
6. (f) Following the re-ranking of the list a line will again be drawn not to exceed the amount of remaining funds available in accordance with subsection (b) of this section.
7. (g) Projects above the line shall be eligible for assistance. After the funding line is re-drawn, the executive administrator shall notify, in writing, all potential applicants of the availability of funds and will invite the submittal of applications.
8. (h) Applicants must submit complete applications within four months of being invited to submit.
9. (i) If, after six months from the second date of invitation to submit applications, the remaining funds are not committed the executive administrator will return any applications which have not received a commitment. Except for funds for disadvantaged communities projects, any funds remaining that exceed the amount needed to fund complete applications will be made available for the next fiscal year. Funds for disadvantaged communities projects shall remain available for commitment in accordance with §371.25 of this title (relating to Criteria and Methods for Distribution of Funds for Disadvantaged Communities).
10. (j) If, at any time during either six month period of availability of funds, a potential applicant above the funding line submits written notification that it does not intend to submit an application or if additional funds become available for assistance, the line may be moved downward in priority order to accommodate projects which would utilize the funds that would otherwise not be committed during the particular six month period. The executive administrator will notify such additional potential applicants in writing and will invite the submittal of applications. Potential applicants receiving such notice will be given four months to submit an application and six months from the date of notification to receive a loan commitment.
11. (k) Applications for assistance may be submitted at any time within four months after notification by the executive administrator of the availability of funds and will be funded on a first come, first served basis. Funds shall be committed to a project designated to receive assistance upon board approval of the application.
12. (l) If funds are available after the executive administrator is able to make a determination that all applicants in a population class have had the opportunity to be funded, the remaining funds will be made available to the other population classes.

Source Note:The provisions of this §371.21 adopted to be effective March 18, 1997, 22 TexReg 2502; amended to be effective August 6, 1997, 22 TexReg 7057; amended to be effective September 10, 1997, 22 TexReg 9004; amended to be effective March 11, 1998, 23 TexReg 2396; amended to be effective October 8, 1998, 23 TexReg 10042.