40 CFR Part 35 — State and Local Assistance

PART 35—STATE AND LOCAL ASSISTANCE Authority: 42 U.S.C. 7401 et seq.; et seq.; et seq.; et seq.; et seq.; et seq.; et seq.; § 35.001 Applicability. This part codifies policies and procedures for financial assistance awarded by the Environmental Protection Agency (EPA) to State, interstate, and local agencies, Indian Tribes and Intertribal Consortia for pollution abatement and control programs. These provisions supplement the EPA general assistance regulations in 2 CFR parts 200 and 1500. [66 FR 1734, Jan. 9, 2001, as amended at 79 FR 76054, Dec. 19, 2014] Subpart A—Environmental Program Grants Authority: 42 U.S.C. 7401 et seq.; et seq.; et seq.; et seq.; et seq.; et seq.; et seq.; Source: 66 FR 1734, Jan. 9, 2001, unless otherwise noted. General § 35.100 Purpose of the subpart. This subpart establishes administrative requirements for all grants awarded to State, interstate, and local agencies and other entities for the environmental programs listed in § 35.101. These provisions supplement the EPA general assistance regulations in 2 CFR parts 200 and 1500. Sections 35.100-35.118 contain administrative requirements that apply to all environmental program grants included in this subpart. Sections 35.130-35.418 contain requirements that apply to specified environmental program grants. Many of these environmental programs also have programmatic and technical requirements that are published elsewhere in the Code of Federal Regulations. [66 FR 1734, Jan. 9, 2001, as amended at 79 FR 76054, Dec. 19, 2014] § 35.101 Environmental programs covered by the subpart. (a) The requirements in this subpart apply to all grants awarded for the following programs: (1) Performance partnership grants (Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. Law 104-134, 110 Stat. 1321, 1321-299 (1996) and Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1998, Pub. Law 105-65, 111 Stat. 1344, 1373 (1997)). (2) Air pollution control (section 105 of the Clean Air Act). (3) Water pollution control (section 106 of the Clean Water Act). (4) Public water system supervision (section 1443(a) of the Safe Drinking Water Act). (5) Underground water source protection (section 1443(b) of the Safe Drinking Water Act). (6) Hazardous waste management (section 3011(a) of the Solid Waste Disposal Act). (7) Pesticide cooperative enforcement (section 23(a)(1) of the Federal Insecticide, Fungicide, and Rodenticide Act). (8) Pesticide applicator certification and training (section 23(a)(2) of the Federal Insecticide, Fungicide, and Rodenticide Act). (9) Pesticide program implementation (section 23(a)(1) of the Federal Insecticide, Fungicide, and Rodenticide Act). (10) Nonpoint source management (sections 205(j)(5) and 319(h) of the Clean Water Act). (11) Lead-based paint program (section 404(g) of the Toxic Substances Control Act). (12) State indoor radon grants (section 306 of the Toxic Substances Control Act). (13) Toxic substances compliance monitoring (section 28 of the Toxic Substances Control Act). (14) State underground storage tanks (section 2007(f)(2) of the Solid Waste Disposal Act). (15) Pollution prevention state grants (section 6605 of the Pollution Prevention Act of 1990). (16) Water quality cooperative agreements (section 104(b)(3) of the Clean Water Act). (17) Wetlands development grants program (section 104(b)(3) of the Clean Water Act). (18) State administration of construction grant, permit, and planning programs (section 205(g) of the Clean Water Act). (19) Water quality management planning (section 205(j)(2) of the Clean Water Act). (20) State Response Program Grants (section 128(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)). (b) Unless otherwise prohibited by statute or regulation, the requirements in § 35.100 through § 35.118 of this subpart also apply to grants under environmental programs established after this subpart becomes effective if specified in Agency guidance for such programs. (c) In the event a grant is awarded from EPA headquarters for one of the programs listed in paragraph (a) of this section, this subpart shall apply and the term “Regional Administrator” shall mean “Assistant Administrator'. [66 FR 1734, Jan. 9, 2001, as amended at 74 FR 28444, June 16, 2009] § 35.102 Definitions of terms. Terms are defined as follows when they are used in this subpart. Allotment. Consolidated grant. Environmental program. Funding period. National program guidance. Outcome. Output. Performance Partnership Agreement. Performance Partnership Grant. Planning target. Regional supplemental guidance. Work plan commitments. Work plan component. Preparing an Application § 35.104 Components of a complete application. A complete application for an environmental program must: (a) Meet the requirements in 2 CFR part 200, subpart C. (b) Include a proposed work plan (§ 35.107); and (c) Specify the environmental program and the amount of funds requested. [66 FR 1734, Jan. 9, 2001, as amended at 79 FR 76054, Dec. 19, 2014] § 35.105 Time frame for submitting an application. An applicant should submit a complete application to EPA at least 60 days before the beginning of the proposed funding period. § 35.107 Work plans. (a) Bases for negotiating work plans. (1) Negotiation considerations. (2) National program guidance. (3) Use of existing guidance. (b) Work plan requirements. (2) An approvable work plan must specify: (i) The work plan components to be funded under the grant; (ii) The estimated work years and the estimated funding amounts for each work plan component; (iii) The work plan commitments for each work plan component and a time frame for their accomplishment; (iv) A performance evaluation process and reporting schedule in accordance with § 35.115 of this subpart; and (v) The roles and responsibilities of the recipient and EPA in carrying out the work plan commitments. (3) The work plan must be consistent with applicable federal statutes; regulations; circulars; executive orders; and EPA delegations, approvals, or authorizations. (c) Performance Partnership Agreement as work plan. (1) Are clearly identified and distinguished from other portions of the Performance Partnership Agreement; and (2) Meet the requirements in § 35.107(b). § 35.108 Funding period. The Regional Administrator and applicant may negotiate the length of the funding period for environmental program grants, subject to limitations in appropriations acts. § 35.109 Consolidated grants. (a) Any applicant eligible to receive funds from more than one environmental program may submit an application for a consolidated grant. For consolidated grants, an applicant prepares a single budget and work plan covering all of the environmental programs included in the application. The consolidated budget must identify each environmental program to be included, the amount of each program's funds, and the extent to which each program's funds support each work plan component. Recipients of consolidated grants must account for grant funds in accordance with the funds' environmental program sources; funds included in a consolidated grant from a particular environmental program may be used only for that program. (b) Insular areas that choose to consolidate environmental program grants may be exempted by the Regional Administrator from requirements of this subpart in accordance with 48 U.S.C. 1469a. EPA Action on Application § 35.110 Time frame for EPA action. The Regional Administrator will review a complete application and either approve, conditionally approve, or disapprove it within 60 days of receipt. This period may be extended by mutual agreement between EPA and the applicant. The Regional Administrator will award the funds for approved or conditionally approved applications when the funds are available. § 35.111 Criteria for approving an application. (a) The Regional Administrator may approve an application upon determining that: (1) The application meets the requirements of this subpart and 2 CFR part 200, subpart C. (2) The application meets the requirements of all applicable federal statutes; regulations; circulars; executive orders; and delegations, approvals, or authorizations; (3) The proposed work plan complies with the requirements of § 35.107; and (4) The achievement of the proposed work plan is feasible, considering such factors as the applicant's existing circumstances, past performance, program authority, organization, resources, and procedures. (b) If the Regional Administrator finds the application does not satisfy the criteria in paragraph (a) of this section, the Regional Administrator may either: (1) Conditionally approve the application if only minor changes are required, with grant conditions necessary to ensure compliance with the criteria, or (2) Disapprove the application in writing. [66 FR 1734, Jan. 9, 2001, as amended at 79 FR 76054, Dec. 19, 2014] § 35.112 Factors considered in determining award amount. (a) After approving an application under § 35.111, the Regional Administrator will consider such factors as the applicant's allotment, the extent to which the proposed work plan is consistent with EPA guidance and mutually agreed upon priorities, and the anticipated cost of the work plan relative to the proposed work plan components, to determine the amount of funds to be awarded. (b) If the Regional Administrator finds the requested level of funding is not justified or the work plan does not comply with the requirements of § 35.107, the Regional Administrator will attempt to negotiate a resolution of the issues with the applicant before determining the award amount. The Regional Administrator may determine that the award amount will be less than the amount allotted or requested. § 35.113 Reimbursement for pre-award costs. (a) Notwithstanding the requirements of 2 CFR parts 200 and 1500, EPA may reimburse recipients for pre-award costs incurred from the beginning of the budget period established in the grant agreement if such costs would have been allowable if incurred after the award. Pre-award costs must be identified in the grant application EPA approves. (b) The applicant incurs pre-award costs at its own risk. EPA is under no obligation to reimburse such costs unless they are included in an approved grant award. [66 FR 1734, Jan. 9, 2001, as amended at 79 FR 76054, Dec. 19, 2014; 87 FR 30398, May 19, 2022] Post-Award Requirements § 35.114 Amendments and other changes. The following provisions govern amendments and other changes to grant work plans and budgets after the work plan is negotiated and a grant awarded. (a) Changes requiring prior approval. (b) Changes requiring approval. (c) Changes not requiring approval. (d) OMB cost principles. (e) Changes in consolidated grants. (f) Subgrants. [66 FR 1734, Jan. 9, 2001, as amended at 79 FR 76055, Dec. 19, 2014; 87 FR 30398, May 19, 2022] § 35.115 Evaluation of performance. (a) Joint evaluation process. (b) Elements of the evaluation process. (1) A discussion of accomplishments as measured against work plan commitments; (2) A discussion of the cumulative effectiveness of the work performed under all work plan components; (3) A discussion of existing and potential problem areas; and (4) Suggestions for improvement, including, where feasible, schedules for making improvements. (c) Resolution of issues. (d) Evaluation reports. [66 FR 1734, Jan. 9, 2001, as amended at 79 FR 76055, Dec. 19, 2014; 87 FR 30398, May 19, 2022] § 35.116 Direct implementation. If funds remain in a State's allotment for an environmental program grant either after grants for that environmental program have been made or because no grant was made, the Regional Administrator may, subject to any limitations contained in appropriation acts, use all or part of the funds to support a federal program required by law in the State in the absence of an acceptable State program. § 35.117 Unused funds. If funds for an environmental program grant remain in a State's allotment either after an initial environmental program grant has been made or because no grant was made, and the Regional Administrator does not use the funds under § 35.116 of this subpart, the Regional Administrator may award the funds to any eligible recipient in the region, including the same State or an Indian Tribe or Tribal consortium, for the same environmental program or for a Performance Partnership Grant, subject to any limitations in appropriation acts. § 35.118 Unexpended balances. Subject to any relevant provisions of law, if a recipient's Financial Status Report shows unexpended balances, the Regional Administrator will deobligate the unexpended balances and make them available, to either the same recipient in the same region or other eligible recipients, including Indian Tribes and Tribal Consortia, for environmental program grants. Performance Partnership Grants § 35.130 Purpose of Performance Partnership Grants. (a) Purpose of section. (b) Purpose of program. (1) Strengthen partnerships between EPA and State and interstate agencies through joint planning and priority-setting and better deployment of resources; (2) Provide State and interstate agencies with flexibility to direct resources where they are most needed to address environmental and public health priorities; (3) Link program activities more effectively with environmental and public health goals and program outcomes; (4) Foster development and implementation of innovative approaches such as pollution prevention, ecosystem management, and community-based environmental protection strategies; and (5) Provide savings by streamlining administrative requirements. § 35.132 Requirements summary. Applicants and recipients of Performance Partnership Grants must meet: (a) The requirements in §§ 35.100 to 35.118, which apply to all environmental program grants, including Performance Partnership Grants; and (b) The requirements in §§ 35.130 to 35.138, which apply only to Performance Partnership Grants. § 35.133 Programs eligible for inclusion. (a) Eligible programs. (b) Changes in eligible programs. www.epa.gov/nepps. [66 FR 1734, Jan. 9, 2001, as amended at 74 FR 28444, June 16, 2009; 74 FR 46020, Sept. 8, 2009; 87 FR 30398, May 19, 2022] § 35.134 Eligible recipients. (a) Eligible agencies. (b) Designated agency. (c) Programmatic requirements. § 35.135 Activities eligible for funding. (a) A recipient may use a Performance Partnership Grant, subject to the requirements of paragraph (c) of this section, to fund any activity that is eligible for funding under at least one of the environmental programs from which funds are combined into the grant. (b) A recipient may also use a Performance Partnership Grant to fund multi-media activities that are eligible in accordance with paragraph (a) of this section and have been agreed to by the Regional Administrator. Such activities may include multi-media permitting and enforcement and pollution prevention, ecosystem management, community-based environmental protection, and other innovative approaches. (c) A recipient may not use a Performance Partnership Grant to fund activities eligible only under a specific environmental program grant unless some or all of the recipient's allotted funds for that program have been included in the Performance Partnership Grant. § 35.136 Cost share requirements. (a) An applicant for a Performance Partnership Grant must provide a non-federal cost share that is not less than the sum of the minimum non-federal cost share required under each of the environmental programs that are combined in the Performance Partnership Grant. Cost share requirements for the individual environmental programs are described in §§ 35.140 to 35.418. (b) When an environmental program included in the Performance Partnership Grant has both a matching and maintenance of effort requirement, the greater of the two amounts will be used to calculate the minimum cost share attributed to that environmental program. § 35.137 Application requirements. (a) An application for a Performance Partnership Grant must contain: (1) A list of the environmental programs and the amount of funds from each program to be combined in the Performance Partnership Grant; (2) A consolidated budget; (3) A consolidated work plan that addresses each program being combined in the grant and that meets the requirements of § 35.107; and, (4) A rationale, commensurate with the extent of any programmatic flexibility (i.e., increased effort in some programs and decreased effort in others) indicated in the work plan, that explains the basis for the applicant's priorities, the expected environmental or other benefits to be achieved, and the anticipated impact on any environmental programs or program areas proposed for reduced effort. (b) The applicant and the Regional Administrator will negotiate regarding the information necessary to support the rationale for programmatic flexibility required in paragraph (a)(4) of this section. The rationale may be supported by information from a variety of sources, including a Performance Partnership Agreement or comparable negotiated document, the evaluation report required in § 35.125, and other environmental and programmatic data sources. (c) A State agency seeking programmatic flexibility is encouraged to include a description of efforts to involve the public in developing the State agency's priorities. § 35.138 Competitive grants. (a) Some environmental program grants are awarded through a competitive process. An applicant and the Regional Administrator may agree to add funds available for a competitive grant to a Performance Partnership Grant. If this is done, the work plan commitments that would have been included in the competitive grant must be included in the Performance Partnership Grant work plan. After the funds have been added to the Performance Partnership Grant, the recipient does not need to account for these funds in accordance with the funds' original environmental program source. (b) If the projected completion date for competitive grant work plan commitments added to a Performance Partnership Grant is after the end of the Performance Partnership Grant funding period, the Regional Administrator and the applicant will agree in writing as to how the work plan commitments will be carried over into future work plans. Air Pollution Control (Section 105) § 35.140 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Program regulations. § 35.141 Definitions. In addition to the definitions in § 35.102, the following definitions apply to the Clean Air Act's section 105 grant program: Implementing Nonrecurrent Recurrent expenditures § 35.143 Allotment. (a) The Administrator allots air pollution control funds under section 105 of the Clean Air Act based on a number of factors, including: (1) Population; (2) The extent of actual or potential air pollution problems; and (3) The financial need of each agency. (b) The Regional Administrator shall allot to a State not less than one-half of one percent nor more than 10 percent of the annual section 105 grant appropriation. (c) The Administrator may award funds on a competitive basis. § 35.145 Maximum federal share. (a) The Regional Administrator may provide air pollution control agencies, as defined in section 302(b) of the Clean Air Act, up to three-fifths of the approved costs of implementing programs for the prevention and control of air pollution or implementing national primary and secondary ambient air quality standards. (b) Revenue collected pursuant to a State's Title V operating permit program may not be used to meet the cost share requirements of section 105. § 35.146 Maintenance of effort. (a) To receive funds under section 105, an agency must expend annually, for recurrent section 105 program expenditures, an amount of non-federal funds at least equal to such expenditures during the preceding fiscal year. (b) In order to award grants in a timely manner each fiscal year, the Regional Administrator shall compare an agency's proposed expenditure level, as detailed in the agency's grant application, to that agency's expenditure level in the second preceding fiscal year. When expenditure data for the preceding fiscal year is complete, the Regional Administrator shall use this information to determine the agency's compliance with its maintenance of effort requirement. (c) If the expenditure data for the preceding fiscal year shows that an agency did not meet the requirements of § 35.146, the Regional Administrator will take action to recover the grant funds for the year in which the agency did not maintain its level of effort. (d) The Regional Administrator may grant an exception to § 35.146(a) if, after notice and opportunity for a public hearing, the Regional Administrator determines that a reduction in expenditure is attributable to a non-selective reduction of the programs of all executive branch agencies of the applicable unit of government. (e) The Regional Administrator will not award section 105 funds unless the applicant provides assurance that the grant will not supplant non-federal funds that would otherwise be available for maintaining the section 105 program. § 35.147 Minimum cost share for a Performance Partnership Grant. (a) To calculate the cost share for a Performance Partnership Grant (see §§ 35.130 through 35.138) in the initial and subsequent years that it includes section 105 funds, the minimum cost share contribution for the section 105 program will be the match requirement set forth in § 35.145, or the maintenance of effort established under § 35.146 in the first year that the section 105 grant is included in a Performance Partnership Grant, whichever is greater. (b) If an air pollution control agency includes its section 105 air program funding in a Performance Partnership Grant and subsequently withdraws that program from the grant: (1) The required maintenance of effort amount for the section 105 program for the first year after the program is withdrawn will be equal to the maintenance of effort amount required in the year the agency included the section 105 program in the Performance Partnership Grant. (2) The maximum federal share for the section 105 program in the first and subsequent years after the grant is withdrawn may not be more than three-fifths of the approved cost of the program. (c) The Regional Administrator may approve an exception from paragraph (b) of this section upon determining that exceptional circumstances justify a reduction in the maintenance of effort, including when an air pollution control agency reduces section 105 funding as part of a non-selective reduction of the programs of all executive branch agencies of the applicable unit of government. § 35.148 Award limitations. (a) The Regional Administrator will not award section 105 funds to an interstate or intermunicipal agency: (1) That does not provide assurance that it can develop a comprehensive plan for the air quality control region which includes representation of appropriate State, interstate, local, Tribal, and international interests; and (2) Without consulting with the appropriate official designated by the Governor or Governors of the State or States affected or the appropriate official of any affected Indian Tribe or Tribes. (b) The Regional Administrator will not disapprove an application for or terminate or annul a section 105 grant without prior notice and opportunity for a public hearing in the affected State or States. Water Pollution Control (Section 106) § 35.160 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program requirements. § 35.161 Definition. Recurrent expenditures § 35.162 Basis for allotment. (a) Allotments. (b) State allotment formula. (1) Components and component weights Components. (ii) Component weights. Table 2—Component Weights in the Water Pollution Control State Grant Allotment Formula Component FY 2000 FY2001-FY2003 FY2004 + Surface Water Area 13 13 12 Ground Water Use 11 12 12 Water Quality Impairment 13 25 35 Point Sources 25 17 13 Nonpoint Sources 18 15 13 Population of Urbanized Area 20 18 15 Total 100 100 100 (2) Funding floor. (3) Funding decrease. (4) Inflation adjustment. (5) Cap on annual funding increases. (6) Cap on component ratio. (7) Update cycle. (c) Interstate allotment formula. (1) Funding Floor. (2) Variable allotment. (d) Alternative allotment formula. [66 FR 1734, Jan. 9, 2001, as amended at 69 FR 59812, Oct. 6, 2004; 71 FR 18, Jan. 3, 2006; 73 FR 52590, Sept. 10, 2008; 74 FR 17405, Apr. 15, 2009] § 35.165 Maintenance of effort. To receive a Water Pollution Control grant, a State or interstate agency must expend annually for recurrent section 106 program expenditures an amount of non-federal funds at least equal to expenditures during the fiscal year ending June 30, 1971. § 35.168 Award limitations. (a) The Regional Administrator may award section 106 funds to a State only if: (1) The State monitors and compiles, analyzes, and reports water quality data as described in section 106(e)(1) of the Clean Water Act; (2) The State has authority comparable to that in section 504 of the Clean Water Act and adequate contingency plans to implement such authority; (3) There is no federally-assumed enforcement as defined in section 309(a)(2) of the Clean Water Act in effect with respect to the State agency; (4) The State's work plan shows that the activities to be funded are coordinated, as appropriate, with activities proposed for funding under sections 205(g) and (j) of the Clean Water Act; and (5) The State filed with the Administrator within 120 days after October 18, 1972, a summary report of the current status of the State pollution control program, including the criteria used by the State in determining priority of treatment works. (b) The Regional Administrator may award section 106 funds to an interstate agency only if: (1) The interstate agency filed with the Administrator within 120 days after October 18, 1972, a summary report of the current status of the State pollution control program, including the criteria used by the State in determining priority of treatment works. (2) There is no federally-assumed enforcement as defined in section 309(a)(2) of the Clean Water Act in effect with respect to the interstate agency. Public Water System Supervision (Section 1443( a § 35.170 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.172 Allotment. (a) Basis for allotment. (b) Allotment limitation. § 35.175 Maximum federal share. The Regional Administrator may provide a maximum of 75 percent of the State's approved work plan costs. § 35.178 Award limitations. (a) Initial grants. (b) Subsequent grants. Underground Water Source Protection (Section 1443( b § 35.190 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.192 Basis for allotment. The Administrator allots funds for grants to support State's underground water source protection programs based on such factors as population, geographic area, extent of underground injection practices, and other relevant factors. § 35.195 Maximum federal share. The Regional Administrator may provide a maximum of 75 percent of a State's approved work plant costs. § 35.198 Award limitation. The Regional Administrator will only award section 1443(b) funds to States that have primary enforcement responsibility for the underground water source protection program. Hazardous Waste Management (Section 3011( a § 35.210 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.212 Basis for allotment. The Administrator allots funds for Hazardous Waste Management Grants in accordance with section 3011(b) of the Solid Waste Disposal Act based on factors including: (a) The extent to which hazardous waste is generated, transported, treated, stored, and disposed of in the State; (b) The extent to which human beings and the environment in the State are exposed to such waste, and; (c) Other factors the Administrator deems appropriate. § 35.215 Maximum federal share. The Regional Administrator may provide up to 75 percent of the approved work plant costs. § 35.218 Award limitation. The Regional Administrator will not award Hazardous Waste Management Grants to a State with interim or final hazardous waste authorization unless the applicant is the lead agency designated in the authorization agreement. Pesticide Cooperative Enforcement (Section 23( a § 35.230 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Program regulations. § 35.232 Basis for allotment. (a) Factors for FIFRA enforcement program funding. (1) The State's population, (2) The number of pesticide-producing establishments, (3) The numbers of certified private and commercial pesticide applicators, (4) The number of farms and their acreage, and (5) As appropriate, the State's potential farm worker protection concerns. (b) Final allotments. § 35.235 Maximum federal share. The Regional Administrator may provide up to 100 percent of the approved work plan costs. Pesticide Applicator Certification and Training (Section 23( a § 35.240 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.242 Basis for allotment. The Regional Administrator considers two factors in allotting pesticides applicator certification and training funds: (a) The number of farms in each State; and (b) The numbers of private and commercial applicators requiring certification and recertification in each State. § 35.245 Maximum federal share. The Regional Administrator may provide up to 50 percent of the approved work plan costs. Pesticide Program Implementation (Section 23( a § 35.250 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Program regulations. § 35.251 Basis for allotment. (a) Factors for pesticide program implementation funding. (b) Final allotments. § 35.252 Maximum federal share. The Regional Administrator may provide up to 100 percent of the approved work plan costs. Nonpoint Source-Management (Section 319( h § 35.260 Purpose. (a) Purpose of section. (b) Purpose of program. § 35.265 Maximum federal share. The Regional Administrator may provide up to 60 percent of the approved work plan costs in any fiscal year. The non-federal share of costs must be provided from non-federal sources. § 35.266 Maintenance of effort. To receive section 319 funds in any fiscal year, a State must agree to maintain its aggregate expenditures from all other sources for programs for controlling nonpoint pollution and improving the quality of the State's waters at or above the average level of such expenditures in Fiscal Years 1985 and 1986. § 35.268 Award limitations. The following limitations apply to funds appropriated and awarded under section 319(h) of the Act in any fiscal year. (a) Award amount. (b) Financial assistance to persons. (c) Administrative costs. (d) Requirements. (1) Approved assessment report. (2) Approved State management program. (3) Progress on reducing pollutant loadings. (4) Activity and output descriptions. (5) Significant watershed projects. (i) A brief synopsis of the watershed implementation plan outlining the problem(s) to be addressed; (ii) The project's goals and objectives; and (iii) The performance measures or environmental indicators that will be used to evaluate the results of the project. Lead-Based Paint Program (Section 404( g § 35.270 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.272 Funding coordination. Recipients must use the lead-based paint program funding in a way that complements any related assistance they receive from other federal sources for lead-based paint activities. State Indoor Radon Grants (Section 306) § 35.290 Purpose. (a) Purpose of section. (b) Purpose of program. (i) Survey of radon levels, including special surveys of geographic areas or classes of buildings (such as public buildings, school buildings, high-risk residential construction types); (ii) Development of public information and education materials concerning radon assessment, mitigation, and control programs; (iii) Implementation of programs to control radon on existing and new structures; (iv) Purchase by the State of radon measurement equipment and devices; (v) Purchase and maintenance of analytical equipment connected to radon measurement and analysis, including costs of calibration of such equipment; (vi) Payment of costs of EPA-approved training programs related to radon for permanent State or local employees; (vii) Payment of general overhead and program administration costs in accordance with § 35.298(d); (viii) Development of a data storage and management system for information concerning radon occurrence, levels, and programs; (ix) Payment of costs of demonstration of radon mitigation methods and technologies as approved by EPA, including State participation in the EPA Home Evaluation Program; and (x) A toll-free radon hotline to provide information and technical assistance. (2) States may use grant funds to assist local governments in implementation of activities eligible for assistance under paragraphs (b)(1)(ii), (iii), and (vi) of this section. (3) In implementing paragraphs (b)(1)(iv) and (ix) of this section, a State should make every effort, consistent with the goals and successful operation of the State radon program, to give preference to low-income persons. (4) Funds appropriated for section 306 may not be used to cover the costs of federal proficiency rating programs under section 305(a)(2) of the Act. Funds appropriated for section 306 and grants awarded under section 306 may be used to cover the costs of State proficiency rating programs. § 35.292 Basis for allotment. (a) The Regional Administrator will allot State Indoor Radon Grant funds based on the criteria in EPA Guidance in accordance with sections 306(d) and (e) of the Toxic Substances Control Act. (b) No State may receive a State Indoor Radon Grant in excess of 10 percent of the total appropriated amount made available each fiscal year. § 35.295 Maximum federal share. The Regional Administrator may provide State agencies up to 50 percent of the approved costs for the development and implementation of radon program activities. § 35.298 Award limitations. (a) The Regional Administrator shall not include State Indoor Radon funds in a Performance Partnership Grant awarded to another State Agency without consulting with the State Agency which has the primary responsibility for radon programs as designated by the Governor of the affected State. (b) No grant may be made in any fiscal year to a State which in the preceding fiscal year did not satisfactorily implement the activities funded by the grant in the preceding fiscal year. (c) The costs of radon measurement equipment or devices (see § 35.290(b)(1)(iv)) and demonstration of radon mitigation, methods, and technologies (see § 35.290(b)(1)(ix)) shall not, in the aggregate, exceed 50 percent of a State's radon grant award in a fiscal year. (d) The costs of general overhead and program administration (see § 35.290(b)(1)(vii)) of a State Indoor Radon grant shall not exceed 25 percent of the amount of a State's Indoor Radon Grant in a fiscal year. (e) A State may use funds for financial assistance to persons only to the extent such assistance is related to demonstration projects or the purchase and analysis of radon measurement devices. (f) Recipients must provide the Regional Administrator all radon-related information generated in its grant supported activities, including the results of radon surveys, mitigation demonstration projects, and risk communication studies. (g) Recipients must maintain and make available to the public, a list of firms and individuals in the State that have received a passing rating under the EPA proficiency rating program under section 305(a)(2) of the Act. Toxic Substances Compliance Monitoring (Section 28) § 35.310 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.312 Basis for allotment. EPA will allot and award Toxic Substances Control Act Compliance Monitoring grant funds to States based on national program guidance. [71 FR 7415, Feb. 13, 2006] § 35.315 Maximum federal share. The Regional Administrator may provide up to 75 percent of the approved work plan costs. § 35.318 Award limitation. If the toxic substances compliance monitoring grant funds are included in a Performance Partnership Grant, the toxic substances compliance monitoring work plan commitments must be included in the Performance Partnership Grant work plan. State Underground Storage Tanks (Section 2007( f § 35.330 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.332 Basis for allotment. The Administrator allots State Underground Storage Tank Grant funds to each EPA regional office. Regional Administrators award funds to States based on their programmatic needs and applicable EPA guidance. § 35.335 Maximum federal share. The Regional Administrator may provide up to 75 percent of the approved work plan costs. Pollution Prevention State Grants (Section 6605) § 35.340 Purpose. (a) Purpose of section. (b) Purpose of program. § 35.342 Competitive process. EPA Regions award Pollution Prevention State Grants to State programs through a competitive process in accordance with EPA guidance. When evaluating State applications, EPA must consider, among other criteria, whether the proposed State program would: (a) Make specific technical assistance available to businesses seeking information about source reduction opportunities, including funding for experts to provide onsite technical advice to businesses seeking assistance in the development of source reduction plans; (b) Target assistance to businesses for whom lack of information is an impediment to source reduction; and (c) Provide training in source reduction techniques. Such training may be provided through local engineering schools or other appropriate means. § 35.343 Definitions. In addition to the definitions in § 35.102, the following definitions apply to the Pollution Prevention State Grants program and to §§ 35.340 through 35.349: (a) Pollution prevention/source reduction is any practice that: (1) Reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment (including fugitive emissions) prior to recycling, treatment, or disposal; (2) Reduces the hazards to public health and the environment associated with the release of such substances, pollutants, or contaminants; or (3) Reduces or eliminates the creation of pollutants through: (i) Increased efficiency in the use of raw materials, energy, water, or other resources; or (ii) Protection of natural resources by conservation. (b) Pollution prevention/source reduction does not include any practice which alters the physical, chemical, or biological characteristics or the volume of a hazardous substance, pollutant, or contaminant through a process or activity which itself is not integral to and necessary for the production of a product or the providing of a service. § 35.345 Eligible applicants. Applicants eligible for funding under the Pollution Prevention program include any agency or instrumentality, including State universities, of the 50 States, the District of Columbia, the U.S. Virgin Islands, the Commonwealth of Puerto Rico, and any territory or possession of the United States. § 35.348 Award limitation. If a State includes a Pollution Prevention State Grant in a Performance Partnership Grant, the work plan commitments must be included in the Performance Partnership Grant work plan (see § 35.138). § 35.349 Maximum federal share. The federal share for Pollution Prevention State Grants will not exceed 50 percent of the allowable pollution prevention State grant project cost. Water Quality Cooperative Agreements (Section 104( b § 35.360 Purpose. (a) Purpose of section. (b) Purpose of program. [66 FR 1734, Jan. 9, 2001, as amended at 79 FR 76055, Dec. 19, 2014] § 35.362 Competitive process. EPA will award Water Quality Cooperative Agreement funds through a competitive process in accordance with national program guidance. § 35.364 Maximum federal share. The Regional Administrator may provide up to 100 percent of approved work plan costs. State Wetlands Development Grants (Section 104( b § 35.380 Purpose. (a) Purpose of section. (b) Purpose of program. [66 FR 1734, Jan. 9, 2001, as amended at 79 FR 76055, Dec. 19, 2014] § 35.382 Competitive process. State Wetlands Development Grants are awarded on a competitive basis. EPA annually establishes a deadline for receipt of proposed grant project applications. EPA reviews applications and decides which grant projects to fund in a given year based on criteria established by EPA. After the competitive process is complete, the recipient can, at its discretion, accept the award as a State Wetlands Development Grant or add the funds to a Performance Partnership Grant. If the recipient chooses to add the funds to a Performance Partnership Grant, the wetlands development program work plan commitments must be included in the Performance Partnership Grant work plan. § 35.385 Maximum federal share. EPA may provide up to 75 percent of the approved work plan costs for the development or refinement of a wetlands protection and management program. State Administration (Section 205( g § 35.400 Purpose. (a) Purpose of section. (b) Purpose of program. (1) Construction management grants. (2) Permit and planning grants. (c) Associated program requirements. § 35.402 Allotment. Each State may reserve up to four percent of the State's authorized construction grant allotment as determined by Congress or $400,000, whichever is greater, for section 205 (g) grants. § 35.405 Maintenance of effort. To receive funds under section 205(g), a State agency must expend annually for recurrent section 106 program expenditures an amount of non-federal funds at least equal to such expenditures during fiscal year 1977, unless the Regional Administrator determines that the reduction is attributable to a non-selective reduction of expenditures in State executive branch agencies (see § 35.165). § 35.408 Award limitations. The Regional Administrator will not award section 205(g) funds: (a) For construction management grants unless there is a signed agreement delegating responsibility for administration of those activities to the State. (b) For permit and planning grants before awarding funds providing for the management of a substantial portion of the State's construction grants program. The maximum amount of permit and planning grants a State may receive is limited to the amount remaining in its reserve after the Regional Administrator allows for full funding of the management of the construction grant program under full delegation. (c) For permit and planning grants unless the work plan submitted with the application shows that the activities to be funded are coordinated, as appropriate, with activities proposed for funding under sections 106 (Water Pollution Control) and 205(j) (Water Quality Management Planning) of the Clean Water Act. Water Quality Management Planning Grants (Section 205( j § 35.410 Purpose. (a) Purpose of section. (b) Purpose of program. (1) Identification of the most cost-effective and locally acceptable facility and nonpoint measures to meet and maintain water quality standards. (2) Development of an implementation plan to obtain State and local financial and regulatory commitments to implement measures developed under paragraph (b)(1) of this section. (3) Determination of the nature, extent, and causes of water quality problems in various areas of the State and interstate region. (4) Determination of those publicly owned treatment works which should be constructed with State Revolving Fund assistance. This determination should take into account the relative degree of effluent reduction attained, the relative contributions to water quality of other point or nonpoint sources, and the consideration of alternatives to such construction. (5) Implementation of section 303(e) of the Clean Water Act. (c) Program requirements for water quality management planning activities are provided in 40 CFR part 130. § 35.412 Allotment. States must reserve, each fiscal year, not less than $100,000 nor more than one percent of the State's construction grant allotment as determined by Congress for Water Quality Management Planning Grants under section 205(j)(2). However, Guam, the Virgin Islands, American Samoa and the Commonwealth of the Northern Mariana Islands must reserve a reasonable amount for this purpose. (See 40 CFR 35.3110(g)(4) regarding reserves from State allotments under Title VI of the Clean Water Act for section 205(j) grants.) § 35.415 Maximum federal share. The Regional Administrator may provide up to 100 percent of the approved work plan costs. § 35.418 Award limitations. The following limitations apply to funds awarded under section 205(j)(2) of the Clean Water Act. The Regional Administrator will not award these grants to a State agency: (a) Unless the agency develops its work plan jointly with local, regional and interstate agencies and gives funding priority to such agencies and designated or undesignated public comprehensive planning organizations to carry out portions of that work plan. (b) Unless the agency reports annually on the nature, extent, and causes of water quality problems in various areas of the State and interstate region. (c) Unless the work plan submitted with the application shows that the activities to be funded are coordinated, as appropriate, with activities proposed for funding under section 106 (Water Pollution Control) of the Clean Water Act. State Response Program Grants (CERCLA Section 128(A)) Source: 74 FR 28444, June 16, 2009, unless otherwise noted. § 35.419 Purpose. (a) Purpose of section. (b) Purpose of program. § 35.420 Basis for allotment. The Administrator allots response program funds to each EPA regional office. Regional Administrators award funds to States based on their programmatic needs and applicable EPA guidance. § 35.421 Maximum federal share. The Regional Administrator may provide up to 100 percent of the approved work plan costs with the exception of the cost shares required by CERCLA 104(k)(9)(B)(iii) for capitalization of revolving loan funds under CERCLA 104(k)(3). Subpart B—Environmental Program Grants for Tribes Authority: 42 U.S.C. 7401 et seq.; et seq.; et seq.; et seq.; et seq.; et seq.; et seq.; Source: 66 FR 3795, Jan. 16, 2001, unless otherwise noted. General—All Grants § 35.500 Purpose of the subpart. This subpart establishes administrative requirements for all grants awarded to Indian Tribes and Intertribal Consortia for the environmental programs listed in § 35.501. These provisions supplement the EPA general assistance regulations in 2 CFR parts 200 and 1500. Sections 35.500-518 contain administrative requirements that apply to all environmental program grants included in this subpart. Sections 35.530 through 35.718 contain requirements that apply to specified environmental program grants. Many of these environmental programs also have programmatic and technical requirements that are published elsewhere in the Code of Federal Regulations. [66 FR 3795, Jan. 16, 2001, as amended at 79 FR 76055, Dec. 19, 2014] § 35.501 Environmental programs covered by the subpart. (a) The requirements in this subpart apply to all grants awarded for the following programs: (1) Performance Partnership Grants (1996 Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L. 104-134; 110 Stat. 1321, 1321-299 (1996) and Departments of Veterans Affairs, Housing and Urban Development, and Independent Agencies Appropriations Act of 1998, Pub. L. 105-65; 111 Stat. 1344, 1373 (1997)). (2) The Indian Environmental General Assistance Program Act of 1992, 42 U.S.C. 4368b. (3) Clean Air Act. Air pollution control (section 105). (4) Clean Water Act. (i) Water pollution control (section 106 and 518). (ii) Water quality cooperative agreements (section 104(b)(3)). (iii) Wetlands development grant program (section 104(b)(3)). (iv) Nonpoint source management (section 319(h)). (5) Federal Insecticide, Fungicide, and Rodenticide Act. (i) Pesticide cooperative enforcement (section 23(a)(1)). (ii) Pesticide applicator certification and training (section 23(a)(2)). (iii) Pesticide program implementation (section 23(a)(1)). (6) Pollution Prevention Act of 1990. Pollution prevention grants for Tribes (section 6605). (7) Safe Drinking Water Act. (i) Public water system supervision (section 1443(a)). (ii) Underground water source protection (section 1443(b)). (8) Toxic Substances Control Act. (i) Lead-based paint program (section 404(g)). (ii) Indoor radon grants (section 306). (iii) Toxic substances compliance monitoring (section 28). (9) Department of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1999 (Pub. L. 105-276; 112 Stat. 2461, 2499; 42 U.S.C. 6908a). (i) Hazardous Waste Management Program Grants (Pub. L. 105-276; 112 Stat. 2461, 2499; 42 U.S.C. 6908a). (ii) Underground Storage Tanks Program Grants (Pub. L. 105-276; 112 Stat. 2461, 2499; 42 U.S.C. 6908a). (10) Tribal Response Program Grants (section 128(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)). (b) Unless otherwise prohibited by statute or regulation, the requirements in § 35.500 through § 35.518 of this subpart also apply to grants to Indian Tribes and Intertribal Consortia under environmental programs established after this subpart becomes effective, if specified in Agency guidance for such programs. (c) In the event a grant is awarded from EPA headquarters for one of the programs listed in paragraph (a) of this section, this subpart shall apply and the term “Regional Administrator” shall mean “Assistant Administrator'. [66 FR 3795, Jan. 16, 2001, as amended at 74 FR 28444, June 16, 2009] § 35.502 Definitions of terms. Terms are defined as follows when they are used in this regulation: Consolidated grant. Environmental program. Federal Indian reservation. Funding period. Intertribal Consortium or Consortia. National program guidance. Outcome. Output. Performance Partnership Grant. Planning target. Regional supplemental guidance. Tribal Environmental Agreement Tribe. Work plan. Work plan commitments. Work plan component. § 35.503 Exceptions from this subpart. EPA will consider and may approve requests for official exceptions from non-statutory provisions of this regulation in accordance with 2 CFR 1500.4. [87 FR 30398, May 19, 2022] § 35.504 Eligibility of an Intertribal Consortium. (a) An Intertribal Consortium is eligible to receive grants under the authorities listed in § 35.501 only if the Consortium demonstrates that all members of the Consortium meet the eligibility requirements for the grant and authorize the Consortium to apply for and receive assistance in accordance with paragraph (c) of this section, except as provided in paragraph (b) of this section. (b) An Intertribal Consortium is eligible to receive a grant under the Indian Environmental General Assistance Program Act, in accordance with § 35.540, if the Consortium demonstrates that: (1) A majority of its members meets the eligibility requirements for the grant; (2) All members that meet the eligibility requirements authorize the Consortium to apply for and receive assistance; and (3) It has adequate accounting controls to ensure that only members that meet the eligibility requirements will benefit directly from the grant project and will receive and manage grant funds, and the Consortium agrees to a grant condition to that effect. (c) An Intertribal Consortium must submit to EPA adequate documentation of: (1) The existence of the partnership between Indian Tribal governments, and (2) Authorization of the Consortium by all its members (or in the case of the General Assistance Program, all members that meet the eligibility requirements for a General Assistance Program grant) to apply for and receive the grant(s) for which the Consortium has applied. Preparing an Application § 35.505 Components of a complete application. A complete application for an environmental program grant must: (a) Meet the requirements in 2 CFR part 200, subpart C. (b) Include a proposed work plan (§ 35.507 of this subpart); and (c) Specify the environmental program and the amount of funds requested. [66 FR 3795, Jan. 16, 2001, as amended at 79 FR 76055, Dec. 19, 2014] § 35.506 Time frame for submitting an application. An applicant should submit a complete application to EPA at least 60 days before the beginning of the proposed funding period. § 35.507 Work plans. (a) Bases for negotiating work plans. (1) Negotiation considerations. (2) National program guidance. (3) Use of existing guidance. (b) Work plan requirements. (2) An approvable work plan must specify: (i) The work plan components to be funded under the grant; (ii) The estimated work years and estimated funding amounts for each work plan component; (iii) The work plan commitments for each work plan component, and a time frame for their accomplishment; (iv) A performance evaluation process and reporting schedule in accordance with § 35.515 of this subpart; and (v) The roles and responsibilities of the recipient and EPA in carrying out the work plan commitments. (3) The work plan must be consistent with applicable federal statutes; regulations; circulars; executive orders; and delegations, approvals, or authorizations. (c) Tribal Environmental Agreement as work plan. (1) Is clearly identified as the grant work plan and distinguished from other portions of the Tribal Environmental Agreement; and (2) Meets the requirements in § 35.507(b). § 35.508 Funding period. The Regional Administrator and applicant may negotiate the length of the funding period for environmental program grants, subject to limitations in appropriations and authorizing statutes. § 35.509 Consolidated grants. Any applicant eligible to receive funds from more than one environmental program may submit an application for a consolidated grant. For consolidated grants, an applicant prepares a single budget and work plan covering all of the environmental programs included in the application. The consolidated budget must identify each environmental program to be included, the amount of each program's funds, and the extent to which each program's funds support each work plan component. Recipients of consolidated grants must account for grant funds in accordance with the funds' environmental program sources; funds included in a consolidated grant from a particular environmental program may be used only for that program. EPA Action on Application § 35.510 Time frame for EPA action. The Regional Administrator will review a complete application and either approve, conditionally approve, or disapprove it within 60 days of receipt. The Regional Administrator will award grants for approved or conditionally approved applications if funds are available. § 35.511 Criteria for approving an application. (a) After evaluating other applications as appropriate, the Regional Administrator may approve an application upon determining that: (2) The application meets the requirements of all applicable federal statutes; regulations; circulars; executive orders; and EPA delegations, approvals, or authorizations; (3) The