TD365
.57 TWV
1988 JTr\
United States
Envlronmental
Protection
Agency
Office of Water
Office of Municipal
Pol IutIon Control
Planning and Analysis
Division (WH-546)
Washington, D.C. 20460
January 1988
832B88102
INITIAL GUIDANCE
For
STATE REVOLVING FUNDS
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^ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
omce or
JAN 2 8 1988
MEMORANDUM
SUBJECT: Initial Guidance - State Water Pollution Control
Revolving Fund
FROM: Lawrence J. Jensen
Assistant Administrator for Water
TO: Regional Water Management Division Directors
Regions I - X
State Program Directors
State Water Pollution Control Agencies
Attached for your use is a copy of the final Initial Guidance -
State Water Pollution Control Revolving Fund, as well as a summary
of our responses to public comments received as a result of the
Notice of Availability published in the FaderaI Register on
September 4, 1987.
This document represents the Environmental Protection Agency's
(EPA) approach to implementation of Title VI of the Clean Water Act
(CWA), until interim final regulations on selected provisions in
this guidance are issued later this year. The release of this
document marks a significant step in the transition of the
responsibility for financing, constructing and managing municipal
wastewater treatment facilities from the Federal government to
States and localities. It will assist EPA Regions in their review
of proposed State Water Pollution Control Revolving Fund (SRF)
programs and provide States with initial guidance on applying for
Capitalization Grants.
The attached document is a result of public comment on the
Concept Paper issued last Spring, comments on draft editions of this
guidance from the Office of Municipal Pollution Control's (OMPC)
workgroup, public comments on a final draft noticed in the Federal
-,---r^ I?'^'"C' ^^
• ' ''' • ' ~ ' '.. c-;•' f ei. • Eoom .
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Register, and a final public meeting of the CWA. steering committee
on October 22, 1987. The comments we received were extremely
helpful in developing this initial guidance document. I appreciate
the cooperation we have received in preparing this document.
The guidance has been designed to promote flexibility for
States in establishing and operating their SRF programs, within the
bounds of the CWA.. In addition to using their SRF funds to finance
municipal wastewater construction needs, and after the municipal
enforceable requirements have been addressed, States may also use
their SRF resources to finance certain nonpoint source and estuary
program costs. The guidance imposes very few requirements on States
and municipalities beyond those imposed by the CNA. itself. This
will allow each State to tailor its program to serve its unique
needs. To distinguish statutory and pending regulatory requirements
from discretionary guidance, the following coventions are used:
requirements to meet statutory or pending regulatory requirements
use the word "must" while recommended methods use the word "should".
To further assist Regional offices and State agencies in
implementing SRF programs, we will be issuing more detailed guidance
including model documents on such activities as intended use plans,"
capitalization grant agreements, annual reports, etc., in the near
future. Regional personnel should direct their questions on this
guidance to: H. Wi i i i am Kr ame r , Chief, Policy and Analysis Branca,
OMPC or, Alan Hais, Acting Director, Planning and Analysis Division,
GMPC. State representatives should direct their questions to the
Regional contacts identified in Appendix B to the attached guidance.
Attachment
cc: James Elder, OWEP
William Whittington, OWRS
David Davis, CWP
Michael Quigley, OMPC
Tudor Davis, GMEP
Robert Green, OPPE
Howard Corcoran, OGC
George Ames , OW
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RESPONSIVENESS SUMMARY OF MAJOR COMMENTS ON
INITIAL GUIDANCE: STATE WATER POLLUTION CONTROL REVOLVING FUND
(January 28, 1988)
The Office of Municipal Pollution Control has reviewed the comments of
nearly 50 respondents to the September 4 Federa1 Regi ater request for
comments on the Draft Initial Guidance to implement Title VI of the
Clean Water Act. This responsiveness summary explains the
clarifications that were made in the Final Initial Guidance, and
describes matters that have been changed at the suggestion of
respondents and matters that have been left unchanged.
Nearly half of the responses to the Federal Register notice were from
the State agencies that will administer the program. The major areas
of concern to the commentators, in order of the appearance of these
issues in the Guidance, were: 1) our interpretation of the
administrative expenses provision of section 603(d)(7); 2) tax
implications of Fund activities; 3) the State match; 4) the category
of funds and projects subject to the ''first use''requirement of
section 602(b)(S); 5) application of environmental reviews in the SRF
program; 6) application of Minority and Women's Business Enterprise
(MBE/WBE) requirements and other Federal requirements; 7) details
required in the Intended Use Plan; and, 8) the extent of the Agency's
discretion to withold capitalization grant payments.
Payments by 1 e11er-of -credit
The issue receiving the most attention was initially i sued as a.
supplement to the August 17 draft of the Guidance. Commentators,
particularly States, argued that the Agency's plan to make payments by
letters of credit contravenes the language and the intent of the Act
and could thwart the establishment of the permanent funding mechanisms
Congress envisioned. The States contend that they will be compelled
to lend at or near market rates of interest to overcome the
impediments to the payments process that the letter of credit will.
introduce (for example, limiting the opportunity to earn interest on
Fund balances). Critics of the policy argue that this will discourage
communities from using the SRFs and force them to acquire financing in
the private market.
A detailed description of the payments process is included in the
final version of the Initial Guidance (see Section IV. D). The letter
of credit method has been carefully designed to enable States to
operate SRF programs efficiently, and to enable the Federal government
to manage outlays in a manner that avoids the sudden cash demands the
program could make on the budget. The method will minimize the need
for communities to obtain interim financing, and permit States to
engage the Fund in any authorized activity. Although the
letter of credit may not itself be used soley to earn interest,
the Fund may be used for any purpose permitted by the Act.
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MATTERS CLARIFIED
Treatment of deobligationa and fea 1 1otmenta
The draft Guidance could be read to preclude the use of Title II
deobligations and reallotments for Title VI purposes, except for those
available from fiscal year 1991 allotments. The final version
explains that deobligations and reallotments of Title II funds
originally allotted in fiscal year 1987 (the year of enactment of the
Water Quality Act) and thereafter are available for purposes of the
SRF program. The percentage ceilings set forth in section 205Cm)
that apply to the transfer of fiscal year 1987 and 1988 Title II
allotments shall apply to the entire amount of Title II funds
available to the States.
Refinanced projects
Title VI authorizes an SRF to refinance local ''debt obligations
incurred after March 7, 1985, '' the date on which the Water Quality
Act was introduced in the Senate. Commentators recommended that the -
Guidance include a more complete definition of the quoted phrase and
discussion of the requirements attaching to projects receiving
refinancing. The legislative history of this ^revision indicates thac
Congress was seeking to spur construction of needed projects, and not
to encourage communities to assume more indebtedness for completed
construction or for construction already underway. Therefore, the
Final Guidance expands the phrase to read: '' debt incurred and
construction be£iin after March 7, 1985.'' (emphasis added)
The Final Guidance also explains that projects begun between March 7,
1985 and the issuance of this Guidance must comply with the statutory
requirements then effective in order to be eligible for refinancing.
For example, if a State wishes to count the costs of refinancing a
project toward satisfaction of Title II requirements in section
602(b)(5), that project must have undergone an environmental review in
conformity with the National Environmental Policy Act. Projects
begun after the Final Guidance is issued must comply with the
statutory requirements and with any additional requirements that the
Guidance authorizes the Regional Administrator to include as
conditions in the capitalization grant agreement.
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Application of Title II requirement^
The Draft Guidance could be interpreted to require States to expend at
least the amount of the annual capitalization grant on section 212
publicly owned treatment works, and to ensure that those projects
comply with the Title II requirements. The Final Guidance explains
that the sixteen statutory requirements that attach to projects
constructed with funds directly made available by capitalization
grants only attach to the extent that States actually construct
section 212 publicly owned treatment works, up to the amount of the
yearly award. The Final Guidance makes clear, then, that the
statutory requirements only apply insofar as those funds are expended
on Section 212 projects, even if that amount is less than the
capitalization grant award for the year. A State that has addressed
the ''first use'' requirement for the year is free to fund any
eligible activities under Title VI.
MATTERS CHANGED „
Private operations
The Draft Guidance contained the sentence: ''(Of a portion of the
treatment works is privately owned or operated, the State may use SRF
funds to support only the publicly owned portion of a treatment
works.*' This was construed by many respondents to imply that an SRF
could not finance a publicly, owned treatment works if a private
concern would conduct its operations. The commentators correctly
noted that this restriction cannot be found in the Water f-iality Act.
Several also argued that such a restriction could render some
communities ineligible for SRF financing, because many communities,
particularly smaller ones, commonly award private contracts for
treatment works operations. The private operation language was
removed from that sentence and another sentence was inserted
explaining that contractual arrangements for the private operation of
POTWs would have no affect on eligibility for financing.
Envi r nmnent a 1 review requirements
States argued that Congress intended to restrict environmental review
requirements to those projects receiving funds directly made available
by the grant. They saw no statutory basis far exceeding the authority
the Agency has been given by the Act by extending this requirement to
all projects. Other commentators were concerned that this requirement
could disco.urage communities from participating in the program.
The Conference Report to the Water Quality Act can be read to restrict
the application of the requirements of the National Environmental
Policy Act to those projects specifically mentioned in the section
602(b)(6). However, section 602(a) authorizes the Administrator to
include additional requirements in the capitalization grant
agreement.
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Pursuant to this authority , the Agency will require States to condue
environmental reviews of all other section 212 projects funded from
the SRFs , although those reviews may be less intensive than the
NEPA-like reviews required under section 602(b)(6). The exercise of
this discretionary authority is in keeping with the Agency's mission.
The criteria by which the Regional Administrator will review States'
environmental review procedures for section 212 projects funded with
funds ' 'direct ly made available by' ' capitalization grants have
changed to some extent. The Draft guidance and its appendix
describing these review criteria gave States the impression that they
would be required to adopt the procedures at 40 CFR Part 6. Changes
have been made in the final document only to correct this perception,
to make clear that the States will be required to adopt ''NEPA-like''
procedures. Existing State environmental review procedures that meet
the NEPA standards and that are supported by State authority will be
approved.
Cross-cutting authorities
Commentators urged the Agency to supply more detail regarding the
other -Federal authorities with which the States and/or municipalities
must comply. States argued that they may be exposed to risk if they
are required to certify their compliance with an unspecified body of ^_
Federal law. . "~
The .\geacy is ssamisiag other authoritisa to det"-:nins the sztsnt ? f
their application in the SRF program. The Final Guidance does contain
a detailed list of the authorities that are being examined (Appendix
F) and makes clear that many of the listed authorities that have
applied in the construction grant program will apply, by their own
terms, to all activities assisted with funds ' 'direct ly made available
by'' capitalization grants. Additional guidance regarding the
application of these cross-cutting authorities will be forthcoming.
Oerating
In the capitalization grant agreement process, the State must provide
documentation of the procedures it will use to comply with
many of the required specifications. For those procedures that will
not change from year-to-year , OMPC has recommended the use of an
''operating agreement'' as an efficiency measure . The procedures
would be incorporated into the operating agreement in the first year
and would not be required for each capitalization grant agreement .
In the Draft Guidance, the decision to use this alternative framework
is the Regions' alone. States argue that Regions should not be given
such unilateral authority. In the Final Guidance, the decision to use
an operating agreement is negotiated between the Region and the State.
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MATTERS LEFT UNCHANGED
A rim iniatrative expenses provisions
States argued that Congress intended to allow the use of any State
monies in the Fund in excess of the 20 percent match for
administrative purposes and that the four percent limitation in
section 603(d)(7) applies only to the capitalization grant award.
The language of the administrative expenses provision describes a
ceiling on the amount of money in the Fund that can be used for
administrative purposes. The ceiling is not calculated on the basis
of the amount of the capitalization grant award, but it applies to the
entire Fund.
State tna t e h
The treatment of this issue in the Draft guidance was criticized from
two perspectives. Cities and municipal interests opposed allowing the
use of the Fund in deriving the match. They argued that Congress
intended to compel State participation in capitalizing the Funds by
requiring States to derive the match from their own sources. Several
States criticized the restrictions contained in the Guidance for
acquiring the match, and recommended that the Agency remain silent on
the issue, thereby allowing States, to use whatever financial
mechanisms they have at their disposal to acquire the match.
The treatment of t' e match issue was not changed in the Final
Guidance. It permits States to issue bonds to acquire the match, and
to retire bonds with the interest payments from loans awarded by the
Fund. Other proposed mechanisms by which the Fund will participate in
deriving the match must be reviewed on an individual basis to ensure
that they do not impair the Fund's integrity.
First use requirements (secti
on
Most commentators on this issue criticized the Agency's decision on
both the category of funds and the types of projects subject to the
first use requirement. The Final Guidance, like the previous version,
includes the repayments of the first round of loans issued from the
federal grant and National Municipal Policy majors and minors within
the first use requirement.
This interpretation of section 602(b)(5) is clearly permitted by the
Act. The statutory language and the Conference Report accompanying
the Act supports the Agency's approach. The Report explains that
funds resulting from the capitalization grant includes the repayments
of the first round of loans issued from the grant. The Act describes
the projects that must comply with the enforceable requirements of the
Act as those that must meet the July 1, 1988 municipal compliance
deadl ine .
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Tar Reform Act implications
A wide range of commentators expressed concern that the Tax Reform Act
of 1986 would have a major affect on activities of State revolving
Funds and insisted that the Agency assume the responsibility for
advising States on these affects. The Final Guidance contains little
additional information on the Tax Reform Act. However, the Guidance
now clearly commits the EPA to work with the Department of the
Treasury to resolve these questions. States are again advised to seek
the advice of bond and tax experts in the Final Guidance, and are
assured that any information the Agency acquires will be promptly
shared with State agencies.
Minority and Women'a Buaineaa enterprise requirements fMBF/WBE)
States and other respondents argued that the Agency is exceeding its
statutory authority by imposing MBE/WBE requirements on State SRF
programs. The Agency's position is not changed in the Final Guidance,
and it has received support from the Senate Appropriations Committee,
which wrote recently:
"'The Committee is pleased to note that EPA has included
a fair-share requirement for small and minority- businesses
in the draft guidelines it has prepared to assist States in
establishing revolving fun'ds . The Committee fully expects
this req"irement to remain an integral part of -the Agency's
revolving fund guidelines.'' Report to accompany the Department
of Housing and Urban Development-Independent Agencies
Appropriation Bill, 1988 (HR. 2783)
However, the Final Guidance does explain more fully that
requirements do not apply to all projects funded from the SRF, but
only to those that the State selects to fulfill its ''fair share''
objective .
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Intended Ua e Plan details
Most State respondents argued that the level of detail required in the
Intended Use Plan by the Draft Guidance was too specific.
Particularly troublesome to these commentators was the implication
that project-by-project disbursement schedules would be demanded.
This type of information, the commentators argued, is extremely
difficult to forecast and is not required by the Water Quality Act.
The Guidance is clear that the draft payment schedule should be
supported by an estimate of cash disbursements from the SRF at a level
of detail sufficient to allow negotiations on the payment schedule.
Withholding payments for noncomp1iance
States argued that the Agency's discretion to withhold payments for
non-compliance with the Act or the capitalization grant agreement
should extend only to future payments, and not to payments under which
the States have already made commitments. Payments must continue
under existing schedules to avoid upsetting the expectations of
communities and the bond markets.
By limiting its discretion in this manner, the Agency could emasculate
the prerogative it is given in section 605 of the Act. Only those
funds that have not been tainted with non-compliance could be withheld
and, conceiveably, a Sta-te could avoid the non-compliance penalty
altogether by sntering i'to a largs number of szecutory contracts.
