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(continued)
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: The allowance does not reimburse for costs incurred. Accordingly,
the allowance tables shall not be used to determine the compensation
for facilities planning or design services. The compensation for
facilities planning or design services should be based upon the
nature, scope and complexity of the services required by the
community.
*Interpolate between values.
Table 2_Allowance for Design Only
------------------------------------------------------------------------
Allowance as a
Building cost 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: The allowance does not reimburse for costs incurred. Accordingly,
the allowance tables shall not be used to determine the compensation
for facilities planning or design services. The compensation for
facilities planning or design services should be based upon the
nature, scope and complexity of the services required by the
community.
*Interpolate between values.
Table 3_Allowance for Facilities Planning for Design/Build Projects
------------------------------------------------------------------------
Allowance as a
Building cost (dollars) 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: Building cost is the sum of the allowable cost of (1) the initial
award amount of the prime subagreement for building and designing the
project; and (2) the purchase price of eligible real property.
*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
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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.
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(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.
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(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.
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(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.
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(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., Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d et seq.), except for sections 201, 203, 204, and 212 of the Clean Water Act;
(4) Final resolution of construction grant audit exceptions; and
(5) Procurement determinations listed under 40 CFR 33.001(g).
§ 35.3020 Certification procedures.
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(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.
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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. The plan for overview specifies priority objectives, key measures of performance, and monitoring and evaluation activities (including State reporting to EPA) for the upcoming year. EPA and the State should agree to a plan for overview in advance of the upcoming year.
(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. Annually, the Region and delegated State will negotiate and agree upon outputs, where required by the plan for overview, to cover priority objectives for the upcoming year. This negotiation should also result in development of the work program required for the section 205(g) assistance application, pursuant to subpart A, §35.130 of this part. Where the assistance application covers a budget period beyond the annual overview program period, the assistance award may be made for the full budget period, contingent on future negotiation of annual outputs under this paragraph for subsequent years of the budget period.
(c) Monitoring and evaluating program performance. Monitoring and evaluation of program performance (including State reporting) is based on the plan for overview agreed to in advance, and should be appropriate to the delegation situation existing between the Region and State. It should take into account past performance of the State and the extent of State experience in administering the delegated functions. An on-site evaluation will occur at least annually and will cover, at a minimum, negotiated annual outputs, performance expected in the delegation agreement and, where applicable, evaluation of performance under the assistance agreement as provided in 40 CFR 35.150. The evaluation will cover performance of both the Region and the State. Upon completion of the evaluation, the delegation agreement may be revised, if necessary, to reflect changes resulting from the evaluation. The Regional Administrator may terminate or annul any section 205(g) financial assistance for cause in accordance with the procedures in subpart A, §35.150, and part 30.
(Approved by the Office of Management and Budget under control number 2000–0417)
§ 35.3030 Right of review of State decision.
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(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 40 CFR part 30, subpart L. 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 subpart L.
(Approved by the Office of Management and Budget under control number 2040–0095)
[50 FR 45896, Nov. 4, 1985]
§ 35.3035 Public participation.
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(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
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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.
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(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.
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Words and terms that are not defined below and that are used in this rule shall have the same meaning they are given in 40 CFR part 31 and 40 CFR part 35, subpart I.
(a) Act. The Federal Water Pollution Control Act, more commonly known as the Clean Water Act (Pub. L. 92–500), as amended by the Water Quality Act of 1987 (Pub. L. 100–4). 33 U.S.C. 1251 et seq.
(b) Binding Commitment. A legal obligation by the State to a local recipient that defines the terms for assistance under the SRF.
(c) Capitalization Grant. The assistance agreement by which the EPA obligates and awards funds allotted to a State for purposes of capitalizing that State's revolving fund.
(d) Cash draw. The transfer of cash under a letter of credit (LOC) from the Federal Treasury into the State's SRF.