proposed work plan complies with the requirements of § 35.507 of this subpart; and (4) The achievement of the proposed work plan is feasible, considering such factors as the applicant's existing circumstances, past performance, program authority, organization, resources, and procedures. (b) If the Regional Administrator finds the application does not satisfy the criteria in paragraph (a) of this section, the Regional Administrator may either: (1) Conditionally approve the application if only minor changes are required, with grant conditions necessary to ensure compliance with the criteria, or (2) Disapprove the application in writing. [66 FR 3795, Jan. 16, 2001, as amended at 79 FR 76055, Dec. 19, 2014] § 35.512 Factors considered in determining award amount. (a) After approving an application under § 35.511, the Regional Administrator will consider such factors as the amount of funds available for award to Indian Tribes and Intertribal Consortia, the extent to which the proposed work plan is consistent with EPA guidance and mutually agreed upon priorities, and the anticipated cost of the work plan relative to the proposed work plan components to determine the amount of funds to be awarded. (b) If the Regional Administrator finds that the requested level of funding is not justified, the Regional Administrator will attempt to negotiate a resolution of the issues with the applicant before determining the award amount. § 35.513 Reimbursement for pre-award costs. (a) Notwithstanding the requirements of 2 CFR parts 200 and 1500, EPA may reimburse recipients for pre-award costs incurred from the beginning of the budget period established in the grant agreement if such costs would have been allowable if incurred after the award. Pre-award costs must be identified in the grant application EPA approves. (b) The applicant incurs pre-award costs at its own risk. EPA is under no obligation to reimburse such costs unless they are included in an approved grant application. [66 FR 3795, Jan. 16, 2001, as amended at 79 FR 76055, Dec. 19, 2014; 87 FR 30398, May 19, 2022] Post-Award Requirements § 35.514 Amendments and other changes. The following provisions govern amendments and other changes to grant work plans and budgets after the work plan is negotiated and a grant awarded. (a) Changes requiring prior approval. (b) Changes requiring approval. (c) Changes not requiring approval. (d) Office of Management and Budget (OMB) cost principles. (e) Changes in consolidated grants. (f) Subgrants. [66 FR 3795, Jan. 16, 2001, as amended at 79 FR 76055, Dec. 19, 2014; 87 FR 30398, May 19, 2022] § 35.515 Evaluation of performance. (a) Joint evaluation process. (b) Elements of the evaluation process. (1) A discussion of accomplishments as measured against work plan commitments; (2) A discussion of the cumulative effectiveness of the work performed under all work plan components; (3) A discussion of existing and potential problem areas; and (4) Suggestions for improvement, including, where feasible, schedules for making improvements. (c) Resolution of issues. (d) Evaluation reports. [66 FR 3795, Jan. 16, 2001, as amended at 79 FR 76055, Dec. 19, 2014; 87 FR 30398, May 19, 2022] § 35.516 Direct implementation. If funds for an environmental program remain after Tribal and Intertribal Consortia environmental program grants for that program have been awarded or because no grants were awarded, the Regional Administrator may, subject to any limitations contained in appropriation acts, use all or part of the funds to support a federal program required by law in the absence of an acceptable Tribal program. § 35.517 Unused funds. If funds for an environmental program remain after Tribal and Intertribal Consortia grants for that program have been awarded or because no grants were awarded, and the Regional Administrator does not use the funds under § 35.516 of this subpart, the Regional Administrator may award the funds to any eligible Indian Tribe or Intertribal Consortium in the region (including a Tribe or Intertribal Consortium that has already received funds) for the same environmental program or for a Performance Partnership Grant, subject to any limitations in appropriation acts. § 35.518 Unexpended balances. Subject to any relevant provisions of law, if a recipient's final Financial Status Report shows unexpended balances, the Regional Administrator will deobligate the unexpended balances and make them available, either to the same recipient or other Tribes or Intertribal Consortia in the region, for environmental program grants. Performance Partnership Grants § 35.530 Purpose of Performance Partnership Grants. (a) Purpose of section. (b) Purpose of program. (1) Strengthen partnerships between EPA and Tribes and Intertribal Consortia through joint planning and priority setting and better deployment of resources; (2) Provide Tribes and Intertribal Consortia with flexibility to direct resources where they are most needed to address environmental and public health priorities; (3) Link program activities more effectively with environmental and public health goals and program outcomes; (4) Foster development and implementation of innovative approaches, such as pollution prevention, ecosystem management, and community-based environmental protection strategies; and (5) Provide savings by streamlining administrative requirements. § 35.532 Requirements summary. (a) Applicants and recipients of Performance Partnership Grants must meet: (1) The requirements in §§ 35.500 to 35.518 of this subpart which apply to all environmental program grants, including Performance Partnership Grants; and (2) The requirements in §§ 35.530 to 35.538 of this subpart which apply only to Performance Partnership Grants. (b) In order to include funds from an environmental program grant listed in § 35.501(a) of this subpart in a Performance Partnership Grant, applicants must: (1) Meet the requirements for award of each environmental program from which funds are included in the Performance Partnership Grant, except the requirements at §§ 35.548(c), 35.638(b) and (c), 35.691, and 35.708(c), (d), (e), and (g). These requirements can be found in this regulation beginning at § 35.540. If the applicant is an Intertribal Consortium, each Tribe that is a member of the Consortium must meet the requirements. (2) Apply for the environmental program grant. (3) Obtain the Regional Administrator's approval of the application for that grant. (c) If funds from an environmental program are not included in a Performance Partnership Grant, an applicant is not required to meet the eligibility requirements for that environmental program grant in order to carry out activities eligible under that program as provided in § 35.535. [66 FR 3795, Jan. 16, 2001, as amended at 87 FR 30398, May 19, 2022] § 35.533 Programs eligible for inclusion. (a) Eligible programs. www.epa.gov/nepps. (b) Changes in eligible programs. [66 FR 3795, Jan. 16, 2001, as amended at 74 FR 28444, June 16, 2009; 87 FR 30399, May 19, 2022] § 35.534 Eligible recipients. (a) A Tribe or Intertribal Consortium is eligible for a Performance Partnership Grant if the Tribe or each member of the Intertribal Consortium is eligible for, and the Tribe or Intertribal Consortium receives funding from, more than one of the environmental program grants listed in § 35.501(a) in accordance with the requirements for those environmental programs. (b) For grants to Tribes, a Tribal agency must be designated by a Tribal government or other authorized Tribal process to receive grants under each of the environmental programs to be combined in the Performance Partnership Grant. § 35.535 Activities eligible for funding. (a) Delegated, approved, or authorized activities. (b) Other program activities. § 35.536 Cost share requirements. (a) The Performance Partnership Grant cost share shall be the sum of the amounts required for each environmental program grant included in the Performance Partnership Grant, as determined in accordance with paragraphs (b) and (c) of this section, unless waived under paragraph (d) of this section. (b) For each environmental program grant included in the Performance Partnership Grant that has a cost share of five percent or less under the provisions of §§ 35.540 through 35.718, the required cost share shall be that identified in §§ 35.540 through 35.718 of this subpart. (c) For each environmental program grant included in the Performance Partnership Grant that has a cost share of greater than five percent under the provisions of §§ 35.540 through 35.718 of this subpart, the required cost share shall be five percent of the allowable cost of the work plan budget for that program. However, after the first two years in which a Tribe or Intertribal Consortium receives a Performance Partnership Grant, the Regional Administrator must determine through objective assessment whether the Tribe or the members of an Intertribal Consortium meet socio-economic indicators that demonstrate the ability of the Tribe or the Intertribal Consortium to provide a cost share greater than five percent. If the Regional Administrator determines that the Tribe or the members of Intertribal Consortium meets such indicators, then the Regional Administrator shall increase the required cost share up to a maximum of 10 percent of the allowable cost of the work plan budget for each program with a cost share greater than five percent. (d) The Regional Administrator may waive the cost share required under this section upon request of the Tribe or Intertribal Consortium, if, based on an objective assessment of socio-economic indicators, the Regional Administrator determines that meeting the cost share would impose undue hardship. § 35.537 Application requirements. An application for a Performance Partnership Grant must contain: (a) A list of the environmental programs and the amount of funds from each program to be combined in the Performance Partnership Grant; (b) A consolidated budget; (c) A consolidated work plan that addresses each program being combined in the grant and which meets the requirements of § 35.507. § 35.538 Project period. If the projected completion date for a work plan commitment funded under an environmental program grant that is added to a Performance Partnership Grant extends beyond the end of the project period for the Performance Partnership Grant, the Regional Administrator and the recipient will agree in writing as to how and when the work plan commitment will be completed. Indian Environmental General Assistance Program (GAP) § 35.540 Purpose. (a) Purpose of section. (b) Purpose of program. § 35.542 Definitions. [Reserved] § 35.543 Eligible recipients. The following entities are eligible to receive grants under this program: (a) Tribes and (b) Intertribal Consortia as provided in § 35.504. § 35.545 Eligible activities. Tribes and Intertribal Consortia may use General Assistance Program funds for planning, developing, and establishing environmental protection programs and to develop and implement solid and hazardous waste programs for Tribes. § 35.548 Award limitations. (a) Each grant awarded under the General Assistance Program shall be not less than $75,000. This limitation does not apply to additional funds that may become available for award to the same Tribe or Intertribal Consortium. (b) The Regional Administrator shall not award a grant to a single Tribe or Intertribal Consortium of more than 10 percent of the total annual funds appropriated under the Act. (c) The project period of a General Assistance Program award may not exceed four years. (d) No award under this program shall result in reduction of total EPA grants for environmental programs to the recipient. Air Pollution Control (Section 105) § 35.570 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.572 Definitions. In addition to the definitions in § 35.502, the following definitions apply to the Clean Air Act's section 105 grant program: Nonrecurrent expenditures Recurrent expenditures § 35.573 Eligible Tribe. (a) A Tribe is eligible to receive section 105 financial assistance under §§ 35.570 through 35.578 if it has demonstrated eligibility to be treated as a State under 40 CFR 49.6. An Intertribal Consortium consisting of Tribes that have demonstrated eligibility to be treated as States under 40 CFR 49.6 is also eligible for financial assistance. (b) Tribes that have not made a demonstration under 40 CFR 49.6 and Intertribal Consortia consisting of Tribes that have not demonstrated eligibility to be treated as States under 40 CFR 49.6 are eligible for financial assistance under sections 105 and 302(b)(5) of the Clean Air Act. § 35.575 Maximum federal share. (a) For Tribes and Intertribal Consortia eligible under § 35.573(a), the Regional Administrator may provide financial assistance in an amount up to 95 percent of the approved costs of planning, developing, establishing, or improving an air pollution control program, and up to 95 percent of the approved costs of maintaining that program. After two years from the date of each Tribe's or Intertribal Consortium's initial grant award, the Regional Administrator will reduce the maximum federal share to 90 percent if the Regional Administrator determines that the Tribe or each member of the Intertribal Consortium meets certain economic indicators that would provide an objective assessment of the Tribe's or each of the Intertribal Consortiums member's ability to increase its share. For a Tribe or Intertribal Consortium eligible under § 35.573(a), the Regional Administrator may increase the maximum federal share if the Tribe or Intertribal Consortium can demonstrate in writing to the satisfaction of the Regional Administrator that fiscal circumstances within the Tribe or within the member Tribes of the Intertribal Consortium are constrained to such an extent that fulfilling the match requirement would impose undue hardship. (b) For Tribes and Intertribal Consortia eligible under § 35.573(b), the Regional Administrator may provide financial assistance in an amount up to 60 percent of the approved costs of planning, developing, establishing, or improving an air pollution control program, and up to 60 percent of the approved costs of maintaining that program. (c) Revenue collected under a Tribal Title V operating permit program may not be used to meet the cost share requirements of this section. § 35.576 Maintenance of effort. (a) For Tribes and Intertribal Consortia that are eligible for financial assistance under § 35.573(b) of this subpart, the Tribe or each of the Intertribal Consortium's members must expend annually, for recurrent Section 105 program expenditures, an amount of non-federal funds at least equal to such expenditures during the preceding fiscal year. (1) In order to award grants in a timely manner each fiscal year, the Regional Administrator shall compare a Tribe's or each of the Intertribal Consortium's member's proposed expenditure level, as detailed in the grant application, to its expenditure level in the second preceding fiscal year. When expenditure data for the preceding fiscal year is complete, the Regional Administrator shall use this information to determine the Tribe's or Intertribal Consortium's compliance with its maintenance of effort requirement. (2) If expenditure data for the preceding fiscal year shows that a Tribe or Intertribal Consortium did not meet the requirements of paragraph (a) of this section, the Regional Administrator will take action to recover the grant funds for that year. (3) The Regional Administrator may grant an exception to § 35.576(a) if, after notice and opportunity for a public hearing, the Regional Administrator determines that a reduction in expenditures is attributable to a non-selective reduction of all the Tribe's or each of the Intertribal Consortium's member's programs. (b) For Tribes and Intertribal Consortia that are eligible under § 35.573(b), the Regional Administrator will not award Section 105 funds unless the applicant provides assurance that the grant will not supplant non-federal funds that would otherwise be available for maintaining the Section 105 program. § 35.578 Award limitation. The Regional Administrator will not disapprove an application for, or terminate or annul an award of, financial assistance under § 35.573 without prior notice and opportunity for a public hearing within the appropriate jurisdiction or, where more than one area is affected, within one of the affected areas within the jurisdiction Water Pollution Control (Sections 106 and 518) § 35.580 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program requirements. § 35.582 Definitions. Federal Indian reservation. Tribe. § 35.583 Eligible recipients. A Tribe, including an Intertribal Consortium, is eligible to receive a section 106 grant if EPA determines that the Indian Tribe or each member of the Intertribal Consortium meets the requirements for treatment in a manner similar to a State under section 518(e) of the Clean Water Act (see 40 CFR 130.6(d)). § 35.585 Maximum federal share. (a) The Regional Administrator may provide up to 95 percent of the approved work plan costs for Tribes or Intertribal Consortia establishing a section 106 program. Work plan costs include costs of planning, developing, establishing, improving or maintaining a water pollution control program. (b) The Regional Administrator may increase the maximum federal share if the Tribe or Intertribal Consortium can demonstrate in writing to the satisfaction of the Regional Administrator that fiscal circumstances within the Tribe or within each Tribe that is a member of an Intertribal Consortium are constrained to such an extent that fulfilling the match requirement would impose undue hardship. § 35.588 Award limitations. (a) The Regional Administrator will only award section 106 funds to a Tribe or Intertribal Consortium if: (1) All monitoring and analysis activities performed by the Tribe or Intertribal Consortium meets the applicable quality assurance and quality control requirements in 2 CFR 1500.12. (2) The Tribe or each member of the Intertribal Consortium has emergency power authority comparable to that in section 504 of the Clean Water Act and adequate contingency plans to implement such authority. (3) EPA has not assumed enforcement as defined in section 309(a)(2) of the Clean Water Act in the Tribe's or any Intertribal Consortium member's jurisdiction. (4) The Tribe or Intertribal Consortium agrees to include a discussion of how the work performed under section 106 addressed water quality problems on Tribal lands in the annual report required under § 35.515(d). (5) After an initial award of section 106 funds, the Tribe or Intertribal Consortium shows satisfactory progress in meeting its negotiated work plan commitments. (b) A Tribe or Intertribal Consortium is eligible to receive a section 106 grant or section 106 grant funds even if the Tribe or each of the members of an Intertribal Consortium does not meet the requirements of section 106(e)(1) and 106(f)(1) of the Clean Water Act. [66 FR 3795, Jan. 16, 2001, as amended at 79 FR 76055, Dec. 19, 2014; 87 FR 30399, May 19, 2022] Water Quality Cooperative Agreements (Section 104( b § 35.600 Purpose. (a) Purpose of section. (b) Purpose of program. [66 FR 3795, Jan. 16, 2001, as amended at 79 FR 76055, Dec. 19, 2014] § 35.603 Competitive process. EPA will award water quality cooperative agreement funds through a competitive process in accordance with national program guidance. After the competitive process is complete, the recipient can, at its discretion, accept the award as a separate cooperative agreement or add the funds to a Performance Partnership Grant. If the recipient chooses to add the funds to a Performance Partnership Grant, the water quality work plan commitments must be included in the Performance Partnership Grant work plan. § 35.604 Maximum federal share. The Regional Administrator may provide up to 100 percent of approved work plan costs. Wetlands Development Grant Program (Section 104( b § 35.610 Purpose. (a) Purpose of section. (b) Purpose of program. [66 FR 3795, Jan. 16, 2001, as amended at 79 FR 76055, Dec. 19, 2014] § 35.613 Competitive process. Wetlands development grants are awarded on a competitive basis. EPA annually establishes a deadline for receipt of grant applications. EPA reviews applications and decides which grant projects to fund based on criteria established by EPA. After the competitive process is complete, the recipient can, at its discretion, accept the award as a wetlands development program grant or add the funds to a Performance Partnership Grant. If the recipient chooses to add the funds to a Performance Partnership Grant, the wetlands development program work plan commitments must be included in the Performance Partnership Grant work plan. § 35.615 Maximum federal share. EPA may provide up to 75 percent of the approved work plan costs for the development or refinement of a wetlands protection and management program. Nonpoint Source Management Grants (Sections 319( h f § 35.630 Purpose. (a) Purpose of section. (b) Purpose of program. § 35.632 Definition. Tribe. § 35.633 Eligibility requirements. A Tribe or Intertribal Consortium is eligible to receive a Nonpoint Source Management grant if EPA has determined that the Tribe or each member of the Intertribal Consortium meets the requirements for treatment in a manner similar to a State under section 518(e) of the Clean Water Act (see 40 CFR 130.6(d)). § 35.635 Maximum federal share. (a) The Regional Administrator may provide up to 60 percent of the approved work plan costs in any fiscal year. The non-federal share of costs must be provided from non-federal sources. (b) The Regional Administrator may increase the maximum federal share if the Tribe or Intertribal Consortium can demonstrate in writing to the satisfaction of the Regional Administrator that fiscal circumstances within the Tribe or within each Tribe that is a member of the Intertribal Consortium are constrained to such an extent that fulfilling the match requirement would impose undue hardship. In no case shall the federal share be greater than 90 percent. § 35.636 Maintenance of effort. To receive funds under section 319 in any fiscal year, a Tribe or each member of an Intertribal Consortium must agree that the Tribe or each member of the Intertribal Consortium will maintain its aggregate expenditures from all other sources for programs for controlling nonpoint source pollution and improving the quality of the Tribe's or the Intertribal Consortium's members' waters at or above the average level of such expenditures in Fiscal Years 1985 and 1986. § 35.638 Award limitations. (a) Available funds. (b) Financial assistance to persons. (c) Administrative costs. (d) The Regional Administrator will not award section 319(h) funds to any Tribe or Intertribal Consortium unless: (1) Approved assessment report. (2) Approved Tribe or Intertribal Consortium management program. (3) Progress on reducing pollutant loadings. (4) Activity and output descriptions. (5) Significant watershed projects. (i) A brief synopsis of the watershed implementation plan outlining the problems to be addressed; (ii) The project's goals and objectives; and (iii) The performance measures and environmental indicators that will be used to evaluate the results of the project. Pesticide Cooperative Enforcement (Section 23( a § 35.640 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.641 Eligible recipients. Eligible recipients of pesticide enforcement cooperative agreements are Tribes and Intertribal Consortia. § 35.642 Maximum federal share. The Regional Administrator may provide up to 100 percent of the approved work plan costs. § 35.645 Basis for allotment. The Administrator allots pesticide enforcement cooperative agreement funds to each regional office. Regional offices award funds to Tribes and Intertribal Consortia based on their programmatic needs and applicable EPA guidance. Pesticide Applicator Certification and Training (Section 23( a § 35.646 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.649 Maximum federal share. The Regional Administrator may provide up to 50 percent of the approved work plan costs. Pesticide Program Implementation (Section 23( a § 35.650 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Program regulations. § 35.653 Eligible recipients. Eligible recipients of pesticide program implementation cooperative agreements are Tribes and Intertribal Consortia. § 35.655 Basis for allotment. The Administrator allots pesticide program implementation cooperative agreement funds to each Regional Office. Regional Offices award funds to Tribes and Intertribal Consortia based on their programmatic needs and applicable EPA guidance. § 35.659 Maximum federal share. The Regional Administrator may provide up to 100 percent of the approved work plan costs. Pollution Prevention Grants (Section 6605) § 35.660 Purpose. (a) Purpose of section. (b) Purpose of program. § 35.661 Competitive process. EPA Regions award Pollution Prevention Grant funds to Tribes and Intertribal Consortia through a competitive process in accordance with EPA guidance. When evaluating a Tribe's or Intertribal Consortium's application, EPA must consider, among other criteria, whether the proposed program would: (a) Make specific technical assistance available to businesses seeking information about source reduction opportunities, including funding for experts to provide onsite technical advice to businesses seeking assistance in the development of source reduction plans; (b) Target assistance to businesses for whom lack of information is an impediment to source reduction; and (c) Provide training in source reduction techniques. Such training may be provided through local engineering schools or other appropriate means. § 35.662 Definitions. The following definition applies to the Pollution Prevention Grant program and to §§ 35.660 through 35.669: (a) Pollution prevention/source reduction is any practice that: (1) Reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment (including fugitive emissions) prior to recycling, treatment, or disposal; (2) Reduces the hazards to public health and the environment associated with the release of such substances, pollutants, or contaminants; or (3) Reduces or eliminates the creation of pollutants through: (i) Increased efficiency in the use of raw materials, energy, water, or other resources; or (ii) Protection of national resources by conservation. (b) Pollution prevention/source reduction does not include any practice which alters the physical, chemical, or biological characteristics or the volume of a hazardous substance, pollutant, or contaminant through a process or activity which itself is not integral to and necessary for the production of a product or the providing of a service. § 35.663 Eligible recipients. (a) The Regional Administrator will treat a Tribe or Intertribal Consortium as eligible to apply for a Pollution Prevention Grant if the Tribe or each member of the Intertribal Consortium: (1) Is recognized by the Secretary of the Interior; (2) Has an existing government exercising substantial governmental duties and powers; (3) Has adequate authority to carry out the grant activities; and (4) Is reasonably expected to be capable, in the Regional Administrator's judgment, of administering the grant program. (b) If the Administrator has previously determined that an Indian Tribe has met the prerequisites in paragraphs (a)(1) and (2) of this section for another EPA program, the Tribe need provide only that information unique to the Pollution Prevention Grants program required by paragraphs (b)(3) and (4) of this section. § 35.668 Award limitation. If the Pollution Prevention Grant funds are included in a Performance Partnership Grant, the Pollution Prevention work plan commitments must be included in the Performance Partnership Grant work plan. § 35.669 Maximum federal share. The federal share for Pollution Prevention Grants will not exceed 50 percent of the allowable Tribe and Intertribal Consortium Pollution Prevention project cost. Public Water System Supervision (Section 1443( a § 35.670 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.672 Definition. Tribe. § 35.673 Annual amount reserved by EPA. Each year, EPA shall reserve up to seven percent of the public water system supervision funds for grants to Tribes and Intertribal Consortia under section 1443(a). § 35.675 Maximum federal share. (a) The Regional Administrator may provide up to 75 percent of the approved work plan costs. (b) The Regional Administrator may increase the maximum federal share if the Tribe or Intertribal Consortium can demonstrate in writing to the satisfaction of the Regional Administrator that fiscal circumstances within the Tribe or Consortium are constrained to such an extent that fulfilling the match requirement would impose undue hardship, except that the federal share shall not be greater than 90 percent. § 35.676 Eligible recipients. A Tribe or Intertribal Consortium is eligible to apply for a public water system supervision grant if the Tribe or each member of the Intertribal Consortium meets the following criteria: (a) The Tribe or each member of the Intertribal Consortium is recognized by the Secretary of the Interior; (b) The Tribe or each member of the Intertribal Consortium has a governing body carrying out substantial governmental duties and powers over any area; (c) The functions to be exercised under the grant are within the area of the Tribal government's jurisdiction; and (d) The Tribe or each member of the Intertribal Consortium is reasonably expected to be capable, in the Regional Administrator's judgment, of carrying out the functions to be exercised under the grant. § 35.678 Award limitations. (a) Initial grant. (1) Met the requirements of § 35.676 (Eligible recipients); (2) Established an approved public water system supervision program or agrees to establish an approvable program within three years of the initial award and assumed primary enforcement responsibility within this period; and (3) Agreed to use at least one year of the grant funding to demonstrate program capability to implement the requirements found in 40 CFR 142.10. (b) Subsequent grants. Underground Water Source Protection (Section 1443( b § 35.680 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.682 Definition. Tribe. § 35.683 Annual amount reserved by EPA. EPA shall reserve up to five percent of the underground water source protection funds each year for underground water source protection grants to Tribes under section 1443(b) of the Safe Drinking Water Act. § 35.685 Maximum federal share. (a) The Regional Administrator may provide up to 75 percent of the approved work plan costs. (b) The Regional Administrator may increase the maximum federal share if the Tribe or Intertribal Consortium can demonstrate in writing to the satisfaction of the Regional Administrator that fiscal circumstances within the Tribe or Consortium are constrained to such an extent that fulfilling the match requirement would impose undue hardship, except that the federal share shall not be greater than 90 percent. § 35.686 Eligible recipients. A Tribe or Intertribal Consortium is eligible to apply for an underground water source protection grant if the Tribe or each member of the Intertribal Consortium meets the following criteria: (a) The Tribe or each member of the Intertribal Consortium is recognized by the Secretary of the Interior; (b) The Tribe or each member of the Intertribal Consortium has a governing body carrying out substantial governmental duties and powers over any area; (c) The functions to be exercised under the grant are within the area of the Tribal government's jurisdiction; and (d) The Tribe or each member of the Intertribal Consortium is reasonably expected to be capable, in the Regional Administrator's judgment, of carrying out the functions to be exercised under the grant. § 35.688 Award limitations. (a) Initial grants. (1) Met the requirements of § 35.676 (Eligible recipients); and (2) Established an approved underground water source protection program or agrees to establish an approvable program within four years of the initial award. (b) Subsequent grants. Lead-Based Paint Program (Section 404( g § 35.690 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.691 Funding coordination. Recipients must use the Lead-Based Paint program funding in a way that complements any related assistance they receive from other federal sources for lead-based paint activities. § 35.693 Eligible recipients. (a) The Regional Administrator will treat a Tribe or Intertribal Consortium as eligible to apply for a Lead-Based Paint Program grant if the Tribe or each member of the Intertribal Consortium: (1) Is recognized by the Secretary of the Interior; (2) Has an existing government exercising substantial governmental duties and powers; (3) Has adequate authority to carry out the grant activities; and (4) Is reasonably expected to be capable, in the Regional Administrator's judgment, of administering the grant program. (b) If the Administrator has previously determined that an Indian Tribe has met the prerequisites in paragraphs (a)(1) and (2) of this section for another EPA program, the Tribe need provide only that information unique to the Lead-Based Paint Program required by paragraphs (b)(3) and (4) of this section. Indoor Radon Grants (Section 306) § 35.700 Purpose. (a) Purpose of section. (b) Purpose of program. (i) Survey of radon levels, including special surveys of geographic areas or classes of buildings (such as public buildings, school buildings, high-risk residential construction types); (ii) Development of public information and education materials concerning radon assessment, mitigation, and control programs; (iii) Implementation of programs to control radon on existing and new structures; (iv) Purchase, by the Tribe or Intertribal Consortium of radon measurement equipment and devices; (v) Purchase and maintenance of analytical equipment connected to radon measurement and analysis, including costs of calibration of such equipment; (vi) Payment of costs of Environmental Protection Agency-approved training programs related to radon for permanent Tribal employees; (vii) Payment of general overhead and program administration costs; (viii) Development of a data storage and management system for information concerning radon occurrence, levels, and programs; (ix) Payment of costs of demonstration of radon mitigation methods and technologies as approved by EPA, including Tribal and Intertribal Consortia participation in the Environmental Protection Agency Home Evaluation Program; and (x) A toll-free radon hotline to provide information and technical assistance. (2) In implementing paragraphs (b)(1)(iv) and (ix) of this section, a Tribe or Intertribal Consortia should make every effort, consistent with the goals and successful operation of the Tribal Indoor Radon program, to give preference to low-income persons. § 35.702 Basis for allotment. (a) The Regional Administrator will allot Indoor Radon Grant funds based on the criteria in EPA guidance in accordance with section 306(d) and (e) of the Toxic Substances Control Act. (b) No Tribe or Intertribal Consortium may receive an Indoor Radon Grant in excess of 10 percent of the total appropriated amount made available each fiscal year. § 35.703 Eligible recipients. (a) The Regional Administrator will treat a Tribe or Intertribal Consortium as eligible to apply for an Indoor Radon Grant if the Tribe or each member of the Intertribal Consortium: (1) Is recognized by the Secretary of the Interior; (2) Has an existing government exercising substantial governmental duties and powers; (3) Has adequate authority to carry out the grant activities; and, (4) Is reasonably expected to be capable, in the Regional Administrator's judgment, of administering the grant program. (b) If the Administrator has previously determined that a Tribe has met the prerequisites in paragraphs (a)(1) and (2) of this section for another EPA program, the Tribe need provide only that information unique to the radon grant program required by paragraphs (a)(3) and (4) of this section. § 35.705 Maximum federal share. The Regional Administrator may provide Tribes and Intertribal Consortia up to 75 percent of the approved costs for the development and implementation of radon program activities incurred by the Tribe in the first year of a grant to the Tribe or Consortium; 60 percent in the second year; and 50 percent in the third and each year thereafter. § 35.708 Award limitations. (a) The Regional Administrator shall consult with the Tribal agency which has the primary responsibility for radon programs as designated by the affected Tribe before including Indoor Radon Grant funds in a Performance Partnership Grant with another Tribal agency. (b) No grant may be made in any fiscal year to a Tribe or Intertribal Consortium which did not satisfactorily implement the activities funded by the most recent grant awarded to the Tribe or Intertribal Consortium for an Indoor Radon program. (c) The costs of radon measurement equipment or devices (see § 35.820(b)(1)(iv)) and demonstration of radon mitigation, methods, and technologies (see § 35.820(b)(1)(ix)) shall not, in aggregate, exceed 50 percent of a Tribe's or Intertribal Consortium's radon grant award in a fiscal year. (d) The costs of general overhead and program administration (see § 35.820(b)(1)(vii)) of an indoor radon grant shall not exceed 25 percent of the amount of a Tribe's or Intertribal Consortium's Indoor Radon Grant in a fiscal year. (e) A Tribe or Intertribal Consortium may use funds for financial assistance to persons only to the extent such assistance is related to demonstration projects or the purchase and analysis of radon measurement devices. (f) Recipients must provide the Regional Administrator all radon-related information generated in its grant supported activities, including the results of radon surveys, mitigation demonstration projects, and risk communication studies. (g) Recipients must maintain and make available to the public, a list of firms and individuals that have received a passing rating under the EPA proficiency rating program under section 305(a)(2) of the Act. (h) Funds appropriated for section 306 may not be used to cover the costs of federal proficiency rating programs under section 305(a)(2) of the Act. Funds appropriated for section 306 and grants awarded under section 306 may be used to cover the costs of the Tribal proficiency rating programs. Toxic Substances Compliance Monitoring (Section 28) § 35.710 Purpose. (a) Purpose of section. (b) Purpose of program. (c) Associated program regulations. § 35.712 Competitive process. EPA will award Toxic Substances Control Act Compliance Monitoring grants to Tribes or Intertribal Consortia through a competitive process in accordance with national program guidance. § 35.713 Eligible recipients. (a) The Regional Administrator will treat a Tribe or Intertribal Consortium as eligible to apply for a Toxic Substances Compliance Monitoring grant if the Tribe or each member of the Intertribal Consortium: (1) Is recognized by the Secretary of the Interior; (2) Has an existing government exercising substantial governmental duties and powers; (3) Has adequate authority to carry out the grant activities; and, (4) Is reasonably expected to be capable, in the Regional Administrator's judgment, of administering the grant program. (b) If the Administrator has previously determined that an Indian Tribe has met the prerequisites in paragraphs (a)(1) and (2) of this section for another EPA program, the Tribe need provide only that information unique to the Toxic Substances Compliance Monitoring grant program required by paragraphs (a)(3) and (4) of this section. § 35.715 Maximum federal share. The Regional Administrator may provide up to 75 percent of the approved work plan costs. § 35.718 Award limitation. If the Toxic Substances Compliance Monitoring grant funds are included in a Performance Partnership Grant, the toxic substances compliance monitoring work plan commitments must be included in the Performance Partnership Grant work plan. Hazardous Waste Management Program Grants (Pub.L. 105-276) § 35.720 Purpose. (a) Purpose of section. (b) Purpose of program. § 35.723 Competitive process. EPA will award Tribal hazardous waste program grants to Tribes or Intertribal Consortia on a competitive basis in accordance with national program guidance. After the competitive process is complete, the recipient can, at its discretion, accept the award as a Tribal hazardous waste program grant or add the funds to a Performance Partnership Grant. If the recipient chooses to add the funds to a Performance Partnership Grant, the Tribal hazardous waste program work plan commitments must be included in the Performance Partnership Grant work plan. § 35.725 Maximum federal share. The Regional Administrator may provide up to 100 percent of the approved work plan costs. Underground Storage Tanks Program Grants (Pub. L. 105-276) § 35.730 Purpose. (a) Purpose of section. (b) Purpose of program. § 35.731 Eligible recipients. Eligible recipients of underground storage tank program grants are Tribes and Intertribal Consortia. § 35.732 Basis for allotment. The Administrator allots underground storage tank program grant funds to each regional office based on applicable EPA guidance. Regional offices award funds to Tribes and Intertribal Consortia based on their programmatic needs and applicable EPA guidance. § 35.735 Maximum federal share. The Regional Administrator may provide up to 100 percent of the approved work plan costs. Tribal Response Program Grants (CERCLA Section 128(A)) Source: 74 FR 28444, June 16, 2009, unless otherwise noted. § 35.736 Purpose. (a) Purpose of section. (b) Purpose of program. § 35.737 Basis for allotment. The Administrator allots response program funds to each EPA regional office. Regional Administrators award funds to Tribes based on their programmatic needs and applicable EPA guidance. § 35.738 Maximum federal share. The Regional Administrator may provide up to 100 percent of the approved work plan costs with the exception of the cost shares required by CERCLA 104(k)(9)(B)(iii) for capitalization of revolving loan funds under CERCLA 104(k)(3). Subparts C-H [Reserved] Subpart I—Grants for Construction of Treatment Works Authority: Secs. 101(e), 109(b), 201 through 205, 207, 208(d), 210 through 212, 215 through 219, 304(d)(3), 313, 501, 502, 511 and 516(b) of the Clean Water Act, as amended, 33 U.S.C. 1251 et seq. Source: 49 FR 6234, Feb. 17, 1984, unless otherwise noted. § 35.2000 Purpose and policy. (a) The primary purpose of Federal grant assistance available under this subpart is to assist municipalities in meeting enforceable requirements of the Clean Water Act, particularly, applicable National Pollutant Discharge Elimination System (NPDES) permit requirements. (b) This subpart supplements EPA's Uniform Relocation and Real Property Acquisition Policies Act regulation (part 4 of this chapter), its National Environmental Policy Act (NEPA) regulation (part 6 of this chapter), its public participation regulation (part 25 of this chapter), its intergovernmental review regulation (part 29 of this chapter), its general grant regulation (2 CFR parts 200 and 1500), and its debarment regulation (2 CFR part 1532), and establishes requirements for Federal grant assistance for the building of wastewater treatment works. EPA may also find it necessary to publish other requirements applicable to the construction grants program in response to Congressional action and executive orders. (c) EPA's policy is to delegate administration of the construction grants program on individual projects to State agencies to the maximum extent possible. Throughout this subpart we have used the term Regional Administrator. To the extent that the Regional Administrator delegates review of projects for compliance with the requirements of this subpart to a State agency under a delegation agreement (§ 35.1030), the term Regional Administrator may be read State agency. (d) In accordance with the Federal Grant and Cooperative Agreement Act (Pub. L. 95-224) EPA will, when substantial Federal involvement is anticipated, award assistance under cooperative agreements. Throughout this subpart we have used the terms grant and grantee but those terms may be read cooperative agreement and recipient if appropriate. (e) From time to time EPA publishes technical and guidance materials on various topics relevant to the construction grants program. Grantees may find this information useful in meeting requirements in this subpart. These publications, including the MCD and FRD series, may be ordered from: EPA, 1200 Pennsylvania Ave., NW., room 1115 ET, WH 547, Washington, DC 20460. In order to expedite processing of requests, persons wishing to obtain these publications should request a copy of EPA form 7500-21 (the order form listing all available publications), from EPA Headquarters, Municipal Construction Division (WH-547) or from any EPA Regional Office. [49 FR 6234, Feb. 17, 1984, as amended at 79 FR 76055, Dec. 19, 2014] § 35.2005 Definitions. (a) Words and terms not defined below shall have the meaning given to them in 2 CFR part 200, subpart A—Acronyms and Definitions. (b) As used in this subpart, the following words and terms mean: (1) Act. et seq., (2) Ad valorem tax. (3) Allowance. (4) Alternative technology. (5) Alternative to conventional treatment works for a small community. (6) Architectural or engineering services. (7) Best Practicable Waste Treatment Technology (BPWTT). (i) 40 CFR part 133—secondary treatment of wastewater; (ii) 40 CFR part 125, subpart G—marine discharge waivers; (iii) 40 CFR 122.44(d)—more stringent water quality standards and State standards; or (iv) 41 FR 6190 (February 11, 1976)—Alternative Waste Management Techniques for Best Practicable Waste Treatment (treatment and discharge, land application techniques and utilization practices, and reuse). (8) Building. (9) Building completion. (10) Collector sewer. (i) Crossover sewers connecting more than one property on one side of a major street, road, or highway to a lateral sewer on the other side when more cost effective than parallel sewers; and (ii) Except as provided in paragraph (b)(10)(iii) of this section, pumping units and pressurized lines serving individual structures or groups of structures when such units are cost effective and are owned and maintained by the grantee. (iii) This definition excludes other facilities which convey wastewater from individual structures, from private property to the public lateral sewer, or its equivalent and also excludes facilities associated with alternatives to conventional treatment works in small communities. (11) Combined sewer. (12) Complete waste treatment system. (13) Construction. (14) Conventional technology. (15) Enforceable requirements of the Act. (16) Excessive infiltration/inflow. (17) Field testing. (18) Individual systems. (19) Industrial user. Division A. Division B. Division D. Division E. Division I. (20) Infiltration. (21) Inflow. (22) Initiation of operation. (23) Innovative technology. (24) Interceptor sewer. (i) To intercept wastewater from a final point in a collector sewer and convey such wastes directly to a treatment facility or another interceptor. (ii) To replace an existing wastewater treatment facility and transport the wastes to an adjoining collector sewer or interceptor sewer for conveyance to a treatment plant. (iii) To transport wastewater from one or more municipal collector sewers to another municipality or to a regional plant for treatment. (iv) To intercept an existing major discharge of raw or inadequately treated wastewater for transport directly to another interceptor or to a treatment plant. (25) Interstate agency. (26) Marine bays and estuaries. (27) Municipality. (i) This definition includes a special district created under State law such as a water district, sewer district, sanitary district, utility district, drainage district or similar entity or an integrated waste management facility, as defined in section 201(e) of the Act, which has as one of its principal responsibilities the treatment, transport, or disposal of domestic wastewater in a particular geographic area. (ii) This definition excludes the following: (A) Any revenue producing entity which has as its principal responsibility an activity other than providing wastewater treatment services to the general public, such as an airport, turnpike, port facility or other municipal utility. (B) Any special district (such as school district or a park district) which has the responsibility to provide wastewater treatment services in support of its principal activity at specific facilities, unless the special district has the responsibility under State law to provide wastewater treatment services to the community surrounding the special district's facility and no other municipality, with concurrent jurisdiction to serve the community, serves or intends to serve the special district's facility or the surrounding community. (28) Nonexcessive infiltration. (29) Nonexcessive inflow. (30) Operation and Maintenance. (i) Maintenance: (ii) Operation: (31) Principal residence. (32) Project. (33) Project performance standards. (34) Priority water quality areas. (35) Project schedule. (36) Replacement. (37) Sanitary sewer. (38) Services. (39) Small commercial establishments. (40) Small Community. (41) State. (42) State agency. (43) Step 1. (44) Step 2. (45) Step 3. (46) Step 2 + 3. (47) Step 7. (48) Storm sewer. (49) Treatment works. (50) Treatment works phase or segment. (51) Useful life. (52) User charge. (53) Value engineering. [49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45894, Nov. 4, 1985; 55 FR 27095, June 29, 1990; 79 FR 76056, Dec. 19, 2014] § 35.2010 Allotment; reallotment. (a) Allotments are made on a formula or other basis which Congress specifies for each fiscal year (FY). The allotment for each State and the availability period shall be announced each fiscal year in the Federal Register. (b) Unless otherwise provided by Congress, all sums allotted to a State under section 205 of the Act shall remain available for obligation until the end of the one year after the close of the fiscal year for which the sums were appropriated. Except as provided in § 35.2020(a), sums not obligated at the end of that period shall be subject to reallotment on the basis of the same ratio as applicable to the then-current fiscal year, adjusted for the States which failed to obligate any of the fiscal year funds being reallotted, but none of the funds reallotted shall be made available to any State which failed to obligate any of the fiscal year funds being reallotted. Any sum made available to a State by reallotment under this section shall be in addition to any funds otherwise allotted to such State for grants under this subpart during any fiscal year and the reallotted funds shall remain available for obligation until the last day of the fiscal year following the fiscal year in which the reallotted funds are issued by the Comptroller to the Regional Administrator. (c) Except for funds appropriated for FY 72 and fiscal years prior to 1972, sums which are deobligated and reissued by the Comptroller to the Regional Administrator before their reallotment date shall be available for obligation in the same State and treated in the same manner as the allotment from which such funds were derived. (d) Except for funds appropriated for FY 72 and fiscal years prior to 1972, deobligated sums which are reissued by the Comptroller to the Regional Administrator after their reallotment date shall be available for obligation in the same State until the last day of the fiscal year following the fiscal year in which the reissuance occurs. (e) Deobligated FY 72 and prior to 1972 fiscal year funds, except 1964, 1965 and 1966 funds, will be credited to the allowances of the same Region from which such funds are recovered, and the Regional Administrator may determine how these recoveries are credited to the States within the Region. [49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45895, Nov. 4, 1985] § 35.2012 Capitalization grants. Amounts allotted to a State under title II may be deposited in that State's water pollution control revolving fund as a capitalization grant in accordance with 40 CFR 35.5020 (f) and (g). [55 FR 27095, June 29, 1990] § 35.2015 State priority system and project priority list. (a) General. (b) State priority system. (1) Criteria. (A) The impairment of classified water uses resulting from existing municipal pollutant discharges; and (B) The extent of surface or ground water use restoration or public health improvement resulting from the reduction in pollution. (ii) The State may also include other criteria in its priority system for ranking projects, such as the use of innovative or alternative technology, the need to complete a waste treatment system for which a grant for a phase or segment was previously awarded; and the category of need and the existing population affected. (iii) In ranking phased and segmented projects States must comply with § 35.2108. (2) Categories of need. (i) Before October 1, 1984, these categories of need shall include at least the following: (A) Secondary treatment (category I); (B) Treatment more stringent than secondary (category II); (C) Infiltration/inflow correction (category IIIA); (D) Major sewer system rehabilitation (category IIIB); (E) New collector sewers and appurtenances (category IVA); (F) New interceptors and appurtenances (category IVB); (G) Correction of combined sewer overflows (category V). (ii) After September 30, 1984, except as provided in paragraphs (b)(2) (iii) and (iv) of this section, these categories of need shall include only the following: (A) Secondary treatment or any cost-effective alternative; (B) Treatment more stringent than secondary or any cost-effective alternative; (C) New interceptors and appurtenances; and (D) Infiltration/inflow correction. (iii) After September 30, 1984, up to 20 percent (as determined by the Governor) of a State's annual allotment may be used for categories of need other than those listed in paragraph (b)(2)(ii) of this section and for any purpose for which grants may be made under sections 319 (h) and (i) of the Act (including any innovative and alternative approaches for the control of nonpoint sources of pollution). (iv) After September 30, 1984, the Governor may include in the priority system a category for projects needed to correct combined sewer overflows which result in impaired uses in priority water quality areas. Only projects which comply with the requirements of § 35.2024(a) may be included in this category. (c) Project priority list. (1) The State shall develop the project priority list consistent with the criteria established in the approved priority system. In ranking projects, the State must also consider total funds available, needs and priorities set forth in areawide water quality management plans, and any other factors contained in the State priority system. (2) The list shall include an estimate of the eligible cost of each project. (d) Public participation. (i) Before submitting its priority system to the Regional Administrator for approval and before adopting any significant change to an approved priority system; and (ii) Before submitting its annual project priority list to the Regional Administrator for acceptance and before revising its priority list unless the State agency and the Regional Administrator determine that the revision is not significant. (iii) If the approved State priority system contains procedures for bypassing projects on the fundable portion of the priority list, such bypasses will not be significant revisions for purposes of this section. (2) Public hearings may be conducted as directed in the State's continuing planning process document or may be held in conjunction with any regular public meeting of the State agency. (e) Regional Administrator review. (1) After submission and approval of the initial priority system and submission and acceptance of the project priority lists under paragraph (c) of this section, the State may revise its priority system and list as necessary. (2) The Regional Administrator shall review the State priority system and any revisions to insure that they are designed to obtain compliance with the criteria established in accordance with paragraphs (b) and (d) of this section and the enforceable requirements of the Act as defined in § 35.2005(b)(15). The Regional Administrator shall complete review of the priority system within 30 days of receipt of the system from the State and will notify the State in writing of approval or disapproval of the priority system, stating any reasons for disapproval. (3) The Regional Administrator will review the project priority list and any revisions to insure compliance with the State's approved priority system and the requirements of paragraph (c) of this section. The Regional Administrator will complete review of the project priority list within 30 days of receipt from the State and will notify the State in writing of acceptance or rejection, stating the reasons for the rejection. Any project which is not contained on an accepted current priority list will not receive funding. (f) Compliance with the enforceable requirements of the Act. (2) The Regional Administrator shall not require removal of projects in categories under paragraphs (b)(2)(i) (D) through (G) of this section which do not meet the enforceable requirements of the Act unless the total Federal share of such projects would exceed 25 percent of the State's annual allotment. [49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27095, June 29, 1990] § 35.2020 Reserves. In developing its priority list the State shall establish the reserves required or authorized under this section. The amount of each mandatory reserve shall be based on the allotment to each State from the annual appropriation under § 35.2010. The State may also establish other reserves which it determines appropriate. (a) Reserve for State management assistance grants. (b) Reserve for alternative systems for small communities. 