Bond market experts have also argued that the leverage the Agency is
given by section 605 may actually heighten the appeal of SRF bonds,
since the market can be better assured that the money will be spent
wisely.
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INITIAL GUIDANCE
FOR
STATE REVOLVING FUNDS
FINAL
January 28, 1988
U.S. Environmental Protection Agency
Office of Water
Office of Municipal Pollution Control
Planning and Analysis Division CttH-546)
Washington D.C. 20460
(202J 382-7256
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OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
TABLE OF CONTENTS
PAGF
INTRODUCTION iv
I. FISCAL AUTHORIZATIONS AND RESERVES 1
A. Authorization, Allotment, and Reallotment 1
B. Notice of Intent 1
C. Section 205(m) Transfer of Title II Reserves 2
1. Section 205(g) Management Reserve 2
2. Section 205(j)(1) Water Quality and
Section 205(j)(5) Non-point Source Reserves 3
3. Section 20l(i)(2) Advance of Allowance,
Section 20S(h) Alternative Systems, and
Section 205(i) Innovative/Alternative Reserves 3
D Reserves from Title VI Allotments . 3
II. USES OF STATE REVOLVING LOAN FUNDS 3
A. Eligible Activities of the SRF 3
B. Types of Financial Assistance 4
1. Loans (Section 602(d)(l)) 4
a. Interest Rate 4
b. Repayment to SRF 4
c. Dedicated Repayment Source S
2. Refinancing Existing Debt Obligations
(Section 602(d)(2)) 5
3. Guarantee or Purchase Insurance for
Local Debt Obligations (Section 602(d)(3)) 6
4. Guarantee SRF Debt Obligations (Section 603(d)(3)) 6
S. Loan Guarantees for SubState
Revolving Funds (Section 603(d)(5)) 7
6. Earn Interest on Fund Accounts (Section 603(d)(6)) 7
7. SRF Administrative Expenses (Section 603(d)(7)) 7
C. Prevention of Double Benefits 8
D. Assistance for the Non-Federal Share 9
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OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
III. MAJOR LEGISLATIVE PROVISIONS AFFECTING CAPITALIZATION GRANT
AGREEMENTS 9
A. Capitalization Grant Agreement 9
B. Legislative Requirements for the Grant Agreement 9
1. Agreement to Accept Payments 9
2. Provide a State Match 10
3. Binding Commitments Within One year 11
4. Expeditious and Timely Ezpediture 11
5. First Use of Funds for Enforceable Requirements 11
6. Compliance with Title II Requirements 12
7. State Laws and Procedures 16
8. State Accounting and Auditing Procedures 16
9. Recipient Accounting and Auditing Procedures 16
10. Annual Report 17
11. Compliance with Environmental Review Requirements 17
C. Application of Other Federal Authorities 18
IV. APPLICATION FOR A CAPITALIZATION GRANT 18
A. Fund Establishment, Instrumentality of the State 19
B. Decision on the Use of Allotments 19
C. Intended Use Plan (IUP) 20
1. List of Projects 20
2. Short and Long Term Goals 21
3. Information on the SRF Activities to be Supported 21
4. Assurances and Specific Proposals 21
5. Criteria and Method for Distribution of Funds 22
D. Payments 24
V. CAPITALIZATION GRANT AGREEMENT 28
ii
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OFFICE OF WATER INITIAL GUIDANCE
STATE 'WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
VI. REPORTING AND OVERSIGHT OF SRF ACTIVITIES 30
A. Annual Report 30
B. Annual Review 31
C. Annual Audit 32
D. Compliance Assurance 32
E. Dispute Resolution 33
VII. APPENDICES
A. Clean Water Act Title VI
B. Regional Contacts
C. FY 1988 Project Priority List Guidance
D. Criteria for Structuring a State Environmental
Revi ew Process
E. Letter of Credit Procedures
F. Federal Laws and Federal Authorities Applying to State
Revolving Fund Programs
iii
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OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
INTRODUCTION _
Program Purpose
Title VI of the Clean Water Act (OMfO, as amended, authorizes
the Administrator of the Environmental Protection Agency (EPA) to
make capitalization grants to States for deposit in State Water
Pollution Control Revolving Funds (SRFs). From these Funds,
States can provide loans and other types of financial assistance,
but not grants, to communities and intermunicipal and interstate
agencies for the construction of publicly-owned wastewater
treatment facilities, and for implementation of nonpoint source
management programs and development and implementation of plans
under the new estuary protection program.
Congress created the SRF capitalization grant program to
facilitate the establishment of permanent institutions in each
State that would provide continuing sources of financing needed to
maintain water quality. The SRF capitalization grant program is
fundamentally different from the established construction grant
program. In the existing grant program, EPA is ultimately
responsible for awarding construction grants, with the States
managing the projects on a day-to-day basis. In the
capitalization grant program, the States have the responsibility
for SRF operations, including providing assistan e for
cons i rue i i on. Haci. SRF is co be primarily 3 t a. i e -de s i gneci and.
operated, with minimal Federal requirements beyond those in
Federal law imposed on its structure. The release of this
document marks a significant step in the transition of the
responsibility for financing, constructing and managing municipal
wastewater treatment facilities from the Federal Government to
States and municipalities.
Congress established this new program in furtherance of a
long-standing national policy to provide financial assistance to
construct publicly owned treatment works. The State management of
the construction grant and State revolving fund programs should be
coordinated to achieve this goal.
Organization of the Guidance
Part I of this guidance explains the authorizations and
allotments potentially available to the SRF. Part II sets forth
the activities that can be undertaken by SRFs. Part III describes
the major legislative provisions affecting the design and
operation of the SRF.
IV
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OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
Part IV describes the contents of the capitalization grant
application, intended use plan, and payment schedule. Part V
describes how the certifications and demonstrations required by
the CWA. are addressed in the grant agreement. Part VI explains
the reporting obligations of States and the oversight
responsibilities of the Agency. Part VII is a compilation of
appendices, many of which are referred to in the text.
The Capitalization Grant Agreement Process
The capitalization grant agreement process begins when the
State submits an application to the Regional Administrator (RA)
requesting a capitalization grant. With its application, the
State should also submit an Intended Use Plan (IUP), documentation
on the institutional framework of its SRF program, and a proposed
schedule for capitalization grant payments by the EPA.
The IUP outlines the State's planned SRF activities, provides
assurances and specific proposals for meeting requirements of the
CWA, and serves as the basis for negotiations between the RA and
the State on the proposed payment -schedule. The IUP and the
payment schedule are then incorporated into the capitalization
grant agreement, which defines the State program and operating
:ne:aods and :h.e Regional oversight rois. Ma 15 r i a 1 ia :b.3se
documents that does not change from year-to-year may be
incorporated by reference in subsequent grant agreements or in an
operating agreement, which may remain in effect for several years.
The Agency will conduct an annual review of the State SRF
program each year. This review will focus on the State's Annual
Report, which describes in more detail how the State performed the
activities it planned in the preceeding year under its IUP. The
objective of this review will be to determine the extent to which
the State has fulfilled the assurances it made in the
capitalization grant agreement and supporting documents, and to
assess the financial health of the SRF.
To bring about an effective transition from an EPA focused
grant program to a State operated loan program, States and
Regional Offices are encouraged to work closely to develop an
application that effectively addresses all the critical areas of
the new SRF program.
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OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
I. FISCAL AUTHORIZATIONS AND RESERVES
A. Authorization, Allotment, and Reallotment
Authorizations under Title II for construction grants
continue through fiscal year (FY) 1990. Following passage of the
Water Quality Act, Congress appropriated $1.16 billion for FY
1987. For FY 1988, Congress has appropriated $2.3 billion. For
FYs 1989 and 1990. the Title II authorization falls to $1.2
billion. For FYs 1987 and 1988, States may use up to 50 and 75
percent respectively of their Title II funds for SRFs. For FYs
1989 and 1990, States may use essentially all of their Title II
funds for SRFs. The option for using Title II funds for SRFs is
explained in more detail in section I.B., Notice of Intent.
Separate authorizations for SRF programs under Title VI begin
in FY 1989. Congress has authorized $1.2 billion for each of FYs
1989 and 1990, $2.4 billion for FY 1991, $1.8 billion for FY 1992,
$1.2 billion for FY 1993, and $600 million for FY 1994.
Appropriations for FYs 1987 through 1990 under both the Title II
and Title VI programs will be allotted in accordance with the
formula contained in section 205(c)(3) of the CWA.
Title VI funds are available for EPA's obligation to the
State during the fiscal year in which they are allotted and during
the following fiscal year. The amount of any Title VI allotment
not obligated to the State at the end of this period of
availability shall be reallotted for Title VI purposes in
accordance with the procedures for reallotment established under
the Title II construction grant program. Deobligations and
reallotments of Title II funds originally allotted in fiscal year
1987 and thereafter may be used by the States for Title VI
purposes, provided that the ceilings described in sections
205(m)(l)(A) and (B) are not exceeded.
A State that does not receive all the money allotted to it
under Title VI in the first year of its availability, is
prohibited under section 604(c)(2) from receiving realloted funds
from that appropriation.
B. Notice of Intent
To enable States to participate in the Title VI program as
soon as possible, and to facilitate the transition from the
construction grant to the capitalization grant program, section
205(m) of the CffA. provides each State with the option to transfer
a portion of its allotment from Title II authorizations for
deposit, through a capitalization grant, into an established water
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OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
pollution control revolving fund. States may not transfer from
Title II any sums authorized to be reserved under section 205(j)
of the CWA.
Section 205(m) requires the Governor of the State to submit a
Notice of Intent to the Regional Administrator (RA) specifying the
amount of the Title II allotment the State intends to use for
Title VI purposes during the fiscal year for which it is
submitted. The Notice may also identify anticipated, unobligated
Title II funds from a prior fiscal year, and request transfer of
those funds as well, provided that the requested amount does not
exceed the statutory limit on the use of those funds for Title VI
purposes. For example, the State may submit a Notice of Intent
for FY 1989 that identifies both the amount of its FY 1989 Title
II allotment it intends to use for Title VI purposes, and the
amount of its unobligated Title II allotment from FY 1988 it
intends to use for such purposes.
Section 20S(m)(2)(B) requires each Notice to be submitted on
or before July 3 of the year preceding the fiscal year in which
those funds are available (90 days before the first day of the
Federal fiscal year). The FY 1989 Notice of Intent must be filed
no later than July 3, 1988. If a State fails to file a Notice of
Intent on or before the prescribed date, then the State may not
transfer funds under Title II into an SRF in the upcoming fiscal
year. A timel; Notice of Intent may be later withdrawn or amended
ac tie Governor's request.
The funds the State wishes to transfer under section 205(m)
from Title II allotments will be held in reserve until these funds
are requested as part of a capitalization grant application. When
the capitalization grant is awarded, these funds will be obligated
under Title VI for the activities of the SRF. If these funds are
not so obligated, they will be subject to reallotment as
construction grant funds. Unobligated Title VI funds are subject
to reallotment by EPA as indicated in I. A. above.
C. Section 205(m) transfer of Title II Reserves
1. Section 205(g) Management Reserve
FY 1987-1990 - A State can reserve up to 4% of its share of
the annual Title II authorization or $400,000, whichever is
greater. Section 205(g) funds can be used to develop SRF
programs. However, before any of these funds may be transferred
to the SRF, the State must establish to the satisfaction of the RA
that adequate funds, up to the section 205(g) maximum, will be
available from whatever source to administer the construction
grants program in the State. For a complete discussion of the
source of administrative funds for the operation of the SRF, see
section II.B.7.
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2. Section 205(j)(l) Water Quality Planning and Section 205(j)(5)
Nonpoint Scarce Reserves
These reserves must be calculated based on a State's full
Title II allotment, and cannot be transferred to the SRF.
3. Section 201(l)(2) Advance of Allowance, Section 205(h)
Alternative Systems for Small Communities, and Section
205(i) Innovative and Alternative Reserves
Under Section 20S(m)(3), only the section 205(j) reserve may
not be transferred pursuant to the State's authority under section
205(m). Accordingly the State does have the authority to transfer
sums reserved under sections 20l(l)(2), 20S(h), and 205(i). To
comply with section 205, these reserves must be first calculated
based upon the full Title II allotment. The amount of these
reserves need not remain for Title II purposes, but may be
transferred into an SRF.
D. Reserves from Title VI Allotments
Title VI provides for one reserve. Under section 604(b) a
State must reserve the greater of one percent of its allotment or
$100,000 each year, to carry out planning under sections 205(j)
and 303(e). The use of Title VI funds for these purposes will be
3ov«rn.ed by guidance or rsg-iations developed by tb.e Offics of
Water Regulations and Standards.
II. USES OF STATE REVOLVING LOAN FUNDS
A. Eligible Activities of the SRF
Funds in the SRF shall not be used to provide grants. All
funds within the SRF must be used solely to provide loans and
other authorized forms of financial assistance:
-- to municipalities, intermunicipal, interstate, or
State agencies for the construction of publicly
owned wastewater treatment works as these are
defined in section 212 of the CWA and that appear on
the State's priority list;
-- for implementation of a nonpoint source pollution
control management program under section 319 of the
CWA.; and,
-- for development and implementation of an estuary
conservation and management plan under section 320
„ f * t. > /-TITA
of the CWA..
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B. Types of Financial Assistance
Section 603(d) authorizes seven specific types of assistance.
1. Loans
SRFs s£ .d be established primarily -to award loans to
municipal!ti . Repayments of loans will enable the Fund balance
to be available in perpetuity for the designated purposes of the
Fund, so it can continue assisting communities to attain and
maintain compliance with the enforceable requirements of the CWA,
and to support other eligible high priority uses identified in a
State's Clean Water Strategy.
SRF loan conditions are designed to maintain the Fund's
financial integrity without hampering the State's flexibility to
use the SRF to address the diverse needs of its communities. As
part of its Fund management strategy, a State should strive to
ensure that money will be continually available to meet future
wastewater treatment needs.
a. Interest Rate
Section 603(d)(1)(A) provides that loans may be made at
or be low market interest rates, and may include zero interest
loans. States .re responsible for determining appropriate
rates and may exercise flexibility in setting interest rates
in order to accommodate the fiscal circumstances of individual
conmuni ties.
b. Repayment to SRF
Under Section 603(d)(l)(D), all principal and interest
payments on loans must be credited directly to the SRF.
Section 603(d)(; 3) requires the annual repayment of
principal and interest to begin not later than one year after
project completion. EPA defines project completion as the
date operations of the treatment works are initiated or are
capable of being initiated, whichever is earlier. Where
construction of a treatment works has been phased or
segmented, the repayment requirement applies to the completion
of individual phases or segments. At the State's discretion,
principal and interest payments may begin earlier than one
year after operations are initiated.
Section 603(d)(l)(B) also requires the loan to be fully
amortized not later than twenty years after project
completion. The yearly amount of the principal repayment and
the interest payment is set at the State's discretion.
(States may set standard State-wide amortization schedules or
address each loan on a case-by-case basis.)
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c. Dedicated Repayment Source
Section 603(d)(l)(C) requires each loan recipient to
establish one or more dedicated sources of revenue for
repayment of the loan. Dedicated sources of revenue could be
special assessments, general taxes or general obligation bonds
(backed by the full faith and credit of the municipality),
revenue bonds, user charges or other sources.
Section 602(b)(6) requires recipients to establish user
charge systems, when constructing treatment works with loan
funds ''directly made available by*' Federal capitalization
grants. However, user charge systems, as they are defined in
section 204(b)(l) of the CWA, may not be sufficient to satisfy
the dedicated source of revenue requirement of section
603(d)(1)(c). Therefore, States should agree to obtain
assurances from loan recipients that revenues will be
available to repay loans in their entirety.
