United States        Office of Water     '  December 1978
          Environmental Protection    Program Operations (WH-547)
          Agency          Washington, DC 20460    A/I/1 7*\ — /) ~"? ~~J

          "Vater
EPA      Program Requirements
          Memoranda
          Municipal Wastewater
          Treatment Works
          Construction  Grants Program
                                             •*»
                                  MCD-02.7

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                  OFFICE OF WATER PROGRAM OPERATIONS
                         WASHINGTON, D.C.  20460
                   NOTICE TO ALL HOLDERS OF THE EPA
                 MUNICIPAL WASTEWATER TREATMENT WORKS
       CONSTRUCTION GRANTS PROGRAM MANUAL OF REFERENCES (MCD-02)
     Because the material contained in the "Manual  of References"  is
obsolete, further printing and distribution will  cease.   However,  the
program policy documents incorporated in that manual, and subsequently
updated by the publication of supplemental issuances of new and revised
Program Requirements Memoranda (PRMs), will continue to be made available
to that segment of the public involved in various aspects of the
Construction Grants Program.  Hence, holders of the MCD-02 will  continue
to receive copies of Program Requirements Memoranda (MCD-02.00) as they
are printed.  So that PRM recipients are kept apprised of the completeness
of their policy document library, a full index of PRMs issued will be
included with each printing.

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                  Municipal Wastewater Treatment Works
                     Construction Grants Program
                     PROGRAM REQUIREMENTS MEMORANDA
                           Table of Contents
MCD 02.1

PRM 75-1

PRM 75-2
PRM 75-3
PRM 75-4
PRM 75-5
PRM 75-6
PRM 75-7
PRM 75-8
PRM 75-9

PRM 75-10
PRM 75-11

PRM 75-12

PRM 75-13
PRM 75-14
PRM 75-15

PRM 75-16

PRM 75-17
Use of Revenue Sharing Funds for Waste               6/25/73
Treatment Projects
Experience Clauses for Equipment Suppliers           7/11/73
Waste Stabilization Ponds                            9/11/73
Standardized Construction Contract Documents         4/15/75
Non-Restrictive Specifications                        8/8/75
Adequacy of Treatment Certification                  11/8/73
Sewer System Evaluation and Rehabilitation            2/7/74
Flood Disaster Protection Act of 1973                 3/1/74
Supplement to PG No, 25; Flood Disaster              11/4/74
Protection Act of 1973 (PL 93-234)
User Charges and Industrial Cost Recovery System      4/5/74
Approval of Reimbursement Projects Not               4/17/74
Previously Serviced by EPA
Obligation, Recovery and Reallotment of Contract     5/13/74
Authority Funds
Management of Construction Grants Funds              4/19/74
Grant Funds and Project Segmenting                   5/10/74
Class Deviation—Use of Force Account Work            5/7/74
on Construction Grant Projects
Title II Regulations, Section 35.915(1)—             6/3/74
Reserve for Step 1 and Step 2 Projects
Construction of Pretreatment or Treatment             6/5/74
Facilities for Municipal Utilities

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PRM 75-18



PRM 75-19


PRM 75-20

PRM 75-21

PRM 75-22

PRM 75-23


PRM 75-24

PRM 75-25


PRM 75-26


PRM 75-27


PRM 75-28


PRM 75-29


PRM 75-30

PRM 75-31


PRM 75-32


PRM 75-33

PRM 75-34


PRM 75-35




PRM 75-36
Eligibility of Wastewater Treatment Facilities       9/17/74
at Municipally Owned Water Treatment Works for
Construction Grants

Cancelling PG-28 - User Charges and Industrial        7/9/74
Cost Recovery System

User Charge Systems                                  7/16/74

Overruns, Reserves and Priority Lists               10/16/74

Policy Re Retention of Payments                     11/18/74

Escalation Clauses in Construction Grant             12/9/74
Projects

Large City Problems in State Priority Lists           1/9/75

Eligibility of Land Acquisition Costs for Land
Treatment Processes

Consideration of Secondary Environmental Effects      6/6/75
in the Construction Grants Process

Field Surveys to Identify Cultural Resources          7/2/75
Affected by EPA Construction Grants Projects

Flood Insurance Requirements Effective                7/8/75
July 1, 1975

EPA Procedures in Initiating Debarment Actions        8/5/75
Against Grantee Contractors

Cost Control                                          9/8/75

Facilitating EIS Preparation with Joint                 9/75
EIS/Assessments (Piggybacking)

Compliance with Title VI in the Construction         2/11/76
Grants Program

Discount Rate                                        8/11/75

Grants for Treatment and Control of Combined        12/16/75
Sewer Overflows and Stormwater Discharges

Allowable Costs for Construction of Treatment       12/29/75
Works that Jointly Serve Municipalities and
Federal Facilities

Value Engineering in the EPA Construction            1/20/75
Grants Program

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PRM 75-37

PRM 75-38


PRM 75-39



PRM 75-40


PRM 76-1

PRM 76-2
User Charge System: Plan and Schedule

Relationship Between 201 Facility Planning
and Water Quality Management (WQM) Planning