1/2 1/2 (c) Reserve for innovative and alternative technologies. 1/2 (d) Reserve for water quality management. (e) Reserve for Advances of Allowance. (f) Nonpoint source reserve. (g) Marine estuary reserve. 1/2 (h) Indian program reserve. [49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45895, Nov. 4, 1985; 55 FR 27095, June 29, 1990] § 35.2021 Reallotment of reserves. (a) Mandatory portions of reserves under § 35.2020(b) through (g) shall be reallotted if not obligated during the allotment period (§ 35.2010(b) and (d)). Such reallotted sums are not subject to reserves. The State management assistance reserve under § 35.2020(a) is not subject to reallotment. (b) States may request the Regional Administrator to release funds in optional reserves or optional portions of required reserves under § 35.2020(b) through (e) for funding projects at any time before the reallotment date. If these optional reserves are not obligated or released and obligated for other purposes before the reallotment date, they shall be subject to reallotment under § 35.2010(b). (c) Sums deobligated from the mandatory portion of reserves under paragraphs (b) through (e) of § 35.2020 which are reissued by the Comptroller to the Regional Administrator before the initial reallotment date for those funds shall be returned to the same reserve. (See § 35.2010(c)). [49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45895, Nov. 4, 1985; 55 FR 27095, June 29, 1990] § 35.2023 Water quality management planning. (a) From funds reserved under § 35.2020(d) the Regional Administrator shall make grants to the States to carry out water quality management planning including but not limited to: (1) Identifying the most cost-effective and locally acceptable facility and non-point measures to meet and maintain water quality standards; (2) Developing an implementation plan to obtain State and local financial and regulatory commitments to implement measures developed under paragraph (a)(1) of this section; (3) Determining the nature, extent and causes of water quality problems in various areas of the State and interstate region, and reporting on these annually; and (4) Determining which publicly owned treatment works should be constructed, in which areas and in what sequence, taking into account the relative degree of effluent reduction attained, the relative contributions to water quality of other point or nonpoint sources, and the consideration of alternatives to such construction, and implementing section 303(e) of the Act. (b) In carrying out planning with grants made under paragraph (a) of this section, a State shall develop jointly with local, regional and interstate entities, a plan for carrying out the program and give funding priority to such entities and designated or undesignated public comprehensive planning organizations to carry out the purposes of this section. § 35.2024 Combined sewer overflows. (a) Grant assistance from State allotment. (b) Separate fund for combined sewer overflows in marine waters. (2) The Administrator shall establish priorities for projects with demonstrated water quality benefits based upon the following criteria: (i) Extent of water use benefits that would result, including swimming and shellfishing; (ii) Relationship of water quality improvements to project costs; and (iii) National and regional significance. (3) If the project is a phase or segment of the proposed treatment works described in the facilities plan, the criteria in paragraph (b)(2) of this section must be applied to the treatment works described in the facilities plan and each segment proposed for funding. (4) All requirements of this subpart apply to grants awarded under section 201(n)(2) of the Act except §§ 35.2010, 35.2015, 35.2020, 35.2021, 35.2025(b), 35.2042, 35.2103, 35.2109, and 35.2202. § 35.2025 Allowance and advance of allowance. (a) Allowance. (b) Advance of allowance to potential grant applicants. (2) The State may request that the right to receive payments under the grant be assigned to specified potential grant applicants. (3) The State may provide advances of allowance only to small communities, as defined by the State, which would otherwise be unable to complete an application for a grant under § 35.2040 in the judgment of the State. (4) The advance shall not exceed the Federal share of the estimate of the allowance for such costs which a grantee would receive under paragraph (a) of this section. (5) In the event a Step 2 + 3, Step 3 or Step 7 grant is not awarded to a recipient of an advance, the State may seek repayment of the advance on such terms and conditions as it may determine. When the State recovers such advances they shall be added to its most recent grant for advances of allowance. [49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27095, June 29, 1990] § 35.2030 Facilities planning. (a) General. i.e. (2) Grant assistance may be awarded before certification of the completed facilities plan if: (i) The Regional Administrator determines that applicable statutory and regulatory requirements (including part 6) have been met; that the facilities planning related to the project has been substantially completed; and that the project for which grant assistance is awarded will not be significantly affected by the completion of the facilities plan and will be a component part of the complete waste treatment system; and (ii) The applicant agrees to complete the facilities plan on a schedule the State accepts and such schedule is inserted as a special condition of the grant agreement. (b) Facilities plan contents. (1) A description of both the proposed treatment works, and the complete waste treatment system of which it is a part. (2) A description of the Best Practicable Wastewater Treatment Technology. (See § 35.2005(b)(7).) (3) A cost-effectiveness analysis of the feasible conventional, innovative and alternative wastewater treatment works, processes and techniques capable of meeting the applicable effluent, water quality and public health requirements over the design life of the facility while recognizing environmental and other non-monetary considerations. The planning period for the cost-effectiveness analysis shall be 20 years. The monetary costs to be considered must include the present worth or equivalent annual value of all capital costs and operation and maintenance costs. The discount rate established by EPA for the construction grants program shall be used in the cost-effectiveness analysis. The population forecasting in the analysis shall be consistent with the current Needs Survey. A cost-effectiveness analysis must include: (i) An evaluation of alternative flow reduction methods. (If the grant applicant demonstrates that the existing average daily base flow (ADBF) from the area is less than 70 gallons per capita per day (gpcd), or if the Regional Administrator determines the area has an effective existing flow reduction program, additional flow reduction evaluation is not required.) (ii) A description of the relationship between the capacity of alternatives and the needs to be served, including capacity for future growth expected after the treatment works become operational. This includes letters of intent from significant industrial users and all industries intending to increase their flows or relocate in the area documenting capacity needs and characteristics for existing or projected flows; (iii) An evaluation of improved effluent quality attainable by upgrading the operation and maintenance and efficiency of existing facilities as an alternative or supplement to construction of new facilities; (iv) An evaluation of the alternative methods for the reuse or ultimate disposal of treated wastewater and sludge material resulting from the treatment process; (v) A consideration of systems with revenue generating applications; (vi) An evaluation of opportunities to reduce use of, or recover energy; (vii) Cost information on total capital costs, and annual operation and maintenance costs, as well as estimated annual or monthly costs to residential and industrial users. (4) A demonstration of the non-existence or possible existence of excessive inflitration/inflow in the sewer system. See § 35.2120. (5) An analysis of the potential open space and recreation opportunities associated with the project. (6) An adequate evaluation of the environmental impacts of alternatives under part 6 of this chapter. (7) An evaluation of the water supply implications of the project. (8) For the selected alternative, a concise description at an appropriate level of detail, of at least the following: (i) Relevant design parameters; (ii) Estimated capital construction and operation and maintenance costs, (identifying the Federal, State and local shares), and a description of the manner in which local costs will be financed; (iii) Estimated cost of future expansion and long-term needs for reconstruction of facilities following their design life; (iv) Cost impacts on wastewater system users; and (v) Institutional and management arrangements necessary for successful implementation. (c) Submission and review of facilities plan. § 35.2032 Innovative and alternative technologies. (a) Funding for innovative and alternative technologies. (1) Only funds from the reserve in § 35.2020(c) shall be used to increase these grants. (2) If the project is an alternative to conventional treatment works for a small community, funds from the reserve in § 35.2020(b) may be used for the 75 percent portion, or any lower Federal share of the grant as determined under § 35.2152. (b) Cost-effectiveness preference. (1) Privately-owned individual systems (§ 35.2034) are not eligible for this preference. (2) If the present worth costs of the innovative or alternative unit processes are 50 percent or less of the present worth cost of the treatment works, the cost-effectiveness preference applies only to the innovative or alternative components. (c) Modification or replacement of innovative and alternative projects. (1) The innovative or alternative elements of the project have caused the project or significant elements of the complete waste treatment system of which the project is a part to fail to meet project performance standards; (2) The failure has significantly increased operation and maintenance expenditures for the project or the complete waste treatment system of which the project is a part; or requires significant additional capital expenditures for corrective action; (3) The failure has occurred prior to two years after initiation of operation of the project; and (4) The failure is not attributable to negligence on the part of any person. § 35.2034 Privately owned individual systems. (a) An eligible applicant may apply for a grant to build privately owned treatment works serving one or more principal residences or small commercial establishments. (b) In addition to those applicable limitations set forth in §§ 35.2100 through 35.2127 the grant applicant shall: (1) Demonstrate that the total cost and environmental impact of building the individual system will be less than the cost of a conventional system; (2) Certify that the principal residence or small commercial establishment was constructed before December 27, 1977, and inhabited or in use on or before that date; (3) Apply on behalf of a number of individual units to be served in the facilities planning area; (4) Certify that public ownership of such works is not feasible and list the reasons; and (5) Certify that such treatment works will be properly operated and maintained and will comply with all other requirements of section 204 of the Act. § 35.2035 Rotating biological contractor (RBC) replacement grants. The Regional Administrator may award a grant for 100 percent of the cost, including planning and design costs, of modification or replacement of RBCs which have failed to meet design performance specifications, provided: (a) The applicant for a modification/replacement grant demonstrates to the Regional Administrator's satisfaction, by a preponderance of the evidence, that the RBC failure is not due to the negligence of any person, including the treatment works owner, the applicant, its engineers, contractors, equipment manufacturers or suppliers; (b) The RBC failure has significantly increased the project's capital or operation and maintenance costs; (c) The modification/replacement project meets all requirements of EPA's construction grant and other applicable regulations, including 40 CFR part 35, and 2 CFR parts 200, 1500 and 1532. (d) The modification/replacement project is included within the fundable range of the State's annual project priority list; and (e) The State certifies the project for funding from its regular ( i.e. [55 FR 27095, June 29, 1990, as amended at 79 FR 76056, Dec. 19, 2014] § 35.2036 Design/build project grants. (a) Terms and conditions. (1) The proposed treatment works has an estimated total cost of $8 million or less; (2) The proposed treatment works is an aerated lagoon, trickling filter, waste stabilization pond, land application system (wastewater or sludge), slow rate (intermittent) sand filter or subsurface disposal system; (3) The proposed treatment works will be an operable unit, will meet all requirements of title II of the Act, and will be operated to meet the requirements of any applicable permit; (4) The grantee obtains bonds from the contractor in an amount the Regional Administrator determines adequate to protect the Federal interest in the treatment works (see 2 CFR 200.326); (5) The grantee will not allow any engineer, engineering firm or contractor which provided facilities planning or pre-bid services to bid or carry out any part of the design/build work; (6) Contracts will be firm, fixed price contracts; (7) The grantee agrees that the grant amount, as amended to reflect the lowest responsive/responsible bid (see paragraph (e) of this section), will not be increased; (8) The grantee will establish reasonable building start and completion dates; (9) The grantee agrees that EPA will not pay more than 95 percent of the grant amount until after completion of building and the Regional Administrator's final project approval, based on initiation of operation and acceptance of the facility by the grantee; (10) The grantee agrees that a recipient of a Step 7 grant is not eligible for any other grant for the project under title II of the Act; and (11) The grantee accepts other terms and conditions deemed necessary by the Regional Administrator. (b) Procurement. (2) The grantee will use the sealed bid (formal advertising) method of procurement to select the design/build contractor. (3) The grantee may use the same architect or engineer that prepared the facilities plan to provide any or all of the pre-bid, construction management, and contract and/or project administration services provided the initial procurement met EPA requirements (see 2 CFR 1500.11). (c) Pre-bid package. (d) Grant amount. (1) An allowance for facilities planning if the grantee did not receive a Step 1 grant (the amount of the allowance is established as a percentage of the estimated design/build cost in accordance with appendix B of this subpart); (2) An estimated cost of supplementing the facilities plan and other costs necessary to prepare the pre-bid package (see appendix A.I.1(a) of this subpart); and (3) The estimated cost of the design/build contract. (e) Amended grant amount. (i) The amount of the lowest responsive, responsible bid; (ii) A lump sum for construction management, contract and project administration services and contingencies; (iii) Any adjustments to the final allowance for facilities planning if included as required by paragraph (c)(1) of this section (the amount of the final allowance is established as a percentage of the actual building cost in accordance with appendix B of this subpart); (iv) The actual reasonable and necessary cost of supplementing the facilities plan to prepare the pre-bid package (see paragraph (c)(1) of this section); and (v) The submission of approvable items required by § 35.2203 of this part. (2) Changes to Step 7 projects cannot increase the amount of EPA assistance established at the time of the grant amendment. (f) Allotment limit for design/build grants. [55 FR 27096, June 29, 1990, as amended at 79 FR 76056, Dec. 19, 2014; 87 FR 30399, May 19, 2022] § 35.2040 Grant application. Applicants for Step 2 + 3 or Step 3 assistance shall submit applications to the State. In addition to the information required in 2 CFR parts 200 and 1500, applicants shall provide the following information: (a) Step 2 + 3: Combined design and building of a treatment works and building related services and supplies. (1) A facilities plan prepared in accordance with this subpart; (2) Certification from the State that there has been adequate public participation based on State and local statutes; (3) Notification of any advance received under § 35.2025(b); (4) Evidence of compliance with all application limitations on award (§§ 35.2100 through 35.2127); and (5) The project schedule. (b) Step 3: Building of a treatment works and related services and supplies (1) A facilities plan prepared in accordance with this subpart; (2) Certification from the State that there has been adequate public participation based on State and local statutes; (3) Notification of any advance received under § 35.2025(b); (4) Evidence of compliance with all applicable limitations on award (§§ 35.2100 through 35.2127); (5) Final design drawings and specifications; (6) The project schedule; and (7) In the case of an application for Step 3 assistance that is solely for the acquisition of eligible real property, a plat which shows the legal description of the property to be acquired, a preliminary layout of the distribution and drainage systems, and an explanation of the intended method of acquiring the real property (see 40 CFR part 4). (c) Training facility project. (1) A written commitment from the State agency to carry out at such facility a program of training; and (2) If a facility is to be built, an engineering report including facility design data and cost estimates for design and building. (d) Advances of allowance. (1) A list of communities that received an advance of allowance and the amount received by each under the previous State grant; and (2) The basis for the amount requested. (e) Field Testing of Innovative and Alternative Technology. (1) Identification; including size, of all principal components to be tested; (2) Location of testing facilities in relationship to full scale design; (3) Identification of critical design parameters and performance variables that are to be verified as the basis for I/A determinations: (4) Schedule for construction of field testing facilities and duration of proposed testing; (5) Capital and O&M cost estimate of field testing facilities with documentation of cost effectiveness of field testing approach; and (6) Design drawing, process flow diagram, equipment specification and related engineering data and information sufficient to describe the overall design and proposed performance of the field testing facility. (f) Marine CSO Fund Project. (1) All information required under paragraphs (b) (1), (2), (4), (6), and (7), of this section; (2) Final design drawings and specifications or a commitment to provide them by a date set by the Regional Administrator; and (3) The water quality benefits demonstration required under § 35.2024(b)(1). (g) Design/build project grant (Step 7). (1) All the information required in paragraphs (b) (1), (2) and (4) of this section; and (2) The estimated building start and completion dates and Federal payment schedule (the start and completion dates may be revised when the design/build bids are accepted and included in the amended grant). (Approved by the Office of Management and Budget under control number 2040-0027) [49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45895, Nov. 4, 1985; 55 FR 27096, June 29, 1990; 79 FR 76056, Dec. 19, 2014] § 35.2042 Review of grant applications. (a) All States shall review grant applications to ensure that they are complete. When the State determines the proposed project is entitled to priority it shall forward the State priority certification and, except where application review is delegated, the complete application to the regional Administrator for review. (b)(1) All States delegated authority to manage the construction grants program under section 205(g) of the Act and subpart F of this part shall furnish a written certification to the Regional Administrator, on a project-by-project basis, stating that the applicable Federal requirements within the scope of authority delegated to the State under the delegation agreement have been met. The certification must be supported by documentation specified in the delegation agreement which will be made available to the Regional Administrator upon request. The Regional Administrator shall accept the certification unless he determines the State has failed to establish adequate grounds for the certification or that an applicable requirement has not been met. (2)(i) When EPA receives a certification covering all delegable preaward requirements, the Regional Administrator shall approve or disapprove the grant within 45 calendar days of receipt of the certification. The Regional Administrator shall state in writing the reasons for any disapproval, and he shall have an additional 45 days to review any subsequent revised submissions. If the Regional Administrator fails to approve or disapprove the grant within 45 days of receipt of the application, the grant shall be deemed approved and the Regional Adminstrator shall issue the grant agreement. (ii) Grant increase requests are subject to the 45 day provision of this section if the State has been delegated authority over the subject matter of the request. (c) Applications for assistance for training facilities funded under section 109(b) and for State advances of allowance under section 201(l)(1) of the Act and § 35.2025 will be reviewed in accordance with 2 CFR parts 200 and 1500. (Approved by the Office of Management and Budget under control number 2040-0027) [49 FR 6234, Feb. 17, 1984, as amended at 79 FR 76056, Dec. 19, 2014] § 35.2050 Effect of approval or certification of documents. Review or approval of facilities plans, design drawings and specifications or other documents by or for EPA is for administrative purposes only and does not relieve the grantee of its responsibility to properly plan, design, build and effectively operate and maintain the treatment works described in the grant agreement as required under law, regulations, permits, and good management practices. EPA is not responsible for increased costs resulting from defects in the plans, design drawings and specifications or other subagreement documents. § 35.2100 Limitations on award. (a) Facilities plan approval. (b) Agreement on eligible costs. (2) Notwithstanding such agreement, the Regional Administrator may: (i) Modify eligibility determinations that are found to violate applicable Federal statutes and regulations; (ii) Conduct an audit of the project; (iii) Withhold or recover Federal funds for costs that are found to be unreasonable, unsupported by adequate documentation or otherwise unallowable under applicable Federal cost principles; (iv) Withhold or recover Federal funds for costs that are incurred on a project that fails to meet the design specifications or effluent limitations contained in the grant agreement and NPDES permit issued under section 402 of the Act. [55 FR 27096, June 29, 1990] § 35.2101 Advanced treatment. Projects proposing advanced treatment shall be awarded grant assistance only after the project has been reviewed under EPA's advanced treatment review policy. This review must be completed before submission of any application. EPA recommends that potential grant applicants obtain this review before initiation of design. § 35.2102 Water quality management planning. Before grant assistance can be awarded for any treatment works project, the Regional Administrator shall first determine that the project is: (a) Included in any water quality management plan being implemented for the area under section 208 of the Act or will be included in any water quality management plan that is being developed for the area and reasonable progress is being made toward the implementation of that plan; and (b) In conformity with any plan or report implemented or being developed by the State under sections 303(e) and 305(b) of the Act. [55 FR 27097, June 29, 1990] § 35.2103 Priority determination. The project shall be entitled to priority in accordance with § 35.2015, and the award of grant assistance for the project shall not jeopardize the funding of any project of higher priority under the approved priority system. § 35.2104 Funding and other considerations. (a) The applicant shall; (1) Agree to pay the non-Federal project costs; (2) Demonstrate the legal, institutional, managerial, and financial capability to ensure adequate building and operation and maintenance of the treatment works throughout the applicant's jurisdiction including the ability to comply with part 30 of this subchapter. This demonstration must include: An explanation of the roles and responsibilities of the local governments involved; how construction and operation and maintenance of the facilities will be financed; a current estimate of the cost of the facilities; and a calculation of the annual costs per household. It must also include a written certification signed by the applicant that the applicant has analyzed the costs and financial impacts of the proposed facilities, and that it has the capability to finance and manage their building and operation and maintenance in accordance with this regulation; (3) Certify that it has not violated any Federal, State or local law pertaining to fraud, bribery, graft, kickbacks, collusion, conflict of interest or other unlawful or corrupt practice relating to or in connection with facilities planning or design work on a wastewater treatment works project. (4) Indicate the level of participation for minority and women's business enterprises during facilities planning and design of the project. (b) Federal assistance made available by the Farmers Home Administration may be used to provide the non-Federal share of the project's cost. (Approved by the Office of Management and Budget under control number 2040-0027) [49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27097, June 29, 1990] § 35.2105 Debarment and suspension. The applicant shall indicate whether it used the services of any individual, organization, or unit of government for facilities planning or design work whose name appears on the master list of debarments, suspensions, and voluntary exclusions. See 2 CFR 200.214 and 2 CFR part 1532. If the applicant indicates it has used the services of a debarred individual or firm, EPA will closely examine the facilities plan, design drawings and specifications to determine whether to award a grant. EPA will also determine whether the applicant should be found non-responsible under 2 CFR parts 200 and 1500 or be the subject of possible debarment or suspension under 2 CFR part 1532. [87 FR 30399, May 19, 2022] § 35.2106 Plan of operation. The applicant shall submit a draft plan of operation that addresses development of: An operation and maintenance manual; an emergency operating program; personnel training; an adequate budget consistent with the user charge system approved under § 35.2140; operational reports; laboratory testing needs; and an operation and maintenance program for the complete waste treatment system. § 35.2107 Intermunicipal service agreements. If the project will serve two or more municipalities, the applicant shall submit the executed intermunicipal agreements, contracts or other legally binding instruments necessary for the financing, building and operation of the proposed treatment works. At a minimum they must include the basis upon which costs are allocated, the formula by which costs are allocated, and the manner in which the cost allocation system will be administered. The Regional Administrator may waive this requirement provided the applicant can demonstrate: (a) That such an agreement is already in place; or (b) Evidence of historic service relationships for water supply, wastewater or other services between the affected communities regardless of the existence of formal agreements, and (c) That the financial strength of the supplier agency is adequate to continue the project, even if one of the proposed customer agencies fails to participate. (Approved by the Office of Management and Budget under control number 2040-0027) § 35.2108 Phased or segmented treatment works. Grant funding may be awarded for a phase or segment of a treatment works, subject to the limitations of § 35.2123, although that phase or segment does not result in compliance with the enforceable requirements of the Act, provided: (a) The grant agreement requires the recipient to make the treatment works of which the phase or segment is a part operational and comply with the enforceable requirements of the Act according to a schedule specified in the grant agreement regardless of whether grant funding is available for the remaining phases and segments; and (b) Except in the case of a grant solely for the acquisition of eligible real property, one or more of the following conditions exist: (1) The Federal share of the cost of building the treatment works would require a disproportionate share of the State's annual allotment relative to other needs or would require a major portion of the State's annual allotment; (2) The period to complete the building of the treatment works will cover three years or more; (3) The treatment works must be phased or segmented to meet the requirements of a Federal or State court order; or (4) The treatment works is being phased or segmented to build only the less-than-secondary facility pending a final decision on the applicant's request for a secondary treatment requirement waiver under section 301(h) of the Act. [49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45895, Nov. 4, 1985] § 35.2109 Step 2 + 3. The Regional Administrator may award a Step 2 + 3 grant which will provide the Federal share of an allowance under appendix B and the estimated allowable cost of the project only if: (a) The population of the applicant municipality is 25,000 or less according to the most recent U.S. Census; (b) The total Step 3 building cost is estimated to be $8 million or less; and (c) The project is not for a treatment works phase or segment. § 35.2110 Access to individual systems. Applicants for privately owned individual systems shall provide assurance of access to the systems at all reasonable times for such purposes as inspection, monitoring, building, operation, rehabilitation and replacement. § 35.2111 Revised water quality standards. After December 29, 1984, no grant can be awarded for projects that discharge into stream segments which have not, at least once since December 29, 1981, had their water quality standards reviewed and revised or new standards adopted, as appropriate, under section 303(c) of the Act, unless: (a) The State has in good faith submitted such water quality standards and the Regional Administrator has failed to act on them within 120 days of receipt; (b) The grant assistance is for the construction of non-discharging land treatment or containment ponds; or (c) The grant assistance is a State program grant awarded under section 205(g) or 205(j) of the Act. [50 FR 45895, Nov. 4, 1985] § 35.2112 Marine discharge waiver applicants. If the applicant is also an applicant for a secondary treatment requirement waiver under section 301(h) of the Act, a plan must be submitted which contains a modified scope of work, a schedule for completion of the less-than-secondary facility and an estimate of costs providing for building the proposed less-than-secondary facilities, including provisions for possible future additions of treatment processes or techniques to meet secondary treatment requirements. § 35.2113 Environmental review. (a) The environmental review required by part 6 of this chapter must be completed before submission of any application. The potential applicant should work with the State and EPA as early as possible in the facilities planning process to determine if the project qualifies for a categorical exclusion from part 6 requirements, or whether a finding of no significant impact or an environmental impact statement is required. (b) In conjunction with the facilities planning process as described in § 35.2030(c), a potential applicant may request, in writing, that EPA make a formal determination under part 6 of this chapter. § 35.2114 Value engineering. (a) If the project has not received Step 2 grant assistance the applicant shall conduct value engineering if the total estimated cost of building the treatment works is more than $10 million. (b) The value engineering recommendations shall be implemented to the maximum extent feasible. (Approved by the Office of Management and Budget under control number 2040-0027) § 35.2116 Collection system. Except as provided in § 35.2032(c), if the project involves collection system work, such work: (a) Shall be for the replacement or major rehabilitation of an existing collection system which was not build with Federal funds awarded on or after October 18, 1972, and shall be necessary to the integrity and performance of the complete waste treatment system; or (b) Shall be for a new cost-effective collection system in a community in existence on October 18, 1972, which has sufficient existing or planned capacity to adequately treat such collected wastewater and where the bulk (generally two-thirds) of the expected flow (flow from existing plus future residential users) will be from the resident population on October 18, 1972. The expected flow will be subject to the limitations for interceptors contained in § 35.2123. If assistance is awarded, the grantee shall provide assurances that the existing population will connect to the collection system within a reasonable time after project completion. § 35.2118 Preaward costs. (a) EPA will not award grant assistance for Step 2 + 3 and Step 3 work performed before award of grant assistance for that project, except: (1) In emergencies or instances where delay could result in significant cost increases, the Regional Administrator may approve preliminary building work (such as procurement of major equipment requiring long lead times, field testing of innovative and alternative technologies, minor sewer rehabilitation, acquisition of eligible land or an option for the purchase of eligible land or advance building on minor portions of treatment works) after completion of the environmental review as required by § 35.2113. (2) If the Regional Administrator approves preliminary Step 3 work, such approval is not an actual or implied commitment of grant assistance and the applicant proceeds at its own risk. (b) Any procurement is subject to the requirements of 40 CFR part 33, and in the case of acquisition of eligible real property, 40 CFR part 4. (Approved by the Office of Management and Budget under control number 2040-0027) [49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27097, June 29, 1990] § 35.2120 Infiltration/Inflow. (a) General. (b) Inflow. (c) Infiltration. (2) If the flow rate at the existing treatment facility is more than 120 gallons per capita per day during periods of high groundwater, the applicant shall either: (i) Perform a study of the sewer system to determine the quantity of excessive infiltration and to propose a sewer rehabilitation program to eliminate the excessive infiltration; or (ii) If the flow rate is not significantly more than 120 gallons per capita per day, request the Regional Administrator to determine that he may proceed without further study, in which case the allowable project cost will be limited to the cost of a project with a capacity of 120 gallons per capita per day under appendix A.G.2.a. (Approved by the Office of Management and Budget under control number 2040-0027) [49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45895, Nov. 4, 1985] § 35.2122 Approval of user charge system and proposed sewer use ordinance. If the project is for Step 3 grant assistance, unless it is solely for acquisition of eligible land, the applicant must obtain the Regional Administrator's approval of its user charge system (§ 35.2140) and proposed (or existing) sewer use ordinance § 35.2130). If the applicant has a sewer use ordinance or user charge system in affect, the applicant shall demonstrate to the Regional Administrator's satisfaction that they meet the requirements of this part and are being enforced. (Approved by the Office of Management and Budget under control number 2040-0027) § 35.2123 Reserve capacity. EPA will limit grant assistance for reserve capacity as follows: (a) If EPA awarded a grant for a Step 3 interceptor segment before December 29, 1981, EPA may award grants for remaining interceptor segments included in the facilities plan with reserve capacity as planned, up to 40 years. (b) Except as provided in paragraph (a) of this section, if EPA awards a grant for a Step 3 or Step 3 segment of a primary, secondary, or advanced treatment facility or its interceptors included in the facilities plan before October 1, 1984, the grant for that Step 3 or Step 3 segment, and any remaining segments, may include 20 years reserve capacity. (c) Except as provided in paragraph (b) of this section, after September 30, 1984, no grant shall be made to provide reserve capacity for a project for secondary treatment or more stringent treatment or new interceptors and appurtenances. Grants for such projects shall be based on capacity necessary to serve existing needs (including existing needs of residential, commercial, industrial, and other users) as determined on the date of the approval of the Step 3 grant. Grant assistance awarded after September 30, 1990 shall be limited to the needs existing on September 30, 1990. (d) For any application with capacity in excess of that provided by this section: (1) All incremental costs shall be paid by the applicant. Incremental costs include all costs which would not have been incurred but for the additional excess capacity, i.e., any cost in addition to the most cost-effective alternative with eligible reserve capacity described under paragraphs (a) and (b) of this section. (2) It must be determined that the actual treatment works to be built meets the requirements of the National Environmental Policy Act and all applicable laws and regulations. (3) The Regional Administrator shall approve the plans, specifications and estimates for the actual treatment works. (4) The grantee shall assure the Regional Administrator satisfactorily that it has assessed the costs and financial impacts of the actual treatment works and has the capability to finance and manage their construction and operation. (5) The grantee must implement a user charge system which applies to the entire service area of the grantee. (6) The grantee shall execute appropriate grant conditions or releases protecting the Federal Government from any claim for any of the costs of construction due to the additional capacity. § 35.2125 Treatment of wastewater from industrial users. (a) Grant assistance shall not be provided for a project unless the project is included in a complete waste treatment system and the principal purpose of both the project and the system is for the treatment of domestic wastewater of the entire community, area, region or district concerned. (b) Allowable project costs do not include: (1) Costs of interceptor or collector sewers constructed exclusively, or almost exclusively, to serve industrial users; or (2) Costs for control or removal of pollutants in wastewater introduced into the treatment works by industrial users, unless the applicant is required to remove such pollutants introduced from nonindustrial users. § 35.2127 Federal facilities. Grant assistance shall not be provided for costs to transport or treat wastewater produced by a facility that is owned and operated by the Federal Government which contributes more than 250,000 gallons per day or 5 percent of the design flow of the complete waste treatment system, whichever is less. (Approved by the Office of Management and Budget under control number 2040-0027) § 35.2130 Sewer use ordinance. The sewer use ordinance (see also §§ 35.2122 and 35.2208) or other legally binding document shall prohibit any new connections from inflow sources into the treatment works and require that new sewers and connections to the treatment works are properly designed and constructed. The ordinance or other legally binding document shall also require that all wastewater introduced into the treatment works not contain toxics or other pollutants in amounts or concentrations that endanger public safety and physical integrity of the treatment works; cause violation of effluent or water quality limitations; or preclude the selection of the most cost-effective alternative for wastewater treatment and sludge disposal. (Approved by the Office of Management and Budget under control number 2040-0027) § 35.2140 User charge system. The user charge system (see §§ 35.2122 and 35.2208) must be designed to produce adequate revenues required for operation and maintenance (including replacement). It shall provide that each user which discharges pollutants that cause an increase in the cost of managing the effluent or sludge from the treatment works shall pay for such increased cost. The user charge system shall be based on either actual use under paragraph (a) of this section, ad valorem taxes under paragraph (b) of this section, or a combination of the two. (a) User charge system based on actual use. (b) User charge system based on ad valorem taxes. (1) On December 27, 1977, the grantee had in existence a system of dedicated ad valorem taxes which collected revenues to pay the cost of operation and maintenance of wastewater treatment works within the grantee's service area and the grantee has continued to use that system; (2) The ad valorem user charge system distributes the operation and maintenance (including replacement) costs for all treatment works in the grantee's jurisdiction to the residential and small non-residential user class (including at the grantee's option nonresidential, commercial and industrial users that introduce no more than the equivalent of 25,000 gallons per day of domestic sanitary wastes to the treatment works), in proportion to the use of the treatment works by this class; and (3) Each member of the industrial user and commercial user class which discharges more than 25,000 gallons per day of sanitary waste pays its share of the costs of operation and maintenance (including replacement) of the treatment works based upon charges for actual use. (c) Notification. (d) Financial management system. (e) Charges for operation and maintenance for extraneous flows. i.e. (1) In the same manner that it distributes the costs for their actual use, or (2) Under a system which uses one or any combination of the following factors on a reasonable basis: (i) Flow volume of the users; (ii) Land area of the users; (iii) Number of hookups or discharges of the users; (iv) Property valuation of the users, if the grantee has an approved user charge system based on ad valorem taxes. (f) After completion of building a project, revenue from the project (e.g., sale of a treatment-related by-product; lease of the land; or sale of crops grown on the land purchased under the grant agreement) shall be used to offset the costs of operation and maintenance. The grantee shall proportionately reduce all user charges. (g) Adoption of system. (h) Inconsistent agreements. (i) Low income residential user rates. (2) Any lower user charge rate for low income residential users must be defined as a uniform percentage of the user charge rate charged other residential users. (3) The costs of any user charge reductions afforded a low income residential class must be proportionately absorbed by all other user classes. The total revenue for operation and maintenance (including equipment replacement) of the facilities must not be reduced as a result of establishing a low income residential user class. (Approved by the Office of Management and Budget under control number 2040-0027) [49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27097, June 29, 1990] § 35.2152 Federal share. (a) General. (1) 75 percent for grant assistance awarded before October 1, 1984; (2) 55 percent for grant assistance awarded after September 30, 1984, except as provided in paragraph (a)(3) of this section; and (3) Subject to paragraphs (c) and (d) of this section, 75 percent for grant assistance awarded after September 30, 1984 and before October 1, 1990, for sequential phases or segments of a primary, secondary, or advanced treatment facility or its interceptors, or infiltration/inflow correction provided: (i) The treatment works being phased or segmented is described in a facilities plan approved by the Regional Administrator before October 1, 1984; (ii) The Step 3 grant for the initial phase or segment of the treatment works described in (a)(3)(i) of this section is awarded prior to October 1, 1984; and (iii) The phase or segment that receives 75 percent funding is necessary to (A) make a phase or segment previously funded by EPA operational and comply with the enforceable requirements of the Act, or (B) complete the treatment works referenced in (a)(3)(i) of this section provided that all phases or segments previously funded by EPA are operational and comply with the enforceable requirements of the Act. (b) Innovative and alternative technology. (c) A project for which an application for grant assistance has been made before October 1, 1984, but which was under judicial injunction at that time prohibiting its construction, shall be eligible for a grant at 75 percent of the cost of its construction. (d) Uniform lower Federal share. (2) After EPA awards grant assistance for a project, the Federal share shall be the same for any grant increase that is within the scope of the project. (3) The uniform lower Federal share established by the Governor does not apply to projects funded under § 35.2024(b). (e) Training facilities. (1) Where a grant is made to serve two or more States, the Administrator is authorized to make an additional grant for a supplemental facility in each State. The Federal funds awarded to any State under section 109(b) for all training facilities shall not exceed $500,000. (2) Any grantee who received a grant under section 109(b) before December 27, 1977, may have the grant increased up to $500,000 by funds made available under the Act, not to exceed 100 percent of the allowable costs. (Approved by the Office of Management and Budget under control number 2040-0027) [49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45896, Nov. 4, 1985; 55 FR 27097, June 29, 1990] § 35.2200 Grant conditions. In addition to the EPA General Grant Conditions ( http://www.epa.gov/ogd/tc.htm [79 FR 76056, Dec. 19, 2014] § 35.2202 Step 2 + 3 projects. (a) Prior to initiating action to acquire eligible real property, a Step 2 + 3 grantee shall submit for Regional Administrator review and written approval the information required under § 35.2040(b)(7). (b) Before initiating procurement action for the building of the project, a Step 2 + 3 grantee shall submit for the Regional Administrator's review and written approval the information required under §§ 35.2040(b) (5) and (6), 35.2106, 35.2107, 35.2130 and 35.2140. § 35.2203 Step 7 projects. (a) Prior to initiating action to acquire real property, a Step 7 grantee shall submit for Regional Administrator review and written approval the information required under § 35.2040(b)(7). (b) Before approving a Step 7 grant amendment under § 25.2036, the Regional Administrator shall determine that the applicant and its project have met the requirements of §§ 35.2040 (b)(6) and (g), 35.2106, 35.2107, and 35.2122. [55 FR 27097, June 29, 1990] § 35.2204 Project changes. (a) Minor changes in the project work that are consistent with the objectives of the project and within the scope of the grant agreement do not require the execution of a formal grant amendment before the grantee's implementation of the change. However, the amount of the funding provided by the grant agreement may only be increased by a formal grant amendment. (b) The grantee must receive from the Regional Administrator a formal grant amendment before implementing changes which: (1) Alter the project performance standards; (2) Alter the type of wastewater treatment provided by the project; (3) Significantly delay or accelerate the project schedule; (4) Substantially alter the facilities plan, design drawings and specifications, or the location, size, capacity, or quality of any major part of the project; or (5) Otherwise require a formal grant amendment under part 30 of this subchapter. (c) Notwithstanding paragraph (a) of this section, changes to Step 7 projects cannot increase the amount of EPA assistance established at the time of the grant amendment. [49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27097, June 29, 1990] § 35.2205 Maximum allowable project cost. (a) Grants awarded on or after the effective date of this regulation. (1) The allowable cost of the following: (i) The initial award amount of all project subagreements between the grantee and its contractors; (ii) The initial amounts approved for force account work to be performed on the project; (iii) The purchase price of eligible real property; and (iv) The initial amount approved for project costs not included under paragraphs (a)(1)(i) through (a)(1)(iii) of this section, excluding any amounts approved for an allowance under § 35.2025 and for contingencies; and (2) Five percent of the sum of the amounts included under paragraphs (a)(1)(i) through (a)(1)(iv) of this section. (b) Grants awarded before the effective date of the regulation. (c) Differing site conditions. [50 FR 46649, Nov. 12, 1985] § 35.2206 Operation and maintenance. (a) The grantee must assure economical and effective operation and maintenance (including replacement) of the treatment works. (b) Except as provided in paragraphs (c) (1) and (2) of this section, the Regional Administrator shall not pay more than 50 percent of the Federal share of any project unless the grantee has furnished and the Regional Administrator has approved the final plan of operation required by § 35.2106, and shall not pay more than 90 percent of the Federal share of any project unless the grantee has furnished and the Regional Administrator has approved an operation and maintenance manual. (c)(1) In projects where segmenting of a proposed treatment works has occurred, the Regional Administrator shall not pay more than 90 percent of the Federal share of the total allowable costs of the proposed treatment works until the grantee has furnished and the Regional Administrator has approved an operation and maintenance manual. (2) In projects where a component is placed in operation before completion