U.S. Environmental  Protection Agency

 Office of Water Program Operations
   Facility Reauirements Division
      Washington, D.C.  20460
             MARCH 1981

 ORDER single copies free from:

     General Services Administration (8BRC)
     Centralized Mailing Lists Services
     Building 41, Denver Federal  Center
     Denver, Colo.   80225

Planning and Environmental Policy Section (WH-595)
Facility Requirements Division
Office of Water Program Operations
Environmental Protection Agency
Washington, DC  20460
Project Officers:  Elaine Stanley, William Kramer
Assistant: Betty Ford
    ESEI;  Vienna,  Va.   22180
    Project Manager:   Joseph A.  Grieshaber
    Assistants:   Jane  T.  Cameron and  Michael  E.  Dorman

    Facilities Planning 1981 (FP 81)  is a new approach to guidance on
facilities planning.   FP 81 is one of a series of efforts which are underway
to simplify, deregulate, and delegate the construction grants program.  It
represents a commitment to reduce the requirements of the facilities
planning process, to publish new requirements only once during a fiscal
year, to avoid imposing retroactive requirements (with the exception of
those specified by law), and to facilitate delegation to the States of the
review and approval of facilities plans.

    The purpose of FP 81 is to provide States, grantees, and the
Environmental Protection Agency (EPA) regional offices with everything to be
said about  facilities planning in a single document.  The requirements in
this document apply to all step 1 grants awarded during  fiscal year 1981.
It  is intended that no additional requirements will be applied during  the
life of those facilities planning processes  initiated in fiscal year  1981 —
even if the original  step  1 grant is amended  in  subsequent  fiscal  years.

    Once  a  year, priot  to  the start of  the new  fiscal year,  an updated bound
volume  of complete facilities planning  guidance  will  be  published.  The
updated guidance will include any modifications  in requirements which will
apply only  to new step  1  grants - those  initiating  the  facilities planning
process —  which are  awarded  during  that  new fiscal  year.   Of  course,  no
grantee will  be  precluded  from  voluntarily applying  future  simplified
procedures  to step  1  processes  which  are  already underway.

     To  simplify  the  process,  several  procedural changes  were made in
 facilities  planning  for fiscal  year  1981.  Changes  are  highlighted by a
heavy  line  in the margin of facilities planning 1981.  Most relate to
block-by-block  analysis for septic  tanks,  infiltration/inflow analysis,
multiple  purpose projects, and  land  treatment.   As  additional program
 improvements  are developed, they will be  reflected in subsequent annual
 facilities  planning documents.

     I  encourage all who use Facilities Planning 1981 to let us know of any
 changes you believe would improve its usefulness.  Send any comments or
 suggestions to the Director,  Facility Requirements  Division; Office of Water
 Program Operations (WH-595);  Environmental Protection Agency;
 Washington, D.C.  20460.
                                         -.ongesjc II
                               Deput//Assista/t Administrator
                               for W«ter Program Operations

            INTRODUCTION AND USER GUIDE                                  —
            TEXT                                                       V11*

 1.  ... BEGINNING FACILITIES PLANNING 	             !
            1.1   State Planning Processes                      	 i
            1.2   Wasteload Allocations
            1.3   Delineation of Planning Areas                           2
            1.4   Water Quality Management (WQM) Plans                    3
            1.5   State Delegation                                        ,

            2.1   Preapplication Conference                   	   4
            2.2   Special  Topics for  Discussion                           5

 3.  ...  APPLICATION FOR  STEP  1 GRANT	           6
            3.1    Plan  of  Study                     	
            3.2    Public Participation                                     7
            3.3    General  Application Requirements                         8
                   3.3.1   Application Form                               g
                   3.3.2   Allowable and Unallowable  Costs                3
                   3.3.3   Procurement of Services                        9
                   3.3.4   Clearinghouse Comments                        10

4.  ... REVIEW, APPROVAL AND AWARD	        io

           5.1   Project Need and Service Areas                 * " * *  11
           5.2   Effluent Limitations                                    1?
           5.3   Environmental Information Document (EID)                13
                   5.3.1   Historical and Archeological                  14
                   5.3.2   Floodplains  and Wetlands                      15
                      Flood Insurance                    15
                   5.3.3   Agricultural Lands                           15
                   5.3.4   Coastal Zone Management                       16


5 (continued)
           Contents  (continued)

  5.3.5    Wild and  Scenic  Rivers
  5.3.6    Fish and  Wildlife Protection
  5.3.7    Endangered Species Protection
  5.3.8    Air Quality
  5.3.9    Water Quality and Quantity
  5.3.10  Direct and Indirect Impacts
  5.3.11  Decision  to Prepare an EIS
Current  Situation
  5.4.1    Existing  Environment of the
            Planning Area
  5.4.2    Existing Wastewater Flows and
            Treatment Systems
  5.4.3   Infiltration and Inflow (I/I)
    State Certification
    I/I Analysis
    Sewer System
                       Evaluation Survey
                       (SSES) and
    Sewer Maintenance
                       Program and  Sewer
                       Use  Ordinance
           Performance  of  Existing Systems
                                         Economic,  and Land
Future Situation
  5.5.1   Demographic
            Use Projections
  5.5.2   Forecasts of Flows and
  5.5.3   Flow and Waste Reduction
  5.5.4   Future Environment Without the
Development of Alternatives
  5.6.1   Optimum Operation of Existing
  5.6.2   Regionalization, Individual
            Systems and Small Wastewater
  5.6.3   Evaluation of Systems
    Best  Practicable Waste
                       Treatment Technology
    Innovative and  Alternative
                        (I&A)  Technology
    Evaluation of  Sewer
    Ultimate Disposal of
                                                      16  .








  * section includes  simplified  requirement

             Contents (continued)
5. (continued)
     Combined Sewer Overflows
                        (CSOs) and Stormwater
                      Phased Construction
                      Multiple Purpose Projects
 Evaluation of Alternatives
   5.7.1   Evaluation of Monetary Costs
     Sunk Costs


           Present Worth and
             Equivalent Uniform
             Annual Costs
           Cost Escalation Factors
             For Energy Use
           I&A Cost Preference
           Multiple Purpose Projects
Financial Impact Evaluation
Environmental Evaluation
Evaluation of Reliability
              Energy Requirements
           "  Implementability
           "  Recreational
Comparison of Alternatives
Views of the Public and Concerned
          5.8   Selected Plan
          Justification for Plan Selection
          Description of Selected Plan
          Design of Selected Plan
          Cost Estimates for Selected Plan
          Energy Requirements of Selected Plan
          Environmental Impacts of Selected Plan
    Description of Impacts
    Mitigating Adverse Impacts
Arrangements for Implementation
  5.9.1   Institutional Responsibilities
          Civil Rights Compliance
          Site Availability
          Operation and Maintenance (O&M)
          Pretreatment Program
          Implementation Steps







 section  includes  simplified  requirement

6. .
                    Contents (continued)

  6.1   Clearinghouse Comments
  6.2   State Review and Certification to EPA
  6.3   Revisions to Plans
           7.1   Management of the Facilities Planning
           7.2   Pre-Step 2 Application Considerations
                   7.2.1   State Project Priority List
                   7.2.2   Engineering Consultant
                   7.2.3   Intermunicipal Agreements
                   7.2.4   Other Considerations
                              User Charge System
                              Sewer  Use Ordinance
                              Federal Facilities
                              Dredge and Fill Permits
                              Pretreatment  Program
                              Public Participation
                    7.2.5    Summary Checklist


              Appendix A.  Preambles to EPA Construction Grants
                 "     B.  List of Other Applicable Federal
                 ii     c.  List of EPA Publications and Forms
                 "     D.  Discontinued or Canceled PRMs and POMs
                 "     E.  EPA Offices



              Procedural Flow Chart for Facilities
                Planning (Step 1 Grant).  Figure 1.

              Nonexcessive Infiltration Rates.  Figure 2.

              Alternate Justifiable Expenditure Method (AJE).
                Figure 3.

              Calculating Present Worth and Equivalent Uniform
                Annual Costs.  Examples 1-3.

              Application of  I&A Cost  Preference.   Example  4.

  *section  includes  simplified requirement




                        INTRODUCTION AND USER GUIDE
 This book describes the Federal
 regulations,  policies and pro-
 cedures that  apply to Step 1
 facilities planning under the EPA
 construction  grants program. The
 chapters are  organized in a pro-
 cess sequence.   By following the
 sequence and  completing the re-
 quirements for  each stage, you
 will be able  to get your facili-
 ties plan approved and your pro-
 ject under design as fast as
 Procedural  Flow Chart

 Figure  1  is a  procedural  flow
 chart that  illustrates  the princi-
 pal  stages  of  the  Step  1  grant
 process.  Note that  each  major
 element on  the chart corresponds
 to a chapter of text.   The chart
 relates each chapter of this book
 to the  overall grant process.

 The  chart also lists the  specific
 parts,  sections, and subsections
 of the  Code of Federal Regulations
 (CFR) that  apply at each  stage in
 the  process.   This is important
 because many sections of  the
 principal construction grants
 regulations do not apply  to a Step
 1 grant.  The  construction grants
 regulations are contained in 40
 CFR  Part 35 Subpart E.

 Certain regulations other than
 those in Part  35 Subpart E specify
 activities  to  be performed as a
part of a Federal grant program.
A copy of the  construction grants
program regulations applicable to
your facilities plan will be
 included in your grant application
 package.  If you find you need
 other regulations,  contact your
 project reviewer.
 Reference to Federal Regulations

 This book is written to help you
 meet the requirements of the
 regulations.   It is important that
 you read these regulations.

 References  to regulations  in this
 book are made by citing specific
 portions of the appropriate  title
 of  the  Code of Federal  Regulations
 (CFR).   Virtually all regulations
 applicable  to the Step  1 process
 are contained in Title  40
 (Protection of the  Environment);
 therefore,  most references cite
 only the specific subdivisions of
 the Title 40  regulations.

 For example,  a citation for
 "35.917-l(a)"  means  subsection
 917-l(a)  of Part  35  of  Title  40,
 while "35 Appendix A.8.a." refers
 to  subsection  8.a.  in Appendix A
 to  Subpart  E,  Part  35 of Title 40.

 An  example  of  a citation for  a
 part of  Title  40  other  than Part
 35;  e.g. Part  6,  would  be:
 6.507.   References to regulations
 other than  in  Title 40  include
 citation of the  appropriate
 title.   For example,  "10 CFR
 2.700" is found  in Title 10 Part 2.

When regulations  are  first publi-
 shed in  the Federal Register  they
may be cited by volume  and page;
e.g., 45 FR 2186.

Introduction and User Guide (continued)
Other Guidance

A number of program requirements
memoranda (PRMs)  and program
operations memoranda (POMs)  have
been discontinued because their
provisions are contained in the
text.  They are  listed in Appendix
D.  While the text is intended to
incorporate all  essential policies
and procedures other than referen-
ced regulations, certain important
technical publications have been
cited.  You can  get copies of
these  documents  from either the
State  or EPA.
Appendixes and Index

A key word index and references
are included in the appendixes at
the end of this book.

The appendixes include reprints of
the preambles to the construction
grants regulations.  These pream-
bles discuss the development of
the regulations.

Also listed are applicable parts
and subparts of the Code of Fed-
eral Regulations,  other EPA publi-
cations that cover various sub-
jects  related  to Step  1 grant
activities, discontinued PRMs  and
POMs,  and addresses  of key Federal


/ 2.



/»• 7
-/ FOR / 	
             CHAPTER 1
Your State water pollution control
agency working with the U.S.
Environmental Protection Agency
(EPA) did much of the groundwork
that resulted in your community's
proposed wastewater facilities
being selected for planning during
the current fiscal year (October 1
- September 30).

The following discussion will
briefly acquaint you with the
processes that have led to your
project getting priority for
planning under the construction
grants program and the context in
which the work will be performed.
                     Several sec-
                     tions of the
                     Clean Water
Act have been consolidated into an
integrated water quality management
(WQM) process.  Through this pro-
cess State and area agencies
conduct WQM planning to achieve the
water quality goals of the Clean
Water Act.

Each of these agencies develops a
WQM plan that identifies sources
and severity of pollution and
needed programs to control pollu-
tion.  Once completed and approved,
the plan becomes the foundation for
the WQM process.

Using information in the plan and
other data, each State annually
assesses current water quality
problems, updates its strategy to
solve problems, prepares and
carries out a work program to
implement solutions, evaluates
performance, and revises the plan.
Implementation may involve building
wastewater treatment facilities,
regulation of point source manage-
ment of nonpoint sources, legisla-
tive initiatives, enforcement, and
other activities to meet water
quality objectives.

The Clean Water Act requires each
State to describe the policies,
procedures and practices for ful-
filling its WQM responsibilities  in
a planning document.  The document
is submitted to the EPA  regional
administrator for approval and  is
revised as appropriate through  the
annual work program.  The completed
annual work program becomes  a part
of the State/EPA agreement,  a
mutually agreed approach for carry-
ing out  the Clean Water  Act  as  well
as other legislation.  Incorporated
into  the agreement  is the State
strategy,  which  is  also  annually
updated  under  the work program.
The State  strategy  includes:

  •    Goals  for  a  5-year period
with  estimated  costs  of  activities
to  control priority water quality

  •    An identification  of  govern-
ment  entities  that  will  be
responsible for conducting  the

   •   Funding  sources for the
 strategy period.

 The State  planning process  also
 encompasses the State priority
 system as  described in 35.915,
which results  in the State  project
 priority list  for construction
 grants funding.  The State priority
 system is a method used to  rank

 municipal  wastewater  treatment
 projects eligible  for grant  assist-
 ance  based on  the  following  criter-
   •    Severity  of  pollution  problem;

   •    Existing  population affected;

   •    Need for  preservation  of high
 quality waters;

   •    Other criteria  consistent
 with  regulations.

 It is  from the  State  project prior-
 ity list that projects are selected
 and certified by the  State for
 Federal funding.
                      As  a part
                      of  the  WQM
                      process,  the
 State  agency establishes total
 maximum daily wasteloads for all
 surface waters throughout the
 State.   The  agency  classifies
 segments of  State waters as  either
 "effluent limited"  or "water qual-
 ity  limited."

 To make this distinction,  the State
 employs mathematical  modeling of a
 river  basin,  noting existing point
 and  nonpoint sources  of  waste as
 well as basic physical and chemical
 conditions.   Using  the assumption
 that all  municipal  point  sources
 achieve a minimum of  secondary
 treatment, the model  can  predict
 whether water quality standards can
 be met.   If  standards can be met,
 the  stream segment  is classified as
 effluent  limited and  all municipal
 treatment plants need only achieve
 secondary treatment.

 If the  basin model predicts  that
water quality  standards will not be
met when all municipal point
 sources achieve secondary
 treatment, the segment is
 classified as water quality
 limited.  Inputs to the model are
 then varied to establish wasteload
 allocations for each discharge in
 the segment.   Wasteload allocations
 help determine the levels of
 treatment beyond secondary that
 must be achieved by municipal
 treatment plants to meet water
 quality standards.

 The wasteload allocations are
 generally incorporated into the
 effluent limitations and compliance
 schedule in the National Pollutant
 Discharge Elimination System
 (NPDES) permit.   Thus the ability
 of  your community's  treatment plant
 to  meet water quality standards and
 comply  with the  NPDES permit  may
 serve as a factor in the priority
 ranking of your  project  for a
 construction  grant.   The wasteload
 allocation performed by  your  State
 is  a critical  factor in  determining
 the  level  of  your facilities  plan-
 ning effort.

 Congress  requires  special  consi-
 deration  of cases  that involve
 treatment  levels  greater  than
 secondary,  due to the high  costs
 and energy  requirements  associated
with additional processes  (section
                                        DELINEATION OF
                                        PLANNING AREAS
                     Delineation of
                     the planning
                     area is init-
ially a responsibility of the State
agency (35.917-2(a)).  The geo-
graphic area should be sufficient
to ensure that the most cost-
effective means of achieving the
established water quality goals can
be implemented and that an adequate
evaluation of environmental effects

can be made.  The State also has
the responsibility of consulting
with local officials in determining
boundaries and ensuring that the
planning area is large enough to
take advantage of economies of
scale and efficiencies in planning
and management including
decentralized or individual systems.
                     WQM planning is
                     conducted by
                     agencies in
areas where particularly complex
water quality problems exist and by
State agencies in areas outside
designated areas.  The State agency
coordinates planning activities by
the designated agencies to achieve
a State strategy.  WQM plans are
developed and revised as appro-
priate to address point and
nonpoint pollution problems and
solutions that cover the following

  •   Municipal  and industrial
wastewater facilities needs and
information to support subsequent
facilities planning;

  •   Total maximum daily  loads  and
wasteload allocations  for  surface
water segments;

  •   Programs for control of
pollutants from  dredge and fill

  •   Nonpoint pollutant  source

  •   Urban  stormwater control;

  •   Residuals  waste control  and

  •   Review and recommendations
 for  revision of  water quality
standards to meet water quality

  •   Water conservation needs and

WQM plans influence the facilities
planning process.  In particular,
all wastewater treatment facilities
identified in approved WQM plans
are included in the State's needs
inventory which contributes to the
priority system.  The plan also may
include recommendations for loca-
tion, modification, construction,
operation and maintenance of munic-
ipal  facilities, suggested regional
or decentralized approaches, and
population data  for use in planning.

Once  relevant portions of a WQM
plan  have been approved, construc-
tion  grants may  be awarded only  to
designated management  agencies
identified  in the plan.  Facilities
planning  is based on  the wasteload
allocations, delineation of plan-
ning  areas,  and  population pro-
jections  and disaggregations  in  the
approved  WQM plan.  To ensure
continuity  of  facilities planning
during the  period  before final
approval  of  the  WQM plan, EPA
established  the  following policies
 for  coordination between the  two

   •    New facilities  plans will  be
 started and carried  out as  provided
 in the State project  priority list.

   •    The scope and  funding  of
 facilities planning  will  be  suf-
 ficient to collect all data  and
 conduct all analyses  necessary for
 expeditious completion of  the
 facilities plan.

   •   The WQM planning agency is
 expected to review the facilities
 plan and provide comments.

   •   After WQM outputs have been
 developed and approved by the State
 and EPA for the area, new facil-
 ities plans must be consistent with
 the approved WQM outputs.

 The following applies after the WQM
 plan has been completed and
 approved  and the agency to con-
 struct and operate the municipal
 treatment facilities  required by
 the plan has been identified:

   •   All facilities  plans underway
 at the time of the WQM plan
 approval will continue unless the
 approved WQM plan clearly justifies
 a  change in required  treatment
 levels or alternative approach on
 the basis of lower costs  or major
 changes  in environmental  impacts.

   •   The scope  and funding of new
 facilities  plans  begun after
 approval of  the WQM plan  will be
 sufficient  to  supplement  the data
 and  analyses  in  the WQM plan to
 provide  a  complete  facilities plan

                      the  process of
 delegating the administration and
 management of  the construction
 grants program to the  States.  The
 amount of delegation varies  from
 State to State; you should always
 check first, however,  with your
 State water pollution control
 agency project reviewer as  issues
 arise.  Subsequent references in
 this book to "project reviewer"
mean State project reviewer.
                                                      CHAPTER 2
 PREAPPLICATION       Preapplication
 CONFERENCE           assistance,
                      including a
 preapplication conference,  is
 specifically encouraged in
 35.920- 2(a).  While called a
 preapplication conference,  in some
 cases it will come after grant
 award but before planning has
 progressed substantially.

 Generally, the project  reviewer
 will contact the appropriate
 official of your municipality when
 your project has received priority
 for funding.  The reviewer  will
 advise the official  on  how  to
 complete a grant application and
 will provide appropriate guidance,
 including this book.

 The project reviewer will schedule
 a  conference at  which municipal
 officials and their consultants
 will meet with the State  and  EPA
 reviewers to discuss various
 elements  of the  Step 1  grant  and
 subsequent  steps  in the  con-
 struction grants  program.

 While a  conference may not  be
 possible  for  every project,  your
 municipal  officials are entitled to
 complete  assistance and explan-
 ations by  the  project reviewer
 before or  soon after initiation of
 grant  activities.

At  the conference, issues relevant
 to your facilities planning  will be
reviewed and highlighted.  Follow-
 ing are examples of the subjects
which might be discussed.  Regula-
tions and related sections of this
book are referenced in parenthesis:

  •   Application requirements and
procedures including plan of study
(30.315, 35.917-3(a), 35.920-2(b),
35.920-3(a), section 3);

  •   Procurement of professional
services, generally architect and
engineering contracts (35.936,
35.937, section 3.3.3);

  •   Public participation require-
ments for the plan of study and
preparation of the facilities plan
(35.917-5, 35.920-3U), Part 25,
section 3.2);

  •   Comments by State, local and
Federal agencies using A-95 clear-
inghouse procedures  (30.305,
35.920-3(a)(3), section 3.3.4);

  •   Award of grant and execution
of grant agreement including any
special grant conditions (30.345,
35.930, 35.935, section 4);

  •   Permit limitations to be met
by proposed facilities  (section

  •   Preparation of facilities
plan  including scope and detail
(35.917-4), general  contents
(35.917-1), pretreatment program
(35.907, Part 403.8), and  cost-
effectiveness analysis  (35 Appendix
A, and  section 5);

  •    Scope of environmental
information document (BID), evalua-
tion  of need for Environmental
Impact  Statement  (EIS),  and concur-
rent  development of  environmental
assessment  (EA);  i.e.,  piggybacking
(35.917-l(d)(7),  35.925-8(a), Part
6; sections  5.3,  5.3.11);

  •    Submission,  review and
approval of  facilities  plan
(sections 6 and 7).

You should not incur costs you
intend to finance by Step 1 grant
funding until the grant has been
awarded to you.  EPA does not
reimburse you for facilities plan-
ning work undertaken before grant
award (35.925-18 (a)).
                     In addition
                     to the above
                     items, topics
of particular priority or interest
to EPA, the State or you should be
discussed at the preapplication
conference.  These might include:

  •   Use of a simplified (generic)
facilities plan for small commun-
ities if the screening criteria are
met (section 5.6.2);

  •   Consideration of innovative
or alternative treatment technol-
ogies particularly appropriate for
your project (section;

  •   Use of a mutually agreed upon
work schedule in your facilities
planning effort (section 6.2);

  •   Coordination with other
Federal agencies that might partic-
ipate in funding design or con-
struction stages of the project
(especially appropriate for rural
or small communities) (section

  •   Techniques for addressing
industrial pretreatment needs
(section 5.9.5);

  •   Status of accelerated facil-
ity plans  (fast track), use of con-
current and midcourse facility plan
reviews (sections  5.7.8, 6.2,  7.1).

              CHAPTER 3
 Your municipality  is  eligible  for  a
 Step 1  grant  if  it meets  the eligi-
 bility  criteria  of 35.917-3(a).  If
 two  or  more political jurisdictions
 are  included  in  the facilities
 planning  area, the grant  applicant
 may  be  a  joint authority  that
 represents all the jurisdictions,  a
 designated lead  agency, or  two or
 more eligible jurisdictions.   In
 these situations,  implementation of
 the  completed plan requires inter-
 jurisdictional resolutions or
 agreements (35.917-6).  The politi-
 cal  jurisdictions  in  the.  planning
 area should consult before the
 application process is begun.

 The  elements of  a  Step 1  grant
 application are  listed in
 35.920-3(a) and  summarized below.
 For  further information see the
 general grant regulations (30.315)
 or consult your  project reviewer.

 PLAN OF STUDY        The plan of
                     study required
 by 35.920-3(a)(l)  is a major ele-
ment of the Step 1 application.  It
 ensures that you,  the State and EPA
have a common understanding of the
 scope,  schedule and costs of the
 planning to be undertaken.  The
 plan of study should provide the
 following information (generally in
 10 pages or less  because the cost
of preparation is not allowable for
grant funding):

  •   Maps of the planning area
showing boundaries, political
 jurisdictions,  river basins and
 surface water bodies,  and service
 areas of existing wastewater treat-
 ment facilities;  NPDES permits; the
 existing population (most recent
 U.S.-Census); a brief  description
 of  existing wastewater facilities;
 and the communities and major
 industries  served;

  •   The agencies  and jurisdic-
 tions involved  in the  planning.
 Include any joint resolutions or
 agreements  among  jurisdictions that
 designate a lead  agency or  official
 to  serve as applicant;

  •   The nature  and scope  of
 planning, including a  description
 of  need for the project (such as
 water quality problems or changes
 in  permit conditions or effluent
 limitations), and facilities  plan-
 ning tasks  and  schedule;

  •   A list  of tasks  and schedule
 for a public  participation  program;

  •   An itemized description of
 costs to complete tasks and an
 estimate of total cost  for  the
 Step 1  project;

  •   A brief summary  of  signifi-
 cant public comments received  on
 the  proposed  project.  Notice  and
 consultations with  the  public  to
 discuss  the proposed Step 1 grant
 application and plan of study with
 local  residents is  recommended
 (35.917-5(b)(2)).   Since  this  is
 not  an  allowable  cost you may use
 regularly scheduled community

 For  complex planning situations,
more detailed, accurate cost esti-
mates and planning  schedules can be
 prepared following grant award.

PUBLIC               General
PARTICIPATION        regulations for
                     public partic-
ipation in programs under the Clean
Water Act are included in Part 25.
The specific regulations relating
to public participation as a part
of the Step 1 grant are delineated
in 35.917-5.

Most projects will need a "basic"
public participation program.
However, where a project may
involve advanced wastewater treat-
ment, or will have significant
impacts on matters of  public con-
cern, or require preparation of  an
environmental impact statement,  a
"full scale" program will be

Elements of  a basic public  partici-
pation  program  are  specified  in
Part  25 and  in  35.917-5(b).   They

   •  Keep the  community's
 residents  informed of  project
 development  (25.4)  throughout the
 facilities planning process.

   •   Notify and consult the public
 during preparation of the plan of

   •   Include in the plan of study
 a brief outline of the public
 participation program (elements,
 tasks,  budget and schedule).

   •   Submit to EPA or delegated
 State a public participation work
 plan and project fact sheet within
 45 calendar days of grant accept-
 ance or approval to proceed and
 distribute copies to  the interested
 public (25.11).

   •    Provide one opportunity  for
 public consultation early  in  the
planning process before selection
of alternatives with at least 30
days advance  notice (25.4).

  •   Prepare and distribute res-
ponsiveness summaries after each
public meeting  and address adverse
or significant views in the facili-
ties plan (25.8).

  •   Hold public hearing with 45
days advance notice before  adoption
of the  facilities plan  (25.5).

  •   Include  final responsiveness
summary  in the  facilities plan
(25.8,  35.917-l(g)).

Besides  the basic program,  a  full
scale public participation  program

   •   A public participation
coordinator  to be designated  or
hired and an advisory  group (25.7).

   •  A public meeting for  consult-
 ation  early  in the  planning process

 Advice  on the  performance of public
 participation program activities
 will be given at the preapplication

 Generally, EPA or the delegated
 State will decide the level of
 program appropriate to your project
 before your submission of  the grant
 application and plan of study.  The
 public participation regulations
 (Parts 25 and  35) for  facilities
 planning already provide a great
 deal of  flexibility in setting  the
 level of effort for projects that
 qualify  for the basic  program.

 Small  communities can  comply with
 the public participation require-
 ments  through rather  inexpensive
 means  with regional or delegated

 State approval.  For example, a
 one-page plan of study outline,
 workplan and fact sheet can be
 presented; existing town council
 meetings can be used to satisfy
 requirements for public consulta-
 tion and public hearings; the
 notification requirements can be
 met through the use of existing
 local information channels;  e.g.,
 town bulletin board,  notices in the
 library.  Further savings for small
 communities can be realized  by
 using local officials or volunteers
 to coordinate public  participation
 efforts  and prepare records  of

 Public participation  might not end
 with the completion of Step  1
 work.  Based  on the results  of the
 facilities  plan and its  public
 participation program,  additional
 public participation  activities may
 be required as  elements  of subse-
 quent grants  (35.920-3(b)(10)  and
 35.920-3(c)(5)).   Public  participa-
 tion requirements  also apply  to
 adoption of a user  charge system
                     In addition
                     to the plan of
                     study, the
                     Step  1 grant
application includes the items
described below to complete the
application package.
                     EPA form
                     5700-32 is the
                     formal appli-
cation for a construction grant
(30.315).  Instructions for comple-
tion of each part are included with
the form.  All information in the
application should be consistent
with that in the plan of study.
                                         The name of the applicant, project,
                                         identification number assigned by
                                         the State, project description, and
                                         the amount of the grant should
                                         correspond with the project data on
                                         the State priority list.  Contact
                                         the project reviewer to resolve any

                                         The form is signed by the author-
                                         ized representative of the agency
                                         serving as the "applicant" for the
                                         grant.  A resolution designating
                                         the official who may sign the
                                         application accompanies the form.
                                         By signing the form,  the applicant
                                         agrees to comply with various laws,
                                         regulations and executive orders
                                         listed in Part V of the form.  The
                                         applicant also agrees to pay  the
                                         non-Federal costs  of  the project
                                         and assures that the  jurisdiction
                                         has the legal,  managerial  and
                                         financial capabilities  to  adequate-
                                         ly construct,  operate and  maintain
                                         the resulting  facilities (35.925-5).
                                         ALLOWABLE AND
                                         UNALLOWABLE  COSTS
                     and unallowable
                     project costs
are described in 35.940.  For costs
that are not listed (i.e.; miscel-
laneous costs), determinations are
made on a case-by-case basis as to
whether costs are allowable using
the following criteria (30.705).
Allowable costs are:

  •   Necessary and reasonable and
not a normal expense of municipal

  •   Authorized (or not pro-
hibited) and consistent with
Federal, State and local laws or

  •   Consistent with policies and
regulations applicable to both

Federally assisted and other activ-
ities of the unit of government of
which the grantee is a part;

  •   Not included in costs covered
by any other Federally financed
                     Contracts with
firms or other consultants for
performance of facilities planning
tasks are considered "subagree-
ments" to the grant agreement
between the EPA and you.  Proposed
subagreements or an explanation of
intended methods of awarding con-
tracts are included as "a part of
the Step 1 application
(35.920-3 (a)(2)).  Detailed pro-
curement regulations are in 35.936,
35.937 and Part 33.

The regulations set minimum
requirements  for procurement of
consultant services and negotiation
of contracts.  EPA's objective is
to ensure that procurement results
from open competition and that
simple, clearcut contracts are
negotiated on the basis of demon-
strated competence at a reasonable
and  fair price.  Acceptable types
of contracts  are identified in
35.937-1, with the most common  for
Step  1 work being the cost-plus-
fixed-fee type.

The  amount of the contract
determines which sections of  the
regulations apply.  Contracts
totaling $10,000 or less  can  be
treated  as "small purchases"  as
stated  in 35.936-19.  Information
on costs is to be prepared  in  an
appropriate  format  (EPA form
5700-41)  for  negotiated contracts
in excess of  $10,000  and  submitted
when the contract exceeds $100,000
(35.937-6).   Contents of  each
engineering contract in excess of
$10,000 are defined in 35.937-9.
Appendix C-l to Part 35 is to be
part of any engineering contract
greater than $10,000.

Contracts totaling more than
$25,000 are subject to the public
notification or prequalified list
requirements of 35.937-2 unless the
population of the municipality
getting the grant is 25,000 or
less.  See 35.937-6(b) for proce-
dures when the contract amount
exceeds $100,000.

Consultation with the public in
selecting the professional engineer
is  encouraged (35.917-5(b)(2)).

Other elements that affect the
procurement process are EPA's
goal-oriented systems  for  increased
participation of minority  business
enterprises (MBE)  (35.936-7  and  35
Appendix C-l.14).  Under  these
systems each regional EPA office
has the responsibility of  estab-
lishing goals.  Reasonable costs
associated with MBE  liaison
services,  as determined by EPA or
the delegated State,  are  allowable
for funding under  the  grant

The regulations  that  govern
procurement of  consultants and the
goal-oriented  policies  and proce-
dures  for  MBE  use  need careful
consideration.   These matters  will
be reviewed  in  detail at  the pre-
application conference.   Contact
your project  reviewer if  you have
 any questions  on the effects of the
 goal-oriented  MBE  policies on your
 proposed  subagreements.

 Do not incur costs that are to be
 funded from the grant until  the
 relationship  of the various  regula-
 tions and policies to your project
 has been resolved and a Step 1
 grant awarded.

 CLEARINGHOUSE        Office of
 COMMENTS             Management and
                      Budget (OMB)
 Circular A-95 calls for inclusion
 of comments from State, local and
 Federal agencies (by way of State
 and areawide clearinghouses) as
 part of the application for a Step
 1 grant (35.920-3 (a)(3)).  Regula-
 tions for clearinghouse review are
 included in 30.305.  Section
 30.305-8(b) applies this review to
 a Step 1 construction grant

 Before submitting a completed Step
 1 application to your State water
 pollution control agency,  provide a
 copy of the application, plan of
 study and project notification
 review system letter of intent to
 the  State and areawide clearing-
 houses in your project area.   This
 should be done soon enough to
 permit timely response by  the
 clearinghouses and  avoid delays in
 subsequent  application processing.
 The  plan of study and  related
 application materials  constitute a
 notice of intent  to apply  for
 Federal  assistance.

 The  clearinghouses  have  30 calendar
 days  to  review the  application
 materials and  return comments  to
 you.   Include  these comments in the
 application package you  submit  to
 the  State.  If  the  clearinghouses
 cannot complete their  review in  the
 time  allotted,  they must so  inform
 you.   In  such  case, contact your
 project  reviewer  for advice.
 Comments will 'indicate the degree
 of interest or  concern of-  other
 agencies  in your  project".  You
 should review  them  to  identify
 sensitive issues  for evaluation in
 the  facilities plan.  Where an
 agency or clearinghouse makes
 adverse comments, include a res-
 ponse to the comments as part of
your Step 1 grant application.
              Chapter 4
 When you receive the State and
 areawide clearinghouse comments on
 the application and plan of study
 (or if 30 days have passed without
 response),  submit the grant
 application package to the State.
 At least one copy of the applica-
 tion form must have an original
 signature.   The State will review
 the application and plan of study
 with reference to the project
 priority list and approved elements
 of the WQM plan.   The project
 reviewer will notify you of errors
 or omissions  and may request
 additional  information.

 Once the State agency has  completed
 its review  and confirms  that  award
 of grant assistance will not  exceed
 the State's  funding allotment,  the
 project reviewer  will complete  a
 priority certification (EPA Form
 5700-28)  for the  project.   The
 State  will  send the approved
 application  and priority certifica-
 tion form signed  by the  appropriate
 State  official  to the EPA  regional
 office.   EPA will consider  the
 application  complete  only when  the
 State  priority certification  form
 has  been  included (35.920-2(b)).
 The  EPA regional  office  will  con-
 duct an independent review  or,  if
 responsibilities  have  been  delega-
 ted  to  the State  agency  (35.912),
 accept  the application on the basis
 of  State  certification.  Partial
 submittals may be made and  reviewed
 before  completion of  all applica-
 tion requirements, but no final
 action  can be taken until the
 application  is complete.

After the State and EPA approve the
grant application the EPA regional

office will begin processing the
notification of grant award and the
grant agreement for your project.
First, EPA will complete the grant
agreement (EPA form 5700-20).
Then, EPA headquarters and the ap-
propriate congressional office are
notified; next, information on the
project is recorded in the EPA
data processing and retrieval sys-
tem; and finally, notification is
made to the appropriate State and
areawide clearinghouses.
Modifications to any of the grant
amounts, scope of work, or other
aspects may be made as a result of
the review process.  In addition
special conditions based on recom-
mendations from the State agency or
comments from clearinghouses may be
included in the agreement.

The completed grant agreement will
be mailed to you and you will have
3 weeks to accept the grant offer
and to return the signed agreement
to EPA (30.345-3).  The person
signing the agreement must be the
authorized representative (usually
the same person who signed the
application form).  If there is a
new authorized representative, an
authorizing resolution must be
included with the agreement.  Once
signed, the agreement forms a
legally binding contract between
you and the Federal Government.
You should review the agreement
carefully and, if necessary,
discuss any changes from your
application with your project
reviewer.  Also, take note of the
special grant conditions that
require attention during facilities
planning and review the payment
schedule included in the agreement.
A brief public participation work
plan should be submitted to EPA or
the State within 45 days of the
date of grant acceptance
(35.917-5 (b)(4) and
             CHAPTER 5
PROJECT NEED         The State,
AND SERVICE          often in
AREAS                consultation
IDENTIFICATION       with your
designates the facilities planning
area for your project as a part of
its WQM process (35.917-2(a)).
Changes in the geographic scope of
the plan can be made only upon
approval by the EPA regional
administrator after consultation
with State and local officials
(35.917-4).  Once the boundaries of
the planning area have been
delineated, your first objective is
to demonstrate the need for
proposed facilities (35.917(b)).
In demonstrating need, recognize
that the primary purpose of the
construction grants program is to
assist municipalities in meeting
the enforceable requirements of the
Clean Water Act (35.901).  Emphasis
is placed, therefore, upon the
abatement of existing water quality
problems and compliance with
National Pollutant Discharge
Elimination System (NPDES) permit

While many facilities plans will
result in complete wastewater
treatment systems, facilities plans
of lesser scope may also be per-
formed under the construction
grants program.  Such projects may
involve such things a§ onsite
treatment or collector sewers or
interceptors from an area located
within the delineated service
area.  If a project includes sewage
collection system work, the design
and construction may be grant

 eligible if:  (a)  it  is  for  re-
 placement or  rehabilitation of an
 existing system (35.927-3); or (b)
 it is for a new system  in a commun-
 ity that meets  the requirements of
 regulations (35.925-13)  and EPA
 policies described in this  section.

 Because  the Clean Water  Act was
 intended primarily to correct
 existing water  quality problems,
 new sewage collection systems  are
 grant eligible  only  for  communities
 that were substantially  inhabited
 on October 18,  1972,  the date
 section  211 of  the Act was  passed.
 Substantial habitation means that
 at least two-thirds  of the  design
 flow capacity in  the proposed  sewer
 system will be  for wastewater
 originating from  habitations that
 existed  on October 18, 1972.
 Exception:  certain  systems are
 eligible for residences  and small
 commercial establishments that  were
 inhabited before  December 27,  1977,

 New collection  sewers must  be
 proven necessary  and  cost effective
 within the facilities plan.
 Funding  may be  provided  only when
 the  existing systems used for
 wastewater disposal  are  causing, or
 have  a potential  to  cause,  public
 health problems,  are contaminating
 groundwater,  or are violating point
 source discharge  requirements of
 the  Clean Water Act.   If the pro-
 posed project will include  a new
 collection system for a  portion of
 the  planning area, provide  the
 following  information to justify
 the need  for the project.

  •   Specific documentation of the
nature and extent of health,
groundwater or discharge problems
associated with existing wastewater
disposal  systems;
  •   Pertinent information (soil
maps, historical data) documenting
 physical  restrictions  to  the  use  of
 onsite  systems;

   •   Documentation of the nature,
 number, and  location of malfunction-
 ing onsite systems.  A community
 survey  is recommended  and fundable.

 Where the need to replace onsite
 systems has  been determined,  show
 that a  collection system will be
 cost effective.  The facilities
 plan should  compare the proposed
 sewer system to nonconventional
 alternatives such as small-diameter
 sewers  (35. 918(a) (.5)).  EPA's
 policies on  the evaluation of
 alternatives for unsewered communi-
 ties are further described in
 section 5.6.2.

 If the proposed project will not
 include a new collection system,
 project need should be described  in
 terms of the location,  service
 areas, and problems associated with
 existing wastewater treatment
 facilities.  You should discuss the
 need for improving or  replacing
 existing facilities and address
 such factors as violations of
 effluent limitations,   inability of
 existing facilities to meet a
 discharge compliance schedule, or
 potential public health hazards
 associated with existing conditions.
                     The facilities
                     plan includes
limitations for all discharges
(35.917-l(e)) and the numbers of
all NPDES permits issued to
facilities in the planning area.
Effluent limitations will be based
on wasteload allocations developed
by the State and will indicate the
level of treatment required for
each facility (35.917(e)).
At least secondary treatment
(generally 30-day average not to

exceed 30 mg/1 each of biochemical
oxygen demand and suspended solids)
is required for all municipal point
source discharges to surface waters.

Higher levels of treatment
(advanced treatment) may be
required to meet State standards
for water quality limited segments
of receiving waters; however,
Congress requires the EPA to review
projects involving treatment more
stringent than secondary.  In such
cases, the advanced treatment
project can be approved only if the
costs attributable to the stricter
limitations are supported by a
demonstration of significant
improvement in receiving water
quality and mitigation of existing
public health problems.  The finan-
cial  impact of advanced treatment
projects on the community is also
assessed (see section 5.7.2).  If
advanced treatment  is likely,
contact your project reviewer or
EPA for assistance.  Note that, in
response to the Clean Water Act,
EPA requires consideration of land
application systems and reuse/
recycling technologies as a normal
part  of facilities  planning.  These
systems are especially applicable
as alternatives to  advanced  treat-
ment  and discharge.

Construction grant  funds may be
used  to revise wasteload alloca-
tions applicable  in the  facilities
planning area.  The responsibility
for validity of the wasteload
allocations will  remain with the
State.  Accountability  for  the
construction grants funds used  for
the water quality  analyses neces-
sary  to verify  the  applicable
wasteload allocations will  rest
with  you as  the municipality
preparing  the  facilities plan;
however, the  analyses  should be
done  independently  of  you  or your
consultant.  If this applies to
your project, the EPA and State
reviewers will discuss procedures
with you.
                     The facilities
                     plan should
information to evaluate the
environmental impacts of the alter-
natives and selected plan
(35.917-l(d)(7)).  Actions under
the construction grants program are
subject to EPA regulations (Part 6)
and the National Environmental
Policy Act (NEPA).  EPA cannot
award subsequent grants for design
and construction of the proposed
facilities until either a Finding
of No Significant Impact (FNSI) or
an Environmental Impact Statement
(EIS) has been issued for the
facilities plan  (35.925-8(a)).

An EID  should be an  integral  part
of the  facilities plan  (6.507  (c)).
It should present the environment-
al analysis  conducted throughout
the  facilities planning process.
The  information  in  the  EID will be
of sufficient scope  to  enable  the
State or EPA to  prepare an envi-
ronmental assessment and decide
whether a FNSI or EIS should  be
          The following  elements of
the  facilities plan provide inform-
ation for compliance with the
regulations  (6.507):

  •   Describe the  existing
environment  of the  planning area
and  relate it to the analysis  of
the  alternatives and selection of  a
proposed plan.   The  existing
environmental conditions  to be
described in the facilities plan
are  listed in section 5.4.1 of this

  •   Describe  the  future environ-
ment without the project, i.e., the
"no action" alternative and its
effects on future environmental
conditions in the planning area, as
discussed in section 5.5.4.

  •   Show the  purpose and need for
the proposed project, as discussed
in section 5.1.

  •   Sources of information used
to describe existing and future
conditions should be properly
referenced.  Consultation with
regional, State and Federal agen-
cies responsible for impacts in
various areas should be performed
early during planning.

  •   As described further in
sections 5.6 and 5.7, develop and
evaluate alternatives within the
plan.  Evaluate impacts on the
environment as beneficial or
adverse, direct or  indirect,  and
long term or short term.

  •   Consider the Environmental
impacts of the proposed action as
described in section 5.8.6,  with
special attention to unavoidable
impacts, tradeoffs,  commitments of
resources,  and measures to mitigate
adverse effects.

For further assistance in evaluat-
ing environmental impacts during
preparation of the facilities  plan,
consult the EPA publication
"Enviromental Assessment of
Construction Grants Projects"
(FRD-5) and your project reviewer.

EPA's decision either to issue a
FNSI or prepare an EIS will be
based on an environmental review
(required by the Part 6 regula-
tions).  Moreover,  EPA must comply
with procedures of other laws  and
executive orders.   The following
special topics require consultation
or other procedures during prepara-
tion of the facilities plan to
avoid delay during review.  Adverse
impacts in any of these areas may
result in the need for an EIS and
the imposition of special condi-
tions on subsequent grants.
                     Under section
                     106 of the
Preservation Act and Executive
Order 11593, EPA must comply with
procedures for consultation and
comment by the Advisory Council on
Historic Preservation (ACHP) if any
of its actions will affect a prop-
erty listed or eligible for listing
on the National Register of
Historic Places (6.301(a)).

Consult the State Historic
Preservation Officer (SHPO) for
information on properties on or
eligible for the National Register
within the facilities planning area
and on the need for any additional
work.  The project reviewer can
advise you of specific procedures
for SHPO consultation and review.

In general, planning should be
conducted to avoid direct and
indirect impact by the proposed
facilities on identified properties
or potentially sensitive areas.
Any unavoidable impact will require
evaluation of the identified
historic or cultural property,
providing information on the
property, the potential for effect
by the project and mitigating
measures.  Minimally, adequate data
on the property's boundaries,
integrity, and significance will be
necessary to evaluate the eligibil-
ity of the property for listing on
the National Register.

Criteria for evaluation and
guidelines for level of
documentation necessary for
requesting a determination of
eligibility from the Secretary of
Interior are available from the
SHPO.  Projects affecting proper-
ties on or eligible to be on the
National Register should be
assessed in consultation with the
SHPO and in consideration of the
ACHP's criteria for effect and
adverse effect (36 CFR 800.3).

Cultural resource surveys should be
initiated early in the planning
process and completed before the
Step 3 grant award.  The reasonable
cost of EPA-required surveys is
allowable for grant funding.
                     EPA's Statement
                     of Procedures
                     for Floodplain
Management and Wetlands Protection
(Appendix A to Part 6) requires EPA
to prepare a floodplains/wetlands
assessment for any action under its
programs that will adversely affect
a floodplain or wetland (6.302(a)
and (b)).  You should adequately
identify floodplains and wetlands
in the planning area as they re-
late to alternatives in the plan.

Floodplains and flood hazard areas
are shown on maps prepared by the
Federal Emergency Management
Agency.  Wetlands may be identi-
fied by consulting the U.S. Fish
and Wildlife Service or the U.S.
Army Corps of Engineers.

Alternatives should be developed or
modified to avoid direct or in-
direct impacts on wetlands and
floodplains wherever possible.

Wastewater treatment service
should not be provided for new
development in floodplain areas.
                                        Measures to minimize adverse
                                        impacts must be evaluated and
                                        described when no practicable
                                        alternative exists.   If the project
                                        is located in a wetland or flood-
                                        plain area or in navigable waters,
                                        consult the Corps of Engineers to
                                        determine whether a  "404/Section
                                        10" permit for discharge of dredge
                                        and fill material will be needed.
                                        If a permit is necessary the Corps
                                        should identify alternate
                                        locations, if any, to be evaluated,
                                        and which environmental factors
                                        should be addressed  when the formal
                                        permit application is submitted for
                                        the selected alternative.  (Part
                                        230, 33 CFR Parts 120 and 209).
                                        FLOOD INSURANCE
                     If the selected
                     plan proposes
in a flood hazard area, all af-
fected communities may have to
participate in the National Flood
Insurance Program to receive a Step
3 grant (30.405-10).  Early coord-
ination among affected communities
will help avoid delays in Step 3
grant approval.
                     EPA's policy to
significant agricultural lands
requires the agency to evaluate the
direct and indirect impacts on
significant agricultural lands of
any actions under its programs.
The policy aims to protect sig-
nificant agricultural lands from
irreversible loss as an environ-
mental or essential food production
resource (section 6.302(c),
35.925-13 (d) and (e) and Appendix
A.8.f(l)).  Therefore, the
facilities plan should identify
significant agricultural lands in
the planning area.  You may consult
the local office of the Soil

Conservation Service of the U.S.
Department of Agriculture (USDA).
Environmentally significant agri-
cultural lands identified by EPA
and USDA include the following

  •   Prime farmland;

  •   Unique farmland;

  •   Additional farmland of State

  •   Additional farmland of local

  •   Farmlands of waste utili-
      zation importance;

  •   Farmlands with significant
      capital investment in erosion
      and nonpoint pollution con-
      trol plans.

You should evaluate alternatives
that will avoid or minimize adverse
impacts on significant agricultural
lands (6.302(c)).  Measures to
mitigate any unavoidable adverse
impacts should be described; e.g.,
as in FRD-5.
                     The Coastal
                     Zone Management
                     Act requires
all Federal activities to be con-
sistent with approved State coastal
zone management programs to the
extent possible (6.302(d)).  If the
project is in a coastal area,
consult the Office of Coastal Zone
Management in the U. S. Department
of Commerce and any appropriate
State agency.  Develop and evaluate
alternatives that comply with any
approved State coastal management
programs applicable to the planning
                                        WILD AND             To comply
                                        SCENIC RIVERS        with  the  Wild
                                                             and Scenic
                                        Rivers Act,  EPA ensures that  its
                                        actions do not adversely impact any
                                        wild, scenic,  or recreational  river
                                        area (6.302(e) and  15 WCPD 1353).
                                        During facilities planning you
                                        should identify any  inventoried or
                                        designated rivers in the planning
                                        area through consultation  with the
                                        Heritage Conservation and  Recre-
                                        ation Service of the Department of
                                        Interior.   Project alternatives
                                        should then be developed and  eval-
                                        uated to avoid or mitigate adverse
                                        impacts on these rivers.
                                        FISH AND WILDLIFE
                     The Fish and
Act requires that all Federal
actions be undertaken so as to
protect fish and wildlife resources
that may be affected (6.302(f)).