Eligibility of Land Acquisition Costs for the
Ultimate Disposal of Residues from Wastewater
Treatment Processes

Priority List Supplement to FY 1977
Construction Grants Guidance

Construction Grants Program Issuances

Cancellation of Certain Program Guidance
Memoranda (PGM)
 3/17/76

  2/9/76


  4/2/76



  5/7/76


 7/25/76

 7/26/76
MCD 02.2
PRM 76-3


PRM 76-4



PRM 76-5
Presentation of Local Government Costs of
Wastewater Treatment Works in Facility Plans

Coordination of Construction Grants Program
with EPA-Corps of Engineers Section 404/
Section 10 Permit Programs

Flood Insurance Requirements
 8/16/76


10/14/76



 8/16/76
MCD 02.3
PRM 77-1


PRM 77-2

PRM 77-3


PRM 77-4

PRM 77-5
Treatment Works for Recreational  Parks, Industrial  11/23/76
Parks and Institutions

Grant Eligibility of Start-up Services              11/29/76

Plan of Operation for Municipal  Wastewater          11/29/76
Treatment Facilities

Cost Allocations for Multiple Purpose Projects       12/3/76

Grant Eligibility of Land Acquisition by Lease-     12/15/76
holds or Easements for Use in Land Treatment
and Ultimate Disposal of Residues

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MOD 02.4
PRM 77-6

PRM 77-7

PRM 77-8
Easements

Management of State Project Priority Lists

Funding of Sewage Collection System Projects
 5/4/77

5/13/77

6/21/77
MCD 02.5
PRM 77-9

PRM 78-1


PRM 78-2

PRM 78-3

PRM 78-4


PRM 78-5


PRM 78-6

PRM 78-7


PRM 78-8


PRM 78-9

PRM 78-10
Reallotment of Recovered Funds                        8/5/77

Erosion and Sediment Control in the Construction    12/29/77
Grants Program

Discount Rate                                        1/26/78

Buy American                                         2/17/78

Grant Eligibility of Land Acquired for Storage       2/17/78
in Land Treatment Systems

Interim Management of FY 1978 State Priority         2/17/78
Lists Under the 1977 Amendments

Industrial Cost Recovery—Interim Guidance           2/17/78

Combined Step 2 and Step 3 Construction Grant        2/17/78
Awards (Step 2+3)

Rejection of All Bids: Guidance for EPA              2/13/78
Concurrence Function

Funding of Sewage Collection System Projects          3/3/78

Infiltration/Inflow Program Guidance                 3/17/78
MCD 02.6
PRM 78-11


PRM 78-12
Toxicity of Chemical Grouts for Sewer
Rehabilitation

Preconstruction Lag Management
5/11/78


6/12/78

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MCD 02.7
 PRM  78-13



 PRM  79-1


 PRM  79-2

 PRM  79-3



 PRM  79-4

PRM  79-5

PRM 79-6
 Interim  Priority  List Guidance for the               6/29/78
 Development  and Management of FY 1979 State
 Priority Lists

 Safety Requirements  for the Design and Operation    10/23/78
 of  Chlorination Facilities Using Gaseous Chlorine

 Royalties  for Use of or for Rights in Patents       11/13/78

 Revision of  Agency Guidance for Evaluation of       11/15/78
 Land Treatment Alternatives Employing Surface
 Application

 Discount Rates                                      11/17/78

Construction Incentive Program                      12/28/78

Priority List Guidance for the Development            1/8/79
and Management of FY  1980 State Project
Priority Lists

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&55K*?   UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

       °                      WASHINGTON, D.C.  20460
                                 JUN  291978
                                                              OFFICE OF WATER AND
                                                             HAZARDOUS MATERIALS
                                                  Construction Grants
                                                  Program Requirements  Memorandum
                                                  PRM # 78 - 13
     SUBJECT:  Interim Priority List Guidance for the Development and
               Management of FY 1979 State Priority Lists

     FROM:     John T. Rhett, Deputy Assistant Administrator
               for Water Program Operations (WH 546)

     TO:       Regional Administrators

     PURPOSE

          This memorandum sets forth interim priority list policy for  the
     development and management of FY 1979 State project priority lists  for
     EPA's construction grants program.   This interim policy allows  for  the
     phase-in of the recently published  interim Title II regulations.  Final
     priority list policy concerning priority criteria and the  development
     and management of FY 1980 and subsequent lists is currently  being developed
     and should be issued by the beginning of FY 1979.

     DISCUSSION

          The recently enacted Clean Water Act and  the interim  Title II
     regulations make it necessary to revise many of  the procedures  for  the
     development and management of State project priority  lists set  forth in
     Program Requirements Memorandum #77-7.  Immediate changes  must  be made
     to meet enforceable requirements, and provide  an interface between  the
     priority list and the Needs Survey.  Revisions to the systems used  to
     rate and rank projects will be deferred during development of the FY 1979
     list to minimize the impact on the  State construction grants program.
     In most cases the FY 1979 changes are not expected  to significantly
     alter currently approved priority systems.   The  Regions  should  insure
     that the FY 79 priority list review process moves expeditiously and that
     any disruptions in the program be kept to a minimum.