of the entire project, the Regional Administrator shall not make any additional payment on that project until a final operation and maintenance manual for the operating component is furnished and approved. (Approved by the Office of Management and Budget under control number 2040-0027) § 35.2208 Adoption of sewer use ordinance and user charge system. The grantee shall adopt its sewer use ordinance and implement its user charge system developed under §§ 35.2130 and 35.2140 before the treatment works is placed in operation. Further, the grantee shall implement the user charge system and sewer use ordinance for the useful life of the treatment works. § 35.2210 Land acquisition. The grantee shall not acquire real property determined allowable for grant assistance until the Regional Administrator has determined that applicable provisions of 40 CFR part 4 have been met. § 35.2211 Field testing for Innovative and Alternative Technology Report. The grantee shall submit a report containing the procedure, cost, results and conclusions of any field testing. The report shall be submitted to the Regional Administrator in accordance with a schedule to be specified in the grant agreement. (Approved by the Office of Management and Budget under control number 2040-0027) § 35.2212 Project initiation. (a) The grantee shall expeditiously initiate and complete the project, in accordance with the project schedule contained in the grant application and agreement. Failure to promptly initiate and complete a project may result in the imposition of sanctions under 2 CFR 200.338. (b) The grantee shall initiate procurement action for building the project promptly after award of a Step 3 grant or, after receiving written approval of the information required under § 35.2202 under a Step 2 + 3 grant or, for a Step 7 project, after completing the facilities plan and the preparation of a pre-bid package that is sufficiently detailed to insure that the bids received form the design/build work will be complete, accurate, comparable and will result in a cost-effective operable facility. Public notice of proposed procurement action should be made promptly after Step 3 award or after final approvals for a Step 2 + 3 grant under § 35.2202, or after completing the pre-bid package for the Step 7 award. The grantee shall award the subagreement(s) and issue notice(s) to proceed, where required, for building all significant elements of the project within twelve months of the Step 3 award or final Step 2 + 3 approvals. (c) Failure to promptly award all subagreement(s) for building the project will result in a limitation on allowable costs. (See appendixes A, A.2.e.). (d) The grantee shall notify the Regional Administrator immediately upon award of the subagreement(s) for building all significant elem (Approved by the Office of Management and Budget under control number 2040-0027) [49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27097, June 29, 1990; 79 FR 76056, Dec. 19, 2014] § 35.2214 Grantee responsibilities. (a) The grantee shall complete the project in accordance with the grant agreement including: The facilities plan that establishes the need for the project; the design drawings and specifications; the plan of operation under § 35.2106 that identifies the basis to determine annual operating costs; the financial management system under § 35.2140(d) that adequately accounts for revenues and expenditures; the user charge system under § 35.2140 that will generate sufficient revenue to operate and maintain the treatment works; the project schedule; and all other applicable regulations. The grantee shall maintain and operate the project to meet project performance standards including the enforceable requirements of the Act for the design life. (b) The grantee shall provide the architectural and engineering services and other services necessary to fulfill the obligation in paragraph (a) of this section. § 35.2216 Notice of building completion and final inspection. The grantee shall notify the Regional Administrator when the building of the project is complete. Final inspection shall be made by the Regional Administrator after receipt of the notice of building completion. (Approved by the Office of Management and Budget under control number 2040-0027) § 35.2218 Project performance. (a) The grantee shall notify the Regional Administrator in writing of the actual date of initiation of operation. (b) Subject to the provisions of 40 CFR part 33, the grantee shall select the engineer or engineering firm principally responsible for either supervising construction or providing architectural and engineering services during construction as the prime engineer to provide the following services during the first year following the initiation of operation: (1) Direct the operation of the project and revise the operation and maintenance manual as necessary to accommodate actual operating experience; (2) Train or provide for training of operating personnel and prepare curricula and training material for operating personnel; and (3) Advise the grantee whether the project is meeting the project performance standards. (c) On the date one year after the initiation of operation of the project, the grantee shall certify to the Regional Administrator whether the project meets the project performance standards. If the Regional Administrator or the grantee concludes that the project does not meet the project performance standards, the grantee shall submit the following: (1) A corrective action report which includes an analysis of the cause of the project's failure to meet the performance standards (including the quantity of infiltration/inflow proposed to be eliminated), and an estimate of the nature, scope and cost of the corrective action necessary to bring the project into compliance; (2) The schedule for undertaking in a timely manner the corrective action necessary to bring the project into compliance; and (3) The scheduled date for certifying to the Regional Administrator that the project is meeting the project performance standards. (d) Except as provided in § 35.2032(c) the grantee shall take corrective action necessary to bring a project into compliance with the project performance standards at its own expense. This limitation on Federal funding for corrective actions does not apply to training funds under section 104(g)(1) of the Act. (e) Nothing in this section: (1) Prohibits a grantee from requiring more assurances, guarantees, or indemnity or other contractual requirements from any party performing project work; or (2) Affects EPA's right to take remedial action, including enforcement, against a grantee that fails to carry out its obligations under § 35.2214. (Approved by the Office of Management and Budget under control number 2040-0027) [49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27098, June 29, 1990] § 35.2250 Determination of allowable costs. The Regional Administrator will determine the allowable costs of the project based on applicable provisions of laws and regulations, the scope of the approved project, 2 CFR part 200, subpart E—Cost Principles and appendix A of this subpart. [79 FR 76056, Dec. 19, 2014] § 35.2260 Advance purchase of eligible land. In the case of grant assistance awarded solely for the acquisition of eligible land, the following provisions are deferred until the award of the ensuing Step 3 assistance for the building of facilities: §§ 35.2105, 35.2130, 35.2140, 35.2206 and 35.2208. § 35.2262 Funding of field testing. In the case of grant assistance for field testing of innovative or alternative wastewater process and techniques, the following provisions are deferred until the award of assistance for building the approved facilities: §§ 35.2105, 35.2106, 35.2122, 35.2130, 35.2140, 35.2206, and 35.2208. § 35.2300 Grant payments. Except as provided in § 35.2206, the Regional Administrator shall pay the Federal share of the allowance under § 35.2025 and the allowable project costs incurred to date and currently due and payable by the grantee, as certified in the grantee's most recent payment request. (a) Adjustment. (b) Refunds, rebates and credits. (c) Release. (d) Payment of costs incurred under the Uniform Relocation Assistance and Real Property Acquisition Policies Act. (e) Payment under grants to States for advances of allowance Advance payment to State. (2) Assignment. (f) Design/build projects. (Approved by the Office of Management and Budget under control number 2040-0027) [49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27098, June 29, 1990; 79 FR 76057, Dec. 19, 2014; 87 FR 30399, May 19, 2022] § 35.2350 Subagreement enforcement. (a) Regional Administrator authority. (b) Privity of subagreement. (c) Grantee responsibilities. Appendix A to Subpart I of Part 35—Determination of Allowable Costs (a) Purpose. (b) Applicability. A. Costs Related to Subagreements 1. Allowable costs related to sub- agreements include: a. The costs of subagreements for building the project. b. The costs of complying with the procurement standards in 2 CFR 200.317 through 200.327 and 2 CFR 1500.10 and 1500.11. c. The cost of legal and engineering services incurred by grantees in deciding procurement protests and defending their decisions in protest appeals in 2 CFR 200.318. d. The costs for establishing or using minority and women's business liaison services. e. The costs of services incurred during the building of a project to ensure that it is built in conformance with the design drawings and specifications. f. The costs (including legal, technical, and administrative costs) of assessing the merits of or negotiating the settlement of a claim by or against a grantee under a subagreement provided: (1) The claim arises from work within the scope of the grant; (2) A formal grant amendment is executed specifically covering the costs before they are incurred; (3) The costs are not incurred to prepare documentation that should be prepared by the contractor to support a claim against the grantee; and (4) The Regional Administrator determines that there is a significant Federal interest in the issues involved in the claim. g. Change orders and the costs of meritorious contractor claims for increased costs under subagreements as follows: (1) Change orders and the costs of meritorious contractor claims provided the costs are: (i) Within the scope of the project; (ii) Not caused by the grantee's mismanagement; and (iii) Not caused by the grantee's vicarious liability for the improper actions of others. (2) Provided the requirements of paragraph g(1) are met, the following are examples of allowable change orders and contractor claim costs: (i) Building costs resulting from defects in the plans, design drawings and specifications, or other subagreement documents only to the extent that the costs would have been incurred if the subagreement documents on which the bids were based had been free of the defects, and excluding the costs of any rework, delay, acceleration, or disruption caused by such defects; (ii) Costs of equitable adjustments under Clause 4, Differing Site Conditions, of the model subagreement clauses required under § 33.1030 of this subchapter. (3) Settlements, arbitration awards, and court judgments which resolve contractor claims shall be reviewed by the grant award official and shall be allowable only to the extent that they meet the requirements of paragraph g(1), are reasonable, and do not attempt to pass on to EPA the cost of events that were the responsibility of the grantee, the contractor, or others. h. The costs of the services of the prime engineer required by § 35.2218 during the first year following initiation of operation of the project. i. The cost of development of a plan of operation including an operation and maintenance manual required by § 35.2106. j. Start-up services for onsite training of operating personnel in operation and control of specific treatment processes, laboratory procedures, and maintenance and records management. k. The specific and unique costs of field testing an innovative or alternative process or technique, which may include equipment leasing costs, personnel costs, and utility costs necessary for constructing, conducting, and reporting the results of the field test. 2. Unallowable costs related to sub- agreements include: a. The costs of architectural or engineering services incurred in preparing a facilities plan and the design drawings and specifications for a project. This provision does not apply to planning and design costs incurred in the modification or replacement of an innovative or alternative project funded under § 35.2032(c). b. Except as provided in 1.g. above, architectural or engineering services or other services necessary to correct defects in a facilities plan, design drawings and specifications, or other subagreement documents. c. The costs (including legal, technical and administrative) of defending against a contractor claim for increased costs under a subagreement or of prosecuting a claim to enforce any subagreement unless: (1) The claim arises from work within the scope of the grant; (2) A formal grant amendment is executed specifically covering the costs before they are incurred; (3) The claim cannot be settled without arbitration or litigation; (4) The claim does not result from the grantee's mismanagement; (5) The Regional Administrator determines that there is a significant Federal interest in the issues involved in the claim; and (6) In the case of defending against a contractor claim, the claim does not result from the grantee's responsibility for the improper action of others. d. Bonus payments, not legally required, for completion of building before a contractual completion date. e. All incremental costs due to the award of any subagreements for building significant elements of the project more than 12 months after the Step 3 grant award or final Step 2 + 3 approvals unless specified in the project schedule approved by the Regional Administrator at the time of grant award. B. Mitigation 1. Allowable costs include: a. Costs necessary to mitigate only direct, adverse, physical impacts resulting from building of the treatment works. b. The costs of site screening necessary to comply with NEPA related studies and facilities plans, or necessary to screen adjacent properties. c. The cost of groundwater monitoring facilities necessary to determine the possibility of groundwater deterioration, depletion or modification resulting from building the project. 2. Unallowable costs include: a. The costs of solutions to aesthetic problems, including design details which require expensive building techniques and architectural features and hardware, that are unreasonable or substantially higher in cost than approvable alternatives and that neither enhance the function or appearance of the treatment works nor reflect regional architectural tradition. b. The cost of land acquired for the mitigation of adverse environmental effects identified pursuant to an environmental review under NEPA. C. Privately or Publicly Owned Small and Onsite Systems 1. Allowable costs for small and onsite systems serving residences and small commercial establishments inhabited on or before December 27, 1977, include a. through e. below. Alternatively, the two-thirds rule at 40 CFR 35.2116(b) may be used to determine allowable residential flows to be served by publicly owned small and alternative wastewater systems, including a. through e. below: a. The cost of major rehabilitation, upgrading, enlarging and installing small and onsite systems, but in the case of privately owned systems, only for principal residences. b. Conveyance pipes from property line to offsite treatment unit which serves a cluster of buildings. c. Treatment and treatment residue disposal portions of toilets with composting tanks, oil flush mechanisms, or similar in-house devices. d. Treatment or pumping units from the incoming flange when located on private property and conveyance pipes, if any, to the collector sewer. e. The cost of restoring individual system building sites to their original condition. 2. Unallowable costs for small and onsite systems include: a. Modification to physical structure of homes or commercial establishments. b. Conveyance pipes from the house to the treatment unit located on user's property or from the house to the property line if the treatment unit is not located on that user's property. c. Wastewater generating fixtures such as commodes, sinks, tubs, and drains. D. Real Property 1. Allowable costs for land and rights-of-way include: a. The cost (including associated legal, administrative and engineering costs) of land acquired in fee simple or by lease or easement under grants awarded after October 17, 1972, that will be an integral part of the treatment process or that will be used for the ultimate disposal of residues resulting from such treatment provided the Regional Administrator approves it in the grant agreement. These costs include: (1) The cost of a reasonable amount of land, considering irregularities in application patterns, and the need for buffer areas, berms, and dikes; (2) The cost of land acquired for a soil absorption system for a group of two or more homes; (3) The cost of land acquired for composting or temporary storage of compost residues which result from wastewater treatment; (4) The cost of land acquired for storage of treated wastewater in land treatment systems before land application. The total land area for construction of a pond for both treatment and storage of wastewater is allowable if the volume necessary for storage is greater then the volume necessary for treatment. Otherwise, the allowable cost will be determined by the ratio of the storage volume to the total volume of the pond. b. The cost of complying with the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4621 et seq., et seq. c. The cost of contracting with another public agency or qualified private contractor for part or all of the required acquisition and/or relocation services. d. The cost associated with the preparation of the treatment works site before, during and, to the extent agreed on in the grant agreement, after building. These costs include: (1) The cost of demolition of existing structures on the treatment works site (including rights-of-way) if building cannot be undertaken without such demolition; (2) The cost (considering such factors as betterment, cost of contracting and useful life) of removal, relocation or replacement of utilities, provided the grantee is legally obligated to pay under state or local law; and (3) The cost of restoring streets and rights-of-way to their original condition. The need for such restoration must result directly from the construction and is generally limited to repaving the width of trench. e. The cost of acquiring all or part of an existing publicly or privately owned wastewater treatment works provided all the following criteria are met: (1) The acquisition, in and of itself, considered apart from any upgrade, expansion or rehabilitation, provides new pollution control benefits; (2) The acquired treatment works was not built with previous Federal or State financial assistance; (3) The primary purpose of the acquisition is not (4) The acquisition does not circumvent the requirements of the Act, these regulations, or other Federal, State or local requirements. 2. Unallowable costs for land and rights-of-way include: a. The costs of acquisition (including associated legal, administrative and engineering etc.) of sewer rights-of-way, waste treatment plant sites (including small system sites), sanitary landfill sites and sludge disposal areas except as provided in paragraphs 1. a. and b. of this section. b. Any amount paid by the grantee for eligible land in excess of just compensation, based on the appraised value, the grantee's record of negotiation or any condemnation proceeding, as determined by the Regional Administrator. c. Removal, relocation or replacement of utilities located on land by privilege, such as franchise. E. Equipment, Materials and Supplies 1. Allowable costs of equipment, materials and supplies include: a. The cost of a reasonable inventory of laboratory chemicals and supplies necessary to initiate plant operations and laboratory items necessary to conduct tests required for plant operation. b. The costs for purchase and/or transportation of biological seeding materials required for expeditiously initiating the treatment process operation. c. Cost of shop equipment installed at the treatment works necessary to the operation of the works. d. The costs of necessary safety equipment, provided the equipment meets applicable Federal, State, local or industry safety requirements. e. A portion of the costs of collection system maintenance equipment. The portion of allowable costs shall be the total equipment cost less the cost attributable to the equipment's anticipated use on existing collection sewers not funded on the grant. This calculation shall be based on: (1) The portion of the total collection system paid for by the grant, (2) a demonstrable frequency of need, and (3) the need for the equipment to preclude the discharge or bypassing of untreated wastewater. f. The cost of mobile equipment necessary for the operation of the overall wastewater treatment facility, transmission of wastewater or sludge, or for the maintenance of equipment. These items include: (1) Portable stand-by generators; (2) Large portable emergency pumps to provide “pump-around” capability in the event of pump station failure or pipeline breaks; and (3) Sludge or septage tankers, trailers, and other vehicles having as their sole purpose the transportation of liquid or dewatered wastes from the collector point (including individual or on-site systems) to the treatment facility or disposal site. g. Replacement parts identified and approved in advance by the Regional Administrator as necessary to assure uninterrupted operation of the facility, provided they are critical parts or major systems components which are: (1) Not immediately available and/or whose procurement involves an extended “lead-time;” (2) Identified as critical by the equipment supplier(s); or (3) Critical but not included in the inventory provided by the equipment supplier(s). 2. Unallowable costs of equipment, materials and supplies include: a. The costs of equipment or material procured in violation of the procurement standards in 2 CFR 200.317 through 2 CFR 200.327 and 2 CFR 1500.10 and 1500.11. b. The cost of furnishings including draperies, furniture and office equipment. c. The cost of ordinary site and building maintenance equipment such as lawnmowers and snowblowers. d. The cost of vehicles for the transportation of the grantees' employees. e. Items of routine “programmed” maintenance such as ordinary piping, air filters, couplings, hose, bolts, etc. F. Industrial and Federal Users 1. Except as provided in paragraph F.2.a., allowable costs for treatment works serving industrial and Federal facilities include development of a municipal pretreatment program approvable under part 403 of this chapter, and purchase of monitoring equipment and construction of facilities to be used by the municipal treatment works in the pretreatment program. 2. Unallowable costs for treatment works serving industrial and Federal facilities include: a. The cost of developing an approvable municipal pretreatment program when performed solely for the purpose of seeking an allowance for removal of pollutants under part 403 of this chapter. b. The cost of monitoring equipment used by industry for sampling and analysis of industrial discharges to municipal treatment works. c. All incremental costs for sludge management incurred as a result of the grantee providing removal credits to industrial users under 40 CFR 403.7 beyond those sludge management costs that would otherwise be incurred in the absence of such removal credits. G. Infiltration/Inflow 1. Allowable costs include: a. The cost of treatment works capacity adequate to transport and treat nonexcessive infiltration/inflow under § 35.2120. b. The costs of sewer system rehabilitation necessary to eliminate excessive infiltration/inflow as determined in a sewer system study under § 35.2120. 2. Unallowable costs include: a. When the Regional Administrator determines that the flow rate is not significantly more than 120 gallons per capita per day under § 35.2120(c)(2)(ii), the incremental cost of treatment works capacity which is more than 120 gallons per capita per day. H. Miscellaneous Costs 1. Allowable costs include: a. The costs of salaries, benefits and expendable materials the grantee incurs for the project. b. Unless otherwise specified in this regulation, the costs of meeting specific Federal statutory procedures. c. Costs for necessary travel directly related to accomplishment of project objectives. Travel not directly related to a specific project, such as travel to professional meetings, symposia, technology transfer seminars, lectures, etc., may be recovered only under an indirect cost agreement. d. The costs of additions to a treatment works that was assisted under the Federal Water Pollution Control Act of 1956 (Pub. L. 84-660), or its amendments, and that fails to meet its project performance standards provided: (1) The project is identified on the State priority list as a project for additions to a treatment works that has received previous Federal funds; (2) The grant application for the additions includes an analysis of why the treatment works cannot meet its project performance standards; and (3) The additions could have been included in the original grant award and: (a) Are the result of one of the following: (i) A change in the project performance standards required by EPA or the State; (ii) A written understanding between the Regional Administrator and grantee prior to or included in the original grant award; (iii) A written direction by the Regional Administrator to delay building part of the treatment works; or (iv) A major change in the treatment works' design criteria that the grantee cannot control; or (b) Meet all the following conditions: (i) If the original grant award was made after December 28, 1981, the treatment works has not completed its first full year of operation; (ii) The additions are not caused by the grantee's mismanagement or the improper actions of others; (iii) The costs of rework, delay, acceleration or disruption that are a result of building the additions are not included in the grant; and (iv) The grant does not include an allowance for facilities planning or design of the additions. (4) This provision applies to failures that occur either before or after the initiation of operation. This provision does not cover a treatment works that fails at the end of its design life. e. Costs of royalties for the use of or rights in a patented process or product with the prior approval of the Regional Administrator. f. Costs allocable to the water pollution control purpose of multiple purpose projects as determined by applying the Alternative Justifiable Expenditure (AJE) method described in the CG g. Costs of grantee employees attending training workshops/seminars that are necessary to provide instruction in administrative, fiscal or contracting procedures required to complete the construction of the treatment works, if approved in advance by the Regional Administrator. 2. Unallowable costs include: a. Ordinary operating expenses of the grantee including salaries and expenses of elected and appointed officials and preparation of routine financial reports and studies. b. Preparation of applications and permits required by Federal, State or local regulations or procedures. c. Administrative, engineering and legal activities associated with the establishment of special departments, agencies, commissions, regions, districts or other units of government. d. Approval, preparation, issuance and sale of bonds or other forms of indebtedness required to finance the project and the interest on them. e. The costs of replacing, through reconstruction or substitution, a treatment works that was assisted under the Federal Water Pollution Control Act of 1956 (Pub. L. 84-660), or its amendments, and that fails to meet its project performance standards. This provision applies to failures that occur either before or after the initiation of operation. This provision does not apply to an innovative and alternative treatment works eligible for funding under § 35.2032(c) or a treatment works that fails at the end of its design life or to a failed rotating biological contactor eligible for funding under § 35.2035. f. Personal injury compensation or damages arising out of the project. g. Fines and penalties due to violations of, or failure to comply with, Federal, State or local laws, regulations or procedures. h. Costs outside the scope of the approved project. i. Costs for which grant payment has been or will be received from another Federal agency. j. Costs of treatment works for control of pollutant discharges from a separate storm sewer system. k. The cost of treatment works that would provide capacity for new habitation or other establishments to be located on environmentally sensitive land such as wetlands or floodplains. l. The costs of preparing a corrective action report required by § 35.2218(c). I. Design/Build Project Grants 1. Allowable costs include: a. The costs of supplementing the facilities plan to prepare the pre-bid package including the cost of preliminary boring and site plans, concept and layout drawings, schematic, general material and major equipment lists and specifications, instructions to builders, general and special conditions, project performance standards and permit limits, applicable State or other design standards, any requirements to go into bid analyses, and other contract documents, schedules, forms and certificates. b. The costs for building the project, including: (1) Project costs based on the lowest responsive, responsible competitive design/build project bid. (2) Construction management services including detailed plans and specifications review and approval, change order review and approval, resident inspection, shop drawing approval and preparation of an O & M manual and of user charge and sewer use ordinance systems. (3) Any adjustments to reflect the actual reasonable and necessary costs for preparing the pre-bid package. (4) Post-construction activities required by project performance certification requirements. (5) Contract and project administration activities including the review of contractor vouchers and payment requests, preparation of monitoring reports, grant administration and accounting services, routine legal costs, cost of eligible real property. (6) Contingencies. 2. Unallowable costs include: a. All costs in excess of the maximum agreed Federal share. b. Costs of facilities planning where the grantee has received a Step 1 grant. [49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45896, Nov. 4, 1985; 55 FR 27098, June 29, 1990; 79 FR 76057, Dec. 19, 2014; 87 FR 30399, May 19, 2022] Appendix B to Subpart I of Part 35—Allowance for Facilities Planning and Design 1. This appendix provides the method EPA will use to determine both the estimated and the final allowance under § 35.2025 for facilities planning and design. The Step 2 + 3, Step 3 and Step 7 grant agreements will include an estimate of the allowance. 2. The Federal share of the allowance is determined by applying the applicable grant percentage in § 35.2152 to the allowance. 3. The allowance is not intended to reimburse the grantee for costs actually incurred for facilities planning or design. Rather, the allowance is intended to assist in defraying those costs. Under this procedure, questions of equity (i.e., reimbursement on a dollar-for-dollar basis) will not be appropriate. 4. The estimated and final allowance will be determined in accordance with this appendix and tables 1, 2 and 3. Table 2 is to be used in the event the grantee received a grant for facilities planning. Table 3 is to be used to determine the facilities planning allowance for a Step 7 grant if the grantee did not receive a Step 1 grant. The amount of the allowance is computed by applying the resulting allowance percentage to the initial allowable building cost. 5. The initial allowable building cost is the initial allowable cost of erecting, altering, remodeling, improving, or extending a treatment works, whether accomplished through subagreement or force account. Specifically, the initial allowable building cost is the allowable cost of the following: a. The initial award amount of all prime subagreements for building the project. b. The initial amounts approved for force account work performed in lieu of awarding a subagreement for building the project. c. The purchase price of eligible real property. 6. The estimated allowance is to be based on the estimate of the initial allowable building cost. 7. The final allowance will be determined one time only for each project, based on the initial allowable building cost, and will not be adjusted for subsequent cost increases or decreases. 8. For a Step 3 or Step 7 project, the grantee may request payment of 50 percent of the Federal share of the estimated allowance immediately after grant award. Final payment of the Federal share of the allowance may be requested in the first payment after the grantee has awarded all prime subagreements for building the project, received the Regional Administrator's approval for force account work, and completed the acquisition of all eligible real property. 9. For a Step 2 + 3 project, if the grantee has not received a grant for facilities planning, the grantee may request payment of 30 percent of the Federal share of the estimated allowance immediately after the grant award. Half of the remaining estimated allowance may be requested when design of the project is 50 percent complete. If the grantee has received a grant for facilities planning, the grantee may request half of the Federal share of the estimated allowance when design of the project is 50 percent complete. Final payment of the Federal share of the allowance may be requested in the first payment after the grantee has awarded all prime subagreements for building the project, received the Regional Administrator's approval for force account work, and completed the acquisition of all eligible real property. 10. The allowance does not include architect or engineering services provided during the building of the project, e.g., reviewing bids, checking shop drawings, reviewing change orders, making periodic visits to job sites, etc. Architect or engineering services during the building of the project are allowable costs subject to this regulation and 40 CFR part 33. 11. The State will determine the amount and conditions of any advance under § 35.2025(b), not to exceed the Federal share of the estimated allowance. 12. EPA will reduce the Federal share of the allowance by the amount of any advances the grantee received under § 35.2025(b). Table 1—Allowance for Facilities Planning and Design Building cost Allowance as a percentage of building cost* $100,000 or less 14.4945 120,000 14.1146 150,000 13.6631 175,000 13.3597 200,000 13.1023 250,000 12.6832 300,000 12.3507 350,000 12.0764 400,000 11.8438 500,000 11.4649 600,000 11.1644 700,000 10.9165 800,000 10.7062 900,000 10.5240 1,000,000 10.3637 1,200,000 10.0920 1,500,000 9.7692 1,750,000 9.5523 2,000,000 9.3682 2,500,000 9.0686 3,000,000 8.8309 3,500,000 8.6348 4,000,000 8.4684 5,000,000 8.1975 6,000,000 7.9827 7,000,000 7.8054 8,000,000 7.6550 9,000,000 7.5248 10,000,000 7.4101 12,000,000 7.2159 15,000,000 6.9851 17,500,000 6.8300 20,000,000 6.6984 25,000,000 6.4841 30,000,000 6.3142 35,000,000 6.1739 40,000,000 6.0550 50,000,000 5.8613 60,000,000 5.7077 70,000,000 5.5809 80,000,000 5.4734 90,000,000 5.3803 100,000,000 5.2983 120,000,000 5.1594 150,000,000 4.9944 175,000,000 4.8835 200,000,000 4.7894 Note: *Interpolate between values. Table 2—Allowance for Design Only Building cost Allowance as a percentage of building cost* $100,000 or less 8.5683 120,000 8.3808 150,000 8.1570 175,000 8.0059 200,000 7.8772 250,000 7.6668 300,000 7.4991 350,000 7.3602 400,000 7.2419 500,000 7.0485 600,000 6.8943 700,000 6.7666 800,000 6.6578 900,000 6.5634 1,000,000 6.4300 1,200,000 6.3383 1,500,000 6.1690 1,750,000 6.0547 2,000,000 5.9574 2,500,000 5.7983 3,000,000 5.6714 3,500,000 5.5664 4,000,000 5.4769 5,000,000 5.3306 6,000,000 5.2140 7,000,000 5.1174 8,000,000 5.0352 9,000,000 4.9637 10,000,000 4.9007 12,000,000 4.7935 15,000,000 4.6655 17,500,000 4.5790 20,000,000 4.5054 25,000,000 4.3851 30,000,000 4.2892 35,000,000 4.2097 40,000,000 4.1421 50,000,000 4.0314 60,000,000 3.9432 70,000,000 3.8702 80,000,000 3.8080 90,000,000 3.7540 100,000,000 3.7063 120,000,000 3.6252 150,000,000 3.5284 175,000,000 3.4630 200,000,000 3.4074 Note: *Interpolate between values. Table 3—Allowance for Facilities Planning for Design/Build Projects Building cost (dollars) Allowance as a percentage of building cost* 100,000 or less 5.9262 120,000 5.7337 150,000 5.5061 175,000 5.3538 200,000 5.2250 250,000 5.0163 300,000 4.8516 350,000 4.7162 400,000 4.6019 500,000 4.4164 600,000 4.2701 700,000 4.1499 800,000 4.0483 900,000 3.9606 1,000,000 3.8837 1,200,000 3.7538 1,500,000 3.6003 1,750,000 3.4976 2,000,000 3.4109 2,500,000 3.2703 3,000,000 3.1595 3,500,000 3.0684 4,000,000 2.9915 5,000,000 2.8669 6,000,000 2.7686 7,000,000 2.6880 8,000,000 2.6198 Note: *Interpolate between values. [49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27098, June 29, 1990] Subpart J—Construction Grants Program Delegation to States Authority: Sections 205(g) and 518(e) of the Clean Water Act, as amended, 33 U.S.C. 1251 et. seq. Source: 48 FR 37818, Aug. 19, 1983, unless otherwise noted. § 35.3000 Purpose. (a) This regulation establishes policies and procedures for the development, management, and EPA overview of State administration of the wastewater treatment works construction grants program under section 205(g) of the Clean Water Act, as amended. The delegation agreement between EPA and the State is a precondition for construction management assistance under section 205(g). Program requirements for other assistance agreements authorized by section 205(g) for activities under sections 402 and 404 and section 208(b)(4) are provided in part 130. Administration of all section 205(g) assistance agreements follows the procedures established in subpart A of this part. (b) A State, for purposes of receiving delegation of construction grant program responsibilities under this subpart, shall include a State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Trust Territories of the Pacific Islands (Palau), the Commonwealth of the Northern Marianas, and any Indian Tribe, band, group, or community recognized by the Secretary of the Interior and exercising governmental authority over a Federal Indian reservation, provided that the Tribe satisfies the following criteria: (1) The Indian Tribe has a governing body carrying out substantial governmental duties and powers. The Tribe must submit a narrative statement to the Regional Administrator describing the form of the Tribal government, describing the types of essential governmental functions currently performed and identifying the source of the authority to perform these functions. (2) The functions to be exercised by the Indian Tribe pertain to the management and protection of water resources which are held by an Indian Tribe, held by the United States in trust for Indians, held by a member of an Indian Tribe if such property is subject to a trust restriction on alienation, or otherwise within the borders of an Indian reservation. Assertions by the Indian Tribe with respect to this criterion will be provided by EPA to adjacent governmental entities in accordance with 40 CFR 130.15. (3) The Indian Tribe is reasonably expected to be capable, in the Regional Administrator's judgment, of carrying out the functions to be exercised in a manner consistent with the terms and purposes of the Clean Water Act and applicable regulations. (c) Where a Tribe has previously qualified for treatment as a State under a Clean Water Act or Safe Drinking Water Act program, the Tribe need only provide the required information which had not been submitted in a previous treatment as a State application. [48 FR 37818, Aug. 19, 1983, as amended at 55 FR 27098, June 29, 1990] § 35.3005 Policy. (a) EPA's policy is to delegate management of the wastewater treatment works construction grant program to the maximum extent possible consistent with the objectives of the Act, prudent fiscal management, and EPA's overall national responsibility for the program. The policy is premised on an on-going partnership between EPA and the States that includes consultation with the States in formulation of policy and guidance by EPA. EPA expects States to undertake full delegation of all project level activities, including preliminary determinations of non-delegable requirements. The objective of delegation is to eliminate duplication of Federal and State effort in the management of the construction grant program, to increase State participation in the construction grant program, and to improve operating efficiency. (b) Program delegation is to be accomplished through a formal delegation agreement between the Regional Administrator and the State. The delegation agreement will specify the functions which the State will perform and procedures for State certification to EPA. (c) EPA will overview the performance of the program under delegation to ensure that progress is being made toward meeting the construction grant program objectives and that the State is continuing to employ administrative, fiscal, and program controls to guard against fraud, misuse, and mismanagement of public funds. Overview will also include review of the State management process to ensure it is efficient, effective and assures timely State reviews. § 35.3010 Delegation agreement. (a) Before execution of the delegation agreement, the Regional Administrator must determine that the unit of the State agency designated to implement the agreement is capable of carrying out the delegated functions. The Regional Administrator will evaluate those aspects of the unit which directly affect the State's capability to implement the agreement. (b) In the delegation agreement, the State agency will assure the Regional Administrator that it will execute its responsibilities under the delegation agreement in conformance with all applicable Federal laws, regulations, orders, and policies. (c) The delegation agreement will: (1) Designate the organizational unit within the State responsible for the implementation of the delegation agreement; (2) List the functions delegated and functions to be delegated, with a schedule for their assumption by the State; (3) Identify procedures to be followed and records to be kept by the State and EPA in carrying out each delegated function; (4) Identify the staffing, hiring, training, and funding necessary to carry out the delegated functions; (5) Estimate program costs by year for the term of the delegation agreement; (6) Identify an accounting system, acceptable to the Regional Administrator, which will properly identify and relate State costs to the conduct of delegated functions; and (7) Identify the form and content of the system for EPA overview of State performance consistent with the requirements in § 35.3025 of this subpart, including the frequency, method, and extent of monitoring, evaluation, and reporting. (d) The term of the delegation agreement shall generally be five years. As subsequent construction management assistance is awarded, the delegation agreement may be amended to maintain a five-year period. (e) The delegation agreement will be revised, as necessary, to reflect substantial program or procedural changes, as determined by the Regional Administrator. (Approved by the Office of Management and Budget under control number 2000-0417) § 35.3015 Extent of State responsibilities. (a) Except as provided in paragraph (c) of this section, the Regional Administrator may delegate to the State agency authority to review and certify all construction grant documents required before and after grant award and to perform all construction grant review and management activities necessary to administer the construction grants program. (b) The State may also act as the manager of waste treatment construction grant projects for small communities. The State, with the approval of the community, may serve as the community contracting agent and undertake responsibilities such as negotiating subagreements, providing technical assistance, and assisting the community in exercising its resident engineering responsibility. In this capacity, the State is in the same position as a private entity and cannot require a small community to hold the State harmless from negligent acts or omissions. The State may also execute an agreement with any organization within the State government, other than the State agency, which is capable of performing these services. The terms of the agreement to provide these services to small communities must be approved by the Regional Administrator before execution of the agreement. (c) The Regional Administrator shall retain overall responsibility for the construction grant program and exercise direct authority for the following: (1) Construction grant assistance awards, grant amendments, payments, and terminations; (2) Projects where an overriding Federal interest requires greater Federal involvement; (3) Final determinations under Federal statutes and Executive Orders (e.g., the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq., et seq. (4) Final resolution of construction grant audit exceptions; and (5) Procurement determinations listed under 40 CFR 33.001(g). § 35.3020 Certification procedures. (a) The State will furnish a written certification to the Regional Administrator for each construction grant project application submitted to EPA for award. The certification must state that all Federal requirements, within the scope of authority delegated to the State under the delegation agreement, have been met. This certification must be supported by documentation specified in the delegation agreement. The documentation must be made available to the Regional Administrator upon request. (b) Certification that a construction grant project application complies with all delegable pre-award requirements consists of certification of compliance with the following sections of subpart I of this part: § 35.2030 (Facilities planning); § 35.2040 (a) and (b) (Grant application); § 35.2042 (Review of grant applications); and §§ 35.2100 (Limitations on award) through and including 35.2125, except for § 35.2101 (Advanced treatment reviews for projects with incremental capital advanced treatment costs of over $3 million), § 35.2112 (Marine waiver discharge applicants), and § 35.2113 (final decisions under the National Environmental Policy Act). § 35.3025 Overview of State performance under delegation. The Regional Administrator will review the performance of a delegated State through an annual overview program, developed in accordance with procedures agreed to in the delegation agreement (§ 35.3010(c)(7)). The purpose of the overview program is to ensure that both the delegated State and EPA efficiently and effectively execute the fiscal and program responsiblilities under the Clean Water Act and related legislation. The overview program is comprised of three steps: (a) Developing a plan for overview. (1) Priority objectives will include both program and management objectives. In developing the State priority objectives, the national priorities identified by the Administrator on an annual basis must, at a minimum, be addressed and applied as appropriate to each State. In addition, the Regional Administrator and the State may identify other objectives unique to the situation in the State. (2) For each priority objective, the plan for overview will specify key measures of performance (both quantitative and qualitative), identify which measures will require the negotiation of outputs, and enumerate the specific monitoring and evaluation activities and methods planned for the upcoming year. (b) Negotiating annual outputs. (c) Monitoring and evaluating program performance. Remedies for Noncompliance. (Approved by the Office of Management and Budget under control number 2000-0417) [48 FR 37818, Aug. 19, 1983, as amended at 79 FR 76057, Dec. 19, 2014; 87 FR 30399, May 19, 2022] § 35.3030 Right of review of State decision. (a) Any construction grant application or grantee who has been adversely affected by a State's action or omission may request Regional review of such action or omission, but must first submit a petition for review to the State agency that made the initial decision. The State agency will make a final decision in accordance with procedures set forth in the delegation agreement. The State must provide, in writing, normally within 45 days of the date it receives the petition, the basis for its decision regarding the disputed action or omission. The final State decision must be labeled as such and, if adverse to the applicant or grantee, must include notice of the right to request Regional review of the State decision under this section. A State's failure to address the disputed action or omission in a timely fashion, or in writing, will not preclude Regional review. (b) Requests for Regional review must include: (1) A copy of any written State decision. (2) A statement of the amount in dispute, (3) A description of the issues involved, and (4) A concise statement of the objections to the State decision. The request must be filed by registered mail, return receipt requested, within thirty days of the date of the State decision or within a reasonable time if the State fails to respond in writing to the request for review. (c) The Region shall determine whether the State's review is comparable to a dispute decision official's (DDO) review pursuant to 2 CFR part 1500, subpart E. If the State's review is comparable, Regional review of the State's decision will be conducted by the Regional Administrator. If the State's review is not comparable, the DDO will review the State's decision and issue a written decision. Review of either a Regional Administrator or DDO decision may be requested pursuant to 2 CFR part 1500, subpart E. (Approved by the Office of Management and Budget under control number 2040-0095) [50 FR 45896, Nov. 4, 1985, as amended at 79 FR 76057, Dec. 19, 2014] § 35.3035 Public participation. (a) Public participation during the development, review, approval, and substantial revision of the delegation agreement will be in accordance with the requirements of section 101(e) of the Act, part 25 of this chapter, and this subpart. (b) The Regional Administrator or the State, as mutually agreed, will make the draft delegation agreement, any proposed substantial amendment to the delegation agreement, and the proposed annual overview program, available to the public for comment, and provide notice of availability, sufficiently in advance of execution to allow for timely comment. (c) If, based on comments received, the Regional Administrator or State determines that significant interest exists, the State and EPA will consult with interested and affected groups and citizens prior to execution of the delegation agreement, substantial amendment, or annual overview program. If the Regional Administrator or State determines that significant interest and desire for a public meeting exist, the Region or State will hold one or more public meetings at least 30 days prior to execution. Subpart K—State Water Pollution Control Revolving Funds Authority: Sections 205(m), 501(a) and title VI of the Clean Water Act, as amended, 33 U.S.C. 1285(m), 33 U.S.C. 1361(a), 33 U.S.C. 1381-1387. Source: 55 FR 10178, Mar. 19, 1990, unless otherwise noted. § 35.3100 Policy and purpose. (a) The Agency intends to implement the State water pollution control revolving fund program in a manner that preserves for States a high degree of flexibility for operating their revolving funds in accordance with each State's unique needs and circumstances. The purpose of these regulations is to advance the general intent of title VI of the Clean Water Act, which is to ensure that each State's program is designed and operated to continue providing assistance for water pollution control activities in perpetuity. (b) These regulations reflect statutory and program requirements that have been previously published in the Initial Guidance for State Revolving Funds, which was signed by the Assistant Administrator for Water on January 28, 1988, and the supplementary memorandum to the Initial Guidance for State Revolving Funds, which was signed by the Assistant Administrator for Water on September 30, 1988. Copies of both documents can be obtained by writing the Office of Municipal Pollution Control (WH-546), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. (c) These regulations supplement title VI by codifying all major program requirements, applicable to the SRF program. EPA will not impose additional major program requirements without an opportunity for affected parties to comment. The process for amending this regulation to incorporate these requirements will begin within three months of their issuance. § 35.3105 Definitions. Words and terms that are not defined below and that are used in this rule shall have the same meaning they are given in 2 CFR part 200 Subpart A—Acronyms and Definitions and 40 CFR part 35, subpart I. (a) Act. et seq. (b) Binding Commitment. (c) Capitalization Grant. (d) Cash draw. (e) Disbursement. (f) Equivalency projects. (g) Funds “directly made available by” capitalization grants. (h) Payment. (i) SRF. [55 FR 10178, Mar. 19, 1990, as amended at 79 FR 76057, Dec. 19, 2014] § 35.3110 Fund establishment. (a) Generally. (b) SRF accounts. (c) SRF administration. (d) Documentation of the establishment of an SRF program. (2) With each capitalization grant application, the State's Attorney General (AG), or someone designated by the AG, must sign or concur in a certification that the State legislation establishing the SRF and the powers it confers are consistent with State law, and that the State may legally bind itself to the terms of the capitalization grant agreement. (3) Where waiting for the AG's signature or concurrence would by itself significantly delay awarding the first grant (i.e., there are no other issues holding up the award), the head or chief legal officer of the State agency which has direct responsibility for administering the SRF program may sign the certification at the time of the