1. (a) Amount of available funds. Annually, the executive administrator will determine the amount of funds available for water system improvements and other projects for the fiscal year.
2. (b) Subsidy limits. The total amount of subsidies in any fiscal year may not exceed the percentages established by federal law or by the capitalization grant.

3. (c) Small water systems. Projects with identical combined rating scores, including rating scores of zero, will be listed in order of population. Projects serving smaller populations will be listed above those projects serving larger populations.

   1. (1) To the extent eligible Applicants are available, a minimum of 15% of the funds will be made available to small communities, i.e. those systems serving populations less than 10,000.
   2. (2) If small community projects above the funding line are less than 15%, then the executive administrator may bypass projects for systems serving larger populations to ensure inclusion of small community projects for at least 15% of available funds.

4. (d) Priority list of projects. Available program funds will be applied to the list of projects designated to receive funding. The methods used for ranking include:

   1. (1) Project costs. Project costs will be determined by cost estimates contained in the project information if the executive administrator deems those costs reasonable and acceptable; the costs are part of the IUP.
   2. (2) Tie-breakers. If two or more projects receive the same rating, then the executive administrator will use the tie-breaker procedures listed in the IUP.
   3. (3) Bypass procedure. The executive administrator may pass over higher rated and ranked projects to ensure the minimum funding dedicated to disadvantaged communities, green project reserve, additional subsidization, and other priorities described in the IUP.
5. (e) Funding line and invitation and intent to apply for funds. After projects have been rated and ranked, funding lines will be drawn on the priority list to the limit of available funds. Applicants with projects above the funding line will be invited to submit applications for financial assistance and shall confirm their intent to apply as directed by the executive administrator. The intent to apply must be received within 30 days from the executive administrator's invitation or the project will be bypassed for the applicable funding cycle.
6. (f) Additional funds. When invited Applicants decline the invitation to apply for funds or when additional funds become available, the executive administrator shall redraw the funding line and shall continue the process described in this section to ensure the use of all available funds.
7. (g) Bypass. All projects for which no or incomplete applications for financial assistance are received or where invitations to apply were declined shall be bypassed. This process shall continue to ensure the use of all available funds.
8. (h) Invitation to apply for funds. After the funding line is re-drawn, the executive administrator shall provide written notice to all potential Applicants about the availability of funds for their project and shall invite the submittal of applications for financial assistance. Applicants shall submit their complete application within three months of the invitation or the project will be ineligible for funding in the applicable IUP.
9. (i) Utilization of remaining funds. If there are insufficient applications for financial assistance to obligate available funds for the funding year, then the executive administrator shall utilize the remaining funds during the next funding year or at any time in combination with other Board loan programs.
10. (j) Fund shortages. When the amount of funds required to fund all complete applications for financial assistance exceeds the amount of funds available in the funding year, a shortage of funds exists. In such an instance, the Board will fund Applicants in order of priority ranking until all funds have been utilized. In the event of identical ratings, the Board shall fund projects prioritized by the date and time of receipt of a complete application.

Source Note:The provisions of this §371.23 adopted to be effective August 4, 2010, 35 TexReg 6680.