2. Refinancing Existing Debt Obligations
Under Section 603(d)(2), an SRF may buy or refinance local
debt obligations (e.g., retire existing municipal bonds to reduce.
the interest rate, or extend the maturity date, or both) at or
below market rates, where the initial debt was incurred after
March 7, 1985 (the date the Senate began considering the Water
Quality Act). This provision should encourage municipalities to
proceed with construction using their own means of financing in
advance of the availability of SRF assistance, by offering the
prospect of project refinancing at better financial terms at a
later date.
Projects incurring debt and intitiating construction between
March 7, 1985 and the effective date of this guidance must have
met the requirements of Title VI to be eligible for refinancing.
Where the original debt for a project was in the form of a
multi-purpose bond incurred for purposes in addition to wastewater
treatment facility construction, an SRF may provide refinancing
only for eligible purposes, and not for the entire debt.
The State should seek the advice of bond counsel or tax
attorneys to ensure that these refinancings do not conflict with
the ''advance refunding'' provisions of the Tax Reform Act of 1986
(P.L. 99-514). For example, refinanced loans may possibly avoid
classification as ''advance refundings'' if, before the comnunity
enters into its debt, the community receives a non-binding
expression of intent from the SRF to provide refinancing in the
future. Such action would demonstrate that the original debt was
intended to be interim financing.
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The Tax Reform Act of 1986 amended the rules pertaining to
municipal finance in significant ways, particularly those rules
applying arbitrage restrictions and rebate requirements to
tax-exempt bonds. EPA is in the process of gathering additional
information on the impact of specific provisions of the Federal
tax code on the operations of SRFs, and will disseminate that
information in the future. However, EPA does not have authority
to make tax related decisions and States are encouraged to seek
assistance from appropriate authorities to determine the tax
impacts on various aspects of SRF management. States are
encouraged to share with EPA any information they acquire
regarding the tax aspects of various uses of the Fund.
3. Guarantee or Purchase Insurance
for Local Debt Obligations
Section 603(d)(3) authorizes an SRF to guarantee local debt
obligations where such action would improve credit market access
or reduce interest rates. The SRF may not, however, grant funds
to a municipality to fund a reserve account for a municipal bond
issue.
SRF guarantees of municipal debt obligations create a
''parent-subsidiary'' relationship between the SRF and the
municipality. The SRF (parent) provides municipal bondholders
with a guarantee of full and timely payment of principal and
interest on the obiigacion to the limit of the guarantee, in tne
event of default by the municipality (subsidiary).
The SRF can also be used to purchase or provide bond
insurance to guarantee debt service payment. Bond insurance is
available from a number of insurance companies.
Unless an SRF charges a ''premium'* for guarantees and
insurance, the use of the Fund for these purposes may involve the
expenditure of SRF monies without a ''stream*' of repayments.
Therefore, this type of assistance could have a negative effect on
the ability of the State to maintain the Fund in perpetuity.
4. Guarantee SRF Debt Obligations
Resources in the SRF may also be ''leveraged,*' or used as a
means of increasing the assets in the SRF without additional
contribution of capital by the State. Section 603(d)(4) allows
the SRF to be used as security or as a source of revenue for the
payment of principal and interest on revenue or general obligation
bonds issued by the State and deposited in the SRF.
The security may be provided by any of the assets of an SRF,
including an existing SRF balance and future revenues from loan
repayments. The State may also choose to borrow against the
repayment stream from outstanding loans made from an initial set
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of capitalization grants (or part of the capitalization grant or
State match), thus increasing the financial resources of the SRF
much sooner than would otherwise be possible. Bonds may be issued
by an instrumentality of the State, the State agency responsible
for administering the SRF, or an interstate agency to which two or
more States have delegated such responsibility. Under section
603(d)(4) of the CWA, the net proceeds of the sale of such bonds
must be deposited in the SRF.
Under Federal Tax laws, the tax-exempt status of SRF secured
bonds is unclear. Again, States and municipalities are strongly
urged to solicit the legal opinion of a bond counsel or tax
attorney with respect to this use of the SRF.
Note that the use of a capitalization grant to leverage does
not, in and of itself, satisfy any requirements on the use of SRF
funds. The proceeds of the bond issue must ultimately be used for
providing loans and other assistance to satisfy the requirements
of Title VI.
5. Loan Guarantees for ''Sub-State Revolving Funds'*
Section 603(d)(5) authorizes an SRF to provide loan
guarantees for similar revolving funds established by municipal or
intermunicipa1 agencies, to finance activities eligible under
Title VI. The "Stats level SRF may credit the value of tiosa
guarantees against its equivalency requirement (see section
III.B.6) if the projects guaranteed would otherwise satisfy these
requirements had they received loans directly from the SRF.
6. Earn Interest on Fund Accounts
Section 603(d)(6) provides that SRFs may earn interest on
Fund accounts prior to disbursement of assistance (for example, on
reserve accounts used as security for guarantees), subject to the
section 602(b)(4) requirement for expeditious and timely
expenditure of funds in the SRF. That is, funds should not remain
in the SRF primarily to earn interest.
Again, States and municipalities are strongly urged to
solicit the legal opinion of a bond counsel or tax attorney with
respect to using the SRF to earn interest on the proceeds of a tax
exempt issue.
7. SRF Administrative Expenses
Under section 603(d)(7), money in the SRF may be used for
the reasonable costs of administering the Fund, provided that the
amount does not exceed 4 percent of all grant awards received by
the SRF. In each year, the dollar amount potentially available
for administrative expenses is 4 percent of all awards. However,
the dollar amount actually available must be adjusted to reflect
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the amount of administrative expenses in previous years. Expenses
of the SRF in excess of the amount permitted under this section
must be paid for from sources outside the SRF.
SRF administrative monies may be used for all reasonable
costs that would be eligible under section 205(g) for program and
project management, to the extent those types of costs are
incurred for management of the SRF and for projects receiving
financial assistance from the SRF.
Also eligible are reasonable costs unique to the SRF, such as
costs of servicing loans and issuing debt, SRF program start-up
costs, financial, management, and legal consulting fees, and
reimbursement costs for support services from other State
agencies. However, the SRF administrative allowance cannot be
charged with the costs of administering the construction grant
program under section 205(g), permit programs under sections 402
and 404 and Statewide wastewater management planning programs
under section 208(b)(4), States that secure contractual
assistance for services under section 603(d)(7) must comply with
the regulations at 40 CFR Parts 32 and 33 governing debarment and
suspension and procurement.
Expenses incurred issuing bonds guaranteed by the SRF may be
absorbed by the proceeds of the bonds, and need not be charged
against tae 4 percent administrative coats ceiling. The net
proceeds of those issues must be deposited in the Fund.
C. Prevention of Double Benefits
If a project is receiving a Federal construction grant under
section 20l(g) of the Act, section 603(h) prohibits the project
from receiving a loan for the non-Federal share of the project's
cost. Loans can be made for subsequent phases, segments, or
stages of wastewater treatment works that previously received
grant assistance for earlier phases, segments, or stages of the
same treatment works.
Communities that have been awarded ''pick-up'* grants, which
are Title II construction grants that are received after the
community has begun construct ion with its own financing, may apply
to an SRF for a loan to refinance the pre-grant work, provided
that the construct ion was initiated after March 7, 1985.
Section 603(e) provides that if a State makes a loan from its
SRF in part to finance the cost of facility planning and
preparation of plans, specifications, and estimates for
construction of treatment works and the recipient subsequently
receives a grant under section 201(g) for construction of
treatment works and an allowance under section 20l(l)(l), the
State shall ensure that the recipient will promptly repay, the loan
to the extent of the allowance.
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If a portion of the treatment works is privately owned, the
State may use SRF funds to support only the publicly owned portion
of the treatment works. Contractual arrangements for the private
operation of a publicly-owned treatment works will not affect the
eligibility of the POTW for SRF financing. Again, bond counsel
should be consulted regarding the ''private purpose'' provisions
of the Tax Act.
D. Assistance for the Non-Federal Share
Section 603(h) does not allow loans for the non-Federal share
of a project receiving construction grant assistance. However,
an SRF may provide ''ancillary'' financial assistance (e.g.
guarantees and insurance) if the Governor or his designee
determines that assistance is necessary to allow the project to
proceed.
III. MAJOR LEGISLATIVE PROVISIONS AFFECTING CAPITALIZATION
GRANT AGREEMENTS
A. Capitalization Grant Agreement
The capitalization grant agreement, described in section V.
of this Guidance, Is the principal instrument by which the State
commits t-o manage its rsvolviag fund program ir. conformity with.
the requirements of the Clean Water Act. The following section
describes the major legislative provisions that affect the
capitalization grant agreement.
B. Legislative Requirements for the Grant Agreement
Section 602(b) lists ten specifications which must be
included in the grant agreement. In addition, the State must
agree to conduct environmental reviews of all Section 212 publicly
owned treatment works construction projects funded from the SRF
pursuant to the Administrator's discretionary authority contained
in Section 602(a) .
The eleven specifications that must be included in the
capitalization grant agreement are discussed below. Some require
the State to certify in the grant agreement that it will comply
with the specifications. Others require documentation of the
procedures by which the State plans to ensure compliance with the
specifications.
1. Agreement to Accept Payments
*
Under section 602(b)(l) the State must agree to accept grant
payments in accordance with the negotiated payment schedule and
use those payments for the activities.of its established revolving
fund.
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2. Provide a State Match
Under section 602(b)(2) the State must agree to deposit into
the SRF an amount equalling at least 20 percent of the amount of
each grant payment. The State match must be deposited on or
before the date on which the State receives each payment from the
grant award (see Section IV.D. for further discussion). State
match contributions are cumulative. If the State provides a match
in excess of the required amount, the excess balance may be
credited (banked) toward subsequent match requirements.
States may acquire the matching amount from a variety of
sources, including legislative appropriations, proceeds from State
issued bonds, revenues from State taxes or assessments, and funds
maintained in other State accounts. Bonds issued by the State to
derive the match may be retired from the interest repayments made
to the SRF on loans awarded by the SRF if the net proceeds from
the State issued bond are deposited in the fund. Loan repayments
on the principal of a loan must be repaid to the SRF and cannot be
used as a source of funds to retire State bond issues that provide
the State match. This flexibility to retire State debt should not
be used to the extent that it endangers the long term financial
condition of the SRF.' The source(s) of the match must be
identified and it must be established to the satisfaction of the
HA chat it is State money.
A State that has deposited State monies in a dedicated
revolving fund after March 7, 1985 and prior to receiving a
capitalization grant may credit these monies toward the match
requirement:
(1) if the monies were deposited in an SRF that
subsequently received a capitalization grant
and, if the deposit was expended, it was
expended for purposes that would be eligible
had it been an actual match; or
(2) if the monies were deposited in a separate fund
that has not received a capitalization grant,
they were lent under terms consistent with the
GR&&. and an amount equal to all repayments from these
loans will be deposited in the Federally capitalized
fund; or,
(3) if the monies were deposited in a separate fund and used
as a reserve consistent with the CWA, and an amount equal
to the reserve is transferred to the Federally
capitalized fund as its function is satisfied.
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3. Binding Commitments Within One Year.
Section 602(b)(3) requires the State to agree to enter into
binding commitments with recipients to provide financial
assistance from the SRF. These binding commitments must be made
in an amount equal to 120 percent of each quarterly grant payment
within one year after the receipt of each quarterly grant payment.
Binding commitments are legal obligations of the State to
recipients (municipality, intermunicipal, interstate, or State
agency) that define terms and timing for provision of assistance
from the SRF. Binding commitments may take the form of any of the
types of assistance provided for in sections 603(d)(l)-(3) & (5),
and the funds expended for the reasonable cost of administration,
as provided in section 603(d)(7).
If the State does not make binding commitments equalling 120
percent of the quarterly grant payment within one year after it
receives the payment, the RA may withhold future quarterly grant
payments, and require adjustments to the payment schedule before
releasing further payments. To facilitate complying with this
requirement, the State may wish to plan for binding commitments
greater than the 120 percent requirement. Then, if some projects
are unable to proceed for unforeseen reasons, the State will still
be able to comply with the requirement. In addition, if the State
commits more than the required 120 percent, EPA wi11 Tecognize the
cumulative value of tie binding commitments, and :Le access
balance may be credited (banked) towards the binding commitment
requirements of subsequent quarters.
4. Expeditious and Timely Expediture
Section 602(b)(4) requires the State to agree to expend all
funds in the SRF in an expeditious and timely manner.
5. First Use of Funds for Enforceable Requirements
A detailed understanding of the ''first use'* requirement
begins with the Act. Section 602(b)(5) reads:
''all funds in the fund as a result of capitalization
grants under this title and section 20S(m) of this Act
will first be used to assure maintenance of progress, as
determined by the Governor of the State, toward compliance
with enforceable deadlines, goals, and requirements of the
Act, including the municipal compliance deadline.*'
The categories of funds subject to this requirement are:
*
(1) the Federal capitalization grant awarded
under section 205(m) and Title VI;
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(2) repayments of the first round of loans awarded from
the grant; and,
(3) the State match.
These funds must first be used for any major and minor
publicly owned treatment works (POTW) that Regions and States have
previously identified as part of the National Municipal Policy
universe.
These funds may be used to fund the cost-effective reserve
capacity of these projects.
In order for a State to use these funds for other treatment
works under section 212 or programs and projects for nonpoint
sources (section 319) or estuaries (section 320), the State must
certify that the POTWs described above are:
(a) in compliance, or
(b) on an enforceable schedule, or
(c) have an enforcement action filed, or
(d) have a funding commitment during or
pfior to the first year covered by the IUP.
Other funds in the SRF (e.g., interest earned on sources
other than the first round of loans, bond proceeds from leveraging
with the capitalization grant in excess of the grant amount, State
money in excess of the match, or loan repayments - except first
round repayments from capitalization grants) are not required to
be used first for assuring maintenance of progress toward
compliance with the enforceable requirements of the Act. These
monies may be used at any time for the construction of any
treatment works on the State's priority list or for programs under
sections 319 and 320.
6. Compliance with Title II Requirements
Section 602(b)(6) attaches sixteen specific statutory
requirements to section 212 publicly-owned treatment works
projects constructed ''in whole or in part before FY 1995 with
funds directly made available'' by Federal capitalization grants.
When a capitalization grant is used directly to fund an SRF
reserve account to secure a State bond issue (leveraging), these
requirements attach to section 212 projects funded up to an amount
equivalent to the capitalization grant only (''equivalency
funds''), and not to other types of projects for which the Act
authorizes funding, nor to section 212 projects funded with other
monies in the fund i'n excess of the grant amount.
Projects cited by the State to satisfy this ''equivalency
requirement'' are termed ''equivalency projects''. If a State
funds the construction of section 212 publicly-owned treatment
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works in any year in which, it receives a capitalization grant, the
costs of that construction, up to the amount of the grant, must be
costs that are'eligible under sections 20l(b), 20l(g)(l) and (2),
20l(n)(l) and 211. These ''equivalency'' projects must also
comply with the other statutory requirements of section 602(b)(6).
The costs of constructing section 212 projects that are funded in
amounts in excess of the grant award are not subject to the
eligibility requirements of these sections, nor do those projects
need to comply with the other requirements of section 602(b)(6).
However, if the State wishes to fund equivalency projects for
more than the capitalization grant amount, EPA wi 11 recognize the
cumulative value of the eligible costs of the equivalency
projects, and the excess balance may be credited (banked) towards
subsequent year equivalency requirements.
