---
kind: "section"
citation: "43 U.S.C. § 2405"
title: "43"
title_heading: "Public Lands"
number: "2405"
heading: "Feasibility studies"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/43/2405"
units:
  - "Chapter 42 — Rural Water Supply"
  - "Subchapter I — Reclamation Rural Water Supply"
---

# §2405. Feasibility studies

- (a) **In general—** On completion of an appraisal report under [section 2404(c) of this title](/usc/43/2404.md?p=c) that recommends undertaking a feasibility study and subject to the availability of appropriations, the [Secretary](/usc/43/2401.md?p=10) shall—
  - (1) in cooperation with a [non-Federal project entity](/usc/43/2401.md?p=5), carry out a study to determine the feasibility of the proposed [rural water supply project](/usc/43/2401.md?p=9-A);
  - (2) receive and review a feasibility study that is—
    - (A) developed by the [non-Federal project entity](/usc/43/2401.md?p=5), with or without support from the [Secretary](/usc/43/2401.md?p=10); and
    - (B) submitted to the [Secretary](/usc/43/2401.md?p=10) by the [non-Federal project entity](/usc/43/2401.md?p=5); or
  - (3)
    - (A) provide a grant to, or enter into a cooperative agreement with, a [non-Federal project entity](/usc/43/2401.md?p=5) to conduct a feasibility study, for submission to the [Secretary](/usc/43/2401.md?p=10), if the [Secretary](/usc/43/2401.md?p=10) determines that—
      - (i) the non-Federal entity is qualified to complete the feasibility study in accordance with the criteria promulgated under [subsection (d)](#d); and
      - (ii) using the [non-Federal project entity](/usc/43/2401.md?p=5) to conduct the feasibility study is a cost-effective alternative for completing the appraisal investigation; or
    - (B) if the [Secretary](/usc/43/2401.md?p=10) determines not to provide a grant to, or enter into a cooperative agreement with, a [non-Federal project entity](/usc/43/2401.md?p=5) under [subparagraph (A)](#a-3-A), provide to the [non-Federal project entity](/usc/43/2401.md?p=5) notice of the determination, including an explanation of the reason for the determination.
- (b) **Review of non-Federal feasibility studies—**
  - (1) **In general—** In conducting a review of a feasibility study submitted under paragraph [(2)](#a-2) or [(3)](#a-3) of subsection (a), the [Secretary](/usc/43/2401.md?p=10) shall—
    - (A) in accordance with the feasibility factors described in [subsection (c)](#c) and the criteria promulgated under [subsection (d)](#d), assess the completeness of the feasibility study; and
    - (B) if the [Secretary](/usc/43/2401.md?p=10) determines that a feasibility study is not complete, notify the non-Federal entity of the determination.
  - (2) **Revisions—** If the [Secretary](/usc/43/2401.md?p=10) determines under [paragraph (1)(B)](#b-1-B) that a feasibility study is not complete, the non-Federal entity shall pay any costs associated with revising the feasibility study.
- (c) **Feasibility factors—** Feasibility studies authorized or reviewed under this subchapter shall include an assessment of—
  - (1) near- and long-term water demand in the area to be served by the [rural water supply project](/usc/43/2401.md?p=9-A);
  - (2) advancement of public health and safety of any existing [rural water supply project](/usc/43/2401.md?p=9-A) and other benefits of the proposed [rural water supply project](/usc/43/2401.md?p=9-A);
  - (3) alternative new water supplies in the study area, including any opportunities to treat and use low-quality water, nonpotable water, water reuse-based supplies, and brackish and saline waters through innovative and economically viable treatment technologies;
  - (4) environmental quality and source water protection issues related to the [rural water supply project](/usc/43/2401.md?p=9-A);
  - (5) innovative opportunities for water conservation in the study area to reduce water use and water system costs, including—
    - (A) nonstructural approaches to reduce the need for the project; and
    - (B) demonstration technologies;
  - (6) the extent to which the project and alternatives take advantage of economic incentives and the use of market-based mechanisms;
  - (7)
    - (A) the [construction](/usc/43/2401.md?p=1) costs and projected [operations, maintenance, and replacement costs](/usc/43/2401.md?p=6-A) of all alternatives; and