capitalization grant award, provided the capitalization grant agreement contains a special condition requiring the State to submit the AG/designee's concurrence to EPA within a reasonable time, not to exceed 120 days, after the grant is awarded. (e) Allotment. (2) Title VI funds are available for the Agency to obligate to the State during the fiscal year in which they are allotted and during the following fiscal year. The amount of any title VI allotment not obligated to the State at the end of this period of availability will be reallotted for title VI purposes in accordance with 40 CFR 35.2010. (3) A State that does not receive grants that obligate all the funds allotted to it under title VI in the first year of its availability will not receive reallotted funds from that appropriation. (4) Notwithstanding 40 CFR 35.910 and 40 CFR 35.2010(a), deobligations and reallotments of title II funds may be transferred to a title VI capitalization grant regardless of either the year in which the title II funds were originally allotted or the year in which they are deobligated or reallotted. (f) Transfer of title II allotments. (1) If the State elects this option, the Governor of the State must submit a Notice of Intent to the RA specifying the amount of the title II allotment the State intends to use for title VI purposes during the fiscal year for which it is submitted. The Notice may also identify anticipated, unobligated title II funds from the prior fiscal year, and request transfer of those funds as well. (2) Each Notice of Intent must be submitted on or before July 3 of the year preceding the Federal fiscal year in which those funds are available. If a State fails to file a Notice of Intent on or before the prescribed date, then the State may not transfer title II allotments into an SRF in the upcoming fiscal year. A timely Notice of Intent may be later withdrawn or amended. (3) When the capitalization grant is awarded, funds requested under section 205(m) of the Act will be obligated under title VI for the activities of the SRF. If a Notice of Intent anticipates transfer of funds under the authority of section 205(m), but those funds are not so obligated by the end of the two year period of availability, they will be subject to reallotment as construction grant funds. (g) Reserves and transferred allotments. (2) Funds reserved under sections 205(j)(1) and 205(j)(5) of the Act must be calculated based on the State's full title II allotment, and cannot be transferred to the SRF. (3) Funds reserved under sections 201(l)(2), 205(h), and 205(i) of the Act must also be calculated based upon the State's full title II allotment. However, these reserves may be transferred into an SRF. (4) The State must reserve from each fiscal year's title VI allotment the greater of one percent of its allotment or $100,000 to carry out planning under sections 205(j) and 303(e) of the Act. (Approved by the Office of Management and Budget under control number 2040-0118) § 35.3115 Eligible activities of the SRF. Funds in the SRF shall not be used to provide grants. SRF balances must be available in perpetuity and must be used solely to provide loans and other authorized forms of financial assistance: (a) To municipalities, inter-municipal, interstate, or State agencies for the construction of publicly owned wastewater treatment works as these are defined in section 212 of the Act and that appear on the State's priority list developed pursuant to section 216 of the Act; and (b) For implementation of a nonpoint source pollution control management program under section 319 of the Act; and (c) For development and implementation of an estuary conservation and management plan under section 320 of the Act. § 35.3120 Authorized types of assistance. The SRF may provide seven general types of financial assistance. (a) Loans. (1) Loans may be awarded only if: (i) All principal and interest payments on loans are credited directly to the SRF; (ii) The annual repayment of principal and payment of interest begins not later than one year after project completion; (iii) The loan is fully amortized not later than twenty years after project completion; and (iv) Each loan recipient establishes one or more dedicated sources of revenue for repayment of the loan. (2) Where construction of a treatment works has been phased or segmented, loan repayment requirements apply to the completion of individual phases or segments. (b) Refinancing existing debt obligations. (1) Projects otherwise eligible for refinancing under this section on which building began: (i) Before January 28, 1988 (the effective date of the Initial Guidance for State Revolving Funds) must meet the requirements of title VI to be fully eligible. (ii) After January 28, 1988, but before the effective date of this rule, must meet the requirements of title VI and of the Initial Guidance for State Revolving Funds to be fully eligible. (iii) After March 19, 1990 must meet the requirements of this rule to be fully eligible. (2) Where the original debt for a project was in the form of a multi-purpose bond incurred for purposes in addition to wastewater treatment facility construction, an SRF may provide refinancing only for eligible purposes, and not for the entire debt. (c) Guarantee or purchase insurance for local debt obligations. (d) Guarantee SRF debt obligations. (e) Loan guarantees for “sub-State revolving funds.” (f) Earn interest on fund accounts. (g) SRF administrative expenses. (2) Allowable administrative costs include all reasonable costs incurred for management of the SRF program and for management of projects receiving financial assistance from the SRF. Reasonable costs unique to the SRF, such as costs of servicing loans and issuing debt, SRF program start-up costs, financial management, and legal consulting fees, and reimbursement costs for support services from other State agencies are also allowable. (3) Unallowable administrative costs include the costs of administering the construction grant program under section 205(g), permit programs under sections 402 and 404 and Statewide wastewater management planning programs under section 208(b)(4). (4) Expenses incurred issuing bonds guaranteed by the SRF, including the costs of insuring the issue, may be absorbed by the proceeds of the bonds, and need not be charged against the 4 percent administrative costs ceiling. The net proceeds of those issues must be deposited in the Fund. § 35.3125 Limitations on SRF assistance. (a) Prevention of double benefit. (b) Assistance for the non-Federal share. (2) The SRF may provide authorized financial assistance other than a loan for the non-Federal share of a treatment works project receiving EPA assistance if the Governor or the Governor's designee determines that such assistance is necessary to allow the project to proceed. (3) The SRF may provide loans for subsequent phases, segments, or stages of wastewater treatment works that previously received grant assistance for earlier phases, segments, or stages of the same treatment works. (4) A community that receives a title II construction grant after the community has begun building with its own financing, may receive SRF assistance to refinance the pre-grant work, in accordance with the requirements for refinancing set forth under § 35.3120(b) of this part. (c) Publicly owned portions. (d) Private operation. (e) Water quality management planning. § 35.3130 The capitalization grant agreement. (a) Contents. (b) Operating agreement. (c) Application requirements. (Approved by the Office of Management and Budget under control number 2040-0118) § 35.3135 Specific capitalization grant agreement requirements. (a) Agreement to accept payments. (b) Provide a State match. (1) The State match must be deposited on or before the date on which the State receives each payment from the grant award. The State may maintain its match in an LOC or other financial arrangement similar to the Federal LOC, provided that the State's proportional share is converted to cash when the Federal LOC is drawn upon. (2) Bonds issued by the State for the match may be retired from the interest earned by the SRF (including interest on SRF loans) if the net proceeds from the State issued bonds are deposited in the fund. Loan principal must be repaid to the SRF and cannot be used to retire State issued bonds. (3) The State must identify the source of the matching amount in the capitalization grant application and must establish to the RA's satisfaction that the source is not Federal money, unless specifically authorized to be used for such purposes under the statute making the funds available. (4) If the State provides a match in excess of the required amount, the excess balance may be banked toward subsequent match requirements. (5) If the State has deposited State monies in a dedicated revolving fund after March 7, 1985 and prior to receiving a capitalization grant, the State may credit these monies toward the match requirement: (i) If the monies were deposited in an SRF that subsequently received a capitalization grant and, if the deposit was expended, it was expended in accordance with title VI; (ii) If the monies were deposited in a separate fund that has not received a capitalization grant, they were expended in accordance with title VI and an amount equal to all repayments of principal and payments of interest from these loans will be deposited in the Federally capitalized fund; or (iii) If the monies were deposited in a separate fund and used as a reserve consistent with title VI, and an amount equal to the reserve is transferred to the Federally capitalized fund as its function is satisfied. (c) Binding commitments. (1) Binding commitments may be for any of the types of assistance provided for in sections 40 CFR 35.3120(a), (b), (c), (e) or (f) and for Fund administration under 40 CFR 35.3120(g). (2) If the State commits more than the required 120 percent, EPA will recognize the cumulative value of the binding commitments, and the excess balance may be banked towards the binding commitment requirements of subsequent quarters. (3) If the State does not make binding commitments equaling 120 percent of the quarterly grant payment within one year after it receives the payment, the RA may withhold future quarterly grant payments, and require adjustments to the payment schedule before releasing further payments. (d) Expeditious and timely expenditure. (e) First use of funds. (2) These funds may be used to fund the cost-effective reserve capacity of these projects. (3) In order for a State to use these funds for other section 212 POTWs or for nonpoint source (section 319) or estuary (section 320) activities, the State must certify that the POTWs identified in § 35.3135(e)(1) are either: (i) In compliance; or (ii) On an enforceable schedule; or (iii) Have an enforcement action filed; or (iv) Have a funding commitment during or prior to the first year covered by the Intended Use Plan. (4) Other funds in the SRF may be used at any time for the construction of any treatment works on the State's priority list or for activities under sections 319 and 320 of the Act. (f) Compliance with title II requirements. (2) The State must comply only with the statutory requirements. The State may develop its own procedures for implementing the statutory provisions. The RA will accept State procedures provided that the procedures will adequately assure compliance with the statutory requirements, considered in the context of the SRF program. (3) Where the State funds equivalency projects for more than the capitalization grant amount, EPA will recognize the cumulative value of the eligible costs of the equivalency projects, and the excess balance may be banked toward subsequent year equivalency requirements. (4) Only those eligible costs actually funded with loans or other authorized assistance from the SRF may be credited toward satisfaction of the equivalency requirement, and only in the amount of that assistance. (g) State laws and procedures. (h) State accounting and auditing procedures. (2) The State must also agree to use accounting, audit, and fiscal procedures conforming to generally accepted government accounting standards as these are promulgated by the Governmental Accounting Standards Board. Generally accepted government auditing standards are usually defined as, but not limited to, those contained in the U.S. General Accounting Office (GAO) publication “Government Auditing Standards” (1988 revision). (i) Recipient accounting and auditing procedures. (j) Annual report. § 35.3140 Environmental review requirements. (a) Generally. (b) NEPA-like State environmental review process. (1) Legal foundation. (i) The mechanisms to implement mitigation measures to ensure that a project is environmentally sound; (ii) The legal remedies available to the public to challenge environmental review determinations and enforcement actions; (iii) The State agency primarily responsible for conducting environmental reviews; (iv) The extent to which environmental review responsibilities will be delegated to local recipients and will be subject to oversight by the primary State agency. (2) Interdisciplinary approach. (3) Decision documentation. (i) Proceed with a project contained in a finding of no significant impact (FNSI) following documentation in an environmental assessment (EA); (ii) Proceed or not proceed with a project contained in a record of decision (ROD) following preparation of a full environmental impact statement (EIS); (iii) Reaffirm or modify a decision contained in a previously issued categorical exclusion (CE), EA/FNSI or EIS/ROD following a mandatory 5 year environmental reevaluation of a proposed project; and (iv) If a State elects to implement processes for either partitioning an environmental review or CE from environmental review, the State must similarly document these processes in its proposed SERP. (4) Public notice and participation. (ii) Except with respect to a public notice of a categorical exclusion or reaffirmation of a previous decision, a formal public comment period must be provided during which no action on a project will be allowed. (iii) A public hearing or meeting must be held for all projects except for those having little or no environmental effect. (5) Alternatives Consideration. (i) Comparative evaluation among alternatives including the beneficial and adverse consequences on the existing environment, the future environment and individual sensitive environmental issues that are identified by project management or through public participation; and (ii) Devising appropriate near-term and long-range measures to avoid, minimize or mitigate adverse impacts. (c) Alternative State environmental review process. (1) Is supported by a legal foundation which establishes the State's authority to review section 212 construction projects; (2) Responds to other environmental objectives of the State; (3) Provides for comparative evaluations among alternatives and account for beneficial and adverse consequences to the existing and future environment; (4) Adequately documents the information, processes and premises that influence an environmental determination; and (5) Provides for notice to the public of proposed projects and for the opportunity to comment on alternatives and to examine environmental review documents. For projects determined by the State to be controversial, a public hearing must be held. (d) EPA approval process. (e) Modifications to approved SERPs. [55 FR 10178, Mar. 19, 1990, as amended at 79 FR 76057, Dec. 19, 2014] § 35.3145 Application of other Federal authorities. (a) Generally. (b) Informing EPA. (c) Civil Rights laws. et seq., [55 FR 10178, Mar. 19, 1990, as amended at 73 FR 15922, Mar. 26, 2008] § 35.3150 Intended Use Plan (IUP). (a) Purpose. (b) Contents List of projects. (ii) The IUP must also contain a list of the nonpoint source and national estuary protection activities under sections 319 and 320 of the Act that the State expects to fund from its SRF. (iii) The IUP must provide information in a format and manner that is consistent with the needs of the Regional Offices. (2) Short and long term goals. The IUP must describe the long and short term goals and objectives of the State's water pollution control revolving fund. (3) Information on the SRF activities to be supported. The IUP must include information on the types of activities including eligible categories of costs to receive assistance, types of assistance to be provided, and SRF policies on setting the terms for the various types of assistance provided by the fund. (4) Assurances and specific proposals. The IUP must provide assurances and specific proposals on the manner by which the State intends to meet the requirements of the following sections of this part: §§ 35.3135(c); 35.3135(d); 35.3135(e); 35.3135(f); and 35.3140. (5) Criteria and method for distribution of funds. (i) The IUP must describe the criteria and method established for the distribution of the SRF funds and the distribution of the funds available to the SRF among the various types of assistance the State will offer. (ii) The IUP must describe the criteria and method the State will use to select section 212 treatment work project priority list and projects or programs to be funded as eligible activities for nonpoint sources and estuary protection management programs. (c) Amending the IUP. (Approved by the Office of Management and Budget under control number 2040-0118) § 35.3155 Payments. (a) Payment schedule. (b) Estimated disbursements. (c) Timing of payments. (d) General payment and cash draw rules. (2) The SRF or assistance recipient must first incur a cost, but not necessarily disburse funds for that cost, on an activity for which the State has entered into a binding commitment, in order to draw cash. (3) Cash draws will be available only up to the amount of payments made. (4) For loans or for refinancing or purchasing of municipal debt, planning, design and associated pre-building costs that are within the scope of a project built after March 7, 1985, may be included in the assistance agreement regardless of when they were incurred, provided these costs are in conformity with title VI of the Act. The State may draw cash for these incurred pre-building costs immediately upon executing an assistance agreement. (5) A State may draw cash from the LOC equal to the proportional Federal share at which time the State will provide its proportional share. The Federal proportional share will be 83 1/3 2/3 (i) Where the State provides funds in excess of the required 20 percent match, the proportional Federal share drawn from the LOC will be the ratio of Federal funds in the capitalization grant to the sum of the capitalization grant and the State funds. Alternatively, the State may identify a group of activities approximately equal to 120 percent of the grant amount, and draw cash from the LOC for 83 1/3 (ii) The Federal proportional share may exceed 83 1/3 § 35.3160 Cash draw rules. (a) Loans. (b) Refinance or purchase of municipal debt. (2) The State may immediately draw cash for up to five percent of each fiscal year's capitalization grant or two million dollars, whichever is greater, to refinance or purchase local debt. (3) Projects or portions of projects not constructed. The State may draw cash based on incurred construction costs, as set forth in § 35.3160(a). (4) Incremental disbursement bonds. For the purchase of incremental disbursement bonds from local governments, cash draws will be based on a schedule that coincides with the rate at which construction related costs are expected to be incurred for the project. (c) Purchase of insurance. (d) Guarantees and security for bonds. (2) Cash draw in the absence of default. (i) The State can draw cash up to the amount of the LOC dedicated for the guarantee or security in accordance with a schedule based on the national title II annual outlay rate (Yr 1: 7%; Yr 2: 35%; Yr 3: 26%; Yr 4: 20%; Yr 5: 12%), or actual construction cost. In the latter case, the amount of the cash draw would be the actual construction costs multiplied by the Federal share of the reserve multiplied by the ratio of the reserve to either the amount guaranteed or the proceeds of the bond issue. (ii) In addition, in the case of a security the State can identify a group of projects whose value equals approximately the total of that portion of the LOC and the State match dedicated as a security. The State can then draw cash based on the incurred construction costs of the selected projects only, multiplied by the ratio of the Federal portion of the security to the entire security. (3) Aggressive leveraging exception. (i) There are eligible projects ready to proceed in the immediate future with enough costs to justify the amount of the secured bond issue; (ii) The absence of cash on an accelerated basis will substantially delay these projects; (iii) If accelerated cash draws are allowed, the SRF will provide substantially more assistance; and (iv) The long term viability of the State program to meet water quality needs will be protected. (4) Cash draw limitation. (e) Administrative expenses Payments. (2) Cash draw. (f) Withholding payments. § 35.3165 Reports and audits. (a) Annual report. (b) Matters to establish in the annual report. (1) Reviewed all SRF funded section 212 projects in accordance with the approved environmental review procedures; (2) Deposited its match on or before the date on which each quarterly grant payment was made; (3) Assured compliance with the requirements of § 35.3135(f); (4) Made binding commitments to provide assistance equal to 120 percent of the amount of each grant payment within one year after receiving the grant payment pursuant to § 35.3135(c); (5) Expended all funds in an expeditious and timely manner pursuant to § 35.3135(d); and (6) First used all funds as a result of capitalization grants to assure maintenance of progress toward compliance with the enforceable requirements of the Act pursuant to § 35.3135(e). (c) Annual review Purpose. (2) Records access. (d) Annual audit. (2) The auditor can be a certified public accountant, a public accountant licensed on or before December 31, 1970, or a governmental auditor who meets the qualification standards (Government Auditing Standards). In addition, the auditor must meet the independence standard as enumerated by the General Accounting Office and American Institute of Certified Public Accountants. The Office of the Inspector General may arrange for an EPA audit if the State fails to conduct the audit or if the State's review is otherwise unsatisfactory. (3) The audit report required under section 606(b) must contain an opinion on the financial statements of the SRF and its internal controls, and a report on compliance with title VI. (4) The audit report must be completed within one year of the end of the appropriate accounting period and submitted to the Office of the Inspector General within 30 days of completion. In cases of State conducted audits, the State will be notified within 90 days as to the acceptability of the audit report and its findings. Audits may be done in conjunction with the Single Audit Act. (Approved by the Office of Management and Budget under control number 2040-0118) § 35.3170 Corrective action. (a) Causes. (b) RA's course of action. (c) Consequences for failure to take corrective action. (d) Releasing payments. Appendix A to Subpart K of Part 35—Criteria for evaluating a State's proposed NEPA-Like process The following criteria will be used by the RA to evaluate a proposed SERP. (A) Legal foundation. (B) Interdisciplinary approach. (C) Decision documentation. (D) Public notice and participation. (E) Consider alternatives. (1) Designation of a study area comparable to the final system; (2) A range of feasible alternatives, including the no action alternative; (3) Direct and indirect impacts; (4) Present and future conditions; (5) Land use and other social parameters including recreation and open-space considerations; (6) Consistency with population projections used to develop State implementation plans under the Clean Air Act; (7) Cumulative impacts including anticipated community growth (residential, commercial, institutional and industrial) within the project study area; and (8) Other anticipated public works projects including coordination with such projects. Subpart L—Drinking Water State Revolving Funds Authority: Section 1452 of the Safe Drinking Water Act, as amended, 42 U.S.C. 300j-12. Source: 65 FR 48299, Aug. 7, 2000, unless otherwise noted. § 35.3500 Purpose, policy, and applicability. (a) This subpart codifies and implements requirements for the national Drinking Water State Revolving Fund program under section 1452 of the Safe Drinking Water Act, as amended in 1996. It applies to States ( i.e., (b) This subpart supplements section 1452 of the Safe Drinking Water Act by codifying statutory and program requirements that were published in the Final Guidelines for the Drinking Water State Revolving Fund program (EPA 816-R-97-005) signed by the Assistant Administrator for Water on February 28, 1997, as well as in subsequent policies. This subpart also supplements EPA general assistance regulations in 2 CFR parts 200 and 1500 which contain administrative requirements that apply to governmental recipients of Environmental Protection Agency (EPA) grants and subgrants. EPA will not impose additional major program requirements without providing an opportunity for affected parties to comment. (c) EPA intends to implement the national Drinking Water State Revolving Fund program in a manner that preserves for States a high degree of flexibility to operate their programs in accordance with each State's unique needs and circumstances. To the maximum extent practicable, EPA also intends to administer the financial aspects of the national Drinking Water State Revolving Fund program in a manner that is consistent with the policies and procedures of the national Clean Water State Revolving Fund program established under Title VI of the Clean Water Act, as amended, 33 U.S.C. 1381-1387. [65 FR 48299, Aug. 7, 2000, as amended at 79 FR 76057, Dec. 19, 2014] § 35.3505 Definitions. The following definitions apply to terms used in this subpart: Act. et seq. Administrator. Allotment. Automated Clearing House (ACH). Binding commitment. Capitalization grant. Cash draw. CWSRF program. Disadvantaged community. Disbursement. DWSRF program. Fund. Intended Use Plan (IUP). Net bond proceeds. Payment. Public water system. Regional Administrator (RA). Set-asides. Small system. State. § 35.3510 Establishment of the DWSRF program. (a) General. (b) Administration. i.e., (1) The authority to establish assistance priorities and to carry out oversight and related activities of the DWSRF program, other than financial administration of the Fund, must reside with the State agency having primary responsibility for administration of the State's public water system supervision (PWSS) program ( i.e., (2) If a State is eligible to receive a capitalization grant but does not have primacy, the Governor will determine which State agency will have the authority to establish priorities for financial assistance from the Fund. Evidence of the Governor's determination must be included with the capitalization grant application. (3) If more than one State agency participates in implementation of the DWSRF program, the roles and responsibilities of each agency must be described in a Memorandum of Understanding or interagency agreement. (c) Combined financial administration. (d) Use of funds. (2) The inability or failure of any public water system to receive assistance from the DWSRF program, or any delay in obtaining assistance, does not alter the obligation of the system to comply in a timely manner with all applicable drinking water standards and requirements of section 1452 of the Act. [65 FR 48299, Aug. 7, 2000, as amended at 79 FR 76057, Dec. 19, 2014] § 35.3515 Allotment and withholdings of funds. (a) Allotment General. (2) Allotment formula. (3) Period of availability. (4) Loss of primacy. (i) A State may not receive a capitalization grant from allotments that have been made if the State had primacy and subsequently loses primacy. (ii) For a State that loses primacy, the Administrator may reserve funds from the State's allotment for use by EPA to administer primacy in that State. The balance of the funds not used by EPA to administer primacy will be reallotted to the other States. (iii) A State will be eligible for future allotments from funds appropriated in the next fiscal year after primacy is restored. (b) Withholdings General. (i) Capacity development authority. (ii) Capacity development strategy. (iii) Operator certification program. (2) Maximum withholdings. (3) Reallotment of withheld funds. (4) Termination of withholdings. § 35.3520 Systems, projects, and project-related costs eligible for assistance from the Fund. (a) Eligible systems. (1) Privately-owned and publicly-owned community water systems and non-profit noncommunity water systems. (2) Projects that will result in the creation of a community water system in accordance with paragraph (b)(2)(vi) of this section. (3) Systems referred to in section 1401(4)(B) of the Act for the purposes of point of entry or central treatment under section 1401(4)(B)(i)(III). (b) Eligible projects General. (2) Only the following project categories are eligible for assistance from the Fund: (i) Treatment. (ii) Transmission and distribution. (iii) Source. (iv) Storage. (v) Consolidation. (vi) Creation of new systems. (c) Eligible project-related costs. (1) Costs for planning and design and associated pre-project costs. A State that makes a loan for only planning and design is not required to provide assistance for completion of the project. (2) Costs for the acquisition of land only if needed for the purposes of locating eligible project components. The land must be acquired from a willing seller. (3) Costs for restructuring systems that are in significant noncompliance with any national primary drinking water regulation or variance or that lack the technical, financial, and managerial capability to ensure compliance with the requirements of the Act, unless the systems are ineligible under paragraph (d)(2) or (d)(3) of this section. (d) Ineligible systems. (1) Federally-owned public water systems and for-profit noncommunity water systems. (2) Systems that lack the technical, financial, and managerial capability to ensure compliance with the requirements of the Act, unless the assistance will ensure compliance and the owners or operators of the systems agree to undertake feasible and appropriate changes in operations to ensure compliance over the long-term. (3) Systems that are in significant noncompliance with any national primary drinking water regulation or variance, unless: (i) The purpose of the assistance is to address the cause of the significant noncompliance and will ensure that the systems return to compliance; or (ii) The purpose of the assistance is unrelated to the cause of the significant noncompliance and the systems are on enforcement schedules (for maximum contaminant level and treatment technique violations) or have compliance plans (for monitoring and reporting violations) to return to compliance. (e) Ineligible projects. (1) Dams or rehabilitation of dams. (2) Water rights, except if the water rights are owned by a system that is being purchased through consolidation as part of a capacity development strategy. (3) Reservoirs or rehabilitation of reservoirs, except for finished water reservoirs and those reservoirs that are part of the treatment process and are on the property where the treatment facility is located. (4) Projects needed primarily for fire protection. (5) Projects needed primarily to serve future population growth. Projects must be sized only to accommodate a reasonable amount of population growth expected to occur over the useful life of the facility. (6) Projects that have received assistance from the national set-aside for Indian Tribes and Alaska Native Villages under section 1452(i) of the Act. (f) Ineligible project-related costs. (1) Laboratory fees for routine compliance monitoring. (2) Operation and maintenance expenses. § 35.3525 Authorized types of assistance from the Fund. A State may only provide the following types of assistance from the Fund: (a) Loans. (i) An assistance recipient begins annual repayment of principal and interest no later than one year after project completion. A project is completed when operations are initiated or are capable of being initiated. (ii) A recipient completes loan repayment no later than 20 years after project completion except as provided in paragraph (b)(3) of this section. (iii) A recipient establishes a dedicated source of revenue for repayment of the loan which is consistent with local ordinances and State laws or, for privately-owned systems, a recipient demonstrates that there is adequate security to assure repayment of the loan. (2) A State may include eligible project reimbursement costs within loans if: (i) A system received approval, authorization to proceed, or any similar action by a State prior to initiation of project construction and the construction costs were incurred after such State action; and (ii) The project met all of the requirements of this subpart and was on the State's fundable list, developed using a priority system approved by EPA. A project on the comprehensive list which is funded when a project on the fundable list is bypassed using the State's bypass procedures in accordance with § 35.3555(c)(2)(ii) may be eligible for reimbursement of costs incurred after the system has been informed that it will receive funding. (3) A State may include eligible planning and design and other associated pre-project costs within loans regardless of when the costs were incurred. (4) All payments of principal and interest on each loan must be credited to the Fund. (5) Of the total amount available for assistance from the Fund each year, a State must make at least 15 percent available solely for providing loan assistance to small systems, to the extent such funds can be obligated for eligible projects. A State that provides assistance in an amount that is greater than 15 percent of the available funds in one year may credit the excess toward the 15 percent requirement in future years. (6) A State may provide incremental assistance for a project (e.g., for a particularly large, expensive project) over a period of years. (b) Assistance to disadvantaged communities. (2) A State may take an amount equal to no more than 30 percent of the amount of a particular fiscal year's capitalization grant to provide loan subsidies to disadvantaged communities. If a State does not take the entire 30 percent allowance associated with a particular fiscal year's capitalization grant, it cannot reserve the authority to take the remaining balance of the allowance from future capitalization grants. In addition, a State must: (i) Indicate in the Intended Use Plan (IUP) the amount of the allowance it is taking for loan subsidies; (ii) Commit capitalization grant and required State match dollars taken for loan subsidies in accordance with the binding commitment requirements in § 35.3550(e); and (iii) Commit any other dollars (e.g., principal and interest repayments, investment earnings) taken for loan subsidies to projects over the same time period during which binding commitments are made for the capitalization grant from which the allowance was taken. (3) A State may extend the term for a loan to a disadvantaged community, provided that a recipient completes loan repayment no later than 30 years after project completion and the term of the loan does not exceed the expected design life of the project. (c) Refinance or purchase of local debt obligations General. (2) Multi-purpose debt. (3) Refinancing and State match. (d) Purchase insurance or guarantee for local debt obligations. (e) Revenue or security for Fund debt obligations (leveraging). § 35.3530 Limitations on uses of the Fund. (a) Earn interest. (b) Program administration. (1) A State may use the proceeds of bonds guaranteed by the Fund to absorb expenses incurred issuing the bonds. The net proceeds of the bonds must be deposited into the Fund. (2) A State may assess fees on an assistance recipient which are paid directly by the recipient and are not included as principal in a loan as allowed in paragraph (b)(3) of this section. These fees, which include interest earned on fees, must be deposited into the Fund or into an account outside of the Fund. If the fees are deposited into the Fund, they are subject to the authorized uses of the Fund. If the fees are deposited into an account outside of the Fund, they must be used for program administration, other purposes for which capitalization grants can be awarded under section 1452, State match under sections 1452(e) and (g)(2) of the Act, or combined financial administration of the DWSRF program and CWSRF program Funds where the programs are administered by the same State agency. (3) A State may assess fees on an assistance recipient which are included as principal in a loan. These fees, which include interest earned on fees, must be deposited into the Fund or into an account outside of the Fund. If the fees are deposited into the Fund, they are subject to the authorized uses of the Fund. If the fees are deposited into an account outside of the Fund, they must be used for program administration or other purposes for which capitalization grants can be awarded under section 1452. Fees included as principal in a loan cannot be used for State match under sections 1452(e) and (g)(2) of the Act or combined financial administration of the DWSRF program and CWSRF program Funds. Additionally, fees included as principal in a loan: (i) Cannot be assessed on a disadvantaged community which receives a loan subsidy provided from the 30 percent allowance in § 35.3525(b)(2); (ii) Cannot cause the effective rate of a loan (which includes both interest and fees) to exceed the market rate; and (iii) Cannot be assessed if the effective rate of a loan could reasonably be expected to cause a system to fail to meet the technical, financial, and managerial capability requirements under section 1452 of the Act. (c) Transfers. (1) When a State initially decides to transfer funds: (i) The State's Attorney General, or someone designated by the Attorney General, must sign or concur in a certification for the DWSRF program and the CWSRF program that State law permits the State to transfer funds; and (ii) The Operating Agreements or other parts of the capitalization grant agreements for the DWSRF program and the CWSRF program must be amended to detail the method the State will use to transfer funds. (2) A State may not use the transfer provision to acquire State match for either program or use transferred funds to secure or repay State match bonds. (3) Funds may be transferred after one year has elapsed since a State established its Fund ( i.e., (4) A State may reserve the authority to transfer funds in future years. (5) Funds may be transferred on a net basis between the DWSRF program and CWSRF program, provided that the 33 percent transfer allowance associated with DWSRF program capitalization grants received is not exceeded. (6) Funds may not be transferred or reserved after September 30, 2001. (d) Cross-collateralization. (1) When a State initially decides to cross-collateralize: (i) The State's Attorney General, or someone designated by the Attorney General, must sign or concur in a certification for the DWSRF program and the CWSRF program that State law permits the State to cross-collateralize the Fund assets of the DWSRF program and CWSRF program; and (ii) The Operating Agreements or other parts of the capitalization grant agreements for the DWSRF program and the CWSRF program must be amended to detail the method the State will use to cross-collateralize. (2) The proceeds generated by the issuance of bonds must be allocated to the purposes of the DWSRF program and CWSRF program in the same proportion as the assets from the Funds that are used as security for the bonds. A State must demonstrate at the time of bond issuance that the proportionality requirements have been or will be met. If a default should occur, and the Fund assets from one program are used for debt service in the other program to cure the default, the security would no longer need to be proportional. (3) A State may not combine the Fund assets of the DWSRF program and the CWSRF program as security for bond issues to acquire State match for either program or use the assets of one program to secure match bonds for the other program. (4) The debt service reserves for the DWSRF program and the CWSRF program must be accounted for separately. (5) Loan repayments must be made to the respective program from which the loan was made. § 35.3535 Authorized set-aside activities. (a) General. (2) A State may not use set-aside funds for those projects or project-related costs listed in § 35.3520(b), (c), (e), and (f), with the following exceptions: (i) Project planning and design costs for small systems; and (ii) Costs for restructuring a system as part of a capacity development strategy. (b) Administration and technical assistance. (c) Small systems technical assistance. (d) State program management. (1) This set-aside may only be used for the following activities: (i) To administer the State PWSS program; (ii) To administer or provide technical assistance through source water protection programs (including a Class V Underground Injection Control Program), except for enforcement actions; (iii) To develop and implement a capacity development strategy; and (iv) To develop and implement an operator certification program. (2) Match requirement. A State must provide a dollar for dollar match for expenditures made under this set-aside. (i) The match must be provided at the time of the capitalization grant award or in the same year that funds for this set-aside are expected to be expended in accordance with a workplan approved by EPA. (ii) A State is authorized to use the amount of State funds it expended on its PWSS program in fiscal year 1993 (including PWSS match) as a credit toward meeting its match requirement. The value of this credit can be up to, but not greater than, 50 percent of the amount of match that is required. After determining the value of the credit that it is eligible to receive, a State must provide the additional funds necessary to meet the remainder of the match requirement. The source of these additional funds can be State funds (excluding PWSS match) or documented in-kind services. (e) Local assistance and other State programs. (1) This set-aside may only be used for the following activities: (i) A State may provide assistance only in the form of loans to community water systems and non-profit noncommunity water systems to acquire land or conservation easements from willing sellers or grantors. A system must demonstrate how the purchase of land or easements will protect the source water of the system from contamination and ensure compliance with national primary drinking water regulations. A State must develop a priority setting process for determining what parcels of land or easements to purchase or use an established priority setting process that meets the same goals. A State must seek public review and comment on its priority setting process and must identify the systems that received loans and include a description of the specific parcels of land or easements purchased in the Biennial Report. (ii) A State may provide assistance only in the form of loans to community water systems to assist in implementing voluntary, incentive-based source water protection measures in areas delineated under a source water assessment program under section 1453 of the Act and for source water petitions under section 1454 of the Act. A State must develop a list of systems that may receive loans, giving priority to activities that facilitate compliance with national primary drinking water regulations applicable to the systems or otherwise significantly further the health protection objectives of the Act. A State must seek public review and comment on its priority setting process and its list of systems that may receive loans. (iii) A State may make expenditures to establish and implement wellhead protection programs under section 1428 of the Act. (iv) A State may provide assistance, including technical and financial assistance, to public water systems as part of a capacity development strategy under section 1420(c) of the Act. (v) A State may make expenditures from its fiscal year 1997 capitalization grant to delineate and assess source water protection areas for public water systems under section 1453 of the Act. Assessments include the identification of potential sources of contamination within the delineated areas. These assessment activities are limited to the identification of contaminants regulated under the Act or unregulated contaminants that a State determines may pose a threat to public health. A State must obligate funds within 4 years of receiving its fiscal year 1997 capitalization grant. (2) A State may make loans under this set-aside only if an assistance recipient begins annual repayment of principal and interest no later than one year after completion of the activity and completes loan repayment no later than 20 years after completion of the activity. A State must deposit repayments into the Fund or into a separate account dedicated for this set-aside. The separate account is subject to the same management oversight requirements as the Fund. Amounts deposited into the Fund are subject to the authorized uses of the Fund. § 35.3540 Requirements for funding set-aside activities. (a) General. (b) Set-aside accounts. (c) Workplans General. (2) Submitting workplans. (3) Content. (i) The annual funding amount in dollars and as a percentage of the State allotment or capitalization grant; (ii) The projected number of work years needed for implementing each set-aside activity; (iii) The goals and objectives, outputs, and deliverables for each set-aside activity; (iv) A schedule for completing activities under each set-aside activity; (v) Identification and responsibilities of the agencies involved in implementing each set-aside activity, including activities proposed to be conducted by a third party; and (vi) A description of the evaluation process to assess the success of work funded under each set-aside activity. (4) Amending workplans. (d) Reserving set-aside funds. (2) With the exception of the local assistance and other State programs set-aside under § 35.3535(e), a State may reserve the authority to take from future capitalization grants those set-aside funds that it has not included in workplans. The State must identify in the IUP the amount of authority reserved from a capitalization grant for future use. (e) Fund and set-aside account transfers. (2) A State may transfer funds between the Fund and set-asides, provided that set-aside ceilings are not exceeded. Set-aside funds may be transferred at any time to the Fund. If a State has taken payment for the set-aside funds to be transferred to the Fund, it must make binding commitments for these funds within one year of the transfer. Monies intended for the Fund may be transferred to set-asides only if the State has not yet taken a payment that includes those funds to be transferred in accordance with the payment schedule negotiated with EPA. (3) The capitalization grant agreement must be amended prior to any transfer among the set-aside categories or any transfer between the Fund and set-asides. [65 FR 48299, Aug. 7, 2000, as amended at 79 FR 76057, Dec. 19, 2014] § 35.3545 Capitalization grant agreement. (a) General. (b) Content. (c) Operating agreement. (d) Attorney General certification. (1) The authority establishing the DWSRF program and the powers it confers are consistent with State law; (2) The State may legally bind itself to the proposed terms of the capitalization grant agreement; and (3) An agency of the State is authorized to enter into capitalization grant agreements with EPA, accept capitalization grant awards made under section 1452 of the Act, and otherwise manage the Fund in accordance with the requirements and objectives of the Act and this subpart. (e) Roles and responsibilities of agencies. (f) Process for evaluating capability and compliance. (1) The process it will use to assess the technical, financial, and managerial capability of all systems requesting assistance to ensure that the systems are in compliance with the requirements of the Act. (2) If a State provides assistance to systems that lack technical, financial, and managerial capability, the process it will use to ensure that the systems undertake feasible and appropriate changes in operations to comply with the requirements of the Act over the long-term. (3) If a State provides assistance to systems in significant noncompliance with any national primary drinking water regulation or variance, the process it will use to ensure that the systems return to compliance. § 35.3550 Specific capitalization grant agreement requirements. (a) General. (b) Comply with State statutes and regulations. (c) Demonstrate technical capability. (d) Accept payments. (e) Make binding commitments. (1) Binding commitments must be made in an amount equal to the amount of each capitalization grant payment and accompanying State match that is deposited into the Fund and must be made within one year after the receipt of each grant payment. (2) A State may make binding commitments for more than the required amount and credit the excess towards the binding commitment requirements of subsequent grant payments. (3) If a State is concerned about its ability to comply with the binding commitment requirement, it must notify the RA and propose a revised payment schedule for future grant payments. (f) Deposit of funds. (1) A State must agree to deposit the portion of the capitalization grant to be used for projects into the Fund. (2) A State must agree to maintain separate and identifiable accounts for the portion of the capitalization grant to be used for set-aside activities. (3) A State must agree to deposit net bond proceeds, interest earnings, and repayments into the Fund. (4) A State must agree to deposit any fees, which include interest earned on fees, into the Fund or into separate and identifiable accounts. (g) Provide State match. (1) A State must identify the source of State match in the capitalization grant application. (2) A State must deposit the match into the Fund on or before the date that a State receives each payment for the capitalization grant, except when a State chooses to use a letter of credit (LOC) mechanism or similar financial arrangement for the State match. Under this mechanism, payments to this LOC account must be made proportionally on the same schedule as the payments for the capitalization grant. Cash from this State match LOC account must be drawn into the Fund as cash is drawn into the Fund through the Automated Clearing House (ACH). (3) A State may issue general obligation or revenue bonds to derive the State match. The net proceeds from the bonds issued by a State to derive the match must be deposited into the Fund and the bonds may only be retired using the interest portion of loan repayments and interest earnings of the Fund. Loan principal must not be used to retire State match bonds. (4) If the State deposited State monies in a dedicated revolving fund after July 1, 1993, and prior to receiving a capitalization grant, the State may credit these monies toward the match requirement if: (i) The monies were deposited in a separate revolving fund that subsequently became the Fund after receiving a capitalization grant and they were expended in accordance with section 1452 of the Act; (ii) The monies were deposited in a separate revolving fund that has not received a capitalization grant, they were expended in accordance with section 1452 of the Act, and an amount equal to all repayments of principal and payments of interest from loans will be deposited into the Fund; or (iii) The monies were deposited in a separate revolving fund and used as a reserve for a leveraged program consistent with section 1452 of the Act and an amount equal to the reserve is transferred to the Fund as the reserve's function is satisfied. (5) If a State provides a match in excess of the required amount, the excess balance may be credited towards match requirements associated with subsequent capitalization grants. (h) Provide match for State program management set-aside. (i) Use generally accepted accounting principles. (1) Revenues earned and other receipts, including but not limited to, loan repayments, capitalization grants, interest earnings, State match deposits, and net bond proceeds; (2) Expenses incurred and other disbursements, including but not limited to, loan disbursements, repayment of bonds, and other expenditures allowed under section 1452 of the Act; and (3) Assets, liabilities, capital contributions, and retained earnings. (j) Conduct audits. (k) Dedicated repayment source. (l) Efficient expenditure. (m) Use funds in accordance with IUP. (n) Biennial report. (o) Comply with cross-cutters. (p) Comply with provisions to avoid withholdings. [65 FR 48299, Aug. 7, 2000, as amended at 79 FR 76057, Dec. 19, 2014] § 35.3555 Intended Use Plan (IUP). (a) General. (b) Public review requirements. (c) Content. (1) Priority system. (2) Priority lists of projects. (i) The IUP must contain a fundable list of projects that are expected to receive assistance from available funds designated for use in the current IUP and a comprehensive list of projects that are expected to receive assistance in the future. The fundable list of projects must include: the name of the public water system; the priority assigned to the project; a description of the project; the expected terms of financial assistance based on the best information available at the time the IUP is developed; and the population of the system's service area at the time of the loan application. The comprehensive list must include, at a minimum, the priority assigned to each project and, to the extent known, the expected funding schedule for each project. A State may combine the fundable and comprehensive lists into one list, provided that projects which are expected to receive assistance from available funds designated for use in the current IUP are identified. (ii) The IUP may include procedures which would allow a State to bypass projects on the fundable list. The procedures must clearly identify the conditions which would allow a project to be bypassed and the method for