The sixteen specific sect-ion 602(b)(6) requirements listed
below are accompanied by citations to the regulations EPA uses to
implement these statutory requirements in the construction grants
program. The citations are included for the convenience of those
States that wish to use EPA regulations. The States need to
comply only with the statutory requirements. The State may
develop its own procedures for implementing the statutory
provisions. The RA.will accept State procedures provided that,
considered in the context of the SRF program, they will adequately
assure comrliance with, the statutory requirements.
Sect i on 201fhi. which requires that projects apply best
practicable waste treatment technology (see 40 CFR
35.2005(b)(7): Definition of BPWTT; 40 CFR 35.2030(b) (2):
Facilities Planning);
Sect ion 2Qlf g") C 11 f which limits assistance to projects for
secondary treatment, advanced treatment, or any cost-effective
alternative, new interceptors and appurtenances, and
infi1tration-inflow correction. This section retains the
Governor's discretionary set-aside by which a State can
use up to 20 percent of its allotment for other projects within
the definition of treatment works in section 212(2), and for
certain non-point source control and groundwater protection
purposes, as defined in section 319 of the Act (40 CFR
35.20l5(b)(2)(ii-iv): State Priority System and Project
Priority List);
Sect ion 201 f g") ( 2"). which requires that alternative technologies
be considered in project design (40 CFR 35.2030: Facilities
Planning);
Sect ion 201 (g)f3). which requires the applicant to show that
the related sewer collection system is not subject to
excessive infiltration (40 CFR 35.2030(b)(4): Facilities
Planning; 40 CFR 35.2120: Infiltration/Inflow);
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which requires that applicants study
innovative and alternative treatment technologies and take
into account opportunities to construct revenue producing
facilities and to make more efficient uses of energy and
and resources (40 CFR 35.2030: Facilities Planning);
Sect ion 20! ( gK 6") . which requires that the applicant analyze the
potential recreation and open space opportunities in the
planning of the proposed facility (40 CFR 35 . 2030(b) (5) :
Facilities Planning);
Sect ion 201 Cnlf 1 ") . which provides that funds under section 205
may be used for water quality problems due to discharges
of combined sewer overflows, which are not otherwise eligible,
if such discharges are a major priority in a State (40 CFR
35.2015(b)(2)(iv) : State Priority Systems - categories of need
and 3S.2024(a): Combined Sewer Overflows);
Section iQifal. which calls on the Administrator ["State" under
a capitalization grant] to encourage and assist communities in
the development of capital financing plans;
Section 2Q4f a ") C 1 1 and ( 1 1 l which require that treatment works
projects be included in plans developed under sections 208
ad 303(e), (40 CRF 35.2102: Water Qua 1 i ty Management Plans);
Sect ion 20Af b1( l ") . which requires communities to develop user
charge systems and to have the legal, institutional, managerial,
and financial capability to construct, operate, and maintain
the treatment works (40 CFR 35.2208: Adoption of Sewer Use
Ordinance and User Charge System; 35.2130: Sewer Use Ordinance;
35.2140: User Charge System; and 35.2214: Grantee
Responsibilities; 35.2122: Approval of User Charge System and
proposed Sewer Use Ordinance; 35.2110: Access to Individual
Systems, and 35.2206(a): Operation and Maintenance) ;
Sac t ion iQAfdlf 2 1 . which requires that, one year after the date
of completion of construction and initation of operation the
owner/operator of the treatment works must certify that
the facility meets design specifications and effluent
limitations included in its permit (40 CFR 35.2218(c),
(d) and (e)(2): Project Performance);
Sect ion lit f which provides that major rehabilitation or
replacement of collectors is not eligible, under the Governor's
20 percent discretionary authority of 20l(g)(l), unless the
collector is needed to assure the total integrity of the
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treatment works or that for a new collector, adequate capacity
exists at the facility (40 CFR 35.2116 Collection System); (Note
that the 1987 Amendments extend the prohibition for funding
separate storm sewers, unless they are part of a CSO separation
project, through fiscal year 1990.);
Section 218. which assures that treatment systems are cost-
effective and requires that projects of over $10 million
include a value-engineering review (40 CFR 35.2030(b)(3): Cost
Effectiveness, Facilities Planning, and 35.2114: Value
Engineering);
Sect ion SllCcK 1) r which applies the Environmental Impact
Statement requirement of the the National Environmental
Policy Act to projects receiving Title II grants (40 CFR 35.2113
Environmental Review). The environmental review requirements
are discussed in greater detail in subsection III.B.11 and
Appendix D.
Sect ion 513 r which applies Davis-Bacon labor wage provisions
to treatment works construction (see 29 CFR Part 5). Wages
paid for the construction of treatment works must conform to the
prevailing wage rates established for the locality by the U.S.
Department of Labor under the Davis-Bacon Act (section 513,
applys 40 U.S.C. 276 et aeq.) .
The State must identify in its Annual Report those section
212 treatment works construction projects that will be constructed
in whole or in part with funds, up to the amount of that year's
grant, that were eligible under sections 20l(b), 20l(g)(l)&(2),
20l(n)(l), and 211, and in compliance with the other statutory
requirements listed in section 602(b)(6). Only those eligible
costs actually funded with loans or other authorized assistance
from the SRF may be credited toward satisfaction of the
equivalency requirement, and only in the amount of that
as s istance.
The equivalency requirement is fully satisfied for a
particular grant when funds equal to the amount of the grant have
been lent or otherwise used to support treatment works
construction costs that meet the specified Title II requirements.
Up to 20 percent of the equivalency requirements can be
satisfied with discretionary funds. The Governor retains the
discretion to direct up to 20 percent of each capitalization grant
for other projects within the definition of treatment works in
section 212(2), and for certain NPS purposes defined in section
319 of the CWA. Note, however, that section 319 projects cannot
be funded with funds ''as a result of* the Federal grant before
the ''first use'1 requirement is met (see previous section).
Under section 211, collectors are eligible under section 20l(g)(l)
if the State can demonstrate to the satisfaction of .the RA that
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for major rehabilitation or replacement, collectors are needed to
assure the tota-1 integrity of the system; and for new collectors
for existing conmuni t ies , that sufficient treatment capacity
exists. Section 20l(n) provides that the State may also assist
projects to correct water quality problems due to discharge from
combined sewer overflows, but only upon assurances that such
problems are a major priority in the State. Although storm sewers
may be funded from an SRF, even if they are not part of a sewer
separation project, section 211 makes them ineligible for
satisfying the equivalency requirement through 1990.
Note that satisfaction of the first use requirement of
section 602(b)(S) (discused at II. B. 5), does not necessarily
entail satisfaction of the equivalency requirement of section
602(b)(6). A State that has met the test for the ''first use'' of
its funds may use remaining grant funds for section 319 or 320
purposes, but the State must still apply the Title II requirements
to any section 212 project it chooses to fund from a particular
capitalization grant up to the amount of that grant „
7. State Laws and Procedures
Under section 602(b)(7) of the CWA the State must agree to
commit or expend each quarterly capitalization grant payment in
accordance with the State's own laws and procedures regarding the
t or expenditure of revenues.
8. State Accounting and Auditing Procedures
Section 606(a) requires each State to establish fiscal
controls and accounting procedures that are sufficient to assure
proper accounting for: (l) payments received by the Fund; (2)
disbursements made by the Fund; and (3) Fund balances at the
beginning and end of the accounting period. In carrying out these
requirements, the State must agree to use accounting, audit, and
fiscal procedures conforming to ''generally accepted government
accounting standards.*' These standards are usually defined as,
but not limited to, those contained in the U.S. General Accounting
Office (GAO) publication ''Standards for Audit of Governmental
Organizations, Programs, Activities and Funct ions '' (2/27/81 ).
The accounting period will be the State's fiscal year unless
the State and the Regional Office select a different accounting
period.
9. Recipient Accounting and Auditing Procedures
Under section 602(b)(9) the State must agree that as a
condition of making a loan or other form of assistance, it will
require recipients of SRF assistance to maintain project accounts
in accordance with "generally accepted government accounting
standards", as defined in the section above. For example, charges
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to the fund must be properly supported, related to eligible
construction co_sts, and documented by appropriate records. These
accounts must be maintained as separate accounts.
10. Annual Report
Under section 602(b)(lO) the State must agree to make Annual
Reports to the Administrator on the actual use of the funds in
accordance with section 606(d) of the Act. The contents of the
Annual Report are discussed in section VI A of this guidance.
11. Compliance with Environmental Review Requirements
Section 212 POTW projects. that the State constructs with
funds ''directly made available by'' capitalization grants
(equivalency projects) must be treated under the National
Environmental Policy Act (NEPA) in the same manner as Title II
construction grant projects. To comply with this requirement, the
State may either develop or revise its own "NEPA-1ike"
environmental review methods or adopt and apply the procedures at
40 CFR Part 6. If the State selects its own method for conducting
environmental reviews, the process must be approved by the
Regional Administrator. State- processes will be evaluated on the
basis of the guidance included as Appendix D which describes an
adequate NEPA-like program for environmental reviews of,
equivalency projects. State environmental review procedures that
have previously been used in the Title II program augmented by
actions formerly undertaken by EPA and that are supported by State
authority wi 11 meet these requirements.
Under section 602(a) of the CNA., the Administrator is
authorized to include specifications in the capitalization grant
agreement that are in addition to those required by section
602(b). Pursuant to this authority, EPA will also require States
to agree to conduct reviews of the potential environmental impacts
of all other section 212 POTW construction projects receiving
assistance from the SRF.
If a State chooses to, it may apply a different environmental
review process to these other projects. If so, the RAwill
evaluate and approve this process on the basis of additional
guidance that is also included in Appendix D. This ''second
tier'* process differs in scope and rigor from the NEPA-like
process required for equivalency projects under section 602(b)(6).
Changes to both the NEPA-like and second-tier environmental
review processes must be approved by the RA.
In the annual review, the RAwill determine whether the
appropriate environmental reviews have been conducted on all
treatment works projects, as defined in section 212, that have
received assistance from the SRF.
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C. Application, of Other Federal Authorities
There are a number of other Federal laws and Federal
authorities that have applied to traditional construction grants
projects, but that are not included among the authorities listed
in section 602(b)(6). These other Federal laws and authorities
apply to activities supported with funds ''directly made available
by'* capitalization grants and the State use of such funds in the
administration of the program. Appendix F contains a list of such
Federal laws and authorities.
EPA has determined that Federal regulations governing
procurement at 40 CFR Part 33 apply to the use of capitalization
grant funds for procurement activities in the State's
administration of the program. In addition, EPA has determined
that requirements for the participation of minority and women
owned businesses (MBE/WBEs) will apply to assistance in an amount
equalling the grant. To attain compliance withMBE/WBE
requirements, the RA shall negotiate an overall ''fair share5'
objective with the State for MBE/WBE participation on these SRF
funded activities. A fair share objective should be based on the
amount of the capitalization grant award or other State
established goals or standards. The State may accomplish its fair
share objective by selecting certain projects or activities funded
directly by the capitalization grant to under take.the six
affirmative steps described ia 40 CFR Part 33.
EPA has also determined that the Davis-Bacon Act and
associated labor laws apply only to section 212 publicly owned
treatment works constructed with funds ''directly made available
by'' capitalization grants.
The Tax Reform Act of 1986 will also have an effect on State
SRF programs. Section II.B of this Guidance describes the tax
considerations of several fund activities, and recommends that
States seek the advice of tax and municipal bond experts. EPA
will be working with the Department of the Treasury to address and
resolve tax related issues where possible.
IV. APPLICATION FOR A CAPITALIZATION GRANT
The standard application for EPA non-construction grant
assistance (EPA Form 5700-33) should be submitted to the RA no
later than July 3 of the end of the second year of the fiscal year
authorization period. Applications received by this date will
reduce the risk that available funds will be lost due to the
provisions governing reallotment. The State must certify in its
application that it has the legal, managerial, technical, and
operational capabilities to administer the program competently.
The State's compliance with these assurances will be examined by
the RA during the .annual review.
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A. Fund Establishment, Instrumentality of the State
Section 603(a) requires the State to establish a Water
Pollution Control Revolving Fund (SRF) before it can receive a
capitalization grant award. The SRF can be established within a
mul t iple -purpos e State financing program. However, the SRF must
be a separate account or series of accounts dedicated solely to
providing loans and other forms of financial assistance, but not
grants :
-- to municipalities, intermunicipal , interstate, or
State agencies for the construction of publicly owned
wastewater treatment works as defined in section 212 of
the GMA. that appear on the State's priority list,
-- for implementation of a nonpoint source pollution
control management program under section 319 of the
CNA.; and,
-- for development and implementation of an estuary
conservation and management program under section 320
of the
Section 603(b) requires the Fund to be administered by an
instrumentality of the Stats that i s snip owe r ?d to enter into
capitalization grant agreements with the RA, to accept
capitalization grant awards made under Title VI, and to otherwise
manage the Fund in accordance with the requirements of Title VI
and the objectives of the CNA.. These requirements and objectives
include the oversight of assistance recipients.
As part of its initial application for the capitalization
grant, the State must furnish the RAwith documentation of the
establishment of the SRF and of the instrumentality enabling the
State to participate in the Title VI program. This documentation
should include copies of either statutes, executive orders,
administrative orders, Attorney General opinions, or any other
materials that provide adequate assurances that an SRF has been
established, and that it will be administered by a legally
established instrumentality of the State. If more than one State
Agency is involved in SRF activities, the roles and
responsibilities of each agency should be described in the
application.
B. Decision on the Use of Allotments
In its application the State should, as described in section
I of this guidance, request the amount of the State Title II
allotment(s) to be deposited in the SRF as a capitalization grant
under the authority of section 20S(m), advise the RA as to the
amounts of reserves remaining and certify that if the funds
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transferred reduce the 205(g) set-aside, adequate funds (up to an
amount equal to- the 205(g) maximum) will be available for
administration of the construction grants program in the State.
Beginning in FY 1989, the State should also request the amount of
the Title VI allotment to be deposited in the SRF.
C. Intended Use Plan (IUP)
Section 606(c) requires the State to prepare a plan
identifying the intended uses of the funds in the SRF and
describing how those uses support the goals of the SRF. This
Intended Use Plan (IUP) must be prepared annually, after the State
has provided for public comment and review. The primary purpose
of the IUP is to identify proposed annual intended uses of the
amounts available to the SRF.
The secondary purpose of the IUP is to facilitate the
negotiation process for the capitalization grant agreement and
schedule of grant payments (Section 60l(b)). Therefore, the IUP
must be subjected to public comment and review before being
submitted to EPA. EPA should receive the IUP no later than the
date of the submittal of the capitalization grant application.
The following information must be include-d in- the IUP:
1. List of Project's
Under section 606(c)(l), the IUP must contain a list
of publicly owned treatment works projects on the State's
priority list (PPL), developed pursuant to section 216 of
the CNA, that are eligible for SRF construction assistance.
This list must include: the name of the community; permit
number or other applicable enforceable requirement, if
available; the type of financial assistance, and; the
projected amount of eligible assistance. The IUP must also
include a schedule of estimated disbursements of funds at a
level of detail sufficient to facilitate negotiation on the
payment schedule, and the IUP should also include a
preliminary identification of projects that may undergo an
EIS.
The IUP must also contain a list of the nonpoint
source and national estuary protection activities under
sections 319 and 320 of the CWA that the State expects to
fund from its SRF consistent with any guidance or
regulations issued by the Office of Water Regulations and
Standards and the Office of Marine and Estuarine
Protect ion.