During facilities planning consult
the U. S. Fish and Wildlife Service
and any appropriate State agency to
find ways to prevent or lessen
adverse impacts your project could
have on fish and wildlife.

Sewage treatment facilities can
attract birds that pose potential
birdstrike hazards to aircraft at
nearby airports.  If locating a
wastewater treatment facility near
an airport, you can coordinate the
location with regional Federal
Aviation Administration (FAA)
officials for civilian airports,
the regional Fish and Wildlife
Service representative, and nearby
military air base commanders.
"Near airports" means locations
within 10,000 feet of any jet
runway, within 5,000 feet of any

runway used only by piston aircraft
and within the approach zones
bounded by the conical surfaces as
described in FAA regulations.

PROTECTION           grantees must
                     comply with
the Endangered Species Act
(6.302(g)).  If a project affects a
species of plant or wildlife that
the Federal, State, or local gov-
ernment lists as endangered or
threatened, EPA must formally
consult the U.S. Fish and Wildlife
Service, National Marine Fisheries
Service, or State agency to identi-
fy mitigation measures.  Consult
these agencies during facilities
planning to determine whether the
proposed planning area includes the
habitats of a listed species.
Projects should avoid disrupting
such habitats.  If a project could
cause such disruption, the facili-
ties plan should suggest mitigation

AIR QUALITY          The Clean Air
                     Act requires
all Federally funded projects to
conform to approved State Air
Quality Implementation Plans (SIPs)
(6.303).  During facilities
planning evaluate the direct and
indirect impacts of the alterna-
tives on air quality.  Consult the
State and regional agencies that
monitor SIP compliance.  Alterna-
tives should be evaluated for
compliance and include measures to
mitigate adverse affects.   As
applicable,  these actions should
comply with the policy and
procedures to implement section 316
of the Clean Air Act (45 FR 53382).
effluent from
municipal treatment facilities
would percolate or discharge into
groundwater, the facilities plan
includes information and analyses
showing the impacts on the ground-
water.  The plan demonstrates that
the effluent, when mixed with
groundwater used as a public water
supply, will comply with all Fed-
eral, State, and local environ-
mental laws and regulations,
including the standards established
under the Safe Drinking Water Act
and the Best Practicable Waste
Treatment Technology (41 FR 6190,
35.917-l(d), 35.925-14, 35 Appendix
A, and 6.506(a)(6)).  The plan for
any facility to be built over the
recharge zone of any aquifer
designated as a sole or principal
source (under Section 1424 (e) of
the Safe Drinking Water Act) should
show that the facility will not
contaminate so as to create a
public health hazard.  For a
private, individual system the
facilities plan provides a program
to test water periodically from
existing portable wells in the
area.  If there are a significant
number of onsite systems in the
area, checking of aquifers is
required (35.918-l(i)).

Identify and evaluate the potential
for erosion and sedimentation in
the proposed plan.

Special problems include long
slopes, steep grades and highly
erodible soils.  Propose special
construction procedures and
constraints to deal with these
problems.  For project sites where
dewatering operations are expected
during construction, consider
minimizing adverse effects from the
discharge of silt-laden waters by
means of filtration or sedimenta-
tion basins or similar construction
methods.   For projects that involve
land treatment or disposal, methods
of application should be carefully

studied and selected to make sure
soil erosion and sediment runoff is
minimized.  Specify requirements
for sediment control practices and
maintenance after construction.

Support local and State shoreline
stabilization efforts where appro-

Consider and discuss with local and
State officials saltwater encroach-
ment, depletion of aquifers, land
subsidence, and other special
problems where they are likely to
                     The facilities
                     plan assesses
                     both direct
                     (primary) and
indirect (secondary) environmental
impacts of the selected plan and
alternatives.  Direct impacts
relate to the construction, opera-
tion, and maintenance of the
treatment works and may include
such things as:

  •   Damage to historical, archeo-
logical, geological, cultural, or
recreational areas during construc-

  •   Disturbance of sensitive
ecosystems such as wetlands and
habitats of endangered species
during construction;

  •   Damage and pollution of
surface waters due to erosion
during construction;

  •   Displacement of households,
businesses, or services.

Indirect impacts include:  (1)
induced changes in land use,
population, and economic growth
resulting from the project;
(2) other environmental impacts of
induced changes.  Examples:

  •   Changes in the rate, density
or type of development, including
residential, commercial, or
industrial, or changes in the use
of open space or other land;

  •   Air, water, noise, solid
waste, or pesticide pollution from
the induced changes in population
and land use;

  •   Damage to sensitive
ecosystems (wetlands, habitats of
endangered species) and environmen-
tally protected areas (parks,
historic sites) that result from
changes in population and land use.

The environmental information
document should give special
attention to determining whether
indirect impacts will violate
environmental and land use statutes
or regulations.
                                        DECISION TO
                                        PREPARE AN
                     When your
                     a Step 1 grant
EPA and the State agency reviewed
your application and plan of study,
WQM plans, and clearinghouse com-
ments, to identify environmentally
sensitive conditions in the facili-
ties planning area (6.507).

Based on that review, EPA may have
included in the grant agreement
special conditions that relate to
the scope of environmental informa-
tion to be provided  in your plan.
EPA may also have decided to re-
quire an EIS.  If an EIS is
required, EPA will contact you to
discuss the possible use of the
joint EIS/EID approach (piggy-
backing).  A piggyback EIS saves

 considerable  time because  the EIS
 is prepared concurrently with,
 rather  than subsequent to,  the
 facilities plan.

 Through this method the EIS may be
 prepared by a consultant to the
 municipality  and funded with the
 Step  1  grant  based on a memorandum
 of understanding between EPA and
 you.  To ensure independent review,
 the EIS and the facilities plan are
 prepared by different consultants.

 Whether a decision to prepare an
 EIS is made before, during, or
 after completion of the facilities
 plan, it can  be made only by EPA
 based on an environmental review.
 EPA must prepare an EIS when any of
 the following conditions exist

  •   The treatment works will
 induce  significant changes in
 industrial, commercial, agricultur-
 al, or  residential land use con-
 centrations or distributions.
 Factors that  should be considered
 in determining if these changes are
 significant include:  (1) vacant
 land  subject  to increased develop-
 ment  pressure as a result of the
 treatment works; (2) population
 increases; (3) faster rate of change
 in population or changes in popu-
 lation density; (4) potential for
 overloading sewage treatment works;
 (5) extent to which landowners may
 benefit from the areas subject to
 increased development; (6) nature
 of land use regulations in the
 affected area and their potential
 effects on development; and (7)
 deleterious changes in the avail-
 ability or demand for energy.

  •   The municipal treatment
 facilities or collector system will
have significant adverse effects on
wetlands,  including indirect ef-
 fects, or any major part of the
treatment works will be located on

  •   The treatment facilities or
collector system will significantly
affect, directly or indirectly, a
habitat identified on the Depart-
ment of the Interior's or a State's
threatened and endangered species

  •   Construction of the treatment
facilities or implementation of the
facilities plan may directly cause
or induce changes that significant-
ly:  (1) displace population; (2)
alter the character of an existing
residential area; (3) adversely
affect a floodplain; or (4) ad-
versely affect significant amounts
of prime or unique agricultural
land  or agricultural operations on
this land as defined in EPA's
policy to protect environmentally
significant agricultural land.

  •   The treatment works will have
significant adverse direct or
indirect effects on parklands,
other public lands, or areas of
recognized scenic, recreational,
archeological, or historic value.

  •   The treatment works may
directly or indirectly or through
induced development have a signifi-
cant adverse effect on local am-
bient air quality, local ambient
noise levels,  surface or ground-
water quality or quantity,  or fish
and wildlife and their natural

  •   The treated effluent is being
discharged into a body of water
where the present classification is
too low to protect present or
recent uses and the effluent will
not be of sufficient quality or
quantity to meet the requirements
of these uses.

If EPA determines that an EIS is
needed, a full-scale public parti-
cipation program will be required
                     The facilities
                     plan describes
                     conditions in
the planning area for compliance
with 6.507(c)(l).  The description
should be sufficient to provide a
basis for analysis of alternatives
and determination of impacts of the
proposed action.  The description

  •   Surface and groundwater
hydrology, quantity, quality, and

  •   Geology and soils;

  •   Terrestrial and aquatic plant
and animal communities;

  •   Air quality and noise;

  •   Energy production and

  •   Population and socioeconomic

  •   Land use and development;

  •   Public facilities and

  •   Related Federal and State
projects in the planning area.

The description should emphasize
environmentally sensitive features
and areas to be avoided or protect-
ed during planning.  Consult Fed-
eral, State, and regional agencies
                                        and the public early in the plan-
                                        ning process and follow the spec-
                                        ific procedures identified in
                                        sections 5.3, 5.5, and 5.7.  All
                                        sources should be properly
                     Provide an
                     inventory of
                     facilities and
their interrelationships.   This
should include onsite systems.  The
inventory may indicate conditions
that limit the number of feasible
alternatives and the severity of
the pollution problems.  Address
the existing systems and methods of
achieving optimum performance
(section 5.6.1):

  •   Show the location of indus-
trial and municipal treatment
plants,  sludge management areas and
facilities, pretreatment plants,
pumping stations, and sewer service

  •   Describe these facilities,
including design capacities, exist-
ing flows and characteristics of
wastes,  NPDES permits, and any
overload conditions.

  •   Show locations of signifi-
cantly developed areas served by
onsite or nonconventional systems.

  •   Include a discussion and
analysis of average, peak, dry, and
wet-weather flows.

  •   Show the locations of
bypasses and overflows.

  •   Describe the extent of any
combined sewer system.

  •   Describe any flow-reduction
program in effect.

INFLOW (I/I)         award a Step 2
                     or Step 3
grant for the proposed project, the
facilities plan or supporting
documentation (35.917-l(c)) is to
show that each sewer system dis-
charging into the treatment works
is not, or will not be, subject to
excessive infiltration/inflow
(35.927(a)).  Procedures for doc-
umentation are described in 35.927.

An infiltration/inflow (I/I) analy-
sis (35.927-1) is normally required
as a part of the facilities plan to
identify excessive I/I on a system-
wide basis.

Where the analysis shows that
excessive I/I may exist, subsequent
evaluation (35.927-2) -and probably
rehabilitation (35.927-3) will be
necessary and may be required
before approval of the facilities
plan and award of a Step 2 grant.

However, if the facilities plan
demonstrates that the treatment
works will not be significantly
changed by subsequent rehabilita-
tion or will be a component part of
the rehabilitated system, EPA may
approve doing the evaluation and
rehabilitation under a Step 2 or
Step 3 grant (35.927~5(c)),
                     Using informa-
                     tion you
                     provide and
other data, the State may certify
that excessive I/I does not exist
and further documentation is not
required in the facilities plan.
If the State certifies that ex-
cessive I/I does exist, no future
grant may be awarded until the
regional administrator is satisfied
that rehabilitation will not sig-
nificantly change the treatment
works design (35.927-5(a)).
I/I ANALYSIS         The following
apply to performance of the I/I
analysis (35.927-1) :

  •   When flow meters at the
treatment plants are determined to
be well maintained and accurate,
determine the quantity of I/I on
the basis of plant flow records
compared with the calculated theo-
retical base flow (based on water
flow records when available).  A
subsystem approach for determining
I/I conditions may be advisable in
large systems especially where flow
records for pump stations are
available or where specific prob-
lems are known or suspected.

  •   To determine quickly if
infiltration in a study area is
excessive refer to Figure 2 on the
following page.

  •   For separate sanitary sewers,
determine the possible existence of
excessive inflow by performing a
cost-effectiveness analysis.

  •   A maximum of 30% removal of
total infiltration (the total as
 based on the entire system) is
generally used as the basis for the
cost-effectiveness analysis.  A
higher infiltration removal rate
can be used if it can be technic-
ally justified.  While these limits
do not apply to specific sections
of pipe where infiltration is found
to be excessive, the overall reduc-
tion for the entire system should
be consistent with these limits.

  •   The results obtained from a
cost-effectiveness study in the I/I
analysis phase are, at best, pre-
liminary and subject to further
verification when possibly exces-
sive I/I exists.  Therefore, the
cost-effectiveness analysis should

     Figure 2.  Nonexcessive Infiltration Rate

     Length of Sewer Pipe
                                      Infiltration Rate
     greater than 100,000 ft.
         10,000 to 100,000 ft.
     less than      10,000 ft.
                                      2000 to 3000 gpd/in/mi
                                      3000 to 6000 gpd/in/mi
                                      6000 to 10,000 gpd/in/mi
     The infiltration rate is based on the highest 7-day to 14-day
     average  infiltration within a 12-month period.  The infiltration
     allowance determined above applies to both I/I analysis and SSES
be simple and brief and additional
data is not routinely necessary.

  o   A report summarizing the
results of the above analysis is
required.  The report may be pre-
pared and approved separate from
the facilities plan but is incor-
porated into the facilities plan.
The report provides flow data to
substantiate the I/I conclusions.
When I/I is determined to be pos-
sibly excessive, the report con-
tains, in addition to flow data, a
detailed study program and esti-
mated costs for performance of a
sewer system evaluation survey
(SSES) to identify specific
                     You are
                     encouraged to
                     use the excep-
                     tion clause
35.927-5(c) which allows the SSES
to be conducted concurrently with
the Step 2 design work.

Do the SSES and rehabilitation in a
logical and sequential order.  I/I
problems should be carefully de-
fined by a systematic flow monitor-
ing program (overall subsystem flow
monitoring followed by flow isola-
tion within subsystems) before
conducting any other field work.
The proposed flow-monitoring pro-
gram accurately identifies and
isolates sewer sections that have
excessive I/I.  For systems where
inflow is a primary problem, limi-
ted field work (including physical
inspection and smoke testing) may
be done to allow timely correction
of these inflow problems.  Do all
field work, including physical
inspection and smoke testing, only
in areas that have excessive I/I.
You may use smoke testing instead
of flow monitoring to define inflow
problems when it is economical.

Identify I/I problems associated
with service laterals; i.e, the
sewer connecting the building to
the collector sewer, and specifi-
cally address them as a separate
item in the sewer system evaluation
and the proposed rehabilitation

Preferably, determine service
lateral I/I problems through visual
inspection of a representative
sample of joints where service
laterals are connected to collector
sewers.  For example, television
(TV) inspection of collector sewers

during flow isolation may be used
for estimating I/I at Y - fittings
from service laterals while at the
same time inspecting the internal
conditions of the collector sew-
ers.  Quantifying sources of I/I
other than service laterals by
means of TV is generally unaccept-
able.  Flow isolation followed by
concurrent pressure testing and
sealing procedures is the preferred
method and should be used where
leaks are to be grouted and concur-
rent test and seal can be used.

After completing  the flow monito-
ring, physical inspection, and
smoke testing activities, prepare
an  interim SSES report.  The report
contains:  (1) supporting data;  (2)
a proposed rehabilitation program;
(3)  a detailed cost estimate for
the  proposed rehabilitation pro-
gram; and (4) specifications for
the  proposed rehabilitation pro-
gram.  For larger sewer  systems
where the I/I problem  is generally
more complex, this report can be
submitted before  completion of  the
bidding  documents to avoid project
delays.   In  these cases, prepare
bid documents while  the  State and
EPA are  reviewing the  report.

When concurrent  sewer  testing and
sealing  techniques  are  used,  ensure
that the bid package covers  sewer
line cleaning,  pressure  testing,
and grouting.  When  applicable,  the
contract documents  should  also
include  other  sewer  structural
repairs  such as  manholes and  cov-
ers. Require bidding  in unit
prices;  e.g.,  price  per  foot  of
sewer cleaned,  price per joint  of
sewer pressure  tested  or chemically

Do  rehabilitation work through
competitive  bidding if the cost of
 the rehabilitation  work in the
contract exceeds $10,000
(35.936-14).  The work must comply
with the procurement requirements
of 35.938 and 35 Appendixes C-l and
C-2.  For projects where large
scale pressure test and seal work
is proposed, the recommended ap-
proach is rehabilitating first a
selected sample of sewers or a
small subsystem.  Analyze the
results of the pilot rehabilitation
to be sure the benefits are at-
tained before conducting a
full-scale rehabilitation.

To ensure the concurrent pressure
testing and  sealing techniques are
effectively  applied, isolate sec-
tions of the sewer subject  to
excessive infiltration within each
subsystem.   Limit sewer grouting to
structurally sound sections of the
sewer that have  service line con-
nections in  good condition.  Before
the  actual  testing and sealing
process, make a  brief  internal
inspection by pulling  the TV camera
quickly through  the sewer line.
When rehabilitation methods other
than grouting are required; i.e.,
limited structural repair,  record
these needs  and  identify  the  sewer
section.  The testing  and sealing
process  is  usually not performed  in
sections that need structural
repairs because  the  structural work
is  done  in  Step  3 and  the cost of
mobilizing  equipment,  etc.,  is not

You may  perform  limited  structural
repairs  and sewer  replacement  under
any Step grant  when  approved  by  the
State and EPA (35.927-3(a)&(c))
provided  the work  is  not  a  part  of
 the municipality's normal operation
and maintenance  responsibilities.
Where structural repairs  are  requi-
red for a  substantial portion of
 the sewer  system,  especially  in  ca-
 ses where  public hearings are war-
 ranted,  make repairs  later  and per-
 haps as part of Step 2 and  Step  3.

 Test the performance of the com-
 pleted rehabilitation of each
 subsystem when the groundwater
 level is high, using single point
 flow monitoring.  Analyze the
 results and compare them with the
 system flow meter records to assess
 the effect of groundwater migra-
 tion.  Report the results immed-
 iately to the project reviewer when
 you find that the rehabilitation
 program for a particular subsystem
 is not producing the projected
 result.  When the rehabilitation
 for the entire system is completed,
 send the State and EPA a report
 summarizing the results of
 postrehabilitation flow monitoring
 and analysis for each subsystem.

I Your engineer should inspect reha-
 bilitation work.   He should have
I experience in sewer rehabilitation.
                     The SSES report
                     addresses and,
                     incorporates an
sewer use ordinance.  The ordinance
contains a realistic program to
remove existing excessive I/I
sources and illegal connections and
to prohibit future illegal connec-
tions.  The ordinance also speci-
fies an acceptable infiltration
rate for new sewers that discharge
into the proposed treatment works
and describes how new connections
should be designed.

The SSES report contains a commit-
ment to a comprehensive and effec-
tive sewer maintenance program.
The proposed maintenance program is
prepared subsequent to Step 1 and
                                          •   Organizational and  functional
                                         structure of  the proposed mainte-
                                         nance department (inhouse and/or
                                         contract service);

                                          •   Equipment and vehicles  to
                                         perform the maintenance;

                                          •   Staffing;

                                          •   Anticipated activity includ-
                                         ing preventive and corrective

                                          •   Recordkeeping;

                                          •   Annual budget;

                                          •   Schedule of implementation.
                                        PERFORMANCE OF
                                        EXISTING SYSTEMS
                     Evaluate the
                     performance of
wastewater treatment facilities,
including onsite disposal systems,
to determine their operational
efficiency.  Compare existing
performance with optimum perfor-
mance in terms of effluent quality
and treatment capacity.  For decen-
tralized systems describe the
extent, nature, and location of
malfunctions (refer to section 5.1).

When you evaluate the performance
of existing systems, consider:

  •   Adequacy of the treatment
plant design for the character and
amount of waste treated (compare
with NPDES permit);

  •   Adequacy of operation and
maintenance program; including
process control methods,  mainte-
nance management systems,  staffing,
salaries, and replacement funds and

  •   Effects of infiltration/

  •   Effects of industrial dis-
charges ;

  •   Degree of documentation of
problems associated with onsite
                     The planning
                     period (35
A.4.c) is the timespan over which
wastewater management needs are
forecast, facilities planned, and
costs amortized.  The facilities
planning period is 20 years beyond
the date the facilities are sched-
uled to begin operation (35
Appendix A.6.b).

The most cost-effective plan may
provide for staging construction of
operable parts of the facilities to
meet changing conditions during the
planning period.  Consider building
a plant with capacity to handle
wastewater flows projected for only
part of the 20-year planning per-
iod.  The plan could provide more
capacity later to treat the  in-
crease in wastewater flows pro-
jected for the rest of  the planning

Procedures for staging  proposed
treatment plants and interceptors
are given in 35 Appendix A.S.e and
                     treatment needs
                     and  design
                     capacities  for
                     the  facilities
 planning  area will  be  determined by
 future  population,  land use  pat-
 terns,  and  economic growth.   Regu-
 lations governing  the  use of
population estimates for facilities
planning are included in 35
Appendix A.8.a.  The estimates of
design year population in the
planning area are based on disag-
gregations of State population
projections.  The baseline State
population projections were pre-
pared in 1977 by the Bureau of
Economic Analysis of the Department
of Commerce.  Deviations should be
justified by supporting documen-

The facilities plan should be
carefully coordinated with land use
plans.  Projected land use patterns
and densities  are one basis for
determining  the optimum capacity
and location of facilities.  Where
land use plans have not been pre-
pared for all  or part of the plan-
ning area, you can  estimate future
land use patterns and densities  in
consultation with existing planning
agencies and zoning commissions.

Lands where  development should be
avoided, such  as highway rights-
of-way, powerline easements, and
environmentally sensitive areas
(including  significant  agricultural
lands,  parks and historic sites),
are not to  be  included  when esti-
mating  future  development patterns
and densities.
                                         FORECASTS  OF  FLOWS
                                         AND WASTELOADS
                      The facilities
                      plan should
                      relate the size
 and capacity of facilities to the
 needs in the planning area
 (35.917-l(d)(D).   Wastewater flow
 estimates are calculated from
 estimated future population,  nonex-
 cessive infiltration/inflow,  and
 industrial flows projected accord-
 ing to procedures  in 35 Appendix
 A.S.b and Appendix A.8.d.
 Regulations in 35  Appendix A.S.d
 identify allowances for future

 flows  from  industries  and  required
 documentation.  During planning
 contact  industries  served  by  the
 municipal facilities to determine
 needs  for future  capacity.  When
 estimating  future flows and waste-
 loads  consider:

  •    Use of  approvable population
 estimates (35 Appendix A.8.a);

  •    Use of  approvable average
 daily  base  flow (35 Appendix  A.S.b);

  •    Use of  approvable allowances
 for  future  industrial  flows with
 documentation by  letters of intent
 from industries (35 Appendix
 A.8.d(2)).  Note:   If  you have any
 industrial  sources whose flow
 exceeds  50,000 gallons  per day
 contact  your  project re'viewer to
 determine the impact of the indus-
 trial  cost  exclusion contained in
 the  recently  enacted 1980 Clean
Water  Act amendments;

  •    Analyses of pollutant content
of existing flows;

  •   Estimates of nonexcessive
                     The facilities
                     plan includes
                     evaluation of
alternative flow and waste reduc-
tion measures, including nonstruc-
tural methods (35.917-l(d)(2) and
6.507(c)(5)).  Unless the existing
average daily base flow is 70
gallons per capita per day (gpcd)
or less or the current population
is under 10,000 (35 Appendix
A.8.C), consider:

  •   A public information program
to encourage wastewater reduction;

  •   Changes in water pricing
policies to promote conservation;
                                          •    Installation of water meters
                                         and  retrofit with water-saving
                                         devices  of  existing homes  and other

                                          •    Changes  in local ordinances
                                         or codes that  require installation
                                         of water-saving devices  in new
                                         homes  and other buildings.
                                         FUTURE ENVIRONMENT
                                         WITHOUT THE
                     A  "no  action"
                      option  is  to  be
                      evaluated  as  an
                      alternative to
any proposed project  (6.507(c)(2)).
The plan  should discuss  the  future
environmental conditions without
the project and cover  the  same
subjects  described  in  section 5.4.1.
                                        DEVELOPMENT OF
                     The prime
                     objective of
planning is to develop and evaluate
alternatives (not to be confused
with "alternative technology", and then select the most
cost effective system for
wastewater management in the
planning area.  Note, however, that
cost effectiveness is not strictly
a monetary term, and the most
cost-effective alternative need not
necessarily be the lowest cost
alternative.  Rather, cost
effectiveness includes
consideration of a variety of
quantitative and qualitative fac-
tors (economic, environmental,
social, institutional), and selec-
tion of the action that meets water
quality objectives, without over-
riding adverse impacts, at the
lowest present-worth cost

Identify the feasible alternative
waste management systems in the
plan (35.917(b), 35 Appendix
A. 5.a).  These alternatives are

then screened to determine those
that can meet the Federal, State
and local criteria (35 Appendix
A.5.b).  Evaluation of these prin-
cipal alternatives is performed
later (section 5.7).  Discuss
possible use of simplified
(generic) plans with your project
                     The facilities
                     plan includes
                     an evaluation
                     of improved
effluent quality attainable by
improved operation and maintenance
of existing facilities (35.917-l(d)
and (e) and 6.507(c)(5)).

An investigation of existing facil-
ities, including onsite disposal
systems, may reveal that they can
function more efficiently with the
addition of new equipment, opera-
tional changes, or the addition and
training of operating personnel.
Conversely it may be found that the
facilities are already operating at
peak efficiency but other factors
are limiting their ability to meet
applicable standards.

Whatever the results of  the  inves-
tigation, the optimum operation of
existing facilities will determine
if additions, expansions, or re-
placements must be made, including
better  design, operation, and
maintenance of onsite  systems,  and
the extent to which existing  facil-
ities  can be converted  or used  in
lieu  of a new  system.   Consider any
improvements  expected  as a result
of future pretreatment  by  indus-
trial  contributors, removal  of  ex-
cessive infiltration/inflow,  or
staging of new  capacity.
REGIONALIZATION,     In delineating
INDIVIDUAL           the facilities
SYSTEMS AND          planning area,
SYSTEMS              agency was
for including an area sufficiently
large to allow  for efficiencies
through interconnection of waste
treatment systems or collective
management of such systems
(35.917-2(a)(D).  Also, where
individual systems are  likely to be
cost effective,  the area should
have been delineated with suffi-
cient size to allow for economies
of  scale in planning and managing
these systems (35.917-2(a)(4) and

If  the  facilities planning area
includes several communities, each
served  by separate  facilities or
systems for wastewater  disposal, a
regional planning approach may be
advisable.  Such an approach may
have been evaluated or  recommended
in  an  approved  WQM  plan for  the

Regional alternatives  for a  large
planning area may  involve various
arrangements  for construction,
operation, maintenance, and  mana-
gement. For  example,  several  juris-
dictions may  form  a regional author-
 ity to c6nstruct,  operate,  and main-
 tain a centralized  treatment system
 for the entire  planning area.   As
 another approach,  one  jurisdiction
may serve  as  a lead agency  for
 construction,  operation,  and
maintenance  of facilities  that
 serve all  the jurisdictions.

 Regionalization need not involve
 construction of physically connected

 facilities.   Rather,  individual
 jurisdictions may be  responsible  for
 construction of municipal  facilities
 while a regional authority may be
 formed to consolidate one  or  more
 operation and management  functions.

 Regional facilities have various
 advantages and disadvantages.
 Advantages include:   savings  in
 personnel, materials  and supplies,
 more  treatment capability  per dol-
 lar,  higher  operator  skill levels,
 better performance of treatment,  and
 fewer effluent discharge points.
 Fewer discharge points  could  reduce
 direct environmental  impacts.  Dis-
 advantages include:   higher costs
 due to heavy  reliance on techno-
 logy,  longer  design and construction
 time,  potential for induced growth
 and resultant  adverse environmental
 impacts,  depletion of streamflow,
 and need for  interjurisdictional  co-
 operation and  joint agreements.

 The planning  area often includes
 several  jurisdictions or communi-
 ties.  One or more of  those may be
 served by  individual  onsite systems
 such  as  septic  tanks  or holding

 Alternatives  for onsite or small-
 flow  wastewater disposal systems
 should be considered  in facilities
 planning, especially  for areas not
 now served by central systems or
 where  alternatives are  likely to  be
 more  cost effective than collector
 and interceptor networks (35.917-1).

 Twenty-one alternative  systems are
 briefly  described in an EPA publi-
 cation (FRD-10) available  from your
 project  reviewer.  Engineers can
 get detailed technical descriptions
 of many  of these systems in EPA'S
manual for onsite systems available
 through  the EPA.  These systems
   •    Subsurface  disposal  or mound

   •    Dual  systems  (blackwater/

   •    Cluster  systems  that  serve
       several  users;

   •    Small-diameter gravity sewers
       (6-inches or  less);

   •    Pressure or vacuum sewers.

As a  financial incentive to  small
or rural communities,  Federal
funding of  privately owned alterna-
tive  wastewater treatment  facili-
ties  is permitted where they are
shown to be cost effective
(35.918).   A program for inspection
and maintenance to be  included in
the facilities plan should provide

   •    Periodic physical inspection
of all onsite systems  in the  plan-
ning  area;

   •    Pumpouts, renovation and
replacement as needed;

   •    Testing of existing,  local
potable water wells once a year;

  •   Additional monitoring  of
water  supply aquifers,  if appro-
priate, where substantial numbers
of onsite systems exist.

Publicly owned systems may qualify
for and use the 15% cost preference
to determine the most cost-
effective alternative for
alternative and innovative
processes;  privately owned systems
may not (35 Appendix A.7).   Both
types of systems,  however,  are
eligible for 85% EPA grants rather
than conventional 75% funding if
they qualify as innovative  and

alternative technology (35 Appendix

To provide additional assistance
for small and rural communities,
EPA has executed an interagency
agreement for rural water and sewer
projects with the Farmers Home
Administration (FmHA), Economic
Development Administration (EDA),
Housing and Urban Development
(HUD), and Community Services
Administration (CSA).  These agen-
cies will coordinate efforts to
improve delivery of Federal assis-
tance to small, rural, and semi-
rural communities in the form of
grants, loans, and technical assis-
t anc e.

As discussed in section 5.1, con-
ventional sewage collection systems
for existing unsewered communities
may be eligible for grant funding
if the communities existed on
October 12, 1972, and the system
will not encourage development  in
environmentally sensitive areas
(35.925-13).  Include documentation
of need in the facilities plan
(section 5.1).  The conventional
system should be cost effective.

Where the population density within
the proposed collection system  area
is less than 1.5 persons per acre
(one household per 2 acres), col-
lector sewers will be considered
non-cost-effective unless a severe
pollution or public health problem
is documented and collector sewers
are shown to be clearly more cost
effective than any of the alterna-
tives for sparsely populated areas.

In addition, the facilities plan
should show, where population
I density is less than 6 persons  per
acre (2 households per acre), that
alternatives are less cost effec-
tive than new gravity collector
sewer construction and centralized

The facilities plan should examine
alternatives such as limited sewer
service for a portion of a commu-
nity where applicable.  For exam-
ple, septic systems work very well
in many small towns except in one
isolated area, such as a business
district, where open space for
adequate individual onsite disposal
is not available.  Consider a
community drainfield or other
alternative solution as well as
limited central collection and
treatment solutions.  Consult your
EPA or State reviewer about
"Generic Facilities Plans for a
Small Community" (FRD-18, February

When considering regional alterna-
tives involving construction of new
interceptors to connect communities
in the planning area or when con-
sidering new collection systems,
evaluate the environmental factors
discussed in section 5.3.  Addi-
tional guidance for alternative
interceptor systems is provided in

The need for a service agreement to
be completed before award of a Step
2 grant for projects involving more
than one political jurisdiction
will be determined by the regional
administrator (35.920-3(b)(6),
35.917-6).  Such agreements cover
the specific items defined in
35.920-3(b)(8); e.g., financial
arrangements, enforcement, user
charge requirements, sewer system
rehabilitation, sewer use ordinan-
ces.  Since the agreements often
entail long periods of negotiation,
it  is to your advantage to begin
action on them as early as possible
during the development of the
facilities plan.

EVALUATION OF        When developing
SYSTEMS              alternative
systems, the facilities plan should
relate the size and capacity of the
facilities to the needs, including
reserve capacity (35.917-l(d)(1)),
based on existing and future condi-
tions (sections 5.4 and 5.5).

The "no action" alternative should
be discussed (6.507)(c)(2)).  This
option will frequently be appro-
priate for a portion of the plan-
ning area.  The no action alternate
describes the future environment
without the project (section 5.5.4).

Consider each treatment alterna-
tive's flexibility to operate in
various treatment modes and under
different hydraulic and loading
                     BPWTT can be
                     defined as a
                     minimum of
                     treatment for
discharge to surface waters or
treatment that will meet the pri-
mary drinking water standards after
land application (5.7.4,
To meet the BPWTT requirement,
facilities plans are to evaluate,
at a minimum, alternatives under
the following five waste treatment
management techniques

  •   Biological or physical-
chemical treatment and discharge to
receiving waters;

  •   Treatment and reuse;

  •   Land application;

  •   Systems that generate revenue;
  •   Onsite and nonconventional

In evaluating options for treatment
and discharge, consider the later
application of technology providing
for:  (1) the reclaiming of waste,
(2) recycling of water, (3) elimi-
nating the discharge of pollutants
by containment to the extent prac-

The Clean Water Act encourages the
use of land treatment of municipal
waste where practicable.  Design
manuals for the other listed treat-
ment technologies are referenced in
Appendix C of this book.

Land treatment, water reuse and
nonconventional systems qualify as
alternative (as in I&A) technology
and may receive a higher level of
Federal funding.  Section
provides additional information on
I&A technologies.

The technical design basis for land
treatment alternatives (slow rate,
overland flow, and rapid infil-
tration), is the EPA "Design Manual
on Land Treatment" (EPA
625/1-77-008) and "Costs of Waste-
water Treatment by Land Appli-
cation" (EPA 430/9-75-003, revised

The design manual recommends a two-
phase approach to the evaluation of
land treatment alternatives.   The
first phase should include enough
detail to establish whether sites
are available, soils suitable,  and
the cost of land treatment
competitive.  If these conditions
are met,  phase two would include an
indepth investigation of sites and
refinement of design factors to
complete the requirements  of a
facilities plan.   An acceptable
analysis of land treatment includes:

  •   Site selection—A map of the
planning area showing the tracts of
land evaluated as potential land
treatment sites.  The plan should
describe the reasons for rejecting
sites as well as the availability
of suitable sites.  Categorical
elimination of land treatment for
lack of suitable sites is to be
documented with supporting infor-
mation  (soils data, etc.).

  •   Loading rates and  land
area—Values used  for these para-
meters  that agree  with established
ranges  in the EPA  design manual.
Values  outside  the established
ranges  are  to be  explained with  a
discussion  of extenuating circum-

  •   Estimated Costs—Compare
approximate costs  for  land treat-
ment with those in the EPA guidance
on  costs, as  updated,using local
construction cost  indexes.  Elimi-
nation  of land  treatment due  to
land costs  or transport  costs
should  be documented by  an evalua-
tion of actual  costs.

   •  Preapplication  treatment—The
 level of treatment before land
application should agree with
guidance in the EPA design manual
 for the type of application  process
used.   EPA  will not accept  a uni-
versal  minimum of secondary  treat-
ment  before land application with-
 out supporting environmental docu-
mentation.   Treatment  more  strin-
 gent  than recommended in the design
 manual  should be  justified.   If
 documentation is not acceptable,
 EPA may consider  the costs of the
 additional  processes beyond those
 recommended in the design manual as
 unallowable for grant funding.

   •   Environmental effects—The
 environmental evaluation of a land
 treatment  system  should emphasize
quality and quantity of surface
water and groundwater resources,
energy conservation, pollutant
recycling, and compatibility of
land use.  BPWTT criteria are to be
met for protection of groundwater
based on current quality and uses
of the water.
                     The Clean Water
                     Act clearly
                     established the
                     intent of
Congress to encourage the use of
innovative and alternative techno-
logies in the construction grants

The underlying concept of the
regulations for I&A technology
(35.908) is the provision of a
basic monetary incentive through a
grant increase from 75 percent to
85 percent for design and con-
struction of municipal treatment
facilities that represent advance-
ment of current state-of-the-art
(for innovative technology)  to meet
national goals for resource  recov-
ery, energy conservation, cost
reduction,  and improved
environmental management.  All
facilities plans are  to  include
evaluation of I&A technology

"Alternative  technologies" are
fully proven methods  that  reclaim
and  reuse water, productively
recycle wastewater constituents,
eliminate  the discharge  of pollu-
tants,  or  recover energy.

"Innovative  technologies"  are
methods that  have not been fully
proven  in  the circumstances  of
their  contemplated use.   They  may
be alternative  technologies  or
conventional  treatment methods
which  have an acceptable level of
risk and  corresponding opportunity

 for significant advancement in the

 Specific guidelines and examples of
 areas of alternative technologies
 are included in 35 Appendixes  A &
 E.   EPA has issued a publication
 entitled,  "Innovative and Alterna-
 tive Technology Assessment Manual"
 (MCD-53),  which should be consulted
 for detailed information.

 Wastewater treatment  systems  to
 solve the  water pollution problem
 are initially classified  either as
 alternative technology or  conven-
 tional  methods.  For those which
 are not fully proven,  potential for
 advancement in the  state-of-the-art
 is  to be evaluated.   Systems that
 involve some reasonble risk; i.e.,
 advancement over proven conven-
 tional  practices, are  then evalua-
 ted against six criteria  (defined
 in  35 Appendix E) to determine
 whether they qualify as innova-
 tive.   Alternative  technology
 qualifies  as  innovative if it meets
 any  one of  the  six  criteria.

 The  regional  administrator may
 consider local  conditions  in deter-
mining  a technology  innovative  (35
Appendix E.6).  Conventional me-
 thods,  however, may  be classified
 as  innovative  only  if  they meet
 either  the  15  percent  life-cycle
cost  reduction or the  20 percent
net primary  energy reduction cri-

The remaining  feasible alterna-
tives,  called principal alterna-
tives, which will be subjected   to
cost-effectiveness  analysis, are
analyzed to identify the noninnova-
tive system and the  least energy
consuming noninnovative system.
The I&A technology  projects are
then compared with  these noninnova-
 tive  systems.   A 115  percent  cost
 preference  is  applied;  i.e.,  the
 I&A project may cost  15 percent
 more  in  present worth than  the
 lowest-cost noninnovative alterna-
 tive  and still  be  considered
 equal.   Further explanations  and
 examples are provided in section
 5.7.1 and MCD-53,  Figure 2-2  .

 If  the I&A  project  is cost  effec-
 tive  and environmentally sound,
 implementable,  and  acceptable to
 the public,  subsequent  Federal
 grants may  be  increased  to  85
 percent  for  the  I&A portions of  the
 project  and  for  costs associated
 with  preparation of the  facilities
 plan.   Furthermore, grants  are
 provided  for up  to  100 percent of
 the correction  or replacement cost
 if the I&A  project  elements fail  to
 operate  as  required within  2 years
 of the date  of  final  inspection,
 except where failure  is  caused by
 gross  negligence.
                     Since  the
                     location and
                     length of
will generally influence growth in
the planning area, plan carefully
the interceptor routes and  staging
of construction.

In general, interceptors may be
funded where they eliminate exist-
ing point source discharges and
accommodate flows from existing
communities that violate enforce-
able requirements of the Clean
Water Act.

The following restrictions apply
(35 Appendix A.S.f):

  •   Do not extend interceptors
into environmentally sensitive areas

unless they eliminate existing
discharges or serve existing com-
munities that violate an enforceable
requirement of the Clean Water Act.

  •   Evaluate direct and indirect
impacts (section 5.3.10) of inter-
ceptors on environmentally sensi-
tive areas such as:  floodplains,
wetlands, and significant agricul-
tural lands.

  •   Where there is no practicable
alternative that avoids impacts on
environmentally sensitive areas,
identify measures to minimize
adverse impacts.

  •   EPA may impose grant condi-
tions on subsequent grants, includ-
ing restrictions on sewer hookups,
to protect environmentally sensi-
tive areas  (section 5.3.2).

The facilities plan should assess
the need for  interceptors, areas  to
be served, and the existence  of
environmentally sensitive areas.
Consider alternative routes for
interceptors  in light of the  above
factors  (6.507(c)(5) and section
                    The required
                    analysis of
                    methods of
ultimate disposal of residuals
should include an assessment of
potential impacts on ground-water
quality (35.917-l(d)(6),(7) and
6.507(c)(5)).  In addition to con-
ventional methods such as landfill
or incineration, consider innova-
tive and alternative technologies
(section and their asso-
ciated economic, environmental,
social and institutional factors
(section 5.7).
                                       For further information refer to "A
                                       Guide to Regulations and Guidance
                                       for the Utilization and Disposal of
                                       Municipal Sludge (MCD-72).
                                       COMBINED SEWER
                     The costs and
                     benefits from
                     control of
                     combined sewer
overflows (CSOs) vary with numerous
environmental and system-related
factors.  Decisions relating to
CSOs are made on a case-by-case

Control of pollution from CSOs
should be considered if application
of BPWTT for dry-weather flows
would not meet water quality stan-
dards (35.917-Kd)(4)).  Treatment
or control of CSOs may be given
priority for construction grants
funds only after secondary treat-
ment of all dryweather flows in the
area is assured.  (Exception: where
EPA has received an application for
a marine discharge waiver under
section 301(h) of the Clean Water

Where measures may be proposed  for
the control of CSOs, the  facilities
plan  is  to evaluate  the  following
for the  20-year  planning  period:

  •   Alternative control tech-
niques  and management practices
that  could attain various levels  of
pollution control;

  •   Cost of achieving  various
levels  of pollution  control  by  each
of  the  control  techniques that
appear  to be most  feasible  and  cost

  •   Benefits  to  receiving  waters
of  a  range of pollution control
alternatives  during  wet-weather

 conditions.   Consult WQM plan as

   •   Costs  and benefits from
 addition of  advanced wastewater
 treatment (AWT) processes for
 dry-weather  flows  in the area as  an
 alternative  to  CSO control.

 A final  alternative selected  for
 control  of CSOs is to meet  the
 following criteria:

   •   The analysis demonstrates
 that  the proposed  level  of  pollu-
 tion  control  is necessary to  pro-
 tect  an  attainable beneficial use
 of the receiving waters  even  after
 the standards required by the Clean
 Water Act for industrial  discharges
 are met  and a. minimum of  secondary
 treatment is achieved for all
 dry-weather municipal discharges  in
 the area.

   •  Provision has  been  made for
 funding  of secondary  treatment of
 all dry-weather  flows in  the area
 or  an application  for a marine
 discharge waiver has  been received
 by  EPA.

   •   The technique  proposed for
 CSO control is more  cost  effective
 for protecting beneficial uses than
 other CSO control  techniques plus
 higher levels of treatment for
 dry-weather municipal flows in the

  •   The marginal costs  of control
 are not  substantial compared to
marginal benefits.

 If portions of the planning area
 are served by combined sewers and
 an  evaluation of CSO  abatement is
 to be included in  the facilities
 plan,  request additional guidance
 from  the project reviewer.  To
determine what portion of CSO
control costs for a multiple pur-
pose project are grant eligible,
refer to the multipurpose dis-
cussion in section

The Clean Water Act prohibits
funding of costs for control of
pollutant discharges from a sepa-
rate storm sewer system (35.925-21)
                      Consider  the
                      mentioned below
                      when  planning
municipal  treatment  facilities that
will accommodate  industrial  flows.
The treatment works  design capacity
may include allowances  for indus-
trial  flows (35 Appendix A.S.d and
section  5.5.2).   However,  the
following  costs are  not allowable
for grant  funding  (35.925-15):

  •    Costs of interceptor or
collector  sewers  constructed exclu-
sively or  almost  exclusively to
serve  industrial users;

  •  Costs allocable  to the  treat-
ment for control  or  removal of
pollutants introduced solely by
industrial processes.

The 1980 amendments  to the Clean
Water Act, (PL 96-483) provided

  •  Construction costs to collect
or treat industrial  flows  in excess
of 50,000 gallons per day  are not
grant  eligible after November  15,
1981,  unless the project was ap-
proved to prepare construction
plans  and specifications before May
15,  1980.

  •  Requirements for industrial
cost recovery (ICR) are repealed as
of December 27,  1977.  Any ICR
provisions in a grant made since

March 1, 1973, are to be removed;
35.928 is no longer in force for
those projects.

Where industries will be served by
the planned facilities, a pretreat-
ment program may be required
(35.907 and 403.8).  A pretreatment
program is required (35.907(b))

  •  The municipal treatment works
serves or is expected to serve
industries subject to pretreatment
standards under the Clean Water Act

  •  The WQM  plan has not provided
for development of an approvable
pretreatment  program.

Section 5.9.6  identifies specific
elements to be  included in  a pre-
treatment program.
                     Adding capacity
                     in phases
                     during the
20-year planning period may be more
cost effective than providing full
capacity in initial construction.
The plant will be more efficient,
effective and economical than if it
runs substantially under capacity.
Information on staging of treatment
plant construction is provided in
35 Appendix A.S.e.  Staging of
interceptors is discussed in 35
Appendix A.S.f.  Factors to be
considered are:

  •  Relative cost of providing
full capacity initially compared
with the present worth of deferred
costs for providing capacity when

  •  Uncertainties of projecting
long-term wastewater flows and
                                       possible technological advances or
                                       flow- and waste-reduction measures
                                       which may limit need for full

                                       Modular development of operable
                                       components of a treatment plant is
                                       advisable in areas where high
                                       growth rates are projected, where
                                       treatment must become more  stringent
                                       later in the planning period,  or
                                       where existing facilities are  to be
                                       used initially but phased out  later.
                                        MULTIPLE  PURPOSE
                     A multiple
                     purpose project
                     is one that is
designed to meet enforceable
requirements of the Clean Water
Act; i.e., NPDES permit or BPWTT,
but that also has components not
associated with enforceable
requirements of the Act.

Projects designed only to meet an
enforceable requirement are single
purpose.  Thus, a project that
includes land application as an
integral part of a wastewater
treatment system to meet effluent
limitations is single purpose.

An agricultural reuse project that
uses effluent which could be dis-
charged to a stream; i.e., discharge
meets NPDES limitations, is multi-
ple purpose.

To reduce costs and conserve energy,
the facilities plan may contain a
broad examination of structural and
nonstructural alternatives that
include multiple purpose options.

Reasonable costs necessary for
screening and evaluating multiple
purpose options are allowable  for
Step 1 grant funding.

 EVALUATION OF        After develop-
 ALTERNATIVES         ing  alterna-
                     tives as
 described in section 5.6, system-
 atically screen  them to determine
 those that can meet Federal, State
 and  local criteria (35 Appendix
 A.5.b).  Then analyze the resulting
 principal alternatives to identify
 those which have cost-effective
 potential (35 Appendix A.S.c).

 CAPDET, a computer assisted proce-
 dure for the design and evaluation
 of wastewater treatment systems,
 can be used quickly to screen costs
 of a large number of alternatives.
 The  fact sheets  in Appendix A of
 the I/A Manual (MCD-53) and the
 financial impact on a community on
 a per household basis can also be

 The principal alternatives,  which
 you will select  through this
 screening process, should undergo a
 thorough cost-effectiveness
 analysis.  This  is  described and
 outlined in 35 Appendix A.6 and
 (6.507(c)(5), (6) and (7)).
 Discuss the reasons for the
 selection of a prefered alter-
 native and the reasons for the
 elimination of other alternatives.
EVALUATION OF        Procedures
MONETARY COSTS       for performing
                     the cost-
effectiveness analysis are given in
35 Appendix A.6.

There is also a cost preference for
projects involving I&A technologies
(35 Appendix A.7).  This section
gives additional guidance and
examples.  Section
summarizes the procedures for
application of the cost preference
in the analysis. Once the present
worth or equivalent uniform annual
cost are determined for each
principal alternative, the least
costly alternative can be
SUNK COSTS           Any investments
                     or commitments
made before or during facilities
planning are regarded as sunk costs
and not included as monetary costs
in the plan because they are iden-
tical for all alternatives, and the
sunk costs have already been
committed regardless of the alter-
native selected.  Such investments
and commitments include:

  •  Investments in existing waste-
water treatment facilities and
associated lands even though incor-
porated in the plan;

  •  Outstanding bond indebtedness;

  •  Cost of preparing the
facilities plan.
                     "Present worth"
                     may be thought
                     of as the sum
                     which, if
                     invested now
at a given rate, would provide
exactly the funds required to make
all future payments.  "Equivalent
uniform annual cost" is the expres-
sion of a nonuniform series of
expenditures as a uniform annual
amount.  Either of these methods
may be used (35 Appendix A.6.a).

Detailed procedures for making
these calculations are explained in
most engineering economics text-

Three examples are shown on the
following pages and include:   (1) a
simple project assuming constant

O&M costs; (2) a project with
varying O&M costs; and (3) a com-
plex project assuming varying O&M,
phased construction, and a positive
salvage value.  To follow the
example analyses, you may refer to
the tables in Appendix D of the I&A
Assessment Manual for 7 3/8% com-
pound interest, the rate for fiscal
year 1981; i.e., October 1, 1980,
to September  30, 1981.  These
tables may also be found in
engineering economics textbooks.

The discount  rate used for facili-
ties planning  is published annually
by the United  States Water Resources
Council in the Federal Register.
                     Energy cost
                     factors,  for
                     use at the
grantee's option,  were published in
the Federal Register October 3,
1980, page 72984.   If necessary,
check with your project reviewer to
find out if final energy factors
have been published.
                     If a proposed
                     system is to
                     qualify as
innovative based on criteria other
than 15% life-cycle cost savings,
or if it is to qualify as alterna-
tive technology, use the following
procedure (35 Appendix A.7):

  a. Calculate the present worth of
the innovative or alternative
components of the proposed system.

  b. Using the total present worth
of the innovative or alternative
system, calculate the percentage
that the proposed innovative or
alternative components represent.

  c. If the present worth of the
proposed innovative or alternative
is less than 50% of the total
present worth of the innovative or
alternative system:

    (1)  Calculate the present
worth cost of the least costly
noninnovative system components
being replaced;

    (2)  Multiply the present worth
cost of (1) by 1.15;

    (3)  Add the result of (2) to
the present worth of the remaining
components of the least costly
noninnovative system.