    - (B) the economic feasibility and lowest cost method of obtaining the desired results of each alternative, taking into account the Federal cost-share;
  - (8) the availability of guaranteed loans for a proposed [rural water supply project](/usc/43/2401.md?p=9-A);
  - (9) the financial capability of the [non-Federal project entity](/usc/43/2401.md?p=5) to pay the [non-Federal project entity](/usc/43/2401.md?p=5)’s proportionate share of the design and [construction](/usc/43/2401.md?p=1) costs and 100 percent of [operations, maintenance, and replacement costs](/usc/43/2401.md?p=6-A), including the allocation of costs to each [non-Federal project entity](/usc/43/2401.md?p=5) in the case of multiple entities;
  - (10) whether the [non-Federal project entity](/usc/43/2401.md?p=5) has developed an operations, management, and replacement plan to assist the [non-Federal project entity](/usc/43/2401.md?p=5) in establishing rates and fees for beneficiaries of the [rural water supply project](/usc/43/2401.md?p=9-A) that includes a schedule identifying the annual [operations, maintenance, and replacement costs](/usc/43/2401.md?p=6-A) that should be allocated to each non-Federal entity participating in the project;
  - (11)
    - (A) the [non-Federal project entity](/usc/43/2401.md?p=5) administrative organization that would implement [construction](/usc/43/2401.md?p=1), operations, maintenance, and replacement activities; and
    - (B) the fiscal, administrative, and operational controls to be implemented to manage the project;
  - (12) the extent to which assistance for rural water supply is available under other Federal authorities;
  - (13) the engineering, environmental, and economic activities to be undertaken to carry out the proposed [rural water supply project](/usc/43/2401.md?p=9-A);
  - (14) the extent to which the project involves partnerships with other [State](/usc/43/31b.md?p=8), local, or tribal governments or Federal entities; and
  - (15) in the case of a project intended for [Indian tribes](/usc/43/2401.md?p=4) and [tribal organizations](/usc/43/2401.md?p=11), the extent to which the project addresses the goal of economic self-sufficiency.
- (d) **Feasibility study criteria—**
  - (1) **In general—** Not later than 18 months after December 22, 2006, the [Secretary](/usc/43/2401.md?p=10) shall promulgate criteria (including the feasibility factors listed under [subsection (c)](#c)) under which the feasibility studies shall be assessed for completeness and appropriateness.
  - (2) **Inclusions—** The [Secretary](/usc/43/2401.md?p=10) shall include in the criteria promulgated under [paragraph (1)](#d-1) methods to scale the level of effort needed to complete the feasibility assessment relative to the total size and cost of the proposed [rural water supply project](/usc/43/2401.md?p=9-A) and reduce total costs to non-Federal entities.
- (e) **Feasibility report—**
  - (1) **1 In general—** After completion of appropriate feasibility studies for [rural water supply projects](/usc/43/2401.md?p=9-A) that address the factors described in [subsection (c)](#c) and the criteria promulgated under [subsection (d)](#d), the [Secretary](/usc/43/2401.md?p=10) shall—
    - (A) develop a feasibility report that includes—
      - (i) a recommendation of the [Secretary](/usc/43/2401.md?p=10) on—
        - (I) whether the [rural water supply project](/usc/43/2401.md?p=9-A) should be authorized for [construction](/usc/43/2401.md?p=1); and
        - (II) the appropriate non-Federal share of [construction](/usc/43/2401.md?p=1) costs, which shall be—
          - (aa) at least 25 percent of the total [construction](/usc/43/2401.md?p=1) costs; and
          - (bb) determined based on an analysis of the capability-to-pay information considered under subsections [(c)(9)](#c-9) and [(f)](#f); and
      - (ii) if the [Secretary](/usc/43/2401.md?p=10) recommends that the project should be authorized for [construction](/usc/43/2401.md?p=1)—
        - (I) what amount of grants, loan guarantees, or combination of grants and loan guarantees should be used to provide the Federal cost share;
        - (II) a schedule that identifies the annual [operations, maintenance, and replacement costs](/usc/43/2401.md?p=6-A) that should be allocated to each non-Federal entity participating in the [rural water supply project](/usc/43/2401.md?p=9-A); and
