C.F.R. » Title 7 » CHAPTER XVII—RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE › PART 1782—SERVICING OF WATER AND WASTE PROGRAMS

7 C.F.R. § 1782.14

Protection of service areas—7 U.S.C. 1926(b)

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(a) 7 U.S.C. 1926(b) was enacted to protect the service area of Agency borrowers with outstanding loans, or those loans sold in the sale of assets authorized by the “Joint Resolution Making Continuing Appropriations for the Fiscal Year 1987, Pub. L. 99-591, 100 Stat. 3341 (1986),” from loss of users due to actions or activities of other entities in the service area of the Agency financed system. Without this protection, other entities could extend service to users within the service area, and thereby undermine the purpose of the congressionally mandated water and waste loan and grant programs and jeopardize the borrower's ability to repay its Agency debt.

(b) Responsibility for initiating action in response to those actions prohibited by 7 U.S.C. 1926(b) rests with the borrower.

Notes of Decisions
Cited in 5 cases (4 in the last 5 years), 2020–2024 · leading case: Mobile Cnty. Water, Sewer & Fire Prot. Auth. v. Bd. of Water & Sewer Commissioners of the City of Mobile (S.D. Ala. 2022).
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Mobile Cnty. Water, Sewer & Fire Prot. Auth. v. Bd. of Water & Sewer Commissioners of the City of Mobile (S.D. Ala. 2022). · cites it 2× “) Plaintiff also directs the Court to 7 C.F.R. § 1782.14 which states: (a) 7 U.”
Milcrofton Util. Dist. of Williamson Cnty., Tennessee v. City of Brentwood, Tennessee (M.D. Tenn. 2020). · cites it 2× “” 7 C.F.R. § 1782.14 . “Responsibility for initiating action in response to those actions prohibited by 7 U.”
S. Black Hills Water Sys., Inc. v. Town of Hermosa (D.S.D. 2023). “7 C.F.R. § 1782.14 (2023). Section 1926(b) states in full: The service provided or made available through any such association shall not be curtailed or limited by inclusion of the area served by such association within the boundaries of any municipal corporation or other public…”
Dupont Water Co. Inc. v. City of Madison, Indiana (S.D. Ind. 2024). “" 7 C.F.R. § 1782.14 (emphasis added). However, while these cases do not specifically address whether a water customer that is a municipal corporation1 can be sued for violating § 1926(b) by contracting with another water servicer to purchase water within a rural association's…”
Dobbin Plantersville Water Supply Corp. v. Lake (W.D. Tex. 2022). “” 7 C.F.R. § 1782.14 (emphasis added). The regulation “has been interpreted liberally by federal courts to protect an indebted rural water association from municipal encroachment.”
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