(e) Disbursement. The transfer of cash from an SRF to an assistance recipient.
(f) Equivalency projects. Those section 212 wastewater treatment projects constructed in whole or in part before October 1, 1994, with funds “directly made available by” the capitalization grant. These projects must comply with the requirements of section 602(b)(6) of the Act.
(g) Funds “directly made available by” capitalization grants. Funds equaling the amount of the grant.
(h) Payment. An action by the EPA to increase the amount of capitalization grant funds available for cash draw from an LOC.
(i) SRF. State water pollution control revolving fund.
§ 35.3110 Fund establishment.
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(a) Generally. Before the Regional Administrator (RA) may award a capitalization grant, the State must establish an SRF that complies with section 603 of the Act and this rule.
(b) SRF accounts. The SRF can be established within a multiple-purpose State financing program. However, the SRF must be a separate account or series of accounts that is dedicated solely to providing loans and other forms of financial assistance, but not grants.
(c) SRF administration. The SRF must be administered by an instrumentality of the State that is empowered to manage the Fund in accordance with the requirements of the Act. Where more than one agency of the State is involved in administering the activities of the State's program, the functions and the relationships of those agencies must be established to the satisfaction of the RA.
(d) Documentation of the establishment of an SRF program. (1) As part of its initial application for the capitalization grant, the State must furnish the RA with documentation of the establishment of an SRF and designation of the State instrumentality that will administer the SRF in accordance with the Act.
(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. (1) Appropriations for fiscal years 1987 through 1990 under both title II and title VI programs will be allotted in accordance with the formula contained in section 205(c)(3) of the Act.
(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. A State may exercise the option to transfer a portion of its title II allotment for deposit, through a capitalization grant, into an established water pollution control revolving fund, under section 205(m) of the Act.
(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. (1) Funds reserved under section 205(g) of the Act can be used to develop SRF programs. However, before any of these funds may be used for purposes of the SRF, the State must establish to the satisfaction of the RA that adequate funds, up to the section 205(g) maximum, will be available from any source to administer the construction grants program.
(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.
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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.
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The SRF may provide seven general types of financial assistance.
(a) Loans. The SRF may award loans at or below market interest rates, or for zero interest.
(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. The SRF may buy or refinance local debt obligations at or below market rates, where the initial debt was incurred after March 7, 1985, and building began after that date.
(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. The SRF may guarantee local debt obligations where such action would improve credit market access or reduce interest rates. The SRF may also purchase or provide bond insurance to guarantee debt service payment.
(d) Guarantee SRF debt obligations. The SRF may be used as security or as a source of revenue for the payment of principal and interest on revenue or general obligation bonds issued by the State provided that the net proceeds of the sale of such bonds are deposited in the SRF.
(e) Loan guarantees for “sub-State revolving funds.” The SRF may provide loan guarantees for similar revolving funds established by municipal or intermunicipal agencies, to finance activities eligible under title VI.
(f) Earn interest on fund accounts. The SRF may earn interest on Fund accounts.
(g) SRF administrative expenses. (1) Money in the SRF may be used for the reasonable costs of administering the SRF, provided that the amount does not exceed 4 percent of all grant awards received by the SRF. Expenses of the SRF in excess of the amount permitted under this section must be paid for from sources outside the SRF.
(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.
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(a) Prevention of double benefit. If the SRF makes a loan in part to finance the cost of facility planning and preparation of plans, specifications, and estimates for the building of treatment works and the recipient subsequently receives a grant under section 201(g) for the building of treatment works and an allowance under section 201(1)(1), the SRF shall ensure that the recipient will promptly repay the loan to the extent of the allowance.
(b) Assistance for the non-Federal share. (1) The SRF shall not provide a loan for the non-Federal share of the cost of a treatment works project for which the recipient is receiving assistance from the EPA under any other authority.
(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. The SRF may provide assistance for only the publicly owned portion of the treatment works.