Result:  The total present worth of
         the proposed innovative or
alternative system should be  less
than the result of (3) to be  con-
sidered cost effective.

  d. If the present worth of  the
innovative or alternative components
is more than 50% of the total
present worth of the proposed
innovative or alternative system,
multiply the total present worth of
the  least costly noninnovative
system by  1.15.

Result:  The total present worth of
          the proposed  innovative or
alternative  system should be  less
than the  result  of (d)  to be  con-
sidered cost effective.

Example 4   shows  the  application  of
            the  I&A cost  preference.
                                         MULTIPLE PURPOSE
                      Use the
 Expenditure method (AJE) described
 in Figure 3 to determine grant
 eligible costs for most multiple
 purpose projects.  These projects
 are defined in section

 If a multiple purpose project is
 the most cost-effective way of

  Examples for Calculating Present  Worth and Equivalent  Uniform Annual  Cost
 EXAMPLE 1;   Constant  O&M Costs


     sewage  treatment  plant #1:
     capacity:   10 tngd;
     average flow through plant:   9 mgd;
     planning period:  20 years;
     salvage value at  end of  20 years:  $0;
     capital cost of plant:   $3 million;
     average annual operation and  maintenance cost:  $190,000;
     discount rate:  7 3/8 %.

 Determine:   Present worth and equivalent uniform annual cost of this
 plant over  20 years.

 Method:  Present worth equals capital cost plus the present worth of the
 operating and maintenance costs.  Equivalent uniform annual cost equals
 the  present  worth times  the  appropriate capital recovery factor.

 Step 1:

 Capital cost 	 $3,000,000.

 Step 2:

 Present worth of annual O&M cost equals annual O&M costs times the
 uniform series present worth factor @ 7 3/8% for 20 years.

 $190,000  (10.292) 	 $1,955,500

 Step 3:

 Sum  of figures obtained in above steps yields present  worth

capital cost 	 $3,000,000
present worth of O&M cost	$1,955,500

PRESENT WORTH	$4,955,500

Step 4:

To find equivalent uniform annual cost,  multiply present worth obtained
above times the capital recovery factor @ 7 3/8% for 20 years.

$5,013,000 (.0972)  	 $   481,700

EXAMPLE 2:  Varying O&M Costs

    sewage treatment plant #2:
    capacity: 10 mgd;
    average  flow through plant:  increase linearly from 2 mgd to
       10 mgd over 20 years;
    planning period:  20 years;
    salvage  value at end of  20 years:  $0;
    capital  cost of plant:   $3,000,000;
    constant annual O&M cost:  £126,000;
    variable annual O&M cost:  increases
       linearly  from $0 to  $68,000  in year 20;
    discount rate:  7  3/8  %.

 Determine:   Present worth  and average  equivalent  uniform  cost of  this
 plant over  20 years.

 Method:   Present worth  equals the  sum  of  capital  cost plus  present  worth
 of constant O&M cost,  plus present worth  of the gradient  series
 of variable O&M cost.    Equivalent uniform  annual cost is derived as in
 the first example.

 Step 1:

 Capital cost 	 $3,000,000

 Step 2:

 To find present worth of  operating costs, calculate  the present worths of
 constant costs and variable  costs separately.

 a.   Present worth of constant annual  costs  equals that cost times  the
      uniform series present worth  factor @  7 3/8%  for 20 years.

      $126,000 (10.292)	$1,296,800

 b.   Present worth of a variable cost  increasing  linearly is found  by
      first  finding amount  of increase  per year.   This amount is $68,000
      divided by 20 years  or  $3,400 per year. This increase is known as a
      gradient series.   This  series times  the correct  gradient series
      present worth  factor  @  7 3/8  % for 20  years  yields present worth  of
      variable cost.  Thus:

      $3,400 (74.211)	$252,300

 Example 2;  Varying O&M Costs (continued)

 Step 3:

 Sum of figures obtained in steps  above  yields  present  worth:

 capital  cost  	 $3,000,000
 present  worth  of  constant  O&M  costs	$1,296,300
 present  worth  of  variable  O&M  costs	$   252.'300

 PRESENT  WORTH	$4,549,100

 Step  4:

 As  before, present worth times capital  recovery
         ? 3/8% f°r 2°  yearS WU1 yUld e1uivalent uniform annual cost.
$4,549,100 (.0972) 	  $ 442,
EXAMPLE 3:	Varying O&M Cost. Phased Construction, and Salvage Vali
    sewage treatment plant #3:
    capacity:  year 1-10,  5 mgd;  years 11-20,  10 mgd;
    average flow through plant:  increase linearly from 2 mgd to 10 med
      over 20 years;
    planning period:  20 years;
    salvage value at end of 20  years:   $750,000;
    capital cost of plant  (5 mgd):   $2,000,000;
    future capital cost at year 10  to  expand to  10 mgd:   $1,500,000-
    O&M costs:

    a.   constant annual O&M cost, years  1-10:  $84,000;

    b.   variable annual O&M cost, years  1-10;
          increases linearly from $0-$29,000 in
          year  10;
    c.   constant annual O&M cost, years  11-20:   $165,000;

    d.   variable annual O&M cost, years  11-20:
        increases  linearly  from $0-$29,000 in
        year  20.

        discount  rate:   7 3/8 %.

Example 3; Varying O&M Costs, Etc, (continued)
Determine:  Present worth and annual equivalent uniform cost of plant
over 20 years.

Method:  Present worth is derived as in previous example; but this time
calculate O&M costs from year 1 through year 10 and O&M costs for years
11 through 20 separately.  Also add present worth of expansion and
subtract present worth of salvage value from present worth of other
costs.  Equivalent uniform annual costs are calculated as before.

Step 1:

Initial capital cost  	 *2,000,000

Step 2:

Calculate present worth  of O&M costs as follows:

a.   Present worth of  constant annual cost years 1-10 equals
     given cost  times  uniform series present worth  factors @  7  3/8%  for  10
     years.  Thus:

     $84,000 (6.903)	*  579,800

b.   Present worth  of  variable O&M costs years  1-10 equals
     gradient  series  ($2,900) times present worth  factor  of  a gradient
     series  @  7  3/8%  for  10 years.

     $2,900  (27.047)	* 78,400

 c.   Present worth  of  constant  O&M costs year  11-20 are first calculated
     as in (a) above  using given cost  for  years 11-20.   This, however,
     yields  present worth in  year 11 which must be converted to present
     worth in year  1.   This  is  accomplished by  multiplying present worth
     (year 11) times  single  payment present worth  factor @ 7 3/8% for 10
     years (.4909).   Thus, present worth  in year 1 equals:

     $165,000 (6.903X.4909)	$  559,100

 d.   Present worth of variable O&M costs  years 11-20 are first calculated
     as in (b) above using gradient series for years 11-20 which is
     $2,900.  This yields present worth in year 11 which again must be
     converted to present worth in year 1 by multiplying present worth
     (year 11) times single payment present worth factor 7 3/8% for 10
     years (.4909).  Thus:

     $2,000 (27.047X.4909)	*   38,500

 Example 3: Varying O&M Costs. Etc, (continued)
 Step 3:

 Present worth of expansion cost which occurs at year 10, times single
 payment present worth factoj (§ 7 3/8% for 10 years.  Thus:

 $1,500,000 (.4909) 	 $ 736,400

 Step 4:

 Present worth of salvage value at end of 20 years equals that value times
 single  payment present worth factor @ 7  3/8% for 20 years.   Thus:

 $750,000 (.2410) 	 $  180,800

 Step 5:

 The  sums of  values obtained  in steps  1,  2,  and 3 minus  value  obtained  in
 step 4  equals present  worth  of plant.  Thus:

 initial  capital  cost  	  $2,000,000
 present  worth of constant O&M  years

   1-10	$   579,000
 present  worth of variable O&M  years

   1-10	$    78,400
 present  worth of constant O&M  years

   11-20	$   559,100
 present  worth of variable O&M  years

   11-20	$    38,500

 present  worth of expansion at  year  10. ...  $   736.400

 Total	$3,992,200

 Subtract from total the present worth of salvage value:

 present worth  of  salvage value  	  $   180,800

 PRESENT WORTH  of plant 	  $3,811,400

 Step 6:

As before, present worth just derived times the capital recovery factor @
7 3/8% for 20 years will yield average annual equivalent cost.  Thus:

$3,811,400 (.0972) 	 $  370,500

EXAMPLE 4.  Application of I&A Cost Preference


   A proposed innovative system has passed the risk test and
   fulfills the requirements of 20% energy savings.  The primary and
   secondary process components are considered innovative.

   The present worth costs of the proposed system and the least costly
   noninnovative system are shown below:
Least Costly
Noninnovat ive
   Total         $1,693         $1,834             $1,734       $1,911

   *Includes O&M.

Determine:  Whether innovative system is cost effective by application of
cost-preference procedures described in section

a.   $35 +  $905 = $940  (total present worth of innovative components).

b.   $  940 = 49% (percentage of total present worth represented by
     $1,911            innovative components;  note:  less than 50%).

c.   (1) $110 + $753 =  $863     (present worth of replaced components in
                               least costly noninnovative system).

     (2) $863 (1.15) =  $992.45  (application of cost preference

     (3) $992.45 +  $971 =  $1,963 (determination of cost ceiling).

Result:  $1,911 is less than $1,963; therefore, proposed innovative
system is  considered cost effective.


Capital costs of lorA  components  (85% grant)
         $31 + $830 -  $861  (.85)	$  731.85

Capital costs of Non-IorA components (75% grant)
         $873  (.75)	$  654.75

Total  Grant	$1,386.60

 satisfying enforceable requirements
 for CSOs,  (section,  it
 should be  treated as a single
 purpose project in determining
 grant eligibility.  Keep in mind
 that I&A portions of projects get  a
 15% cost preference (section   If the project is  cost
 effective,  it is the preferred
 alternative regardless of what
 other purposes it serves.

 Multiple purpose projects that
 combine wastewater treatment  with
 recreation (section 5.7.7)  can be
 funded at  the level of the  most
 cost-effective,  single purpose
 alternative.   Incremental costs of
 the recreation component  that
 exceed the  most  cost-effective,
 single purpose alternative  cannot
 be  grant funded.   To determine what
 percentage  of a  recreation  project
 is  grant eligible,  proceed  as

 Calculate  the grant  eligibility
 percentage  (a),  by  dividing the
 present  worth of  the  cost-effective
 pollution control  alternative  (b),
 by  the  present worth  of the
 multiple purpose  project  (c),   and
 multiplying  the  result by 100.  Or:
           (a) = 100 x
Another simpler means of determining
eligibility can be used for proposed
projects that involve clearly
separate recreational components
that are part of an otherwise
single purpose project.  Here the
grant-eligible cost simply equals
the total capital cost of the
single purpose components.

The basic principle behind the
Alternative Justifiable Expenditure
(AJE) method is to allocate costs
 of a multiple purpose project among
 its purposes.  Figure 3 describes
 the AJE method and illustrates its
 use.  Grant funding is based on the
 cost of the pollution control
 component plus a portion of the
 joint cost.  This policy assumes
 that achieving several purposes at
 the same time should be less costly
 than achieving them separately and
 that all purposes should share in
 the cost savings.   The grant eligi-
 bility for multiple purpose proj-
 ects of this  type will ordinarily
 be less than  the eligibility of a
 single purpose project with the
 same pollution-control objectives.

 To determine  the Step 2 and Step 3
 grant amount  for each component of
 a  multiple purpose  project,  first
 multiply the  cost  of the component
 by the grant-eligible percentage
 determined in the  cost allocation.
 The resulting amount is then multi-
 plied by 75%  for a  non-I&A  component
 and 85% for an I&A  component
 (section   Funding  at  85%
 for I&A technology  is  limited  to
 project portions  specifically
 identified as  I&A unit  processes,
 I&A unit  operations,  or other
 components  uniquely  necessary  for
 proper  functioning  of  the I&A

 Guidance  on grant increase
 eligibility and  cost-effectiveness
 preference  for  I&A  components  is
 found  in  35 Appendix E,  the
 Innovative  and  Alternative
 Technology  Assessment Manual
 (MCD-53),  and  in section
                     To ensure
operation, and maintenance of
treatment facilities, the community
must be able to raise sufficient

Figure 3


    The alternative justifiable expenditure method is fundamentally based
on the justified investment for each function.  That justified investment
is taken to be the cost of the most economical alternative single purpose
project which will achieve substantially the same benefits as does that
function in the multiple purpose project.  That investment, sometimes
called the alternative justifiable investment, represents the largest
amount which could justifiably be expended on the function in the
multiple purpose project, for, in most instances, no more should be spent
on a purpose than the cost of producing those benefits from the least
expensive alternative source.

    The cost allocation steps are:

    1.  Estimate the costs of most cost-effective, single purpose
projects to obtain the same objectives as those of the multiple purpose

    2.  Determine the respective specific costs of each purpose in the
multiple purpose project.  The specific costs of a purpose are the sum of
costs assignable to each project component exclusively serving that
single purpose.  An example of a specific cost would be the cost of a
treatment plant included in a project designed to improve urban drainage
and reduce pollution from combined sewer overflows.

    3.  Deduct the specific cost of each purpose in  the multiple purpose
project from the single purpose project cost.

    4.  From total cost of multiple purpose project  deduct all specific
costs to determine joint costs.

    5.  Distribute joint costs of the multiple purpose project among
purposes in direct proportion to the remainders  found in  step 3.

    6.  T6 obtain allocated costs for each purpose,  add the specific and
the distributed joint costs for each purpose.

    It should be noted that none of the purposes will be  assigned costs
which are greater than the cost of the most cost-effective single purpose
project nor less than the specific cost of the purpose.

Single Purpose
Pollution Control
Multiple Purpose
Single Purpose
Water Reuse
Total Cost (E)
                                            1   Remainder
                                            I   (E-B) = F
                                       Total Cost  (A)
                        Specific Cost
                        Pollution Control
              Joint   I   Specific Cost
              Cost    |   Water Reuse
               (C)    |       (D)
                  Total  Cost (G)

          *	H
                                             (G-D) = H
             Pollution Control Allocation =   B +   /  F  j   X C = J

             Water Reuse Allocation       =   D +   ( -2- )   X C = K
                                                    \ F+H /

             Grant Eligible Fraction

capital and operating revenue.

The monetary cost analysis
(section 5.7.1) includes a thorough
evaluation of the costs of various
alternatives.  But an explicit
analysis of the financial con-
straints that limit a community's
ability to finance and operate
facilities is not normally included
within the analysis.  Financial
capability analysis performed early
in the planning process can be an
effective screening tool in the
cost-effectiveness analysis.

A financial capability analysis
covers three basic areas:  (1) the
community's financial character-
istics, (2) an assessment of the
community's ability to support the
project, and (3) cost estimates for
various alternative systems.

Analysis of the financial character-
istics of a community covers
existing debt, revenues, assessed
value of property, median income,
income distribution, rate of popu-
lation growth, bond ratings,
existing sewer system charges,
planned capital expenditures, and
other  factors and  trends.
Determining whether a community can
support a wastewater project
requires an analysis of  the com-
munity's ability to generate
necessary income and an  analysis of
the  residents' ability to pay for
the  project.  User charges, which
are  included in charges  to cus-
tomers, are discussed in section
5.7.8.  Tne  screening process
should eliminate project alterna-
tives  that  clearly exceed the
community's ability to pay (see
worksheet: EPA 68-01-4343).

The  financial capability analysis
is important in  selecting the
appropriate  technology.   For
example,  the analysis may determine
that a community will give weak
support to a facility that has high
operation and maintenance costs.
Here the analysis would show the
need for technologies with low or
fixed operation and maintenance
costs.  If the cost-effectiveness
analysis shows two alternatives
with roughly equivalent present
worth, choose the one with the
lower cost impacts on the community.
The financial capibility analysis
is especially important for small
rural or semi-rural communities and
where receiving waters are water
quality limited.

Total annual charges to customers
are estimated after Federal and
other funding is determined.  When
total annual charges to customers
for wastewater facilities (includ-
ing debt service, connection costs,
and operation and maintenance)
exceed the following percentages of
annual household median income
(1980 dollars), EPA considers the
project expensive:

  •   1.0% when median  income is
under $10,000;
  •   1.5% when median  income is
between $10,000 and $17,000;
  •   1.75% when median  income
exceeds $17,000.

EPA and the  State agency will
intensively  review expensive pro-
jects.  If the proposed project  is
identified as expensive on  the
basis of the financial  impact
analysis or  the above  rule-of-thumb:

  •   Review  cost-effectiveness
analysis to  ensure estimates are
adequate and accurate  (section;

  •   Determine whether  high costs
are due to water quality  limita-
tions and requirements  of advanced
treatment processes.   If  so,
reconsider alternatives  (sections
5.2 and;

  •  Review soundness of local
share financing of project
(section 5.9.1);

  •  Pursue other funding sources.
Rural areas should look at the
Interagency Agreement for Rural
Water and Sewer Projects (see
section 5.6.2).
                     When you
weigh environmental impacts:
adverse and beneficial, direct and
indirect, long-term and short-term,
irreversible, and induced effects
such as changes in development
(35.917-l(d)(7) and 6.507 (c)(5)).
Weigh carefully potential impacts
on environmentally sensitive areas
described in section 5.3.  For
further guidance consult the EPA
publication:  "Environmental
Assessment of Construction Grants
Projects" (FRD-5).
                     Evaluate each
                     alternative for
                     its ability to
meet and maintain effluent limita-
tions and BPWTT (35.917-l(d)(4)).
The plan must provide a way to meet
these requirements.
                     plans include
                     an analysis of
                     energy require-
ments for each alternative system
considered (35.917-l(d)(9)).   The
objective is to select alternatives
that reduce consumption or increase
recovery of energy.  Coordinate
evaluation of energy requirements
and I&A technologies discussed in
section  Consider State
energy plans in doing this.
EVALUATION OF        Evaluate
IMPLEMENTABILITY     alternatives
                     for their
implementability, taking into
account legal, institutional, and
financial constraints (6.507(c)(5)).
Where several  jurisdictions are
included in the planning area,
implementation of a selected alter-
native will require intermunicipal
agreements (35.917-6).  Evaluate
alternatives as they affect each
jurisdiction in the planning area
to ensure all jurisdictions find
the selected alternative acceptable
and equitable.
                                        EVALUATION OF
                     Include in your
                     facilities plan
                     an analysis and
                     description of
potential opportunities for recre-
ation, open space, and access to
bodies of water (35. 917-K j) ) .

Evaluate the recreational potential
of the selected treatment plant
site and collection system.  Base
the analysis on existing data or
evaluation of the sites.  The
analysis need not require extensive
new data collection or surveys to
determine suitability.  The level
of detail needed to produce a good
recreational use analysis in a
facilities plan depends upon the
size of the community, the facility,
and the suitability of the chosen
site for recreation.  Provide
enough detail in the recreational
use analysis to determine the
site's potential recreation uses.
Show you coordinated the recreation
elements of approved water quality
management plans with State and
local recreation programs; e.g.,
State Comprehensive Outdoor
Recreation Plan or Heritage
Conservation and Recreation Service

of the United States Department of
Interior.  Potential recreation
benefits associated with wastewater
projects include:

  •  Use of interceptor rights-of-'
way for running or hiking paths,
bicycling or equestrian trails;

  •  Use of roadway to facilities
for access to waterways for canoe-
ing, boating, fishing, or swimming;

  •  Provision of access to natural
areas for camping, photography, or
nature appreciation;

  •  Use of project sites for
sports such as target shooting or
field sports;

  •  Use of facilities or sites for
educational or information purposes;

  •  Recreation  opportunities at
offsite  locations such as applica-
tion of  effluent or sludge to
improve  other recreational areas.

While costs for  design and con-
struction of  separate recreation
facilities are not  allowable for
funding, costs associated with
developing the recreational use
evaluation in the plan are.  These
costs must be identified in the
plan  of  study (section 3.1).

Multipurpose  projects  that include
recreation may also be considered
by  coupling  facilities planning
activities with  recreation
planning.  EPA limits  the allowable
costs of multipurpose  projects  to
the costs of  the least costly,
single  purpose pollution control
project  (section; but
inclusion of  recreation
opportunities  in the  plan can
effectively  enhance public  support
while not  significantly  increasing
 the local  share  of  project costs.
COMPARISON OF        Review,
ALTERNATIVES         summarize, and
compare the alternatives' costs,
primary energy requirements,
environmental impacts, implementa-
bility, and other significant
factors.  See FRD-5, page 12 for
sample format.

This information should be based on
the supporting analyses elsewhere
in the plan.  Where quantification
is not possible, brief descriptions
will serve.  The visual display
should allow comparison of
alternatives at a glance so it can
be used at required public meetings
(35.917-5(b)(6) and (c)<3)(vii)).

Conduct a midcourse review with EPA
and the delegated State before
selecting the plan  to ensure that
all alternatives have been
adequately considered, that the
findings of  the environmental
information  document  or  environ-
mental assessment are available,
and that the  public information
requirements  have been met
(35.917-5(f), 6.507(b),

The  facilities  plan includes an
estimate of  total project costs  and
average charges  to  customers
(35.917-KD).   Charges  to  customers
include costs for existing  debt
service, debt service on the local
share  of capital costs,  annual
operation  and maintenance costs  for
the  completed project, connection
charges, and other  related  costs.
These  requirements  ensure that both
the  local  government  agencies  and
residents  are aware of  their  finan-
cial obligations under  the  proposed
plan.   Local jurisdictions  must
 fully  understand  these obligations.
The  regulations require  that  local
 jurisdictions agree to  pay  the

 non-Federal  project  costs  and  that
 they  have  the  financial  capability
 to  construct,  operate, and maintain
 the facilities (35.925-5).

 The following  costs  must be
 identified for the selected  plan,
 presented  at the  public  hearing,
 and included in the  facilities  plan:

  •  Estimated total capital costs
 for the  recommended  treatment works
 should be  broken  down into esti-
 mated eligible and ineligible
 costs.   Indicate  the estimated
 portions of  the project  cost to be
 borne by the Federal, State, and
 local governments and industry.

  •  Method  of local financing and
 estimated  debt service charge or
 taxes on the total local capital
 cost  of  recommended  treatment works;

  •  Estimated annual operation and
 maintenance  costs broken down into
 industrial and local government

  •   Estimated monthly charge for
 operation  and  maintenance  (user
 charge); monthly debt service
 charge;  service charges  from exist-
 ing treatment  works,  both O&M and
 debt  service;  estimated connection
 charge;  total  of above costs; and
 the monthly  charge to typical
 residential  customer.
VIEWS OF THE         Section 2.2
PUBLIC AND           requires a
CONCERNED            public
INTERESTS            participation
                     program as
part of facilities planning.
Requirements are also detailed in
35.917-5, Part 25, and are
discussed at the preapplication

Before facilities planning starts,
EPA and the State
 decide whether you need  a  basic  or
 full-scale  program (section  3.2).

 A  section or  chapter of  the  facili-
 ties  plan describes the  public
 participation program, outlines  the
 specific coordination  tasks  com-
 pleted, or  summarizes  the  program
 (35.917-l(g)).  The facilities plan
 summarizes  public meeting  comments
 and your responses.  Include:
 (a) text of the public notices;
 (b) evidence  of compliance with
 notification  requirements  such as
 advertisements or leaflets;
 (c) synopses  of information  presen-
 ted at the meetings; and (d) any
 significant comments or  statements
 received.   Letters submitted by
 individuals,  groups or agencies  are
 included as an appendix  to the
 plan.  Where  significant issues
 surface at meetings or in corres-
 pondence, the plan indicates the
 appropriate response or  action
 taken, justifies controversial
 findings, or  is revised.

 A public hearing is required before
 the facilities plan is formally
 adopted and submitted to the State
 agency, (25.2, 35.917-5(b)(7)).
 Present the proposed plan and
 alternatives at the hearing for
 public review and comment.  Also,
 submit the draft facilities plan
 for review and comment by the State
 and areawide clearinghouses
 (35.917-l(f)and section 6.1).
After the hearing has been held and
comments received, local officials
may adopt the proposed plan.   A
 final responsiveness summary and
 responses to adverse comments are
 included in the final facilities
                     Selection of
                     the preferred
plan is based on evaluation of
alternatives for cost effectiveness
(economic, environmental, social,

and institutional impacts) and
public comments.  It includes a
detailed description of the proposed
facilities and addresses items in
this section.  It clearly names
project segments, implementing
authority, and approximate
construction dates.
                     A brief
                     summarizes why
                     the plan was
selected.  It demonstrates that the
plan is the most cost effective and
environmentally sound (35.917(b)).
                     Describe the
                     treatment works
                     and the com-
plete wastewater treatment system
in detail.  Cover all elements,
including service areas, collection
sewers, interceptors, treatment
works, and ultimate disposal of
effluent and sludge.  Use maps to
show locations of major components,
existing and proposed, including
locations of any individual systems
proposed for funding (35.917-l(a)
and (b)).
5.8.3                Present
DESIGN OF            preliminary
SELECTED             engineering
PLAN                 data in the
                     plan to show
all major components of the system
have been included, the cost esti-
mate is adequate and reasonable
(consult MCD-5), and the facilities
can meet  effluent limitations.
The level of  detail of the pre-
liminary design varies from project
to project.  It depends on the
project's complexity.  Discuss this
with the project reviewer.  For
example, standard package plants
will not require the same degree of
detail as a pure oxygen system with
phosphate removal and sludge

Preliminary design data for treat-
ment facilities should include a
simple tabulation (one or two
pages) of information such as:

  •  A description of the selected
plan's major features;

  •  Unit processes and sizes;

  •  A schematic flow diagram for
treatment plants and plant and
pumping station siting;

  •  Sewer lengths and sizing;

  •  Proposed design criteria,
including:  detention times, over-
flow rates, process loadings,
removal efficiencies, initial
design flow, and reserve capacity.
                                        COST ESTIMATES
                                        FOR SELECTED PLAN
                     The facilities
                     plan pro-
                     vides detailed
cost estimates for design, con-
struction, and operation and main-
tenance of the proposed project
(35.917-l(a)).  Include an estimate
of total project costs
(35.917-1(1)) and average
annual charges to customers, as
described in  section 5.7.8.
                                        REQUIREMENTS OF
                                        SELECTED PLAN
                     features of
                     the selected
                     plan that
conserve, recover, or reduce energy
consumption.  For systems that
claim innovation on the basis of
the  20% net primary energy reduc-
tion, the plan  should contain a
detailed energy analysis
(35.917-l(d)(9)).  Refer to 35
Appendix E and  the "Innovative and
Alternative Technology Assessment
Manual" (MCD-53) for guidance.

                     The facilities
relevant direct and indirect
impacts of the proposed action
(6.507(c)(6)).  Emphasize:

  •  The proposed plan's unavoidable
adverse impacts, especially on
environmentally sensitive areas;

  •  The relationship between local
short-term uses of the environment
and the maintenance and enhancement
of long-term environmental produc-

  •  Irreversible and irretrievable
commitments of resources.

The evaluation emphasizes indirect
impacts (sections 5.3.10) on
environmentally sensitive areas and
present and future actions to
protect these areas (section 5.3).
Interceptors should conform with
approved Water Quality Management
(WQM) plans and EPA's objectives
for minimizing indirect impacts on
environmentally sensitive areas.
Section discusses this.
                     Discuss alter-
                     nate measures
                     to minimize
                     any adverse
environmental impacts (6.507(c)(7)).
Such measures should include struc-
tural and nonstructural components.

Structural measures may involve:

  •  Changes in design, size, or
location of facilities;

  •  Rerouting of interceptors to
avoid sensitive areas;
  •  Buffer zones or screening for
aesthetic purposes;

  •  Systems for odor control.

Nonstructural components may

  •  Development or enforcement of
sewer use regulations;

  •  Protection of environmentally
sensitive areas by local ordinance.

                     The authority
                     that implements
                     the selected
plan must have the necessary legal,
financial, institutional and mana-
gerial resources to ensure the
construction, operation, and main-
tenance of the proposed facilities
(35.917-l(h)).  Where responsibility
for implementation rests with one
or more agencies or jurisdictions,
include in the plan resolutions or
agreements between agencies or
government units assuring that the
plan has been accepted and will be
implemented (35.917-6).

To adequately describe the arrange-
ments for implementation, the plan

  •  Identify each agency or juris-
diction and its responsibility;

  •  Demonstrate that each agency
has the ability and authority under
State law (or reasonable expectation
of obtaining such authority) to
finance, design, construct, operate,
and maintain those facilities
within its jurisdiction;

  •  Identify any referendums or
public elections necessary to
implement the plan;

  •  Include adopted resolutions of
plan acceptance and agreements
among jurisdictions;

  •  Include proposed method of
allocating estimated O&M costs,
debt service costs, and connection
charges among participating com-
munities and among various users
and user classes;

  •  Include financial arrangements
that obligate each jurisdiction to
enforce the requirements for user
charges, sewer system rehabilita-
tion, and sewer use ordinance;

  •  Identify jurisdictions that
oppose or have failed to approve
the plan and describe steps neces-
sary to reach agreement.

In addition to assessing the local
financial resources, alternative
sources of funds should also be

Some capital expenditures could be
met through creative financing
techniques using special improvement
districts, industry assistance  to
local governments, or inter-
governmental agreements.  The
institutional arrangements will
have a  strong influence on the
feasibility of alternatives.   You
should  structure those arrangements
to ensure your agency continues to
meet the  financial eligibility
requirements of  35.917-l(h).

It may  be possible  to reduce  the
local share of capital costs by
using funds available from State
and Federal agencies, such as
Farmers Home Administration,
Housing and Urban  Development,  and
Community Services Administration.
Requirements for  funding  from  other
agencies' programs will vary  and
some communities may not  qualify.
A thorough  investigation  during
facilities planning of all possible
sources of funding will ensure that
the local share is available.

The financial and institutional
arrangements provide you and the
project reviewer with a starting
point in an overall financial
assessment.  A schedule for market-
ing bonds and developing a user
charge system can be developed
during Step 1.  These can be
adjusted during subsequent design
and construction.
                     The facilities
                     plan needs to
                     comply with
the requirements of the Civil
Rights Act of 1964, Part 7, and
 35.917-l(i).  Include in the plan
a statement that these requirements
have been met.  Where minority
areas are included in the facilities
planning area, show in the plan
that such areas will be served or
excluded from service for cost
effectiveness reasons.

SITE AVAILABILITY    Include in the
                     plan a state-
ment concerning the availability
and estimated costs of sites pro-
posed for facilities (35.917-l(m)).
                     The facilities
                     plan includes
                     basic inform-
                     ation on the
requirements for adequate operation
and maintenance of the proposed
facilities, such as:  sewers, pump
stations, sewage treatment plant.
This information conforms with that
developed for the cost-effectiveness
calculations and demonstrates that
the costs are based on a reasonable
assessment of the staffing, manage-
ment,  training, sampling, and

analysis requirements essential for
effective operation and maintenance.
PRETREATMENT         Development of
PROGRAM              a pretreatment
                     program is
required where the municipal facil-
ities serve or will serve industries
subject to pretreatment standards
under the Clean Water Act
(35.917-l(k), 35.907 and
Part 403.8).  Industrial use of
municipal facilities is discussed
in section

A pretreatment program is intended
to control pollutants from non-
domestic sources and to provide for
the reclamation and reuse of wastes
wherever practicable.

The objectives are:  (a) To prevent
the introduction into the treatment
plant of pollutants that will
interfere with plant operation, or
disposal or use of municipal sludge;
(b) To prevent the introduction
into the treatment plant of pol-
lutants that will pass through the
plant into receiving waters or that
will be otherwise harmful; (c) When
possible to recycle and reclaim
wastewater and sludge produced by
wastewater treatment.

A document "Municipal Pretreatment
Program Guidance Package" is
available from Municipal Technology
Branch (WH-547),  USEPA,  Washington,
D.C.  20460; (202) 426-8976.

A complete and approvable pretreat-
ment program includes the following:

  •  An industrial survey that
identifies system user by type and
location of industry and the char-
acter and volume of pollutants

  •  An evaluation of the legal
authority for control and enforce-
ment, including adequacy of enabling
legislation and selection of mech-
anisms to be used, (e.g., ordin-
ances, codes) ;

  •  An evaluation of revenue
sources and financial programs to
ensure adequate funding to carry
out the pretreatment programs;

  •  A determination of technical
information needed to support
development of an industrial waste
enforcement mechanism to ensure
compliance with NPDES permit con-
ditions ;

  •  The design of enforcement
monitoring programs;

  •  A determination of pollutant
removals in existing treatment

  •  A preliminary determination of
monitoring equipment required at
the treatment facilities;

  •  A determination of tolerance
of the treatment facilities to
toxic pollutants;

  •  A preliminary determination of
the municipal facilities needed for
monitoring or analysis of indus-
trial wastes.
                     The facilities
                     plan should in-
                     clude a
schedule of specific actions to
implement the plan and to meet its
objectives on schedule.  The dates
in this schedule should correspond
to compliance dates specified in
your NPDES permits (if applicable).
Resolve differences that would
result in failure to meet the
compliance schedule, including, if
necessary, a formal request through
the State agency for extension of
compliance dates (35.935-9(b)).

             CHAPTER 6
REVIEW, CERTIFICA-   This chapter
TION AND APPROVAL    describes the
OF PLANS             administrative
                     procedures for
submission of a facilities plan,
including review by:

  •  State and Local A-95

  •  WQM agency (for conformance
with WQM plan);

  •  State (for compliance with
State  and Federal statutory and
regulatory requirements);

  ••  EPA (where not delegated  to  a
State,  for compliance with Federal
 (A-95  REVIEW)
                     Include with
plan comments or approvals from
relevant State, local and Federal
agencies, by way of State and
areawide clearinghouses,
(35.917-l(f), section 3.2.4).
Office of Management and Budget
Circular A-95 requires such reviews

Before providing a completed facil-
ities plan to the State agency,
send a copy to clearinghouses
designated for your project area.
Do this as soon as possible to
                                       allow time for response by the
                                       clearinghouses and to minimize
                                       delays in subsequent reviews.  The
                                       clearinghouses have 30 calendar
                                       days to review the facilities plan
                                       and return comments to you.  Once
                                       received, these comments are to be
                                       included in the completed facilities
                                       plan package when it is sent to the
                                       State.  If the clearinghouses
                                       cannot complete their review in the
                                       time allotted, they have to  inform
                                       you within that time.  If this
                                       happens you should contact the
                                       project reviewer  for specific
                                       advice.  Where an agency or  clear-
                                       inghouse makes adverse comments,
                                       include a statement  that explains
                                       how the comments  were considered.
The draft facilities plan should be
submitted to the A-95 clearinghouse
30 calendar days before the public
hearing on the plan.

If the EPA regional administrator
determines that a public hearing is
not required, the plan should be
submitted to the clearinghouses a
reasonable amount of time before
submission to the State for review.

If the proposed project is sub-
stantially modified as a result of
the facilities plan review by the
State or EPA (described in sections
6.2 and  7), it may be necessary to
obtain clearinghouse comments on
the revised facilities plan again.
However, once A-95  review has been
completed  for a facilities plan,
additional review of the Step 2 and
Step  3 applications  that will
implement  the plan  is  seldom re-

Check with the  clearinghouses to
ensure that  the A-95 review of  the
facilities plan will suffice if
other Federal  funds; e.g.; from
Farmers  Home Administration,

Economic Development Admin-
istration, or Housing and Urban
Development, are to supplement EPA
funding of the same project.
                      Upon receipt  of
                      State and
 inghouse  comment  on  the  completed
 facilities  plan  (or  if 30 days pass
 without response), submit the
 review package with  comments to  the
 State project reviewer.   The pack-
 age  should  include:

  •  The  number of copies  of the
 facilities  plan required  by the

  •  2 copies of  all  documents
 required  by OMB Circular  A-95 (see
 section 6.1);

  •  1 original and  1  copy of the
 letter from the grantee's  authorized
 official  requesting review and
 approval  of the facilities plan and

     —the grantee has met all
 requirements for  public partici-
 pation relating to facilities

     —the names  of all jurisdic-
 tions within the  planning area
which either oppose the plan or
have failed to approve the plan.

The project reviewer will use this
document  to review the plan and
contact you if there are any
discrepancies.  You are responsi-
ble for providing requested infor-
mation or otherwise responding as
appropriate.  Problems between you
and the State should be resolved
before review by EPA unless con-
current review (in nondelegated
States) is included in a
contracted work schedule.  EPA
will not approve a facilities plan
without State certification
(35.917-7) that the completed
facilities plan:

  •  Conforms with the regulatory
requirements described in section

  •  Has been made available to
the concerned WQM planning agency,
if any, for comment;

  •  Conforms with completed WQM
plans that have been approved.

Upon completion of the State
review, the project reviewer will
prepare a certification letter for
the project.   The State then sends
the approved plan with the certi-
fication letter signed by the
appropriate State official to the
EPA regional office.   A copy of
the transmittal letter will notify
                                        REVISIONS             A facilities
                                        OF PLANS              plan that  has
                                                             served  as  the
                                        basis  for  award  of  a  Step 2  or
                                        Step 3 grant  will be  reviewed by
                                        the State  before application for
                                        any subsequent Step 2 and Step  3
                                        grant  to determine  if the plan
                                        needs  to be revised.

                                        Revisions  to  the plan should be
                                        accompanied by a statement on the
                                        status of  plan implementation as
                                        of the revision  date.   The appro-
                                        priate EPA regional administrator,
                                        A-95 clearinghouses,  and  State
                                        should be  notified  at least  30
                                        days before you  modify the plan.
                                        Processing of revised plans
                                        follows the procedures outlined

             CHAPTER 7
                     EPA will take
                     final actions
                     only on
plans that have State approval and
certification.  The State should
send the following documents to

  •  A letter signed by the chief
official of the State water pollu-
tion control agency requesting
review and approval and certifying

    —The plan complies with
requirements of the construction
grants regulations;

    —The plan conforms to a State
WQM plan;

    —The WQM planning agency, if
any, has had an opportunity  to
comment on the plan, and  the plan
conforms to any approved WQM plan.

  •  The number of copies of the
plan required by EPA;

  •  1 copy of the letter from the
local agency  to the State
(required under section 6.2).
 Partial  submittals may be made  and
 reviewed before  completion  of all
 requirements, but  final  action
 will  not be  taken  until  all re-
 quirements are met.   You will be
                                        notified  when  your  plan  is
                                        OF THE FACILITIES
                                        PLANNING PROCESS
                     EPA in
                     with the
                     States may
designate a selected project as
"fast track" to help priority
projects comply with NPDES permit
conditions or to correct signifi-
cant public health or water qual-
ity problems.  Fast-track projects
must have a midcourse review
meeting.  EPA's goal is to com-
plete most fast-track facilities
planning in 24 months.

Conversely, if your facilities
planning experiences extensive and
uninterrupted periods when no
progress is made because no fund-
ing for a subsequent step is
scheduled within 5 years, it may
be considered inactive until
subsequent steps are scheduled and
progress resumes.
                                        PRE-STEP 2
                     As your Step  1
                     planning nears
 thinking  early  about the proce-
 dures  and requirements  for  your
 Step 2 (design)  grant.  Some of
 these  considerations are discussed
 in  this section.
                                        STATE PROJECT
                                        PRIORITY LIST
                      Similar  to
                      Step  1  grant,
 your  Step  2 project  usually  is
 listed on  the  State  project  prior-
 ity list to receive  a grant.  As
 your  Step  1 project  nears  comple-
 tion,  contact  the  State to deter-
 mine  what  information is necessary
 for your project to  be listed on
 the priority list.   The State will

want  to know at  a minimum when you
expect to  submit a  Step  2 applica-
tion  and your estimated  Step  2
                     You will need
                     a  consulting
                     engineer to
 prepare  plans  and  specifications
 for  the  project you  selected in
 your  Step  1 planning.

 You have a choice  at this point
 about your engineering  consult-
 ant.  If you are satisfied with
 your  present engineer,  if your
 engineer did all or part of your
 Step  1 planning, and if your
 engineer has' the capability of
 doing the design,  you may continue
 with  the same  engineer without
 advertising and going through
 procurement procedures. The only
 requirement is that you negotiate
 a new contract and price for the
 Step  2 work.

 If you want to change engineers,
 follow the procurement procedures,
 including advertising, receipt of
 proposals, and contract negotia-
 tions to get competent profes-
 sional engineering design services
 at a  fair and reasonable price.

Whichever choice you make, begin
 early to discuss the scope of
 services and the type of con-
 tract.   Do not sign a contract but
proceed  up to that point.
                     If your
                     serves two or
more jurisdictions, you should
have a proposed intermunicipal
agreement at the time of Step 2
application.  The agreement
includes financial arrangements, a
user charge system, a sewer-use
 ordinance,  and  any  other consider-
 ations  that constitute  a working
 agreement  among the municipal-
 ities.   Intermunicipal  agreements
 are  time consuming  to negotiate,
 so a head  start will help prevent
                     to be satis-
 fied during  the Step 2 work are:
  •  User Charge System—The
written procedure you adopt to
collect fees from users of your
treatment system to pay costs of
operation and maintenance.

  •  Sewer Use Ordinance—A muni-
cipal ordinance that forbids
illegal connections to the sewer
system and specifies other limita-
tions on sewer use.

  •  Federal Facilities—If a
Federal facility; e.g., Air Force
base, is to be connected to the
wastewater treatment system,
follow special procedures.
Discuss this with the project

  •  Relocation—If people will be
relocated because of your project,
follow certain procedures.  Con-
tact the project reviewer.

  •  Dredge and Fill Permits—If
your project requires that mate-
rial be removed from or placed in
a body of water, you may need a
determination from the Army Corps
of Engineers that they will issue
a permit before EPA allows the
project to be designed.

  •  Pretreatment Program—If an
industrial pretreatment program is
required and you have not complet-
ed planning for it  during your

Step 1 planning, the pretreatment
planning is to be completed during
Step 2.  If this is the case, make
arrangements with your engineer to
include this in his scope of work.

  •  Public Participation—You^may
continue your public participation
program in the Step 2 design phase
if you think it would be helpful.
If you do, include the costs in
your application and decide who
will do the work.
SUMMARY              The completion
CHECKLIST            of a
plan is not easy unless a generic
plan is used.  However, your
project and its water quality
improvements will be of great
importance to  your  community.  The
time and effort spent in planning
your project is well worthwhile.

We  have summarized  below the major
items  to be considered during  and
at  the conclusion of Step  1 plan-
ning.   Use the checklist to ensure
that all applicable items have
been considered.

   •   Sign and accept your EPA

   •   Finalize other grant or  loan
requests as  appropriate.

   •   Arrange  for  the balance  of
 the local  funds needed.

   •   Execute  an  agreement with
 your  consultants  and issue  a
 notice to  begin work.

   •   Arrange  and  conduct  meetings
with  your  project  team.
  •   Begin work on your public
participation work plan and submit
to the State within 45 days after
accepting grant.

  •   Coordinate with WQM agency
if applicable.

Facilities Plan:  Periodically
check on progress of:

  •   Population and flow fore-
casts; obtain State agreement.

  •   Infiltration/inflow analysis
if applicable.  Watch timing and
obtain State agreement of results.

  •   Possible  use of generic  plan
for small communities (consult
project reviewer).

  •   Alternative development:

      —Land application;
      —Small wastewater systems;
      —Centralized  treatment;
      —Rehabilitation  of  existing
      —Innovative and  alternative
      —No  action.

   •   Environmental  assessment of
 alternatives  as integral part  of
 facilities  plan.

   •   Alternatives  evaluation
 based on:

      —Engineering  feasibility;
      —Environmental impacts;
      —Public  acceptance;

   •   Public participation pro-
 gram.  Get public and interest
 groups  involved.

Facilities Plan review by:

  •   WQM agency;
  •   Clearinghouse (A-95);
  •   State agency.
Critical Topics:  Be sure the
following areas receive close

  •   Detail of facilities plan;
  •   Coordination with WQM
  •   Procurement of consultants;
  •   Population and flow
  •   Public participation;
  •   Alternatives development and
  •   Effluent limitations;
  •   Disposal of residuals;
  •   Intermunicipal agreements;
  •   Pretreatment program;
  •   Preliminary cost  estimates;
Project Administration:  Check on:

  •   Filing system;
  •   Accounting records;
  •   Payment requests;
  •   Force account.

Pre-Step 2 Application
Considerations:   Begin working on
or considering the following items:

  •   State project priority list
      (contact State);
  •   Engineering consultant's
  •   Intermunicipal agreements
      (develop proposed
  •   Other considerations:
      —User charge system;
      —Sewer use ordinance;
      —Other Federal facilities;
      —Dredge and fill permits;
      —Pretreatment program;
      —Public participation

                                APPENDIX A
               Preambles to Construction Grants Regulations

                  (Discussion of Regulation Development)
You should consult the full text of the construction grants regulations
contained in the Code of Federal Regulations (CFR), the July 1, 1980
edition, as Title 40, Part 35, Subpart E.  The preambles which follow are
published here only because they are not included in the CFR.
Preamble to the September 27, 1978, edition of the construction grants
program regulations.  Published in the Federal Register, Vol. 43 No. 188,
pages 44022 - 44049.
Preamble to the February 16, 1979, amendments to the construction grants
program regulations on public participation (35.903, 35.917-1, 35.920-3,
35.928-1, 35.929-2 and 35.928-1, 35.929-2 and 35.940-1).  Published in
the Federal Register, Vol. 44, No. 34, pages 10300 - 10302.
Preamble to the July 5, 1979, miscellaneous amendments to the
Construction Grants Program Regulations (35.910-10, 35.925-15,
35.936-13(a)(l) and (3), and Appendix E, paragraphs 6e.  (1) and (2).
Published in the Federal Register, Vol. 44 No. 130, pages 39228 - 39339.



   Title 40—Protection of Environment


               CPRL 951-8]


   Subport E—Grant* For Construction
          of Treatment Works

  AGENCY: Environmental Protection
  ACTION: Rule.

  SUMMARY: This is a conformed ver-
  sion of regulations governing the'con-
  struction  grants program for munici-
  pal wastewater treatment works. The
  substantial changes in the regulations
  serve several  purposes. The  majority
  of  the changes  implement  amend-
  ments to the .Federal Water Pollution
  Control Act  (FWPCA or  the Act) as
  amended,   contained  in  the  Clean
  Water Act of 1977 
illations, the final regulations included
both revisions to the technical amend-
ments and editorial changes.
  Altogether  the  Agency  circulated
more than 60,000  copies  of  various
drafts of the  regulations. We received
invaluable assistance from the organi-
zations, agencies, and the  public at
large. Commenters raised a variety of
issues. The major issues raised during
the official comment period are dis-
cussed  below under the appropriate
subject area.
  Various related  regulations  have
been or will be published soon. As re-
quired   by  statutory deadline,  EPA
published two  short amendments to
the construction grants program regu-
lations early this year. On January 10,
1978 (43 FR 1597), fiscal years  1978-81
authorizations were allotted. On June
29, 1978 (43 FR 28202), we published a
correction of the section number for
the allotment regulation. It is § 35.910-
8 in this conformed regulation. On
February 23,1978 (43 FR 7426), the re-
imbursement grant regulations (subpt.
D) were revised to  extend eligibility
dates. On June  26. 1978 (43  FR 27738),
EPA published  final pretreatment reg-
ulations as 40  CFR part 403. Those
regulations establish the  responsibil-
ities of Government, industry, and the
public to implement national pretreat-
ment standards to control pollutants
that pass through  or interfere with
treatment processes in publicly-owned
treatment works or that may contami-
nate sewage sludge.
  On August 7,1978, we published pro-
posed regulations on public participa-
tion in  the FEDERAL REGISTER  (43 FR
34794).  Those  regulations  implement
section  101(e) of the FWPCA which
requires EPA to  provide for,  encour-
age,  and assist  public participation in
EPA programs. The regulations would
replace  40 CFR part 105 (Public Par-
ticipation in Water Pollution Control)
and 40 CFR part 249 (Public Participa-
tion in Solid Waste Management) with
a new 40 CFR part 25.
  References to part 25 are inserted hi
this regulation  in anticipation of pub-
lication of final  public participation
regulations. In  the interim any refer-
ence to part 25 in these regulations
should be interpreted as referencing
the current part 105 regulations. The
new part 25 would establish overall
public participation  requirements for
programs under the  Clean Water Act,
the Safe Drinking Water Act, and the
Resource Conservation and Recovery
Act.  The  regulations,  in addition,
revise  public  participation  require-
ments in 40 CFR part 35  subpart E,
specifically for the construction grants
program. They focus the public's at-
tention  on decisions made  during the
planning of the wastewater treatment
facilities. They  also provide the oppor-

tunity for public involvement in later
stages of project development.
  EPA published proposed regulations
for the  water  quality  management
program in the FEDERAL REGISTER on
September  12,  1978  (43  FR  40742).
Those regulations  replace 40  CFR
parts 130 and 131 and portions of part
35 with a new 40 CFR part 35. subpart
O. The regulations govern the water
quality management  program  under
sections 106, 208, and  303(e) of the
FWPCA and include changes made  to
implement provisions  of the 1977 Act.
The regulations require a State/EPA
agreement, which is intended to serve
as the principal management tool for
the water quality  management  pro-
gram. The State/EPA agreement will
integrate  the  planning, management,
and implementation of all water qual-
ity management programs under the
Clean  Water Act. RCRA, and SDWA
by fiscal year 1980. At a minimum, the
fiscal year 1979 agreement shall cover
programs  authorized  by sections 106,
205(g), 208, 303, and 314 of the Clean
Water Act. The State/EPA agreement
is distinct from the construction grant
delegation agreements that may be ne-
gotiated under  section  205(g) of the
FWPCA, as amended by the 1977 Act.
The   water   quality   management
(WQM)'regulations coordinate the es-
tablishment of State  and areawide
WQM agencies' sewage treatment pri-
orities with the construction  grants
priority system  and lists. WQM plans
are to provide certain  facility planning
related information such  as planning
area delineations, waste load  alloca-
tions, and population projection disag-
gregations. Construction grant facility
plans will have to be based on this in-
formation. Overall the WQM program
regulations link that program and the
construction grants program together
much more closely.
  On September 20, 1978 (43 FR 42251)
we published in the FEDERAL REGISTER
final regulations on State management
assistance  grants  (subpt. F).  They
make funds available to States to man-
age the construction grants program
and to hire and train staff needed  to
implement delegated functions.
  From time to  time EPA issues guid-
ance and technical information to sup-
plement   regulations   and  to   assist
those participating and interested  in
EPA programs. A listing  of informa-
tion and copies may be obtained from
the General Services  Administration
(8FSS). Centralized Mailing Lists Ser-
vices,  Building 41, Denver Federal
Center, Denver,  Colo.  80225. (See
§ 35.900(O.)
  Discussion of the regulatory changes
being  made are grouped by  subject
matter. Following  the discussion  of
each subject area, the preamble identi-
fies those sections  in the regulations
related to the  subject areas that are

changed.  For the  technical  amend-,
ments  each  section   containing  a
change is discussed separately.