        - (III) an assessment of the financial capability of each non-Federal entity participating in the [rural water supply project](/usc/43/2401.md?p=9-A) to pay the allocated annual operation, maintenance, and replacement costs for the [rural water supply project](/usc/43/2401.md?p=9-A);
    - (B) submit the report to the Committee on Energy and Natural Resources of the Senate and the Committee on Resources of the House of Representatives;
    - (C) make the report publicly available, along with associated study documents; and
    - (D) publish in the Federal Register a notice of the availability of the results.
- (f) **Capability-to-pay—**
  - (1) **In general—** In evaluating a proposed [rural water supply project](/usc/43/2401.md?p=9-A) under this section, the [Secretary](/usc/43/2401.md?p=10) shall—
    - (A) consider the financial capability of any [non-Federal project entities](/usc/43/2401.md?p=5) participating in the [rural water supply project](/usc/43/2401.md?p=9-A) to pay 25 percent or more of the capital [construction](/usc/43/2401.md?p=1) costs of the [rural water supply project](/usc/43/2401.md?p=9-A); and
    - (B) recommend an appropriate Federal share and non-Federal share of the capital [construction](/usc/43/2401.md?p=1) costs, as determined by the [Secretary](/usc/43/2401.md?p=10).
  - (2) **Factors—** In determining the financial capability of [non-Federal project entities](/usc/43/2401.md?p=5) to pay for a [rural water supply project](/usc/43/2401.md?p=9-A) under [paragraph (1)](#f-1), the [Secretary](/usc/43/2401.md?p=10) shall evaluate factors for the project area, relative to the [State](/usc/43/31b.md?p=8) average, including—
    - (A) per capita income;
    - (B) median household income;
    - (C) the poverty rate;
    - (D) the ability of the [non-Federal project entity](/usc/43/2401.md?p=5) to raise tax revenues or assess fees;
    - (E) the strength of the balance sheet of the [non-Federal project entity](/usc/43/2401.md?p=5); and
    - (F) the existing cost of water in the region.
  - (3) **Indian tribes—** In determining the capability-to-pay of [Indian tribe](/usc/43/2401.md?p=4) project beneficiaries, the [Secretary](/usc/43/2401.md?p=10) may consider deferring the collection of all or part of the non-Federal [construction](/usc/43/2401.md?p=1) costs apportioned to [Indian tribe](/usc/43/2401.md?p=4) project beneficiaries unless or until the [Secretary](/usc/43/2401.md?p=10) determines that the [Indian tribe](/usc/43/2401.md?p=4) project beneficiaries should pay—
    - (A) the costs allocated to the beneficiaries; or
    - (B) an appropriate portion of the costs.
- (g) **Cost-sharing requirement—**
  - (1) **In general—** Except as otherwise provided in this subsection, the Federal share of the cost of a feasibility study carried out under this section shall not exceed 50 percent of the study costs.
  - (2) **Form—** The non-Federal share under [paragraph (1)](#g-1) may be in the form of any in-kind services that the [Secretary](/usc/43/2401.md?p=10) determines would contribute substantially toward the conduct and completion of the study.
  - (3) **Financial hardship—** The [Secretary](/usc/43/2401.md?p=10) may increase the Federal share of the costs of a feasibility study if the [Secretary](/usc/43/2401.md?p=10) determines, based on a demonstration of financial hardship, that the non-Federal participant is unable to contribute at least 50 percent of the costs of the study.
  - (4) **Larger communities—** In conducting a feasibility study of a rural water supply system that includes a community with a population in excess of 50,000 inhabitants, the [Secretary](/usc/43/2401.md?p=10) may require the [non-Federal project entity](/usc/43/2401.md?p=5) to pay more than 50 percent of the costs of the study.
- (h) **Consultation and cooperation—** In addition to the [non-Federal project entity](/usc/43/2401.md?p=5), the [Secretary](/usc/43/2401.md?p=10) shall consult and cooperate with appropriate Federal, [State](/usc/43/31b.md?p=8), tribal, regional, and local authorities during the conduct of each feasibility assessment and development of the feasibility report conducted under this subchapter.

## Footnotes

[^1]: So in original. No par. (2) has been enacted.

## Source credit

(Pub. L. 109–451, title I, § 106, Dec. 22, 2006, 120 Stat. 3351.)