Assistance to provide water and wastewater services in financially distressed rural areas

Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) (as amended by section 6209) is amended by adding at the end the following: (28) Assistance to provide water and wastewater services in financially distressed rural areas (A) Definitions In this paragraph: (i) Distressed water system The term distressed water system means an association described in paragraph (1) that— (I) is unable to provide water and wastewater services to the residents of an eligible area because the association— (aa) lacks the capacity— (AA) to operate, maintain, or manage water and wastewater facilities or services; or (BB) to provide for the continued availability and use of those facilities or services at reasonable user rates and charges; or (bb) lacks the financial, technical, or managerial capability to consistently comply with pertinent Federal and State laws and requirements; and (II) voluntarily agrees to the provision of water or wastewater services in the eligible area described in subclause (I) by an eligible association the service area of which is contiguous to, or in the locality of, the eligible area. (ii) Eligible area The term eligible area means a rural area that is a low-income community or an economically distressed area, as determined by the Secretary. (iii) Eligible association The term eligible association means an association described in paragraph (1) that— (I) currently receives, or is eligible for, assistance under a rural water or wastewater program; and (II) is experienced in, and currently, providing functioning water and wastewater services to the residents of a rural area. (iv) Rural water or wastewater program The term rural water or wastewater program means a water or wastewater program under this subsection. (B) Assistance (i) Financial assistance The Secretary may provide financial assistance under a rural water or wastewater program to an eligible association for construction costs relating to providing water and wastewater services to the residents in the service area of a distressed water system that is contiguous to, or in the locality of, the service area of the eligible association. (ii) Technical assistance grants The Secretary may provide grants to qualified nonprofit technical assistance organizations with demonstrated experience in working with rural communities on regionalization, consolidation, and independent assessment, planning, and implementation projects to provide technical assistance to— (I) an eligible association for the purpose of providing water and wastewater services to the residents in the service area of a distressed water system that is contiguous to, or in the locality of, the service area of the eligible association; and (II) a distressed water system in deciding whether to voluntarily agree to allow an eligible association to provide the services described in subclause (I). (C) Consolidation and regionalization (i) In general For purposes of providing water and wastewater services using assistance provided under subparagraph (B), an eligible association and a distressed water system may— (I) consolidate governance, management, and financial functions; or (II) enter into a regional partnership. (ii) Effect on population limitation If an eligible association and a distressed water system consolidate or enter into a regional partnership pursuant to clause (i), the Secretary shall only consider the population of the service area of the distressed water system for purposes of eligibility for assistance under subparagraph (B). (iii) Use of systems Notwithstanding any other provision of law, an eligible association may use assistance provided under subparagraph (B) to provide water or wastewater services to the service area of a distressed water system using— (I) the system of the eligible association; (II) a system located in the service area of the distressed water system; or (III) a combination of both systems. (D) Limitation An eligible association that receives financial assistance under subparagraph (B)(i) shall only use that assistance for the benefit of the residents in the service area of the distressed water system..