States must provide this information in a format and a
manner that is consistent with the needs of their Regional
offices.
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2. Short and Long Term Goals
Under section 606(c)(2), the State must describe the
long and short term goals and objectives of its water
pollution control revolving fund. The plan should address
the extent to which the SRF will be operated alone or in
comb.ination with other State financial assistance programs,
and describe how the SRF will assist communities to attain
and maintain compliance with the Clean Water Act and carry
out other provisions specified in the State Clean Water
Strategy.
3. Information on the SRF Activities to be Supported
Under section 606(c)(3), the IUP must include
information on the types of activities, as opposed to
project level details, to be supported by the SRF
including: the' eligible categories of costs to receive
assistance as provided for in section 201(g)(l); types of
assistance to be provided (e.g., loans, guarantees,
insurance); SRF policies on setting the terms for the
various types of assistance provided by the fund (e.g.,
interest rate, guarantee fees, repayment schedules); the
types of communities to be served by the fund; and,
administrative costs of the SRF (e.g., amount and uses).
If the Governor or his designe. plans to niak.3
determinations under section 603(h) that a grant funded
project is unable to proceed without SRF assistance, the
IUP should include the conditions under which the ancillary
financial assistance might be provided.
4. Assurances and Specific Proposals
Under section 606(c)(4), the IUP must provide
assurances and specific proposals on how the State intends
to meet the requirements of the following sections of the
law:
o 602(a) - Environmental reviews
The State must certify that it will conduct
environmental reviews on treatment works projects to
satisfy the requirements discussed in Section III.B.6, and
submit the specific procedures it will use.
o 602(b)(3) - certify binding commitments within one
year.
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The State must certify that it will enter into
binding commitments equal to at least 120% of each
quarterly grant payment -within one year after receipt of
the payment. An estimated schedule for entering into
binding commitments must be included in the IUP.
o 602(b)(4) - certify expeditious and timely
expenditures.
The State must certify that it will expend all funds
in the SRF in an expeditious and timely manner.
o 602(b)(S) - first use for enforceable requirements
The State must identify all projects expected to be
funded with first use funds to meet the enforceable
requirements of the Act in the list of projects described
above. To the extent that the State plans to fund projects
or activities not required to meet the enforceable
requirments of the Act, it should certify that all POTWs
described in Section II.B.5 of this guidance are:
(a) in compliance, or
(b) on an enforceable schedule, or
(c) have an enforcement action filed, or
(d) have a fundins commitment during o-r
prior to che first year covered by the IUP.
o 602(b)(6) - compliance with Title II requirements
The State must certify that it will assure compliance
with Title II requirements as discussed in Section III.B.6
above and, in cases where they will not be following EPA
regulations, submit their own specific procedures for
ensuring that these Title II requirements are met. For
example, in conducting the State's cost-effective analysis
under section 218, the State needs to assure that oversized
facilities that cannot be effectively built or operated are
not constructed.
5. Criteria and Method for Distribution of Funds
Finally, section 606(c)(5) requires that the IUP
describes the criteria and method established for the
distribution of the SRF funds. The criteria and method for
distribution of the funds includes two basic parts.
The first part describes the criteria and method used
to determine the distribution of the funds available to the
SRF among the various types of assistance the State will
offer (e.g., loans, guarantees, insurance, refinancing
existing debt, leveraging).
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The Sjate should also describe in selecting its mix of
categories for SRF funding how it -will maintain the long
term health and viability of the fund
The second part describes the criteria and method the
State will use to select section 212 POTW construction
projects from the PPL and projects or programs to be funded
as eligible activities for NFS and estuary protection
management programs. This part also includes information
on any project or program by-pass provisions, assistance
deadlines, etc. This part also includes how the State will
provide opportunity for public comment and review of the
I UP before submitting it in final form to EPA. The
hearings for the priority list may also be used to
receive public comment on the IUP. Note that section
603(g) permits section 212 SRF projects to be selected for
funding from anywhere on the PPL regardless of priority
ranking (the FY 1988 PPL guidance is included as Appendix
C).
The IUP project list may be amended during the year
under provisions established in the IUP as long as the
projects have been previously identified through the public
participation process.
In addition to the above requirements, the States are
encouraged to include in the IUP any additional provisions
that the State feels appropriate to properly manage the
Fund to achieve the goals and objectives of the SRF and the
Cf&L (e.g. provisions for default, facilities not
constructed, and facilities not operating in a timely
manner). EPA strongly encourages States to adopt policies
that restrict the expenditure of funds to correct
deficiencies in planning, design, and inspection or
construction of facilities. In the Title II Construction
Grant program, EPA has found that restricting participation
in costs associated with such deficiencies results in
greater accountability for performance on the part of
municipalities, engineers, and contractors.
Submitted along with the IUP must be a summary of the
procedures allowing public comment and review of the IUP
and the results of that process.
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D. Payments
[NOTE: For the purposes of this section, the following definitions
apply: a) payment is an action by EPA to increase the amount of
funds available for cash draw in a letter-of-credit (LOG), (i.e.,
the ceiling); b) cash draw is the transfer of cash from the LOC to
the SRF; c) disbursement is the transfer of cash from the SRF to
an assistance recipient.]
1. Capitalization Grant Application and Agreement
The process of transferring Federal grant funds to States
begins with Congress' annual appropriation of funds from an
authorization for each fiscal year. After funds are appropriated
and allotted to the States, EPA obligates the appropriated funds
to each State for SRF purposes in the form of a capitalization
grant. All grants and payments under the grants are made with
previously appropriated funds and are not dependent on future
appropriations. Obligated funds are then paid to the States.
A State must include with each application for a
capitalization grant a draft payment schedule based on the State's
projection of Jbinding commitments in its Intended Use Plan, The
payment schedu'le and the specific criteria establishing the
conditions under which the State may draw cash from its LOC
payments must be joinciy estabii.lied by SPA and the Scace ana
included in the capitalization grant agreement. Amendments to the
grant agreement may be negotiated during the year.
With the first application for a capitalization grant, a
State must also submit a schedule (at least by quarters) of
estimated disbursements from the SRF for that Federal fiscal year.
In addition, at the end of the third quarter of each Federal
fisca year after the first capitalization grant award, the State
must provide EPA with a schedule of estimated disbursements for
the upcoming Federal fiscal year. This schedule must be developed
consistent with the procedures applicable to cash draws in
paragraph * 4 below and must be at a level of detail sufficient to
allow EPA and the State to develop jointly a forecast of cash
draws from the LOC. The State should advise EPA when significant
changes from the schedule of estimated disbursements are
anticipated. Based on this schedule, States and EPA will jointly
establish a forecast of cash to be drawn from the LOC during the
upcoming Federal fiscal year. This forecast is necessary to plan
the outlay of Federal funds from the title VI program.
2. Payment by Letter of Credit
A separate LOC, for the SRF program only, will be established
with each State to make capitalization grant payments (see
Appendix E for a detailed discussion on how a LOC operates). The
negotiated payment schedule in the grant agreement will establish
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the timing and amount of increases in the LOG ceiling, up to the
amount of the Capitalization grant. Once a payment (increase to
the LOG ceiling) has been made, EPA will not reduce that ceiling.
EPA will only control cash draws against the ceilingt as described
in paragraph * 4 below. The State match can be provided in a LOC
or similar financial arrangement comparable to the Federal LOC.
However, the State match must be provided as cash at the time the
Federal LOC is drawn on.
3. Schedule of Payments
All payments will be made no later than the earlier of 8
quarters after the award of the capitalization grant, or 12
quarters after the date such funds were allotted to the State.
The schedule of payments must be based on the State's Intended Use
Plan, which must include information on the binding commitments
expected to be entered into. Binding commitments must be entered
into by the SRF in an amount equal to 120 percent of each
payment (LOC increase) within one year of each payment.
4. Cash Draw
The policy intent in structuring the LOC process is that
neither the SRF nor the assistance recipients will be required to
provide interim financing on financial transactions of the SRF.
Transfer procedures are being established that ensure that cash.
will be in the SRF account within one day after EPA's receipt of a
valid request for cash draw from the State. To effect this one
day transfer, EPA will only subject requests to account
verification. No SRF program reviews will be conducted at this
t ime .
Cash draws from the LOC are limited by the ceiling available
in the SRF LOC. However, in the event of an imminent default in
regard to debt service payments to bondholders and resulting need
for a cash draw from a LOC being used as a security or guarantee,
a cash draw and, if necessary, an amendment to the grant agreement
and payment schedule will be processed simultaneously to allow for
an increased cash draw not to exceed the amount of the
capitalization grant. The SRF or the assistance recipient must
first incur a cost, but not necessarily disburse funds for that
cost, in order for cash to be drawn against the LOC. The State
may draw cash from the LOC for the proportionate Federal share of
eligible costs at the time those costs have been incurred. For
example, if a non-leveraged SRF that consists of a $1 million LOC
ceiling and $200,000 in State match receives a request for
disbursement of $120 based on construction costs incurred, the
State may draw cash for $100 from the LOC and the remaining $20
must come from the State match.
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Under section 603 of the Act, the SRF is authorized to
provide a varie~ty of forms of assistance. The LOC wi 11 enable the
State to draw cash from its LOC for each of these types of
assistance, except solely for the purpose of earning interest:
a. Loan Agreements
The SRF may draw cash against the LOC when the SRF receives a
request for cash disbursements from a recipient, based on incurred
construction related costs. If such a cash draw request exceeds the
LOC ceiling, the payment schedule in the grant agreement will be
amended to allow for the request not to exceed the amount of the
capitalization grant.
b. Refinancing and Purchase of Municipal Debt
States may draw against the LOC when: 1) cash is required to
purchase or refinance debt obligations or 2) where the State
purchases incremental disbursement bonds from local governments on a
schedule which coincides with the rate at which construction related
costs are expected to be incurred for that project. In either case,
the amount of cash drawn each quarter for purchasing or refinancing
may not exceed the total amount of the grant that will be used for
purchasing or refinancing divided by the number of quarters over
which payments will be made.
c. Insurance and Guarantees
States may draw on the LOC to obtain cash for the purchase of
insurance. In addition, under an SRF guarantee, if the local
obligations being guaranteed experience the need for cash because of
an unanticipated interruption of repayments or imminent default in
regard to debt service payments to bondholders, cash can be drawn
against the LOC. The cash draw and, if necessary, an amendment to
the payranent schedule in the grant agreement, up to the amount of the
grant, will be processed simultaneously. In the event that cash
draws less than the guarantee reserve occur as a result of defaults,
cash draws for the remaining amount of the guarante may be
negotiated up to the rate at which cash draws would occur as a result
of construction related costs.
d. Leveraging
For the purpose of this section, leveraging refers to the use
of the capitalization grant/LOG as the security for the sale of State
revenue bonds. Leveraging does not include State financing
arrangements in which repayment streams, rather than the
capitalization grant or LOC, are used as the primary security for the
bond 'issue. As in 'c' above, the LOC can be drawn against to preve
imminent default on the leveraged issue.
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When the LOG is used as a debt service reserve, cash draws are
not needed to provide disbursements for the incurred project costs.
In this case, cash may be drawn from the LOG at a fixed rate which
will be based on the national, historical Title II outlay rate. If
construction costs on projects constructed with bond proceeds are
incurred faster than the fixed rate, cash can be drawn as those costs
are incurred. In that case, cash draws will be based on those
projects funded from the proceeds of the leveraging, up to an amount
equivalent to EPA's proportionate share of the incurred costs. For
example, in a leveraged SRF account consisting of a S100 LOC payment
(serving as the debt service reserve), a $20 State match and S280
from bond proceeds, a cash disbursement of $40 is requested for
construction costs incurred on any of the projects funded with
leveraged proceeds. In this example, the fund may draw cash for S10
from the LOC [$40 x ($100 / ($280 + $20 + $100))]. A second approach
to achieve proportionality would be for the State to identify a group
of projects equal to the amount of the capitalization grant and,
based on the incurred construction cost of these projects, draw cash
against the LOC in the same manner as a non-leveraged program (see
above) .
In the case of particularly aggressive leveraging proposals
where the cash draw procedures discussed above would significaatly
frustrate a State's program, EPA may allow an exception to these
rules and provide for a more, accelerated cash draw. A State seeking
aa S2tsei;ioa aus: first demons t ra;s :o EFA :ia: there are projac:3
ready to proceed in the immediate future with sufficient costs to
justify the proposed leveraging and that the absence of cash on an
accelerated basis will substantially delay these projects. The State
must also demonstrate that, if accelerated cash draws are allowed,
the SRF will provide substantially more assistance and the long term
viability of the State's program to meet water quality needs will be
protected. Case-by-case determinations to allow exceptions will be
made by EPA Headquarters prior to the award of each capitalization
grant.
The amount of cash drawn each quarter for a leveraged account
may not exceed the total amount of the grant to be used for
leveraging divided by the number of quarters over which payments will
be made, except in a default situation as described in 'c' above.
e. Loan Guarantees for Sub-State Revolving Funds
Cash can be drawn against the LOC if the Sub-State revolving
fund experiences the need for cash, as with guarantees in 'c' above,
because of an unanticipated interruption of repayments or imminent
default. In the event that cash draws less than the guarantee
reserve occur as a result of this financing technique, cash draws for
the remaining amount of the guarantee may be negotiated up to the
rate at which cash draws would occur as a result of construction
related costs .
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f. Administrative Expenses
Cash can be drawn against the LOG for administrative expenses
on a schedule that coincides with the rate at which administrative
expenses will be incurred up to four percent of the grants.
V. CAPITALIZATION GRANT AGREEMENT
The Capitalization Grant Agreement is the principal
instrument by which the State commits to manage its revolving fund
program in conformity with the requirements .of the Clean Water
Act. The grant agreement contains or incorporates by reference
the Application, the IUP, the agreed upon payment schedule, and
certifications or demonstrations of other agreement requirements
as discussed in Section III above.
In addition to these requirements, the grant agreement should
also include the negotiated terms for effective operation of the
program and should define oversight activities including the types
of records and reports needed to determine compliance with the Act
and the grant agreement, the specific contents and timing of the
Annual Report and EPA review, and the responsibility for
performing audits. The following chart describes how each, of the
application and grant agreement requirements should be addressed.
REQUIREMENT
APPLICATION
HOW ADDRESSED
Part 30 Assurances
Established SRF
Instrumentality
Adequate 20S(g)
IUP
(1) List of Projects
(2) SRF Goals
(3) Activities to be Supported
(4) Assurances and Proposals
- Environmental Review
- 120% binding Commitments
- Timely Expenditure
- First Use
o Enforceable requirements
o Non Enforceable requirements
- Compliance with Title II
o Procedures
o Projects
(5) Criteria & Method for
distributing funds
Payment Schedule/Schedule of Estimated
SRF Disbursements
cert ify
document
document
certify
propose
describe
describe
document/cert ify
cert ify
cert ify
document
certify
propose
document
certify
describe
propose
Page 28
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OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
REQUIREMENT HOW ADDRESSED
AGREEMENT
Accept Grant payments certify
Deposit State Match
o Source of the Match identify
o Deposit of match certify
120% Binding Commitments Agree to
First Use Agreeto
Compliance with Title II Agree to
Use State Laws & Procedures Agree to
Use GAAPs & GANs Agree to
Recipient Accounting Agree to
Annual Report Agree to
Environmental Review Agree to
Program Oversight Agree to
All changes to the agreement require a formal grant amendment.