  Sections 20 and 40 of the 1977 Act
modified the policy and procedures ap-
plicable to State project priority plan-
ning and clarified the intent of Con-
gress regarding the roles and responsi-
bilities of the States in preparation of
priority lists. These new provisions of
the Act require  several modifications
to the procedures used by the States
in managing their priority lists. Estab-
lished priority rating and ranking cri-
teria that are consistent with applica-
ble guidance  and  these  regulations
need not be changed.
  The 1977 Act gives the States exclu-
sive  authority to rank categories  of
projects. The categories  specified  in
the 1977 Act are  those used in the
survey of the cost of needed publicly-
owned  treatment  works  (the needs
survey) and have  been  defined  in
detail  in  previously published  guid-
ance for the survey. The regulations
have been written so that no State is
required to  assign a different ranking
to categories of projects, but it may do
so on an optional basis.
  States are expected  to  continue  to
use priority criteria based on the se-
verity of  the pollution problem, the
existing   population   affected,   and
other  related  factors necessary  to
meet  statutory requirements. All pro-
jects  on the priority  lists, including
those benefiting  from the setaside pro-
visions, must be rated according to the
priority criteria and  subject to the
management procedures contained in
the approved State priority  system.
When preparing their priority lists,
States must take  into account the
work  completed by designated State
and areawide agencies  responsible for
water quality management.
  The legislative history of the  1977
Act indicates that  State  priority list
planning  and management must be
closely  linked   to  meeting  unfilled
treatment needs before other eligible
treatment works may be funded. The
1977 Act specifically requires, with one
exception, that only projects resulting
in compliance with the enforceable re-
quirements of the Act may be included
on the State's priority list. Projects on
the State  list which do not meet this
requirement are  to be removed and al-
ternate projects which  do meet the re-
quirements  added  to  use available
  Several  commenters  on the regula-
tions  expressed concern that the sec-
tion on State priorities was very long
compared with the relatively short ref-
erence to priorities in the Clean Water
Act. We believe  that these comments
result from a misunderstanding of the
role of the priority system and priority
                           FEDERAL REGISTER, VOL 43, NO.  188—WEDNESDAY, SEPTEMBER 27, 1978


   Hsti In the construction grants -pro-
   cram. The priority system and lists are
   the principal mechanisms in the pro-
   gram for selecting who will be in line
   for grant funds, for scheduling grants,
   for planning obligations and outlays of
   funds, and for providing information
   to justify congressional authorizations
   and   appropriations.  The   priority
   system and lists are, to short, the man-
   agement tools which allow the Feder-
  al, State,  and  local  governments  to
  plan,  budget,  and  oversee  the  con-
  struction grants program.
    The 1977 Act complicated the  task
  of management by  imposing new re-
  quirements for planning and set-asides
  which must be met for the  orderly
  progress of the grants program. At the
  same time, the  Congress provided for
  State  management  assistance  grants
  to increase  revenues  available  to
  States to handle added managerial re-
  sponsibilities. The grants program will
  not be able to maintain a proper bal-
  ance and an orderly flow of  step 1,  2,
  and 3 projects at the rate necessary to
  utilize the $24.5 billion authorized by
  Congress without a sound managerial
  system  such as  that  established for
  State priority systems and lists.
   Some commenters  stated  that  the
  priority system should not have to be
  submitted annually to EPA, but rather
  only when  revised.  EPA agrees and
  has changed the regulation according-
   Several  commenters  recommended
 additions to the criteria forming  the
 basis for the State priority system, in-
 cluding  national priorities,  public
 health,  economic  hardship,  workers'
 health and safety, evidence of past or
 present discrimination in the use of
 grant  funds, and groundwater pollu-
 tion. We believe,  however, that the cri-
 teria selected are those  most relevant
 to achieve the  goals of the  Clean
 Water Act.
   The  Council   on  Environmental
 Quality recommended that water im-
 provement be reinstated as the  main
 goal of the priority system. We agree
 and have changed the regulation  ac-
   Enforceable requirements.  The en-
 forceable requirements of  the Act, as
 defined in this regulation, are limita-
 tions or conditions of a 402 or 404
 permit which, if  violated, could result
 in a civil or criminal action under sec-
 tion 309 of  the Act Where a permit
 has not .been issued, the term  includes
 any requirement that in the judgment
 of the Regional  Administrator would
 be included in the permit when issued.
 Where a permit is not applicable the
 term shall include any requirement
which the Regional Administrator de-
termines is necessary to meet  applica-
ble criteria tat  best practicable waste
treatment technology <(BPWTT).

    This definition covers municipal pol-
  lution of surface  water and ground-
  water. Permits  issued  under section
  402 of the Act incorporate surface dis-
  charge requirements imposed by sec-
  tions 301, 403, and 405. Section 301, in
  turn, requires BPWTT or  any more
  stringent  level  of  treatment deter-
  mined in the water  quality manage-
  ment  planning  process  (authorized
  under sections 208 and 303)  to be nec-
  essary  to meet  water quality stand-
  ards. It also requires any more strin-
  gent level of treatment found to be
  necessary to meet State laws or regula-
  tions  (under  authority  preserved by
  section 510).
   To receive construction grants,  mu-
  nicipal treatment works are required
  under section 201(g)(2)(A) of the Act
  to  provide  for  the application  of
  BPWTT.   Information published  by
  the Agency on BPWTT contains crite-
  ria  which  must be  met  by  grant
  funded projects involving land applica-
  tion techniques,  land  utilization prac-
  tices  and alternatives involving reuse
  and recycling. These criteria, designed
  to protect groundwater from pollution
  by municipal treatment  facilities, are
  analogous  to effluent limitations and
  conditions in permits designed to pro-
  tect surface waters.
   We received  several comments re-
  questing thajt the  definition  of  en-
  forceable  requirements  list   sections
  201, 208, 301, 309, 402, and 405 of the
 Act. Some comments  also suggested a
 reference to section  510. We have care-
 fully considered these comments but
 decided to retain the same definition
 used in the interim  regulation. As was
 discussed above, our definition encom-
 passes these other sections of the Act
 to the extent they are translated into
 specific  requirements to protect  and
 improve  ground  and  surface water
 quality.  To the extent they are not
 translated into  such - specif ic require-
 ments, grantees,  States, and  EPA
 would have difficulty determining if a
 project was necessary to meet them or
  A  few commenters  expressed con-
 cern that the definition of enforceable
 requirements adopted by EPA would
 exclude projects  involving reuse and
 recycling which were not  necessary to
 protect ground or  surface waters. The
 Agency believes   that  such  projects
 should be  excluded  tram the defini-
 tion.  Federal  assistance for  publicly
 owned treatment works under the Act
 is intended to correct  and reduce -Qie
 backlog of pollution problems.
  The Act and Agency policy strongly
 encourage  reuse and  recycling tech-
niques as a means to  meet pollutant
discharge requirements. Reuse and re-
cycling projects which  are needed to
meet the- enforceable requirements of
tfae Act should be  given higher prior-
ity. The lefniatfonx hare numerous
                                          V&U 0, HO. 1M  WCTMBPAY.
  provisions to encourage reuse and re-
  cycling, including changes between the
  interim and final versions of ttie cost
  effectiveness guidelines to allow addi-
  tional projects to  qualify for the 115
  percent cost preference (see section 7
  of appendix A).
    Priority  list  management  Priority
  list management procedures have been
  clarified in the  new regulations to
  assure that EPA, the States and  mu-
  nicipalities each know which projects
  will be funded with available monies
  during the current  year, and which
  projects  may  expect funding during
  subsequent years. In addition, the new
  procedures require documentation  and
  notification to interested  parties  of
  any changes to the funding plans. The
  fundable portion  of the priority  list
  has been defined to  include only pro-
  jects planned for funding with availa-
  ble funds during the first year of  the
  5-year  period.  Procedures  are estab-
  lished to allow a project on the funda-
  ble portion of the priority list to be by-
  passed when the State documents and
  notifies the grant  applicant  that it
  cannot be ready for award during the
  current year. Projects that are ranked
  highest on the planning portion of the
  priority list will replace the project
  which is not ready to proceed. In most
  cases,  the project bypass procedure is
  not  expected  to constitute  a signifi-
  cant Tevision to the priority  list, and
  additional public participation should
  not be required.
   An alternative to the bypass proce-
  dure  was  carefully  considered  but
  eventually rejected.  This  alternative
 would  allow a State to include on the
 fundable  portion  all projects  that
 could conceivably be  ready for award
 during  the  funding  year   without
 regard to the limits of available allot-
 ments.  Bypass  procedures would  be
 unnecessary, as all  potential projects
 would  be included  on  the  fundable
 portion of the list. This approach was
 rejected because it  would potentially
 allow high priority projects to go un-
 funded even though ready to proceed
 during  the funding year  in  favor  of
 lower priority projects. It also would
 create  a great  deal  of  uncertainty
 about which projects would be ap-
 proved  during  the funding year and
 which would not.
  There are other priority list  manage-
 ment procedures required by  the  new
 regulations, most based  on  existing
 policy and guidance.  The  regulations
 require some increase to the  project
 information included on the  priority
 list and an improvement to the public
 participation process.  Supplemental
 guidance wffl be issued  to  further
 define these requirements and provide
 the phasing necessary to avoid disrup-
tion of State operations.
  A few commenters  expressed con-
cern that t*ie bypass procedures cr«-

  27, MPB

                                           RULES AND REGULATIONS
ated undue administrative difficulties
for the States. We  believe,  however,
that without such procedures, the goal
of the priority list to insure that fund-
ing is first available to projects with
highest  priority,   could  easily   be
thwarted. One commenter stated that
the bypass provisions were too  vague
and could be abused. We believe that
they have been defined in sufficient
detail  for  a  regulation.  Additional
guidance could be issued if abuses de-
  One commenter stated that adding
and  deleting projects to an  approved
priority list is very difficult. We agree
that such changes  are  not easy. Sig-
nificant changes are likely to disrupt
plans for one or more  municipalities
and should be made only after careful
consideration  and   opportunity  for
public participation.
  Several     States     recommended
changes  to  the regulation to restrict
further the role of EPA in review of
the  priority list.  We  disagree  with
these  recommendations because  the
management role of  the Agency  has
already been reduced to the minimum
necessary to insure equitable  imple-
mentation of the Clean  Water Act and
related regulations.
  Five-year  priority  list. The interim
regulations for State priority list man-
agement require a 5-year priority list
to ensure  that projects are planned
and  managed in  accordance with  an
overall multiple-year operating strate-
gy. In preparing the priority list, con-
sideration must be given to the inven-
tory  of  all  needed  publicly  owned
treatment works within a State. The
most recent Needs  Survey should be
used for this purpose. Sufficient infor-
mation, including cost data, is readily
available  from this Survey allowing
the development of a long-term prior-
ity list without undue additional effort
on the part of the State.
  Several  commenters expressed con-
cern  that  excessive information  was
required  on the  priority  list.  EPA
agrees and has revised the regulations
so that requirements for the planning
portion of the list will  be detailed in
supplemental  guidance. The Agency
will require only the minimum amount
of information commensurate with the
requirements of program management
and  public participation. The remain-
ing  requirements  are  essential  to
insure orderly development of projects
which will utilize available funds  and
set-asides,  while  meeting  the  most
critical needs for water pollution con-
  A few commenters said that  infor-
mation required on the priority list is
not appropriate for public review. We
believe that the required information
provides the essentials  of  what is  re-
quired for the public, including an ad-
dress where more information may be
obtained on individual projects.
  Comments were also received recom-
mending separate priority lists for pro-
jects utilizing set-aside funds for small
communities and  for innovative and
alternative  technologies.  The Agency
has allowed and will continue to allow
a separate priority list for small com-
munities where desired by a State and
where  the splitting of funds between
the  list  for small  communities and
other  communities  is justified on a
sound  basis. Our  experience is that
such lists are difficult  to administer.
The complexity would be compounded
where  States could not  tell  with cer-
tainty  whether or  not a project might
qualify for a set-aside. The regulation
does allow  a higher priority  to  be
given  to  projects  qualifying for the
  Several commenters expressed con-
cern about  the relationship between
the needs survey and the priority list.
A few commenters said that  EPA
should not  expect  the  States  to pre-
pare the needs survey. We would em-
phasize that this was not our intent.
Our interest is in  having the priority
list prepared on the basis of  the needs
inventory, and to  cross  reference the
needs  inventory so that the Agency
and  the  States  can readily  ascertain
which  needs are planned to be met
and which are not. Other commenters
stated  that there  should be no rela-
tionship  between the needs  inventory
and  the  priority list. We disagree  be-
cause of  the critical role the needs  in-
ventory plays in the grants  program.
The needs inventory includes all exist-
ing and needed treatment works. This
inventory is used  for program plan-
ning, oversight, and evaluation. The
needs are, of course, also used by Con-
gress  as  a  basis  for allotting grant
funds among the States. When prepar-
ing  the  priority  list.  States  should
review the  needs  inventory  and give
highest priority to those facilities with
the most critical need. After  a new  fa-
cility is  funded, the needs  inventory
will be revised by EPA accordingly.
  Pipe-related projects. One  exception
to the stipulation  that all projects  on
the  priority list must  meet the  en-
forceable requirements is provided in
the Act.  This exception is for projects
involving major sewer  rehabilitation,
interceptor  sewers, collector  sewers,
and  correction  of  combined  sewer
overflows. States may, at-their option,
include on  the fundable portion  of
their list facilfties  in these categories
with a combined estimated EPA share
of as much as 25 percent of the availa-
ble allotment. Facilities in these cate-
gories  which would use funds beyond
the 25-percent level may be included
on the list only  where they are essen-
tial to meet the enforceable require-
ments  of the Act.
  Comments on the Agency's interpre-
tation of the 25-percent provision fell
into two  groups. One  group stated
that all projects must satisfy the test
of being necessary  to meet  the en-
forceable  requirements of  the  Act
whether or  not they fall  into the
sewer-related   categories.  EPA   dis-
agrees  with this interpretation be-
cause it necessarily results in vitiating
almost  all  meaning  from  the 25-per-
cent provision  of section  216. More-
over, it would  prevent some projects,
such  as those  necessary  to protect
public  health but not ground or sur-
face waters, from being retained on
the priority list.  Congress clearly did
not intend this  result.
  The other group of commenters on
the 25-percent provision stated  that
we have misconstrued the law by stat-
ing that the 25-percent was a ceiling
rather than a  floor for sewer-related
projects in the specified categories. We
would note, however, that the 25-per-
cent ceiling is  imposed In  our regula-
tions  only  for sewer-related  projects
which cannot be justified as necessary
to meet the enforceable requirements
of the  Act. No  limitation is placed
upon such projects when necessary to
meet the enforceable requirements of
the Act so  long as they are placed on
the priority list in conformance  with
the  State   priority  system  and are
found to be grant eligible.
  The  Agency  received several  com-
ments  interpreting the regulations to
imply that all  projects placed on the
priority list are automatically eligible
for funding. This is not the case. Pro-
jects should be placed on the priority
list only if they are expected to be eli-
gible. However, there may not be suffi-
cient  information available  to deter-
mine its eligibility at the time the pri-
ority  list  is prepared. Projects  later
found  to be ineligible should be re-
moved from the priority list. This re-
quirement applies to pipe-related pro-
jects placed on the priority list under
the 25-percent provision  as  well as
other types of projects. A project  must
ultimately  be  determined  cost-effec-
tive as well as eligible to receive a con-
struction grant.
  New set-asides on  priority list.  The
Act contains a number of new provi-
sions that require States to set  aside
funds for specific purposes. Included
in these set-asides is a reserve for al-
ternatives to conventional treatment
for communities with populations of
3,500 or less, or the sparsely populated
areas of larger  communities. Rural
States  must set aside 4  percent of
their   allotment  for  such  projects.
Other  States have the option of set-
ting aside no more than 4 percent of
their  allotments  for  this purpose. In
addition, 2  percent  of the allotment
for fiscal year 1979  and  fiscal  year
1980 and 3 percent  of the allotment
                           FEDERAL REGISTER, VOL. 43, NO.  188—WEDNESDAY, SEPTEMBER 27, 1978



  for fiscal year 1981 must be used only
  for grant increases for innovative and
  alternative treatment  processes.  At
  least one-half of 1 percent of the allot-
  ment (part of the  2 percent) must be
  used for grant increases for innovative
  technology during these years.
   Nothing  in  this regulation  is to
  affect existing administrative  policy
  for  the  establishment of a separate
  funding  strategy for small  communi-
  ties where a State chooses to set aside
  a reasonable  percentage of  its funds
  for the projects of  such small commu-
   Several  commenters  recommended
  that  a higher  priority  be allowed for
  innovative and alternative projects at
  the step 3 stage as well as the step 2
  stage, and also for  projects to pay 100
  percent of  the costs  of replacement
  when  an  innovative   or  alternative-
  project fails. EPA  agrees and has re-
  vised the  regulation accordingly. One
  commenter said that the higher prior-
  ity at the  step 2 stage for innovative
  and   alternative  projects  should  be
 mandatory. EPA disagrees since the
  1977 Act clearly leaves it optional.
  A few commenters  asked for a de-
 tailed definition in the regulation of
 what would qualify  as a sparsely popu-
 lated  area of a larger community. Any
 area  where treatment  works serving
 an individual  residence or cluster of
 residences are cost-effective will, in all
 likelihood, qualify as sparsely populat-
  Public participation. This  provision
 o'f the new regulation  has generated
 many comments. These comments are
 almost equally divided expressing both
 sides  of  the  issue.  Public   interest
 groups and private citizens largely
 desire  more and better  information
 and express an interest in sharing in
 the decisions which affect their  lives
 and the well-being of  their communi-
 ties, while comments from others cite
 the additional expense, time delay and
 relatively small anticipated benefits to
 the public that may be associated with
 these  new requirements! This issue is
 of concern to the Agency. These provi-
 sions are  being retained as in the in-
 terim  regulation, but  will be moni-
 tored to determine  if  they should be
 changed in the  future.  Regulatory
 changes related to State priority plan-
 ning and  management  are limited to
 the revision to § 35.915.


  Under the  new   section 201(g)(5).
 after September 30,  1978, grant recipi-
 ents are required to analyze innovative
 and  alternative  treatment processes
 and techniques for use in wastewater
 treatment  works. Section  201(i) re-
quires  the encouragement of processes
that  reduce energy needs.  Section
202(a)(2) provides for  Federal grants

  for 85 percent of  allowable construc-
  tion costs for  treatment works or sig-
  nificant portions of treatment works
  that utilize innovative and alternative
  treatment  processes  and techniques.
  Section 202
dure for applying for the 100-percent
modification  grant.  Such procedures
will be the subject of future program
guidance. Grant recipients will initiate
the procedures by giving written noti-
fication  of failure within the 2-year
period discussed above to the State
and  EPA.  Commenters  raised  some
Questions  concerning  the   ways  in
which such grants will be funded. The
priority system will be used with modi-
fication grants being made from gener-
al allotment  funds.  We are  changing
the regulations on priority lists previ-
ously published to allow consideration
of the need for 100-percent  modifica-
tion grants in the  determination  of
State priorities.
  A  second major  area  of  comment
concerned  the reserve to be used for
increasing  grants for  innovative and
alternative projects from 75 percent to
65  percent. Many  commenters were
critical  of the proposed Agency inter-
pretation of this reserve as  the maxi-
mum amount of allotted funds availa-
ble  for such grant  increases.  The
Agency received and studied thought-
ful analyses  of the issue  from the
State of California, the Council on En-
vironmental  Quality,  the League  of
Women Voters  of the United States
and  others.   Contrary to  the com-
menters, we firmly believe that a thor-
ough analysis of all pertinent provi-
sions of the 1977 Act and its legislative
history  leads to the conclusion  that
the reserve is the maximum to be used
to increase grants from  75  to 85 per-
cent  from funds  allotted  for  fiscal
years 1979 through  1981. This conclu-
sion is  bolstered by sound policy and
administrative considerations and  by
the  Agency's  understanding of  the
provisions  based upon extensive con-
tacts with congressional committees
during   the  months  of  preparation
leading to  enactment of  the 1977 Act.
  The   1977  Act   establishes  what
amounts to a special  program within
the  construction grants  program  to
fund innovative and alternative proc-
esses and  techniques. The  key provi-
sions are in sections 202(a) and 205(1).
They authorize 85-percent grants;  es-
tablish a special fund to increase the
grants from 75 to 85 percent; provide a
backup "insurance"  grant for failures;
and define the treatment works eligi-
ble for  the 85-percent grants. All of
these provisions must be read together
to understand congressional intent on
the question.  Legislative history, espe-
cially from the conference  committee
report,   further substantiates EPA's
  Some commenters argued that treat-
ment of the 205(1)  reserve as a maxi-
mum runs  counter to the promotion of
innovative and alternative  technol-
ogies, which  should be  EPA's policy.
Under  the 1977 Act, EPA  is Imple-
menting a variety  of provisions that

collectively  make the  encouragement
of innovative and alternative technol-
ogies a major thrust of the construc-
tion grants and related programs. Nev-
ertheless, EPA must conduct its activi-
ties within the confines of its legisla-
tive mandate.
  Akin to  the policy  argument, one
commenter  recommended that  EPA
treat the 205(1) reserve as a minimum
amount  available because that would
promote  the overall objective of the
Act—to maintain the physical, chemi-
cal and biological integrity of the Na-
tion's  waters. We believe that  treat-
ment of the  reserve as a maximum
amount  will actually do more to pro-
mote the overall objective. This is so
because  EPA's approach  allows more
communities to be given grants at the
75-percent  level  to deal with  their
water quality problems.
  A few pragmatic considerations were
also raised. Some commenters argued
that the 205(1) reserve is insufficient
to accommodate all innovative and  al-
ternative projects  and  that  States
need the financial incentive to encour-
age these projects. Most indications at
present  are that  a few  States may
have  more projects  than  can  be
funded from the reserve. Most, howev-
er, will find it difficult to use up the
reserve.  The time needed to  plan and
design projects will cut  significantly
into the 3-year authorization. It is in
part for  this reason the EPA is permit-
ting certain 1978 grants that qualify to
be supplemented by 10 percent from
the 1979 reserve. In addition,  there is a
major  incentive for States to use the
205(i)  funds rather than lose them to
reallotment. If a State does not use
the reserve while it is  available, it not
only loses  the unused funds,  but it
cannot share in the  overall reallot-
ment of  construction grant funds from
States that did not obligate them.
  Finally,  it  was  argued  with some
merit  that the  interpretation  as  a
maximum could cause delays because
communities that  cannot get  an 85-
percent  grant one year may wait until
the ensuing year to apply. This could
occur. Two things  militate against it.
Funds are only authorized for 3 years.
Most States will have ample funds the
first year, and  no  one can  delay
beyond  the third  year of authoriza-
tion. Additionally, delay might  cost a
community its position on the priority
list. If any  risk is apparent, a commu-
nity is not likely to delay.
  For  these reasons, EPA is retaining
its interpretation that the  205(1)  re-
serve  is  the maximum amount to be
spent  to increase grants from 75 to 85
percent  for innovative and alternative
  Several States and others  indicated
that the distribution of the  2-percent
reserve according to the chronological
approval of grants is too  inflexible.

EPA agrees. Other approaches recom-
mended, such as  use of  the  priority
system or establishment of criteria to
choose  the most desirable  projects,
also have serious drawbacks. Recogniz-
ing that States will want to handle the
matter  in  different ways,  EPA  has
made chronological approval a general
rule but gives States the option of es-
tablishing a different method in coop-
eration  wth the  EPA Regional Admin-
  Commenter  made  several proposals
for reallotment of any unused portion
of  the  2-percent  reserve.  Some sup-
ported  the proposed return of  such
funds to the general pool which  is di-
vided among States that have used all
their  general funds. Others  favored
the establishment of a special reserve
that would be reallotted to States that
have  used  up their  2-percent innova-
tive/alternative    set-aside.   Another
proposal was  that such surpluses be
used to help fund 100-percent modifi-
cation/replacement grants.
  Unused portions of the 2-percent re-
serve must be reallotted under section
205(b)(l) of the  Act  along with  all
reallotted funds. The EPA Administra-
tor has some leeway  in  determining
the manner of distribution of the real-
lotted funds.  Under current regula-
tions, reallotted funds are distributed
to  States that used  their prior  year's
full allotment. EPA will reallot the re-
serve in the same manner. It should be
noted that if a State loses  funds to
reallotment, whether these funds are
from reserves or  from general grant
funds, then the State cannot receive
funds from the overall reallotment.
  The establishment of special  funds
is constrained ~ by the reallotment pro-
visions  in  section 205(b)(l). Special
funds would have to be established in
each  State that  participates in any
reallotment. This would  require  an
extra set  of bureaucratic procedures
that would be too burdensome and un-
warranted  for the potential benefits.
  Some questions  have been raised re-
garding the extent of the 85-percent
grants—whether they will  cover the
costs of an entire treatment works or
just  that  portion of the  treatment
works deemed innovative or  alterna-
tive.  The  April  25 proposed  rules
adopted a  50-percent  cutoff  rule.
Under  that approach,  if the present
worth  of  innovative  or  alternative
parts of the treatment works exceeds
50 percent of the total present worth
cost of the non-sewer-related part of
the treatment works, then the  entire
treatment  works would be eligible for
the 85-percent grant. Otherwise, only
the innovative  or  alternative  parts
would  be  eligible.  Support for  this
scheme is based largely upon adminis-
trative  grounds.
  Many persuasive   comments  have
argued  for an incremental approach,
                           FEDERAL REGISTER, VOL 43, NO. 188—WEDNESDAY, SEPTEMBER 27, 1978


 under which only innovative or alter-
 native  portions  of  treatment  works
 would be eligible for 85-percent fund-
 ing. The costs of an entire treatment
 facility would be covered by such a
 grant  only  if the whole project  had
 been deemed innovative or alternative.
 The  relationship   between  present
 worth  of  innovative or  alternative
 parts and total present worth  would
 no longer be important in determining
 what portion of a project was eligible
 for the 85-percent grant.
   There are several grounds for  favor-
 ing  the  incremental  approach.  It
 would  be only slightly more difficult
 to administer  than would  the 50-per-
 cent cutoff  approach, which utilizes
 the incremental approach on projects
 below  the 50-percent  level. It would
 spread the 2-percent reserve to more
 innovative  and  alternative  projects
 and would use the reserve  only on in-
 novative and alternative processes  and
 techniques. It  would remove the pres-
 sure on consulting engineers to  make
 every project at least reach the 51-per-
 cent mark. It would provide incentives
 to engineers and grantees to use as
 much innovative and alternative tech-
 nology as possible. For these reasons,
 EPA is  adopting  the incremental  ap-
 proach under  which  only  innovative
 and  alternative unit  processes  and
 techniques   will  receive  85-percent
   Some  commenters  expressed  con-
 cerns related to criteria in section 6 of
 appendix E for identifying innovative
 technology.  These comments princi-
 pally were directed  at the cost and
 energy reduction criteria. Specifically,
 the  comments indicated that (1) cost
 and energy reduction were not among
 the  objectives envisioned by the Con-
 gress in authorizing specific innovative
 and alternative technology;  (2) the  ac-
 curacy of cost  and energy analyses in
 facility plans is not sufficient to allow
 a  meaningful comparison; and (3) the
 15-percent cost reduction and  20-per-
 cent  energy  reduction  criteria  are
 either too easy or  too  difficult  to
 achieve. A related comment suggested
 that using the most  cost-effective  al-
 ternative  as the basis for comparison
 in the case of energy reduction (para-
 graph 6.e.(2) of appendix E of the pro-
 posed regulations) may not result in
 actual energy savings if the cost-effec-
 tive  noninnovative alternative for a
 particular  project  happens to  be
 energy intensive.
  The Agency disagrees with the  com-
ment that cost and  energy reduction
are not  valid criteria  for innovative
technology as envisioned by the  Con-
gress. There are numerous references
to cost  and energy reduction in the
legislative  history  of  the  1977 Act
which indicate  reliance on these fac-
tors  for the evaluation of innovative
and alternative technology.

   Likewise, no change was made with
  respect to the percentage decrease in
  cost or energy necessary to qualify a
  project as innovative. The Agency be-
  lieves that  the proposed  criteria set
  forth substantial, yet achievable, goals
  with respect to cost and energy reduc-
  tion.  In recognition of some  of  the
  comments received, several changes
  were  incorporated into  the final regu-
  lations to insure that  the  cost  and
  energy benefits claimed as  the basis
  for designating a project as innovative
  are not just  "paper savings" but are
  savings actually realized by the grant-
  ee municipalities.
   These changes include: (1) authority
  for the  Regional  Administrator  to
  deny  a 10-percent  grant increase for
  step 3 projects where one  or more of
  the criteria upon which the innovative
  technology designation  was based are
 not verified by the plans and  specifica-
 tions   prepared   for    the   project
 (§35.930-5(b));  (2)  authority for  the
 Regional  Administrator to make an
 initial determination on whether a
 project is innovative after plans and
 specifications prepared for the project
 in step 2 are sufficiently completed to
 verify  conformance with the criteria
 for  innovative technology  (§35.930-
 5(b));  (3)  a requirement that facility
 plans  contain analyses  in  sufficient
 detail  to substantiate claimed cost or
 energy savings when these factors  are
 proposed as the basis for an innovative
 technology designation (§ 35.917-1 and
 paragraph 5.a of appendix A); and (4)
 comparison with the least net energy.
 noninnovative  alternative as the basis
 for determining whether a process or
 technique is innovative on the basis of
 energy savings (paragraph 6.e.(2) of
 appendix E).
  The   Agency is also  preparing  de-
 tailed  guidance which contains infor-
 mation on a wide range of presently
 used processes and techniques to assist
 in the  evaluation of innovative and al-
 ternative technology. Additionally, the
 Agency recently published  a detailed
 study  of the operational energy  re-
 quirements for municipal wastewater
 treatment plants. The Agency has ini-
 tiated  another more comprehensive
 energy study, which should be availa-
 ble next year.
  Paragraph 6.a. of appendix E indi-
 cates that the Regional Administrator
 may consult with EPA  Headquarters
 as to whether a particular process or
 technique  is innovative and as to de-
 terminations made in other EPA Re-
 gions about similar processes and tech-
 niques. As part of its implementation
 of these provisions, EPA is considering
 mechanisms to provide these capabili-
 ties to  the Regional Offices. One possi-
bility being actively  considered is for-
mation of a group or groups of techni-
cal experts to assist in determinations
of innovative technologies both  on a
  national level and on a regional basis.
  The contemplated composition of such
  groups would include qualified individ-
  uals from both Government and pri-
  vate industry. Also being considered is
  a  data management operation which
  would catalog basic technical informa-
  tion on the various innovative projects
  implemented across the country. The
  objective  of such an operation would
  be to establish and  give the EPA Re-
  gions access to the pertinent informa-
  tion on related projects  under consid-
  eration or approved elsewhere. More
  specific information on  these efforts
  will be forthcoming in the form of pro-
  gram directives issued by the construc-
  tion grants program.
   Paragraph  (b)(3) of §35.908 of  the
  proposed  regulations  indicated  that
 projects or portions of projects which
 received step  2, step  3  or step 2+3
 grant awards after December 27. 1977,
 may  receive  grant  increases  from
 funds allotted for fiscal year 1979 if
 they meet the criteria for innovative
 or alternative technologies  in  appen-
 dix E.  Comments  were received that
 the intent of the law to foster imple-
 mentation of innovative and alterna-
 tive technology by providing financial
 and other incentives was not  being
 achieved by allowing these  incentives
 to  be applied to projects which already
 have received step 2 or step 3 grants or
 have approved  facility plans. Plainly
 stated,  these comments indicated that
 additional  incentives in the context of
 those  provided by  the Clean  Water
 Act of 1977 were not necessary to im-
 plement the  technology because ap-
 proval and acceptance of the project
 had  already  been  obtained.  The
 Agency agrees with these comments
 insofar as they apply to innovative
 technology projects. Criteria for inno-
 vative processes and techniques are
 based  upon the concept of  advance-
 ment of technology in comparison to
 currently accepted systems. This com-
 parison implies  a baseline of technol-
 ogy against  which  improvements in
 systems will be measured. Treatment
 processes and techniques which have
 been selected  through the evaluation
 of alternatives in the facility planning
 process prior to initiation of the inno-
 vative/alternative technology program
 will be  considered the baseline of-ac-
 cepted technology against which can-
 didate innovative technology projects
should  be compared.  This  applies
equally to more recently developed
systems  already  incorporated  into
grant projects  by virtue  of the fact
that such systems have been success-
fully subjected to the scrutiny of the
construction grant process in order to
receive project approval. As previously
indicated,  the  Agency  is developing
guidance which will aid  in making
comparisons of  candidate innovative
                           FEDERAL REGISTER, VOL 43, NO. 1M—WEDNESDAY, SEPTEMBER 27, I97S

technology with accepted "baseline"
  We proposed criteria to identify in-
novative projects  on April 25, 1978.
They become effective  in final form
on October 1, 1978. Projects reviewed
and  approved between  December 27,
1977, and October 1, 1978. were not
evaluated on the basis of these crite-
ria. They were  approved under then
existing criteria and as  such were ap-
proved as accepted conventional or al-
ternative systems.
  For these reasons, the reference to
innovative technology  has been  de-
leted from § 35.908(b)(3). Eligible por-
tions of projects that received step 2,
step 3,  or step  2+3 grants after De-
cember  27, 1977, from funds allotted
or reallotted in fiscal year 1978, may
still receive grant increases from funds
allotted for fiscal year  1979 if they
meet the  criteria for alternative tech-
nology in appendix E. This extension
of grant increases to certain alterna-
tive technology projects is based upon
the fact that such projects provide for
the   reclamation   and   reuse   of
wastewater and wastewater  constitu-
ents or recover energy  in accordance-
with the principal objective of the in-
novative/alternative technology provi-
sions of the Clean Water Act. Further-
more, designations of these projects as
alternative technology projects do not
in any  way depend upon a  baseline
comparison with other  technology as
is the case with innovative technology.
Also,  allowance   of   supplemental
grants for alternative projects avoids
possible  delays in  applications  for
grants and helps States use their re-
serves for the  10-percent  grant in-
crease in fiscal year 1979.
  The end result of the Agency's posi-
tion is  fairly simple. We will begin
making 85-percent grants for Innova-
tive projects after  September 30, 1978,
with  fiscal year 1979 funds.  Projects
utilizing alternative technology that
received 75-percent  grants after De-
cember 27, 1977, from  funds allotted
or reallotted for fiscal year 1978, may
receive  a  10-percent  grant  increase
from fiscal year 1979 funds.
  A  number  of comments  were re-
ceived as to whether a particular tech-
nology or piece of equipment is Inno-
vative. Similar inquiries asked whether
EPA  would certify specific processes
and  techniques as innovative. Other
related  questions asked how  many
times a technology  could be  funded
through the construction grants pro-
gram before it ceased to be innovative.
  In considering the response to these
questions, it is important to note that
the Agency has  not in the past adopt-
ed  uniform   standards  or  specified
processes  and designs to be  used  In
grant  projects. Project  approval  is
made on a case-by-case basis In accord-
ance with broad evaluation criteria de-

veloped for the program.  In keeping
with this overall  program structure,
the Agency will not designate or certi-
fy that a specific process or technique
is innovative. The designation of inno-
vative technology will be applied on a
project-by-project basis. Thus, individ-
ual projects may be determined to be
innovative on the basis of their conf or-
mance with the criteria set forth in
section 6 of appendix E.
  As stated in paragraph 6.a. of appen-
dix  E, the  Regional  Administrator
may consider  local variations in geo-
graphic or climatic  conditions which
affect treatment plant design or oper-
ation in making a determination on in-
novative technology projects. Thus a
particular process or technique may be
considered innovative technology in
one project but not another. Similarly,
it is possible that a novel combination
of processes and techniques, which in-
dividually may not be considered inno-
vative, could qualify a project as inno-
vative  if it can be demonstrated that
the project contributes to the advance-
ment  of  technology  and otherwise
achieves the basic objectives of the in-
novative and  alternative  technology
provisions of the Act.
  In accordance with the above discus-
sion, it is not possible to specify how
many projects of a  certain type may
be approved before  a particular tech-
nology is no longer considered innova-
tive. Furthermore, because the innova-
tive/alternative  technology program
authorized by the  Clean  Water  Act
presently extends  only for 3 years,  it
will often not  be possible to verify the
performance  of  certain   innovative
processes  and  techniques  through
actual operation  during   this 3-year
period. For these reasons,  as stated in
paragraph 6.d. of appendix E, it is pos-
sible to fund a  number  of  projects
using  the  same type  of  innovative
technology where  the potential bene-
fits  are  great in  comparison to  the
  We also  received comments on the
relationship of patents and bid specifi-
cations to innovative technology. Spe-
cifically, these commenters were con-
cerned that patent and bid specifica-
tion requirements may restrict the im-
plementation  of innovative  technol-
  The  patent  requirements applicable
to construction grant projects are con-
tained in 40 CFR Part 30. The Agency
is  presently  reviewing these  regula-
tions to determine their impact on in-
novative technology projects. If, as a
result of this  evaluation, modification
of part  30 appears to be advisable,
such modification  will  be  proposed
separately  at a later date. Otherwise,
the matter of patents with respect to
innovative technology will be clarified
by Agency guidance to insure that no

unnecessary impediments are created
due to uncertainty in this area.
  Section 204(a)(6) of the Act states in
part, that no bid specification for con-
struction grant projects  shall be writ-
ten in such a manner as to contain
proprietary, exclusionary or discrimi-
natory requirements unless such re-
quirements  are necessary to test or
demonstrate a specific process or tech-
nique. Accordingly, it is possible that
restrictive  bid specifications  may be
written for innovative technology pro-
jects  when sufficient justification  is
provided  to  substantiate  that such
specifications  are necessary to test or
demonstrate a specific process. We are
revising  §§35.908,  35.936-13  and pro-
gram requirements memorandum 75-5,
which implements this section of the
Act, to clarify this point.
  These new program provisions neces-
sitated a minor revision to clause 2 (re-
sponsibility of the engineer) of appen-
dix C-l. We have changed the refer-
ence  from "advanced"  technology in
§ 35.908 to "innovative" technology.
  Regulatory changes relating to inno-
vative or alternative technologies are
made in §§ 35.908. 35.917-l(d), 35.930-
5, 35.935-20,  35-936-13, appendix A,
section 7, appendix C-l, clause  2,  and
appendix E.


  Section 14 of the 1977 Act authorizes
grants for privately-owned treatment
works serving one or more principal
residences  or  small commercial estab-
lishments constructed prior to and in-
habited  on or  before  December 27,
1977. These systems are intended to
abate an existing water pollution .or
public health problem. A public body
(municipality) must apply on behalf of
a  number  of such  units and certify
that public ownership of such works is
not feasible. The public body must cer-
tify that the treatment  works will be
properly  maintained  and operated.
User charges  are required for cost of
operation and maintenance. Commer-
cial users must  pay back the Federal
share of the cost of construction with
no moratorium during the industrial
cost recovery study, and  the  25,000
gallons  per day exemption  does  not
apply. (See  discussion  of industrial
cost recovery below.) We have decided
that nonprofit  and nongovernmental
institutional     entities,    such   as
churches, schools, hospitals, and chari-
table organizations,  for purposes of
this special authority generally should
be treated the same as small commer-
cial  establishments.  The  alternative
selected must be cost-effective.
  This section is intended  to be  uti-
lized to construct alternative or uncon-
ventional treatment works for individ-
ual  residences  or  clusters  of resi-
dences.  Alternatives  include,  but are
not limited to, septic tanks and subsur-
                           HOERAL REGISTER, VOL 43, NO. 1M—WEDNESDAY, SEPTEMBER 27, 1978


 face  disposal systems, other  on-site
 systems including dual systems, small
 systems serving clusters of households
 or commercial users, and pressure and
 vacuum sewers. Alternative sy terns can
 be innovative. Though small publicly-
 owned systems for one or more homes
 or  small  commercial  establishments
 are not covered  under $35.918,  they
 are covered under regulations govern-
 ing grants  for publicly-owned  treat-
 ment works and are grant eligible. Ad-
 ditional guidance will be issued on the
 conditions under which small publicly-
 owned systems may be funded. As al-
 ternative systems, these individual sys-
 tems are eligible for the 4 percent set
 aside.  Both  publicly-owned  and pri-
 vately-owned individual systems, as al-
 ternatives to conventional technology,
 are eligible  for an additional 10 per-
 cent of the eligible costs for those pro-
 jects where  funds are  available from
 the set-aside for innovative and alter-
 native technology. However, privately-
 owned individual systems are not eligi-
 ble for the 115 percent  cost preference
 for alternative and innovative process-
 es and techniques in the cost-effective-
 ness analysis.
   Acquisition of  land  for individual
 systems is not grant eligible because
 there Is no indication in the law or leg-
 islative history that Congress intended
 the limited funds available to be ex-
 pended for what clearly would be a
 windfall to private landowners. Con-
 struction of  individual systems may
 supplement other types of wastewater
 treatment works, conventional and un-
 conventional, in  the same  planning
 area as determined to be cost-effective.
   A major issue arising in the course
 of preparing the  interim  regulations
 was to what  extent monitoring should
 be required  to  ensure ground-water
 supplies have not been contaminated
 by Individual systems built with con-
 struction grants.  Because  individual
 systems will  often be widely scattered
 and in remote areas, monitoring diffi-
 culties and costs could be of large mag-
 nitude. The periodic sampling of pota-
 ble water wells, selected to represent
 the planning  area, is deemed to be  a
 minimum requirement.  Careful analy-
 sis of  the source  of contamination is
 essential since inadequate well con-
 struction  can be  the primary cause.
 Large concentrations of individual sys-
 tems which have soil absorption beds
 will  require  additional   monitoring
 from existing or test wells, depending
 on the geology of the area and the lo-
 cation of those aquifers which are, or
 are likely to  become, drinking  water
  The  monitoring  program should be
planned as part of the facility plan.
 Criteria for   best  practicable  waste
treatment  technology,  published by
EPA under section 304(d)<2) of  the
Act, shall be met for all  individual sys-

 terns.  These  discharges  shall  also
 comply with State and local require-
 ments for control  and abatement of
 groundwater pollution.
   Other Important  Issues which arose
   1. Are full construction costs, Includ-
 ing major rehabilitation, upgrading,
 installing  and enlarging, grant eligi-
   Yes. These  functions  may  meet
 water pollution  control needs in  the
 most economical and effective manner
 provided the work is properly done
 and adequate  operation and mainte-
 nance procedures are arranged.
   2. Should this special  authority be
 used to construct septic tanks serving
 single residences when legislative his-
 tory  contains an indication that this
 ordinarily should not be done?
   Several statements in the legislative
 history of the  1977 Act  lead to the
 conclusion that septic tanks, with var-
 ious  further  treatment and disposal
 features, are to be considered as indi-
 vidual systems. The optional solution,
 not to make them grant eligible, would
 be to  eliminate from Federal funding
 one of the most frequently used and
 successful   devices.  "Septic  tanks"
 rarely fail. It is the soil absorption
 field  which fails  if not  properly  de-
 signed, constructed,  maintained,  and
  Responses to  comments  received
 after issuance  of the interim regula-
 tions continue below.
  Several comments were received that
 nonprofit and nongovernmental insti-
 tutional entities, such  as churches,
 schools, hospitals, and charitable orga-
 nizations,  with  flows  of  less  than
 25,000  gallons  per  day  should  be
 exempt from paying back the Federal
 share of the cost of construction. The
 1977  Act  authorizes  grants  to  con-
 struct    privately-owned    treatment
 works  only  to  serve principal  resi-
 dences   and  commercial  establish-
 ments. Nonprofit and nongovernmen-
 tal institutions are normally not resi-
 dences and therefore must  fall into
 the "commercial" category or be con-
 sidered ineligible for grants to build
 privately-owned   treatement   works.
 The 1977 Act requires recoupment of
 the capital costs of construction from
 "commercial"  users  and  specifically
 states that such users are not exempt
 from the moratorium during the cost
 recovery study. Some comments were
 of the opinion that  it would be diffi-
 cult to administer this requirement for
 very small  facilities in very small com-
 munities. EPA  believes that the one
 user equivalent (generally  300  gallons
per day) exemption  will ease the ad-
ministrative burden by exempting the
very small  entities from cost recovery.
The industrial cost recovery study now
underway as required by the 1977 Act
will analyze the overall impacts of cost
  recovery from commercial users which
  receive grants to construct  privately-
  owned systems.
   Comments were received on the de-
  sirability of a separate priority list for
  projects eligible for the 4 percent set-
  aside.  The comments  are  addressed
  earlier  in  this preamble under State
   Several  comments pointed out the
  impossibility of forming Individual sys-
  tems  management  districts   where
~  State laws do not exist to permit such
  public bodies'. One commenter asked if
  the costs of evaluation and changes in
  State codes were grant eligible. Appro-
  priate legislation has already been en-
  acted by some States without the  as-
  sistance of  grant  funds. Generally,
  legal fees  for such purposes are not
  eligible  under the 201 grant; however,
 some costs of such  evaluation may be
 eligible  for grants under sections 106,
 205(g), or  208 of the Act. Where such
 organizations  are   legally  possible,
 doubt was expressed as to  the avail-
 ability of manpower with expertise to
 handle such districts. The regulations
 state that the public body is responsi-
 ble for  operation and maintenance of
 individual  systems  and  the establish-
 ment of a comprehensive program for
 regulation  and inspection of the sys-
 tems. The  work can be performed  by
 contract, by commercial firm on an on-
 call basis, or by means other than mu-
 nicipal forces if desired.
   One comment stated individual sys-
 tems should be handled as a generic
 class for step 1  and specifically  de-
 signed in step 2 because the  planning
 effort required is very demanding com-
 pared  with  the  population served.
 However,   individual  systems  vary
 widely in design,  operation, and cost,
 and really  cannot be treated as one
 similar generic group. During the fa-
 cilities planning stage, various types of
 individual systems should be evaluated
 for  suitability  of  operation in the
 physical setting (soils, slope, etc.) and
 for reliability in meeting the  needs  of
 future users; a cost-effectiveness anal-
 ysis  should be  completed  for  each
 system under consideration. The infor-
 mation from these and other  required
 analyses will range greatly and should
 be evaluated carefully in the planning
 stage   before   determining   which
 system should be designed  and con-
  Many  comments were  received ob-
jecting to the requirement for unlimit-
 ed access to each individual system at
 all times for such purposes as inspec-
 tion, monitoring, construction, mainte-
nance, etc. The  regulation has been
modified to read "access ... at all rea-
sonable times."
  Comments were received Indicating a
fear of costly and restrictive monitor-
ing of groundwater  programs. Other
comments   recommended  Increased
                           FEDERAL REGISTER, VOL 43, NO. 188—WEDNESDAY, SEPTEMBER 27, 1978

monitoring requirements. Still others
concurred with  the requirements  as
written. EPA has  worded the regula-
tions to allow considerable  flexibility
in monitoring so that local conditions
can dictate the extent of the require-
ment within limits designed to ensure
that minimum monitoring to protect
the  health  of  the community  is  re-
  Concern  was  expressed  that best
practicable  waste treatment criteria
were not defined. These criteria are
defined in chapter II  of "Alternative
Waste Management  Techniques  for
Best Practicable  Waste  Treatment,"
EPA-430/9-75-013, MCD-13, under al-
ternatives employing land application
techniques.                 .
  EPA received recommendations that
nonprofit organizations be deemed  eli-
gible for grants and for management
of  on-site systems. The  Act  allows
award  of  grants only  to  "public
bodies."  Nonprofit organizations with
the  capability and authority to plan,
design, construct, and operate treat-
ment works for public purposes would
be eligible to function in that capacity
under agreement with the public body.
If the nonprofit organization is consti-
tuted a public body under State law, it
could qualify for consideration for  a
grant (e.g.,  a  citizen's  association
which is  officially  constituted as  a
sewer district).
  One  comment  asked what  is  a
 "number of individual units," is there
 a maximum number  of   individual
 units, and if there is a dollar  ceiling
 for  individual systems. There is no ab-
 solute dollar ceiling for  individual sys-
 tems; the  law  specifically  states  a
 minimum  of "one or more principal
 residences or small commercial estab-
 lishments." The maximum number of
 units would be established through se-
 lection of the appropriate alternative
 of unconventional technology for indi-
 vidual residences or  clusters  of resi-
 dences. Under the definition elsewhere
 in the regulation (§35.915-l(e»,  this
 technology would be  applied  in com-
 munities of 3,500  population or less, or
 highly  dispersed  sections  of larger
   One comment referred to the state-
 ment that all individual systems quali-
 fy as alternative systems, yet the cost-
 effectiveness guidelines provision for
 the 115 percent cost preference for in-
 novative and alternative systems does
 not apply to individual systems.  The
 law specifically states privately owned
 individual systems must cost less than
 the cost of providing a system of col-
 lection and central treatment.
   Other comments recommended more
 coordination between  EPA and  the
 Fanners'    Home    Administration
 (FmHA).  Such coordination has al-
 ready been initiated; PmHA's final de-
 cision on projects is often made pend-

ing EPA approval of a grant. In addi-
tion,  coordination  between  the two
agencies in areas such as joint applica-
tions, standardization of definitions of
high-cost  projects,  and other stream-
lining of administrative procedures is
proceeding under the aegis of a White
House working group on rural  water
and sewer problems. This coordination
also will be extended to other Federal
agencies through this group.
  One comment  recommended exten-
sion of grant eligibility to bathroom
fixtures and plumbing  utilizing flow
reduction  technology.  Congressional
intent expressed  in the legislative his-
tory is quite clear  that commodes or
associated plumbing are not eligible
for grant funding. If eligible, adminis-
trative  difficulties and  costs would be
very large.
  EPA encourages the use of the facili-
ty  plan to  evaluate every feasible al-
ternative for solution of the water pol-
lution problem whether or not such a
solution involves grant ineligible facili-
ties or methods. Assistance  in  grants
packaging,  construction  supervision,
planning and initial training for oper-
ations and  maintenance are all gener-
ally grant eligible.
  There  were   several  requests  to
define  terms and concepts more spe-
cifically. This will be done in separate
guidance to be issued at an early date.
  Regulatory changes relating to indi-
vidual  systems are found  in §§ 35.905-
23,  35.917-Kb),  35.917-2(a),   35.918.
35.918-1, 35.918-2, and 35.918-3.