identifying which projects would receive funding. If a bypass occurs, a State must fund the highest ranked project on the comprehensive list that is ready to proceed. If a State elects to bypass a project for reasons other than readiness to proceed, the State must explain why the project was bypassed in the Biennial Report and during the annual review. To the maximum extent practicable, a State must work with bypassed projects to ensure that they will be prepared to receive funding in future years. (iii) The IUP may allow for the funding of projects which require immediate attention to protect public health on an emergency basis, provided that a State defines what conditions constitute an emergency and identifies the projects in the Biennial Report and during the annual review. (iv) The IUP must demonstrate how a State will meet the requirement of providing loan assistance to small systems as described in § 35.3525(a)(5). A State that is unable to comply with this requirement must describe the steps it is taking to ensure that a sufficient number of projects are identified to meet this requirement in future years. (3) Distribution of funds. (i) The process and rationale for distribution of funds between the Fund and set-aside accounts; (ii) The process for selection of systems to receive assistance; (iii) The rationale for providing different types of assistance and terms, including the method used to determine the market rate and the interest rate; (iv) The types, rates, and uses of fees assessed on assistance recipients; and (v) A description of the financial planning process undertaken for the Fund and the impact of funding decisions on the long-term financial health of the Fund. (4) Financial status. (5) Short- and long-term goals. (6) Set-aside activities. (ii) For loans made in accordance with the local assistance and other State programs set-aside under § 35.3535(e)(1)(i) and (e)(1)(ii), the IUP must, at a minimum, describe the process by which recipients will be selected and how funds will be distributed among them. (7) Disadvantaged community assistance. (i) The State's definition of what constitutes a disadvantaged community; (ii) A description of affordability criteria used to determine the amount of disadvantaged assistance; (iii) The amount and type of loan subsidies that may be made available to disadvantaged communities from the 30 percent allowance in § 35.3525(b)(2); and (iv) To the maximum extent practicable, an identification of projects that will receive disadvantaged assistance and the respective amounts. (8) Transfer process. (i) The total amount and type of funds being transferred during the period covered by the IUP; (ii) The total amount of authority being reserved for future transfer, including the authority reserved from previous years; and (iii) The impact of the transfer on the amount of funds available to finance projects and set-asides and the long-term impact on the Fund. (9) Cross-collateralization process. (i) The type of monies which will be used as security; (ii) How monies will be used in the event of a default; and (iii) Whether or not monies used for a default in the other program will be repaid, and if they will not be repaid, what will be the cumulative impact on the Funds. (d) Amending the IUP. § 35.3560 General payment and cash draw rules. (a) Payment schedule. (b) Timing of payments. (c) Funds available for cash draw. (d) Estimated cash draw schedule. (e) Cash draw for set-asides. (f) Cash draw for Fund. (g) Calculation of proportionate Federal share General. (2) State overmatch. (ii) Federal monies may be drawn at a rate that is greater than that determined by the proportionate Federal share calculation when a State is given credit toward its match amount as a result of funding projects in prior years (but after July 1, 1993), or for crediting excess match in the Fund in prior years and disbursing these amounts prior to drawing cash. If the entire amount of a State's required match has been disbursed in advance, the proportionate Federal share of cash draws would be 100 percent. § 35.3565 Specific cash draw rules for authorized types of assistance from the Fund. A State may draw cash for the authorized types of assistance from the Fund described in § 35.3525 according to the following rules: (a) Loans Eligible project costs. (2) Eligible project reimbursement costs. (b) Refinance or purchase of local debt obligations Completed projects. (2) Portions of projects not completed. (3) Purchase of incremental disbursement bonds from local governments. (c) Purchase insurance for local debt obligations. (d) Guarantee for local debt obligations In the event of default. (2) In the absence of default. (e) Revenue or security for Fund debt obligations (leveraging) In the event of default. (2) In the absence of default. (i) All projects method. (ii) Group of projects method. (3) Aggressive leveraging. (i) There are eligible projects ready to proceed in the immediate future with enough costs to justify the amount of the secured bond issue; (ii) The absence of cash on an accelerated basis will substantially delay these projects; (iii) The Fund will provide substantially more assistance if accelerated cash draws are allowed; and (iv) The long-term viability of the State program to meet drinking water needs will be protected. (f) Loans to privately-owned systems. § 35.3570 Reports and audits. (a) Biennial report General. (2) Financial report. (3) Matters to establish in the biennial report. (i) Managed the DWSRF program in a fiscally prudent manner and adopted policies and processes which promote the long-term financial health of the Fund; (ii) Deposited its match (cash or State LOC) into the Fund in accordance with the requirements of § 35.3550(g); (iii) Made binding commitments with assistance recipients to provide assistance from the Fund consistent with the requirements of § 35.3550(e); (iv) Funded only the highest priority projects listed in the IUP and documented why priority projects were bypassed in accordance with § 35.3555(c)(2); (v) Provided assistance only to eligible public water systems and for eligible projects and project-related costs under § 35.3520; (vi) Provided assistance only for eligible set-aside activities under § 35.3535 and conducted activities consistent with workplans and other requirements of § 35.3535 and § 35.3540; (vii) Provided loan assistance to small systems consistent with the requirements of § 35.3525(a)(5) and § 35.3555(c)(2)(iv); (viii) Provided assistance to disadvantaged communities consistent with the requirements of § 35.3525(b) and § 35.3555(c)(7); (ix) Used fees for eligible purposes under § 35.3530(b)(2) and (b)(3) and assessed fees included as principal in a loan in accordance with the limitations in § 35.3530(b)(3)(i) through (b)(3)(iii); (x) Adopted and implemented procedures consistent with the requirements of § 35.3530(c) and § 35.3555(c)(8) if funds were transferred between the DWSRF program and CWSRF program; (xi) Adopted and implemented procedures consistent with the requirements of § 35.3530(d) and § 35.3555(c)(9) if Fund assets of the DWSRF program and CWSRF program were cross-collateralized; (xii) Reviewed all DWSRF program funded projects and activities for compliance with Federal cross-cutting authorities that apply to the State as a grant recipient and those which apply to assistance recipients in accordance with § 35.3575; (xiii) Reviewed all DWSRF program funded projects and activities in accordance with approved State environmental review procedures under § 35.3580; and (xiv) Complied with 2 CFR part 200, the EPA general assistance regulations in 2 CFR part 1500 and the specific conditions of the grant. (4) Joint report. (b) Audit. (2) A State may voluntarily agree to conduct annual independent audits which provide an auditor's opinion on the DWSRF program financial statements, reports on internal controls, and reports on compliance with section 1452 of the Act, applicable regulations, and general grant requirements. The agreement to conduct voluntary independent audits should be documented in the Operating Agreement or in another part of the capitalization grant agreement. (3) Those States that do not conduct independent audits will be subject to periodic audits by the EPA Office of Inspector General. (c) Annual review Purpose. (2) Records access. (d) Information management system Purpose. (2) Reporting. [65 FR 48299, Aug. 7, 2000, as amended at 79 FR 76057, Dec. 19, 2014] § 35.3575 Application of Federal cross-cutting authorities (cross-cutters). (a) General. (b) Application of cross-cutter requirements. (1) All projects for which a State provides assistance in amounts up to the amount of the capitalization grant deposited into the Fund must comply with the requirements of the cross-cutters. Activities for which a State provides assistance from capitalization grant funds deposited into set-aside accounts must comply with the requirements of the cross-cutters, to the extent that the requirements of the cross-cutters are applicable. (2) Projects and activities for which a State provides assistance in amounts that are greater than the amount of the capitalization grant deposited into the Fund or set-aside accounts are not subject to the requirements of the cross-cutters. (3) A State that elects to impose the requirements of the cross-cutters on projects and activities for which it provides assistance in amounts that are greater than the amount of the capitalization grant deposited into the Fund or set-aside accounts may credit this excess to meet future cross-cutter requirements on assistance provided from the respective accounts. (c) Federal anti-discrimination law requirements. et seq.; (d) [Reserved] (e) Complying with cross-cutters. [65 FR 48299, Aug. 7, 2000, as amended at 73 FR 15922, Mar. 26, 2008] § 35.3580 Environmental review requirements. (a) General. (b) Activities excluded from environmental reviews. (c) Tier I environmental reviews. (1) Legal foundation. (i) The mechanisms to implement mitigation measures to ensure that a project or activity is environmentally sound; (ii) The legal remedies available to the public to challenge environmental review determinations and enforcement actions; (iii) The State agency that is primarily responsible for conducting environmental reviews; and (iv) The extent to which environmental review responsibilities will be delegated to local recipients and will be subject to oversight by the primary State agency. (2) Interdisciplinary approach. (3) Decision documentation. (i) Proceed with a project or activity contained in a finding of no significant impact (FNSI) following documentation in an environmental assessment (EA); (ii) Proceed or not proceed with a project or activity contained in a record of decision (ROD) following preparation of a full environmental impact statement (EIS); (iii) Reaffirm or modify a decision contained in a previously issued categorical exclusion (CE), EA/FNSI or EIS/ROD following a mandatory 5 year environmental reevaluation of a proposed project or activity; and (iv) If a State elects to implement processes for either partitioning an environmental review or categorically excluding projects or activities from environmental review, the State must similarly document these processes in its proposed SERP. (4) Public notice and participation. (5) Alternatives consideration. (i) Comparative evaluation among alternatives, including the beneficial and adverse consequences on the existing environment, the future environment, and individual sensitive environmental issues that are identified by project management or through public participation; and (ii) Devising appropriate near-term and long-range measures to avoid, minimize, or mitigate adverse impacts. (d) Tier II environmental reviews. (1) Is supported by a legal foundation which establishes the State's authority to review projects and activities; (2) Responds to other environmental objectives of the State; (3) Provides for comparative evaluations among alternatives and accounts for beneficial and adverse consequences to the existing and future environment; (4) Adequately documents the information, processes, and premises that influence an environmental determination; and (5) Provides for notice to the public of proposed projects and activities and for the opportunity to comment on alternatives and to examine environmental review documents. For projects or activities determined by the State to be controversial, a public hearing must be held. (e) Categorical exclusions (CEs). (f) Environmental reviews for refinanced projects or reimbursed project costs. (g) EPA approval process. (h) Modifications to approved SERPs. § 35.3585 Compliance assurance procedures. (a) Causes. (b) RA's course of action. (c) Consequences for failure to comply. (2) If a State fails to take the necessary corrective action deemed adequate by the RA within 12 months of receipt of the original notice, any suspended payments will be deobligated and reallotted to eligible States. Once a payment has been made for the Fund, that payment and cash draws from that payment will not be subject to withholding. All future payments will be withheld from a State and reallotted until such time that adequate corrective action is taken and the RA determines that the State is back in compliance. (d) Dispute resolution. [65 FR 48299, Aug. 7, 2000, as amended at 79 FR 76058, Dec. 19, 2014; 87 FR 30400, May 19, 2022] Appendix A to Subpart L of Part 35—Criteria for Evaluating a State's Proposed NEPA-Like Process The following criteria will be used by the RA to evaluate a proposed SERP: (A) Legal foundation. (B) Interdisciplinary approach. (C) Decision documentation. (D) Public notice and participation. (E) Alternatives consideration. (1) Designation of a study area comparable to the final system; (2) A range of feasible alternatives, including the no action alternative; (3) Direct and indirect impacts; (4) Present and future conditions; (5) Land use and other social parameters including relevant recreation and open-space considerations; (6) Consistency with population projections used to develop State implementation plans under the Clean Air Act; (7) Cumulative impacts including anticipated community growth (residential, commercial, institutional, and industrial) within the project study area; and (8) Other anticipated public works projects including coordination with such projects. Subpart M—Grants for Technical Assistance Authority: 42 U.S.C. 9617(e); sec. 9(g), E.O. 12580, 52 FR 2923, 3 CFR, 1987 Comp., p. 193. Source: 65 FR 58858, Oct. 2, 2000, unless otherwise noted. General § 35.4000 Authority. The Environmental Protection Agency (“EPA”) issues this subpart under section 117(e) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), as amended, 42 U.S.C. 9617(e). § 35.4005 What is a Technical Assistance Grant? A Technical Assistance Grant (TAG) provides money for your group to obtain technical assistance in interpreting information with regard to a Superfund site. EPA awards TAGs to promote public participation in decision making at eligible sites. A TAG allows your group to procure independent technical advisors to help you interpret and comment on site-related information and decisions. Examples of how a technical advisor can help your group include, but are not limited to: (a) Reviewing preliminary site assessment/site investigation data; (b) Participating in public meetings to help interpret information about site conditions, proposed remedies, and the implementation of a remedy; (c) Visiting the site vicinity periodically during cleanup, if possible, to observe progress and provide technical updates to your group; and (d) Evaluate future land use options based on land use assumptions found in the “remedial investigation/feasibility study.” § 35.4010 What does this subpart do? This subpart establishes the program-specific regulations for TAGs awarded by EPA. § 35.4011 Do the general grant regulations apply to TAGs? Yes, the regulations at 2 CFR part 200 and 2 CFR Part 1500 apply to TAGs. 2 CFR part 200, as supplemented by 2 CFR part 1500, establishes the uniform administrative requirements for Federal grants. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76058, Dec. 19, 2014] § 35.4012 If there appears to be a difference between the requirements of 2 CFR Parts 200 and 1500 and this subpart, which regulations should my group follow? You should follow the regulations in 2 CFR part 200 and 2 CFR part 1500, except for the following provisions from which this subpart deviates: (a) 2 CFR 200.305(b)(1) and (2), Payment (b) 2 CFR 200.320, Methods of procurement to be followed. (c) 2 CFR 200.325(b)(2), Federal awarding agency or pass-through entity review. (d) 2 CFR 200.324, Cost or price analysis. (e) 2 CFR part 1500 Subpart E—Disputes. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76058, Dec. 19, 2014; 87 FR 30400, May 19, 2022] § 35.4015 Do certain words in this subpart have specific meaning? Yes, some words in this subpart have specific meanings that are described in§ 35.4270, Definitions. The first time these words are used they are marked with quotation marks, for example, “EPA.” Who Is Eligible? § 35.4020 Is my community group eligible for a TAG? (a) Yes, your community group is eligible for a TAG if: (1) You are a group of people who may be “affected” by a release or a threatened release at any facility listed on the National Priorities List (“NPL”) or proposed for listing under the National Contingency Plan (NCP) where a “response action” under CERCLA has begun; (2) Your group meets the minimum administrative and management capability requirements found in 2 CFR 200.302 by demonstrating you have or will have reliable procedures for record keeping and financial accountability related to managing your TAG (you must have these procedures in place before your group incurs any expenses); and (3) Your group is not ineligible according to paragraph (b) of this section. (b) No, your community group is not eligible for a TAG if your group is: (1) A “potentially responsible party” (PRP), receives money or services from a PRP, or represents a PRP; (2) Not incorporated as a nonprofit organization for the specific purpose of representing affected people except as provided in § 35.4045; (3) “Affiliated” with a national organization; (4) An academic institution; (5) A political subdivision (for example, township or municipality); or (6) Established or presently sustained by ineligible entities that paragraphs (b) (1) through (5) of this section describe, or if any of these ineligible entities are represented in your group. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76058, Dec. 19, 2014] § 35.4025 Is there any way my group can get a TAG if it is currently ineligible? You can make your group eligible by establishing an identity separate from that of the PRP or other ineligible entity by making a reasonable demonstration of independence from the ineligible entity. Such a demonstration requires, at a minimum, a showing that your group has a separate and distinct: (a) Formal legal identity (for example, your group has different officers); and (b) Substantive existence (meaning, is not affiliated with an ineligible entity), including its own finances. (1) In determining whether your group has a different substantive existence from the ineligible entity, you must establish for us that your group: (i) Is not controlled either directly or indirectly, by the ineligible entity; and (ii) Does not control, either directly or indirectly, an ineligible entity. (2) You must also establish for EPA that a third group does not have the power to control both your group and an ineligible entity. § 35.4030 Can I be part of a TAG group if I belong to an ineligible group? You may participate in your capacity as an individual in a group receiving a TAG, but you may not represent the interests of an ineligible entity. However, we may prohibit you from participating in a TAG group if the “award official” determines you have a significant financial involvement in a PRP. § 35.4035 Does EPA use the same eligibility criteria for TAGs at “Federal facility” sites? Yes, EPA uses the same criteria found in § 35.4020 in evaluating the eligibility of your group or any group of individuals who may be affected by a release or a threatened release at a Federal facility for a TAG under this subpart. § 35.4040 How many groups can receive a TAG at one Superfund site? (a) Only one TAG may be awarded for a site at any one time. However, the recipient of the grant can be changed when: (1) EPA and the recipient mutually agree to terminate the current TAG or the recipient or EPA unilaterally terminates the TAG; or (2) The recipient elects not to renew its grant even though it is eligible for additional funding. (b) In each of the situations described in paragraph (a) of this section the following information applies: (1) If you are a subsequent recipient of a TAG, you are not responsible for actions taken by the first recipient, nor are you responsible for how the first recipient expended the funds received from EPA; and (2) The process for changing recipients begins when an interested applicant submits a Letter of Intent (“LOI”) to the Agency expressing interest in a TAG as described in § 35.4105. We will then follow the application procedure set forth at §§ 35.4105 through 35.4165. Your Responsibilities as a TAG Recipient § 35.4045 What requirements must my group meet as a TAG recipient? Your group, including those groups which form out of a coalition agreement, must incorporate as a nonprofit corporation for the purpose of participating in decision making at the Superfund site for which we provide a TAG. However, a group that was previously incorporated as a nonprofit organization and includes all individuals and groups who joined in applying for the TAG is not required to reincorporate for the specific purpose of representing affected individuals at the site, if in EPA's discretionary judgment, the group has a history of involvement at the site. You must also: (a) At the time of award, demonstrate that your group has incorporated as a nonprofit organization or filed the necessary documents for incorporation with the appropriate State agency; and (b) At the time of your first request for reimbursement or advance payment, submit proof that the State has incorporated your group as a nonprofit organization. § 35.4050 Must my group contribute toward the cost of a TAG? (a) Yes, your group must contribute 20 percent of the total cost of the TAG project unless EPA waives the match under § 35.4055. (b) Under 2 CFR 200.306, your group may use “cash” and/or “in-kind contributions” (for example, your board members can count their time toward your matching share) to meet the matching funds requirement. Without specific statutory authority, you may not use Federal funds to meet the required match. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76058, Dec. 19, 2014] § 35.4055 What if my group can't come up with the “matching funds?” (a) EPA may waive all or part of your matching funds requirement if we: (1) Have not issued the “Record of Decision” (“ROD”) at the last “operable unit” for the site (in other words, if EPA has not already made decisions on the final cleanup actions at the site); and (2) Determine, based on evidence in the form of documentation provided by your group, that: (i) Your group needs a waiver because providing the match would be a financial hardship to your group (for example, your local economy is depressed and coming up with in-kind contributions would be difficult); and (ii) The waiver is necessary to help your community participate in selecting a remedial action at the site. (b) If your group receives a waiver of the matching funds after your initial award, your grant agreement must be amended. How Much Money TAGs Provide § 35.4060 How much money can my group receive through a TAG? The following table shows how much money your group can receive through a TAG: If your group is . . . Then your initial award will . . . (a) the first recipient of a TAG at a site or a subsequent recipient at a site where the initial recipient spent the entire award amount not exceed $50,000 per site. (b) a subsequent recipient at a site with remaining funds from an initial $50,000 award be the unspent amount remaining from an initial from the initial award (for example, if the Agency awarded the first recipient $50,000 but that recipient only spent $27,000, then your group's initial award would be $23,000). § 35.4065 How can my group get more than $50,000? (a) The EPA regional office award official for your grant may waive your group's $50,000 limit if your group demonstrates that: (1) If it received previous TAG funds, you managed those funds effectively; and (2) Site(s) characteristics indicate additional funds are necessary due to the nature or volume of site-related information. In this case, three of the ten factors below must occur: (i) A Remedial Investigation/Feasibility Study (“RI/FS”) costing more than $2 million is performed; (ii) Treatability studies or evaluation of new and innovative technologies are required as specified in the Record of Decision; (iii) EPA reopens the Record of Decision; (iv) The site public health assessment (or related activities) indicates the need for further health investigations and/or health promotion activities; (v) EPA designates one or more additional operable units after awarding the TAG; (vi) The agency leading the cleanup issues an “Explanation of Significant Differences” (ESD); (vii) A legislative or regulatory change results in new site information after EPA awards the TAG; (viii) EPA expects a cleanup lasting more than eight years from the beginning of the RI/FS through construction completion; (ix) Significant public concern exists, where large groups of people in the community require many meetings, copies, etc.; and (x) Any other factor that, in EPA's judgment, indicates that the site is unusually complex. (b) Your group can also receive more than $50,000 if you are geographically close to more than one eligible site (for example, two or more sites × $50,000 = grant of $100,000) and your group wishes to receive funding for technical assistance to address multiple eligible sites. What TAGs Can Pay For § 35.4070 How can my group spend TAG money? (a) Your group must use all or most of your funds to procure a technical advisor(s) to help you understand the nature of the environmental and public health hazards at the site, the various stages of health and environmental investigations and activities, cleanup, and “operation and maintenance” of a site, including exposure investigation, health study, surveillance program, health promotion activities (for example, medical monitoring and pediatric health units), remedial investigation, and feasibility study, record of decision, remedial design, selection and construction of remedial action, operation and maintenance, and removal action. This technical assistance should contribute to the public's ability to participate in the decision making process by improving the public's understanding of overall conditions and activities at the site. (b) Your group may use a portion of your funds to: (1) Undertake activities that communicate site information to the public through newsletters, public meetings or other similar activities; (2) Procure a grant administrator to manage your group's grant; and/or (3) Provide one-time health and safety training for your technical advisor to gain site access to your local Superfund site. To provide this training, you must: (i) Obtain written approval from the EPA regional office; and (ii) Not spend more than $1,000.00 for this training, including travel, lodging and other related costs. § 35.4075 Are there things my group can't spend TAG money for? Your TAG funds cannot be used for the following activities: (a) Lawsuits or other legal actions; (b) Attorney fees for services: (1) Connected to any kind of legal action; or (2) That could, if such a relationship were allowable, be interpreted as resulting in an attorney/client relationship to which the attorney/client privilege would apply; (c) The time of your technical advisor to assist an attorney in preparing a legal action or preparing and serving as an expert witness at any legal proceeding; (d) Political activity and lobbying that is unallowable under 2 CFR part 200 Subpart E—Cost Principles, (this restriction includes activities such as attempting to influence the outcomes of any Federal, State or local election, referendum, initiative, or similar procedure through in-kind or cash contributions, endorsements, or publicity, or attempting to influence the introduction or passage of Federal or state legislation; this regulation is available at http://www.ecfr.gov (e) Other activities that are unallowable under the cost principles stated in 2 CFR part 200 Subpart E—Cost Principles (such as costs of amusement, diversion, social activities, fund raising and ceremonials); (f) Tuition or other training expenses for your group's members or your technical advisor except as § 35.4070(b)(3) allows; (g) Any activities or expenditures for your group's members' travel; (h) Generation of new primary data such as well drilling and testing, including split sampling; (i) Reopening or challenging final EPA decisions such as: (1) Records of Decision; and/or (2) Disputes with EPA under its dispute resolution procedures set forth 2 CFR Part1500 Subpart E (see § 35.4245); and (j) Generation of new health data through biomedical testing (for example, blood or urine testing), clinical evaluations, health studies, surveillance, registries, and/or public health interventions. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76058, Dec. 19, 2014] How You Get the Money § 35.4080 Does my group get a lump sum up front, or does EPA reimburse us for costs we incur? (a) EPA pays your group by reimbursing you for “allowable” costs, which are costs that are: (1) Grant related; (2) “Allocable”; (3) “Reasonable”; and (4) Necessary for the operation of the organization or the performance of the award. (b) You will be reimbursed for the allowable costs up to the amount of the TAG if your group incurred the costs during the approved “project period” of the grant (except for allowable costs of incorporation which may be incurred prior to the project period), and your group is legally required to pay those costs. § 35.4085 Can my group get an “advance payment” to help us get started? Yes, a maximum of $5,000.00 in the form of an advance payment is available to new recipients. § 35.4090 If my group is eligible for an advance payment, how do we get our funds? (a) Your group must submit in writing a request for an advance payment and identify what activities, goods or services your group requires. (b) Your EPA regional office project officer identified in your award document must approve the items for which your group seeks advance funding. (c) Upon approval of your request, EPA will advance cash (in the form of a check or electronic funds transfer) to your group, up to $5,000, to cover its estimated need to spend funds for an initial period generally geared to your group's cycle of spending funds. (d) After the initial advance, EPA reimburses your group for its actual cash disbursements. § 35.4095 What can my group pay for with an advance payment? (a) Advance payments may be used only for the purchase of supplies, postage, the payment of the first deposit to open a bank account, the rental of equipment, the first month's rent of office space, advertisements for technical advisors and other items associated with the start up of your organization specifically requested in your advance payment request and approved by your EPA project officer. (b) Advance payments must not be used for contracts for technical advisors or other contractors. (c) Advance payments are not available for the costs of incorporation. § 35.4100 Can my group incur any costs prior to the award of our grant? (a) The only costs you may incur prior to the award of a grant from EPA are costs associated with incorporation but you do so at your own risk. (b) If you are awarded a TAG, EPA may reimburse you for preaward incorporation costs or allow you to count the costs toward your matching funds requirement if the costs are: (1) Necessary and reasonable for incorporation; and (2) Incurred for the sole purpose of complying with this subpart's requirement that your group be incorporated as a nonprofit corporation. How To Apply for a TAG § 35.4105 What is the first step for getting a TAG? To let EPA know of your group's interest in obtaining a TAG, your group should first submit to its EPA regional office a Letter of Intent. (The addresses of EPA's regional offices' TAG Coordinators are listed in § 35.4275.) § 35.4106 What information should an LOI include? The LOI should clearly state that your group intends to apply for a TAG, and should identify: (a) The name of your group; (b) The Superfund site(s) for which your group intends to submit an application; and (c) Provide the name of a contact person in the group and his or her mailing address and telephone number. § 35.4110 What does EPA do once it receives the first LOI from a group? The following table shows what EPA does when it receives the first LOI from a group: If your site . . . Then EPA . . . (a) Is not proposed for listing on the NPL or is proposed but no response is underway or scheduled to begin will advise you in writing that we are not yet accepting TAG “applications” for your site. EPA may informally notify other interested groups that it has received an LOI. (b) Is listed on the NPL or is proposed for listing on the NPL and a response action is underway will publish a notice in your local newspaper to formally notify other interested parties that they may contact the first group that sent the LOI to form a coalition or they may submit a separate LOI. § 35.4115 After the public notice that EPA has received an LOI, how much time does my group have to form a coalition or submit a separate LOI? Your group has 30 days (from the date the public notice appears in your local newspaper) to submit documentation that you have formed a coalition with the first group and any other groups, or to submit a separate LOI. This 30-day period is the first 30 days with which your group must be concerned. § 35.4120 What does my group do next? (a) After you submit an LOI, you must determine whether your application is subject to Federal intergovernmental review requirements under 40 CFR part 29 or intergovernmental review procedures established in state or local law. (b) To determine whether your TAG application is subject to Federal intergovernmental review, you must consult EPA's list of financial assistance programs subject to intergovernmental review under 40 CFR part 29 posted at https://www.epa.gov/grants/epa-financial-assistance-programs-subject-executive-order-12372-and-section-204-demonstration [87 FR 30400, May 19, 2022] § 35.4125 What else does my group need to do? Once you've determined whether Federal intergovernmental review requirements apply, you must prepare a TAG application on EPA SF-424, Application for Federal Assistance, or those forms and instructions provided by EPA that include: (a) A “budget”; (b) A scope of work; (c) Assurances, certifications and other pre-award paperwork as 2 CFR part 200 requires. Your EPA regional office will provide you with the required forms. [87 FR 30400, May 19, 2022] § 35.4130 What must be included in my group's budget? Your budget must clearly show how: (a) You will spend the money and how the spending meets the objectives of the TAG project; (b) Your group will provide the required cash and/or in-kind contributions; and (c) Your group derived the figures included in the budget. § 35.4135 What period of time should my group's budget cover? The period of time your group's budget covers (the “funding period” of your grant) will be: (a) One which best accommodates your needs; (b) Negotiated between your group and EPA; and (c) Stated in the “award document.” § 35.4140 What must be included in my group's work plan? (a) Your scope of work must clearly explain how your group: (1) Will organize; (2) Intends to use personnel you will procure for management/coordination and technical advice; and (3) Will share and disseminate information to the rest of the affected community. (b) Your scope of work must also clearly explain your project's milestones and the schedule for meeting those milestones. (c) Finally, your scope of work must explain how your board of directors, technical advisor(s) and “project manager” will interact with each other. § 35.4145 How much time do my group or other interested groups have to submit a TAG application to EPA? (a) Your group must file your application with your EPA regional office within the second 30 days after the date the public notice appears in your local newspaper announcing that EPA has received an LOI. This second 30-day period begins on the day after the first 30-day period § 35.4115 describes ends. EPA will only accept applications from groups that submitted an LOI within 30 days from the date of that public notice. (b) If your group requires more time to file a TAG application, you may submit a written request asking for an extension. If EPA decides to extend the time period for applications in response to your request, it will notify, in writing, all groups that submitted an LOI of the new deadline for submitting TAG applications. (c) EPA will not accept other applications or requests for extensions after the final application deadline has passed. § 35.4150 What happens after my group submits its application to EPA? (a) EPA will review your application and send you a letter containing written comments telling you what changes need to be made to the application to make it complete. (b) Your group has 90 days from the date on the EPA letter to make the changes to your application and resubmit it to EPA. (c) Once the 90-day period ends, EPA will begin the process to select a TAG recipient, or, in the case of a single applicant, if, EPA does not receive a complete application (meaning, an application that does not have the changes provided in the letter described in paragraph (b) of this section), then EPA will readvertise the fact that a TAG is available and the award process will begin again. § 35.4155 How does EPA decide whether to award a TAG to our group? Once EPA determines your group meets the eligibility requirements in § 35.4020 the Agency considers whether and how successfully your group meets these criteria, each of which are of equal weight: (a) Representation of groups and individuals affected by the site; (b) Your group's plans to use the services of a technical advisor throughout the Superfund response action; and (c) Your group's ability and plan to inform others in the community of the information provided by the technical advisor. § 35.4160 What does EPA do if more than one group applies for a TAG at the same site? When multiple groups apply, EPA will rank each applicant relative to other applicants using the criteria in § 35.4155. § 35.4161 Does the TAG application process affect the schedule for work at my site? No, the schedule for response activities at your site is not affected by the TAG process. § 35.4165 When does EPA award a TAG? (a) EPA may award TAGs throughout the Superfund process, including during operation and maintenance, but we will not award a TAG before the start of your site's response action if the site is proposed for listing on the NPL. (b) Based on the availability of funds, EPA may delay awards of grants to qualified applicants. Managing Your TAG § 35.4170 What kinds of reporting does EPA require? There are several types of reports you need to complete at various points during the life of your group's grant; the number varies based on whether you receive an advance payment: Type of report Required information Timing and frequency (a) Federal Cash Transactions Report The amount of funds advanced to you or electronically transferred to your bank account and how you spent those funds Semiannually within 15 working days following the end of the semiannual period which ends June 30 and December 31 of each year. (b) [Reserved] (c) Progress Report Full description in chart or narrative format of the progress your group made in relation to your approved schedule, budget and the TAG project milestones, including an explanation of special problems your group encountered Quarterly, within 45 days after the end of each calendar quarter. (d) Financial Status Report Status of project's funds through identification of project transactions and within 90 days after the end of your TAG's funding period Annually, within 90 days after the anniversary date of the start of your TAG project. (e) Final Report Description of project goals and objectives, activities undertaken to achieve goals and objectives, difficulties encountered, technical advisors' work products and funds spent Within 90 days after the end of your project. [65 FR 58858, Oct. 2, 2000, as amended at 73 FR 15922, Mar. 26, 2008] § 35.4175 What other reporting and record keeping requirements are there? In addition to the report requirements § 35.4170 describes, EPA requires your group to: (a) Comply with any reporting requirements in the terms and conditions of the “grant agreement”; (b) Keep complete financial records accurately showing how you used the Federal funds and the match, whether it is in the form of cash or in-kind assistance; and (c) Comply with any reporting and record keeping requirements in 2 CFR parts 200 and 1500. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76058, Dec. 19, 2014] § 35.4180 Must my group keep financial records after we finish our TAG? (a) You must keep TAG financial records for ten years from the date of the final Financial Status Report, or until any audit, litigation, cost recovery, and/or disputes initiated before the end of the ten-year retention period are settled, whichever, is longer. (b) At the ten-year mark, you may dispose of your TAG financial records if you first get written approval from EPA. (c) If you prefer, you may submit the financial records to EPA for safekeeping when you give us the final Financial Status Report. § 35.4185 What does my group do with reports our technical advisor prepares for us? You must send to EPA a copy of each final written product your advisor prepares for you as part of your TAG. We will send them to the local Superfund site information repository(ies) where all site-related documents are available to the public. Procuring a Technical Advisor or Other Contractor With TAG Funds § 35.4190 How does my group identify a qualified technical advisor? (a) Your group must select a technical advisor who possesses the following credentials: (1) Demonstrated knowledge of hazardous or toxic waste issues, relocation issues, redevelopment issues or public health issues as those issues relate to hazardous substance/toxic waste issues, as appropriate; (2) Academic training in a relevant discipline (for example, biochemistry, toxicology, public health, environmental sciences, engineering, environmental law and planning); and (3) Ability to translate technical information into terms your community can understand. (b) Your technical advisor for public health issues must have received his or her public health or related training at accredited schools of medicine, public health or accredited academic institutions of other allied disciplines (for example, toxicology). (c) Your group should select a technical advisor who has experience working on hazardous or toxic waste problems, relocation, redevelopment or public health issues, and communicating those problems and issues to the public. § 35.4195 Are there certain people my group cannot select to be our technical advisor, grant administrator, or other contractor under the grant? Your group may not hire the following: (a) The person(s) who wrote the specifications for the “contract” and/or who helped screen or select the contractor; (b) In the case of a technical advisor, a person or entity doing work for the Federal or State government or any other entity at the same NPL site for which your group is seeking a technical advisor; and (c) Any person who is on the List of Parties Excluded from Federal Procurement or NonProcurement Programs. § 35.4200 What restrictions apply to contractors my group procures for our TAG? When procuring contractors your group: (a) Cannot award cost-plus-percentage-of-cost contracts; and (b) Must award only to responsible contractors that possess the ability to perform successfully under the terms and conditions of a proposed contract. § 35.4205 How does my group procure a technical advisor or any other contractor? When procuring contractors your group must also: (a) Provide opportunity for all qualified contractors to compete for your work (see § 35.4210); (b) Keep written records of the reasons for all your contracting decisions; (c) Make sure that all costs are reasonable in a proposed contract; (d) Inform EPA of any proposed contract over $1,000.00; (e) Provide EPA the opportunity to review a contract before your group awards or amends it; (f) Perform a “cost analysis” to evaluate each element of a contractor's cost to determine if it is reasonable, allocable and allowable for all contracts over $25,000; and [65 FR 58858, Oct. 2, 2000, as amended at 73 FR 15922, Mar. 26, 2008] § 35.4210 Must my group solicit and document bids for our procurements? (a) The steps needed to be taken to procure goods and/or services depends on the amount of the proposed procurement: If the aggregate amount of the Then your group (1) purchase is $1,000 or less may make the purchase as long as you make sure the price is reasonable; no oral or written bids are necessary. (2) proposed contract is over $1,000 but less than $25,000 must obtain and document oral or written bids from two or more qualified sources. (3) proposed contract is $25,000 to $100,000 must: (i) Solicit written bids from three or more sources who are willing and able to do the work; (ii) Provide potential sources in the scope of work to be performed and the criteria your group will use to evaluate the bids; (iii) Objectively evaluate all bids; and (iv) Notify all unsuccessful bidders. (4) proposed contract is greater than $100,000 must follow the procurement regulations in 2 CFR Parts 200 and 1500 (these regulations outline the standards for your group to use when contracting for services with Federal funds; they also contain provisions on: codes of conduct for the award and administration of contracts; competition; procurement procedures; cost and price analysis; procurement records; contract administration; and contracts generally). (b) Your group must not divide any procurements into smaller parts to get under any of the dollar limits in paragraph (a) of this section. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76058, Dec. 19, 2014] § 35.4215 What if my group can't find an adequate number of potential sources for a technical advisor or other contractor? In situations where only one adequate bidder can be found, your group may request written authority from the EPA award official to contract with the sole bidder. § 35.4220 How does my group ensure a prospective contractor does not have a conflict of interest? Your group must require any prospective contractor on any contract to provide, with its bid or proposal: (a) Information on its financial and business relationship with all PRPs at the site, with PRP parent companies, subsidiaries, affiliates, subcontractors, contractors, and current clients or attorneys and agents. This disclosure requirement includes past and anticipated financial and business relationships, and services provided to or on behalf of such parties in connection with any proposed or pending litigation; (b) Certification that, to the best of its knowledge and belief, it has disclosed such information or no such information exists; and (c) A statement that it will disclose to you immediately any such information discovered after submission of its bid or after award. § 35.4225 What if my group decides a prospective contractor has a conflict of interest? If, after evaluating the information in § 35.4220, your group decides a prospective contractor has a significant conflict of interest that cannot be avoided or otherwise resolved, you must exclude him or her from consideration. § 35.4230 What are my group's contractual responsibilities once we procure a contractor? (a) Is responsible for resolving all contractual and administrative issues arising out of contracts you enter into under a TAG; you must establish a procedure for resolving such issues with your contractor which complies with the provisions of 2 CFR 200.318 (k).These provisions say your group, not EPA, is responsible for settling all issues related to decisions you make in procuring advisors or other contractors with TAG funds; and (b) Must ensure your contractor(s) perform(s) in accordance with the terms and conditions of the contract. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76058, Dec. 19, 2014] § 35.4235 Are there specific provisions my group's contract(s) must contain? Your group must include the following provisions in each of its contracts: (a) Statement of work; (b) Schedule for performance; (c) Due dates for deliverables; (d) Total cost of the contract; (e) Payment provisions; (f) The following clauses from 2 CFR part 200 Appendix II—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards, which are available at http://www.ecfr.gov (g) The following clauses from 2 CFR part 200: (1) Remedies for breaches of contract (2 CFR part 200 Appendix II—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards) (2) Termination by the recipient (2 CFR part 200 Appendix II—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards); and (3) Access to records (2 CFR 200.337); and (h) Provisions that require your contractor(s) to keep the following detailed records as § 35.4180 requires for ten years after the end of the contract: (1) Acquisitions; (2) Work progress reports; (3) Expenditures; and (4) Commitments indicating their relationship to established costs and schedules. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76059, Dec. 19, 2014; 87 FR 30400, May 19, 2022] Requirements for TAG Contractors § 35.4240 What provisions must my group's TAG contractor comply with if it subcontracts? A TAG contractor must comply with the following provisions when awarding subcontracts: (a) Section 35.4205 (b) pertaining to documentation; (b) Section 35.4205 (c) and (f) pertaining to cost; (c) Section 35.4195 (c) pertaining to suspension and debarment; (d) Section 35.4200 (b) pertaining to responsible contractors; (e) [Reserved] (f) Section 35.4200 (a) pertaining to unallowable contracts; (g) Section 35.4235 pertaining to contract provisions; and (h) Cost principles in 48 CFR part 31, the Federal Acquisition Regulation, if the contractor and subcontractors are profit-making organizations. [65 FR 58858, Oct. 2, 2000, as amended at 73 FR 15922, Mar. 26, 2008] Grant Disputes, Termination, and Enforcement § 35.4245 How does my group resolve a disagreement with EPA regarding our TAG? The regulations at 2 CFR part 1500 Subpart E will govern disputes except that, before you may obtain judicial review of the dispute, you must have sought reconsideration of the Dispute Decision Official's Appeal decision under 2 CFR 1500.17. [87 FR 30400, May 19, 2022] § 35.4250 Under what circumstances would EPA terminate my group's TAG? (a) EPA may terminate your grant if your group materially fails to comply with the terms and conditions of the TAG and the requirements of this subpart. (b) EPA may also terminate your grant with your group's consent in which case you and EPA must agree upon the termination conditions, including the effective date as 2 CFR 200.340 describes. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76059, Dec. 19, 2014; 87 FR 30400, May 19, 2022] § 35.4255 Can my group terminate our TAG? Yes, your group may terminate your TAG by sending EPA written notification explaining the reasons for the termination and the effective date. § 35.4260 What other steps might EPA take if my group fails to comply with the terms and conditions of our award? EPA may take one or more of the following actions, under 2 CFR 200.339, depending on the circumstances: (a) Temporarily withhold advance payments until you correct the deficiency; (b) Not allow your group to receive reimbursement for all or part of the activity or action not in compliance; (c) Wholly or partly “suspend” your group's award; (d) Withhold further awards (meaning, funding) for the project or program; (e) Take enforcement action; (f) Place special conditions in your grant agreement; and (g) Take other remedies that may be legally available. [65 FR 58858, Oct. 2, 2000, as amended at 79 FR 76059, Dec. 19, 2014; 87 FR 30400, May 19, 2022] Closing Out a TAG § 35.4265 How does my group close out our TAG? (a) Within 90 calendar days after the end of the approved project period of the TAG, your group must submit all financial, performance and other reports as required by § 35.4180. Upon request from your group, EPA may approve an extension of this time period. (b) Unless EPA authorizes an extension, your group must pay all your bills related to the TAG by no later than 90 calendar days after the end of the funding period. (c) Your group must promptly return any unused cash that EPA advanced or paid; OMB Circular A-129, Policies for Federal Credit Programs and Non-Tax Receivables, governs unreturned amounts that become delinquent debts. Other Things You Need To Know § 35.4270 Definitions. The following definitions apply to this subpart: Advance payment Affected (1) Who live in areas near NPL facilities, whose health may be endangered by releases of hazardous substances at the facility; or (2) Whose economic interests are threatened or harmed. Affiliated (1) Interlocking management or ownership (e.g., centralized decisionmaking and control); (2) Shared facilities and equipment; and (3) Common use of employees. Allocable cost (1) Is incurred specifically for the award; (2) Benefits both the award and other work and can be distributed in reasonable proportion to the benefits received; or (3) Is necessary to the overall operation of the organization, although a direct relationship to any particular cost objective cannot be shown. Allowable cost Applicant Application Award document Award Official Budget Cash contribution Contract Contractor Cost analysis Eligible cost EPA Explanation of Significant Differences Federal facility Funding period Grant agreement In-kind contribution Letter of intent Matching funds National Contingency Plan National Priorities List Operable unit Operation and maintenance Outlay Potentially responsible party Project manager Project period Reasonable cost Recipient Record of decision Remedial investigation/feasibility study Response action Start of response action Suspend § 35.4275 Where can my group get the documents this subpart references (for example Whitehouse OMB circulars, eCFR and tag Web site, EPA HQ/Regional offices, grant forms)? EPA Headquarters and the regional offices that follow have the documents this subpart references available if you need them: (a) TAG Coordinator or Grants Office, U.S. EPA Region I, 5 Post Office Square—Suite 100, Boston, MA 02109-3912 (b) TAG Coordinator or Grants Office, U.S. EPA Region II, 290 Broadway, New York, NY 10007-1866. (c) TAG Coordinator or Grants Office, U.S. EPA Region III, 1650 Arch Street, Philadelphia, PA 19106. (d) TAG Coordinator or Grants Office, U.S. EPA Region IV, Atlanta Federal Center, 61 Forsyth Street, Atlanta, GA 30303. (e) TAG Coordinator or Grants Office, U.S. EPA Region V, Metcalfe Federal Building, 77 W. Jackson Blvd., Chicago, IL 60604. (f) TAG Coordinator or Grants Office, U.S. EPA Region 6, 1201 Elm Street, Suite 500, Dallas, Texas 75270-2102. (g) TAG Coordinator or Grants Office, U.S. EPA Region 7, 11201 Renner Boulevard, Lenexa, Kansas 66219. (h) TAG Coordinator or Grants Office, U.S. EPA Region VIII, 999 18th Street, Suite #500, Denver, CO 80202-2466. (i) TAG Coordinator or Grants Office, U.S. EPA Region IX, 75 Hawthorne Street, San Francisco, CA 94105. (j) TAG Coordinator or Grants Office, U.S. EPA Region X, 1200 6th Avenue, Seattle, WA 98101. (k) National TAG Coordinator, U.S. EPA Mail Code: 5204-G, Ariel Rios Building, 1200 Pennsylvania Avenue, NW, Washington, DC 20460. [65 FR 58858, Oct. 2, 2000, as amended at 76 FR 49671, Aug. 11, 2011; 78 FR 37975, June 25, 2013; 79 FR 76059, Dec. 19, 2014; 84 FR 44227, Aug. 23, 2019] Subpart N [Reserved] Subpart O—Cooperative Agreements and Superfund State Contracts for Superfund Response Actions Authority: 42 U.S.C. 9601 et seq. Source: 72 FR 24504, May 2, 2007, unless otherwise noted. General § 35.6000 Authority. This subpart is issued under section 104(a) through (j) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (CERCLA)(42 U.S.C. 9601 et seq. § 35.6005 Purpose and scope. (a) This subpart codifies recipient requirements for administering Cooperative Agreements awarded pursuant to section 104(d)(1) of CERCLA. This subpart also codifies requirements for administering Superfund State Contracts (SSCs) for non-State-lead remedial responses undertaken pursuant to section 104 of CERCLA. (b) 2 CFR part 200, “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards to Non-Federal Entities,” establishes consistency and uniformity among Federal agencies in the administration of grants and Cooperative Agreements to non-federal entities. For CERCLA-funded Cooperative Agreements, this subpart supplements the requirements contained in 2 CFR parts 200 and 1500 for States, political subdivisions thereof, and Indian Tribes. This subpart references those sections of 2 CFR parts 200 and 1500 that are applicable to CERCLA-funded Cooperative Agreements. (c) Superfund monies for remedial actions cannot be used by recipients for Federal facility cleanup activities. When a cleanup is undertaken by another Federal entity, the State, political subdivision or Indian Tribe can pursue funding for its involvement in response activities from the appropriate Federal entity. [72 FR 24504, May 2, 2007, as amended at 79 FR 76059, Dec. 19, 2014] § 35.6010 Indian Tribe and intertribal consortium eligibility. (a) Indian Tribes are eligible to receive Superfund Cooperative Agreements only when they are federally recognized, and when they meet the criteria set forth in 40 CFR 300.515(b) of the National Oil and Hazardous Substances Pollution Contingency Plan (the National Contingency Plan or NCP), except that Indian Tribes shall not be required to demonstrate jurisdiction under 40 CFR 300.515(b)(3) of the NCP to be eligible for Core Program Cooperative Agreements, and those support agency Cooperative Agreements for which jurisdiction is not needed for the Tribe to carry out the support agency activities of the work plan. (b) Although section 126 of CERCLA provides that the governing body of an Indian Tribe shall be treated substantially the same as a State, the subpart O definition of “State” does not include Indian Tribes because they do not need to comply with all the statutory requirements addressed in subpart O that apply to States. (c) Intertribal consortium: An intertribal consortium is eligible to receive a Cooperative Agreement from EPA only if the intertribal consortium demonstrates that all members of the consortium meet the eligibility requirements for the Cooperative Agreement, and all members authorize the consortium to apply for and receive assistance. § 35.6015 Definitions. (a) As used in this subpart, the following words and terms shall have the following meanings: Activity. i.e. Allowable costs. Architectural or engineering (A/E) services. Award official. Budget period. CERCLA. Change order. Claim. Closeout. Community Relations Plan (CRP). Construction. Contract. Contractor. Cooperative Agreement. Core Program Cooperative Agreement. Cost analysis. Cost share. Equipment. Fair market value. Health and safety plan. (i) Site hazards; (ii) Work areas and site control procedures; (iii) Air surveillance procedures; (iv) Levels of protection; (v) Decontamination and site emergency plans; (vi) Arrangements for weather-related problems; and (vii) Responsibilities for implementing the health and safety plan. In-kind contribution. Indian Tribe. Intergovernmental Agreement. Intertribal consortium. Lead agency. National Priorities List (NPL). Operable unit. Operation and maintenance. Personal property. Political subdivision. Potentially Responsible Party (PRP). Price analysis. Profit. Project. Project manager. Project officer. Project period. Quality Assurance Project Plan. Real property. Recipient. Services. Simplified acquisition threshold. Small business. State. Statement of Work (SOW). Subcontractor. Superfund State Contract (SSC). Supplies. Support agency. Task. Title. Unit acquisition cost. Value engineering. (b) Those terms not defined in this section shall have the meanings set forth in section 101 of CERCLA, 2 CFR part 200, and 40 CFR part 300 (the National Contingency Plan). [72 FR 24504, May 2, 2007, as amended at 73 FR 15922, Mar. 26, 2008; 72 FR 24504, May 2, 2007] § 35.6020 Requirements for both applicants and recipients. Applicants and recipients must comply with the applicable requirements of 2 CFR part 1532, “Nonprocurement Debarment and Suspension and of 2 CFR part 1536, “Requirements for Drug-Free Workplace (Financial Assistance).” [72 FR 24504, May 2, 2007] § 35.6025 Exceptions from this subpart. On a case-by-case basis, EPA will consider requests for official exceptions from the non-statutory provisions of this subpart. Refer to the requirements regarding exceptions described in 2 CFR 1500.4. [87 FR 30400, May 19, 2022] Pre-Remedial Response Cooperative Agreements § 35.6050 Eligibility for pre-remedial Cooperative Agreements. States, political subdivisions, and Indian Tribes may apply for pre-remedial response Cooperative Agreements. § 35.6055 State-lead pre-remedial Cooperative Agreements. (a) To receive a State-lead pre-remedial Cooperative Agreement, the applicant must submit an “Application for Federal Assistance” (SF-424) for non-construction programs. Applications for additional funding need include only the revised pages. The application must include the following: (1) Budget sheets (2) A Project narrative statement, (i) A list of sites (ii) A Statement of Work (SOW) (iii) A schedule of deliverables. (3) Other applicable forms and information (b) Pre-remedial Cooperative Agreement requirements. (1) Health and safety plan. (ii) The recipient's health and safety plan must comply with Occupational Safety and Health Administration (OSHA) 29 CFR 1910.120, entitled “Hazardous Waste Operations and Emergency Response,” unless the recipient is an Indian Tribe exempt from OSHA requirements. (2) Quality assurance. (ii) The recipient must have an EPA-approved non-site-specific quality assurance plan in place before beginning field work. The recipient must submit the plan to EPA in adequate time (generally 45 days) for approval to be granted before beginning field work. (iii) The quality assurance plan must comply with the requirements regarding split sampling described in section 104(e)(4)(B) of CERCLA, as amended. [72 FR 24504, May 2, 2007, as amended at 79 FR 76059, Dec. 19, 2014; 87 FR 30400, May 19, 2022] § 35.6060 Political subdivision-lead pre-remedial Cooperative Agreements. (a) If the Award Official determines that a political subdivision's lead involvement in pre-remedial activities would be more efficient, economical and appropriate than that of a State, based on the number of sites to be addressed and the political subdivision's history of program involvement, a pre-remedial Cooperative Agreement may be awarded under this section. (b) The political subdivision must comply with all of the requirements described in § 35.6055. § 35.6070 Indian Tribe-lead pre-remedial Cooperative Agreements. The Indian Tribe must comply with all of the requirements described in § 35.6055, except for the intergovernmental review requirements included in the “Application for Federal Assistance” (SF-424). Remedial Response Cooperative Agreements § 35.6100 Eligibility for remedial Cooperative Agreements. States, Indian Tribes, and political subdivisions may apply for remedial response Cooperative Agreements. § 35.6105 State-lead remedial Cooperative Agreements. To receive a State-lead remedial Cooperative Agreement, the applicant must submit the following items to EPA: (a) Application form, (1) Budget sheets (2) A Project narrative statement, (i) A site description, (ii) A site-specific Statement of Work (SOW), (iii) A statement designating a lead site project manager among appropriate State offices. (iv) A site-specific Community Relations Plan (v) A site-specific health and safety plan, (vi) Quality assurance General. (B) Quality assurance plan. (C) Split sampling. (vii) A schedule of deliverables (3) Other applicable forms and information (b) CERCLA Assurances. (1) Operation and maintenance. (2) Cost sharing. (i) Ten percent. (ii) Fifty percent or more. (3) Twenty-year waste capacity. (4) Off-site storage, treatment, or disposal. (5) Real property acquisition. See [72 FR 24504, May 2, 2007, as amended at 79 FR 76059, Dec. 19, 2014; 87 FR 30400, May 19, 2022] § 35.6110 Indian Tribe-lead remedial Cooperative Agreements. (a) Application requirements. (b) Cooperative Agreement requirements. (2) If it is designated the lead for remedial action, the Indian Tribe must provide the notification required at § 35.6120, substituting the term “Indian Tribe” for the term “State” in that section, and “out-of-an-Indian-Tribal-area-of-Indian-country” for “out-of-State”. (3) Indian Tribes are not required to share in the cost of CERCLA-funded remedial actions. § 35.6115 Political subdivision-lead remedial Cooperative Agreements. (a) General. See (b) Political subdivision Cooperative Agreement requirements Application requirements. (2) Cooperative Agreement requirements. § 35.6120 Notification of the out-of-State or out-of-an-Indian-Tribal-area-of-Indian-country transfer of CERCLA waste. (a) The recipient must provide written notification of off-site shipments of CERCLA waste from a site to an out-of-State or out-of-an-Indian-Tribal-area-of-Indian-country waste management facility to: (1) The appropriate State environmental official for the State in which the waste management facility is located; and/or (2) An appropriate official of an Indian Tribe in whose area of Indian country the waste management facility is located; and (3) The EPA Award Official. (b) The notification of off-site shipments does not apply when the total volume of all such shipments from the site does not exceed 10 cubic yards. (c) The notification must be in writing and must provide the following information, where available: (1) The name and location of the facility to which the CERCLA waste is to be shipped; (2) The type and quantity of CERCLA waste to be shipped; (3) The expected schedule for the shipments of the CERCLA waste; and (4) The method of transportation of the CERCLA waste. (d) The recipient must notify the State or Indian Tribal government in which the planned receiving facility is located of major changes in the shipment plan, such as a decision to ship the CERCLA waste to another facility within the same receiving State, or to a facility in another State. (e) The recipient must provide relevant information on the off-site shipments, including the information in paragraph (c) of this section, as soon as possible after the award of the contract and, where practicable, before the CERCLA waste is actually shipped. Enforcement Cooperative Agreements § 35.6145 Eligibility for enforcement Cooperative Agreements. Pursuant to CERCLA section 104(d), States, political subdivisions thereof, and Indian Tribes may apply for enforcement Cooperative Agreements. To be eligible for an enforcement Cooperative Agreement, the State, political subdivision or Indian Tribe must demonstrate that it has the authority, jurisdiction, and the necessary administrative capabilities to take an enforcement action(s) to compel PRP cleanup of the site, or recovery of the cleanup costs. To accomplish this, the State, political subdivision or Indian Tribe, respectively, must submit the following for EPA approval: (a) A letter from the State Attorney General, or comparable local official (of a political subdivision) or comparable Indian Tribal official, certifying that it has the authority, jurisdiction, and administrative capabilities that provide a basis for pursuing enforcement actions against a PRP to secure the necessary response; (b) A copy of the applicable State, local (political subdivision) or Indian Tribal statute(s) and a description of how it is implemented; (c) Any other documentation required by EPA to demonstrate that the State, local (political subdivision) or Indian Tribal government has the statutory authority, jurisdiction, and administrative capabilities to perform the enforcement activity(ies) to be funded under the Cooperative Agreement. § 35.6150 Activities eligible for funding under enforcement Cooperative Agreements. An enforcement Cooperative Agreement application from a State, political subdivision or Indian Tribe may request funding for the following enforcement activities: (a) PRP searches; (b) Issuance of notice letters and negotiation activities; (c) Administrative and judicial enforcement actions taken under State or Indian Tribal law; (d) Management assistance and oversight of PRPs during Federal enforcement response; (e) Oversight of PRPs during a State, political subdivision or Indian Tribe enforcement response contingent on the applicant having taken all necessary action to compel PRPs to fund the oversight of cleanup activities negotiated under the recipient's enforcement authorities. If the State, political subdivision, Indian Tribe or EPA cannot obtain PRP commitment to fund such oversight activities, then these activities will be considered eligible for CERCLA funding under an enforcement Cooperative Agreement. § 35.6155 State, political subdivision or Indian Tribe-lead enforcement Cooperative Agreements. (a) The State, political subdivision or Indian Tribe must comply with the requirements described in § 35.6105 (a)(1) through (a)(3), as appropriate. (b) The CERCLA section 104 assurances described in § 35.6105(b) are not applicable for enforcement Cooperative Agreements. (c) Before an enforcement Cooperative Agreement is awarded, the State, political subdivision or Indian Tribe must: (1) Assure EPA that it will notify and consult with EPA promptly if the recipient determines that its laws or other restrictions prevent the recipient from acting consistently with CERCLA; and (2) If the applicant is seeking funds for oversight of PRP cleanup, the applicant must: (i) Demonstrate that the proposed Statement of Work or cleanup plan prepared by the PRP satisfies the recipient's enforcement goals for those instances in which the recipient is seeking funding for oversight of PRP cleanup activities negotiated under the recipient's own enforcement authorities; and (ii) Demonstrate that the PRP has the capability to attain the goals set forth in the plan; (iii) Demonstrate that it has taken all necessary action to compel PRPs to fund the oversight of cleanup activities negotiated under the recipient's enforcement authorities. Removal Response Cooperative Agreements § 35.6200 Eligibility for removal Cooperative Agreements. When a planning period of more than six months is available, States, political subdivisions and Indian Tribes may apply for removal Cooperative Agreements. § 35.6205 Removal Cooperative Agreements. (a) The State must comply with the requirements described in § 35.6105(a). To the extent practicable, the State must comply with the notification requirement at § 35.6120 when a removal action is necessary and involves out-of-State shipment of CERCLA wastes, and when, based on the site evaluation, EPA determines that a planning period of more than six months is available before the removal activities must begin. (b) Pursuant to CERCLA section 104(c)(3), the State is not required to share in the cost of a CERCLA-funded removal action, unless the removal is conducted at a site that was publicly operated by a State or political subdivision at the time of disposal of hazardous substances and a CERCLA-funded remedial action is ultimately undertaken at the site. In this situation, the State must share at least 50 percent in the cost of all removal, remedial planning, and remedial action costs at the time of the remedial action as stated in § 35.6105(b)(2)(ii). (c) If both the State and EPA agree, a political subdivision with the necessary capabilities and jurisdictional authority may assume the lead responsibility for all, or a portion, of the removal activity at a site. Political subdivisions must comply with the requirements described in § 35.6105(a). To the extent practicable, political subdivisions also must comply with the notification requirement at § 35.6120 when a removal action is necessary and involves the shipment of CERCLA wastes out of the State's jurisdiction, and when, based on the site evaluation, EPA determines that a planning period of more than six months is available before the removal activities must begin. (d) The State must provide the cost share assurance discussed in paragraph (b) of this section on behalf of a political subdivision that is given the lead for a removal action. (e) Indian Tribes must comply with the requirements described in § 35.6105(a). To the extent practicable, Indian Tribes also must comply with the notification requirement at § 35.6120 when a removal action is necessary and involves the shipment of CERCLA wastes out of the Indian Tribe's area of Indian country, and when, based on the site evaluation, EPA determines that a planning period of more than six months is available before the removal activities must begin. (f) Indian Tribes are not required to share in the cost of a CERCLA-funded removal action. Core Program Cooperative Agreements § 35.6215 Eligibility for Core Program Cooperative Agreements. (a) States and Indian Tribes may apply for Core Program Cooperative Agreements in order to conduct CERCLA implementation activities that are not directly assignable to specific sites, but are intended to develop and maintain a State's or Indian Tribe's ability to participate in the CERCLA response program. (b) Only the State or Indian Tribal government agency designated as the single point of contact with EPA for CERCLA implementation is eligible to receive a Core Program Cooperative Agreement. (c) When it is more economical for a government entity other than the recipient (such as a political subdivision or State Attorney General) to implement tasks funded through a Core Program Cooperative Agreement, benefits to such entities must be provided for in an intergovernmental agreement. § 35.6220 General. The recipient of a Core Program Cooperative Agreement must comply with the requirements regarding financial administration (§§ 35.6270 through 35.6290), property (§§ 35.6300 through 35.6450), procurement (§§ 35.6550 through 35.6610), reporting (§§ 35.6650 through 35.6670), records (§§ 35.6700 through 35.6710), and other administrative requirements under a Cooperative Agreement (§§ 35.6750 through 35.6790). Recipients may not incur site-specific costs. Where these sections entail site-specific requirements, the recipient is not required to comply on a site-specific basis. § 35.6225 Activities eligible for funding under Core Program Cooperative Agreements. (a) To be eligible for funding under a Core Program Cooperative Agreement, activities must develop and maintain a recipient's abilities to implement CERCLA. Once the recipient has in place program functions described in paragraphs (a)(1) through (a)(4) of this section, EPA will evaluate the recipient's program needs to sustain interaction with EPA in CERCLA implementation as described in paragraph (a)(5) of this section. The amount of funding provided under the Core Program will be determined by EPA based on the availability of funds and the recipient's program needs in the areas described in paragraphs (a)(1) through (a)(4) of this section: (1) Procedures for emergency response actions and longer-term remediation of environmental and health risks at hazardous waste sites (including but not limited to the development of generic health and safety plans, quality assurance project plans, and community relation plans); (2) Provisions for satisfying all requirements and assurances (including the development of a fund or other financing mechanism(s) to pay for studies and remediation activities); (3) Legal authorities and enforcement support associated with proper administration of the recipient's program and with efforts to compel potentially responsible parties to conduct or pay for studies and/or remediation (including but not limited to the development of statutory authorities; access to legal assistance in identifying applicable or relevant and appropriate requirements of other laws; and development and maintenance of the administrative, financial and recordkeeping systems necessary for cost recovery actions under CERCLA); (4) Efforts necessary to hire and train staff to manage publicly-funded cleanups, oversee responsible party-lead cleanups, and provide clerical support; and (5) Other activities deemed necessary by EPA to develop and maintain sustained EPA/recipient interaction in CERCLA implementation (including but not limited to general program management and supervision necessary for a recipient to implement CERCLA activities, and interagency coordination on all phases of CERCLA response). (b) Continued funding of tasks in subsequent years will be based on an evaluation of demonstrated progress toward the goals in the existing Core Program Cooperative Agreement Statement of Work. § 35.6230 Application requirements. To receive a Core Program Cooperative Agreement, the applicant must submit an application form (“Application for Federal Assistance,” SF-424, for non-construction programs) to EPA. Applications for additional funding need include only the revised pages. The application must include the following: (a) A project narrative statement, (1) A Statement of Work (SOW) (2) A background statement, (b) Budget sheets (c) Proposed project and budget periods (d) Other applicable forms and information [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014] § 35.6235 Cost sharing. A State must provide at least ten percent of the direct and indirect costs of all activities covered by the Core Program Cooperative Agreement. Indian Tribes are not required to share in the cost of Core Program activities. The State must provide its cost share with non-Federal funds or with Federal funds, authorized by statute to be used for matching purposes. Funds used for matching purposes under any other Federal grant or Cooperative Agreement cannot be used for matching purposes under a Core Program Cooperative Agreement. The State may provide its share using in-kind contributions if such contributions are provided for in the Cooperative Agreement. The State may not use CERCLA State credits to offset any part of its required match for Core Program Cooperative Agreements. ( See Support Agency Cooperative Agreements § 35.6240 Eligibility for support agency Cooperative Agreements. States, political subdivisions, and Indian Tribes may apply for support agency Cooperative Agreements to ensure their meaningful and substantial involvement in response activities, as specified in sections 104 and 121(f)(1) of CERCLA and the NCP (40 CFR part 300). § 35.6245 Allowable activities. Support agency activities are those activities conducted by the recipient to ensure its meaningful and substantial involvement. The activities described in section 121(f)(1) of CERCLA, as amended, and in subpart F of the NCP (40 CFR part 300), are eligible for funding under a support agency Cooperative Agreement. Participation in five-year reviews of the continuing protectiveness of a remedial action is also an eligible support agency activity. § 35.6250 Support agency Cooperative Agreement requirements. (a) Application requirements. (b) Cooperative Agreement requirements. Combining Cooperative Agreements § 35.6260 Combining Cooperative Agreement sites and activities. (a) EPA may award a Cooperative Agreement to a recipient for: (1) A single activity, or multiple activities; (2) A single activity at multiple sites; and (3) Except as provided in paragraphs (b), (c), and (d) of this section, multiple activities at multiple sites. (b) EPA will not award or amend a Cooperative Agreement to a political subdivision to conduct multiple activities at multiple sites. Before awarding or amending a Cooperative Agreement to permit multiple activities at multiple sites, EPA must determine that the State or Indian Tribe has adequate administrative, technical, and financial management and tracking capabilities. A State's or Indian Tribe's request for such a Cooperative Agreement will be considered only if EPA determines that consolidating these activities under one Cooperative Agreement would be in the Agency's best interests. (c) EPA will not award a single Cooperative Agreement to conduct multiple remedial actions at multiple sites. (d) EPA will require separate Cooperative Agreements for eligible removal actions that exceed the statutory monetary ceiling or whenever a consistency waiver is likely to be sought. Financial Administration Requirements Under a Cooperative Agreement § 35.6270 Standards for financial management systems. (a) Accounting system standards General. (2) Allowable costs. (3) Pre-remedial. (4) Core Program. (5) Support Agency. (6) Accounting system control procedures. (i) Accurate, charging only costs attributable to the site, activity, and operable unit, as applicable; and (ii) Complete, recording and charging to individual sites, activities, and operable units, as applicable, all costs attributable to the recipient's CERCLA effort. (7) Financial reporting. (b) Recordkeeping system standards. (2) The recipient must provide this site-specific documentation to the EPA Regional Office within 30 working days of a request, unless another time frame is specified in the Cooperative Agreement. (3) In addition, the recipient must comply with the requirements regarding records described in §§ 35.6700, 35.6705, and 35.6710. The recipient must comply with the requirements regarding source documentation described in 2 CFR 200.302. (4) For pre-remedial and Core Program activities, the recordkeeping system must comply with the requirements described in paragraphs (a)(3) and (a)(4) of this section. [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014] § 35.6275 Period of availability of funds. The recipient must comply with the requirements regarding the availability of funds described in 2 CFR parts 200 and 1500. (b) Except as permitted in § 35.6285, the Award Official must sign the assistance agreement before costs are incurred. The recipient may incur costs between the date the Award Official signs the assistance agreement and the date the recipient signs the agreement, if the costs are identified in the agreement and the recipient does not change the agreement. [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014] § 35.6280 Payments. (a) General. (1) Assignment of payment. (2) Interest. (b) Payment method Letter of credit. (2) Reimbursement. (3) Working capital advances. [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014] § 35.6285 Recipient payment of response costs. The recipient may pay for its share of response costs using cash, services, credits or any combination of these, as follows: (a) Cash. (b) Services. (c) Credit General credit requirements. (i) The State may claim credit for response activity obligations or expenditures incurred by the State or political subdivision between January 1, 1978, and December 11, 1980. (ii) The State may claim credit for remedial action expenditures made by the State after October 17, 1986. If such expenditures occurred after the site was listed on the NPL (Appendix B to 40 CFR Part 300), they will be eligible for a credit only if the State initiated the remedial action after obtaining EPA's written approval. (iii) The State may not claim credit for removal actions taken after December 11, 1980. (2) Credit submission requirements. (i) Specific amounts claimed for credit, by site (estimated amounts are unacceptable), based on supporting cost documentation; (ii) Units of government (State agency, county, local) that incurred the costs, by site; (iii) Description of the specific function performed by each unit of government at each site; (iv) Certification (signed by the State's fiscal manager or the financial director for each unit of government) that credit costs have not been previously reimbursed by the Federal Government or any other party, and have not been used for matching purposes under any other Federal program or grant; and (v) Documentation, if requested by EPA, to ensure the actions undertaken at the site are cost eligible and consistent with CERCLA, as amended, and the NCP requirements in 40 CFR part 300. This requirement does not apply for costs incurred before December 11, 1980. (3) Use of credit. See (4) Credit verification procedures. (d) Excess cash cost share contributions/overmatch. (e) Cost sharing. (f) Advance match. (2) A State may seek reimbursement for costs incurred under Cooperative Agreements which authorize advance match. (3) Reimbursements are subject to the availability of appropriated funds. (4) If the State does not seek reimbursement, EPA will apply the advance match to off-set the State's required cost share for remedial action at the site. The State may not use advance match for credit at any other site, nor may the State receive reimbursement until the conclusion of CERCLA-funded remedial response activities. Also, the State may not use advance match for credit against cost share obligations for Core Program Cooperative Agreements. (5) Claims for advance match are subject to verification by audit. [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014] § 35.6290 Program income. The recipient must comply with the requirements regarding program income described in 2 CFR 200.307 and 2 CFR part 1500. Recoveries of Federal cost share amounts are not program income, and whether such recoveries are received before or after expiration of the Cooperative Agreement, must be reimbursed promptly to EPA. [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014] Personal Property Requirements Under a Cooperative Agreement § 35.6300 General personal property acquisition and use requirements. (a) General. (2) The recipient must acquire the property during the approved project period. (3) The recipient must: (i) Charge property costs by site, activity, and operable unit, as applicable; (ii) Document the use of the property by site, activity, and operable unit, as applicable; and (iii) Solicit and follow EPA's instructions on the disposal of any property purchased with CERCLA funds as specified in §§ 35.6340 and 35.6345. (b) Exception. § 35.6305 Obtaining supplies. To obtain supplies, the recipient must agree to comply with the requirements in §§ 35.6300, 35.6315(b), 35.6325 through 35.6340, and 35.6350. Supplies obtained with Core Program funds must be for non-site-specific purposes. All purchases of supplies under the Core Program must comply with the requirements in §§ 35.6300, 35.6315(b), 35.6325 through 35.6340, and 35.6350, except where these requirements are site-specific. § 35.6310 Obtaining equipment. To obtain equipment, the recipient must agree to comply with the requirements in §§ 35.6300 and 35.6315 through 35.6350. § 35.6315 Alternative methods for obtaining property. (a) Purchase equipment with recipient funds. (b) Borrow federally owned property. (c) Lease, use contractor services, or purchase with CERCLA funds. (1) Lease or rent equipment. (2) Use contractor services. (ii) The recipient must obtain award official approval before authorizing the contractor to purchase equipment with CERCLA funds. ( See (iii) The recipient must require the contractor to allocate the cost of the contractor services by site, activity, and operable unit, as applicable. (3) Purchase equipment with CERCLA funds. (i) The recipient must include in the Cooperative Agreement application a list of all items of equipment to be purchased with CERCLA funds, with the price of each item. (ii) If the equipment is to be used on sites, the recipient must allocate the cost of the equipment by site, activity, and operable unit, as applicable, by applying a usage rate subject to the usage rate requirements in § 35.6320. (iii) The recipient may not use CERCLA funds to purchase a transportable or mobile treatment system. (iv) Equipment obtained with Core Program funds must be for non-site-specific purposes. All purchases of equipment must comply with the requirements in §§ 35.6300, and 35.6310 through 35.6350, except where these requirements are site-specific. § 35.6320 Usage rate. (a) Usage rate approval. (b) Usage rate application. § 35.6325 Title and EPA interest in CERCLA-funded property. (a) EPA's interest in CERCLA-funded property. (b) Title in CERCLA-funded property. (1) Right to transfer title. (2) Equipment used as all or part of the remedy. (i) Fixed in-place equipment. (ii) Equipment that is an integral part of services to individuals. § 35.6330 Title to federally owned property. Title to all federally owned property vests in the Federal Government. § 35.6335 Property management standards. The recipient must comply with the following property management standards for property purchased with CERCLA funds. The recipient may use its own property management system if it meets the following standards. (a) Control. (1) Property records (2) A control system (3) Procedures (4) Sales procedures (5) Provisions for financial control and accounting (6) Identification (b) Inventory and reporting for CERCLA-funded equipment Physical inventory. (2) Inventory reports. (c) Inventory and reporting for federally owned property Physical inventory. (i) Annually; (ii) When the property is no longer needed; and (iii) Within 90 days after the end of the project period. (2) Inventory reports. § 35.6340 Disposal of CERCLA-funded property. (a) Equipment. (1) Analyze two alternatives: The cost of leaving the equipment in place, and the cost of removing the equipment and disposing of it in another manner. (2) Document the analysis of the two alternatives in the inventory report. See (i) If it is most cost-effective to remove the equipment and dispose of it in another manner: (A) If the equipment has a residual fair market value of $5,000 or more, the recipient must request disposition instructions from EPA in the inventory report. See § 35.6345 for equipment disposal options. (B) If the equipment has a residual fair market value of less than $5,000, the recipient may retain the equipment for the recipient's use on another CERCLA site. If, however, there is any remaining residual value at the time of final disposition, the recipient must reimburse the Hazardous Substance Superfund for EPA's vested interest in the current fair market value of the equipment at the time of disposition. (ii) If it is most cost-effective to leave the equipment in place, recommend in the inventory report that the equipment be left in place. (3) Submit the inventory report to EPA, even if EPA has stopped supporting the project. (b) Supplies. (i) Use the supplies on another CERCLA project and reimburse the original project for the fair market value of the supplies; (ii) If both the recipient and EPA concur, keep the supplies and reimburse the Hazardous Substance Superfund for EPA's interest in the current fair market value of the supplies; or (iii) Sell the supplies and reimburse the Hazardous Substance Superfund for EPA's interest in the current fair market value of the supplies, less any reasonable selling expenses. (2) If the supplies remaining at the end of the project period have an aggregate fair market value of less than $5,000, the recipient may keep the supplies to use on another CERCLA project. If the recipient cannot use the supplies on another CERCLA project, then the recipient may keep or sell the supplies without reimbursing the Hazardous Substance Superfund. § 35.6345 Equipment disposal options. The following disposal options are available: (a) Use the equipment on another CERCLA project and reimburse the original project for the fair market value of the equipment; (b) If both the recipient and EPA concur, keep the equipment and reimburse the Hazardous Substance Superfund for EPA's interest in the current fair market value of the equipment; (c) Sell the equipment and reimburse the Hazardous Substance Superfund for EPA's interest in the current fair market value of the equipment, less any reasonable selling expenses; or (d) Return the equipment to EPA and, if applicable, EPA will reimburse the recipient for the recipient's proportionate share in the current fair market value of the equipment. § 35.6350 Disposal of federally owned property. When federally owned property is no longer needed, or at the end of the project, the recipient must inform EPA that the property is available for return to the Federal Government. EPA will send disposition instructions to the recipient. Real Property Requirements Under a Cooperative Agreement § 35.6400 Acquisition and transfer of interest. (a) An interest in real property may be acquired only with prior approval of EPA. (1) If the recipient acquires real property in order to conduct the response, the recipient with jurisdiction over the property must agree to hold the necessary property interest. (2) If it is necessary for the Federal Government to acquire the interest in real estate to permit conduct of a remedial action, the acquisition may be made only if the State provides assurance that it will accept transfer of the acquired interest in accordance with 40 CFR 300.510(f) of the NCP. States must follow the requirements in § 35.6105(b)(5). (b) The recipient must comply with applicable Federal regulations for real property acquisition under assistance agreements contained in part 4 of this chapter, “Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally Assisted Programs.” § 35.6405 Use. The recipient must comply with the requirements regarding real property described in 2 CFR 200.311. [79 FR 76060, Dec. 19, 2014] Copyright Requirements Under a Cooperative Agreement § 35.6450 General requirements. The recipient must comply with the requirements regarding copyrights described in 2 CFR part 200.315. The recipient must comply with the requirements regarding contract copyright provisions described in § 35.6595(b)(2). [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014] Use of Recipient Employees (“Force Account”) Under a Cooperative Agreement § 35.6500 General requirements. (a) Force Account work is the use of the recipient's own employees or equipment for construction, construction-related activities (including architecture and engineering services), or repair or improvement to a facility. When using Force Account work, the recipient must demonstrate that the employees can complete the work as competently as, and more economically than, contractors, or that an emergency necessitates the use of the Force Account. (b) Where the value of Force Account services exceeds the simplified acquisition threshold, the recipient must receive written authorization for use from the award official. Procurement Requirements Under a Cooperative Agreement § 35.6550 Procurement system standards. (a) Recipient standards. (2) EPA review. (3) Code of conduct. (4) Completion of contractual and administrative issues. (ii) EPA will not substitute its judgment for that of the recipient unless the matter is primarily a Federal concern. (iii) Violations of law will be referred to the local, State, Tribal, or Federal authority having proper jurisdiction. (5) Selection procedures. (i) EPA may not participate in a recipient's selection panel except to provide technical assistance. EPA staff providing such technical assistance: (A) Shall constitute a minority of the selection panel (limited to making recommendations on qualified offers and acceptable proposals based on published evaluation criteria) for the contractor selection process; and (B) Are not permitted to participate in the negotiation and award of contracts. (ii) When selecting a contractor, recipients: (A) May not use EPA contractors to provide any support related to procuring a State contractor. (B) May use the Corps of Engineers for review of State bidding documents, requests for proposals and bids and proposals received. (6) Award. See (7) Protest procedures. (8) [Reserved] (9) Intergovernmental agreements. (ii) Although intergovernmental agreements are not subject to the requirements set forth in this section through § 35.6610, all procurements under intergovernmental agreements are subject to these requirements except for procurements that are: (A) Incidental to the purpose of the assistance agreement; and (B) Made through a central public procurement unit. (10) Value engineering. (b) Contractor standards Disclosure requirements regarding Potentially Responsible Party relationships. (i) Information on its financial and business relationship with all PRPs at the site and with the contractor's parent companies, subsidiaries, affiliates, subcontractors, or current clients at the site. Prospective contractors under a Core Program Cooperative Agreement must provide comparable information for all sites within the recipient's jurisdiction. (This disclosure requirement encompasses past financial and business relationships, including services related to any proposed or pending litigation, with such parties); (ii) Certification that, to the best of its knowledge and belief, it has disclosed such information or no such information exists; and (iii) A statement that it shall disclose immediately any such information discovered after submission of its bid or proposal or after award. The recipient shall evaluate such information and if a member of the contract team has a conflict of interest which prevents the team from serving the best interests of the recipient, the prospective contractor may be declared nonresponsible and the contract awarded to the next eligible bidder or offeror. (2) Conflict of interest Conflict of interest notification. (ii) Contract provisions. (A) Contractor data. (B) Employment. (3) Certification of independent price determination. (4) Recipient's Contractors. [72 FR 24504, May 2, 2007, as amended at 73 FR 15922, Mar. 26, 2008; 79 FR 76060, Dec. 19, 2014; 87 FR 30400, May 19, 2022] § 35.6555 Competition. The recipient must conduct all procurement transactions in a manner providing maximum full and open competition. (a) Restrictions on competition. (1) Placing unreasonable requirements on firms in order for them to qualify to do business; (2) Requiring unnecessary experience and excessive bonding requirements; (3) Noncompetitive pricing practices between firms or between affiliated companies; (4) Noncompetitive awards to consultants that are on retainer contracts; (5) Organizational conflicts of interest; (6) Specifying only a “brand name” product, instead of allowing “an equal” product to be offered and describing the performance of other relevant requirements of the procurement; and (7) Any arbitrary action in the procurement process. (b) Geographic and Indian Tribe preferences Geographic. (2) Indian Tribe. (c) Written specifications. (1) This description must not contain features which unduly restrict competition, unless the features are necessary to: (i) Test or demonstrate a specific thing; (ii) Provide for necessary interchangeability of parts and equipment; or (iii) Promote innovative technologies. (2) The recipient must avoid the use of detailed product specifications if at all possible. (d) Public notice. (e) Prequalified lists. [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014] § 35.6565 Procurement methods. The recipient must comply with the requirements for payment to consultants described in 2 CFR 1500.10. In addition, the recipient must comply with the following requirements: (a) Small purchase procedures. (b) Sealed bids (formal advertising). (1) In order for the recipient to use the sealed bid method, the following conditions must be met: (i) A complete, adequate, and realistic specification or purchase description is available; (ii) Two or more responsible bidders are willing and able to compete effectively for the business; and (iii) The procurement lends itself to a fixed-price contract and the selection of the successful bidder can be made principally on the basis of price. (2) If the recipient uses the sealed bid method, the recipient must comply with the following requirements: (i) Publicly advertise the invitation for bids and solicit bids from an adequate number of known suppliers, providing them sufficient time prior to the date set for opening the bids; (ii) The invitation for bids, which must include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond; (iii) Publicly open all bids at the time and place prescribed in the invitation for bids; (iv) Award the fixed-price contract in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, the recipient shall consider factors such as discounts, transportation cost, and life cycle costs in determining which bid is lowest. The recipient may only use payment discounts to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and (v) If there is a sound documented reason, the recipient may reject any or all bids. (c) Competitive proposals. (1) Recipients must publicize requests for proposals and all evaluation factors and must identify their relative importance. The recipient must honor any response to publicized requests for proposals to the maximum extent practical; (2) Recipients must solicit proposals from an adequate number of qualified sources; (3) Recipients must have a method for conducting technical evaluations of the proposals received and for selecting awardees; (4) Recipients must award the contract to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and (5) Recipients may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitor's qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. This method, where price is not used as a selection factor, may only be used in the procurement of A/E professional services. The recipient may not use this method to purchase other types of services even though A/E firms are a potential source to perform the proposed effort. (d) Noncompetitive proposals. (i) The item is available only from a single source; (ii) The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation (a declaration of an emergency under State law does not necessarily constitute an emergency under the EPA Superfund program's criteria); (iii) The award official authorized noncompetitive proposals; or (iv) After solicitation of a number of sources, competition is determined to be inadequate. (2) When using noncompetitive procurement, the recipient must conduct a cost analysis in accordance with the requirements described in § 35.6585. [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014; 87 FR 30400, May 19, 2022] § 35.6570 Use of the same engineer during subsequent phases of response. (a) If the public notice clearly stated the possibility that the firm or individual selected could be awarded a contract for follow-on services and initial procurement complied with the procurement requirements, the recipient of a CERCLA remedial response Cooperative Agreement may use the engineer procured to conduct any or all of the follow-on engineering activities without going through the public notice and evaluation procedures. (b) The recipient may also use the same engineer during subsequent phases of the project in the following cases: (1) Where the recipient conducted the RI, FS, or design activities without EPA assistance but is using CERCLA funds for follow-on activities, the recipient may use the engineer for subsequent work provided the recipient certifies: (i) That it complied with the procurement requirements in § 35.6565 when it selected the engineer and the code of conduct requirements described in 2 CFR 200.318(c)(1). (ii) That any CERCLA-funded contract between the engineer and the recipient meets all of the other provisions as described in the procurement requirements in this subpart. (2) Where EPA conducted the RI, FS, or design activities but the recipient will assume the responsibility for subsequent phases of response under a Cooperative Agreement, the recipient may use, with the award official's approval, EPA's engineer contractor without further public notice or evaluation provided the recipient follows the rest of the procurement requirements to award the contract. [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014] § 35.6575 Restrictions on types of contracts. (a) Prohibited contracts. (b) Removal. (c) Time and material contracts. § 35.6580 [Reserved] § 35.6585 Cost and price analysis. (a) General. (1) Cost analysis. (2) Price analysis. (b) Profit analysis. § 35.6590 Bonding and insurance. (a) General. (b) Accidents and catastrophic loss. [72 FR 24504, May 2, 2007, as amended at 79 FR 76060, Dec. 19, 2014; 87 FR 30400, May 19, 2022] § 35.6595 Contract provisions. (a) General. (1) Nature, scope, and extent of work to be performed; (2) Time frame for performance; (3) Total cost of the contract; and (4) Payment provisions. (b) Other contract provisions. (1) Energy efficiency. (2) Patents inventions, and copyrights. (3) Labor standards. (4) Conflict of interest. [72 FR 24504, May 2, 2007, as amended at 79 FR 76061, Dec. 19, 2014] § 35.6600 Contractor claims. (a) General. (b) Claims settlement. (1) The claim arises from work within the scope of the Cooperative Agreement; (2) A formal Cooperative Agreement amendment is executed specifically covering the costs before they are incurred; (3) The costs are not incurred to prepare documentation that should be prepared by the contractor to support a claim against the recipient; and (4) The award official determines that there is a significant Federal interest in the issues involved in the claim. (c) Claims defense. (1) The claim arises from work within the scope of the Cooperative Agreement; (2) A formal Cooperative Agreement amendment is executed specifically covering the costs before they are incurred; (3) Settlement of the claim cannot occur without arbitration or litigation; (4) The claim does not result from the recipient's mismanagement; (5) The award official determines that there is a significant Federal interest in the issues involved in the claim; and (6) In the case of defending against a contractor claim, the claim does not result from the recipient's responsibility for the improper action of others. § 35.6605 Privity of contract. Neither EPA nor the United States shall be a party to any contract nor to any solicitation or request for proposals. § 35.6610 Contracts awarded by a contractor. The recipient must require its contractor to comply with the following provisions in the award of contracts (i.e. subcontracts). (This section does not apply to a supplier's procurement of materials to produce equipment, materials and catalog, off-the-shelf, or manufactured items.) (a) The requirements referenced in § 35.6020. (b) The limitations on contract award in § 35.6550(a)(6). (c) [Reserved] (d) The requirements regarding specifications in § 35.6555 (a)(6) and (c). (e) The Federal cost principles in 2 CFR part 200 subpart E. (f) The prohibited types of contracts in § 35.6575(a). (g) The cost, price analysis, and profit analysis requirements in § 35.6585. (h) The applicable provisions in § 35.6595 (b). (i) The applicable provisions in § 35.6555(b)(2). [72 FR 24504, May 2, 2007, as amended at 73 FR 15922, Mar. 26, 2008; 79 FR 76061, Dec. 19, 2014] Reports Required Under a Cooperative Agreement § 35.6650 Progress reports. (a) Reporting frequency. (b) Content. (1) An explanation of work accomplished during the reporting period, delays, or other problems, if any, and a description of the corrective measures that are planned. For pre-remedial Cooperative Agreements, the report must include a list of the site-specific products completed and the estimated number of technical hours spent to complete each product. (2) A comparison of the percentage of the project completed to the project schedule, and an explanation of significant discrepancies. (3) A comparison of the estimated funds spent to date to planned expenditures and an explanation of significant discrepancies. For remedial, enforcement, and removal reports, the comparison must be on a per task basis. (4) An estimate of the time and funds needed to complete the work required in the Cooperative Agreement, a comparison of that estimate to the time and funds remaining, and a justification for any increase. [72 FR 24504, May 2, 2007, as amended at 75 FR 49417, Aug. 13, 2010; 79 FR 76061, Dec. 19, 2014; 87 FR 30401, May 19, 2022] § 35.6655 Notification of significant developments. Events may occur between the scheduled performance reporting dates which have significant impact upon the Cooperative Agreement-supported activity. In