Alternatively, the framework and procedures of the SRF that
are not expected to change annually may be described in an
Operating Agreement (OA) that can be referred to in the Grant
Agreement. For those portions of the State program that io -ot
change from year to year, the grant application may incorporate by
reference relevant portions of the previous year's application.
This Agreement would not result in any additional program
requirement, demonstration or documentation. The Operating
Agreement would describe the structure of the water pollution
control revolving fund in the State, explain its goals and
objectives, and include review, overview, accounting, auditing and
sanction provisions. The provisions of the Operating Agreement
would be generally constant because little or no change is
expected to the fundamentals of the program on a year to year
basis. Upon the successful completion of negotiations, the
Operating Agreement would be signed by the State director and the
Regional Administrator. On an annual basis, the Operating
Agreement would be supplemented with an Intended Use Plan that
would identify the projects and activities that the State plans to
support with financial assistance from the fund. Based on the
Operating Agreement and the Intended Use Plan, the Region would
award a capitalization grant to the State. Any necessary changes
to the Operating Agreement would be made as the result of a
bilateral negotiation process and would apply to future SRF
act ivi t ie.
Page 29
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OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
Regions and States that choose this alternative method of
program implementation may find that it facilitates their program
management capability. The Operating Agreement would be the
single source of program requirements in a State. Any change in a
State review procedure could be accomplished by a single change to
the Operating Agreement and could affect all capitalization grants
made under that agreement. This is contrasted with a scenario
where, if the review procedures are submitted annually in an
application, any change to a review procedure, if it was to affect
all projects funded under the fund, would have to take place
through an Amendment to each active capitalization grant. Based
on this efficiency alone, Regions and States may want to consider
using an Operating Agreement.
VI. REPORTING AND OVERSIGHT OF SRF ACTIVITIES
Formal oversight activities, as provided for in Title VI and
described in the capitalization grant agreement, will be conducted
annually by Regional Office staff.
A. Annual Report
Section 606(d) requires the State to provide an Annual
Report to the Administrator beginning the first fiscal year after
it receives payments under Title VI. The State should submit this
report to the RA according to the schedule established in the
grant agreement. (Generally not later than 90 days after the end
of the fiscal year in which the payments were received.)
The Annual Report should contain detailed information on how
the State has met the goals and objectives of the previous fiscal
year as stated in the IUP and grant agreement. The Report should
provide information on loan recipients, loan amounts, loan terms,,
project categories of eligible cost, and similiar details on other
forms of assistance. This information should be provided in a
format and a manner consistent with the needs of the EPA Regional
Office. The Report should also describe the extent to which the
existing SRF financial operating policies, alone or in combination
with other State financial assistance programs, will provide for
the long term fiscal health of the Fund, attain and maintain
compliance with the Clean Water Act, and carry out other
provisions specified in the State Clean Water Strategy.
Page 30
-------
OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
The State must also establish that it has:
- reviewed all SRF funded section 212 projects in
accordance with the approved environmental review
procedures (section 602(a));
. deposited its match on or befor the date on which
each quarterly grant payment was made (section
602(b)(2));
- made binding commitments to provide assistance equal
to 120 percent of the amount of each grant payment
within one year after receiving the grant payment
(section 602(b)(3);
- expended all funds in the fund in an expeditious and
timely manner (section 602(b)(4));
- first used all funds in the fund as a result of
capitalization grants to assure maintenance of
progress toward compliance with the enforceable
r aqu: r eaieat 3 of the Act ("section 602(b)(5)); and,
- complied with the Title II requirements with
regard to eligible treatment works funded in whole or in
part before fiscal year 1995 with an amount equivalent to
the capitalization grant (section 602(b)(6)).
B. Annual Review
The purpose of the annual review is to assess the success of
the State's performance of activities identified in the IUP and
Annual Report, and to determine compliance with the terms of the
capitalization grant agreement. The RAwill complete an annual
review of the IUP and the Annual Report covering the same fiscal
year according to the schedule established in the grant agreement
(generally within 60 days of receipt of the Annual Report;. After
reasonable notice by the RA, the State or loan recipient shall
make available to the EPA such records as the RA reasonably
requires to review and determine State compliance with the
requirements of Title VI. The RA may conduct onsite visits as
needed to provide adequate programmatic review.
Page 31
-------
OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
C. Annual Audit
Under section 606(b), at least once a year the Administrator
(through the Office of the Inspector General) will conduct, or
require the State to have independently conducted, a financial and
compliance audit of the SRF and the operations of the SRF. If the
State is required to have an independently conducted audit
performed, the State may designate an independent auditor of the
State to carry out the audit or may contractually procure the
service. The auditor can be a CPA, a public accountant licensed
on or before December 31, 1970, or a governmental auditor who
meets the qualification standards (Standards for Audit of
Governmental Organizations, Programs and Functions). In addition,
the auditor must meet the independence standard as enumerated by
the General Accounting Office and American Institute of Certified
Public Accountants. The Office of the Inspector General may
arrange for an EPA audit if the State fails to conduct the audit
or if the Sta.t,e's review is otherwise unsatisfactory.
The audit report will contain an opinion on the SRF and its
internal controls, and an opinion regarding whether the compliance
requirements have been met. Audits should be done in conjunction
with the Single Audit Act of 1984 (See Office of Management and
Budget Circular A-128, ''Audits of State and Local Governments'').
The audit report must be completed within one year of the end of
the appropriate accounting period and submitted to the Office of
Inspector General within JO days of completion. In cases of State
conducted audits, the State will be notified within 90 days as to
the acceptability of the audit report and its findings.
D. Compliance Assurance
If the annual review or audit reveals that the State has not
complied with its capitalization grant agreement or other
requirements under Title VI, section 605 requires the RA to notify
the State of such non-compliance and prescribe the necessary
correctve action. Failure to satisify the terms of the
capitalization grant agreement, including unmet assurances or
invalid certifications, is grounds for a finding of
non-compliance.
In addition, if the State does not manage the SRF in a
financially sound manner (e.g. allows consistent and substantial
failures of loan repayments), the RA may take corrective action as
provided under this section.
In making a determination of non-compliance with the
capitalization grant agreement and devising the corrective action,
the RAwill identify the nature and cause of the problems. The
State's corrective action must remedy the specific instance of
non-compliance and adjust program management to avoid
non-compliance in the 'future.
Page 32
-------
OFFICE OF WATER INITIAL GUIDANCE
STATE WATER POLLUTION CONTROL REVOLVING FUND
(FINAL 1/28/88)
If within. 60 days of receipt of the non-compliance notice, a
State fails to take the necessary actions to obtain the results
required by the RA, or provide an acceptable plan to achieve the
results required, the RA shall withhold payments to the SRF
until the State has taken acceptable actions. Once the State has
taken the corrective action deemed necessary and adequate by the
RA, the withheld payments shall be released and scheduled payments
shall recommence.
If the State fails to take the necessary corrective action
deemed adequate by the RA within twelve months of receipt of the
original notice, any withheld payments shall be deobligated and
realloted to other States.
E. Dispute Resolution
Any State that has been adversely affected by a Regional
action or omission may request a review of such action or
omission. The procedures are codified in the General Grant
Regulations at 40 CFR Part 30, Subpart L.
Page 33
-------
-------
Appendix A. Water Quality Act of 1987
The following appendix contains the relevant portions of thi
Conference Report recommending passage of the Water Quality Act i
Specifically, the appendix includes the following relevant porti<
the Act and the joint explanatory statement from, the conference
committee: Title II amendments, Title VI (SRF) program and the
III sections 319 (NFS and groundwater) and 320 (estuary) program
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s
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Appendix B. Regional SRF Contacts
Mr. Larry H. Brill, Chief
Municipal Facilities Branch
EPA, Region I
John F. Kennedy Federal Bldg.
Boston, MA 02203
(617) 565-3560
CT, ME, MA, NH, RI, V
Ms . Les1ie Peterson
Construction Grants Branch
EPA, Region II
26 Federal Plaza
New York, N.Y. 10278
(212) 264-3279
NJ, NY, PR, VI
Mr. Lee Murphy
Construction Grants Branch
EPA, Region III
841 Chestnut Street
DE, MD, PA, VA, \W, D
Philade
1 p h i a
PA 1910'
(215) 597-3847
Mr. John Ha gen
Facilities Construction Branch
EPA, Region IV
345 Courtland Street, NE
Atlanta, GA 30365
(404) 347-4491
AL, FL, GA, KY, MS, N'
TN
Mr. John Kelley
Municipal Facilities Branch
EPA, Region V
230 South Dearborn Street
Chicago, IL 60604
(315) 353-2123
IL, IN, MI , MN, OH, \V
B-l
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Mr . John Cernero
Construction Grants Branch
EPA, Region vf
1201 Elm Street
Dallas, TX 75270
(214) 655-7110
AR, LA, MM, OK, TX
Ms . Rosali e Minor
Construction Grants Branch
EPA, Region VII
726 Minnesota Avenue
Kansas City, KS 66101
(913) 236-2813
IA, KS, MO, NE
Mr . Wi 11 i am H. Ho rmb erg, Ch i e f
Municipal Facilities Branch
EPA, Region VIII
One Denver Place
999 18th Street
Suite 1300
Denver, CO 80202-2413
(303) 293-1545
CO, MT, ND, SD, UT, W
Mr . Michael Muse
Construction Grants Section
EPA, Region IX
215 Fremont Street
San Francisco, CA 94105
(415) 974-8313
Ms. Chris Noah-Nichols
Water Quality Branch
EPA, Region X
1200 Sixth Avenue
Seattle, WA 98101
(206) 442-1983
Chief
AK, ID, OR, WA
7/13/87
B-;
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
of,,CIOF
WATER
Appendix C
iUBJtCT: FY 19d8 State Project Priority List Guidance
FRCvl: /I'licnael J. Quigley, Director
"p Office of Municipal Pollution Control (M-546)
TO: Uater Management Division Directors
Regions I-X
Attached is guidance for developing the FY 1988 Project Priority List
(PPL). Tnis document integrates Title II Construction Grants Program guidanc
with Title VI State Revolving Fund (SRF) guidance. The guidance is more
detailed tnan in previous-years because of the need to implement requirements
established in the Water Quality Act of 1937. There are certain items in thi
guidance that will oe addressed in the SKF guidance. If they are addressed
differently in tne SRr guidance, this PPL guidance '.vill be amended.
After tne PPL nas oeen accepted by the Regional Administrator and entered
into GICS, a hard copy should be sent to Elaine Greening at Headquarters
f'..'n-59S). If you nave Question: concerning this guidance, olease call Elaine
at tFTS) 332-723U.
Attachment
cc: Construction Grants
iVograr-i ^rancn Chiefs
c-1
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rY 19ad State Project Priority List Guidance
I. Introduction
The purpose of this memorandum is to provide guidance on the development
of tne FY 1988 Project Priority List (PPL) consistent with the Clean Water Act
as amended by the Water Quality Act (ugA) of 1937. The Title II construction
grants program has been extended througn FY 1990, and a new program (Title VI)
for the establishment of State Water Pollution Control Revolving Funds (SRF)
nas been authorized to extend through FY 1994. The Act requires that all
treatment works projects receiving SRF financial assistance be included on the
PPL. The PPL must be available for identifying SRF treatment works projects
in tne intended use plan required by Section 606(c) of Title VI for
implementation of an SRF program. In order for a State to use a portion of
its construction grants allotment as a capitalization grant, the Governor must
file a notice of intent no later than 90 days before the first day of the
fiscal year in which tne State intends to use the funds. (For FY 1988, the
date was July 3, 1987.)
The P?L is an important management tool for ensuring timely use of
availaole funds to achieve compliance with Clean Water Act requirements.
States are required by 40 CFR 35.2015(e) to submit PPL's to the Regional
Administrator (RA) for review by August 31, and the FY 1988 PPL submission is
oeing monitored tnrough a performance'measure in the Office of Water
Accountability System. EPA recognizes that the timing of this guidance
document may cause delays in PPL development; however, States are encouraged
to suomit their PPL's as soon as possible, the RA must complete review and
accept or reject the PPL witnin 30 days of receipt from the State. The
accepted PPL snould be entered into the Grants Information and Control System
(GIGS) within 30 days after acceptance by the RA.
II. Structure of trie Project Priority List
Projects on List
Tne State PPL must include all treatment works projects to be funded by
EPA under Title II and Title VI of the Clean Water Act except training
facilities funded under Section 109(b), marine CSO projects funded
under Section 2ul(n)U), and Indian tribe projects funded under Section
!518(c). In addition, any Section 319 or 320 projects funded witn Title II or
Title Yi funds will not be included on the State PPL. All treatment works
projects, including SRF projects, must be ranked in accordance with priority
systems developed under Section ^16 which must consider water quality or
puolic hedltii problems. However, SKF projects may be selected in any order of
funding from the list regardless of priority ranking. States may use existing
priority systems or may establisn additional rating criteria for SRF
projects. Any new priority systems or revisions to existing systems must be
approved by the Regional Administrator per 40 CFR 35.2015(e). Although
priority ranging is not required to be a factor in selection of SRF projects
to be funded in a given year, States are encouraged to consider the water
quality and puolic nealtn criteria when this selection is made.
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Fundable and Planning Portions
The PPL must contain two portions: the fundable portion, consisting of the
projects anticipated to receive construction grants or SRF funds (these are
identified wherever they appear on tne list) from funds available for obligatic
FY 1*83; and tne planning portion, consisting of projects anticipated to be awa
grants or receive SRF funding from future autnorized allotments. If possible,
planning portion of tne FY 1988 priority list should contain sufficient project
use Dotn Title II and Title VI autnorized allotments through FY 1994. At a mir
tne planning portion should cover funds authorized througn FY 1990, and the FY
PPL should extend through FY 1994. The planning portion may be amended as
necessary to account for new needs, such as toxics removal requirements. In
developing PPL's, States and Regions should assume that the allotment formula
included in the 1987 dQA will continue through FY 1994.
identification of SRF projects
The intended use plan prepared by the State must include a list of project:
be funded for construction of publicly owned treatment works which are include<
the State's PPL. The FY 1983 PPL presented at the public hearing should idenf
all construction grant and SRF projects anticipated to be funded in FY 1988.
However, if tne puolic hearing process identifies additional projects which ma;
receive funding and specifies management procedures which will be used to bypa.
projects or to cnange a project applicant from a potential grant recipient to
recipient or vice versa, such procedures may be invoked for projects so identi
witnout furtner public participation.
III. funding Assumptions
The following table lists the funds authorized under Title II and Title VI
tie tfater Quality Act of 1937.
Funds Autnorized for Construction Grants and State Revolving Loan Programs
Grants SRF
$ $ Potential Transfer*
Fiscal Year (pillions) (billions) of Grant Funds to SRF (205(m))
19d7 2.361** — 50% of $1.161 billion
l*3o 2.4 — 75% of $2.4 billion
1*3* 1.2 1.2 IOCS
199u 1.2 1.2 100%
19*1 — 2.4
1992 — l.d
199J — 1.2
1994 — j.o
* For detailed explanation of this column, see tne discussion following
concerning-impacts of 2G5(j), national reserves, etc.
** FY I*d7 funds shown are tnose actually appropriated.
03
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-3-
Fundlng Lines
Project Priority list development may address more than one funding
scenario. A Stite may anticipate transferring some of its construction grants
allotment to the SRF per new Section 205(m), but may not be certain of the
amount or when tne transfer will occur. In this case tne State, for example,
may establish a construction grants fundable portion assuming the maximum
transfer, out indicate during the public hearing process that the fundable
portion may be extended to specified positions depending on how and when the
SRF program is implemented. These potential funding lines must be delineated
at the public hearing if the State does not wish to hold another public
hearing wnen decisions are made.