  Background. On February 4. 1977,
EPA published in  the  FEDERAL REGIS-
TER proposed guidelines to amend and
 supplement  the   Cost-Effectiveness
 Analysis Guidelines (Appendix A to 40
 CFR, Part 35, Subpart E). That pro-
 posed revision was intended to provide
 for cost-effective  sizes of and suffi-
 cient reserve capacity  for wastewater
 treatment  works  and, at  the same
 time, to avoid overdesign.  Coverage in-
 cluded guidance and alternative proce-
 dures for forecasting growth of popu-
 lation,   for  estimating  wastewater
 flows,  for determining cost-effective
 construction staging periods,  and for
 providing extra  capacity  beyond that
 determined to be cost-effective.
   Most of the commenters on the pro-
 posed revisions, while agreeing in prin-
 ciple with the proposal,  raised ques-
 tions or suggested modifications that
 convinced  the Agency  several  changes
 were warranted. Also,  additional guid-
 ance was required to  implement  sec-
 tion 16  (Cost-Effectiveness) and  sec-
 tion 21 (Reserve Capacity) of the 1977
 Clean Water Act.  Accordingly,  the
 EPA  revised the Cost-Effectiveness
 Analysis  Guidelines  to  incorporate
 these  changes, and on April 25, 1978.

published them as part of a set of in-
terim regulations to  implement  the
Clean Water Act. These interim guide-
lines were effective as of June 28.1978.
Commenters on the interim guidelines
suggested revisions that convinced the
Agency  to  make   some additional
  Innovative and alternative  technol-
ogies. Section 16 of the 1977 Act en-
courages the use of innovative and al-
ternative  wastewater treatment tech-
nologies by extending grant eligibility
to such projects if the life cycle  cost
does not exceed that  of the most cost-
effective alternative by more  than 15
percent. The  Agency's interim  guide-
lines called for  using option 3 of the
following options for calculating the
cost-effectiveness preference:
  1. Use  the life  cycle  cost  of  the
entire  proposed  waste  treatment
system as a base for calculating the
cost difference;
  2. Apply the 15 percent increase to
innovative and alternative components
(and other differing portions) as com-
pared with corresponding portions of
the least  costly noninnovative alterna-
tive; or
  Use, as a base, the entire proposed
waste treatment system where  the
system primarily (more  than 50  per-
cent of its cost) involves  innovative or
alternative technologies.  Should inno-
vative or alternative  components com-
prise 50 percent or less of the system
cost, the calculation base would be
that for option 2.
  Some commenters  have expressed a
preference for  option 2. The Agency
does not concur  because  option 2
would be difficult to administer and
would also restrict unnecessarily the
 number of projects qualifying for the
 15 percent preference. The Agency has
 rewritten option 3 to state that all pro-
 jects with alternative and innovative
 components will qualify for the prefer-
 ence, except  for those in which alter-
 native or innovative  unit processes re-
 place  conventional   processes  in a
 treatment plant and account for less
 than 50 percent of the cost. This lan-
 guage represents a slight liberalization
 of option 3,  allowing some additional
 projects  to qualify for the cost prefer-
 ence. This revision  also clarifies and
 simplifies the old language.
   Other commenters noted that collec-
 tion systems  common to  both the con-
 ventional option and alternative  tech-
 nology system should not be included
 in the calculation base. The Agency
 agrees and has modified the guidelines
   Another commenter noted that the
 15,percent  cost-effectiveness  prefer-
 ence must be mandatory rather than
 permissive.  Both  the law and these
 regulations mandate a 15 percent mon-
 etary cost-effectiveness preference lor
 all innovative  or  alternative projects
                            FEDERAL REGISTER, VOL 43. HO. 188-WEDNESDAY. SEPTEMBER 27, 1978


  or components thereof that meet the
  Agency's criterion for such  projects.
  However, this does not mean that the
  grantee must adopt an option featur-
  ing innovative or alternative technol-
  ogies  wherever their monetary costs
  are less than the 15 percent ceiling be-
  cause nonmonetary  factors must be
  taken into account as well.
    Discount rate. The Agency consid-
  ered raising the discount rate for eval-
  uating proposed wastewater treatment
  works from  that used by  the Agency
  (currently 6H  percent) to 10 percent.
  The former rate is used by the Water
  Resources Council (WHO to evaluate
  the costs  and benefits  of water  re-
  sources projects. EPA, as a  member
  agency, adopted this rate in 1973 when
  it  published  the  Cost-Effectiveness
  Analysis  Guidelines  (appendix  A of
  Construction Grant Regulations),  al-
  though the  construction grants pro-
  gram  is  not covered by the  WRC
  "principles and standards" for evaluat-
  ing water resource projects. The latter
  rate (10 percent) is cited  in Office of
  Management and  Budget (OMB) cir-
  cular A-94 for use in agency programs
  not covered by the  WRC "principles
 and standards."
   The 10-percent rate is believed to ap-
 proximate the opportunity cost of cap-
 ital. The "Opportunity Cost of Capital
 Concept" has the most theoretical eco-
 nomic  justification for cost-effective-
 ness analysis. This concept  suggests
 the proper discount rate to use  for
 public  investment  projects should  be
 based on the  rate of return to private
 sector  investment  (before  taxes and
 adjusted for inflation). This is because
 resources  used  for public investment
 have alternative uses in the produc-
 tion of private commodities which so-
 ciety foregoes  for  the sake  of the
 public investment.
  Use of the  10-percent discount rate
 would help produce a  more economi-
 cally efficient distribution of construc-
 tion grant funds. The expected result
 is  that the  optimal  (cost-effective)
 staging period (the number of years
 for  which  the treatment plant is de-
 signed  to  handle  a  community's
 growth  in  terms  of  sewerage  dis-
 charge) will decrease from about 10-20
 years  to  about 9-16  years.  These
 shorter staging periods will result  in
 slightly smaller treatment works and
 in smaller initial  treatment expendi-
 tures for  each  proposed  treatment
 system. This  should  permit a some-
 what greater number of treatment sys-
 tems to be funded.
  Despite  these considerations,  the
 Agency has decided against raising the
 discount rate  to  10  percent.  The
higher discount rate  would have  the
effect of  lowering  the total  present
worth cost of facilities with high oper-
ation and maintenance costs in com-
parison with the total present worth

  cost of capital intensive faculties with
  low operation and maintenance costs
  such as land treatment and energy re-
  covery facilities.  This  could largely
  offset the 15-percent cost-effectiveness
  preference given  to such  measures
  under the  1977 Act  and these guide-
  lines. It would also run counter to the
  President's recent decision  to retain
  the existing discount rate for water re-
  sources projects.
   Many commenters representing  a
  wide  variety of interests opposed in-
  creasing the discount rate (only one
  favored such action) primarily because
  such  actions would tend to  disadvan-
  tage capital intensive land treatment
  and energy recovery alternatives and
  would favor  operation  and mainte-
  nance cost intensive options.
   The Agency  has decided  to  retain
  the WRC discount rate (currently 6%
  percent) because this  rate is consistent
  with  the  President's water  resources
  policy and the net programmatic ad-
  vantages, if any, of increasing the rate
  are not of overriding importance.
   Cost escalation. Several commenters
  advocated  use of a salvage value for
 land  higher   than  the   prevailing
 market price as required in the inter-
 im guidelines because of the very high
 rate of land value appreciation. The
 Agency has analyzed farmland value
 appreciation since  1960 and since 1970
 and has compared these rates  with
 cost escalation rates for  construction,
 energy and labor. The analysis showed
 that land values over both the 17-year
 and  7-year periods  have  escalated
 roughly 3 percent faster than costs as-
 sociated with construction   or  oper-
 ation and maintenance of a treatment
 works.  On  this  basis,  the final guide-
 lines will require, in the calculation of
 land salvage value,  a land appreciation
 rate of 3 percent compounded annual-
 ly,  unless  the  grantee  justifies a
 higher or lower percentage based upon
 historical  differences  between  local
 land cost escalation and  construction
 cost escalation.  This allowance repre-
 sents the estimated difference in rates
 between land  cost  appreciation  and
 the cost escalation of goods  and ser-
 vices related to construction.
  Several commenters suggested esca-
 lation  of energy, chemical, and labor
 costs in the cost-effectiveness analysis
 to account for anticipated  high  in-
 creases in  these costs. It should be
 noted that the cost effectiveness anal-
 ysis procedures call for use of constant
 dollars  based on  prevailing market
 prices at the time of the analysis and a
 low discount rate which  is less  than
 the inflation-free rate based on the op-
portunity cost of capital concept. This
 approach,  rather than  implying  no
future  inflation, simply assumes that
the costs of all  resources involved in
treatment works construction and op-
eration will increase at about the same
  rate on a long-term basis. The results
  of   the   cost-effectiveness   analysis
  would  be distorted, however, if  the
  prices  of  certain  resource  inputs
  changed  significantly  over  the plan-
  ning period in relation to the prices of
  other resources. The Agency has ana-
  lyzed historic  data on wastewater fa-
  cility construction price indexes and
  on  prices of  .various  operation and
  maintenance   components,  including
  labor, electricity, chemicals,  coal, .pe-
  troleum distillates, and  natural gas.
  We also reviewed projections of future
  energy  use prepared  by the  Depart-
  ment of Energy, Only the historic and
  projected  Increase  in natural  gas
  prices  were  found  to  significantly
  exceed  (by nearly 4 percent) those for
  construction and the average of other
  operation and  maintenance elements.
  Thus,  the  Agency has  revised  the
  guidelines to require escalation of rela-
  tive  natural gas prices over the plan-
  ning  period at a compound rate of 4
  percent.annually, unless the grantee
  justifies a higher or lower percentage
  based upon regional  differentials be-
  tween historical natural gas price esca-
 lation and  construction  cost escala-
   Reserve capacity. The Clean Water
 Act requires the Agency, in determin-
 ing the  amount of reserve capacity eli-
 gible for a grant, to take into account
 the projected population presented in
 a facility  plan.  The population must
 be based  on the latest  information
 available from the U.S. Department of
 Commerce or from the States as EPA
 determines appropriate. The  interim
 guidelines called for population fore-
 casts in  facility  plans to be based upon
 disaggregation  of  State  population
 totals already  developed by the De-
 partment of Commerce. Several com-
 menters,  principally  208  planning
 agencies, oppose this  approach and
 contend that population forecasting 4s
 a policy  matter  that should best be ad-
 dressed  by local  governmental units.
 Others,   principally   environmental
 groups and individuals,  favor the dis-
 aggregation approach as a means of
 preventing excessive capacity  and re-
 sultant secondary impacts.
  The Agency believes the disaggrega-
 tion approach should be retained be-
 cause, to avoid providing excessive re-
 serve capacity, forecasts of population
 and economic activities for individual
 small areas such as facility planning
 areas or designated 208 areas should
 be  reasonably  consistent  with State
 and national  projections.  This ap-
 proach is consonant with  the Presi-
 dent's urban policy intended to revital-
 ize cities and discourage urban sprawl.
The  guidelines   permit  inclusion  of
extra capacity in a treatment works at
the expense ef the grantee to accom-
modate local growth policies. The final
guidelines allow reasonable departures
                           FEDERAL REGISTER. VOL 43, NO. 188-WEDNESDAY, SEPTEMBER 27, 1978

from  the Department  of  Commerce
State projections and their disaggrega-
tions  to designated 208 areawide plan-
ning areas, where the State or desig-
nated 208 agency has already prepared
projections.  The  final  guidelines
permit  use of State  projections al-
ready prepared by the State  if the
year  2000  State  projection does not
exceed  that of  the  Department  of
Commerce projection by more than 5
percent. The  Administrator may ap-
prove State  population  projections
that  exceed the Department of Com-
merce projections by more  than 5 per-
cent if justified by the State. Where a
designated 208 agency has already pre-
pared a population projection  for  its
area, it may be used  if the year 2000
population does not exceed that of the
disaggregation, based  on the Depart-
ment of  Commerce  projection,  by
more than 10 percent.
  One State suggested allowing a State
prepared  population   forecast   to
exceed the Bureau of Economic Analy-
sis forecast by 10 percent without jus-
tification. The Agency does not concur
because the present  5-percent depar-
ture, is substantial.  Also,  since  the
State may increase its total after the
208 agencies have received their var-
iances up to 10 percent, the total final
State departure  from  the Bureau of
Economic  Analysis projection may al-
ready approach  10  percent or  even
more in some cases.  Another State
commented that  States already having
 policies of disaggregating State totals
 among counties,  even within designat-
 ed 208 areas, should be allowed to con-
 tinue to do so. The Agency agrees and
 has  included  such a provision in the
 final guidelines.
   One  commenter has suggested that
 population projections in 201 and 208
 plans should no longer be wedded to
 existing zoning ordinances, which may
 be exclusionary  and  forbid immigra-
 tion by lower income  people.  Instead
 he  suggested  that future population
 and  the resulting reserve capacity for
 grant funded projects should  rely on
 regional population projections and. in
 particular, regional allocations of low-
 and moderate-income apartment units.
 The Agency cannot fully comply with
 this suggestion because it believes that
 zoning and land-use  decisions should
 be  left primarily  with local  govern-
 mental units, and decisions on cost-ef-
 fectiveness should be based  on total
 and not partial population projections
 in an area. However, these regulations
 require the  local population projec-
 tions for 201 plans to fall within ceil-
 ings based on disaggregation of State
 and regional population totals.
   Several  commenters   advocate  a
 much  more  flexible  population fore-
 casting approach by permitting use of
 population projections other than the
 Bureau  of  Economic  Analysis. The

Agency does not concur because use of
various projections would be inequita-
ble and would lead in many instances
to funding excessive reserve  capacity
to accommodate growth.
  One commenter stated that the pop-
ulation disaggregation approach is too
simplistic for interstate  metropolitan
areas where factors influencing popu-
lation change go beyond State bound-
aries. The Agency concedes that  such
situations may pose difficult  forecast-
ing and disaggregation problems.  Nev-
ertheless, the Agency believes the  in-
terstate  disaggregation problems can
be worked out through  consultations
among the concerned States,  designat-
ed 208 agencies and  other  regional
planning agencies.
  Some commenters pointed out the
need for public involvement  un the
review of the State  population disag-
gregations.  The Agency  agrees  that
the public should have an opportunity
to review and comment  on the disag-
gregation before Agency review. Ac-
cordingly, the final guidelines now re-
quire the State to hold a public meet-
ing on its disaggregations  before sub-
mitting them for Agency review.
   The Agency believes that  the  same
population projections should be used
for both air  and water quality  plan-
ning. Appendix A now requires,  as an
initial step toward implementing this
objective, that States, when disaggre-
gating total State population,  consult
with organizations of local officials re-
sponsible for water quality and  air
quality  planning. In  many  instances
the organizations certified by Gover-
nors pursuant to section 174(a) of  the
Clean Air Act to do air quality  plan-
ning are also 208 agencies.
   Some commenters have objected to
 the per capita flow limitations of 60-80
 gallons per capita per day (the second
 method  of  estimating  wastewater
 flows) as being unrealisticaUy low. The
 Agency believes that such dry weather
 base flow allowances are adequate for
 smaller communities where  flow data
 are lacking. These allowances  exclude
 infiltration  and  inflow.  Residential
 wastewater  flows nationwide  average
 only  45  gallons per  capita per day.
 Other commenters  favor increasing
 future  per capita  flows over  time.
 They  contend  that  increasing  per
 capita  flows  have  been  observed
 during the past 10 years and that with
 increasing  affluence  this  trend  will
 continue. The Agency agrees that per
 capita water usage  and wastewater
 flows have increased in the past but
 believes that this trend is  reversing.
 This can be attributed to  the increase
 of personal water conservation  habits
 encouraged by periodic water  short-
 ages or higher water supply and  sewer-
 age costs even in normally water  rich
 areas.  Moreover,  plumbing   codes.
 State laws and ordinances are rapidly

being revised in many areas to require
installation of water-saving fixtures in
new  dwellings,  hotels,  motels,  and
other buildings.
  Section  21  of the 1977 Act requires
the Agency, in approving the amount
of  reserve capacity  for a treatment
works, to  take into account efforts to
reduce the flow of sewage and unnec-
essary water consumption. The Presi-
dent's water resource  policy features
water conservation as  its cornerstone
and requires Federal agencies to im-
plement   appropriate   conservation
  The guidelines require  a cost-effec-
tiveness evaluation of  flow-reduction
measures  such as plastic toilet dams
and low flow showerheads; changes in
laws, ordinances, or plumbing codes re-
quiring installation of water-saving de-
vices in future habitations; and water
pricing changes. The grantee must de-
velop a recommended flow reduction
program  featuring a public informa-
tion program plus cost-effective meas-
ures for which the grantee has imple-
mentation authority or can obtain co-
operation from an entity with such au-
thority. Exempted from these require-
ments  are those communities with a
population less than  10,000  or with
average daily base flows, excluding in-
filtration/inflow and industrial flows,
for treatment  works  design  of  less
than 70 gallons per capita per day or
with ongoing flow reduction programs.
   Several commenters have suggested
that small communities should be en-
couraged to conserve  water and thus
should not be exempt from the flow
reduction requirements.  The  Agency
concedes that some water conservation
 potential exists for smaller communi-
 ties  even though such  communities
 tend to use and waste less water than
 the larger, more affluent cities. Never-
 theless, the Agency believes  that the
 limited cost  savings  obtainable   in
 small communities  from  flow reduc-
 tion programs may not be commensu-
 rate with the  administrative burden
 imposed.  Some   commenters  have
 pointed out  that the  70 gallons per
 capita per day exemption criterion is
 too stringent and have suggested a 100
 gallons per capita per day criterion.
 The Agency disagrees because the  70
 gallons per  capita  per  day figure,
 which represents  an  average  dry
 weather  base flow, is large enough to
 exempt most small communities and
 water-conserving larger cities. Almost
 all  communities,  including  larger
 water  users, would be exempt if the
 suggested 100  gallons per capita  per
 day criterion were used.
   Two commenters  objected to  the
 flow reduction requirements as being
 unreasonable for areas with adequate
 water  supplies. The Agency disagrees.
 During the  past 20 years, persistent
 drought  and   accompanying  water
                            FEDERAL REGISTER, VOL 43, NO. IBS-WEDNESDAY, SEPTEMBER J7, 1971


  shortages have  plagued  many  sup-
  posedly  water-rich areas.  Moreover,
  the costs of water management, in-
  cluding water supply  withdrawal and
  treatment,  distribution, and,  finally,
  wastewater treatment, are very  sub-
  stantial even in areas with plentiful
  water.  Water  conservation can mar-
  kedly  reduce these total water man-
  agement costs over the long term.
   Three commenters  objected to the
  construction staging requirements for
  treatment plants, particularly noting
  that the 10-year period is insufficient
  for planning and designing  future ex-
  pansions in  complex  metropolitan
  areas.  The Agency believes that con-
  struction of treatment  facilities should
  be staged, particularly in high growth
  areas, to reduce the high construction
  and operational costs otherwise attrib-
  utable to large amounts of idle reserve
  capacity. To achieve this objective,  a
  staging  period as short as 10  years
  does  not  appear  unreasonable  for
  high-growth  situations. Another  im-
  portant  related consideration  is  the
  high local cost burden for  treatment
  facilities, especially for small commu-
 nities.  Limiting the treatment  plant
 size to that reasonably  necessary to ac-
 commodate  future growth  helps to
 reduce this local financial cost burden.
   One commenter noted that the tabu-
 lated staging periods for small plants
 of 1 MOD or less capacity could lead
 to designing a treatment plant serving
 a high growth rate area for a capacity
 less than that for a lower growth rate
 area. The Agency agrees with this ob-
 servation and has accordingly included
 in the final guidelines  a 15-year stag-
 ing  period for the small plants to pre-
 clude this transition problem.
   Several commenters objected to the
 required 20-year  staging  period  for
 interceptors  which can be  increased
 only if  justified  and  in  compliance
 with approved water quality manage-
 ment or other environmental  plans.
 They suggest that sizing a pipe for 40
 to 50 years will cost less in the long •
 run and will  often decrease primary
 environmental impacts. The Agency
 has  found that  total  present worth
 costs of  sizing a pipe for 20 years and
 adding  another pipe 20 years hence
 are  about the same as providing 40
 years of pipe  capacity initially. The
 difference in  primary  environmental
 impacts will vary. The primary reason
 for  limiting  interceptor sizes  to  20
 years would  be to limit the induced
 growth  and resultant secondary  envi-
 ronmental impacts  related to larger
  Interceptor  planning.  Two   com-
 menters  have suggested changing the
 guidelines to  permit  extension  of
interceptors into  undeveloped  areas
(but not  environmentally  sensitive
areas) where consistent with growth
management plans. This change would

  be intended to encourage growth  in
  suitable areas. While this suggestion
  has some  merit, the Agency believes
  the provisions discouraging intercep-
  tor extensions into undeveloped areas
  should remain unchanged because:
   (1) Federal funding  of interceptor
  extensions  into  undeveloped  areas
  could  induce very rapid  growth with
  resultant adverse secondary  environ-
  mental impacts,
   (2) Sewering could be encouraged  in
  cases where other approaches  might
  be more cost-effective, and
   (3) The Federal subsidization of new
  development  would  mean deferring
  Federal assistance for correcting exist-
  ing  water  pollution  problems  else-
   Useful life of a treatment works. The
  former guidelines included  unneces-
  sary and  confusing  distinctions  be-
  tween  the definitions of "service life"
  and "useful life" for treatment works.
   The new guidelines drop the former
  service life definitions and amend  the
  useful  life  definition.  This  is now
 simply the estimated period  of time
 during which a treatment works or  a
 component of a waste treatment man-
 agement  system  will  be  operated.
 Other  regulation revisions have been
 made so that the rest of the regulation
 is consistent with this change.
   These regulatory changes are  made
 in appendix A to subpart E.


   On June 21, 1977, the Agency issued
 Program  Requirements Memorandum
 (PRM) 77-8 concerning  the review of
 pending new  collector sewer projects.
 The policy defined in more detail and
 required  rigorous implementation of
 then existing Agency guidance on eli-
 gibility and cost-effectiveness of collec-
 tor sewer projects. It was  intended to
 insure  that  the limited  construction
 grant funds available are obligated for
 collector projects only when needed to
 correct a  problem of public health or
 ground or  surface water pollution.'
 Specifically,   that  policy  restricted
 grant eligibility of collector sewers to
 those areas with population densities
 of at least  1.7 persons per acre (one
 household for every 2 acres) on Octo-
 ber  18, 1972. Population  density  of
 those areas was to be evaluated  on a
 block-by-block basis or, where  typical
 city  blocks do not exist, by areas of 5
 acres or less.
  Section  36 of the 1977 Act amends
 section 211 of FWPCA to preclude use
 of the population density criterion in
 PRM 77-8 as a test of grant eligibility
 for collector sewer projects but per-
mits use of the criterion for evaluating
alternatives. The Agency revised the
policy of PRM 77-8 accordingly and on
March 3, 1978. issued new PRM  78-9
which supersedes PRM 77-8. PRM 78-
9 was published in the FEDERAL REGIS-
  TER on April 7, 1978 (43 FR 14722).
  The new PRM  retains the one house-
  hold per 2-acre  criterion only for iden-
  tifying less closely  populated  areas
  where  individual  or  other  small
  wastewater  treatment  systems   are
  likely  to  be more cost-effective than
  collector sewers and thus must be eval-
  uated  in detail  if collector sewers  are
  proposed  for such areas. The Agency
  believes  that use  of the population
  density criterion in this manner will
  assist with and simplify the cost-effec-
  tiveness  analysis  for collector sewer
   These final regulations require, as a
  basis  for   eligibility, new  collector
  sewer  projects serve  a community In
  existence  on October  18, 1978, and
  define a community  as including any
  area with  substantial'human habita-
  tion on  October  18, 1972.  Also  re-
  quired, consistent with PRM 78-9, is a
  block-by-block evaluation  to identify
  areas with substantial human habita-
  tion on October  18,  1972. The pro-
  posed collection system must be cost-
  effective and the population density of
 the area to be served must be consid-
 ered in determining the cost-effective-
 ness of the project.  In addition, the
 proposed collection system must con-
 form with approved 208 plans, applica-
 ble  environmental   laws,  executive
 orders  on wetlands and  flood plains,
 and Agency  policy on  wetlands and
 prime agricultural lands.
  Two commenters questioned use of a
 block-by-block evaluation to identify
 human habitations existing as of Octo-
 ber 1972 as a test of  grant eligibility
 and suggested that the existence of a
 community at that time is sufficient  to
 pass  the eligibility test.  The Agency
 disagrees because Congress clearly In-
 tended  to  prohibit grant funding of
 collector sewers to serve new'develop-
 ments.  The  block-by-block  evaluation
 is necessary for identifying new devel-
 opments,  principally  in  community
 fringe areas,  that should not receive
 Federal grant assistance for collector
 sewers.  One  commenter suggested ad-
 dition of a provision requiring use of
 grant conditions such as restrictions of
 sewer hookups where necessary to pro-
 tect environmentally  sensitive areas
 and prime agricultural lands from new
 development. The Agency, noting that
 this suggestion conforms with existing
Agency  guidance, has  added the sug-
gested provision  to the final regula-
  Section 38 of the 1977 Act further
amended section 211 of the FWPCA to
prohibit the use of authorized  con-
struction grant funds  for control of
pollutants from separate storm sewers.
  Regulatory  provisions  relating to
grant   eligible   categories   are  in
J§ 35.905-23, 35.925-13,  and 35.925-21.
                           FEDERAL REGISTER, VOL 43, NO. 188-WEDNESOAY, SEPTEMBER 27,  1978

                                           RULES AND  REGULATIONS

  Section 37 of the 1977 Act amends
the definition  of "treatment works"
under section 212(2)(A) of the FWPCA
to include as eligible, under site acqui-
sition of land that will be an integral
part of the treatment process, the land
used  for  the  storage  of  treated
wastewater in land treatment systems
prior to land application. EPA has in-
terpreted this provision  to permit ac-
quisition of land for composting sludge
since such composting can be part of a
treatment process. In order  to imple-
ment this amendment, $ 35.905-23 has
been revised to include in the defini-
tion of "treatment works,"  the  land
used for composting of sludge and for
the  temporary  storage of treated
wastewater in land treatment systems.
Section 35.940-3 has also been revised
to include,  among costs allowable if
approved by the Regional Administra-
tor, the  land used for composting of
sludges and for the temporary storage
of treated wastewater in  land treat-
ment systems  prior to  land applica-
  Construction  grants regulations pro-
mulgated on February  23,  1973,  and
February 11, 1974,  are  applicable to
construction grants awarded between
October  18,  1972,  and  December 27,
1977. The revised definition of treat-
ment works made pursuant to the 1977
Act is applicable to all  projects for
which Agency approval of step 1 facili-
ty plans had not been given before De-
cember 27,1977.
  The Agency received comments sup-
porting and opposing the eligibility of
land for  composting of  sludge.  The
final regulations  retain the eligibility
because, by encouraging composting, it
furthers the clear congressional intent
to promote beneficial use of sludges on
the land. Composting of sludge  and
storage of treated effluent  are  both
critical  stages  immediately  prior  to
land application.  Land eligibility pro-
vides a very similar incentive for com-
parable situations.
  Changes to the regulations imple-
menting this amendment are made in
§§ 35.905-23 and 35.940-3.


  Section 201(g)(6)  requires that no
wastewater treatment facilities grants
be  made after September  30,  1978,
unless  the grant  applicant has satis-
factorily demonstrated to the Admin-
istrator that potential recreation  and
open space opportunities have been
analyzed in the planning of the pro-
posed treatment works. This  provision
provides  an  opportunity for cbmmuni-
ties to obtain  important recreational
and open space benefits at relatively
little extra cost.
  Commenters   generally   addressed
two questions. Should the analysis be
required  for all   projects for which
grants are made after September 30,
1978, or only for projects for which fa-
cility planning begins after that date?
Should  construction  grants   funds
under steps 2 and 3 be used to design
and build recreational facilities? Envi-
ronmental,   parks,   and   recreation
groups   argued  that  the analysis
should be required of new and ongoing
projects  and  that  some  funding for
recreational  use  facilities  should  be
available under steps 2 and 3. Other
commenters  argued to the contrary.
Some pointed out that not all projects
lend themselves to meaningful analy-
ses of recreational use opportunities.
Others indicated  that recreational use
considerations are beyond the scope of
the  water quality objectives of  the
  One  overriding intention of  Con-
gress, often expressed in  the legisla-
tive history of the  1977 Act, was that
new planning requirements not delay
ongoing projects needed to meet water
quality  objectives.  Consequently, the
recreational  use  analysis  will  be re-
quired only of new facility plans initi-
ated after September 30, 1978. None-
theless, EPA encourages planning for
recreational and  open space opportu-
nities   associated   with   treatment
works. Grantees with ongoing projects
are free to request  grant amendments
for extra money to carry out such rec-
reational planning. EPA will look fa-
vorably upon such requests if they do
not delay projects or raise costs signifi-
  Section 201(g)(6) requires an analy-
sis  of  potential recreation and  open
space opportunities in the planning of
wastewater   treatment   facilities.  It
does not require nor authorize  the
funding of the design or construction
of  such  recreational facilities.  Such
costs are not grant eligible under steps
2 and 3. EPA has already taken meas-
ures to prepare program guidance in
coordination with the Heritage  Con-
servation  and Recreation Service  and
in consultation with park associations
to  implement  this provision.   We
intend to aid grantees as much as pos-
sible to avail themselves of funding for
recreation and open space design and
construction from other sources.
  The Heritage Conservation and Rec-
reation Service recommended that the
required analysis specifically mention
access  to water inasmuch  as that is
viewed as the key to deriving recre-
ational benefits in this context. The
final  regulation  reflects  this recom-
  The  question 'of  how  recreational
use and other nonwater quality consid-
erations will be considered in cost- ef-
fectiveness  guidelines will be  dealt
with in program guidance. In general,
such  factors  come into  play  when
choosing between two otherwise close-
ly matched alternatives.
  It was also suggested that the pro-
posed portion of the facility plan de-
scribing measures taken to inform the
public of potential  recreation  and
open space  opportunities be deleted
and that this topic be included  in the
general public  participation  require-
ments. The  Agency agrees with  this
approach and the extra  requirement
has been dropped.
  Pertinent regulatory changes have
been made in § 35.917-Kj).


  Under new provisions added to sec-
tion 203(a) of the FWPCA by section
18 of the  1977 Act, a single grant may
be  awarded for  the combined Federal
share of the cost of step 2 (prepara-
tion of plans and  specifications)  and
step 3 (actual construction) for com-
munities of 25,000 or less population if
the total  estimated step 3 cost  of the
treatment works is $2 million or less—
$3  million in States  with unusually
high construction costs. At the present
time, Alaska, California,  Hawaii,  Illi-
nois, Minnesota, and  New York are
designated as having high construc-
tion costs. Based upon needs survey
standard  cost curves, costs in  these
States were  determined  to be more
than one  standard deviation from the
  EPA awarded step 2+3 grants  in the
past, but in 1974 the General Account-
ing Office ruled that they were not al-
lowed under the existing statute. In al-
lowing this new procedure. Congress
intends to accelerate the grant proc-
ess. By providing limited relief from
the step 1-2-3 process to small commu-
nities, the paperwork and attendant
delays incurred  by separate grant ap-
plications will be minimized. Ultimate-
ly,  the completion time and costs for
these projects should be greatly re-
duced. It is necessary, however, to bal-
ance  the  intent to streamline  these
smaller projects with the minimum
control necessary to assure that  an ac-
ceptable  pollution  abatement facility
is built.  Plans  and specification ap-
proval prior to advertising for bids on
step 3 construction is necessary for
this purpose.
  Formal  comments on the step 2 + 3
construction  grants regulations were
received from a number  of organiza-
  One comment  suggested that since
•existing  State  project priority lists
were developed without the knowledge
that step  2+3  grants were possible,
that portion  of  the regulation requir-
ing a step 2+3  project to appear on
the  approved priority list  should be
delayed to take  effect  for the priority
list for fiscal year 1979 (FY 1979). The
Agency made this provision effective
upon publication of these regulations
as interim final to allow States the op-
portunity to amend their  FY 1978 pri-
                           FEDERAL REGISTER, VOL 43, NO. 188—WEDNESDAY, SEPTEMBER 27, 1978


 ority lists if they chose. The provision
 is intended to require that step  2 + 3
 projects appear on the priority list be-
 ginning with PY 1979.
  Another  comment  suggested   that
 the regulations use service  area popu-
 lation rather than the population of
 the applicant municipality  as the cri-
 terion for determining eligibility for a
 step 2+3 grant. The concern was that
 a regional authority or grantee serving
 more  than  one  municipality  may
 exceed the  25,000 population criterion
 though  the service  area  population
 was less than 25,000.  The regulations
 as  written  use the term,  "applicant
 municipality," as stated in the statute.
 Congress provided the opportunity for
 step 2+3 grants to applicants with  lim-
 ited  administrative  capability.  The
 population  within  the jurisdiction of
 the  applicant municipality  is thought
 to be  a better indicator  of an appli-
 cant's likely administrative capability
 than  the  service area  population,
 which could be more or less than that
 which is  within the applicant's juris-
  Another  comment   concerned   the
 Agency's  criterion  for  determining
 areas of high construction cost.  The
 standard  deviation was selected as  a
 commonly used and appropriate statis-
 tical device.  As  mentioned  above,
 based upon needs survey standard cost
 curves, six States were determined to
 be more than one standard deviation
 from the norm.  (Alaska  and Hawaii
 were two States mentioned by the con-
 gressional  conferees  as having high
 construction costs.)
  A comment from a State agency sug-
 gested that  the regulations  should re-
 quire a comparison of the cost esti-
 mates  after step 2 design with those
 presented in the facility plan. The ob-
 jective of such comparison would be
 the   elimination   of   "gold-plating"
 which escalates  project  costs above
 those presented in the facility  plan.
 Since plans and specifications must be
 reviewed for conformity with the fa-
 cility plan and approved prior to com-
 mencement of step 3 work,  the neces-
 sary authority and checkpoint already
 exist. No modification of the step 2+3
 regulation was necessary.
  The last portion of  § 35.909(a), stat-
 ing that an existing step 2 grant could
 be amended to change it to a step 2+3
 grant, has been deleted and paragraph
 (b)(3) of that section has been amend-
 ed. It was included in the interim regu-
 lations to  supersede Program Require-
ments   Memorandum   (PRM)   78-7,
which was to be effective prior to pro-
mulgation of  these final regulations
and prohibited amendment of existing
step 2 grants for purposes of convert-
ing to a step 2+3 grant. Since that
PRM is no longer effective, specific
reference to allowing such amendment

 is no longer necessary in the regula-
  Regulatory  changes  on  combined
 grants  are   found   in   §§ 35.903(b),
 35.909, 35.920-3(d), and 35.930-l(a)(4).
 §§35.930-lfa)(5), 35.935-4, and 35.935-
 9 were deleted.


  Regulations implementing a compre-
 hensive  pretreatment  program  were
 promulgated as 40 CFR  Part 403 on
 June 26,  1978  (43 CFR 27736). These
 regulations  relate  the  construction
 grants program  to  the pretreatment
 program. They are intended to (1) es-
 tablish pretreatment program develop-
 ment as a grant eligible item, (2) allow
 funding to be accomplished by amend-
 ment of a step 1,  2, or 3 grant which-
 ever is most appropriate to the circum-
 stances,  (3)  insure  uniform  develop-
 ment of the  pretreatment  program by
 requiring  that certain  elements  be
 completed before the award of a step 2
 grant, and other elements tc be  com-'
 pleted prior to  award of a step 3 grant,
 (4) withhold grant payment at the 90
 percent point in step 3 if the pretreat-
 ment program is not approved by that
 time, and (5) provide for time phasing
 that  insures attainment  of environ-
 mental benefits of the  pretreatment
 program without severe disruption to
 the construction grants prqgram.
  Many  municipalities have  already
 developed or are in the process of de-
 veloping   pretreatment    programs
 either on  their own initiative or in re-
 sponse to national pollutant discharge
 elimination  system permit  require-
 ments. We do  not intend that such
 work be duplicated. To the extent that
 previous work meets the requirements
 of an approvable pretreatment  pro-
 gram under part 403, it is to be incor-
 porated in the program development
 under these construction grants regu-
 lations. To the degree  that additional
 work must be done to complete the re-
 quirements of an approvable program,
 it may be grant eligible.  Work done
 prior to the effective date of the final
 regulations is not grant eligible.
  We received  a  number of  formal
 comments  on the proposed construc-
 tion grants pretreatment regulations.
 The comments fall into the basic areas
 discussed below.
  A number of  commenters expressed
 concern that §35.907(e) of the  pro-
 posed regulations  would not allow as
 eligible costs  studies to determine pol-
 lutant removals and tolerance  of mu-
 nicipal treatment works. We modified
 these regulations to clarify the fund-
 ing eligibility of these studies. Cur-
 rently such studies are grant eligible
 when performed for the  purpose  of
properly   designing   the   municipal
treatment works and will continue to
be grant  eligible  for such "purposes.
However, when these studies are  per-
 formed solely for the purpose of  the
 municipalities seeking  allowances  for
 removal of pollutants under part  403
 of this chapter, they are not grant eli-
   Other comments requested clarifica-
 tion  of  the construction  grants pre-
 treatment strategy  and indicated  the
 need for a clearer statement. The gen-
 eral  pretreatment  regulations pub-
 lished under  part 403 of this chapter
 on June  26,  1978, contain a compre-
 hensive  statement  of the Agency's
 overall  pretreatment  strategy. The
 construction grants component is sum-
 marized  as follows.  Section 35.907 of
 these regulations provides that an  ex-
 isting or pending step 1, 2, or 3 grant
 may  be modified to provide for devel-
 opment  of a municipal pretreatment
 program  where such  a program has
 not been provided for in a water qual-
 ity management  plan  under  section
 208 of the Act. The purpose of amend-
 ing an existing or pending grant is (1)
 to recognize that a large proportion of
 the total number  of step 1 grants  ex-
 pected to be made in this program
 have  already been awarded, and (2) to
 insure development  of  an approvable
 pretreatment program at the earliest
 possible date. Municipalities that have
 not yet entered the  grant process will
 be required to develop a pretreatment
 program as part of the scope of their
 step 1 grants.
   In  order  to prevent disruption  or
 delay in the  movement of a  project
 from  step 1 to step 2, or from step 2 to
 step  3  because of  pretreatment  re-
 quirements,  these regulations  allow
 submission of the scope of work under
 the original or unamended grant upon
 its completion  independent  of  the
 status of the work  to be  completed
 under the pretreatment grant amend-
 ment. To illustrate, if an active step 1
 grant at  the 90 percent  completion
 point was modified in December 1978,
 to provide for development of a pre-
 treatment  program,  the grantee may
 upon  completion of  the final 10 per-
 cent  of the original scope  of  work,
 submit that work together with a step
 2 application and the step 2 could  be
 awarded at any time prior to June 30,
 1980,  without any of the elements of
 the pretreatment work being submit-
 ted. In order for the step 2 grant to be
 awarded after June 30, 1980, however,
 the grantee must have completed and
submitted  the elements of  the pre-
 treatment   program   specified   in
 §35.920-3(b)(9).  The  situation would
 be similar in going from step 2 to step
 3 except that in order to receive a step
 3 grant after December 31, 1980, all re-
quired elements of the pretreatment
program  must have been  submitted.
The process described above provides
phase-in for development of pretreat-
ment  program  requirements in the
construction grants program since por-
                           FEDERAL REGISTER, VOL 43, NO. 188—WEDNESDAY, SEPTEMBER 27, 1978

                                           RULES AND  REGULATIONS
ttons  of the  pretreatment program
must be developed during each step of
the grant process to be able to meet
application requirements for the sub-
sequent step grant. It also serves to
insure continuous development of a
pretreatment program.
  Section 35.935-19 requires that step
3 grant payments be withheld  at the
90 percent point unless the pretreat-
ment  program is approved. This provi-
sion is  intended to  ensure that the
grantee complies with the terms of the
grant agreement.
  One commerrter objected to the  re-
quired use of the user charge system
in implementing an approved pretreat-
ment  program. The regulations do not
require  use of the user charge system
if the grantee chooses to provide other
funds sufficient to implement the pre-
treatment program.
  One commenter disagreed with the
position expressed in the preamble to
the proposed regulations  that work
done  on pretreatment program devel-
opment prior to the effective  date of
these final  regulations shall  not  be
grant eligible or reimbursable. A state-
ment  of ineligibility is found on page
VJI-6 of the EPA Handbook of Proce-
dures which states that costs normally
associated with  functions of Govern-
ment  are not grant eligible. The devel-
opment  of regulations or  ordinances
are specifically cited as such unallowa-
ble costs. In  addition,  the proposed
pretreatment regulations published in
the FEDERAL REGISTER on February 2,
1977,  stated that grant funding of the
development  of  municipal pretreat-
ment  programs was a new provision of
those  proposed  regulations.   Those
written statements of eligibility reflect
the Agency  policy  with  respect  to
funding eligibility for work done prior
to these regulations becoming final.
  Comments  were received  requesting
that costs of sampling and analysis -as-
sociated with the industrial survey re-
quired  under §35.907
                                           RULES AND  REGULATIONS
  1. The  definition of industrial user
 in  §35.905 should be changed to ex-
 clude residential users or all discharg-
 ers of sanitary wastes. Preferably, the
 regulations should use the definition
 in effect in the construction grant reg-
 ulations published in  1974.
  In the  interim regulations, we de-
 fined industrial user in part to include
 all users with discharges into publicly-
 owned treatment works of more  than
 25,000  gallons  per  day  of sanitary
 waste  or  its  equivalent  in process
 waste or combined sanitary and proc-
 ess waste. This interpretation  of the
 25,000 gallons per day exemption em-
 phasized the volume  and character of
 waste rather than the type of user. We
 recognize that Congress intended for
 the 25,000 gallons per day exemption
 to  reduce administrative burdens on
 grantees. The definition in the interim
 regulations would have  involved less
 adminstrative  efforts than  that re-
 quired  under  the  prior definition.
 However,  it required more administra-
 tion than if  the prior definition  were
 used with the addition of the 25.000
 gallons  per  day exemption. Also, it
 would have made some large commer-
 cial and  residential  users subject  to
 ICR for the first time.
  We have decided not to adopt the in-
 dustrial user definition  published  in
 the  interim  regulations.  Instead, we
 will use the  prior definition with cer-
 tain modifications. Industrial users are
 nongovernmental, nonresidential users
 of  publicly-owned  treatment  works
 that are identified in Standard Indus-
 trial Classification Divisions A, B, D,
 E, and I, and that discharge more than
 the equivalent of 25,000 gallons per
 day of sanitary waste. We have added
 an. explanation of wastes equivalent to
 sanitary  waste.  A   user's  domestic
 wastes  or discharges from  sanitary
 conveniences may be excluded before
 applying the 25,000 gallons per day ex-
 emption. For example, a user that dis-
 charges 6,000 gallons  of process waste
 and 20,000 gallons of sanitary waste
 would not be subject to industrial cost
 recovery if the grantee elects to allow
 sanitary wastes to be excluded and the
 6,000 gallons of process waste was less
 than the  equivalent  of 25,000 gallons
 of domestic waste.
  The   term  "nongovernmental"  as
 used in the definition of  industrial
 user is  to be interpreted  consistently
with the discussion of publicly-owned
facilities in §35.92P-l(b)(4)(ili) regard-
ing approval of user  charge systems.
An exception Is that publicly-owned
faculties which discharge nonsanitary
waste, such as hospitals, would be sub-
ject to user  charges but not to ICR.
Industrial cost recovery was designed
to  collect funds from  the  private
sector. It would therefore be inconsist-
ent to require a publicly-owned facility
used for public purposes to pay money
back to the public treasury.  Assess-
ment of user charges for large govern-
mental users with other than sanitary
wastes, however, will create a strong
incentive to conserve water and reduce
waste  water flows,  thereby reducing
treatment and sludge handling costs.
  This definition will keep the  admin-
istrative burden on grantees at  a mini-
mum. It does not expand the applica-
bility of ICR payments. It interprets
the  statute  strictly and  essentially
makes  minimal changes  in  the  ICR
program until the end of the 18 month
moratorium on collection  of ICR pay-
ments.  By that time, the  congression-
ally  mandated study of ICR will  be
complete.  The report will address the
various options considered by EPA for
the  industrial  user  definitions.  The
Agency will publish as  a notice docu-
ment in the FEDERAL REGISTER  the in-
terim recommendations of the report
and  receive  comments  before   the
report is made final and presented to
Congress.  With the report providing
substantive  information on ICR sys-
tems. Congress can determine whether
changes are needed and  what  they
should be.
  Two other parts  of  the  industrial
user definition in the Interim regula-
tions are  now promulgated substan-
tially as they  were previously  pub-
lished. Industrial users include  nongo-
vernmental users that discharge toxic
or other pollutants  that contaminate
sludge,  interfere with treatment proc-
esses, or create a hazard to people or
animals. We added a reference to the
contamination of sludge in this part of
the definition. Industrial users also in-
clude all commercial users of individu-
al systems built with grants under sec-
tion  201(h) of the Act.
  2.  Grantees having awarded  step  3
grants as of April 25, 1978, but  not an
approved ICR  system,  should  be al-
lowed to develop  an  ICR system using
either the old or new definition of in-
dustrial user.
  Several  comments expressed  the
concern that it  would be unfair and
burdensome to require  grantees  who
already were  developing  an   ICR
system  under a  step 3 grant prior to
April 25, 1978, to follow the new  defi-
nition of industrial users published in
the  interim regulations on April 25.
Accordingly.  §35.928(b) has  been re-
vised to allow grantees awarded step 3
grants under regulations promulgated
on February 11,  1974, the  option  to
use either the old or new definition of
industrial user in developing their ICR
system.  If the grantee chooses  to use
the 25.000 gallons per day exemption
then it must incorporate all aspects of
the new definition of Industrial  user
into the ICR system.
  3. The grantee must submit rates to
the Regional Administrator in order to
obtain approval  on an ICR system as
 specified  in §35.935-15 (b)  and (c).
 These rates cannot be developed until
 construction is  completed, yet under
 the interim  regulations they are  re-
 quired prior to step 3 grant award.
  The concern  has been  raised that
 grantees would have to develop a spec-
 ulative rate schedule In order to gain
 approval  for step 3 grants but would
 then have to develop a more  accurate
 rate  schedule  when  construction  Is
 completed and the facilities are placed
 in  operation. EPA  has answered this
 concern by revising the regulation so
 that grant approval is not contingent
 upon ICR rate approval.
  4. A grantee must calculate ICR on
 an  industry-by-lndustry basis even If it
 will Implement a systemwide ICR pro-
 gram. The question was  raised wheth-
 er EPA requires a grantee that collects
 ICR funds systemwide to calculate the
 revenue which would  be received  on>
 an  industry-by-industry basis for each
 project within that system.
  EPA does not intend for this to be
 done. EPA wants to insure that the
 total moneys collected from a system-
 wide  ICR  program  would  neither
 exceed nor fall short of the funds that
 would be  collected on  a  project-by-
 project basis. This does not necessitate
 an   industry-by-industry calculation,
 nor does  EPA require that the rate
 structure  be calculated  on a  project-
 by-project basis  when a  systemwide
 ICR  program  is used. We   revised
 §35.928-l(g) to clarify this misunder-
  5. The wording in §35.928-1(1) con-
 cerning inconsistent agreements places
 the grantee in an untenable legal posi-
 tion because the grantee would renege
 on existing contracts.
  See  comment  3  under  the  user
 charge  system discussion in this pre-
  6. The requirements concerning the
 use of ICR payments unnecessarily de-
 prive the  grantees of flexibility in the
 use of these payments.
  Several  comments  suggested  that
 the incremental cost of administration
 should  be paid first from ICR rev-
 enues  before  distribution  of  the re-
 maining funds.  EPA has  accepted  a
 modified version of this suggestion by
 revising §35.928-2(a)(2) to allow gran-
 tees to use funds from their 50 percent
 retained share  for the incremental
 cost of ICR administration before fur-
 ther dividing their 50 percent share to
 be useti for the  other  purposes speci-
 fied in the regulation.
  7. The requirement that step 1 costs
 be recovered through ICR  is new and
  A few commenters urged us to delete
 the requirement  in §35.928-l(a)  that
 industrial users pay their share of the
step 1 grant over the recovery period.
 This requirement is not  new and rep-
 resents  no change in  policy. This
                           FEDERAL REGISTER, VOL. 43, NO. 1M—WEDNESDAY, SEPTEMBER 27, 197(

                                            RULES AND REGULATIONS
 policy  is set forth in Federal guide-
 lines, industrial cost recovery systems
 (MCD-45).  Therefore, EPA disagrees
 with this comment and will not alter
 the requirement.
   Regulatory sections affected by the
 £CR  amendments  are  §§35.905-6,
 35.905-8, 35.928,  35.928-1,  35.9:*-2.
 35.928-3, 35.928-4, and 35.935-15.