such cases, the recipient must inform the EPA project officer as soon as the following types of conditions become known: (a) Problems, delays, or adverse conditions which will materially impair the ability to meet the objective of the award. This disclosure must include a statement of the action taken, or contemplated, and any assistance needed to resolve the situation. (b) Favorable developments which enable meeting time schedules and objectives sooner or at less cost than anticipated or producing more beneficial results than originally planned. § 35.6660 Property inventory reports. (a) CERCLA-funded property Content. (i) Classification and value of remaining supplies; (ii) Description of all equipment purchased with CERCLA funds, including its current condition; (iii) Verification of the current use and continued need for the equipment by site, activity, and operable unit, as applicable; (iv) Notification of any property which has been stolen or vandalized; and (v) A request for disposition instructions for any equipment no longer needed on the project. (2) Reporting frequency. (i) Within 90 days after completing any CERCLA-funded project or any response activity at a site; and (ii) When the equipment is no longer needed for any CERCLA-funded project or any response activity at a site. (b) Federally owned property Content. (i) Description; (ii) Decal number; (iii) Current condition; and (iv) Request for disposition instructions. (2) Reporting frequency. (i) Annually, due to EPA on the anniversary date of the award; (ii) When the property is no longer needed; and (iii) Within 90 days after the end of the project period. § 35.6665 [Reserved] § 35.6670 Financial reports. (a) General. (b) Financial Status Report Content. (ii) A final Financial Status Report (FSR) must have no unliquidated obligations. If any obligations remain unliquidated, the FSR is considered an interim report and the recipient must submit a final FSR to EPA after liquidating all obligations. (2) Reporting frequency. (i) If a Financial Status Report is required annually, the report is due 90 days after the end of the Federal fiscal year or as specified in the Cooperative Agreement. If quarterly or semiannual Financial Status Reports are required, reports are due in accordance with 2 CFR 200.328; (ii) Within 90 calendar days after completing each CERCLA-funded response activity at a site (submit the FSR only for each completed activity); and (iii) Within 90 calendar days after termination or closeout of the Cooperative Agreement. [72 FR 24504, May 2, 2007, as amended at 75 FR 49417, Aug. 13, 2010; 79 FR 76061, Dec. 19, 2014; 87 FR 30401, May 19, 2022] Records Requirements Under a Cooperative Agreement § 35.6700 Project records. The lead agency for the response action must compile and maintain an administrative record consistent with section 113 of CERCLA, the National Contingency Plan, and relevant EPA policy and guidance. In addition, recipients of assistance (whether lead or support agency) are responsible for maintaining project files described as follows. (a) General. (b) Financial records. (1) Amount of funds received and expended; and (2) Direct and indirect project cost. (c) Property records. (1) Description of the property; (2) Manufacturer's serial number, model number, or other identification number; (3) Source of the property, including the assistance identification number; (4) Information regarding whether the title is vested in the recipient or EPA; (5) Unit acquisition date and cost; (6) Percentage of EPA's interest; (7) Location, use and condition (by site, activity, and operable unit, as applicable) and the date this information was recorded; and (8) Ultimate disposition data, including the sales price or the method used to determine the price, or the method used to determine the value of EPA's interest for which the recipient compensates EPA in accordance with §§ 35.6340, 35.6345, and 35.6350. (d) Procurement records General. (i) The reasons for rejecting any or all bids; and (ii) The justification for a procurement made on a noncompetitively negotiated basis. (2) Procurements in excess of the simplified acquisition threshold. (i) The basis for contractor selection; (ii) A written justification for selecting the procurement method; (iii) A written justification for use of any specification which does not provide for maximum free and open competition; (iv) A written justification for the choice of contract type; and (v) The basis for award cost or price, including a copy of the cost or price analysis made in accordance with § 35.6585 and documentation of negotiations. (e) Other records. (1) Time and attendance records and supporting documentation; (2) Documentation of compliance with statutes and regulations that apply to the project; and (3) The number of site-specific technical hours spent to complete each pre-remedial product. § 35.6705 Records retention. (a) Applicability. (b) Length of retention period. (c) Substitution of an unalterable electronic format. (d) Starting date of retention period. [72 FR 24504, May 2, 2007, as amended at 79 FR 76061, Dec. 19, 2014; 87 FR 30401, May 19, 2022] § 35.6710 Records access. (a) Recipient requirements. (b) Availability of records. (c) Contractor requirements. [72 FR 24504, May 2, 2007, as amended at 79 FR 76061, Dec. 19, 2014; 87 FR 30401, May 19, 2022] Other Administrative Requirements for Cooperative Agreements § 35.6750 Modifications. The recipient must comply with the requirements regarding changes to the Cooperative Agreement described by subject in 2 CFR part 200. [79 FR 76061, Dec. 19, 2014] § 35.6755 Monitoring program performance. The recipient must comply with the requirements regarding program performance monitoring described in 2 CFR 200.329. [87 FR 30401, May 19, 2022] § 35.6760 Remedies for noncompliance and termination. The recipient must comply with all terms and conditions in the Cooperative Agreement and is subject to the remedies for noncompliance with the terms of an award and termination described in 2 CFR 200.339 and 200.340. [87 FR 30401, May 19, 2022] § 35.6765 Non-Federal audit. The recipient must comply with the requirements regarding non-Federal audits described in 2 CFR part 200 subpart F. [79 FR 76061, Dec. 19, 2014] § 35.6770 Disputes. The recipient must comply with the requirements regarding dispute resolution procedures described in 2 CFR part 1500 subpart E. [79 FR 76061, Dec. 19, 2014] § 35.6775 Exclusion of third-party benefits. The Cooperative Agreement benefits only the signatories to the Cooperative Agreement. § 35.6780 Closeout. (a) Closeout of a Cooperative Agreement, or an activity under a Cooperative Agreement, can take place in the following situations: (1) After the completion of all work for a response activity at a site; or (2) After all activities under a Cooperative Agreement have been completed; or (3) Upon termination of the Cooperative Agreement. (b) The recipient must comply with the closeout requirements described in 2 CFR 200.344 and 200.345. [72 FR 24504, May 2, 2007, as amended at 79 FR 76061, Dec. 19, 2014; 87 FR 30401, May 19, 2022] § 35.6785 Collection of amounts due. The recipient must comply with the requirements described in 2 CFR 200.346 regarding collection of amounts due. [87 FR 30401, May 19, 2022] § 35.6790 Specific conditions. If EPA determines that a recipient is not responsible, EPA may impose specific conditions on the award as described in 2 CFR 200.208 or restrictions on the award as described in 2 CFR 200.339. [87 FR 30401, May 19, 2022] Requirements for Administering a Superfund State Contract (SSC) § 35.6800 Superfund State Contract. A Superfund State Contract (SSC) with a State is required before EPA can obligate or expend funds for a remedial action at a site within the State and before EPA or a political subdivision can conduct the remedial action. An SSC also ensures State or Indian Tribe involvement consistent with CERCLA sections 121(f) and 126, respectively, and obtains the required section 104 assurances ( See § 35.6805 Contents of an SSC. The SSC must include the following provisions: (a) General authorities (b) Purpose of the SSC (c) Negation of agency relationship between the signatories (d) A site description (e) A site-specific Statement of Work (f) A statement of intention (g) A project schedule (h) A statement designating a primary contact (i) The CERCLA assurances (1) Operation and maintenance. See (2) Twenty-year waste capacity. (3) Off-site storage (4) Real property acquisition. (5) Provision of State cost share. (j) Cost share conditions (1) An estimate of the response action cost (excluding EPA's indirect costs) that requires cost share; (2) The basis for arriving at this figure ( See (3) The payment schedule as negotiated by the signatories, and consistent with either a lump-sum or incremental-payment option. Upon completion of activities in the site-specific Statement of Work, EPA shall invoice the State for its final payment, with the exception of any change orders and claims handled during reconciliation of the SSC. (k) Reconciliation provision, (l) Amendability of the SSC (1) Formal amendments are required when alterations to CERCLA-funded activities are necessary or when alterations impact the State's assurances pursuant to the National Contingency Plan and CERCLA, as amended. Such amendments must include a Statement of Work for the amendment as described in paragraph (e) of this section; and (2) Any change(s) in the SSC must be agreed to, in writing, by the signatories, except as provided elsewhere in the SSC, and must be reflected in all response agreements affected by the change(s). (m) List of support agency Cooperative Agreements (n) Litigation (o) Sanctions for failure to comply with SSC terms (p) Site access. (q) Final inspection of the remedy. (r) Exclusion of third-party benefits (s) Any other provision (t) State review. (u) Responsible party activities (v) Out-of-State or out-of-an-Indian-Tribal-area-of-Indian-country transfers of CERCLA waste [72 FR 24504, May 2, 2007, as amended at 75 FR 49417, Aug. 13, 2010] § 35.6815 Administrative requirements. In addition to the requirements specified in § 35.6805, the State and/or political subdivision must comply with the following: (a) Financial administration. (1) Payment. (2) Collection of amounts due. (3) Failure to comply with negotiated payment terms. See (b) Personal property. (1) Fixed in-place equipment. (2) Equipment that is an integral part of services to individuals. (c) Reports. (1) EPA-lead. (2) Political subdivision-lead. See (d) Records. [72 FR 24504, May 2, 2007, as amended at 79 FR 76061, Dec. 19, 2014; 87 FR 30401, May 19, 2022] § 35.6820 Conclusion of the SSC. (a) In order to conclude the SSC, the signatories must: (1) Satisfactorily complete the response activities at the site and make all payments based upon project costs determined in § 35.6805(j); (2) Produce a final accounting of all project costs, including change orders and outstanding contractor claims; (3) Submit all State cost share payments to EPA ( See (4) Assume responsibility for all future operation and maintenance as required by CERCLA section 104(c) and addressed in 40 CFR 300.510 (c)(1) of the NCP, and if applicable, accept transfer of any Federal interest in real property ( See (b) After the administrative conclusion of the Superfund State Contract, EPA may monitor the signatory's compliance with assurances to provide all future operation and maintenance as required by CERCLA section 104(c) and addressed in 40 CFR 300.510(c)(1) of the NCP. Subpart P—Financial Assistance for the National Estuary Program Authority: Sec. 320 of the Clean Water Act, as amended (33 U.S.C. 1330). Source: 54 FR 40804, Oct. 3, 1989, unless otherwise noted. § 35.9000 Applicability. This subpart codifies policies and procedures for financial assistance awarded by the EPA to State, interstate, and regional water pollution control agencies and entities and other eligible agencies, institutions, organizations, and individuals for pollution abatement and control programs under the National Estuary Program (NEP). These provisions supplement the EPA general assistance regulations in 2 CFR parts 200 and 1500. [54 FR 40804, Oct. 3, 1989, as amended at 79 FR 76061, Dec. 19, 2014] § 35.9005 Purpose. Section 320(g) of the Clean Water Act (CWA) authorizes assistance to eligible States, agencies, entities, institutions, organizations, and individuals for developing a comprehensive conservation and management plan (CCMP) for an estuary. § 35.9010 Definitions. Aggregate costs. Annual work plan. Five-Year State/EPA Conference Agreement. Management Conference. National Program Assistance Agreements. Work Program. § 35.9015 Summary of annual process. (a) EPA considers various factors to allocate among the Management Conferences the funds requested in the President's budget for the NEP. Each year, the Director of the Office of Marine and Estuarine Protection issues budgetary targets for the NEP for each Management Conference. These targets are based upon negotiated Five-Year State/EPA Conference Agreements. (b) Using the budgetary targets provided by EPA, each Management Conference develops Annual Work Plans describing the work to be completed during the year and identifies individual projects to be funded for the completion of such work. Each applicant having a scope of work approved by the Management Conference completes a standard EPA application, including a proposed work program. After the applicant submits an application, the Regional Administrator reviews it and, if it meets applicable requirements, approves the application and agrees to make an award when funds are available. The Regional Administrator awards assistance from funds appropriated by Congress for that purpose. (c) The recipient conducts activities according to the approved application and assistance award. The Regional Administrator evaluates recipient performance to ensure compliance with all conditions of the assistance award. (d) The Regional Administrator may use funds not awarded to an applicant to supplement awards to other recipients who submit a scope of work approved by the management conference for NEP funds. (e) The EPA Assistant Administrator for Water may approve National Program awards as provided in § 35.9070. [54 FR 40804, Oct. 3, 1989, as amended at 87 FR 30401, May 19, 2022] § 35.9020 Planning targets. The EPA Assistant Administrator for Water develops planning targets each year to help each Management Conference develop an Annual Work Plan. These targets are broad budgetary goals for total expenditures by each estuary program and are directly related to the activities that are to be carried out by each Management Conference in that year as specified in the Five-Year State/EPA Conference Agreement. The planning targets also are based on the Director's evaluation of the ability of each Management Conference to use appropriated funds effectively. § 35.9030 Work program. The work program is part of the application for financial assistance and becomes part of the award document. It is part of the basis for an award decision and the basis for management and evaluation of performance under an assistance award. The work program must specify the level of effort and amount and source of funding estimated to be needed for each identified activity, the outputs committed for each activity, and the schedule for delivery of outputs. § 35.9035 Budget period. An applicant may choose its budget period in consultation with and subject to the approval of the Regional Administrator. § 35.9040 Application for assistance. Each applicant should submit a complete application at least 60 days before the beginning of the budget period. In addition to meeting applicable requirements contained in 2 CFR parts 200 and 1500, a complete application must contain a discussion of performance to date under an existing award, the proposed work program, and a list of all applicable EPA-approved State strategies and program plans, with a statement certifying that the proposed work program is consistent with these elements. The annual workplan developed and approved by the management conference each fiscal year must demonstrate that non-Federal sources provide at least 25 percent of the aggregate costs of research, surveys, studies, modeling, and other technical work necessary for the development of a CCMP for the estuary. Each application must contain a copy of the Annual Work Plan as specified in § 35.9065(c) (2) and (3) for the current Federal fiscal year. The funding table in the workplan must demonstrate that the 25 percent match requirements is being met, and the workplan table of project status must show the sources of funds supporting each project. [54 FR 40804, Oct. 3, 1989, as amended at 79 FR 76061, Dec. 19, 2014] § 35.9045 EPA action on application. The Regional Administrator will review each completed application and should approve, conditionally approve, or disapprove the application within 60 days of receipt. When funds are available, the Regional Administrator will award assistance based on an approved or conditionally approved application. For a continuation award made after the beginning of the approved budget period, EPA will reimburse the applicant for allowable costs incurred from the beginning of the budget period, provided that such costs are contained in the approved application and that the application was submitted before the expiration of the prior budget period. (a) Approval. (b) Conditional approval. (c) Disapproval. [54 FR 40804, Oct. 3, 1989, as amended at 79 FR 76061, Dec. 19, 2014] § 35.9050 Assistance amount. (a) Determining the assistant amount. (b) Reduction of assistance amount. § 35.9055 Evaluation of recipient performance. The Regional Administrator will oversee each recipient's performance under an assistance agreement. In consultation with the applicant, the Regional Administrator will develop a process for evaluating the recipient's performance. The Regional Administrator will include the schedule for evaluation in the assistance agreement and will evaluate recipient performance and progress toward completing the outputs in the approved work program according to the schedule. The Regional Administrator will provide the evaluation findings to the recipient and will include these findings in the official assistance file. If the evaluation reveals that the recipient is not achieving one or more of the conditions of the assistance agreement, the Regional Administrator will attempt to resolve the situation through negotiation. If agreement is not reached, the Regional Administrator may impose sanctions under the applicable provisions of 2 CFR parts 200 and 1500. [54 FR 40804, Oct. 3, 1989, as amended at 79 FR 76061, Dec. 19, 2014] § 35.9060 Maximum Federal share. The Regional Administrator may provide up to 100 percent of the approved work program costs for a particular application provided that non-Federal sources provide at least 25 percent of the aggregate costs of research, surveys, studies, modeling, and other technical work necessary for the development of a comprehensive conservation and management plan for the estuary as specified in the estuary Annual Work Plan for each fiscal year. § 35.9065 Limitations. (a) Management conferences. (b) Elements of annual workplans. (1) Introduction. (2) Funding sources. (3) Projects. [54 FR 40804, Oct. 3, 1989, as amended at 59 FR 61126, Nov. 29, 1994] § 35.9070 National program assistance agreements. The Assistant Administrator for Water may approve the award of NEP funds for work that has broad applicability to estuaries of national significance. These awards shall be deemed to be consistent with Annual Work Plans and Five-Year State/EPA Conference Agreements approved by individual management conferences. The amount of a national program award shall not exceed 75 percent of the approved work program costs provided the non-Federal share of such costs is provided from non-Federal sources. Subpart Q—Credit Assistance for Water Infrastructure Projects Source: 81 FR 91833, Dec. 19, 2016, unless otherwise noted. § 35.10000 Purpose. This part implements a Federal credit assistance program for water infrastructure projects. § 35.10005 Definitions. The following definitions apply to this part: Community water system Credit assistance Credit agreement Credit subsidy cost Eligible project costs (1) Development-phase activities, including planning, feasibility analysis (including any related analysis necessary to carry out an eligible project), revenue forecasting, environmental review, permitting, preliminary engineering and design work, and other preconstruction activities; (2) Construction, reconstruction, rehabilitation, and replacement activities; (3) The acquisition of real property or an interest in real property (including water rights, land relating to the project, and improvements to land), environmental mitigation (including acquisitions pursuant to section 5026(7)), construction contingencies, and acquisition of equipment; and (4) Capitalized interest necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses, and other carrying costs during construction. Capitalized interest on the WIFIA credit instrument is not an eligible project cost. Federal credit instrument Investment-grade rating Iron and steel products Lender et seq. (1) A qualified retirement plan (as defined in section 4974(c) of the Internal Revenue Code of 1986, 26 U.S.C. 4974(c)) that is a qualified institutional buyer; and (2) A governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986, 26 U.S.C. 414(d)) that is a qualified institutional buyer. Loan guarantee Nationally recognized statistical rating organization (NRSRO) Obligor Project (1) One or more activities that are eligible for assistance under section 603(c) of the Federal Water Pollution Control Act (33 U.S.C. 1383(c)), notwithstanding the public ownership requirement under paragraph (1) of that subsection; (2) One or more activities described in section 1452(a)(2) of the Safe Drinking Water Act (42 U.S.C. 300j-12(a)(2)); (3) A project for enhanced energy efficiency in the operation of a public water system or a publicly owned treatment works; (4) A project for repair, rehabilitation, or replacement of a treatment works, community water system, or aging water distribution or waste collection facility (including a facility that serves a population or community of an Indian reservation).; (5) A brackish or sea water desalination project, a managed aquifer recharge project, or a water recycling project; (6) Acquisition of real property or an interest in real property— (i) If the acquisition is integral to a project described in paragraphs (1) through (5) of this definition; or (ii) Pursuant to an existing plan that, in the judgment of the Administrator, would mitigate the environmental impacts of water resources infrastructure projects otherwise eligible for assistance under this section; (7) A combination of projects, each of which is eligible under paragraph (1) or (2) of this definition, for which a State infrastructure financing authority submits to the Administrator a single application; or (8) A combination of projects secured by a common security pledge, each of which is eligible under paragraph (1), (2), (3), (4), (5), or (6) of this definition, for which an eligible entity, or a combination of eligible entities, submits a single application. Project obligation Project sponsor, Publicly sponsored Secured loan State State infrastructure financing authority et seq. Subsidy amount et seq. Substantial completion Term sheet Treatment works WIFIA § 35.10010 Limitations on assistance. (a) The total amount of credit assistance offered to any project under this part shall not exceed 49% of the anticipated eligible project costs, as measured on an aggregate cash (year-of-expenditure) basis, or, if the secured loan does not receive an investment-grade rating, the total amount of credit assistance shall not exceed the amount of the senior project obligations of the project. (b) Notwithstanding paragraph (a) of this section, the Administrator may offer credit assistance in excess of 49% of the anticipated eligible project costs as long as such excess assistance combined for all projects does not require greater than 25% of the subsidy amount made available for the fiscal year. (1) Credit assistance may not exceed 80% of the total project costs due to a statutory restriction on the maximum extent of federal participation in a project, except in the case of certain rural water projects authorized to be carried out by the Secretary of the Interior that includes among its beneficiaries a federally recognized Indian tribe and for which the authorized Federal share of the total project costs is greater than 80%. (2) Use of the authority to offer credit assistance in excess of 49% of the anticipated eligible project costs shall be considered only under extraordinarily exceptional circumstances. (3) In the event this authority is used, all other criteria and requirements described in this part must be met and adhered to. (c) Costs incurred, and the value of any integral in-kind contributions made, before receipt of credit assistance may be considered in calculating eligible project costs only upon approval of the Administrator. Such costs and integral in-kind contributions must be directly related to the development or execution of the project and must be eligible project costs as defined in § 35.10005. In addition, such costs, excluding the value of any integral in-kind contributions, are payable from the proceeds of the WIFIA credit instrument and shall be considered incurred costs for purposes of paragraph (f) of this section. Capitalized interest on the WIFIA credit instrument is not eligible for calculating eligible project costs. (d) No costs financed internally or with interim funding may be refinanced under this part later than a year following substantial completion of the project. (e) The Administrator shall not obligate funds for a project that has not received an environmental Categorical Exclusion, Finding of No Significant Impact, or Record of Decision under the National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et seq. (f) The Administrator shall fund a secured loan based on the project's financing needs. The credit agreement shall include the anticipated schedule for such loan disbursements. Actual disbursements will be based on incurred costs, and in accordance with the approved construction plan, as evidenced by paid invoices. (g) The interest rate on a secured loan will be equal to or greater than the yield on U.S. Treasury securities of comparable maturity on the date of execution of the credit agreement as identified through use of the daily rate tables published by the Bureau of the Fiscal Service for the State and Local Government Series (SLGS) investments. The yield on comparable Treasury securities will be estimated by adding one basis point to the SLGS daily rate with a maturity that is closest to the weighted average loan life of the WIFIA credit instrument, measured from first disbursement. (h) The final maturity date of a secured loan will be the earlier of the date that is 35 years after the date of substantial completion of the project, as determined by the Administrator and identified in the assistance agreement, and if the useful life of the project, as determined by the Administrator, is less than 35 years, the useful life the project; however, the final maturity date of a secured loan to a State infrastructure financing authority will be not later than 35 years after the date on which amounts are first disbursed. In determining the useful life of the project, for the purposes of establishing the final maturity date of the WIFIA credit instrument, the Administrator will consider the useful economic life of the asset(s) being financed. (i) A secured loan will not be subordinated to the claims of any holder of project obligations in the event of bankruptcy, insolvency, or liquidation of the obligor of the project. (j) EPA will establish a repayment schedule for a secured loan based on the projected cash flow from project revenues and other repayment sources. Scheduled loan repayments of principal or interest on a secured loan will commence not later than 5 years after the date of substantial completion of the project as determined by the Administrator; however, scheduled loan repayments of principal or interest on a secured loan to a State infrastructure financing authority will commence not later than 5 years after the date on which amounts are first disbursed. [81 FR 91833, Dec. 19, 2016, as amended at 83 FR 29694, June 26, 2018] § 35.10015 Application process. (a) Each fiscal year for which budget authority is made available by Congress, the EPA shall publish a Federal Register (b) Public and private applicants for credit assistance under this part will be required to submit letters of interest to the EPA in order to be selected by the Administrator to submit an application. (c) The application process is divided into two steps: letter of interest and application. (1) The letter of interest provides enough information for EPA to make a project selection and invite prospective borrowers to submit applications. Such information may include, but is not limited to: (i) Prospective borrower information; (ii) Project plan; (iii) Preliminary project operations and maintenance plan; (iv) Proposed financing plan and audited financial statements; (v) Contact information; (vi) Written responses addressing selection criteria; (vii) Certifications; and (viii) Notification of state infrastructure financing authority. (2) The application provides all relevant information for EPA to provide credit assistance. Submission of an application does not guarantee that EPA will award credit assistance to a given applicant. At a minimum, such applications shall provide, in addition to the information provided in the letter of interest: (i) Detailed applicant information; (ii) Detailed project information; (iii) Detailed project operation and maintenance plan; (iv) Comprehensive financing plan; and (v) Complete certifications. (d) Following successful submission and approval by EPA of the application, EPA will offer the applicant a term sheet, as described in section 35.10060. The applicant may accept or negotiate terms in the term sheet. (e) Following acceptance of the term sheet, the applicant will proceed to closing, as described in section 35.10065. (f) An application for a project located in or sponsored by more than one entity shall be submitted to the EPA by just one entity. The sponsoring entities shall designate a single obligor for purposes of applying for, receiving, and repaying WIFIA credit assistance. § 35.10020 Small community set-aside. (a) Each fiscal year for which budget authority is made available by Congress, EPA shall set aside at least 15% of budget authority for projects that serve communities of not more than 25,000 individuals. (b) Any set-aside budget authority remaining unobligated on June 1 of the fiscal year for which the budget authority is set aside shall be made available for projects other than small community projects. § 35.10025 Federal requirements. All projects receiving credit assistance under this part shall comply with: (a) Environmental authorities: (1) The National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq.; (2) Archeological and Historic Preservation Act, 16 U.S.C. 469-469c; (3) Clean Air Act, 42 U.S.C. 7401 et seq.; (4) Clean Water Act, 33 U.S.C. 1251 et seq.; (5) Coastal Barrier Resources Act, 16 U.S.C. 3501 et seq.; (6) Coastal Zone Management Act, 16 U.S.C. 1451 et seq.; (7) Endangered Species Act, 16 U.S.C. 1531 et seq.; (8) Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, Executive Order 12898, 59 FR 7629, February 16, 1994; (9) Floodplain Management, Executive Order 11988, 42 FR 26951, May 24, 1977, as amended by Executive Order 13690, 80 FR 6425, February 4, 2015; (10) Protection of Wetlands, Executive Order 11990, 42 FR 26961, May 25, 1977, as amended by Executive Order 12608, 52 FR 34617, September 14, 1987; (11) Farmland Protection Policy Act, 7 U.S.C. 4201 et seq.; (12) Fish and Wildlife Coordination Act, 16 U.S.C. 661-666c, as amended; (13) Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. 1801 et seq.; (14) National Historic Preservation Act, 16 U.S.C. 470 et seq.; (15) Safe Drinking Water Act, 42 U.S.C. 300f et seq.; (16) Wild and Scenic Rivers Act, 16 U.S.C. 1271 et seq. (b) Economic and miscellaneous authorities: (1) Debarment and Suspension, Executive Order 12549, 51 FR 6370, February 21, 1986; (2) Demonstration Cities and Metropolitan Development Act, 42 U.S.C. 3301 et seq., (3) Drug-Free Workplace Act, 41 U.S.C. 8101 et seq.; (4) New Restrictions on Lobbying, 31 U.S.C. 1352; (5) Prohibitions relating to violations of the Clean Water Act or Clean Air Act with respect to Federal contracts, grants, or loans under 42 U.S.C. 7606 and 33 U.S.C. 1368, and Executive Order 11738, 38 FR 25161, September 12, 1973; and (6) The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. 4601 et seq. (c) Civil Rights, Nondiscrimination, Equal Employment Opportunity Authorities: (1) Age Discrimination Act, 42 U.S.C. 6101 et seq.; (2) Equal Employment Opportunity, Executive Order 11246, 30 FR 12319, September 28, 1965; (3) Section 13 of the Clean Water Act, Pub. L. 92-500, codified in 42 U.S.C. 1251; (4) Section 504 of the Rehabilitation Act, 29 U.S.C. 794, supplemented by Executive Orders 11914, 41 FR 17871, April 29, 1976 and 11250, 30 FR 13003, October 13, 1965; (5) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d et seq.; (6) Participation by Disadvantaged Business Enterprises in Procurement under Environmental Protection Agency (EPA) Financial Assistance Agreements, 73 FR 15904. (d) Other Federal and compliance requirements as may be applicable. § 35.10026 Federal flood risk management standard. (a) In making WIFIA funding decisions under this rule, EPA will follow the requirements of Executive Orders 11988 and 13690, the Federal Flood Risk Management Standard, and the Guidelines for Implementing Executive Order 11988, Floodplain Management, and Executive Order 13690, Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input (Guidelines). Applicants shall submit information regarding the project that is sufficient for EPA to determine that the project is in compliance with the standards and requirements of these Executive Orders and Guidelines. (b) Projects funded under the WIFIA program implemented through this rule must also demonstrate that they will meet or exceed applicable State, local, Tribal, and Territorial standards for flood risk and floodplain management. (c) As a condition of funding projects involving new construction, substantial improvement, or to address substantial damage to structures and facilities, the project sponsor must demonstrate to EPA that it will use the expanded floodplain standard described in E.O. 13690. Projects involving substantial improvement or addressing substantial damage include projects equaling or exceeding 50 percent of the value of the structure or facility. With regard to projects meeting this definition, the project applicant shall determine whether the proposed project will occur in the floodplain using any of the approaches provided in section 6(c) of Executive Order 11988, as amended. Applicants for proposed projects that are not new construction, substantial improvement, or projects to address substantial damage shall use at minimum, the base 100-year floodplain standard for actions that are not “critical actions” as defined in Executive Order 11988 Section 6(d) and the 0.2%-annual chance floodplain for critical actions. (d) For purposes of this section, projects funded under WIFIA will be considered Critical Actions as defined in Executive Order 11988, as amended, unless the Administrator determines and provides written notice to the applicant that the particular project is not considered to be a Critical Action. (e) All applicants shall follow the Guidelines, including the Eight-Step Decision-Making Process described in the Guidelines, as a means of compliance with the requirements of section 2(a) of Executive Order 11988, as amended. EPA shall provide oversight to ensure that project applicants have complied with this process. (f) The Administrator will not allow WIFIA funding for new construction, substantial improvement, or to address substantial damage to structures and facilities sited in or encroaching on a Floodway or a Coastal High Hazard Area/V-Zone, except for a functionally dependent use or to facilitate an open space use. The Administrator will make the determination of whether a proposed project is a functionally dependent use or a structure that facilitates an open space use. In addition to compliance with paragrpahs (a) through (e) of this section, applicants for projects sited in these zones must include engineering plans demonstrating that the facility will be accessible and operational to the elevation of the applicable level, including elevation or floodproofing of buildings, electronics, and mechanical components. § 35.10030 American iron and steel. (a) All projects receiving credit assistance under this part for the construction, alteration, maintenance, or repair of a project shall use only iron and steel products produced in the United States. (b) By statute, at 33 U.S.C. 3914(b), “iron and steel products” means the following products made primarily of iron or steel: Lined or unlined pipes and fittings, manhole covers and other municipal castings, hydrants, tanks, flanges, pipe clamps and restraints, valves, structural steel, reinforced precast concrete, and construction materials. Equipment employed in construction but does not become part of the project is not an “iron and steel product” for purpose of this section. (c) EPA may issue a waiver for a case or category of cases where EPA finds: (1) That applying these requirements would be inconsistent with the public interest; (2) Iron and steel products are not produced in the US in sufficient and reasonably available quantities and of a satisfactory quality; or (3) Inclusion of iron and steel products produced in the US will increase the cost of the overall project by more than 25%. (d) All guidance developed for compliance with American Iron and Steel requirements for EPA's State Revolving Fund programs shall apply to projects receiving credit assistance under this part. Such guidance can be found on EPA's Web site. (e) All national waivers issued by EPA in accordance with section 436(b) of Pub. L. 113-76, 128 Stat. 346, 2014, Consolidated Appropriations Act, 2014, shall apply to projects receiving credit assistance under this part in the same manner as they apply to projects receiving assistance under the Clean Water and Drinking Water State Revolving Fund programs, unless such waiver addresses the timing of the submission of engineering plans and specifications as the submission relates to Congressional appropriations for either the Clean Water or Drinking Water State Revolving Fund programs. § 35.10035 Labor standards. All laborers and mechanics employed by contractors or subcontractors on projects receiving credit assistance under this part shall be paid wages at rates not less than those prevailing for the same type of work on similar construction in the immediate locality, as determined by the Secretary of Labor. § 35.10040 Investment-grade ratings. (a) At the time a project sponsor submits an application, the EPA shall require a preliminary rating opinion letter. This letter is a conditional credit assessment from a NRSRO that provides a preliminary indication of the project's overall creditworthiness and that specifically addresses the potential of the project's senior debt obligations (those obligations having a lien senior to that of the WIFIA credit instrument on the pledged security) to achieve an investment-grade rating and the default risk of the WIFIA loan. (b) The full funding of a secured (direct) loan or loan guarantee shall be contingent on the assignment of an investment-grade rating by two NRSROs to all project obligations that have a lien senior to that of the Federal credit instrument on the pledged security along with commentary on the default risk of the WIFIA loan. (c) Neither the preliminary rating opinion letter nor the formal credit ratings should reflect the effect of bond insurance, unless that insurance provides credit enhancement that secures the WIFIA obligation. § 35.10045 Threshold criteria. (a) To be eligible to receive Federal credit assistance under this part, a project shall meet the following six threshold criteria: (1) The project and obligor shall be creditworthy; (2) The project sponsor shall submit a project application to the Administrator; (3) A project shall have eligible project costs that are reasonably anticipated to equal or exceed $20 million, or for a project eligible under paragraphs (2) or (3) of 33 U.S.C. 3905 serving a community of not more than 25,000 individuals, project costs that are reasonably anticipated to equal or exceed $5 million; (4) Project financing shall be repayable, in whole or in part, from State or local taxes, user fees, or other dedicated revenue sources that also secure the senior project obligations of the project; shall include a rate covenant, coverage requirement, or similar security feature supporting the project obligations; and may have a lien on revenues subject to any lien securing project obligations; (5) In the case of a project that is undertaken by an entity that is not a State or local government or an agency or instrumentality of a State or local government, or a tribal government or consortium of tribal governments, the project that the entity is undertaking shall be publicly sponsored. (6) The applicant shall have developed an operations and maintenance plan that identifies adequate revenues to operate, maintain, and repair the project during its useful life. (b) With respect to paragraph (a)(4) of this section, the Administrator may accept general obligation pledges or general corporate promissory pledges and will determine the acceptability of other pledges and forms of collateral as dedicated revenue sources on a case-by-case basis. The Administrator shall not accept a pledge of Federal funds, regardless of source, as security for the WIFIA credit instrument. § 35.10050 Use of existing financing mechanisms. (a) Within 30 days of receipt of an application for a project eligible under 33 U.S.C. 3905(2) or (3), EPA shall notify the State infrastructure financing authority in the State in which the applicant's project is located that such an application has been received. (b) EPA may not provide assistance under this chapter if within 60 days of receipt of a notification described in paragraph (a) of this section, the State infrastructure financing authority notifies EPA that it intends to commit funds in an amount equal to or greater than the amount requested in the application to the applicant for the project, as evidenced by an amendment to the State revolving fund program's intended use plan described in § 35.3150 or § 35.3555 unless: (1) By the date 180 days after receipt of the notification described in paragraph (a) of this section, the State infrastructure financing authority fails to enter into an assistance agreement with the applicant; or (2) The financial assistance to be provided by the State infrastructure authority will be at rates and terms that are less favorable than the rates and terms of the assistance agreement to be provided under this chapter. § 35.10055 Selection criteria. (a) The Administrator shall assign weights to selection criteria in the first Notice of Funding Availability published in accordance with section 4(a), and adjusted weights in future Notices of Funding Availability to address changing circumstances and priorities. The following thirteen selection criteria will be used for evaluating and selecting among eligible projects to receive credit assistance: (1) The extent to which the project is nationally or regionally significant, with respect to the generation of economic and public health benefits; (2) The likelihood that assistance under this subtitle would enable the project to proceed at an earlier date than the project would otherwise be able to proceed; (3) The extent to which the project uses new or innovative approaches such as the use of energy efficient parts and systems, or the use of renewable or alternate sources of energy; green infrastructure; and the development of alternate sources of drinking water through desalination, aquifer recharge or water recycling; (4) The extent to which the project protects against extreme weather events, such as floods or hurricanes, as well as the impacts of climate change; (5) The extent to which the project helps maintain or protect the environment or public health; (6) The extent to which a project serves regions with significant energy exploration, development, or production areas; (7) The extent to which a project serves regions with significant water resource challenges, including the need to address water quality concerns in areas of regional, national, or international significance; water quantity concerns related to groundwater, surface water, or other resources; significant flood risk; water resource challenges identified in existing regional, state, or multistate agreements; and water resources with exceptional recreational value or ecological importance; (8) The extent to which the project addresses identified municipal, state, or regional priorities; (9) The readiness of the project to proceed toward development, including a demonstration by the obligor that there is a reasonable expectation that the contracting process for construction of the project can commence by not later than 90 days after the date on which a Federal credit instrument is obligated for the project under this subtitle; and (10) The extent to which the project financing plan includes public or private financing in addition to assistance under this subtitle; (11) The extent to which assistance under this subtitle reduces the contribution of Federal assistance to the project; (12) The extent to which the project addresses needs for repair, rehabilitation or replacement of a treatment works, community water system, or aging water distribution or wastewater collection system; and (13) The extent to which the project serves economically stressed communities, or pockets of economically stressed rate payers within otherwise non-economically stressed communities. (b) The Administrator may include additional weighted criteria in the Notice of Funding Availability to address changing circumstances and priorities. (c) In addition, 33 U.S.C. 3907(a)(1)(D)(i) conditions a project's approval for credit assistance on receipt of a preliminary rating opinion letter indicating that the project's senior debt obligations have the potential to attain an investment-grade rating. § 35.10060 Term sheets and approvals. (a) EPA, after review and evaluation of the application, and all other required documents submitted by the applicant, may offer to an applicant a written Term Sheet signed by the Administrator, including detailed terms and conditions that must be met. The issuance of this Term Sheet represents approval of the application for credit assistance. (b) To proceed to closing, the applicant must sign the Term Sheet before the expiration date on which the terms offered will expire unless the Administrator agrees in writing to extend the expiration date. § 35.10065 Closing on the credit agreement. (a) Subsequent to the signing of the Term Sheet by the applicant, EPA will set a closing date for execution of a credit agreement, and provide documents articulating the conditions precedent to closing to the applicant. (b) By the closing date, the applicant must have satisfied all of the detailed terms and conditions required by EPA and all other contractual, statutory, and regulatory requirements. If the applicant has not satisfied all such terms and conditions by the closing date, the Administrator may set a new closing date or rescind the approval of the application. (c) If at any point following the issuance of the Term Sheet by EPA and prior to the closing date, the terms and conditions of the financing arrangements or the financial status of the obligor change in a material manner from the information used to evaluate the application, the applicant must notify EPA within the time period specified by the Administrator, at which point the Administrator may update the Term Sheet accordingly or rescind the approval of the application. (d) The Credit Agreement and related documents will include detailed definitions, terms, and conditions necessary and appropriate to protect the interest of the United States over the life of the credit assistance and in the case of default, and will be executed at closing only after EPA has ensured that all requirements and conditions articulated in this rule, the statute, and other relevant laws and regulations have been satisfied. § 35.10070 Credit agreement. (a) Only a credit agreement executed by the Administrator can contractually obligate EPA to provide assistance under WIFIA. (b) EPA is not bound by oral representations made during the letter of interest step, or application step, or during any negotiation process. (c) Except if explicitly authorized by an Act of Congress, no Federal funds, proceeds of Federal loans, or proceeds of loans guaranteed by the Federal Government, may be used by a borrower to pay for credit subsidy costs, administrative fees, or other fees charged by or paid to EPA relating to the WIFIA program. (d) Prior to the execution by EPA of a credit agreement, EPA must ensure that the following requirements and conditions are satisfied: (1) The project qualifies as an eligible project under WIFIA; (2) The face value of the credit agreement is limited to no more than 49 percent of total eligible project costs, or if credit assistance in excess of 49% has been approved, no more than the percentage of eligible project costs agreed upon, not to exceed 80% of eligible project costs; (3) The applicant is obligated to make full repayment of the principal and interest on the credit instrument over a period of up to the lesser of 35 years or the useful life of the project, after substantial completion; however, the final maturity date of a secured loan to a State infrastructure financing authority will be not later than 35 years after the date on which amounts are first disbursed. (4) If the credit instrument is a loan guarantee, the loan guarantee does not finance, either directly or indirectly, tax-exempt debt obligations, consistent with the requirements of section 149(b) of the Internal Revenue Code; (5) The amount of the credit agreement, when combined with other funds committed to the project, will be sufficient to carry out the project, including adequate contingency funds; (6) The applicant has pledged project assets and other collateral or surety, including non-project-related assets, determined by EPA to be necessary to secure the repayment of the credit agreement; (7) The credit agreement and related documents include detailed terms and conditions necessary and appropriate to protect the interest of the United States in the case of default; (8) The credit agreement is not subordinate to any loan or other debt obligation in the event of bankruptcy, insolvency, or liquidation of the obligor of the project; (9) There is satisfactory evidence that the applicant is willing, competent, and capable of performing the terms and conditions of the credit agreement, and will diligently pursue the project; (10) The applicant has taken and is obligated to continue to take those actions necessary to perfect and maintain liens on assets which are pledged as security for the credit agreement; (11) EPA or its representatives have access to the project site at all reasonable times in order to monitor the performance of the project; (12) EPA and the applicant have reached an agreement as to the information that will be made available to EPA and the information that will be made publicly available; (13) The applicant has filed applications for or obtained any required regulatory approvals for the project and is in compliance, or promptly will be in compliance, where appropriate, with all Federal, State, and local regulatory requirements; (14) The applicant has no delinquent federal debt, including tax liabilities, unless the delinquency has been resolved with the appropriate federal agency in accordance with the standards of the Debt Collection Improvement Act of 1996; (15) The credit agreement and related agreements contain such other terms and conditions as EPA deems reasonable and necessary to protect the interests of the United States, including without limitation provisions for (i) such collateral and other credit support for the credit agreement, and (ii) such collateral sharing, priorities and voting rights among creditors and other intercreditor arrangements as, in each case, EPA deems reasonable and necessary to protect the interests of the United States; and (e) The credit agreement must contain audit provisions which provide, in substance, as follows: (1) The applicant must keep such records concerning the project as are necessary to facilitate an effective and accurate audit and performance evaluation of the project; and (2) EPA and the Inspector General, or their duly authorized representatives, must have access, for the purpose of audit and examination, to any pertinent books, documents, papers, and records of the applicant. Examination of records may be made during the regular business hours of the applicant, or at any other time mutually convenient. § 35.10075 Reporting requirements. At a minimum, any recipient of Federal credit assistance under this part shall submit an annual project performance report and audited financial statements to EPA within no more than 180 days following the recipient's fiscal year-end for each year during which the recipient's obligation to the Federal Government remains in effect. EPA may conduct periodic financial and compliance audits of the recipient of credit assistance, as determined necessary by EPA. The specific credit agreement between the recipient of credit assistance and EPA may contain additional reporting requirements. § 35.10080 Fees. (a) Application fee. (b) Adjustment of application fee. Federal Register (c) Credit processing fee. e.g., (d) Servicing fee. e.g., (e) Optional supplemental fee. (f) Reduced fees. (g) Extraordinary expenses. e.g., [82 FR 29245, June 28, 2017]

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