The maximum amount tnat can be used to determine the fundable portion of
tne PPL includes available FY 1987 carryover (funds remaining from the
original $1.2 billion plus any funds remaining from the supplemental FY 1987
appropriation of $1.161 billion), a FY 1988 appropriation of potentially $2.4
billion, and deobligated funds. Funding lines snould also be delineated at
the puolic hearing to reflect the potential variation in the amount of
availaole funds.
Funds Subject to New Requirements
The $1.2 billion appropriated prior to the passage of the Water Quality
Act of 1987 is subject only to the provisions of the Act in place prior to the
I9a7 amendments. This means only funds allotted after Feoruary 4, 1987, are -
available for transfer to the SRF program, the 2Q5(j)(5) or other new
~sserves, design/build grants, or modification/replacement grants for rotating
oioloyicai contactors.
Transfer of Funds
If a State wishes to transfer construction grant funds to the SRF under
Section <>G3(m), it may use up to 50 percent of FY 1937 funds alloted after
February 4, 1987. Up to 75 percent of tne amount alloted in FY 1988 will be
available for transfer to the SRF. For any transfer of funds in FY 1988, a
notice of intent must have been provided by the State by July 3, 1987.
However, because funds reserved under Section 2Q5(j)(l) and (j)(5) are not
avail aole for transfer to tne SRF, tnese reserves must be taken from a State's
total Title II allotment. Other State reserves (see Section IV) may be
calculated before or after tne Section iiU5(m) transfer as the State chooses.
It is noted tnat up to <*• percent of the capitalization grant may be used for
SRF adi.iini strati on and is not limited by the 205(g) reserve amount.
National Reserves
There are two national reserves which are deducted from the entire
Title II appropriation before allotment. Projects to be funded from these
reserves are not required to be included on State PPL's. The marine CSO and
estuaries reserve is 1 percent of the national appropriation for fiscal years
1937 (supplemental funds) and 19d<4. Two-tnirds of the amount of this reserv
snail De available to address water quality problems of marine bays and
estuaries resulting from CSO discharges, and one-tm'rd shall be available for
implementation of the national estuary program in Section 320 of the Act.
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The second national reserve is U.5-percent of any supplemental FY 1937 anc
all future national Title II appropriations for grants for the development of
waste treatment management plans and for the construction of sewage treatment
works to serve Indian trioes.
20 Percent Discretionary CG Funds
The 1987 WQA has amended Section 201(g)(l) which now provides for grants
under Sections 319(n) and (i) (i.e., nonpoint source management and protection
of groundwater), in addition to grants for otherwise ineligible construction
grants program categories, to be awarded from up to 20 percent of the State's
construction grants allotment as determined by the Governor. If a State
wishes to use construction grants funds to award Sections 319(h) and (i)
grants, these funds should be identified for that use during the PPL public
hearing process in order to determine the amount of dollars available for
construction grants. The Section 31y grant projects will not appear on the
PPL, although tney may be tracked in GICS.
IV. State Set Asiaes
Each State must establish reserves required by the Act and may also
estaolisn other appropriate reserves.
o The 205(j)(1), water quality management, and (j)(5), nonpoint source
management, reserve? must both be the greater of 510U,GGG or 1 percent
of the total State-Title II allotment, so that the total of these two
reserves is the greater of 2 percenter $200,000. (The 205 Cj)(5)
-esarve will acsly :: :na sup?lament "V "367 ana al" future 7: tie :i
allotments.)
o The 205(g) reserve for state management assistance continues to be up to
4 percent of the State's share of the amount authorized or $400,000,
.vnicnever is greater. This reserve can oe used to develop the SRF
program as well as to manage the construction grants program. However,
oefore any of these funds may be transferred to tne SRF, the Governor
must assure the RA tnat adequate funds will be available from whatever
source to administer the construction grants program in the State.
o For rural States, the reserve for alternative systems for small
coi.BTJunities (rural set aside) is from 4 to 7 1/2 percent of the
construct!'on grants allotment.
o The reserve for increasing grants for projects using innovative and
alternative technologies is from 4 to 7 1/2 percent of eacn State's
construction grants allotment. Of the reserve not less than 0.5 percent
of the allotment shall be used to fund increases for projects using
innovative tecnnologies.
o Eacn State must estaolisn a reserve not to exceed 10 percent of its
construction grants allotment for advances of allowance. The Regional
Administrator is authorized to waive tnis requirement if it is shown to
oe unnecessary.
o States can also estaolisn limited reserves to fund grant increases.
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V. Project Types
The priority list siidl I include tne following types of projects:
o rtew projects for Step 3 and 2+3 grants including 100 percent
modification/replacement (M/R) grants under tne innovative/alternative
I I/A) technology program and for rotating oiological contactor (R3C)
failures.
o Changes that expand tne scope of a project whether funded as a grant
amendment or a new grant. (The preferred method of funding a major
scope increase is as a new grant award.)
o uesign/build projects as defined in new Section 203(f) of the Act. No
more than 20 percent of a State's total annual allotment can oe
ooligated for these projects which must have a total estimated cost per
project of $3 million or less.
o Treatment worses projects (as defined in Section 212 of the Clean Water
Act) to receive SRF funds. SRF funds may be used for planning, design,
and construction. Wnen a municipality is already receiving tPA
assistance, SKF assistance may only be provided in the form of a
guarantee or insurance for the non-federal share of project costs if
sucn assistance is necessary to allow such project to proceed. The
definition of treatment won
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These funds must first be used for any major and minor publicly owned
treatment works (POTW) that Regions and States have previously identified as
part of tne National Municipal Policy universe. These funds may be used to
fund the cost-effective reserve capacity of these projects. (Projects
receiving construction grants funding must continue to meet all Title II
eligibility requirements, including tne reserve capacity limitations.)
in order for a State to fund other treatment works described in
Section 212 for which projects are included on the PPL or eligible programs or
projects otner tnan treatment works (Section 319-nonpoint source control or
Section 320-national estuaries), tne bovernor should certify to the RA in the
intended use plan tnat all NHP POTWs that need construction to meet the July
1, 1988 municipal compliance deadline as described in the National flunicipal
Policy are:
(a) in compliance, or
(o) on an enforceable schedule, or
(c) have an enforcement action filed, or
(d) have a funding commitment.
Section 216 of the Act and 40 CRf 35.2015(f) provide that if the total
federal snare of construction grant projects which will not contribute to
compliance wich the enforceable requirements of the Act would exceed 25
percent of the State's annual allotment, tnen such projects shall be removed
from tne fundaole portion of tne State PPL. This provision applies only to
construction grants. SRF projects are subject only to the conditions
described in tne preceding paragraphs.
VII. Program Management
Puolic Participation
The State must proviae opportunity for puolic comment and review of its
SRF intended use plan. This process may be comoined with the PPL public
nearing process because tne Pr>L forms tne oasis for the treatment works
portion of the intended use plan. If a State wishes to identify only tne
amount of money that it will use for SRF during the construction grants PPL
puolic hearing, tnen additional public participation will be necessary wnen
specific SKF projects are identified.
Compliance Coordination
The States should continue to identify all projects on the fundaole and
planning portions of tne PPL that are in non-compliance with applicaole
effluent li.nits including National Municipal Policy (NflP) projects, oy coding
data element Trt FC in t.ie Grants Information and Control System (GICS). Tne
State snould deten.n'ne realistic grant certification dates for each project 01
the fundaole list, including iJi-iP projects, based on detailed project
scnedules. Enforcement staff snould oe notified whenever an uMP project is
falling benind scnedule in addressing requirements for grant certification or
SRF coj.imitinents.
c-7
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(VR (jrants for I/A Projects
Section 2U2(a)(3) of tne Act authorizes grants for 100 percent of the
costs of modifying or replacing (M/R) failed facilities which had previously
oeen funded as innovative and alternative (I/A) technology. The States should
view the award of an I/A tecnnology grant as a commitment to provide
aduitional assistance, where appropriate, to grantees which take on the
increased risx associated with such projects. On this basis, priority systems
wnicn give sufficiently high priority to fund higher risk I/A projects should
also give high priority to 100 percent M/R projects which meet the terms of
Section 2U2(a)(3).
ri/K Grants for RuC Projects
Section 2U2UH3) of tne Act now authorizes the award of M/R grants for
rotating biological contactors (RBC's) if the equipment has failed to meet
design performance specifications, unless the failure is attributable to
negligence, and if the failure has significantly increased plant
expenditures. In order to receive funding, an M/R project for RBC's must be
included witnin the fundable range on the State's PPL and must be certified by
tne State for funding from tne regular portion of allotments from
appropriations enacted after February 4, 1387, when the RBC provision was
enacted.
"Pick-up" Grants
Municipalities initiating construction without grant assistance in order
to coniply witn the iMP may be awarded "pick-up" grants for the remaining
uncoustructed portions of their projects if tne projects appear on State
PPL's. Grants shall not include funds "for Step 2+3 and Step 3 work performed
oefore award of grant assistance for that project," (4u CFR 35.2118). For a
project to qualify for a "pick-up" grant, it should have been reviewed to the
same extent as a fully fundaole project. Further information on "pick-up"
grants is contained in the May 29, 1986 memo from the Office of Municipal
Pollution Control titled "Initiation of Construction and Grant Eligibility".
:MP projects snould continue to De reviewed to determine if "pick-up" grants
or tne SRF refinancing provision or a combination of both can be used to
facilitate long term compliance.
VIII. Eligiole Categories
The table oelow summarizes the project categories eligible for assistance
from tne various sources of funds, including Title II and Title VI funds as
well as other funds associated with the SRF.
In addition to the traditional construction grants treatment works
categories I through V as defined in 40CFR 35.201o(b), project categories
include priority CSOs; storni water treatment projects; implementation of State
nonpoint source management programs including groundwater protection
(Section 319); and development and implementation of State estuaries
conservation and Management plans (Section 320).
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Project Categories Eligible for CG and SRF Funding***
Construction
Grants
SRF Funds
'Direct1'** "Resulting From"*-*
Cat. I,-II, IIIA, IVd
Cat. III3, IVA, V
319{h) - nps. 319(1)-
groundwatar*
Priority CSOs 201 (n HI)
Storm water
Sec. 319-NPS management*
Water quality management*
Sec. 320 - estuary CaM
plan*
State management
assistance
yes
up to
20% of
Title II
allot
yes
no
205(j)(5)
20S(j)(l)
no ***
yes
up to 20% of
Title VI
and/or 205 (m)
allot
yes
no
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
* Section 205(j )., 319 ana 3<:u- projects will not be included on the PPL, but
any of these projects funded througn the SRF must be- included in the
•ntanasa use jian.
** These SKF projects may be funded suoject to tne enforceable requirements
1 imitation.
The suo-hedaings under SRF Funas are defined as follows:
"direct" - funds "directly made available" from Federal capitalization
grants under Title VI and Section 205(m) wnich equal the amount of the
capitalization grant or the deposit, not including the State match.
Projects funded wholly.or in part by these funds nust satisfy certain
enumerated Title II project requirements.
"Resulting Frog" - funds ootained "as a result of" Federal
capitalization grants. Tnis includes capitalization grants, the State
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-9-
IX. Project Priority List Information Requirements
New Codes
In order to implement the provisions of the Water Quality Act of 1987,
codes are being added to two existing data elements in GICS so that SRF and
design/build projects can be identified as follows:
o Data element: Ttt 34 - Project funding status. Add the code "S" to
represent an SKF project which has met the public comment and review
requirements. (This may be expanded in order to differentiate types of
SRF projects).
o Data element TN 87 - Project Step Code. Add Step 7 to be defined as a
design/build grant.
Indian Code
Coding of tne Indian tribe aata element (Trt Fu) wnicn was optional in FY
1947 is now required Because the new Section 513 of the Clean Water Act
requires a determination of tne degree to wnicn the need for sewage treatment
works to serve Indian tribes will be met through funds alloted to States under
Section 205 and PPL's. under Section 21 o.
Amendments
It snould oe noted that amendments that need to he included on the
priority list snoulo nave 'A1 or V entared in data element TU 04, as well as
the current fiscal year (FY19d8) in Trti7.
List of Elements
The first list following represents tne minimum informational requirements
to be availaole on a continuing basis in GICS for both construction grant and
SrtF projects on the State project priority list. The second list includes
information requirements for construction grant projects only. The GICS
transaction numoer is included in parentneses after each listing. Tne &ICS
data element dictionary contains tne definition of each element. All PPL
projects are expected to be entered into GICS; however, the number of data
elements for SRF projects may change due to pending data management decisions-
o Construction Grants ana SRF Information
- Applicant Mame (TiJ12)
- Applicant Street Address or P.u. Box (TN 51)
- Applicant City .Jame (Tu 14)
- npplicant Zip Code (TM 5*)
- Applicant State Abbreviation (TJ 13)
- Project County dame (Til 15)
- Applicant Region Number (TN 17)
- Grant/Loan Amount Requested of ti?A (LJ 19)
- Congressional District (TN 15)
C-10
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-10-
- Program Code (TN 02)
- Serial Numoer (TN 01)
- Sequence Number (TN 54)
- Amendment Designator (T* 03)
- Eligible Project Cost (TN 29)
- NMP Project (TN FC)
- Grant Record Type (TN 04)
- Authority/Facility Numoer (TN 32)
- State Project Priority List Fiscal Year (TN 57)
- Project Funding Status (FN 34)
- Multiple facilities.Code (TN FA)
- Permit Mumoer (TN €2)
- Indian Code (TN FD)
o - Construction Grants Only Information
- Project Step Code (TN 37)
- State Certification of Application Code and Date (TN A5)
- Priority Hoints (TN Hd)
- Legislative Authority (TN U6)
- Pnased/Segmented Project (TN FB)
- Alternative Systems for small communities Code (TN 33)
- Elijiole Cost - Innovative Tecnnology (TN Y7)
- cligiole Cost - Alternative Technology '(TN Y3-) -
- 100% Modification/Replacement Grant (TN FE)
- Eligiols Cost - Category I (TN YO)
- E'i-igioie Cost - Category II ;7!j Yl }
- Eligible Cost - Category IIIA (TN Y2)
- Eligible Cost - Category 11 IB (TN Y3)
- cligiole Cost - Category IVA (TN Y4)
- Eligible Cost - Category IV3 (TN Y5)
- Eligiole Cost - Category V (TN Y5)
C-ll
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APPENDIX D
CRITERIA FOR STRUCTURING A STATE ENVIRONMENTAL REVIEW PROCESS
I. GENERAL
Title VI of the Clean Water Act [CR&.] requires some
treatment works that receive assistance from State Revolving
Funds (SRF) to be treated under the National Environmental
Policy Act [NEPA] in the same manner as title II construction
grant projects. A "NEPA-like" review process similar to that
which occurs on Title II projects is a statutory requirement
for Title VI projects that are funded with funds that are made
directly available by a capitalization grant (equivalency
projects), before fiscal year (FY) 1995 (see section
602(b)(6)). In addition, pursuant to the Administrator's
discretionary authority of section 602(a) and as a condition of
the capitalization grant agreement, the Agency will also
require States to conduct reviews of the potential
environmental impacts of all other section 212 publicly owned
treatment works constructed with SRF assistance. These
NEPA-like and "second-tier" environmental review processes are
described in more detail below.
Nearly all States h?-*e extensive experience in preparing
preliminary environmental assessments under full delegation of
the Title II program. Under Title VI, States not only will be
responsible for producing preliminary environmental impact
assessments, as under Title II delegation, but also will have
full responsibility for final review and decision making
activities for which EPA is legally responsible under Title II.