            USER CHABGES

   Section 22 of the 1977 Act amended
 the user charge requirements in sec-
 tion 204(b)  of  the  FWPCA.  This
 amendment permits grantees to use
 dedicated ad valorem tax systems for
 the collection of operation and main-
 tenance costs if a portion of the gran-
 tee1* ad valorem taxes was dedicated
 for such use  on  December 27,  1977,
 and if  the  grantee's system results in
 the  distribution   of operation  and
 maintenance   costs   proportionally
 among user classes.  Where an ad va-
 lorem  tax  system is used to collect
 user charges, users other than residen-
 tial and small  nonresidential  users
 must pay charges  based upon  actual
   To implement  this amendment we
 have made the following changes to
 the regulations promulgated on Febru-
 ary 11,  1974:
   The  definition  of  user charge  In
 § 35.905 has been revised to include as
 a user  charge that portion of the ad
 valorem taxes paid by a user  for his
 share of the  cost  of  operation and
   A new series of  sections have been
 added in §35.929 which describe the
 requirements  for    acceptable  user
 charge  systems,  whether  based on
 actual use or ad valorem taxes. (Simi-
 lar requirements  in the previous regu-
 lations  were  found  in  §35.935-13.)
 There are no  substantial  changes to
 the requirements for user charge sys-
 tems based on actual use.
  The requirements for a user charge
 system  based on  ad valorem taxes in-
 clude five criteria for evaluating an ad
 valorem tax system to determine If it
 meets the statutory requirements  of
 being  "dedicated"  on  December 27.
  The regulations require, to accord-
 ance with the  statute, that operation
 and maintenance costs be distributed
 proportionally  among the classes  of
 users, even  though ad valorem taxes
 may  foe used  to  collect  the  charge
 within the residential user and small
 nonresidential   user  class.   Each
 member of  the industrial and large
commercial  user  class must pay its
share of the  costs of operation and
maintenance based  on actual use, but
ad valorem taxes may be used  to col-
lect all  or part of these user charges
based on actual use.
  In accordance with the  statute, the
regulations require  that each user be
 notified at least annually of the por-
 tion of the ad valorem taxes attributa-
 ble to wastewater treatment services.
 The regulations apply  this same re-
 quirement  to  user charge systems
 based on actual use. A grantee which
 has obtained  approval of a user charge
 system based on  actual use may not
 now substitute  a  system based on ad
 valorem taxes.
   The grant condition requiring grant-
 ee  development  of  a user  charge
 system, a  schedule  for  compliance
 with the condition, and sanctions for
 noncompliance  continue to be  found
 in § 35.935-13.  This section provides
 that grants awarded under  the previ-
 ously  promulgated  regulations  will
 continue to  be  administered  under
 those regulations unless the grantee
 proceeds to  develop a  user  charge
 system  based on  ad  valorem  taxes
 under the new  law and these regula-
 tions. If the  grantee does wish to do
 so, it must demonstrate by July 24,
 1976, that its ad  valorem tax system
 was dedicated on December 27,1977. If
 it was, any payments being held under
 the old regulations will be released (in
 accordance with the legislative history
 of this  provision), but  it must  com-
 plete  the  user charge  system  and
 submit it to the Regional Administra-
 tor in time for approval before July 1,
 1979. Failure  to comply with this re-
 quirement will  result in cessation of
 all payments under the grant, possible
 termination  or  annulment of  the
 grant, and no  new grant awards.
   For grants awarded after  the effec-
 tive date of these regulations, grantees
 must  obtain  approval  of their user
 charge systems  (whether   based  on
 actual  use  or ad valorem taxes) by
 June 30. 1979, or similar sanctions will
 apply. After that date, no step 3 grant
 will be awarded unless  the grantee's
 user charge system has been  approved.
  The important  comments received
 on the  interim regulations and  the
 EPA response are summarized below:
  1. The  requirement for an annual
 review of the operation and mainte-
 nance charges of a user charge system
 is too burdensome on the grantee.
  EPA agrees  with the comments that
 such a requirement  may prove finan-
 cially, administratively and politically
 burdensome on grantees.  Therefore,
 we have revised  § 35.929-2 to require a
 biennial review, although  we would
 prefer a more  frequent review if possi-
  2.  The notification requirement of
able from  private schools, which are
funded privately, or other public fa-
cilities, such as hospitals, which re-
ceive part of their income from private
users or discharge  other than solely
domestic wastes. In order to minimize
administration  of accounting  for the
user charges due from publicly owned
facilities performing local governmen-
tal functions,  the regulations do not
require the grantee to bill itself for
user charges.
  6.  Clarify the submissions  required
and  dates to obtain approval  of dedi-
cated  ad  valorem  systems  as  user
charge systems.
  All ad valorem systems must have
been dedicated on December 27, 1977,
in order to be approved. To be consid-
ered  dedicated,  the  systems  must
comply with the criteria in  §35.929-
l(b). Grantees  fall  into three catego-
ries. Those with step 3 grants awarded
after February  10, 1974, and before
April 25,  1978, must  have submitted
evidence of compliance with the  first
three criteria in §35.929-l(b)  by  July
24, 1978. Subsequently they must meet
the remainder of the criteria to obtain
approval. The July 24, 1978,  deadline
only constrains grantees in this cate-
gory. Grantees with  step  3  grants
awarded after  April  24,  1978,  and
before July 1, 1979, must submit  evi-
dence of compliance with all of the cri-
teria In § 35.929-Kb) in time to obtain
approval before July 1, 1979. Grantees
with step 3 grants awarded after June
30, 1979, must submit evidence of com-
pliance with all of  the criteria in
§ 35.929-Kb) in order to obtain approv-
al before award of the step 3 grant.
  7. The requirements to show that an
ad valorem system Is dedicated are re-
dundant and overly complex.
  EPA disagrees with  this comment.
These criteria are distinct and are the
minimum needed to demonstrate  that
an ad valorem system is dedicated. No
commenter has put forth recommen-
dations on  how these criteria could be
stated more clearly.
  Regulatory sections affected by the
user charge amendments are §§ 35.905-
26, 35.929. 35.929-1, 35.929-2, 35.929-3,
and 35.935-13.


  Section 39 of the  1977 Act amended
the FWPCA by adding a new section
215 which provides  that no grant (in-
terpreted  to mean  step  3  grant) for
which  application  is received  by  the
Regional Administrator  after Febru-
ary 1, 1978, shall be made unless pref-
erence is given  to the use of domestic
construction materials in the construc-
tion of the  wastewater  treatment
  A new paragraph  (d) is being added
to §35.936-13  (specifications)  which
requires that bidding documents and
construction  contracts  for  affected
projects include a Buy America provi-
sion which  requires use  of  domestic
construction material in preference to
foreign construction material. (Defini-
tions of these terms are provided.) The
regulations  also  establish those  cir-
cumstances  under which  the Agency
may waive  the  provision.  Domestic
construction  material  may be  given
preference if the domestic material is
priced  no more than 6 percent higher
than the  bid or offered price of for-
eign materials.  In  determining wheth-
er to waive  the Buy American provi-
sion, the  Regional Administrator will
generally  use the "protest" procedures
of § 35.939.
  Appendix  C-2 to subpart E is also
amended  by  adding  a  new  clause
which  implements the Buy American
provision in construction contracts.
  Comments  received on  the  Buy
American provision indicate  that the
final regulations for this requirement
should be the same as the interim reg-
ulations published on  April  25, 1978.
These  regulations follow the regula-
tions of the Buy American Act of 1933
which EPA was instructed by the Con-
gress to  observe  where  applicable.
They have the advantage of being rel-
atively  simple.'  Some  commenters
wished for additional guidance on the
application of this  provision. Appropri-
ate procedures of other Federal agen-
cies will serve to fulfill this need until
initial  experience  provides  the basis
for specific EPA guidance. Some com-
menters suggested  that a separate pro-
test procedure for those  adversely af-
fected  should  be  adopted;  however,
the designated protest procedures will
resolve Buy American and other issues
more expeditiously than other reme-
dies or procedures that are available.
Some commenters suggested Inclusion
of additional preference requirements
which are contained in the Buy Ameri-
can provisions of some direct procure-
ment agencies.  However, most such
provisions have a statutory basis other
than the  Buy American  Act of 1933.
Since EPA's statutory authority is lim-
ited  to Buy American,  inclusion  of
these provisions would not be  appro-
priate,  especially since the EPA  pro-
gram is a grant rather than direct pro-
curement     program.    Regulatory
changes  on Buy  American  use  are
made  in  §§35.936-13, 35-938-9,  35-
939(j) and appendix C-2, clause 17.


  The 1977 Act authorizes EPA to pro-
vide technical and legal  assistance  to
grantees  in  the enforcement and ad-
ministration of grantees' contracts re-
lated to EPA-funded wastewater treat-
ment works.
  Several  commenters  suggested  that
EPA could intervene in civil actions in-
volving a grantee's contracts  only
when requested by the grantee. We
have  revised the regulatory language
in § 35.970 to track more  closely the
statutory language of section 203(e) so
that both assistance and intervention
under this section  occur only at the
grantee's request. While this may be
true for  most civil actions which arise
involving contracts  in connection with
federally assisted  treatment  works,
EPA  has existing authority through
the U.S.  Department of Justice to in-
tervene on behalf of the Federal Gov-
ernment  in civil actions when a Feder-
al question arises. In revising the lan-
guage we have also deleted from the
regulation  reference  to the require-
ment for the Office of General  Coun-
sel's concurrence in  EPA's  interven-
tion in civil actions since this involves
internal  EPA procedures  and  would
occur in the normal course of events.
  Two States suggested that the provi-
sion of legal assistance as well as tech-
nical assistance should be delegable to
States under State management  assist-
ance grants. To the extent such  assist-
ance is for the administration of con-
tractual  matters, this is correct  and
the regulation has been revised to re-
flect this change. However, in accord-
ance  with  section 205(g) of the Act,
State management assistance  grants
are limited to administrative functions
and do not extend to areas  of contract
enforcement or intervention in civil
actions involving such contracts. Fur-
ther,  while States may  be empowered
to provide  legal assistance  to munici-
palities, to the extent that such assist-
ance would involve representation in
the Federal Court,  only the U.S. De-
partment of Justice is authorized to
represent the Federal interests in such
  Questions were raised regarding the
provision of assistance under this au-
thority   to   grantees  with  projects
funded prior to the  implementation of
this provision. The statute and legisla-
tive history of the provision do not set
time limits on it. Accordingly, such as-
sistance  will  be  provided  whenever
considered  appropriate  to  accomplish
the intent  of the Act  without  regard
to the date of grant  award.
  The suggestion was made that funds
spent as a result  of this authority
should be deducted  from the construc-
tion grants allotments of the State in
which the grantee is located and that
a contractor should be reimbursed by
EPA for  costs incurred in  resolving a
dispute if the matter is resolved in the
contractor's favor. Assistance and in-
tervention  under this authority  will
normally be  provided by Federal per-
sonnel and as such  will be  funded out
of operating budgets.  To  the  extent
that States would provide contract as-
sistance  under  State management as-
sistance  grants,  those  funds   would
come from the State management as-
                           FEDERAL REGISTER, VOL 43, NO. 188—WEDNESDAY, SEPTEMBER 27, 1978

                                            RULES AND REGULATIONS
 sistance  grants  which  are  deducted
 from the State  allotment. EPA does
 not have  the authority to reimburse
 contractors for their costs of conduct-
 Ing successful litigation of contract
 disputes with grantees even  if EPA is
 Involved in the dispute.
   One commenter suggested that the
 reference in the  regulation permitting
 oral requests for assistance under this
 authority in emergency  situations  is
 unnecessary. It  is our  position that
 since written requests for assistance
 were mentioned  in  the regulation as
 the proper means of requesting assist-
 ance, it is also appropriate to mention
 that oral requests will be accepted on
 an emergency basis.
   Regulatory changes on contract en-
 forcement   have   been  made  in
 §§35.936-5,  35.936-8  and by adding a
 new § 35.970.


   Section  10 of the 1977 Act amends
 section 109(b)  of the PWPCA  to in-
 crease the flexibility  in the expendi-
 ture  of  grant funds  for  wastewater
 treatment works operation and main-
 tenance training. It  also increases the
 authorization for such grants  from
 $250,000 to $500,000. Under the provi-
 sion,  the Administrator may exempt
 such grants  from the priority  list re-
 quirement of section 204ta)(3) of the
 FWPCA.  Agency  guidance for applica-
 tion and implementation of subsection
 109(b) of the 1977 Act, will be distrib-
 uted to EPA Regional Administrators
 and will be available for State use.
   Changes to the regulations imple-
 menting this amendment are made in
 §! 35.915(a), 35.920(e), and 35.930-l(b).


  The  Agency has also received  com-
 ments and questions on topics not cov-
 ered  by  the categories dealt  with
 above. One  organization asked  that
 nonprofit agencies be eligible  as 201
 grantees in  rural areas which might
 otherwise  be neglected by  a  public
 entity. Two  sections of the  Act pre-
 clude  such  an   approach.   Section
 201(g)U) provides for grants to States,
 municipalities or  intermunicipal or in-
 terstate agencies. Section 204(b)(l)(C)
 requires  that a grantee have certain
 "legal, institutional, managerial, and
 financial"  capabilities.   Without  a
 change in the law, the Agency cannot
 make grants for  201  projects to  non-
 profit agencies.
  A similar response must be made to
 those who suggested that the Federal
 share of  all 201 projects be Increased
 to 85 percent or even 100 percent. Sec-
 tions 202(a)(l) and 202(a)(2) specify a
 Federal share of  75 percent  for con-
 ventional  projects and 85 percent for
 eligible innovative and alternative pro-
   The Urban Environment Conference
 asked  that  these   regulations  be
 aligned with the work of the Agency's
 Task Force on Minority Business En-
 terprise.  The  task force  has made
 policy  recommendations  which  will
 apply  to  Agency  grant  programs.
 These recommendations will be pub-
 lished for comment and any decisions
 made thereafter will apply to the 201
 program. Inclusion of task force find-
 Ings would be premature at this junc-
 ture. The Urban Environment Confer-
 ence also asked that  201  regulations
 provide for the"  health and safety of
 workers during the construction  and
 operation of a sewage treatment plant.
 While the well-being of such workers
 is of great concern to the Agency, the
 promulgation  and  enforcement  of
 worker safety  standards is the prov-
 ince  of the  Occupational  Safety  and
 Health Administration (OSHA). The
 Agency is not in a position to review or
 enforce OSHA regulations.
  The New Jersey Department of the
 Public Advocate  called on  the Agency
 to include a fair  housing review as a
 component of the 201 process and to
 insure that population projections are
 not  based on potentially exclusionary
 zoning but instead include allocations
 for low and moderate income housing.
 The  Agency  is  sensitive  to  its  fair
 housing obligations and does not want
 communities to use 201 policy as an
 excuse  to perpetuate discriminatory
 practices. Yet,  there are forceful rea-
 sons why a 201 facility plan should not
 become an overall community develop-
 ment plan. The delay inherent in the
 many local issues that might be thus
 injected would make the goals set by
 the  Act  impossible to  achieve. The
 Agency does have guidance insuring
 construction grants program compli-
 ance  with title VI of the Civil Rights
 Act of 1964. The Agency is also consid-
 ering additional  administrative  meas-
 ures to enhance compliance with title
  As for the use of population projec-
 tions that may not include an alloca-
 tion  for  low and moderate  income
 housing or may be based on exclusion-
 ary zoning, it should be noted that the
 population projection  approach out-
 lined in the cost-effectiveness analysis
 guidelines is a  joint  Federal/State/
 local venture. State population figures
 are determined on the Federal level to
 insure national consistency. These fig-
 ures are then broken  down by State
 and local  agencies. During this disag-
 gregation  process, local problems and
 trade-offs can be  considered In some
 detail when determining  population
 figures  for a  given community or
 region. State and local  governments
 are in a far better position than EPA
to determine the appropriate disaggre-
 gation  methodologies.   Consistent,
overall State totals which provide for
 some flexibility best serve the water
 quality  objectives mandated  by the
 Act by avoiding plant overdesign and
 by spreading resources to as many eli-
 gible communities as possible.
   The National Marine Fisheries Serv-
 ice asked  that these regulations pro-
 hibit the filling of wetlands and pro-
 vide for consultation with the  Depart-
 ments  of  Commerce  and Interior  if
 wetlands will  be disturbed  by a 201
 project. Regulations for the construc-
 tion  grants program refer to environ-
 mental requirements in general terms
 because so many laws and  executive
 orders  dealing with special  environ-
 mental matters apply to the program.
 It should  be  noted  that  Executive
 Order 11990, relating to wetland pro-
 tection, is  explicitly  mentioned  and
 followed in general EPA grant regula-
 tions published  as final  rules in the
 FEDERAL REGISTER on June 30,1978 (40
 CFR  30.410-5  as found  on  43 FR
 28486). EPA recently issued a state-
 ment of procedures defining policy for
 use in assessing the impacts of Agency
 actions on  floodplains and  wetlands.
 The construction grants program will
 issue its own program guidance to sup-
 plement the Agency procedures. It will
 also  implement  the  requirements on
 wetlands that  are expected  to be in-
 cluded in the upcoming revision of 40
 CFR Part  6. Preparation of Environ-
 mental Impact Statements.
   Finally, it was suggested that these
 regulations require preparation of an
 economic impact analysis statement
 under  Executive Order  12044.  The
 Agency believes that the promulgation
 of these regulations does not  impose
 economic costs large enough to neces-
 sitate such an economic impact analy-


  Technical amendments  to  the con-
 struction grants regulations were pro-
 posed in the June 2, 1978, issue of the
 FEDERAL REGISTER. The purpose of the
 technical amendments is  to  make, in
 conjunction with  the final promulga-
 tion  of  Clean  Water  Act  changes,
 other changes which are necessary to
 ease administration  of and participa-
 tion in the  construction  grants  pro-
 gram. These changes include changes
 based upon operating experience as re-
 flected   in  program  requirements
 memoranda; changes based upon devi-
 ations from the  current regulations
 which have been issued by the Direc-
 tor,  Grants  Administration  Division;
 changes that correct operational prob-
 lems or which  appear to  be  adminis-
 tratively desirable; and changes which
 simplify the  language and readability
 of the regulations.
  The discussion of the major changes
 and the public  comments which were
 received  are  presented below. We do
not discuss provisions on which no
                           FEDERAL REGISTER, VOL 43, NO.  1M—WEDNESDAY, SEPTEMBER 27, 1971

                                            RULES AND REGULATIONS
 comments  were  received  or  which
 remain as proposed. Nor do we discuss
 a number of comments of less wide-
 spread interest. A fuller discussion of
 all  sections  that were proposed and
 other comments  can be obtained by
 writing to Michael B. Cook at the ad-
 dress  listed above. This complete dis-
 cussion will be mailed to all those who
 commented on the technical  amend-
   $35.900. This section is promulgated
 substantially as proposed. A new para-
 gragh (c) has been added to  advise
 people of the availability of technical
 and guidance publications.
   § 35. SOI. For the reasons for the ad-
 dition of  this new section,  see the dis-
 cussion below under § 35.93S-1.
   §35.903. The  second sentence of
 paragraph (j) is being revised to clari-
 fy which costs should be claimed in
 the initial request for payment. This
 section is promulgated substantially as
   Reimbursement and "grandfathered"
 planning   phase-out  (the   former
 §35.905-4, and §§35.917,  35.925-18).
 Revisions to these three sections were
 proposed  to  provide for two related,
 new transition rules.
   First, we proposed an orderly phas-
 ing out of projects previously allowed
 to proceed, subject  to reimbursement
 through grant award  at a later date.
 (See  §35.925-18.)  Under the present
 rule, most projects do not receive such
 reimbursement. The  proposed  rule
 would have  required those projects
 presently entitled to reimbursement to
 obtain  the reimbursement  through
 grant  award  by  March 31.  1979, or
 March 31, 1980, in some cases, or be
 barred from obtaining the reimburse-
 ment.  This change is based  upon a
 major program change made by the
 1972  amendments  to  the  Act;  while
 section 8  of the prior Federal Water
 Pollution  Control Act (FWPCA) per-
 mitted funding on either a reimburs-
 able  or  concurrent  basis,  the  1972
 Amendments limited the Agency's re-
 imbursement authority to  that reim-
 bursement authorized by section 206
 of the Act.
  Second,  we proposed phasing out the
 "grandfather" provision  for planning
 performed before  the enunciation of
 the  new statutory requirements and
 implementing   administrative  proce-
 dures now applicable to facility plan-
 ning. (See §35.917.) Under the  previ-
 ous rule, facility planning determined
 by the Regional Administrator to have
 been initiated before May  1,  1974, is
 required to comply with those facility
 planning requirements determined ap-
 propriate by the Regional Administra-
 tor. The proposed rule would require
compliance with all the facility plan-
ning requirements before award of any
step 2 or  step & grant. There was an
extension  until April 1, 1979, provided
 for planning initiated before May 1,
 1974. When the subpart first detailed
 facility planning requirements in 1974,
 the Agency did not  wish to require
 substantial revision  or abandonment
 of prior planning efforts, particularly
 since that would have entailed a dra-
 matic slowdown in grants for neces-
 sary projects and the possible loss of
 funds by States through the reallot-
 ment process. The Agency now desires
 all  grantees  to achieve compliance
 with the administrative  requirements
 which assure attainment of the statu-
 tory objectives. Since facility  planning
 requirements are now more thorough-
 ly understood and procedures stream-
 lined,  this phaseout should  result in
 minimal delay to projects, particularly
 if States and municipalities  take  the
 necessary steps soon to assure funding
 for previously planned projects.
   About 15 comments were received on
 this proposal. Several comments  ex-
 pressed support for the phasing out of
 the planning and reimbursement tran-
   The major  comments received con-
 cerned the short-time period  between
 final promulgation  of  these regula-
 tions and  the effective dates of the
 phaseout, proposed as March  31, 1979
 and 1980. The major obstacle  to meet-
 ing the original  dates was the fact that
 State priorty  lists for  fiscal year 1979
 are already complete. In States which
 do-not utilize a reserve for step 1 or
 step 2 assistance, this could pose a sig-
 nificant problem. Also, in some cases,
 locally financed step 2 work is await-
 ing  completion of facility planning.
 Therefore, we have decided to extend
 each of the proposed dates by 1 year.
  In other  cases, where extenuating
 circumstances (such as preparation of
 an environmental  impact statement
 which  is underway)  prevent award of
 grant assistance by the deadline, devi-
 ation requests will be  considered.  In
 most cases, however, it is of overriding
 importance  to bring in and complete
 any step 1 work still underway, so that
 projects necessary to meet enforceable
 requirements of the Act  can  proceed
 through  steps 2 and 3  in a  manner
 consistent  with the requirements  of
 titles III  and IV of the Act. States
 should utilize the step I/step 2 reserve
 to fund facility planning and design al-
 ready underway where projects would
 not  obtain priority for step  3 under
 the approved project priority system.
  §35.905. This  section  contains the
 definitions of terms applicable to this
 subpart. Formerly, each defined term
 had its own section number. However,
 this made insertion of  new definitions
 in alphabetical order difficult, since it
 necessitated  renumbering the other
definitions and correcting cross, refer-
ences. Therefore, in accordance with
guidance issued  by  the Office of the
Federal Register, the section  designa-
 tions have been deleted. All definitions
 will continue to be shown in §35.905,
 with the defined  term in italics. All
 cross-references  to   definitions  will
 refer to § 35.905.
   §35.905, definition  of "ad valorem
 tax." Although we  did not propose the
 addition of this definition, it is appro-
 priate to add it given its importance in
 the user charge provisions.
   §35.905,  definition  of  "construc-
 tion." This  proposed amendment de-
 letes from the definition of "initiation
 of construction" the different  defini-
 tions which were applicable for work
 initiated prior to November 1,1974.
   Several commenters questioned the
 new definition of initiation of  step  1
 work,  i.e., the approval of  a plan of
 study, since that action usually takes
 place at the same time as step 1 award
 and they felt that the more common
 action  (the  grant  award) should be
 used as the definition. It  is true that
 the award of step 1 assistance denotes
 approval of the plan of study in most
 cases;  however,  there are  situations
 where step  1 work is begun by gran-
 tees following approval of the plan of
 study accompanied by the reservation
 of funds as  authorized  in §35.925-
 18(a)(l). We would not  want to omit
 this circumstance from the definition,
 thereby making ineligible  some step  1
 work of thjsse grantees. Since  step  1
 grant awards should  never take place
 prior to approval of  a plan of  study,
 and since it usually is the  same thing,
 we have retained the def intion we pro-
  Two questions were raised about the
 problems  created  in .the transition
 before April 1. 1981, by the new defini-
 tions of initiation of step 1 and  step 2
 work. This section is one of the provi-
 sions where the old definition will con-
 tinue to apply to phaseout situations
 until   the  transition  is  completed
 before April 1, 1981. Until then,  assist-
 ance will be awarded to the transition
 projects  under  the   old  definition.
 Paragraph B.I. of appendix D will be
 applied to new grant  awards for  the
 transition projects under the old defi-
  §35.905, definition of  "municipal-
 ity. " The Agency proposed a clarifica-
 tion of the  definition of  "municipal-
 ity" in this section because the current
 definition of the term has raised sever-
 al questions  regarding the eligibility of
special districts for funding under this
program.  This revision  clarifies  the
Agency's position by  expanding  the
 description of the types of special  dis-
 tricts  which are  and  are not eligible.
Several comments questioned the defi-
nition  as  it relates to  eligibility  of
State  agencies for grants.  The  defini-
tion of municipality  does not  affect
the eligibility of State agencies. States
and their agencies are eligible in their
own right (see § 35.920-1).
                           HDfftAL HOISTIR, VOL 43, NO. 1M-WIONISOAY, SIPTIMBM 27, WTO

                                            RULES AND REGULATIONS
  In  reviewing  the comments which
 were received on this section, we con-
 cluded  that  paragraphs  (b)(2) and
 (b)(3) were redundant. Therefore,  we
 have deleted paragraph (b)(2). The
 key difference between an eligible and
 ineligible district  is whether the dis-
•trict provides services to the surround-
 ing community  or only for itself. If it
 does  not serve  the surrounding  com-
 munity, even a special district which
 has  wastewater treatment  facilities
 before  passage  of  the 1972 amend-
 ments is not grant eligible.
  § 35.910-2. Paragraph (c) of this sec-
 tion was revised on January 10, 1978.
 That revision inadvertently  did  not
 distinguish between funds deobligated
 during  their  initial allotment period
 and funds deobligated after their real-
 lotment date. Historically, in this pro-
 gram, funds deobligated prior to their
 reallotment date are treated  as are all
 other funds from  that  allotment (i.e.,
 they  are subject to reallotment if not
 reobligated), and the regulation need
 not deal with those funds.  However,
 we treat  other  deobligated  funds  as
 section  205(b)<2)  of the statute  re-
 quires for funds "released by the pay-
 ment of the final voucher for the proj-
 ect." We have revised paragraph (c) to
 describe how  to treat  these  deobliga-
  However, it  has been brought to our
 attention that this statutory require-
 ment may create  accounting difficul-
 ties when  funds which originated  in
 one allotment are subsequently treat-
 ed  as  a  later  allotment.  For  this
 reason,  we intend to examine this pro-
 cedure in depth  during the next sever-
 al months  in order to determine what
 changes, if any, to the regulations or
 statute  might be desirable. Individuals
 (particularly States) wishing to submit
 their  views for  this study are Invited
 to  do so  by  sending  them  to: Mr.
 Harold P. Cahill, Jr., Director, Munici-
 pal Construction Division (WH 547),
 EPA, 401 M Street SW., Washington,
 D.C. 20460.
  $35.912.  We  have   made  textual
 changes to agree  with the new pro-
 gram thrust of State management as-
 sistance grants and  the delegation  of
 § 35.913 (which was done with the pro-
 mulgation of the interim subpart F on
 April  25).
  35.917. One commenter questioned
 the revision of  the  final sentence  in
 paragraph  (b), which in effect defines
 "cost-effective"    as    the    "most
 economical • • * recognizing  environ-
 mental and social considerations." We
 do not believe the  word "economical,"
 when modified by the reference to en-
 vironmental and social considerations,
 will mislead the public to think that
 the "cheapest" solution is desired. We
 believe that the revision of this sen-
 tence  as proposed is better than the
 former regulation in briefly explaining
 what cost-effective means. Therefore,
 we have retained  the language  pro-
 posed but have added a cross-reference
 to  appendix A  to ease further inter-
  Questions  were  raised  about  the
 meaning of paragraph (e) relating to
 water quality  management  and  out-
 puts. One  commenter argued that we
 should  not  withhold  construction
 grants because the State fails to  pro-
 duce water quality  management  out-
 puts. It was argued that the provision
 ignores  typical  State/local  relation-
 ships and further that the unavailabi-
 lity of State outputs and case-by-case
 determinations  would delay the  pro-
 gram. Section  208(d) of the Act re-
 quires EPA to insure that treatment
 works conform  to approved areawide
 plans. The revised paragraph (e) speci-
 fies the  facility-related  information
 that  must be  available and used in
 planning treatment works. Coordina-
 tion of the two programs, as mandated
 by  the Act, will induce coordinated
 State and  local action that will  pro-
 duce a  better  overall water  quality
  We have deleted  the old paragraph
 (f)  which references the Agency's fa-
 cility  planning  guidance.  The   new
 paragraph  §35.900(c) makes  appropri-
 ate reference to the availability of all
 Agency construction grants guidance.
  § 35.917-1. The revision to paragraph
 (d)  is to clarify the  language  and to
 add a reference to appendix A in
 which the cost-effectiveness guidelines
 are found.  The  revision to paragraph
 (d)<2) adds mention  of nonstructural
 methods (see discussion in appendix A,
 cost-effectiveness analysis guidelines).
  The part of paragraph (d)(5) dealing
 with best practicable waste treatment
 technology (BPWTT) has been moved
 into paragraph (d)(4) to better clarify
 the relationship between applicable ef-
 fluent limitations and BPWTT.  The
 previous  reference in (d)(4) to not  less
 than  secondary treatment,  although
 technically correct,  is out-of-date in
 light of current BPWTT requirements.
  In paragraph (e), we have eliminated
 the requirement for submission of the
 NPDES permit. A commenter suggest-
 ed  that  this be .done in accordance
 with  our proposal  to eliminate  the
 permit submission requirement from
 §35.925-6. The permit number must be
  Paragraph (g) has been revised to re-
 quire a summary of public participa-
 tion in the  development of the facility
 plan. The previous regulation required
a summary of meetings. Since public
participation may be achieved through
means other than meetings  or hear-
ings, particularly in accordance with
the proposed new requirements in part
25, this revision is appropriate.
  A new paragraph  (1) incorporates
the requirement for  inclusion of total
 project costs and estimated charges to
 customers in the facility plan. This re-
 quirement was established in program
 requirements   memorandum    76-3
 (August 16, 1976).
  We  have added a  new  paragraph
 (m), based upon public comments re-
 ceived  on §35.920-3.  The  new  para-
 graph requires a statement as to the
 availability and estimated costs of the
 proposed site(s). See additional discus-
 sion under § 35.920-3.
  Some  commenters  also  questioned
 the effective date of the revised facili-
 ty  planning requirements in this sec-
 tion. The effective date this section is
 October 1,1978. Step 1 grants awarded
 after September 30,  1978,  or  facility
 planning initiated after September 30
 without Federal  grant assistance, are
 required to comply with these regula-
 tions.  Note  the relationship  of the
 transition provisions to the effective
 dates;  no step 2 grant will be awarded
 after March 31, 1980, if the  facility
 planning does not comply with current
  § 35.917-3. In the interest  of brevity,
 we have  deleted paragraph (a)  from
 this section. That  paragraph was re-
 dundant with other provisions of the
 regulations. No change in substantive
 requirements  is  intended.   In para-
 graph (a), we have added the statutory
 requirement that, after a waste treat-
 ment management agency  has  been
 designated for an area, only the desig-
 nated agency may receive grants. Fur-
 ther mention of this requirement  is
 also in § 35.925-2.
  Several commenters felt  that  208
 planning agencies should be eligible to
 receive step 1  grants.  This section
 allows  only agencies which are eligible
 to receive  step 2 and 3 grants to re-
 ceive step 1 grants. We did not propose
 to change this provision. We note that
 where 208 agencies are the most quali-
 fied to conduct all or any part of step
 1 planning, a qualified management
 agency  may be the grantee and  may
 pass the  funds through to the  208
 agency  via an interagency agreement
 to do necessary planning.
  Several commenters raised questions
 relating primarily to the process for
 designation of a management agency
 or  agencies under  the statute.  The
 water quality management regulations
 are being revised and were proposed in
 the FEDERAL REGISTER on September
 12,  1978 (43 FR 40742). Those regula-
 tions provide for designation of man-
 agement agencies.
  § 35.920-3. Although we  did not pro-
pose changes to paragraph (a), we
have included in paragraph  (a)QXiii),
reference to the public participation
program.  Though the shape of  the
new program is not yet finalized, it is
appropriate to request grantees to de-
scribe their intended program  in  the
                           FEDERAL REGISTER, VOL 43, NO. 188—WEDNESDAY, SEPTEMBER 27, 1978

                                            RULES AND REGULATIONS
 step 1 application, whether the new or
 old requirements are applicable.
  Paragraph (b) has been rewritten to
 improve style, to  correct references,
 and to add references to the existing
 requirements for intermunicipal agree-
 ments, allocation of costs to Federal
 facilities, project schedules, and sewer
 use ordinances. Experience has shown
 there  are  inordinate program delays
 unless intermunicipal agreements are
 obtained prior to the award of grant
 assistance.  Inclusion of  these  refer-
 ences here will simplify compliance for
  Several questions were  raised con-
 cerning  the requirement for a state-
 ment as to  the availability of the pro-
 posed  site  (paragraph (a)(2)). A  few
 cornme'nters pointed out that a vague
 statement  of availability is not suffi-
 cient, particularly in the case of land
 treatment projects where the feasibil-
 ity and cost-effectiveness of the entire
 project  may depend upon the  firm
 availability  of a particular site. On the
 other hand, it would not be appropri-
 ate,  in  most cases, to  require  fee
 simple  interest  at the step 2  stage,
 since most  municipalities finance  the
 purchase  through  bond  proceeds
 which are generally not available until
 after step 3 award. Therefore, we have
 revised this paragraph to require "ade-
 quate information regarding the avail-
 ability'of the proposed site(s)."  Re-
 gional offices and States are expected
 to use their judgment in determining
 what constitutes adequate information
 in the particular  circumstances. The
 facility  planning  requirements have
 also  been amended to require a state-
 ment of availability and cost  of  the
 site(s) (see § 35.917-l(m)).
  Commenters raised several questions
 concerning  the requirement for sub-
 mission  of  proposed intermunicipal
 agreements  at the step  2  application
 stage (paragraph (b)(6)).  They desired
 to know the degree of certainty which
 would  be required  at this point. The
 degree of finality which is required in
 any  particular  case cannot  be  de-
 scribed with certainty in a regulation
 broadly  applicable  to all cases.  We
 would  expect, however, the proposed
 agreement which is submitted to rep-
 resent  more than just the proposal of
 the  grantee municipality; it should
 represent the product of  discussions
 between  the parties concerned, even if
 the agreement is not yet ready to be
signed.   In  particular  cases,  where
there are doubts regarding the partici-
 pation of municipalities in the project,
 the regional office  may find it neces-
sary  to  request  more  definitive  ar-
rangements.  Therefore,  the require-
ment has been worded to say,  "pro-
posed or executed (as determined  ap-
propriate by the Regional Administra-
tor) • • V
   §35.925-7.  Although no revisions to
 paragraph (e) were  proposed,  it has
 been revised to delete reference to a
 date which has passed, and to empha-
 size  the  current requirements   for
 BPWTT and reuse/recycle technology.
   §35.925-8.   The  addition  of para-
 graph (b) is intended to  enforce deci-
 sions  reached in  the  environmental
 review process, consistent with pro-
 gram  requirements memorandum  75-
 26 (formerly program guidance memo-
 randum 50, June 6, 1975).
   A commenter on this  section sug-
 gested EPA's denial or conditioning of
 award  on compliance  with  environ-
 mental assessment conditions address-
 ing  secondary impacts is an  inappro-
 priate entry  of EPA into  land use and
 growth control. The commenter rec-
 ommended that the program require-
 ments memorandum issued in 1975 on
 this subject be rescinded  as well. EPA
 is required  by the National Environ-
 mental Policy Act to consider second-
 ary  impacts  of its construction grants
 projects and  we, therefore, could not
 accommodate his suggestion.
  $35.925-12. See discussion  under
 § 35.935-3, below.
  $35.925-15.  The  revision of the first
 sentence  clarifies  the current regula-
 tion by making it clear that sewer pro-
 jects which are solely for the purpose
 of handling industrial wastes are ineli-
 gible. This would  affect, for example,
 a  project to extend an  interceptor
 solely to  an industrial park,  with  no
 transport of domestic wastes along the
 way. We believe this is consistent with
 congressional policy to encourage Joint
 treatment, since in the absence  of do-
 mestic waste there is not a joint aspect
 to the project.
  The several commenters on this sec-
 tion felt, for  the most part, that single
 purpose, or almost single purpose, pro-
 jects should be permitted to proceed.
  Some  suggested deletion  of the
 words "almost exclusively" as  being
 too  vague. We have  found other ex-
 pressions  unsatisfactory.  We would
 not  consider an  interceptor which
 serves a large industrial park, but hap-
 pens to pick  up domestic  wastes from
 one  residence on its route, to  thereby
 lose its industrial purpose and become
 eligible for the Federal grant. There-
 fore, we believe the term "almost ex-
 clusively" connotes limited but appro-
 priate discretion for the Regional Ad-
 ministrator necessary  to determine eli-
 gibility under the program.
  The definition of "waste treatment
 system"  has been  deleted from this
 section because the phrase, "complete
 waste treatment system" is defined in
 § 35.905.
  The references to the pretreatment
 regulations in the  final sentence have
been corrected. Part 403 contains the
Agency's new pretreatment regulation
published in  the FEDERAL REGISTER on
 June 26, 1978 (43 FR 27736). § 35.907 is
 promulgated in this package.
   §35.925-.Tfi.  This section deals  with
 costs allocable to Federal facilities. We
 deleted a proposed parenthetical ex-
 pression referring to such facilities in
 the District of Columbia and other ju-
 risdictions  receiving  direct  congres-
 sional appropriations.  The  reference
 would create  administrative difficul-
 ties that  we prefer to handle through
 the grant  deviation  process.  Other-
 wise, this section  is promulgated  sub-
 stantially as proposed.
   §35.925-.ZS.   Significant  revisions
 have been made in paragraph (a)  of
 this section relating to the phaseout of
 authority for reimbursement. See the
 discussion of  this under  the heading
 reimbursement and "grandfathered"
 planning phaseout, above.
   We  made  three  changes to para-
 graph (b). We have added a reference
 to engineering costs  associated with
 advance  acquisition or advance  con-
 struction  to clarify such  costs as al-
 lowable when prior  approval has been
 obtained.  We have  added the  cost  of
 acquisition of  an  option  for the  pur-
 chase of eligible land to the advanced
 work which may be approved. We have
 further clarified this paragraph so the
 Regional  Administrator may not ap-
 prove such advance step 3 work unless
 an  environmental  review  has  been
  Several  commenters indicated their
 approval of the clarification of eligible
 items  in  paragraph  (b). One com-
 menter, however,  questioned the ne-
 cessity for the completion of an envi-
 ronmental review before the Regional
 Administrator  may authorize advance
 expenditures. We are advised by coun-
 sel that the Regional Administrator's
 authorization   is  a  major  Federal
 action  requiring   completion   of  a
 review (either  negative declaration or
 environmental   impact   statement)
 under  the  National  Environmental
 Policy Act. However, grantees  should
 be aware  the environmental  review
 can be narrowed down to a particular
 item in cases where there  is no contro-
 versy over the particular item and the
 item is common to  all alternatives.
  §35.926. Although no changes were
 proposed  to  this  section, we  revised
 paragraph (a) and § 35.920-3 to require
 a  value   engineering  commitment,
 rather than proposal, with the step 2
 application. The actual value engineer-
ing  proposal   would  be submitted
during step 2.  The requirement for a
 full proposal at the application stage
was inappropriate.
  §§ 35.927 et sea. In §§ 35.927, 35.927-1,
35.927-2, and 35.927-3 several changes
were proposed to  update the regula-
tions in accordance with current pro-
gram policy. EPA has deleted the spe-
cific content of the infiltration/inflow
(I/I) analysis.  Program requirements
                           FEDERAL REGISTER, VOL 43, NO. IBS-WEDNESDAY, SEPTEMBER 27,  1978