(d) Private operation. Contractual arrangements for the private operation of a publicly owned treatment works will not affect the eligibility of the treatment works for SRF financing.
(e) Water quality management planning. The SRF may provide assistance only to projects that are consistent with any plans developed under sections 205(j), 208, 303(e), 319 and 320 of the Act.
§ 35.3130 The capitalization grant agreement.
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(a) Contents. The capitalization grant agreement must contain or incorporate by reference the State's application, Intended Use Plan, agreed upon payment schedule, State environmental review process and certifications or demonstrations of other agreement requirements and, where used, the SRF Operating Agreement.
(b) Operating agreement. At the option of the State, the organizational and administrative framework and those procedures of the SRF program that are not expected to change annually may be described in an Operating Agreement (OA). The OA must be incorporated by reference in the grant agreement.
(c) Application requirements. The State must certify in its application that it has the legal, managerial, technical, and operational capabilities to administer the program.
(Approved by the Office of Management and Budget under control number 2040–0118)
§ 35.3135 Specific capitalization grant agreement requirements.
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(a) Agreement to accept payments. The State must agree to accept grant payments in accordance with the negotiated payment schedule.
(b) Provide a State match. The State must agree to deposit into its SRF an amount equaling at least 20 percent of the amount of each grant payment.
(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. The State must make binding commitments in an amount equal to 120 percent of each quarterly grant payment within one year after the receipt of each quarterly grant payment.
(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. The State must agree to expend all funds in the SRF in an expenditious and timely manner.
(e) First use of funds. (1) The State must agree to first use funds in the SRF equaling the amount of the grant, all repayments of principal and payments of interest on the initial loans from the grant, and the State match to address any major and minor publicly owned treatment works (POTW) that the Region and the State have previously identified as part of the National Municipal Policy list for the State.
(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. (1) The State must agree that equivalency projects will comply with sections 201(b), 201(g)(1), 201(g)(2), 201(g)(3), 201(g)(5), 201(g)(6), 201(n)(1), 201(o), 204(a)(1), 204(a)(2), 204(b)(1), 204(d)(2), 211, 218, 511(c)(1), and 513 of the Act.
(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. The State must agree to commit or expend each quarterly capitalization grant payment in accordance with the State's own laws and procedures regarding the commitment or expenditure of revenues.
(h) State accounting and auditing procedures. (1) The State must agree to establish fiscal controls and accounting procedures that are sufficient to assure proper accounting for payments received by the SRF, disbursements made by the SRF, and SRF balances at the beginning and end of the accounting period.
(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. The State must agree to require recipients of SRF assistance to maintain project accounts in accordance with generally accepted government accounting standards as these are promulgated by the Government Accounting Standards Board. These accounts must be maintained as separate accounts.
(j) Annual report. The State must agree to make an Annual Report to the RA on the actual use of the funds, in accordance with section 606(d) of the Act.
§ 35.3140 Environmental review requirements.
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(a) Generally. The State must agree to conduct reviews of the potential environmental impacts of all section 212 construction projects receiving assistance from the SRF, including nonpoint source pollution control (section 319) and estuary protection (section 320) projects that are also section 212 projects.
(b) NEPA-like State environmental review process. Equivalency projects must undergo a State environmental review process (SERP) that conforms generally to the National Environmental Policy Act (NEPA). The State may elect to apply the procedures at 40 CFR part 6, subpart E and related subparts, or apply its own “NEPA-like” SERP for conducting environmental reviews, provided that the following elements are met.
(1) Legal foundation. The State must have the legal authority to conduct environmental reviews of section 212 construction projects receiving SRF assistance. Such authority and supporting documentation must specify:
(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. The State must employ an interdisciplinary approach for identifying and mitigating adverse environmental effects including, but not limited to, those associated with other applicable Federal environmental authorities.
(3) Decision documentation. The State must fully document the information, processes and premises that influence decisions to:
(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); (continued)