States, therefore, will also be responsible for identifying,
funding, undertaking and final decision making for all levels
of environmental impact assessment analyses including detailed
ElS-like analysis formerly handled by EPA. EPA's environmental
review involvement under the Title VI program will be limited
to approving proposed State processes and revisions to them,
conducting annual oversight and providing some technical
assistance thereafter.
In preparation for taking on these additional
responsibilities and making the Title VI environmental impact
assessment process a State process, States must submit, for EPA
review and approval as a part of their SRF capitalization grant
application, documentation on their existing or proposed
NEPA-like process for equivalency projects. If a State chooses
D-l
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to apply a different enviromneata 1 review process to other
section 212 projects, the State must also submit documentation
on its existing or proposed second-tier environmental review
process under section III below. State environmental review
procedures that have previously been used in the title II
program, augmented by actions formerly handled by EPA and the
State authority to administer the State environmental review
process (SERF)", will meet these requirements. For equivalency
projects, this documentation should address how the existing or
proposed State process meets the statutory criterion as being
implement able "in the same manner as Title II". If a state
elects to establish a second-tier review for other section 212
projects, the documentation should address how the criteria in
section III of this document are met. EPA wi11 provide
preapplication assistance to States in establishing an
approvable SERF.
II. "NEPA-LIKE" ENVIRONMENTAL REVIEW PROCESS
A State may either develop or revise its own environmental
review methods or adopt and apply the procedures at 40 CFR Part
6. If the State selects its own methods for conducting
environmental reviews, it must conform generally to the
requirements of the NEPA.
Administratively, EPA will examine existing or proposed
SERPs using the NEPA objectives outlined in the elements below
as a guide. "When approved, the procedures will apply to all
section 212 equivalency projects funded from the SRF. Once a
NEPA-1 ike SERF is approved, any significant changes proposed to
the process must also be approve.d by EPA.
The terminology used in the following discussion is taken
from 40 CRF Part 6, but States may employ different
terminology. Listed below are citations to the regulations EPA
uses to implement these statutory requirements in the
construction grants program. The citations are included for
the convenience of those States that wish to use EPA
regulations. It should be noted, however, that EPA's NEPA
requirements will continue to be applicable to Title II
construction grant projects. In situations where a complete
waste treatment system will receive both Title II and Title VI
assistance, the Title VI portions must be incorporated within
the Title II analyses in compliance with the "cumulative
effects" criterion embedded in the 40 CFR Part 6 process. In
cases where a State has different reviews for equivalency and
other section 212 projects, and where a complete waste
treatment system will receive both equivalency and other SRF
funds, the environmental review associated with the NEPA-like
process must be applied to the complete waste treatment system.
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Flement 1 - Legal foundation and administrative processes
establishing a structured NEPA-like process
A State must provide evidence of the legal foundation
(legislation, regulations, executive orders, etc.) which.
establishes the State's authority to review public works
projects, such as projects contemplated under the SRF programs,
for impacts on the human and natural environment similar in
intent and scope to the steps described in 40 CFR Part 6,
sections 506 and 508 through 511. The submissions must
specify:
--the agency (Department, Division) of government that
will be vested with the primary responsibility for
conducting environmental reviews and evaluations of
SRF projects (e . g . , an existing agency conducting
environmental analyses in conjunct ion wi th a State's
long range planning activity);
--the extent to which any responsibilities for
environmental review will be delegated to local
applicants which will build the projects, and how an
"independent" review and oversight by the primary
State reviewing agency will be achieved;
--the mechanisms to implement mitigation measures
required to make a project environmentally
acceptable; and
--Uie legal remedies available to the public to
challenge environmental revi ew determinations and
enforcement.
Element 2 - Interdisciplinary approach to assessing impacts
including adherence to other Federal and State environmental
object i ve a
Responsiveness to a number of Federal and State
crosscutting environmental concerns, such as impacts on
endangered species or coastal barriers, in relation to a
proposed project is integral to a NEPA-like SERP. The scope of
NEPA's environmental concerns and objectives is set out in
EPA's procedures implementing NEPA at Subpart C, 40 CFR Part 6.
The State should have the interdisciplinary expertise for
identifying these concerns, evaluating preferred alternatives
which avoid, minimize or mitigate undesirable project impacts.
In addressing these Federal crosscutting environmental
concerns, States may rely on State laws, executive orders
and/or regulations which identify lead State agencies having
(or that will acquire) the interdisciplinary expertise to
carry out the responsibilities similar to those discussed in •
Subpart C of 40 CFR Part 6.
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"Where a Stat.- 10 law, executive order and/or
regulation covering pecific Subpart C objective, States may
supplement their own echaaisms and/or interdisciplinary
expertise on an ints.im basis by adopting the coordination
requirements with Federal agencies contained in Subpart C, 40
CFR Part 6. In doing so, States may also adopt the appropriate
coordination procedures contained in environmental review
manuals prepared by EPA regions, or as otherwise developed
under earlier State/EPA agreements. In this situation, States
have the option to coordinate directly with lead Federal
agencies identified in Subpart C, or utilize existing Federal
clearinghouses at the State level. As a State establishes its
own mechanisms and/or interdisciplinary expertise in the
future, these can be substituted for Federal agency
coordination procedures.
Element 3 - Document ation of preliminary and fina{
d e t «t TTTJ i n a. t ions
Decisions resulting from an interdisciplinary,
multi-environmental objective assessment approach require
formal documentation of the information, processes and premises
which influenced the decision-. Documentation should be
maintained to substantiate the lack of, as well as the
existence of, potential impacts associated with a proposed
project. Experience with EPA's environmental review process
has established five distinct determinations that can be made
on a project -- three of which are mutually exclusive:
--a determination to categorically exclude [CE] a
project from an environmental review (see example
criteria at 40 CFR 6.505):
--a determination to proceed with the project contained
in a finding of no significant impact [FNSI] (see
example criteria at 40 CFR 6.506(c) and SOS)
following documentation in an environmental
assessment [EA] (see example criteria at 40 CFR
6o506(a) and (b)); and
--a determination to proceed, or not to proceed, with
the project contained in a record of decision [ROD]
(see example criteria at 40 CFR 6.511), following the
preparation of a full environmental impact statement
lEIS] (see example criteria at 40 CFR 6.506(c), 510
and 511);
and two which are overlapping:
--a determination to partition an environmental review
on a large, complete waste treatment system intended
to be built in several phases (see example criteria
at 40 CFR 6.507); and
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--a determination to reaffirm, or modify a decision
contained in a previously issued CE, FNSI or EIS
following a mandatory 5 year environmental
reevaluation of a proposed project (see example
criteria at 40 CFR 6.50S(d), 508(b) and 511(c)).
Of these five, only determinations involving a FNSI, ROD
or reaffirmation of a previous decision need be in the NEPA-
like SERF. Determinations involving categorical exclusions and
partitioning are optional. However, in the absence of
processes for these two optional types of determinations, a
full environmental review would have to be conducted on a
project.
State established processes for these determinations may
have other names, and additional steps, not traditionally
associated with EPA's environmental review process.
Flernent 4 - Public outreach and oar t i c i pa. t i on in decision
mak ing
Public outreach and participation activities include the
manner in which the affected public and other interested
parties are notified of proposed projects, the extent to which
they have access to documentation, opportunities to comment on
alternatives, and steps for redress of adverse decisions.
The NEPA-like SERP process should provide notices similar
to the 40 CFR Part 6 process (e.g., publication in a local
newspaper and/or distribution to a project mailing list) when:
--a CE is issued or rescinded;
--after a FNSI is issued but before it becomes
effective; and
--following reaffirmation of a decision issued 5 years
earlier.
For initiation of an EIS, this notice requirement may be
satisfied by publication of a notice of intent to prepare an
EIS in a State legal periodical or by using other established
State legal notification processes.
A single public hearing should be held, as a minimum, for
all projects except for those which qualify for exclusion from
environmental review requirements.
A formal public comment period must be provided for all
public notices, (other than for CE projects and reaffirming
previous determinations) during which no action on a project
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should be allowed. la cases where a State proposes review
periods less than those enumerated in 40 CFR Part 6, the State
submittal should discuss their rationale but these periods
should not be less than established by State statute for
similar public works activities.
Element 5 - Alternatives generation and evaluation
The State's evaluation criteria and processes must allow
for comparative evaluations among alternatives including both
the beneficial and adverse consequences on the existing
environment, the future environment and on individual sensitive
environmental issues that have been identified in advance by
project management, or when initiating an BIS, scoped in
advance with the assistance of public participation. These
criteria and processes should also allow for devising
appropriate near-term and long-range measures to avoid,
minimize or mitigate adverse impacts (see 40 CFR 6.506 and 509
to 511). Furthermore, coordination wi th other municipal public
works projects should be considered during the alternatives
generation and evaluation stages, including enhancing public
recreation and' open space opportunities.
Alternative generation and evaluation procedures should
include the following factors (see 40 CFR 6.506 and 509 to
511):
--a no-action alternative;
--direct and indirect impacts of the complete waste
treatment system(s) on all other related
environmental objectives;
--existing and future environmental conditions,
including all other environmental objectives,
affected by the entire system(s); and
--land use and other social parameters affected by the
entire system(s).
T« 1 erne n t 6 - Other envi THuman t; ^ 1 review principles
Acceptable NEPA-like SERPs should incorporate the
following environmental review principles.
(a) Continuation of the practice of describing the
purpose and need for facilities based on population
projection techniques associated wi th the Title II program
is encouraged, and must be used for communities which
receive both Title II and Title VI assistance. In other
cases where the technique to project future populations is
based on unique State models, the results of such
projections should be corroborated, within reasonable
D-6
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bounds, by a nationally recognized model such as one
produced by the Federal Census Bureau, and should be
compatible with population projections used in State
Implementation Plans developed under the Clean Air Act.
(b) Cumulative impacts should be evaluated within the
context of complete municipal wastewater treatment
systems, as well as other public works projects and future
community growth (residential, commercial, industrial,
etc.), within the study area.
For communities which are receiving project assistance for
the first time, especially when the project is for less than a
complete system, the environmental review should be based on
the impacts resulting from the entire system. This means that
an environmental review study area should be delineated in a
manner which generally encompasses the complete service area of
the final system envisioned to be in place at the planning
horizon and outlying areas that may directly or indirectly be
impacted by the completed system.
In situations involving improvements to be built as
separate projects at different times, the environmental review
associated with the first project should consider the
anticipated cumulative impacts from later projects as well.
When later projects are begun, the enviromental review need
only address changes to the anticipated impacts within the
entire study area due to changes in facility plan
design/engineering changes, or to changes in the physical
environment that had occurred in the interim period.
By adoption of this principle, en . i ronmenta 1 review
evaluations will largely satisfy the four factors listed in
Element 5 above .
III. "SECOND-TIER" ENVIRONMENTAL REVIEW PROCESS
If the State elects to establish different review
process for other than equivalency projects, those procedures
must conform to the requirements of this section. When
approved, the procedures will apply to all Section 212 projects
funded from the SRF with funds other than those directly made
available by a capitalization grant. Once the second-tier
provisions are approved, any significant changes proposed to
the process must also be approved by EPA.
1 - Leal foundation
A State must provide evidence of the legal foundation
which establishes the State's authority to review public works
projects, such as projects contemplated under the SRF program.
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Element 2 - Assessing impacts to other State environmental
object ive a
A State should be responsive to State crosscutting
environmental concerns, such, as impacts on endangered species
or coastal barriers, in relation to a proposed project.
Element 3 - Alternatives generation and evaluation of impaq^ft
The State should provide for comparative evaluations among
alternatives taking into account beneficial and adverse
consequences on the existing and future environments.
Coordination with other public works projects should be
considered during the alternatives generation and evaluation
stages .
Element 4 - Document ation of determi nation a
Decisions resulting from the environmental review require
formal documentation of the information, processes and premises
which influenced the decision. Documentation should be
maintained to substantiate the lack of, as well as the
existence of, impacts associated with a proposed project.
Sufficent documentation on issues addressed under this section
should be maintained, and must be available for review by EPA
during the annual review process.
Element S - Public participation in decision making
The public should be- informed of proposed projects, be
given an opportunity to conmc-it on alternatives, and have
access to environmental review documents. A single public
hearing or meeting, as a minimum, should be held for all
projects, except for those with little or no environmental
impact.
IV. REPORTING INFORMATION TO EPA
States should establish administrative procedures for
monitoring, collecting and summarizing environmental review
information and provide documentation of these activities in
the annual report. In the annual review, EPA will determine
whether environmental reviews consistent with the applicable
process have been conducted on all treatment works projects, as
defined in section 212, that have received assistance from the
SRF. The annual evaluation will review a sample of projects to
verify application and adequacy of SERPs.
a
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Appendix E
Letter of Credit Procedures
Prior to the establishment of the letter of credit, it will be
necessary for the State receiving the capitalization grant to provide
certain information regarding the State's chosen commercial financial
institution and those State officers authorized to make draw downs on
the letter of credit. With regard to the State's selected c omme r c i a 1
financial institution the State must furnish the following information:
l) Name and address of the financial institution;
2) Name, title, and telephone -number of two principal
officers of the financial institution;
3) Title and account number of the recipient's account
which will be credited at the financial institution;
4) The American Bankers Association (ABA) nine-digit
identifier of the financial institution and;
5) The name and ABA number of a corresponding bank if the
recipient's bank does not have an on-line access to
the Federal Reserve Communications System (also kaown
as FEIWIRE)
*rVi:h respect ;o identifying i^.ose 3 : a : e officials au:aor;z
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APPENDIX F
LIST OF FEDERAL LAWS AND AUTHORITIES
FNVT RQNMENTAL i
Archeological and Historic Preservation Act of 1974, PL 93-291
Clean Air Act, 42 U.S.C. 7506(c)
Coastal Barrier Resources Act, 16 U.S.C. 3501 et seq.
Coastal Zone Management Act of 1972, PL 92-583, as amended
Endangered Species Act 16 U.S.C. 1531, et seq.
Executive Order 11593, Protection and Enhancement of the Cultural
Environment
Executive Order 11988, Floodplain Management
Executive Order 11990, Protection of Wetlands
• §
Farmland Protection Policy Act, 7 U.S.C. 4201 et seq.
Fish and Wildlife Coord ina t i on Ac t , PL 85 -624, as amended
National Historic Preservation Act of 1966, PL 89-665, as amended
Safe Drinking Water Act,, section 1424(e), PL 92-523, as amended
Wild and Scenic Rivers Act, PL 90-542, as amended
Demonstration Cities and Metropolitan Development Act of 1966,
PL 89-754, as amended
Section 306 of the Clean Air Act and Section 508 of the Clean Wate
Act, including Executive Order 11738, Administration of the Clean
Air Act and the Federal Water Pollution Control Act with Respect t
Federal Contracts, Grants, or Loans
SDTTAT. T.FGT: STATION;
Age Discrimination Act, PL 94-135
Civil Rights Act of 1964, PL 88-352
Section 13 of PL 92-500; Prohibition against sex discrimination
under the Federal Water Pollution Control Act
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Executive Order 11246, Equal Employment Opportunity
Executive Orders 11625 and 12138, Women's and Minority Business
Enterprise
Rehabilitation Act of 1973, PL 93-112 (including Executive Orders
11914 and 11250)
MISCELLANEOUS AUTHORITY:
Uniform Relocation and Real Property Acquisition Policies Act of
1970, PL 91-646
Executive Order 12549 - Debarment and Suspension
F-2
DUE
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