                                            RULES AND REGULATIONS
 memorandum 78-10, Issued on March
 17,1978, established some new options
 to the traditional method of I/I analy-
 sis in this program. The remainder of
 the changes proposed in these sections
 complement  that  memorandum  by
 providing more flexibility.
   Several questions were  raised about
 the     proposed    language     of
 §35.927(b)<3)  which appeared to  re-
 quire the actual  rehabilitation to take
 place during the sewer system evalua-
 tion  survey, thereby establishing with
 certainty the amount of nonremovable
 I/I. We did not  intend this and have
 revised the language of that sentence
 to reference only the program for re-
 habilitation as  part  of the  sewer
 system survey.
   One commenter requested the ratio-
 nale  for the deletion of the phrase, "in
 each  sewer  system  tributary"  in
 § 35.927-l(a), indicating that the revi-
 sion  implied that  only  the  sewer
 system owned by an entity is subject
 to I/I analysis. If the analysis for non-
 owned systems was not conducted, the
 utility of the analysis which was con-
 ducted  would be  distorted. We •deleted
 this phrase to eliminate the inference
 that  each  minor tributary must  be
 analyzed separately to determine if it,
 individually, was subject  to excessive
 I/I. Even if more than one jurisdiction
 is involved, all parts of the system are
 subject to some  sort of analysis. The
 language has been retained  as pro-
  The language of § 35.927-2(a) as pro-
 posed included a typographical error
 which  inadvertently deleted  the re-
 quirement for a comparison of the post
 of transportation versus the cost of re-
 habilitation and treatment for each I/
 I source. We have corrected this lan-
  Section 35.927-3(a) has been further
 revised  to indicate  minor rehabilita-
 tion can be accomplished in any step
 under a grant (not just step 1) 'and re-
 habilitation work under $10,000 (small
 purchase) is not subject to the require-
 ment for formal  advertising. We have
 also  revised §35.936-14,  relating  to
 force account work, to include the re-
 quirement for the Regional Adminis-
 trator's  approval  of force  account
 work for sewer rehabilitation during
 step 1 and step 2. not just for step 3.
  Two  commenters  questioned  the
 policy of EPA which prohibits  funding
,of sewer system rehabilitation beyond
 the   "Y"   fittings  which  convey
 wastewater from  individual structures
 or private property. They  suggested
 we consider as eligible all sewer reha-
 bilitation costs for any  part of a line
 lying  in a  public  easement.  EPA con-
 siders eligible  for new construction
 only those parts of the line  up to and
 including the "Y" fittings..Therefore,
 in accordance with  the definition  of
 sewage  collection system  in §35.905-
 19,  EPA cannot  fund rehabilitation
 work beyond the "Y" fittings. Howev-
 er, the municipality's costs of treating
 the pipe beyond the "Y" fittings up to
 the point which the municipality must
 fund may be calculated on  an incre-
 mental,   rather  than  proportional,
 basis.  A new  paragraph (c)  has been
 added to §35.927-3 to  clarify this
  §35.930-4.  No changes were  pro-
 posed to this section. However, in the
 final regulation, we have deleted refer-
 ence to the requirement for BPWTT,
 secondary treatment,  and  effluent
 limitations,  because  those require-
 ments  are  adequately  covered  in
 §§ 35.917-1 and 35.925-7.
  §35.935-1. EPA  proposed to create
 new paragraphs (a) and (b) to describe
 the grantee's  responsibilities  under
 these grants.
  Paragraph  (a) states EPA's position
 that EPA review and approval of proj-
 ect plans and specifications, under sec-
 tion 203 of the Act, does not  relieve
 the grantee  of its rssponsbilities for
 the design, construction, or use of the
 treatment works.
  Paragraph  (b) provides  an explicit
 basis for seeking specific performance
 or  recoupment of  funds  from  the
 grantee,  if the grantee fails to make
 good faith efforts to meet its  obliga-
 tions under the grant.
  Several comments on paragraphs (a)
 and (b) demonstrated to us the need to
 explicitly set forth the Agency's policy
 assumptions underlying the establish-
 ment of paragraphs (a) and (b). These
 basic assumptions are set forth  in new
 §35.901,  and paragraphs  (a) and (b)
 are promulgated as proposed.
  § 35.935-3. We proposed to add a new
 § 35.935-21 (now renumbered § 35.935-
 3) because there has been some  misun-
 derstanding of the applicability of the
 real property acquisition regulations
 in part 4 of title 40 to this program.
 Questions have also been raised about
 other property requirements. The ad-
 dition of this section does not add any
 new requirements;  rather, it clarifies
 those which have  been in effect and
 summarizes them  in one place.  The
 provisions in the 1977 amendments re-
 lating to  land treatment and eligibility
 for land purchases make this more im-
  One  commenter  suggested the  re-
 quirement in  paragraph  (b)(l) that
 any acquisition be conducted  in  ac-
 cordance  with  40  CFR  part 4 (and
 hence, the Uniform Relocation  Assist-
 ance and Real  Property Acquisition
Policies Act) represents unnecessary
Federal involvment in local affairs. He
felt that  where displacement is not in-
volved, procedures  to acquire noneligi-
ble land should be locally determined,
and EPA should require only satisfac-
tory evidence of sufficient interest in
the site prior to award. However, the
 Uniform Relocation and Real Proper-
 ty Acquisition  Policies Act  requires
 EPA to apply title III of that Act to
 the acquisition of any interest in real
 property (even easements) to be used
 for a federally assisted project. There-
 fore, EPA has  no discretion in  this
 matter and  must  apply  the current
   §35.955-9.  The revision of this sec-
 tion was intended  to  clarify EPA re-
 quirements for prompt initiation of
 project work and to integrate  the
 grant requirements more closely with
 the NPDES permit program. The text
 was broken into the three paragraphs
 for ease of use.
   The revision of paragraph (a) clari-
 fies the term "project" to mean step 1,
 2 or 3. The  new second sentence ap-
 plies the same sanctions to all three
 steps. Several commenters suggested
 the final sentence of (a) be revised to
 address completion, as well as  initi-
 ation, of construction. This has  been
 done. Reference to "any project sched-
 ule" has been revised in the final regu-
 lation to refer to "the project progress
   Paragraph (b) explains the grantee's
 obligations under the NPDES permit
 program as they related to actions the
 grantee takes under  the  grant pro-
 gram. We  received several  comments
 on  the  relationship  between  grant
 dates and.NPDES  permit  dates. One
 commenter suggested that grant dates
 rather than permit dates be the gov-
 erning dates and that all other sched-
 ules requirements  be secondary  and
 subservient to grant  dates. Another
 commenter noted the present permit
 regulations  allow such  a  "floating"
 date  mechanism to be employed by
 EPA and  NPDES  States.  Since  the
 intent of the Agency is to improve the
 extent of municipal compliance  with
 NPDES permit requirements, it will be
 necessary to use selected, fixed dates
 in most municipal permits In order to
 ensure enforceability in the event of
 recalcitrance by grantees with permit
 deficiencies. EPA is presently drafting
 a policy which delineates new operat-
 ing procedures designed to Implement
 this permit/grant  approach. Conse-
 quently, no change has been made to
 the revision as proposed.
  Paragraph (c) contains the same ter-
 mination requirement as the former
 regulation,   but  includes  the items
 which the  Regional  Administrator
 must consider in making his determi-
 nation. This paragraph also clarifies
 EPA's expectations  as to the time by
 which invitations for bids should be
  We received several  comments on
 this paragraph.  One  commenter  ob-
jected to the statement that invita-
 tions for bids are expected to be issued
within 90 to 120 days after award, be-
cause sometimes grantees  postpone
                           FEDERAL REGISTER, VOL 43, NO. 188—WEDNESDAY, SEPTEMBER 27, 1978

work because of too great a demend on
the construction industry in a particu-
lar area. The section provides that is-
suance of the invitation for bids (not
contract award) should occur  within
90 to 120 days after award. The use of
the term "should" indicates that those
dates are not mandatory. However, ini-
tiation of construction  on all signifi-
cant elements of project work within
12 months is mandatory.
  Some commenters raised questions
as to the definitions of "all significant
elements"  and "initiation of step 3
construction."  "All significant   ele-
ments" is not defined because we have
concluded that it is necessary to leave
this to the Regional Administrator, to
decide on a case-by-case basis. What is
essential is that work  be progressing
speedily  toward  completion of  con-
struction. The term "initiation of con-
struction"  is defined in §35.905.  For
step 3, it means issuance of a notice to
proceed under a construction contract
for any segment of step 3 work or if
notice to proceed is not required, ex-
ecution of  the construction contract.
That definition  is  applicable  here,
except,  under the terms  of this sec-
tion, we expect initiation of all signifi-
cant elements within one year.
  Two  comments  on  paragraph  (c)
urged changes to give the Regional
Administrator more flexibility in  ter-
mination of grants.  Where flexibility
beyond the 6 months extension is re-
quired, for  good cause, the "deviation"
process  (see 40 CFR 30.1000 et seq.)
should be used. This will insure that
the  termination requirement  is  con-
sistent nationwide. Where  good cause
has existed in the past for exceptions
to the termination  requirement, devi-
ations have been granted.
  § 35.935-12. This section has been re-
structured in list form for clarity. Ref-
erence has been made  to the NPDES
permit program to  Indicate the rela-
tionship with that program. New para-
graphs (d)  and (e)  implement in  the
regulation  the class deviation which
was  in effect  since  August 24,  1977,
with respect  to  the  operation  and
maintenance manual payment limita-
tions as applied to segmented projects
and multiple faculty projects.
  Several commenters requested a pro-
vision for  waiver of the  90  percent
payment holding provision for good
cause or  where  the  operation  and
maintenance manual cannot be com-
pleted  until experience during initial
operation has been achieved. EPA rec-
ognizes  (see  program  requirements
memorandum  77-2) that  final revi-
sions to the  O&M manual  will be
made after the initial start-up period.
However, a manual which is satisfac-
tory for the   purpose  of beginning
start-up should be  available  for  ap-
proval prior to completion of construc-
tion. If there are other "good causes"
which would reasonably delay submis-
sion and approval of the manual, the
deviation process must be used.  EPA
carefully  reviews all  deviations re-
quests  to  insure  that the  situation
truly justifies a waiver of the regula-
tion. A new paragraph (b)(7) has  been
added to this section  which provides
that the plan  of operation  must in-
clude an operation and maintenance
program for the sewer system. This re-
quirement is in program requirements
memorandum  78-10 and  is  included
here for consistency and clarification.
Existing written manuals,  policy  or
guidance will suffice if they are  ade-
quate to meet current EPA require-
  i 35.935-16. This section is promul-
gated as proposed. Paragraphs (c) and
(d) implement  in the  regulation the
class  deviation  which has  been  in
effect since August 24, 1977, with re-
spect to the sewer use ordinance  pay-
ment limitations  as applied  to  seg-
mented projects and multiple facility
  §35.936-13. No  changes were  pro-
posed to this section.  However, some
changes have been made on advice  of
the Office of General Counsel.
  In paragraph (aXl), an addition has
been made to require identification  of
the "salient requirements" of items  of
equipment  when the grantee elects  to
procure by  the two brand (or trade)
names  or equal procedure. In direct
Federal procurement,  salient require-
ments must be included in the specifi-
cation itself. We feel that the manda-
tory reference to two items itself sub-
stantially   identifies the  salient re-
quirements reflected in both and  that
while Federal  rule reflects  the  best
practice, it would be unnecessarily
burdensome to grantees. However, the
EPA grantee  must be  prepared  to
identify  the   salient  requirements
when an "or equal" issue arises under
EPA program review or in a bid pro-
  In paragraph (b), we are adding a
provision relating to sole source  pro-
curement  for  innovative  technology.
See  the discussion of  this  subject
above under Innovative and alterna-
tive technology. We have also added a
cross-reference  to §33.500 et seq., for
the applicable  procedures to be fol-
lowed when sole source procurement is
  Minor revisions have been made  to
paragraph (c) to reflect experience ob-
tained  in program reviews,  protests,
and  ilT litigation relating to  grantee
"experience" requirements,  including
  In conjunction with  the final  pro-
mulgation  of this section, we are also
proposing two additional changes for
comment  The  last sentence of para-
graph (a)(l) relates to manufactured
materials, such as pipe. The current
 regulation provides that if a single ma-
 terial is specified, the grantee must be
 prepared to  justify  this  selection  of
 only one type of material.
   However,  agency  program reviews
 and  determinations of protests under
 §35.939 indicate that the  application
 of this rule has not corresponded suf-
 ficiently with  the basic requirement
 for competition (see  §35.936-3).  Pro-
 gram requirements memorandum 75-5
 (formerly PO  19A,  August  8,  1975)
 states  the  interrelationship  of  these
 policies as follows:
   "With regard to materials, such  as
 pipe, it is not mandatory  that two  or
 more different types of  material  be
 specified; however, maximum competi-
 tive  bidding is encouraged commensu-
 rate  with sound engineering practice
 and requirements. • •  * It is preferable
 to use performance specifications for
 materials based upon  accepted nation-
 ally  known standards such as AWWA,
 USAS,  ASTM. AASHO  and Federal
 specifications and standards."
   Consideration is  being  given  to
 amendment of the regulation to better
 achieve competition  within  and be-
 tween  types  of material (particularly
. pipe), in the interest of affording  an
 opportunity to compete and insuring
 reasonableness of prices, unless  there
 is a sound  engineering  justificaton
 based  upon  specific site conditions
 which supports any  restrictions upon
   In  paragraph (c) we propose to add
 as a  new final sentence the following:
 "No  experience restriction will be per-
 mitted  which  unjustifiably reduces
 competition or innovation." This is in
 effect the rule which has been devel-
 oped  in   protests   decided  under
 § 35.939. We invite public comment  on
 this  proposed addition.
   We invite public comment  on  these
 two   proposed  changes.   Comments
 should  be  addressed  to the  Director,
 Grants Administration Division, at the
 address given above. The deadline for
 receipt of comments on these issues is
 November 30, 1978.
   § 35.936-20. Paragraph (c) of this sec-
 tion  was proposed to be  amended  to
 clarify  that  costs incurred by the
 grantee in  complying with §35.937-6
 are  allowable, even  when  incurred
 prior to award. One  commenter sug-
 gested EPA should be equally explicit
 regarding the grantee's costs of carry-
 ing out protest procedures required  by
 § 35.939. The paragraph has been fur-
 ther amended to do this.
   135.936-22. Bonding and insurance
 requirements   were   previously   in
 § 35.935-3. Since the publication of the
 procurement regulations  in §35.936,
 we feel the bonding and insurance  re-
 quirements  are more appropriate  in
 this  section. It is promulgated substan-
 tially as proposed.
                           FEDCRA1 REGISTER, VOL. 43, NO. 188—WEDNESDAY, SEPTEMBER 77, 1978

                                           RULES AND REGULATIONS
  § 35.937-2 This section is promulgat-
ed substantially as proposed.
  535.937-5.  The  proposed  deletion
from paragraph (b) of the reference to
40 U.S.C. 541-544 (commonly referred
to as the "Brooks bill") concerned con-
sulting engineering firms and several
of their national professional societies.
This amendment was suggested by the
EPA Office of General Counsel on the
basis of the April 25, 1978, decision by
the  U.S. Supreme Court  in National
Society of Professional Engineers v.
United States (see especially footnote
21).  In the opinion of the EPA Gener-
al Counsel, the Supreme Court's deci-
sion resolved any doubt that the pro-
curement of  professional engineering
services is subject  to general antitrust
requirements    unless    specifically
exempted by Federal statute, e.g., the
Brooks bill. The Brooks bill is applica-
ble  only  to  direct  Federal  procure-
ment,  i.e., contracts for  engineering
and  architectural services awarded by
Federal  departments   and agencies.
There is no  Federal  statute which
exempts Federal  assistance programs
from compliance  with Federal anti-
trust laws.
  The proposed amendment  author-
ized  negotiation  procedures  estab-
lished by State or local law. This pro-
vision  has been  amplified to  state
more clearly the alternatives available
to grantees. If State statutory or local
code procedures exist or  are adopted
which are comparable  to  the negotia-
tion provisions of the Brooks bill, such
procedures may be utilized. Such pro-
cedures can assure reasonableness of
price if the grantee has the staff capa-
bility,  or otherwise  acquires  it (e.g.,
through assistance from another local
or State agency) to develop an inde-
pendent cost estimate to serve as  the
basis for price negotiations with  the
selected  consulting engineering firm.
In connection with the development of
such procedures,  local  governments
may also wish to review the March 20,
1978, U.S. Supreme Court decision in
Lafayette  v.   Louisiana  Power  and
Light Company.
  The  proposed amendment has also
been amplified to make it clear that if
no State statutory or local code proce-
dures exist, a municipality may adopt
either (1) procedures  comparable  to
those observed by the Federal Govern-
ment under  the  Brooks  bill or  (2)
price-competitive procedures. If a mu-
nicipality wishes to utilize a price-com-
petitive system for negotiation of engi-
neering fees,  however,  this must be
based upon an objective negotiation
process in which award is based upon
previously announced objective evalu-
ation  factors,  including  price  and
other considerations (such as profes-
sional   competence   and  technical
merits of proposals). EPA does-not re-
quire or encourage award of engineer-
ing agreements solely on the basis of
  535.937-6. No  change was proposed
to this section. However, from time to
time, we have been asked why gran-
tees who are required to comply with
§§35.937-2, 35.937-3 and 35.937-4 are
required to submit documentation of
negotiation methodology used (negoti-
ation is covered by §35.927-5) when
other grantees are not (see paragraph
(a)(2)(i)).  We have  reviewed the re-
quirement and  have concluded that
there is no reason for the difference.
Further, all grantees are required to
document the basis for selection and
basis for  the  price under §35.936-12.
These records are  available for EPA
should  we need them. Therefore, we
have deleted the requirement for sub-
mission of the negotiation methodolo-
gy used.
  § 35.937-12. We proposed a new para-
graph to reference the requirement of
§35.936-5(b) regarding  the status of
subcontractors when the engineer is
acting for the grantee in the role of
construction  manager. The  proposed
new paragraph (d) indicates that when
an engineer procures items  which are
not  covered by the provisions for ar-
chitectural  and engineering  services
procurements, the appropriate  proce-
dures of §35.938 (formal advertising)
or part 33 apply.  We  also  modified
paragraphs (a) and (b).
  One comment on paragraph (d) re-
quested we clearly  indicate that pro-
fessional  services are excluded  from
the requirement of the other sections
mentioned. We  have specifically ex-
cluded engineering  services. However,
professional services other than engi-
neering services  would  be  procured
under part 33. Clarification was also
requested  as  to  what  subcontracted
services might be appropriately pro-
cured under these other sections. An
example of services which should be
procured under part 33 regulations is
accounting services  for  the develop-
ment of user charge and  industrial
cost  recovery  systems.  Sewer line
cleaning or construction  of a proto-
type unit should be procured  under
§ 35.938 et. seq.
  Revisions to paragraph (b) were pro-
posed to  clarify requirements which
the  engineer  must  comply with  in
awarding  subcontracts. The proposed
addition of (b)(3) has been revised and
renumbered as (b)(7). Rather than in-
corporating the type of contract provi-
sions of the entire § 35.937-1, we have
included only  the prohibition on the
illegal types of contract (i.e., cost-plus-
percentage-of-cost and percentage-of-
construction-cost).   Also,  references
have been added to the appendix C-l
clauses  which are inherently (under
the language of the clause) applicable
to subcontracts.
  §35.93S-4(7i). The  addition of  the
phrase "for good cause" to paragraph
(h)(2) is consistent with program re-
quirements memorandum 78-8, Febru-
ary 13, 1978 (published in the FEDERAL
REGISTER, April 7, 1978. 43 FR 14725).
It is retained here.
  The new paragraph (hXS) permits
award of a prime contract when there
are unresolved procurement issues or
protests relating only to the award of
a subcontract or procurement of a su-
bitem. This rule has been developed in
the protest process. Adoption of it in
the regulations will make it legally im-
possible to use this rule in situations
not  involving  protest, will  make it
easier to enforce in the protest proc-
ess, and will expedite  the procurement
  Another commenter suggested a new
(h)(5)(ii) be created which would state.
"Will not materially  affect resolution
of the protest." Although we felt this
concept was implicit, we have  no ob-
jection to adding .it and have done so.
This suggestion highlighted a problem
in the  proposed regulation, namely,
two different subjects were being ad-
dressed. Therefore, the five items have
now  been   rearranged  into  two
groups—those pertaining to  award of
the contract and those  pertaining to
resolution of the protest.
  One commenter asked whether  the
final  sentence of  this paragraph  im-
plies  that  a bid  must be rejected as
nonresponsive if  a federally required
listing or selection requirement  is not
met by the contractor. This sentence
did not imply that. However, we have
decided to delete that sentence due to
current uncertainty about the future
of Federal listing requirements.
  $35.938-5.  No  changes were  pro-
posed to be made to  this section con-
cerning   negotiation   of   contract
amendments (change orders). Howev-
er, paragraph (dX3) indicated that de-
tailed cost documentation may be re-
quired by EPA when a  contractor is
unable to  certify that his costs  are
complete, current, and accurate, while
the certification  on  EPA's summary
format (EPA Form 5700-41) requires a
contractor to certify that his cost data
are complete, current, and  accurate.
Therefore, paragraph (d)(3) has been
revised to correct this error to indicate
that more detailed cost documentation
may be required when a contractor is
unable to certify that his cost data are
complete, current, and accurate.
  EPA's Office of Audit published a
report in April 1978, that addressed
the contract change  order procedure
in the construction  grants program.
That report recommended deletion of
the reference to a provisional over-
head rate in § 35.938-5(dX3). By defini-
tion, a provisional overhead  rate is a
tentative percentage  or  dollar factor
agreed upon by the grantee and the
                           FEDERAL REGISTER, VOL. 43, NO. 1M—WEDNESDAY, SEPTEMBER 27, 1978


 contractor. It is negotiated for Interim
 reimbursement pending  final settle-
 ment of the actual allowable overhead
 rate. Change  orders should be able to
 "stand by themselves," and should not
 be  renegotiated  when  the change
 order  work  is completed.  For this
 reason, a final overhead rate should be
 negotiated for a change order instead
 of a provisional overhead rate. There-
 fore, as  recommended  by the  EPA
 audit report, we have deleted the last
 sentence in paragraph (dX3).
   §35.938-6(0). This  amendment was
 proposed to deal with a problem which
 was brought  to our attention  with
 regard to progress payments on spe-
 cifically  .manufactured  equipment.
 EPA's primary reason for encouraging
 progress payments  to equipment man-
 ufacturers is  to reduce  the  interest
 cost to the manufacturers, thereby re-
 ducing the  bid price  and the costs to
 the taxpayer.
  An equipment supplier complained
 about  the  additional labor,  expense
 and paperwork needed to comply with
 the  recordation requirement, and as-
 serted that this diminishes the useful-
 ness of progress payments to the com-
 panies and increases the cost  to EPA.
 If elimination of the recordation re-
 quirement for  items  valued  at less
 than a certain amount is reasonable,
 we judge  that considerable paperwork
 can  be  eliminated. We  proposed a
 $200,000 cutoff  level  and particularly
 solicited comment.
  Two commenters felt that $200,000
 was  an appropriate level for  applica-
 tion of the recordation  requirement.
 Two other  commenters  felt  that 10
 percent of the contract value, but not
 less than  $300,000, would be appropri-
 ate. The amount of the contract value
 is not pertinent, since what is Impor-
 tant; is the absolute  dollar level at
 which the Federal Government is will-
 ing to risk nonrecordation. In view of
 the comments received, we have decid-
 ed to retain the $200,000 level.
  Some commenters felt that  even at
 the higher level recordation should be
 discretionary  with  the grantee.  An-
 other commenter suggested that the
 recordation  requirement implied  a
 lack of mutual  trust  and confidence.
 We disagree with both comments. The
 recordation  requirement  was estab-
 lished  for the purpose of protecting
 the interest of  the Federal Govern-
ment as to the work performed (as op-
posed to the value of the item) when
progress payments are made on large
equipment purchases.
  $35.938-7. No  change was proposed
to this section. However,  many ques-
tions have been raised over the last
several years and in comments recent-
ly received as to whether the excep-
tion  for State  law which is mentioned
in $35.938-6  is also applicable to
§35.938-7. We have always responded

 that it is. We decided to add the spe-
 cific exception  language to this sec-
   S 35.938-9<.b). This section is promul-
 gated substantially as proposed with a
 corrected citation. We have also added
 references to the appendix C-2 clauses
 which are inherently (under the lan-
 guage of the clause) applicable to sub-
   $35.939. No changes  were proposed
 to this section.  However,  we  have
 made a series of technical changes to
 the language. These are identified in
 the supplementary  discussion of the
 technical amendments. Also, we added
 a new paragraph  (1)  to advise  the
 public that the  EPA General Counsel
 periodically publishes an index of Re-
 gional Administrator protest determi-
  $35.940-1. Paragraph  (q)  was pro-
 posed to be revised to delete the refer-
 ence to allowability  of  State  agency
 review   costs   in  accordance   with
 5§ 35.912  and 35.913 because  of  the
 new authority in subpart F, and to be
 replaced with the eligibility of start-up
 services. The eligibility of a plan of op-
 eration  was  also specifically  added.
 Both these additions are in accordance
 with program requirements memoran-
 da issued on November 29, 1976 (PRM
 77-2 and PRM 77-3).
  One  commenter   was   concerned
 about the deletion of eligibility of fees
 under §35.913 until  the fee system is
 completely  phased-out  in  favor  of
 State management assistance grants.
 In  order to  avoid  the necessity  of
 amending the regulation next April 25,
 the eligibility of fees has been deleted.
 However, States which  previously in-
 stituted fee  systems may continue to
 charge fees and  the  grantee's costs in
 paying those fees are allowable in the
 interim, in order to permit an orderly
 phasing-out of the fee system no later
 than April 24.1979.
  135.940-2.   Although   no  changes
 were proposed to this section, we have
 made several clarifying additions.  It
 was brought to our attention that the
 fact that the plan of study is an un-
 allowable cost   should  be  explicitly
 mentioned here.  We have done so. We
 have also explicitly stated that pri-
 vately owned treatment works are un-
 allowable, except as authorized in sec-
 tion 201(h) of the Act.
  $35.940-3.  In  this  section, we  pro-
 posed to delete paragraph (d), acquisi-
 tion of an operable portion of a treat-
ment works.  The "Explanation"  de-
scribed   the   limited  circumstances
 under which  such acquisitions might
be approved. However, we have decid-
 ed to retain paragraph (d), with clari-
fication. Comments on this topic con-
firm our  opinion that more detailed
guidance  is  needed  to  clarify when
such costs may be allowable. Since the
factors used to  review these requests
 are extensive, we have decided to issue
 complete guidance instead of increas-
 ing the regulations on a matter of lim-
 ited and rare applicability.
  § 35.945. The first paragraph of this
 section is promulgated as proposed. In
 connection with this section and with
 § 35.903, it was suggested that the reg-
 ulations be revised to permit use of
 letter of credit for construction grants,.
 EPA is currently involved in a study
 concerning cash management.  Feasi-
 bility of letter of credit method of pay-
 ment for construction grantees  is one
 of the items being considered.
  Although no changes were proposed
 to  the  former paragraph (e), it has
 been broken into two paragraphs and
 revised. The new  paragraph (e) deals
 only  with final payment. We moved
 the provision dealing with assignment
 and release to a new paragraph (f). We
 deleted the requirement  for submis-
 sion  of separate assignment and re-
 lease forms. Instead, the grantee's ac-
 ceptance of the final payment const!-
 tutues his agreement to the  assign-
 ment and release. We  expect  this
 change  to eliminate considerable un-
 necessary paperwork.
  $35.960.  No changes were  proposed
 to  this  section.  However,  we  have
 added a new paragraph to advise the
 public that the EPA General Counsel
 periodically  publishes an  index  of
 grant appeals decisions.
  Appendix C-2, clause 11. No changes
 were  proposed  to be made to this
 clause. However,  it has been brought
 to our attention that there is  an incon-
 sistency between the first sentence of
 paragraph (a) of this clause and the
 parallel clause (clause 10) in  appendix
 C-l.  When these  clauses were  first
 drafted  in 1975, they both  read. "If
 the   EPA  Project   Officer  deter-
 mines * * '" As a result of public com-
 ment, they were both supposed to be
 changed to read, "If the owner or EPA
 determines •  •  *"  Inadvertently, this
 change  was  not  made  in  the  C-2
 clause. We are making this change at
 this time.
 Appendix D, paragraph 65.  This sec-
 tion is promulgated as proposed with
 clarifying language here and in para-
 graphs bl, b2 and c. This policy also
 applies to grants awarded under Pub.
 L. 84-660.
  Other sections.  Several commenters
proposed that we make changes to sec-
tions, or parts of sections, which had
not been  proposed to be  changed.
Where we  felt that the changes were
truly  of a technical nature and  could
be made without  prior proposal, we
have  done so, as is noted in  the text
above. In  some cases, however,  the
suggested  changes  were  significant
and inappropriate for promulgation as
final  rules without prior  proposal.
These comments will be retained on
file for consideration in any regulatory
                           FEDERAL REGISTER, VOL 43, NO. 1M—WEDNESDAY, SEPTEMBER 27, 1978

                                           RULES AND REGULATIONS                                     44049
changes which may be proposed in the


  Throughout the regulations we have
made editorial changes to simplify the
language. Several should be noted. We
have eliminated the  phrase, "but not
limited  to"  following  the word  "in-
clude" or "including." We have deleted
titles of cross-referenced sections in
most cases (particularly from the su-
bagreement regulations).
  We made editorial changes  in app-
pendices C-l and C-2, which  contain
clauses for inclusion in subagreements
with engineers and construction con-
tractors. Except for minor  changes
mentioned elsewhere in the preamble,
no change in meaning whatsoever- is
intended. Old supplies  of appendices
C-l and C-2 may continue to be used.
However, grantees are cautioned that
when using an old  edition of appendix
C-2, the new clause 17 (Buy American)
must be added. Some grantees or engi-
neers may prefer to  use the new ver-
sion of  appendix C-l,  because of the
corrected reference  to  §35.908  in
clause 2.
  Effective date: This subpart will be
effective on  October 1, 1978, unless
otherwise specified in particular sec-
tions. Good cause  exists for an effec-
tive date prior to 30 days after publica-
tion in the FEDERAL REGISTER because
many of the requirements are made
effective by the 1977 act on October 1,
1978, and because of the need to start
these interrelated  requirements  to-
gether to ensure program continuity.
  Dated: September 15.1978.
              DOUGLAS M. COSTLE,

  40 CPR Part 35 is amended by revis-
ing subpart E to read as follows:

    Subpart I—Grant* for Conrirvction of
    Treatment Works—dean Water Ad
                           ROCRAL RMISTER, VOL 43, NO. 1M-WEDNESOAY, SIPTIMtlt 27. 1«7t


                                            RULES AND REGULATIONS
     Title 40—Protection of Environment
            [FRL 1041-1A]


 Subpart E—Grants for Construction of
          Treatment Works
 AGENCY:  Environmental Protection


 SUMMARY: These regulations are in-
 tended  to encourage, provide for, and
 assist public participation  in the Mu-
 nicipal  Wastewater Treatment Works
 Construction Grants Program carried
 out under the Clean Water Act. The
 regulations specify that public partici-
 pation in that program applies to de-
 velopment of the State priority system
 and annual list of projects designated
 for Federal funding, to development of
 plans for wastewater treatment facili-
 ties, to development  of user charge
 and industrial cost recovery systems,
 and to  the delegation of administra-
 tive responsibilities for the Construc-
 tion Grants Program  to the States.
 The regulations  establish a  two-tier
 program of participation in the facili-
 ty planning process. This allows EPA,
 States, and grantees'to focus their re-
 sources  and energies, and those of par-
 ticipating citizens, on  the minority  of
 projects which have the greatest  fi-
 nancial   environmental  impacts  and
 which  will benefit  most  from active
 community involvement. The regula-
 tions  contain  fewer public participa-
 tio'n requirements for the large major-
 ity of projects  expected to be less-
costly or to have less  significant im-
pacts. The regulations  permit the ex-
 emption of projects which involve only
minor upgrading of treatment works
or minor sewer  rehabilitation  frpm
many of the public participation  re-
quirements of these regulations.
DATES: These regulations are effec-
tive on February 16, 1979.

ADDRESSES:   Comments  submitted
on these regulations may be inspected
at the Public  Information Reference
Unit, EPA Headquarters, Room 2922,
Waterside Mall, 401 "M" Street, S.W.,
Washington, D.C. between 8:00 a.m.
and 4:30 p.m. on business days.

  Michael B. Cook, Acting Director,
  Facility Requirements Division (WH
  595),   Environmental   Protection
  Agency, 401 "M" Street, S.W., Room
  1137ET, Washington,  D.C.  20460,
  telephone 202/426-9404.

  The regulations for public participa-
 tion in the Construction Grants Pro-
 gram  were proposed in the  FEDERAL
 REGISTER on  August  7,  1978,  along
 with overall public participation regu-
 lations which  would cover programs
 under the Resource Conservation and
 Recovery Act and the  Safe Drinking
 Water Act, as well as the Clean Water
 Act (40 CFR Part 25). The Part 25 reg-
 ulations are  being published in final
 form  in the same issue of the FEDERAL
 REGISTER as the regulations specific to
 the Construction Grants Program.'
  The preamble to the overall Part 25
 regulations includes a complete discus-
 sion of public participation activities
 conducted by EPA in the development
 of the overall regulations and the Con-
 struction Grants Program  public par-
 ticipation regulations.


  A large volume of comment was re-
 ceived on the overall Part  25 regula-
 tions and on the regulations specific to
 the  grants program.  Many  general
 comments were relevant to the .grants
 program  regulations as  well as  to
 other programs under the three cov-
 ered Acts. A full  discussion of  these
 general issues is included in the pre-
 amble  to 40  CFR  Part  25. They in-
 clude consistency  of public participa-
 tion   requirements,  discretion  and
 flexibility in the requirements, role of
 elected officials, composition and use
 of advisory groups, advance notice  of
 public  hearings  and  meetings,  and
 others. The sections which follows de-
 scribe  EPA's  response to those more
 specific issues  and  comments which
 pertain to the  Construction Grants
  1. Delay of Wastewater Treatment
 Projects. Many commenters, especially
some State and local governments, ex-
 pressed sincere concern that the new
 requirements  would delay the con-
struction  of much needed  treatment
 facilities. They cited the requirements
 for/ additional  meetings  and  public
consultation,   the  need  for earlier
public  notice, the additional reporting
requirements, the  additional demands
 on their  staffs, and additional over-
sight and review functions && potential
sources of delay during the  Step  1,
 facilities planning stage.
  Some citizens and public  interest
groups who commented on this issue,
however, noted that the most serious
delays  came not during the planning,
but during the  design  and construc-
 tion  stages. Often it  was  not  until
 these  later stages  that individual citi-
zens  and local groups realized signifi-
cant  fiscal and growth impacts of  ex-
pensive, oversized treatment facilities.
  It is  the Agency's position thal^ this
is  an  environmental,  not  a  public
works, program where the fiscal integ-
 rity and sound environmental manage-
 ment of the program are  paramount.
 Delays, if any, in facilities planning
 due to increased  public participation
 are anticipated to be more than com-
 pensated  for by the selection of more
 appropriate  treatment  systems  and
 more rapid progress in the design and
 construction stages.
  2. Resources. Federal, State and sub-
 state agencies responsible for the Con-
 struction  Grants  Program  were seri-
 ously  concerned about  the resource
 implications  of  these requirements.
 They were especially concerned about
 increased demand for monies and staff
  The Agency  acknowledges the need
 for some  additional resources to ade-
 quately  implement  public  participa-
tion in the  program. All efforts have
 been made to minimize these demands
 while maintaining the integrity of the
 program.  The  distribution  of  the
 public participation work plan and the
 responsiveness summaries  will reduce
 the need  for EPA monitoring by fos-
 tering cooperation between grantees
 and  citizens to ensure  high quality
 program outputs. Also, the Agency has
 conducted a detailed resource analysis
 that indicated that the most resource
 intensive  activity  for  the  States and
 EPA is attendance by staff  at public
 meetings and hearings; the  regulations
 do   not  require   such  attendance,
 making this activity strictly discretion-
 ary.  Since the Full-Scale Public Par-
 ticipation Program is more resource
 intensive  than the Basic Public Par-
 ticipation Program, EPA expects that
 the  Full-Scale  Public  Participation
 Program will be  required of approxi-
 mately 30 percent of projects.
  The Agency is  also making new re-
 sources available.  State management
 assistance funds,  under section 205(g)
 of the  Act, and construction  grants
 funds, under section 201, can be used
 by the States and grantees, respective-
 ly, to cover  public participation costs.
Furthermore, EPA is designating staff
 in its regional offices to assist in carry-
ing out these requirements.
  3. Criteria for Full-Scale Public Par-
 ticipation Program. The Agency re-
 ceived a number  of comments on the
 criteria proposed for use by the Re-
 gional Administrator  in determining
which  projects should have  the  Full-
Scale Public  Participation Program.
Sonic commenters urged that the cri-
teria be made less flexible by the addi-
tion  of specific population  size and
 project  cost criteria. The Agency has
 decided to continue to allow the Re-
 gional  Administrators  a high level of
discretion in determining which pro-
jects  are  likely  to  need  additional
public  involvement based upon their
assessment of cost, complexity, and po-
tential impacts. In the proposed regu-
 lations  the  Full-Scale Program was
                             FEDERAL REGISTER, VOL. 44, NO. 34—FRIDAY, FEBRUARY 16, 1979

mandatory only when  it was deter-
mined early in the facilities planning
process  stage that  an Environmental
Impact Statement would be required,
under 40 CFR Part ft. Recognizing the
public and Congressional concern over
the cost ofradvanced wastewater treat-
ment (AWT>  facilities that  require
very stringent  wastewater  treatment,
the Agency has included AWT  as a
mandatory criterion for the Pull-Scale
Program.  This will enable communi-
ties to give more careful consideration
to less-costly systems and  alternative
treatment  processes,  such  as  land
  Other than the EIS and AWT man-
datory criteria, the Regional Adminis-
trator will require the Pull-Scale Pro-
gram only after a  project meets two
tests.  The Regional  Administrator
must determine (1) that the project
has  the   potential  for  community
impact, as suggested by criteria listed
in §35.917-5(c)(l)(iii), and (2) that the
existing  local  decisionmaking process
would benefit  from increased opportu-
nities for public involvement. The Re-
gional Administrator will exercise this
discretion in light  of the Agency ex-
pectation that approximately 30 per-
cent of the Step 1  projects will be re-
quired to  conduct a Pull-Scale  Pro-
  4. Content of Futt-Scale Public Par-
ticipation Program.  Generally,  citi-
zens and public interest groups, as well
as  some  government agencies,  gave
strong support to the content of the
Pull-Scale Program. They particularly
supported the opportunities for public
involvement and consultation early in
facilities planning, the public partici-
pation coordinator, and the advisory
group.  Some   commenters requested
more discretion in using the advisory
groups. They  urged that they be en-
couraged, but not required.
  The Agency.has decided to retain
the Pull-Scale  Program as  initially
proposed. Since it will only  apply to
those projects of high complexity or
controversy, the presence of  a core
group of informed citizens—the advi-
sory group—is considered particularly
essential. It must be pointed oat that
the Baste Program, which will cover
the large majority of projects, does
not require the advisory group; howev-
er, grantees are at libertry to establish
one at their  discretion. The Part 25
regulations have been  revised to pro-
vide  grantees with  significant  addi-
tional  flexibility   in  composing the
membership of advisory groups.
  5;  Small Community  Impacts.  A
number of commenters expressed con-
cern over the  impact of the regulation
on small communities. They suggested
automatic exemptions  for small com-
munities form the Pull-Scale Program,
and even the Basic Program.
       tMfS AND RfGUtATlONS

  The refutations allow the Regional
Administrator extensive discretion in
determining  which  projects  should
nave a "Poll-Scale Program. First,  the
Regional  Administrator  must deter-
mine that one of the criteria suggest-
ing community impact is  likely, to be
present and second, having made that
determination, the Regional Adminis-
trator   nftist  determine  that  more
active public participation in the form
of the Pull-Scale Program would be of
benefit  in the particular community.
In making this second case-by-case de-
termination, the Regional Administra-
tor is free to take* into consideration
the size and nature of the community
where facility planning will occur.
  In many cases documented by EPA,
the  cost   and  other .  impacts   of
wastewater  treatment  facilities  are
most severe in small, rural communi-
ties. The   evaluation of  less-costly,
more  acceptable  alternatives  may
therefore require more, not less, active
public  participation.  In  many   in-
stances this will be best accomplished
by the attention of a core group of in-
terested citizens,  with staff support,
which is  the cardinal feature of  the
Pull-Scale Program. This  decision  will
be made on a case-by-case basis by the
Regional Administrator.
  6.  Early Public Involvement.  Many
citizens  and  public interest  groups
urged the Agency to require additional
early public  involvement, especially
before the Step t grant is awarded and
in the selection of the consulting engi-
neer. Since pre-Step 1  activities  are
not grant eligible, the Agency has de-
cided not to impose additional require-
ments beyond the performance stand-
ard for public information and consul-
tation in the development of the plan
of study.
   Many private citizens and public in-
terest groups urged EPA to  require
public participation in the selection of
the  consulting  engineer. These com-
menters argued  that this would  en-
courage the selection of  a consultant
able to communicate effectively with
the  public  and  would lead to greater
public confidence and support for the
planning process. EPA agrees in  part
with this concept, but does not believe
it is feasible to make consultation in
engineer selection a requirement.  Ac-
cordingly, the regulations encourage,
but do not require, public consultation
in the selection of the consulting engi-
   To help stimulate early public inter-
est, the final regulations require  the
grantee to  provide the public with an
estimate of the additional per  house-
hold cost of the proposed  facilities.
This cost can be calculated from the
cost and population estimates  in  the
biennial: Needs Survey if more precise
data are not available.

  7.  Coordination  With  Other  Pro-
grams. Many commenters stressed the
importance of coordinating the public
participation  activities in  the  Con-
struction Grants Program with public
participation in other programs, espe-
cially the Water Quality Management
Program under 40 CPR Part 35,  Sub-
part G.
  The Agency concurs and  has modi-
fied the requirement by encouraging
coordination  of   facility   planning
public  participation  activities  with
those associated with other related en-
vironmental  programs to the project
  8. Public Participation in Step 2 and
3.  Some local  agencies and many
public interest  groups expressed ap-
proval of the language in the  regula-
tions which indicated that public par-
ticipation activities in Step  2 (design)
and Step 3 (construction) were grant
eligible.  Some commenters  caned for
mandatory   public  participation re-
quirements in Steps 2 and 3. With the
exception of requirements  to  inform
and consult with the public in  the de-
velopment and  adoption of the  user
charge and  industrial cost recovery
systems, EPA will not impose public
participation requirements to Steps 2
and 3. However,  public participation
activities at these stages are grant eli-
gible provided they are included in a
public participation work plan submit-
ted by the grantee and approved  by
  9.  Training.   Many  citizens  and
public Interest  groups supported the
requirement that EPA train advisory
groups  established under  the  Pull-
Scale Program.  Some States and local
governments pointed  out  that  they
should have a role in training advisory
groups because  of their  familiarity
with local  issues. EPA  agrees. The
final regulations require EPA to devel-
op training materials but indicate that
training would be done in cooperation
with the State or grantee.
  10. EPA Technical Assistance to Im-
plement the Regulations. Many  com-
menters, representing a variety of in-
terests,  urged the Agency  to  provide
technical assistance to implement the
public participation regulations.
  The Agency concurs and has taken
the following actions to aid States and
grantees to implement their  regula-
  —Made public  participation activi-
    ties grant eligible  for construction
    grant funds (section 201 > and State
    management assistance funds (sec-
    tion 205(g)).
  —Begun development of  a modular
    technical training  program  on
    wastewater   treatment  facilities
    planning for grantees and their ad-
    visory groups.
  —Begun  development of training
    courses  on  how to conduct and
                              KOBtM meiSUX. VOt 4*. NO. 34-FMOAT, FEHHMRY W, 1977

 10302                                      RULES AND REGULATIONS

    evaluate public participation activ-
    ities for staff from EPA, State and
    substate agencies.
  —Initiated the development of addi-
    tional guidance on the public par-
    ticipation  regulations,  including a
    citizen handbook.
  —Assigned   staff  persons in  each
    EPA regional office with  the re-
    sponsibility  for  overseeing  public
    participation activities.
  —Funded five wastewater treatment
    facilities  planning institutes,  one
    in each of Regions I, II, III, V, and
    VI, to train local citizen decision-
  —Included   an expanded  presenta-
    tion  on the public participation
    regulations in the Facilities Plan-
    ning Training Course available to
    State and grantee, staff, consulting
    engineers and the public.
  —Produced  and  made available  a
    wide variety of  technical publica-
    tions on all  aspects of wastewater
  —Entered into an interagency agree-
    ment  with  the Department of
    Labor to provide technical assist-
    ance to small, rural communities.
NOTE:   The   Environmental   Protection
Agency has determined that this document
does not contain a major proposal requiring
preparation of an Economic Impact Analy-
sis  Statement  under  Executive  Orders
11821, 11949, and  12044 and OMB Circular
  Dated: February 8,1978.
              DOUGLAS M. COSTLE,
                              FEDERAL REGISTER, VOL. 44, NO. 34—FRIDAY, FEBRUARY 16, 1979


39338        Federal Register  / Vol. 44. No. 130  /  Thursday. July 5.1979 / Rules and Regulations

40 CFR Part 35


State and Local Assistance; Grants for
Construction of Treatment Works;
Miscellaneous Amendments-

  Note.—The following document was
published Wednesday, June 27,1979 at page
87594. On page 37595, certain amendment
Hem numbers appeared incorrectly in the
middle column, 14th line and in the
amendatory language paragraphs beginning
on that page. Therefore, this document is
republished to reflect those corrected
amendment item numbers.
AGENCY: Environmental Protection
ACTION: Final Rule.	^^^

SUMMARY: This amendment to the
regulations governing grants for
construction-of treatment works under
Title II of the Clean Water Act makes
•everal miscellaneous changes. One of
the changes makes final a regulation
proposed on September 27,1978; four of
the changes are designed to simplify
requirements and administration of the
program; and the rest of the changes
correct linguistic, typographical, and
punctuation errors. They are being
published together at this time so that
they will be codified in the July 1.1979,
edition of Title 40 of the Code  of Federal
EFFECTIVE DATES: Amendment Nos. 4,6,
8,9, and 10 are  effective October 1,1979.
The remainder are effective June 27,
ADDRESSES: Comments previously
received on the proposed rules may be
inspected at: Public Information
Reference Unit, Environmental
Protection Agency, Room 2922
Waterside Mall, 401M Street SW.,
Washington, D.C. between 8 a.m. and
4:30 p.m., business days. Comments on
these regulations should be addressed
to: Director, Grants Administration
Division (PM-216), Attention: GPPB/CG
Final, Environmental Protection Agency,
Washington, D.C.  20460.
Mr. Harold P. Cahill, Director,  Municipal
Construction Division (WH-547),
Environmental Protection Agency,
Washington, D.C.  20460, 202-426-8986.
September 27,1978 (43 FR 44021), EPA
published final revised and conformed
regulations governing grants for
construction of treatment works
authorized under Title  II of the Clean
Water Act, as amended. In that same
document, EPA proposed two changes
to § 35.936-13' (43 FR 44046) and
requested comments through November
30,1978. EPA received 90 letters of
comment on these proposed changes.
The following paragraphs discuss the
action we are taking in the three areas
the comments addressed,
  § 35.936-13(a)(l). manufactured
materials. In the September 27,1978,
publication,  EPA proposed to amend the
regulation "to better achieve
competition  within and between types
of material (particularly pipe), in the
interest of affording an opportunity to
compete and insuring reasonableness of
prices, unless there is a sound
engineering  justification based upon
specific site  conditions which supports
any restrictions upon competition."
  The many comments which we
received were unanimously opposed to
any revision to the provision relating to
manufactured materials. The comments
indicate to us that virtually all the major
participants in this system—grantees,
engineers, and suppliers—believe that
the market system is working well under
the current regulation and that there is
suffioient competition to ensure
reasonable prices. Based on their
aisurance, EPA does not expect that
there will be many future protests in this
area and has, therefore, decided not to
make the revision to the regulations
which was proposed. Current
requirements will continue to apply,
including the basic requirement for
competition (see § 35.936-3). Program
Requirements Memorandum 75-5
(formerly PG19A, August 8,1975) states
the interrelationship of these policies as
  With regard to materials, such as pipe, it is
not mandatory that two or more different
types of material be specified; however,
maximum competitive bidding is encouraged
commensurate with sound engineering
practice and requirements. * * * It is
preferable to  use performance specifications
for materials  based upon accepted nationally
known standards such as AWWA, USAS,
ASTM, AASHO [sic] and Federal
specifications and standards.

  § 35.936-13(c) Experience clause
restriction. In the September 27,1978,
publication,  EPA proposed to add a new
final sentence to read, "No experience
restriction will be permitted which
unjustifiably reduces competition or
innovation." EPA received only a few
comments on this aspect of our
proposal. The views ranged from
recommending more stringent
restrictions on the use of experience
clauses to recommending that EPA
abandon its  proposal.
  EPA has decided to promulgate the
proposed change as a final rule with one
minor word change (amendment number
9 below). In order to agree more closely
with OMB's latest proposed revision of
Attachment O to OMB Circular A-102,
we have changed the word
"unjustifiably" in the proposal to
"unnecessarily" in the final. Our
experience with protests under § 35.939
has indicated that this explicit statement
of the Agency policy which has evolved
during the protest process is needed.
One of the commenters suggested that
more detailed requirements be included.
We believe that implementation of this
policy can best be achieved on a case by
case basis and we do not wish to
encumber the regulations with
unnecessary detail. However, we are
aware of at least two types of
experience restrictions which should
normally be considered unnecessarily
restrictive and in violation of the
regulation: (1) an experience clause
restriction that has the effect of
permitting only one equipment
manufacturer to participate in the
bidding without submission of a bond 01
deposit; and (2) an experience clause
restriction which limits competition or
innovation by requiring that the
previous experience be with the exact
size and type of equipment specified.
   S 35.93»-13(a)(l}, salient
requirements. In the final rules
promulgated on September 27, we
revised this paragraph to require the
grantee to be prepared to identify (in a
bid protest or program review) the
"salient requirements" of items of
equipment when the grantee elects to
procure by the "two brand names or
equal" procedure. Although this change
was published as a final rule, the Deputy
Comptroller General recommended that
we further amend this section to require
the grantee to specify the salient
characteristics in the solicitation itself
(rather  than just for protest or program
review  purposes). EPA's brand name or
equal procedure in the construction
grant program differs from that of other
programs.and agencies because of the
unique statutory requirement in Section
204(a)(6) of the Clean Water Act, as
amended. With respect to both the
comments of the Deputy Comptroller
General and the requirements of
Attachment O to OMB Circular A-102,
we feel that the statutorily mandated
reference to two items provides for
adequate  identification of the salient
requirements of specified items when
that type of specification is used. We
also find that neither our grantees nor
we have the resources to develop,
review and maintain up-to-date

              Federal Register / Vol. 44, No.  130 / Thursday, July 5, 1979  /  Rules and Regulations       39339
 performance or guide specifications for
 all procurements. This is particularly
 true because of the rapid changes and
 innovations occurring in the
 marketplace which we don't want to
 stifle with outdated requirements in the
 specifications. Under the circumstances
 involved in the construction grant
 program, it is better to permit the
 definition of salient requirements by
 naming two technologically up-to-date
 and acceptable products followed by the
 words, "or equal." Even in the absence
 of developing or innovative processes or
 technology, the identification of two
 acceptable items normally would
 adequately indicate the acceptability of
 an "equal." Finally, the EPA procedure
 greatly minimizes the paperwork burden
 on grantees, consulting engineers, and
 others in the procurement process since
 most such procurements are not
 disputed. Therefore, we have not
 amended this section further.
 Other Regulation Changes

   Advance purchase of eligible land.
 EPA has approved several deviation
 requests to allow grantees to acquire
 eligible land in advance of Step 3 grant
 award, because of the current
 availability of a specific site and
 generally escalating property values. For
 these reasons, and to facilitate
 expeditious initiation and completion of
 Step 3 construction, we believe that
 more widespread use of this practice
 may be desirable. Amendments 4 and 6
 allow the Regional Administrator to use
 his discretion in permitting grantees to
 proceed with land acquisition after
 approval of the facilities plan in
 advance of the  normal Step 3 award,
 either by (1) award of a Step 3 segment
 consisting only of purchase of eligible
 land or (2) approval of the grantee's
 preaward cost for the purchase of
 eligible land. In amendment 8,
 compliance with the requirement for
 approved user charge/industrial cost
 recovery systems prior to step 3 grant
 award, operation and maintenance
 manuals and sewer use ordinances, is
 deferred until the award of the ensuing
 step 3 construction assistance, since the
 data necessary  will be more readily
 available at that time.
  Advance payment for relocation
 costs. On April  27,1979, EPA published
 as a Federal Register Notice (44 FR
 24926) a class deviation which permits
 the Regional Administrator to make
 advance payment after grant award for
 the payment of relocation costs only
when he determines that it is necessary
for the,expeditious completion of a
project. That Notice gave the legal
background for this change. Amendment
 10 below includes that change in the
 regulations and supersedes the class
 deviation. This amendment does not
 permit advance payment for the Federal
 share of the actual cost of eligible land.
   § 35.925-15. When the construction
 grant regulations were revised on
 September 27,1978, the definition of
 industrial user was revised, in
 accordance with the mandate of the
 Clean Water Act, to exclude sources
 contributing 25,000 gpd or less to the
 treatment works. However, the
 regulations continued to use the phrase,
 "industrial user" in § 35.925-15 where it
 was not the intent of the statute or of the
 regulations to exclude any industries
 from the requirement that the principal
 purpose of the project and system be to
 treat domestic wastes. Therefore,
 amendment number 5 corrects § 35.925-
 15 to replace the words "industrial
 users" with "industrial sources" both
 times it is used in the section. This
 change of words comports with the
 Agency's longstanding interpretation
 and administration of this section, both
 prior to and since the .September 27
 publication; no change in meaning is
 intended. In addition, in order to comply
 with Federal Register format, numbers
 (1) and (2) have been changed to (a) and
   Appendix E. The criteria for
 determining innovative processes and
 techniques found in paragraphs 6.e.(l)
 and (2) both incorrectly use the te'rm
 "treatment works" in referring to life
 cycle costs and energy saving criteria
 for innovative technologies, ^he term
 "treatment works" as defined in the Act
 and § 35.905 includes other facilities
 (e.g. sewers, interceptors, outfalls) in
 addition to treatment plants. To include
 the costs of these in the cost
 effectiveness analysis would unfairly
 restrict the ability of innovative systems
 to qualify under the criteria.
 Amendment 13 clarifies our intent by
 changing the term "treatment works" to
 "eligible portions of the treatment works
 excluding conventional sewer lines" in
 these two paragraphs.
  Corrections. On November 30,1978,
 EPA published the allotments of the
 fiscal year 1979 appropriation in
 § 35.910-10. Two typographical errors
 were made in that publication.
 Amendment 1 corrects  those errors.
 Amendments 2, 3, 7,11, and 12 are for
 the purpose of correcting typographical
 and punctuation errors in the September
 27,1978,  publication of final regulations.
  Notice. The substantive amendments
 (4,6, 8,10) which were not published as
 proposed rulemaking are simplifications
 of procedure which lessen burdens on
grantees. Therefore, formal notice and
opportunity for comment on these
changes are unnecessary and contrary
to the public interest. However, in
accordance with 40 CFR 30.125, public
comment on grant regulations is
solicited on a continuous basis.
  Effective date. Although the effective
date of the substantive regulatory
changes is October 1,1979, the start of
the new Federal fiscal year, and they
apply to all grant assistance (including
subsequent related projects) awarded
on or after that date, Regional
Administrators are authorized to use the
more flexible procedures included in
these regulations in advance of that
date. Where appropriate, special grant
conditions may be used.

                               APPENDIX B
                    List of Other Federal Regulations
40 CFR Part 6, "Implementation of Procedures on the National
Environmental Policy Act."
40 CFR Part 25, "Public Participation in Programs under the Resource
Conservation and Recovery Act, the Safe Drinking Water Act, and the
Clean Water Act."
40 CFR Part 30, "General Grants Regulations and Procedures."
40 CFR Part 35, Subpart G, "Grants Water Quality Planning Management
and Implementation."
40 CFR Part  125, "Modification of Secondary Treatment Requirements for
Discharges into Marine Waters."
 40 CFR Part  133, "Secondary Treatment Information."
 40  CFR  Part 403,  "General  Pretreatment Regulations  for Existing  and New
 Sources of Pollution."
 Circular  A-95,  "Evaluation,  Review,  and  Coordination  of Federal  and
 Federally Assisted  Programs  and  Projects,"  Federal  Register,  Vol.  41
 pages  2052-2065,  January  13,  1976.

                                 APPENDIX C
                     List  of EPA Publications  and Forms
Evaluation of Land Application  Systems. EPA 430/9-75-001, March  1975.

Generic Facilities Plan  for a Small Community:  Stabilization Pond and
Oxidation Ditch. February  1981, FRD-18.

Management of Small Waste  Flows. EPA 600/2-78-173, September 1978.

Municipal Pretreatment Program  Guidance Package.

Process Design Manual for  Land  Treatment of Municipal Wastewater.
Technology Transfer, EPA 625/1-77-008, October 1977.

Process Design Manual for  Sludge Treatment and Disposal. Technology
Transfer, EPA 625/1-79-011, September 1979.

Sludge Treatment and Disposal.  Technology Transfer, EPA 625/4-78-012, 2
volumes, October 1978.

Small Wastewater Systems,  Alternative Systems for Small
Communities and Rural Areas. January 1980, FRD-10.

(To order other EPA publications, use the order form on the following
EPA Forms

Grant Agreement/Amendment.  Form 5700-20.

Application for Federal Assistance.  Form 5700-32,

Cost or Price Summary Format.  Form 5700-41.

EPA Worksheet
Procedure and Worksheet for Determining Municipal Financial Capability,
EPA Contract Number 68-01-4343, May 7, 1979.

                      General information and instructions

                      Use this form to order technical publications concern-
                      ing the U.S.  EPA Construction Grants Program for
                      Municipal Wastewater Treatment Works. On the re-
                      verse of this order form, please sign, indicate type of
                      employer and type of work, and if appropriate, in-
                      clude your job title.
                                               General Services Ad-
                      ministration, Denver, Colorado address should be on
                      the outside. Include your return address,
                              affix first class postage, and mail.

                      Inquiries  concerning individual projects or localities
                      and the Construction Grants Program for Municipal
                      Wastewater Treatment Works should be directed to
                      the appropriate EPA Regional Office or State Water
                      Pollution Control Office.
Editor's note:   We had to cut the publications order form
                   described above  to print it  in "Facilities
                   Planning 1981" (FP-81).   The form  covers
                   five  pages  of information and fills pages
                   97-101 of "FP-81."

                   To order EPA publications fill out the  form
                   as detailed above and  mail  it to the General
                   Services Administration address shown on
                   page  102 of "FP-81."

                  (Type or print name and address to which publications are to be mailed)
 Name/Job Title
                                                                  Zip Code
Telephone No
and Area Code
 If you are not currently on the Construction Grants Program mailing list do you want to be added? DYES D NO
 Previous Name/Address /If Changed/
2 Type Of  Employer  
     Please send me the following publications-(check appropriate boxes)
  Municipal Construction Division  Series  (MCD)
D MCD-02  Program  Requirement Memorandum-
      Municipal Wastewater Treatment Works Con-
      struction Grants Program.
d MCD-03  Handbook of Procedures-Construction
      Grants  Program  for  Municipal  Wastewater
      Treatment Works, (Second Edition).
D MCD-04  How  to Obtain Federal Grants to Build
      Municipal Wastewater Treatment Works, (up-
      dated 1980).
d MCD-05   Design  Criteria for Mechanical, Electric,
      and Fluid System and Component Reliability,
      (EPA 430/99-74^)10), July 1974.
D MCD-06   Protection  of Shellfish  Waters,  (EPA
      430/9-74-010), July 1974.
D MCD-10   Technical  Report: Costs of  Wastewater
      Treatment by Land Application,  (EPA 430/
      9-75-003), revised September 1979.
O MCD-13   Alternative Waste Management  Tech-
      niques  for Best Practicable  Waste  Treatment,
      (EPA 430/9-75-013), October 1975.
d MCD-14   Wastewater Treatment Ponds, (EPA 430/
      9-74-011), March 1976.
O MCD-17   Technical Report: Cost-Effective Comp-
      arison  of  Land  Application  and Advanced
      Wastewater  Treatment.  (EPA  430/9-75-016),
      November 1975.
 D MCD-20  Technical Report: Direct Environmental
      Factors at Municipal  Wastewater  Treatment
      Works, (EPA 430/9-76-003), January 1976.

 d MCD-21  Disinfection of Wastewater Task Force
      Report,  (EPA 430/9-75-012), March  1976.
 d MCD-23 Construction Inspection Guide, printed
       in three volumes,  (EPA 430/9-76-005), July
 d  MCD-24  Model Plan of Study,  Supplement  to:
       Guidance for Preparing a Facility Plan, (EPA
       430/9-76-004), March 1976.
 d MCD-26  Environmental   Changes From  Long-
       Term Application of Sewage Effluent on Land,
       (EPA 430/9-78-003), March 1978.
                                                 D MCD-27   V E Formats and Case Studies,  (EPA
                                                       430/9-77-029). June 1977.

                                                 D MCD-28   Municipal Sludge Management Environ-
                                                       mental Factors,  (EPA 430/9-77-004), October
                                                 D MCD-29   Value Engineering Workbook  for Con-
                                                       struction Grants Projects, (EPA 430/9-76-008),
                                                       July 1976.
                                                 D MCD-30   Municipal  Sludge  Management:  EPA
                                                       Construction  Grants Program, an Overview of
                                                       the Sludge Management Situation, (EPA 430/9-
                                                       76-009), April 1976.
                                                 D MCD-31   Industrial Waste and Pretreatment  in the
                                                       Buffalo  Municipal  System,  (EPA  600/2-77-
                                                       018), January 1977.
                                                 D MCD-32   Energy Conservation in Municipal Waste-
                                                       water Treatment, (EPA 430/9-77-011), October
                                                 D MCD-33   Application of Sewage Sludge to  Crop-
                                                       land:  Appraisal of Potential Hazards of  the
                                                       Heavy  Metals to Plants and Animals,  (EPA
                                                       9-76-013), November 1976.
                                                 D MCD-34   Wastewater:   Is  Muskegon's  Solution
                                                       Your Solution'',  (EPA 905/2-76-004), Septem-
                                                       ber 1976.
                                                 D MCD-35   Application of  Sludges and Wastewater
                                                       on Agricultural Land: A Planning and Educa-
                                                       tional  Guide,  reprinted  with   permission of
                                                       Ohio State University,  March 1978.
                                                 D MCD-36  Sludge Handling and Disposal Practices
                                                       at Selected Municipal Wastewater Treatment
                                                       Plants, (EPA 430/9-77-O07), April 1977.
                                                 D MCD-38   Construction  Costs for Wastewater Con-
                                                       veyance Systems  1973-1977,  (EPA  430/9-77-
                                                       014), January 1978.
                                                 D MCD-39   Analysis  of Operation and Maintenance
                                                       Costs  for  Wastewater  Treatment Systems,
                                                       (EPA 430/9-77-015). February 1978.

                                                  D MCD-40   A  History  of  Land  Application  as a
                                                        Treatment Alternative,  (EPA   430/9-79-012),
                                                       April 1979
   Management  and  Operation Series  (MO)
   The Municipal Construction Division. Office of Water
   Programs wishes to announce the availability of the
   following publications  This material, although widely
D MO-1      Estimating Staffing for Municipal Waste-
      water Treatment Facilities, March 1973.
D MO-3     Maintaining Clean Water, (EPA  140/8),
      March 1979. (pamphlet)
D MO-5     Considerations for preparation of Opera-
      tion and Maintenance Manuals, (EPA  430/9-
D MO-6     Estimating Laboratory Needs for Muni-
      cipal  Wastewater  Treatment Facilities, (EPA
      430/9-74-002), June 1973.
D MO-7     Maintenance  Management Systems  for
      Municipal  Wastewater Facilities, (EPA  430/9-
      74-004), October 1973
D MO-8     Start-up for Municipal Wastewater Treat-
      ment  Facilities,  (EPA 430/9-74-008),   Decem-
      ber 1973.
D MO-9     Emergency  Planning  for   Municipal
      Wastewater Treatment Facilities, (EPA 430/9-
      74-013), February 1974.
D MO-10   Aspects of State-wide  Emergency  Re-
      sponse  Programs for  Municipal  Wastewater
      Treatment  Facilities,  (EPA   430/9-74-014),
      March 1974.
D MO-11    Anaerobic Sludge Digestion-Operations
      Manual, (EPA 430/9-76-001), February  1976.
                                                    distributed from the Municipal Operations Branch is
                                                    considered timely and worthy of your consideration

                                                    D MO-12   Package  Treatment  Plants-Operations
                                                         Manual, (EPA 430/9-77-005), April 1977
                                                    D MO-14   Process Control Manual for Aerobic Bio-
                                                         logical Wastewater Treatment Facilities,  (EPA
                                                         430/9-77-006), March 1977.
                                                    D MO-15   Operations Ponds Stabilization Manual,
                                                         (EPA 430/9-77-012), August 1977
                                                    D MO-16   Field Manual  for  Performance  Evalua-
                                                         tion and Troubleshooting at Municipal Waste-
                                                         water  Treatment  Facilities, (EPA 430/9-78-
                                                         001), January 1978.
                                                    D MO-19   Sludge Hand/ing and Conditioning,  (EPA
                                                         430/9-78-002), February 1978
                                                    D MO-21   Inspector's Guide for Evaluation of Mun-
                                                         icipal  Wastewater  Treatment  Plants,   (EPA
                                                         430/9-79-010), April  1979
                                                    D MO-22   Management of Small-to-Medium Waste-
                                                         water Treatment Plants,  (EPA 430/9-79-013),
                                                         July 1979
                                                    D MO-23   A  Planned  Maintenance  Management
                                                         System  for Municipal  Wastewater Treatment
                                                         Plant, (EPA 600/2-73-004), November 1973.
                                                    D MO-24   Evaluation of Flow Equalization in Mun-
                                                         icipal Wastewater  Treatment, (EPA 600/2-79-
                                                         096), May 1979
                                                    D MO-25   Chemical  Aids Manual  for  Wastewater
                                                          Treatment Facilities, (EPA 430/9-79-018), De-
                                                         cember 1979.

   NOTE: This list is subject to the Freedom of Information Act.
 D MCD-41   An  Approach  for  Comparing  Health
       Risks  of Wastewater  Treatment Alternatives:
       A  Limited Comparison  of Health Risks Be-
       tween Slow Hate Land Treatment and  Acti-
       vated  Sludge  Treatment and Discharge,  (EPA
       430/9-79-009), September 1979.

 D MCD-42   Upgrading Trickling Filters. (EPA 430/9-
       78-004), June 1978.

 D MCD-43   Federal  Guidelines:  State  and  Local
       Pretreatment Programs,  three  volumes   (EPA
       430/9-76-017a, b, c), January 1977.

 D MCD-44   Construction  Grants  Program Informa-
       tion—Industrial  Cost Recovery  Systems,  No-
       vember 1976.

 D MCD-47   AH  You Need to Know About U.S. en-
       vironmental Protection Agency Sewage  Treat-
       ment  Construction Grants,  booklet October

       Please  Note. This publication was announced
       previously  but  due to unforseen circumstances
       printing was delayed.

 D MCD-53   Innovative and  Alternative  Technology
       Assessment Manual, (EPA 430/9-78-009), Feb-
       ruary 1980.

       Thit manual has been  designed to aid Federal
       and State review authorities in the administra-
       tion of the innovative  and  alternative require-
       ments  of the Construction  Grants Program as
       well as providing the same basic methodologi-
       cal information to the engineering and planning
       personnel preparing facilities plans.

 D MCD-54   Wastewater  Stabilization Pond Linings.
       (reprint of USA CRREL,  SR 78-28), November

 D MCD-60   Energy  Requirements  for Small  Flow
       Wastewater Treatment Systems,  (reprinted with
       permission of  USA CRREL, SR  79-7),  April

 D MCD-61   Evaluation of Sludge  Management Sys-
       tems:  Evaluation  Checklist  and  Supporting
       Commentary,  (EPA  430/9-80-001), October
 OMCD-62   NPDES Compliance  Biomonitormg In-
      spection Manual, October  1979.
                                                    D MCD-63* Sludge Recycling for Agricultural  Use,
                                                          (EPA 430/9-80-008), March 1980.

                                                          This color brochure provides insight into  how
                                                          several communities have  successfully devel-
                                                          oped sludge management programs that involve
                                                          the recycling of municipal sludge for agricultu-
                                                          ral use.

                                                    D MCD-64  Innovative and Alternative Technology—
                                                          A  New Approach  to an  Old Problem, March
                                                          1980, (a brochure).

                                                    D MCD-66  Assessment of Current Information on
                                                         .Overland Flow  Treatment of Municipal Waste-
                                                          water, (EPA/9-80-002), May 1980.

                                                    D MCD-67* Aquaculture  Systems  for  Wastewater
                                                          Treatment: Seminar Proceedings and  Engine-
                                                          ering  Assessment,  (EPA 430/9-80-006),  Sep-
                                                          tember 1979.

                                                          This publication contains an engineering assess-
                                                          ment and the proceedings of a seminar held at
                                                          the University of California-Davis on September
                                                          11-12, 1979, on the use of various aquaculture
                                                          systems (wetland processes, aquatic processes)
                                                          for the treatment of municipal wastewater.

                                                    D MCD-68* Aquaculture  Systems  for  Wastewater
                                                          Treatment:  An  Engineering Assessment, (EPA
                                                          430/9-80-007), June 1980.

                                                          This report contains The results of an engineer-
                                                          ing  assessment of  the  current status of aqua-
                                                          culture technologies for wastewater treatment.

                                                    D MCD-69*  Recommendations from Value Engineer-
                                                          ing  Studies in Wastewater  Treatment  Works,
                                                          (EPA 430/9-80-010), September 1980.

                                                          This  publication summarizes the  best ideas/
                                                          recommendations  from 93  value  engineering
                                                          (VE) reports which were completed under the
                                                          EPA mandatory VE program.

                                                    D MCD-72* A Guide  to  Regulations and Guidance
                                                          for  the Utilization  and Disposal of Municipal
                                                          Sludge. (EPA 430/9-80-015), September 1980.

                                                          This  document provides a  concise  outline of
                                                          the different Federal regulations and guidelines
                                                          that  pertain to  each  alternative  for  sludge
                                                          utilization  and disposal  and  points out how
                                                          these regulations and guidelines should be ad-
                                                   "THESE PUBLICATIONS HAVE NOT APPEARED
                                                    ON PREVIOUS APPLICATION FORMS.	
   Facility  Requirements Series  (FRD)
D FRD-2    1978  Needs  Survey—Conveyance  and
      Treatment of  Municipal  Wastewater in Sum-
      maries of Technical Data,  (EPA 430/9-79-002),
      February 1979.

D FRD-5    Environmental Assessment of Construc-
      tion Grant Projects, (EPA 430/9-79-007),  Jan-
      uary 1979.

D FRD-6    Municipal Wastewater Management—Citi-
      zen's Guide to Facility Planning, (EPA 430/9-
      79-006). January 1979.

D FRD-7    Municipal  Wastewater  Management-
      Public  Involvement  Activities  Guide,  (EPA
      9-79-005), January 1979.

D FRD-8    Proceedings—National   Conference   on
      Water Construction and Municipal Wastewater
      Flow Reduction,  November 28 & 29, 1978-
      Chicago, III. (EPA 430/9-79-015), August 1979.

D FRD-9    Determining   Wastewater   Treatment
      Costs for Your Community, October 1979.
                                                    D FRD-10  Small  Wastewater Systems-Alternative
                                                         Systems for Small  Communities and  Rural
                                                         Areas, January 1980. (foldout)

                                                    D FRD-11* Construction Costs for Municipal Waste-
                                                         water  Treatment  Plants:  1973-1978  (EPA
                                                         430/9-80-003), April 1980.

                                                    D FRD-12* The Alternative is Conservation.

                                                         This handbook  demonstrates water conserva-
                                                         tion techniques  and devices; copies of an ac-
                                                         companying film or  video cassette are avail-
                                                         able for loan  or purchase from  the following
                                                          30 Bates Road
                                                          Watertown, MA  02172

                                                    D FRD-19* 7976" Needs Survey-Cost  Estimates for
                                                         Construction  of Publicly-Owned  Wastewater
                                                         Treatment Facilities,  (EPA 430/9-81-001), Feb-
                                                         ruary 1980.
                                                    'THESE PUBLICATIONS HAVE NOT APPEARED
                                                    ON PREVIOUS APPLICATION FORMS.
                            and  Sewer  Programs
D UNA-11.0* Making  Water
      Work, December  1978.

DUNA-120* Water  Wheel-Your  Guide  to  Home
      Water Conservation.

D UNA-15.0* Federal  Financial  Assistance for  Pol-
      lution Prevention and Control.

      This  booklet describes the assistance programs
      available to affected firms, farms) trade associ-
      ations, unions, non-profit development organi-
      zations, and  State and local governments seek-
      ing to reduce the sometimes disruptive effect of
      environmental  regulations  on  individual firms
      and local economics.
NOTE:  A publication entitled, "On-Site Wastewater
Treatment  and Disposal  Systems"  (EPA  625/1-80-
012) may be of interest to your program.

This document provides information on generic types
of on-site wastewater treatment and disposal systems.
The design information presented is intended as tech-
nical guidance reflective of sound professional prac-
tice. The intended  audience for the manual includes
those individuals in design, construction, operation,
maintenance and regulation of on-site systems.

Please contact the following office to order this mater-
ial and cite "1012"  as a distribution number.

 Center for Environmental  Research Information
 Cincinnati,  Ohio 45268
 Telephone Number (513) 684-7394
                                                   •THESE PUBLICATIONS HAVE NOT APPEARED
                                                    ON PREVIOUS APPLICATION FORMS.

     Effective and economic treatment of municipal
     wastewater is a critical element in the effort to
     clean — and keep clean — the waterways of the
     United States. The Municipal Construction
     Division, Office of Water Programs Operations,
     U.S. Environmental Protection Agency, has
     issued a wide range of technical publications on
     municipal wastewater treatment. We will be
     happy to send you copies of any publications
     you might need to assist you.

     — Municipal Construction Division
     United States
     Environmental Protection
     Washington DC 20460
     Municipal Construction Division
     Office of Water Program Operations

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Construction Grants Program
Mailing List Application
EPA Form 7500-21 (Rev. 12-80) REPLACES PRE
                                 VIOUS EDITION AND 7500-21A

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                                APPENDIX D
        PRMs and POMs Discontinued or Canceled  Upon Publication of

                        "Facilities Planning 1981"
PRMs Canceled :
             The following PRMs are canceled for the reasons specified.

      75-1   Use of Revenue Sharing Funds for Waste Treatment Projects.
             Policy no longer valid.  Superseded by 31 CFR 51.40 and
             section 4 of P.L. 94-488.

      75-2   Experience Clauses for Equipment Suppliers.
             Superfluous; policy set forth more completely at 40 CFR
             51.40, 35.936-13 (c).

      75-3   Waste Stabilization Ponds.
             Superfluous; policy set forth in 40 CFR I33.102(c).

      75-4   Standarized Construction Grant Documents.
             Guidance no longer useful; contained in 40 CFR 35.938-8.

      75-5   Nonrestrictive Specification.
             Covered by 40 CFR 35.936-13(a) and (b).

      75-7   Sewer System Evaluation and Rehabilitation.
             Covered by 40 CFR 35.927, 927-1 through 927-5.

      75-8   Flood Disaster Protection Act of  1973.  Superseded by  PRM

      75-9   Supplement  to PG No.  25; Flood Disaster Protection Act of
             1973  (P.L. 93-234).   Superseded by PRM 76-5.

      75-28  Flood Insurance  Requirements Effective July  1,  1975.
             Superseded  by PRM 76-5.

      75-10  User  Charges  and Industrial Cost  Recovery  System.

      75-19  Canceling PG-28  - User Charges  and  Industrial  Cost Recovery
              (ICR)  System.   Superseded by PRM  76-5.  New  ICR systems
             eliminated  by P.L.96-483.

       75-12  Obligation,  Recovery  and Reallotment  of  Contract Authority
             Funds.   Guidance outdated.

       75-15   Class Deviation - Use of Force Account Work  on Construction
              Grants  Projects. Grants deviation from outdated force
              account regulations (40 CFR 35.936-2(a)  1972 edition).  New
              procedures  are  set  forth at 40 CFR 35.936-14.

Appendix D (continued)
PRMs and POMs Discontinued or Canceled, Etc.
PRMs Canceled (continued)

      75-16  Title II Regulations Concerning Reserve for Step 1 and
             Step 2 Projects.
             Superseded by 40 CFR 35.915-l(d).

      75-20  User Charge Systems.
             Covered by revised regulations, 40 CFR 35.925~ll(b),

      75-21  Overruns, Reserves and Priority Lists.
             Subject matter no longer an issue; also,  more appropriately
             Program Operations Memorandum (POM) material.

      75-22  Policy Re:  Retention of Payments.
             Superfluous, policy contained in 40 CFR 35.938-7.

      75-23  Escalation Clauses in Construction Grants Projects.
             Information obsolete.

      75-33  Discount Rate.   Current and future discount rate PRMs  will
             specifically supersede prior discount rate PRMs  and include
             a table listing the rate for previous years.
      78-2   Discount Rate.
      79-4   Discount Rate.
      80-1   Discount Rate.

      75-34  Grants for Treatment & Control of Combined Sewer Overflows  &
             Stormwater Discharges.Section on stormwater treatment
             superseded by section 21l(c) of Act & 40  CFR  35.925-21 which
             contain a flat  prohibition against funding of separate
             stormwater treatment projects.   Remainder of  PRM integrated
             into "Facilities Planning 1981."

      75-40  Priority List Supplement to FY 1977 Construction Grants

      77-7   Management of State Priority Lists.

      78-5   Interim Management of  FY 1978 State Priority  Lists  under  the
             1977 Amendments.

      78-13  Interim Priority List  Guidance  for the Development  and
             Management of FY 1979  State Priority Lists.

      79-6   Priority List Guidance  for the  Development and Management of
             FY  1980 State Project  Priority  Lists.

             The  above five  PRMs  overlap,  and policy in each  subsequent
             PRM  at least partially  supersedes the previous issuance.
             Future priority list guidance will be issued  in  POMs.

Appendix D (continued)
PRMs and POMs Discontinued or Canceled,  Etc.
PRMs Canceled (continued)

      76-1   Construction Grant Programs Issuance.

      76-2   Cancelation of Certain Program Guidance Memoranda (PGM).
             Superseded by PRM 81-1.

      76-4   Coordination of Construction Grants Program with EPA-Corps
             of Engineers Section 404/Section 10 Permit Programs
             Policy integrated into Constructon Grants Handbook of
             Procedures and "Facilities Planning 1981."

      77-6   Easements.
             Expressly superseded by PRM 80-3.

      77-8   Funding of Sewage Collection Projects.
             Superseded by PRM 78-9.

      78-3   Buy American.
             Expressly superseded by PRM 80-5.

      78-6   ICR - Interim Guidance.
             All provisions have been incorporated into regulations,
             intended only as interim guidance.

      78-7   Combined Step 2 & 3 Construction Grants Awards.
             Superseded by 40 CFR 35.903(b) & 40 CFR 35.909.  See 43
             Federal Register 44036.

      80-6   Retroactive Application of Program Requirements.
             Limitation now contained in FY81 appropriation bill,

PRMs  Integrated into  "Facilities Planning 1981."

      75-26  Consideration of Secondary Environmental Effects in  the
             Construction Grants Process.

      75-27  Field Surveys to Identify Cultural Resources Affected  by  EPA
             Construction Grants Projects.

      75-31  Facilitating EIS Preparation with Joint EIS/Assessments

      75-32  Compliance with Title  VI in the  Construction Grants  Program.

      75-38  Relationship Between 201 Facility Planning and Water Quality
             Management  (WQM) Planning.

      76-3   Presentation of Local  Government Costs  of Wastewater
             Treatment Works in Facility Plans.

 Appendix D (continued)
 PRMs  and POMs  Discontinued  or  Canceled,  Etc.
 PRMs  Integrated  in to  "Facilities  Planning  1981"  (continued)

       77-4  Cost  Allocations  for  Multiple  Purpose  Projects.

       78-9  Funding of  Sewage Collection System  Projects.
             (NOTE:  40  CFR 35.925-13 will  be modified  to reflect  policy
             as  conveyed in Facilities Planning 1981.)

       78-10  Infiltration/Inflow.

       79-3  Revision of Agency Guidance for Evaluation of Land Treatment
             Alternatives Employing Surface Application.

       79-8  Small Wastewater  Systems.

       75-34  Grants for  Treatment  and Control of  Combined Sewer Overflows
             and Stormwater Discharges.

       76-4  Coordination of Construction Grants  Program with EPA-Corps
             of Engineers Section  404/Section 10  Permit Programs.
PRMs Partially Canceled

(The portions of these PRMs that relate to Step 1 facilities planning
have been incorporated into Facilities Planning 1981, but portions remain
in effect for Steps 2 and 3.)

      78-1   Erosion and Sediment Control in the Construction Grants
             Program Policy as it Pertains to Facilities Planning,

      76-5   Flood Insurance.

POMs Partially Canceled:

      77-2   Discount Rate.

      78-4   Construction Grants Funding for Lab Testing Equipment.

      80-3   Regarding Use of a Computer Assisted Procedure for the
             Design and Evaluation of Wastewater Treatment Systems
             (CAPDET) in Step 1 Facilities Planning.

      80-4   The Effect of the Hazardous Waste Regulations on Management
             of Municipal Sewage Sludge.

                                   APPENDIX E
                                  EPA Offices

John F. Kennedy Federal Building
Room 2203
Boston, Mass.  02203
Phone:  FTS - 223-7210
Commercial:  617-223-7210
Hours:  8:00-5:00

States in Region:
  New Hampshire
  Rhode Island


26 Federal Plaza
Room 900
New York, New York  10007
Phone:  FTS - 264-2525
Commercial:  212-264-2525
Hours:  8:00-5:00

States in Region:
  New Jersey
  New York
  Puerto Rico*
  Virgin Islands*

Curtis Building
6th & Walnut Streets
Philadelphia, Pennsylvania  19106
Phone:  FTS - 597-9814
Commercial:  215-597-9814
Hours:  8:00-4:30

States in Region:
  West Virginia
  District of Columbia*

*Applicant same as State

First International Building
1201 Elm Street
Dallas, Texas  75270
Phone:  FTS - 729-2600
Commercial:  214-767-2600
Hours:  8:00-4:30

State in Region:
  New Mexico

324 East llth Street
Kansas City, Missouri  64106
Phone:  FTS - 758-5493
Commercial:  816-374-5493
Hours:  7:00-4:30
States in Region:

1860 Lincoln Street
Denver, Colorado  80295
Phone:  FTS - 327-3895
Commercial:  303-837-3895
Hours:  7:00-5:30
States in Region:
  North Dakota
  South Dakota

Appendix E (continued)
EPA Offices

345 Courtland Street, N.E.
Atlanta, Georgia  30308
Phone:  FTS - 257-4727
Commercial:  404-881-4727
Hours:  8:15-4:45

States in Region:
  North Carolina
  South Carolina


230 South Dearborn Street
Chicago, Illinois  60604
Phone:  FTS -353-2000
Commercial:  312-353-2000
Hours:  8:15-4:45

States in Region:

* Applicant same as  State

215 Fremont Street
San Francisco, California  94105
Phone:  FTS - 556-2320
Commercial:  415-556-2320
Hours:  8:00-4:30

States in Region:
  American Samoa*
  Tr. Terr, of Pac. Islands*

1200 6th Avenue
Seattle, Washington  98101
Phone:  FTS - 399-1220
Commercial:  206-442-1220
Hours:  8:00-4:30

States in Region:
EPA Small Wastewater Flows
West Virgina University
Morga'ntown, WV 26506 (800) 624-8301
Innovative and Alternative
  Technology Clearinghouse
Municipal Research Laboratory
26 W. St. Clair
Cincinnati, OH 45268 (513) 684-7611
Contact State office or EPA regional office  for information on other State and
Federal agencies.


    •  "1.1",  e.g., refers  to  section  1.1 of Facilities Planning  1981.
    •  "35.917-l(f)",  e.g.,  refers  to  the Construction Grants Regulations
           in Title 40, Part  35,  Subpart E of the Code of Federal
    •  "Appx.E.4", e.g., refers  to  Appendix E, paragraph 4 of the
           Construction Grants  Regulations.
    •  "appx.  A" refers to  appendix A  of Facilities Planning 1981.
    •  "Part 25", e.g., refers to  Part 25 of Title 40 of the Code of
           Federal Regulations.
    •  "1508.5", e.g., refers  to subpart 5 of Part 1508 of Title 40.
    •  "(CWA 303(e))", e.g., refers to the Clean Water Act, section 303(e)
    •  "41 FR  6190", e.g.,  refers  to volume 41 of the Federal Register,
         page  6190.
    •  "15 WCPD 1353", e.g., refers to volume 15 of the Weekly
           Compilation of Presidential  Documents, page 1353.
    •  an  underlined reference includes a definition.
A-95 clearinghouse comments: 3.3.4, 4, 6.1, 35.917-l(f),
    35.920-3(3), 30.305(b)(2), Part 25
access, for operation, etc: 35.917(h)
access, to water: 35.917(j)
advanced wastewater treatment, (AWT): 3.2, 5.2,, 5.7.2,
adverse impacts:,, 6.507(c)(6)&(7)
ACHP,  (Advisory Council on Historic Preservation): 5.3.1
advisory group: 3.2, 35.917-5(c)(3)(iv), 25.7
agricultural land, prime: 5.3.3, 5.3.11, 35.925-13(e) 6.302(c),
air quality: 5.3.8, 5.3.10, 5.4.1, 6.303, 6.506(a)(6), 45 FR 53187
airports: 5.3.6
AJE (see alternate justifiable expenditure)
alignments: (see sewer collection systems)
allotments: 4, 35.910-1
allowable costs: 2.1, 3.3.2, 5.3.1., 30.705, 35.925-18(a), 35.936-20(c),
    35.940, (see eligible costs)
alternate justifiable expenditure, (AJE):, Figure 3, Appx. E
alternative, preferred:, 6.507(c)
alternative, selected: (see selected alternative/plan)
alternative systems: 5.6.2, 35.918(a)(5), Appx.E.4, (see innovative and
alternatives,  comparison of: 5.7.8, 35.917-5(b)(6)&(c)(vii)
alternatives,  development of:  5.6, 35.917(b),  35.917-5(b)(5)&(6)
alternatives,  evaluation of: 5.3,  5.6, 5.7, 35.917(b),
    35.917-l(d)(5),  Appx. A.5.b &.6,  6.507(c)(5),(6)and(7)
alternatives,  feasible: 5.6, Appx. A.5.a, 35.9l7(b)
alternatives,  principal:  5.6,  5.7
amend facilities plan: 6.3, 35.917-9,  35.920-2(a)
annual costs:, Appx. A.6.c.(2)

applicant, eligible:  3, 3.3.1,  35.917-3(a), 35.925-5
application, contents: 3, 7.2,  35.920-3(a), 30.315
application, form: 3.3.1, 30.315
application procedure: 4, 35.920, 35.920-2, 35.925-18(a)(l)
approval of application:  4
approval of facilities plan: 6, 7, 35.917-8
aquisition of land: 35.918-2(b), (see eligible costs)
aquifer monitoring: 5.3.9, 5.6.2, 35.918-l(i)
aquifer, sole source:  Safe Drinking Water Act, subsec. 1424(e)
archeological: 5.3.1,  5.3.10, 6.30l(a)&(b), 6.506(a)(5),  36 CFR 800
authority, eligible:  3.3.1, 4,  5.9.1, 35.917-l(h), 35.917-3(a).
    35.920-1, 35.920-3(a)(l)(ii)
authorized representative: 3.3.1, 4
availability, site: 5.9.3, 35.917-l(m)
award of grant:  4, 35.917-5(b)(4), 30.345-5
AWT (see advanced wastewaster treatment)
basic public participation program: 3.2, 35.917-5(b)
basin plan, (CWA (303(e)), 35.917-7(b)
best practicable waste treatment technology, (BPWTT):,,
    5.7.4, 35.917-l(d)(4)&(5), 35.918-3, 41 FR 6190
bidding practices:  3.3.3,, 30.415, 35.938, 35.939
biological treatment: 35.917-l(d)(5)(i)
bird strikes:  5.3.6
bonds: 5.7.2
BPWTT (see best practicable wastewater treatment technology)
capacity, additional: Appx. A.10
capacity, reserve: 5.6.3, (see reserve capacity)
charges to customers: 5.7.2, 5.7.8, 5.8.4, 35.917-1(1), (see user charges)
chemical treatment: 35.917-l(d)(5)(i)
civil rights: 5.9.2, 35.917-l(i), Part 7
clearinghouse comments: (see A-95)
coastal zone: 5.3.4, 6.302(d)
combined sewer overflows (CSO):,, 35.917-l(d)(4),
community: 35.925-13
concurrent review: 6.2
conference, preapplication: 2.1
construction schedule: 35.917~l(a)
contracted work schedule: 6.2
contracts: 35.937-1, Appx. C-1&C-2, (see procurement)
conventional collection system: 5.1, 35.918(a)(4)
cost allocation:
cost-effectiveness: 5.6, Appx. A.4.b&.d, A.5.c & A.6, 35.917(b),
    35.917-2U),  35.917-5(b)(5) & (c)(3)(vi), 35.918-Kb), 35.925-13
cost estimates: 3.1, 5.8.3, 5.8.4, Appx. A.6.a, 35.917~l(a)&(i)
costs, annual:, Appx. A.6.c.(2)
current situation: 5.4

debt service: 5.7.2
definitions: 35.905, 35.918(a), 35.936-1, 35.937(c), Appx. A.4, 6.101,
    6.501, (CWA 1004)
delegation: 1.5, 35.912
demographic projections: 5.5.1, (see population)
design of selected plan: 5.8.3
direct impacts: 5.3.9,, 1508.8
disposal of residuals:, 35.917-l(d)(6)
discount rate:
dredge and fill permits: 1.4, 5.3.2, 7.2.4

easement: 35.918-l(h)
economic projection: 5.5.1
effluent discharge  limitations: 1.2, 5.2, 35.917(e), 35.917-l(e),
    Appx. A.6.a
effluent  limited stream: 1.2
EID (see environmental information document)
EIS (see environmental impact statement)
eligible applicant:  35.920-1, 35.925-5
eligible/ineligible  costs:  5.1, 35.918-2, 35.927-3,  (see  allowable costs)
endangered  species:  5.3.7,  5.3.10, 6.302(g)
enforceable  requirements:  5.1,,  35.901,  35.905, 35.917-l(e)
energy:  5.3.10,,,  5.7.5,  5.8.5,  35.917-l(d)(8)&(9),
    Appx. A.6.a &.d, Appx  E
environmental assessment:  5.3,  35.917-l(d)(7),  35.917-2(a),  35.925-8,
    35.925-13(d) &-14, Appx. A.6.a,  Part  6, FRD-5
environmental description:  5.3,,  6.507(c)(1)&(6)
environmental evaluation:  5.3,  5.7.3,  5.8.6,  35.917-l(d)(7),  35.925-8,
    6.507(c)(5), FRD-5
environmental  impact statement, (EIS):  3.2, 5.3,  5.3.11,  35.925-8(a),
    Part  6
environmental  information  document,  (EID):  5.3,  5.3.11, 35.917-l(d)(7),
    6.101(d),  6.507, 6.507(c)
environmentally sensitive  areas: 5.6.2,  5.7.3,  35.925-13(e)
equivalent  uniform annual  costs: 5.7.1,,  Appx. A.6.a
erosion  and sediment control:  5.3.9,  5.3.10
existing facilities:  5.4.2, 5.4.4,  5.6.1, 35.917-l(d)&(e),  6.507(c)(5)
existing environment:  5.3, 5.4.1,  6.507(c)(l)
expensive project  test:  5.7.2

 facilities  plan preparation/content:  5,  35.917
 fact  sheet:  3.2,  35.917-5(b)(4), 25.4(b)(2)
 farmland:  5.3.3,  (see  agricultural land)
 fast  track:  2.2,  7.1
 feasible alternatives:  5.6, (see alternatives,  feasible)
 Federal  facilities: 7.2.4, 35.917-6
 financial capability/impact evaluation:  5.2,  5.7,  5.7.2,  35.925-5
 financial requirements:  5.7.1,  5.7.2,  5.7.8,  35.925-5
 finding  of no significant  impact,  (FNSI): 5.3,  35.925-8(a)
 fiscal year: 1.0,

fish:  5.3.6, 5.3.10, 6.302(f), 6.506(a)(6)
flood  insurance:,  30.405-10
floodplains: 5.3.2, 5.3.10, 35.925-13(d)&(e),  Appx. A.S.f, 6.302(a)&(b),
     6.506(a)(4)(iii); Part 6, Appendix A
flows, existing:  5.4.2
flows, forecasted:  5.5.2,  35.917-l(d)(l), Appx. A.8.b&.d
flow and waste reduction:  5.5.3, 35.917-l(d)(2),  Appx. A.S.c. & d,
FNSI (see finding of no significant impact)
force  account:, 30.645, 35.936-14
fuel cost escalation factors:
full scale public participation program: 3.2,  5.3.10, 35.917-5(c)
future situation: 5.3, 5.5, 5.5.4, Appx. A.6.b.
generic facilities plan: 2.2, 5.6.2
grant acceptance: 4, 35.917-5(b)(4) & (c)(3)(v), 30.345-5
grant application: 4, (see application, grant)
grant assistance agreement form: 4
grant award/conditions: 4, 5.3, 35.925-13(e), 35.925~18(a)
groundwater: 5.3.9, 5.3.10, 35.918(i), 35.918-l(f), Appx. A.6.a,
growth, allowable: 35.925-13 &  (a)
habitation: 5.1, 35.925-13
hearings: (see public hearings)
historical properties: 5.3.1, 5.3.10, 5.5.1, 6.30l(a)&(b), 6.506(a)(5),
    36 CFR 800
ICR, (see industrial cost recovery):
I&A (see innovative and alternative)
I/I (see infiltration/inflow)
implementability: 5.7.6, 5.9, 6.507(c)(5)
implementation agreements: 5.7.6, 5.9, 5.9.1, 35.917-l(h), 35.917-6
implementation steps: 5.9.6
inactive project: 7.1
indirect impacts: 5.3.9,, 1508.8
individual systems: 5.6.2, 35.917-2(a)(4), 35.918
industrial: 5.4.2,  5.5.2,,  5.9.5, 35.925-15, Appx. A.8.d(2)
industrial cost  recovery (ICR):,  35.928
infiltration/inflow, (I/I):  5.4.3,,, Figure  2,  35.905,
    35.927 et. seq., 35.927-l&(c),  35.927-5
innovative and alternative technology, (I/A): 5.6.2, 5.6.3,,,  35.908, 35.917-l(d)(8), Appx. A.5.d & A.7, E.4  &.5
innovative and alternative cost-effective preference:,,, Appx.  A.7
inspection and maintance program: 5.6.2,  35.918-l(h)
interjurisdictional agreements:  3,  (see  joint agreements)
interceptors:,,  Appx.  A.S.f
interest rate:, (see discount  rate)

joint agreements/authority: 3, 3.1, 5.6.2, 7.2.3, 5.7.6, 5.9.1,
    35.917-3(a), 35.917-6, 35.920-3(b)(6)&(8)
land application: 5.2,, 35.917-l(d)(5)(iii)
land treatment: 5.2,
land use projections: 5.3.10, 5.5.1
lead agency: 3, 35.917-3(a)
level of treatment: 5.2, 35.918-3
local share: 5.7.2
locations, facilities alternatives:, 6.507(c)(5)
maintenance requirements:
MBE (see minority business enterprises)
median income: 5.7.2
meetings (see public meetings)
midcourse review: 3.2, 5.7.8, 7.1, 35.917-5(f), 6.507(b), 25.12(a)(2)
minority business enterprises, (MBE): 3.3.3, 35.936-7, 35.936-20(c),
    Appx. C-1.14, & C-2.9
mitigation measures:, 6.507(c)(6)&(7)
monetary costs: 5.7.1, Appx. A.6.a &.e
monitoring: 5.9.5
multiple purpose projects:,,, 5.7.7
National Environmental Policy Act, (NEPA):  5.3, 5.7.3, 5.8.6,
    35.925-8(a), Part 6
National Pollutant Discharge Elimination System, (NPDES): 1.2, 5.1, 5.2,, 35.917-l(e), 35.935-9(b)&(c)(2)
navigable water: 5.3.2
need: 3.1, 5.1, 5.3, 35.917(b), 35.917-5(c)
NEPA (see National Environmental Policy Act)
no action alternative: 5.3, 5.5.4, 5.6.3, 6.507(c)(2)
no discharge: 35.917-l(d)(8)
noise: 5.3.10
notice, public: 25.4(c)
nonconvential collection system: 5.1, 35.918(a)(5)
nonmonetary factors: 5.7.8, Appx A.6.a
NPDES (see National Pollutant Discharge Elimination System)

onsite systems: 5.4.4, 5.6.2, 35.917-l(d)(5)(v), (see individual systems)
operation and maintenance requirements (O&M): 5.9.4, 35.905(replacement),
    35.917-l(d)(3), 35.918-l(f)&(h), 35.927-3(c), Appx. A.6.c
operation, optimum: 5.6.1, 35.917-l(d)(3),  6.507(c)(5)

payment schedule:  4
permits: 5.3.2, 35.925-6, Part 230, 33 CFR Parts 120 and 209,
    (see enforceable requirements)
phased construction:, Appx. A.8.e &.f

piggyback EIS: 5.3.11
planning area: 1.3, 5.1, 5.6.2, 35.917-2(a), 35.917(e), 35.917-4.
    35.917-5(e), 6.507(a), 6.507(c)(l), CWA 201
planning entity: 35.920-3(a) (1) (ii)
planning period: 5.5, Appx. A.4.C & 6.b
planning process: 1.1, Figure 1
plan of study: 3.1. 35.917-l(k), 35.917-5(b)(2) & (c)(3)(ii),
    35.920-3(a)(l). 35.925-18(a)(l)&(2)
population: 5.3.10, 5.5.1, Appx. A. 8. a.
population density: 5.3.10, 5.6.2, 35.925-13(c) ,  Appx. A.S.a,
POTW (publicly owned treatment works)
preapplication conference: 2.1, 35.920-2(a), 6.507(a)
preferred alternative:, (see alternative, prefered)
preliminary design/engineering: 5.8.3
present worth: 5.7.1,
pretreatment:, 5.7.8, 5.9.5, 7.2.4, 35.907
    35.917-l(k), Appx. A. 6. a, Part 403.8, CWA 307
primary impact: 5.3.9, Appx. A. 6. a, Appx. A. 8. f(l)&(2)(a)
principal alternatives: (see alternatives, principal)
principal residence: 35.918(a) (2) , 35.918-l(a)
priority list: 1.1, 1.4, 4, 7.2.1, 35.915. 35.917-2(b), 35.920-2(a)&(b) ,
privately owned systems: 5.6.2, 35.918(a)(l)
procurement of services: 3.3.3,, 7.2.2, 35.920-3(a) (2) ,
    35.925-20(c), 35.936, 35.937, 35.938, 35.939, Appx. C-l and
    C-2, Part 33, (see contracts)
progress reports: 35.917-3(b)
public consultation: 25.4(d)
public hearings/meetings: 3.2, 3.3.3, 5.7.8, 6.1, 25.2. .5&.6. 35.917-5
public participation: 2.2, 3.3.3, 7.2.4, 5.7.9, Part 25. 35.917-l(g),
    35.917-5, 35.920-3(a)(l)(iii), 35.920-3(b) (10) ,  35.920-3(c) (5) ,
    35.925-2(e), 35.940-1
public participation coordinator: 3.2, 35.917~5(c) (3) (iv)
public participation program outline/schedule: 3.2,  35.917-5(b) (3) &
public participation work plan: 3.2, 4, 35.917-5(b) (4) & (c)(3)(v), 25.11
reduction of flows and waste: 5.5.3
recreational opportunities: 5.3.10, 5.5.1,, 5.7.7,
    5.8.6, 35.917-Kj)
regionalization: 5.6.2, 35.917-2(a)(l)
rehabilitation:, 35.918-11, 35.925-13, 35.927-2,-3,-5(b)&(c),
reliability: 5.7.4
relocation/dislocation: 5.3.10, 7.2.4
replacement: 5.9.5, 35.905. 35.917-l(d)(3), 35.918-l(f)&(h),
    35.925-13, 35.927-3(c), Appx. A.6.c(2)
reserve capacity: 5.6.3, 35.917-l(d)(l)
residence, principle: 35.918(a)(2), 35.918-l(a)
residuals disposal: 1.4,,, 35.917-l(d)(6), 6.507(c)(5)

responsiveness summary: 3.2, 35.917-5(b)&(c), 25.8
restoration of site: 35.919-2(d)
reuse/recycle: 5.2, 35.917-l(d)(5)(ii), 35.917-l(d)(8), Appx. A.6.a
revenue: 35.917-l(d)(5)(iv), Appx. A.6.c(2)
review of application: 4, 35.925
review of facilities plan:  6, 6.2, 7, 35.917-7, 35.917-8 & 35.917-9
revisions to facilities plans: 6.3, 35.917-9, 35.920-2(a)
rural communities: 5.6.2, 5.7.2, 5.9.1
scenic rivers: 5.3.5, 5.3.10, 6.302(e), 15 WCPD 1353
schedule: 35.917(d)(2), 35.917-l(a), 35.917-3(b), 35.917-5(b)(3),
    & (c)(3)(iii), 35.920-3(a)(l)(iii) & (b)(l)
secondary impacts: 5.3.9, Appx. A.6.a, Appx. A.8.f(2)(b)
secondary wastewater treatment: 5.2; Part 133, Appendix C
sediment (see erosion)
selected alternative/plan: 5.7.1, 5.7.2, 5.8, 5.8.1, 5.8.2,
    35.917, 35.917-5(b)(6) & (c)(3)(iv)
screening: 35.917-5(b)(5), Appx. A.5.b, (see alternatives evaluation)
service lateral:
service area: 5.1, 35.917-2(a)
sewage collection systems: 5.1, 5.6.2, 35.905, 35.925-13
sewer maintance program and ordinance:
sewer system evaluation survey, (SSES):, 35.927-2,
sewer use ordinance:, 7.2.4
SHPO, (State Historic Preservation Officer): 5.3.1
shoreline stabilization:  5.3.9
site availability: 5.9.3, 35.917-l(m)
SIP, (State Air Implementation Plan): 5.3.8, 6.303, 45 FR 53382
sludge disposal: (see residuals), 35.917-l(d)(6)
small community: 3.2, 35.908(b)(l)(iv)
small purchases: 3.3.3, 35.936-19
small wastewater systems: 5.6.2, 5.9.1
smoke testing:
social impacts: 35.917-5(a)(3), Appx. A.6.a
SSES (see sewer system evaluation survey)
staged construction: Appx. A.5.a, Appx. A.8.e&.f, (see phased
State planning processes: 1.1
storm sewers: 1.4,, 35.925-21
subagreements: 3.3.3
substantial habitation: 5.1,  35.918-l(a)
sunk costs:
surface water: 5.3.10
television inspection:
treatment works: 35.905. 35.917(a)&(b),  35.917-2(a), 35.925-15,
unallowable costs: 3.3.2, (see allowable costs)
undeveloped areas: Appx. A.8.f(l)
unsewered areas: 35.925-13

user charges: 5.7.2, 5.7.8,  5.9.1,  35.905,  35.917-1(1),
    35.918-l(g), 35.925-11,  Appx. B,  (see charges to customers)
user charge system: 5.7.2,  7.2.4, 35.918(g),  35.929 et.  seq.
upgrading: 35,917-l(d)(3)
value engineering  (VE):  35.905.  35.935-18
wasteload allocations:  1.2,  1.4,  5.2,  35.917(e), Part 133
wastewater flows, existing:  5.4.2
wastewater flows, future:  5.5.2
water access:  35.917-Kj),  (see  recreation)
water quality  limited  stream:  1.2,
water quality  management,  (WQM):  1.1,  1.3, 1.4. 35.917(e), 35.925-13(d);
    35 Subpart G; CWA  303(e)
wetlands: 5.3.2,  5.3.10,  5.5.1,  35.925-13(d)&(e), Appx. A.S.f,
    6.302(a)&(b), 6.506(a)(6); Part 6, Appendix A
wildlife: 5.3.6,  5.3.10,  6.302(f),  6.506(a)(6)
wild rivers: 5.3.5,  5.3.10,  6.302(e),  15 WCPD 1352
WQM (see water quality management plans)
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