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POLICY
     1.   Submission and review of priority lists.   A class  deviation
     has been granted from 40 CFR 35.562 and 35.563 for FY  79  setting
     June 15, 1978, as the date for submission of  the preliminary  list,
     and August 15, 1978, for the final  list.  Also, a class  deviation
     has been granted from 40 CFR 35.915(a)(l)(iv) and 35.915(c)(2)
     waiving portions of the information requirements of the new regul-
     ation and restriction of consideration of geographical  region as  a
     priority rating criteria during FY  '79.  No priority list is  to be
     accepted as final by the Region until all remaining required  and
     available information has been received for each project  and  the
     public participation requirements have been met. Upon  receipt of
     the draft list the Region should immediately  enter the information
     into the Regional Construction Grants Management Information  System
     (RCGMIS) for subsequent review and analysis.   The Regional Administrator
     will review the final State project priority  list within  30 days  of
     submission to ensure compliance with the approved State priority
     system and this policy memorandum.   All questionable projects
     (relating to eligibility and enforceable requirements)  must be
     identified during this 30 day period.  The final list  is  to be
     generated from RCGMIS and the list in RCGMIS  will be considered as
     the official list for funding and management  purposes.

     2.    Definitions:

          o    State project priority list - an ordered listing of
               projects for which Federal assistance is expected during
               the five-year planning period starting with  the beginning
               of the next fiscal year based on and drawn from the Needs
               Survey inventory.

          o    Fundable list - that portion of the State project
               priority list which contains projects scheduled for award
               during the first year of the five-year planning period,
               not to exceed the total funds expected to be available
               during the year less all  applicable reserves.  Note that
               this definition of the fundable list is changed from  that
               set forth in PRM #77-7.  The fundable portion of the  list
               no longer relates only to the amount of available funds
               but rather to the first year (fundable year) of the five-
               year list.  It is conceivable that  the fundable list will
               not contain enough projects to use  all available funds
               because the allotment period of some of the  currently
               available funds extends well beyond the fundable year.

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          Extended list - that portion of the State  project
          priority list containing all  projects  outside  the  fund-
          able list that may, under anticipated  allotment  levels,
          receive funding during the five-year planning  period.
          For FY 1979 planning, this list is  to  include  the  fol-
          lowing projects as a minimum:
               All future Step 3 projects  that  will  be
               generated from currently active  Step  2 projects
               and Step 2 projects  that are included on  the
               fundable list.

               All future Step 2 arid Step  3 projects that will
               be generated from completed or currently  active
               Step 1  projects and  Step 1  projects that  are
               included on the fundable list.

               All Step 1 projects  anticipated  to be funded
               during  the first two years  of the five-year
               planning period (and subsequent  Step  2 and Step  3
               projects that may be funded during the five-year
               planning period where the timing and  scope is
               apparent).

3.   Funding Assumptions.  For the  purposes of  developing the
     FY 1979 State project priority list it should be assumed that
     $4.5 billion will  be appropriated for each of the next five
     fiscal  years, starting in FY 1979, and such funds will be
     available on the  first day of  the fiscal year.   It  should
     further be assumed for planning purposes that these funds  will
     be allotted as set forth in Attachment I.

4.   Required priority list information.   Unless otherwise noted
     or excepted for FY 1979 the following information is required
     for all projects  on the State  project priority  list, both
     fundable and extended portions,.  The  GIGS  transaction number
     is included in parentheses and the Region  should refer to  the
     GICS data element dictionary for the  precise definition of
     each element.

     o    State assigned EPA project number (TN 01,  54,  03).

     o    Legal name and address of applicant if known (TN 12,
          51, 14, 52).

     o    Short project name or description (TN 20).

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o    Priority rating and rank of each  project,  based on
     current priority system (TN H8,  59).

o    Project step number (TN 87).

o    Relevant Needs authority/facility number  (TN  32).  This
     is the unique number assigned in  connection with the
     Needs Survey which identifies the facility and the
     cognizant WWT authority. If an authority/facility number
     has not been assigned,  enter "NO  NUMBER".  If multiple
     facilities are applicable within  a single  authority,
     enter the first six positions followed by  "XXX".  If
     multiple authorities, then enter  the  word  "MULTIPLE"
     instead of the nine digit authority facility  number.  For
     FY 79, this information is only required  for  the fundable
     list.

o    Parent project number (i.e., EPA  project  number for
     predecessor project) (TN B2).

o    For Step 2, 3, or 2+3 projects, code  indicating an
     alternative system for small community (TN 33).  Enter
     "D" if the project is for a highly dispersed  section  of a
     larger community or "R" if the project is  for a rural
     community with a population of 3,500  or less. For FY '79
     this information is only required for projects on the
     fundable list. It does  not apply  for  States in which  the
     reserve is not required and has not been  voluntarily
     established.

o    For Step 2, 3, or 2+3 projects, that  amount (if any)  of
     the eligible cost to apply separately to  alternative
     techniques and innovative processes (TN Y7, Y8).  These
     amounts should not be increased to the full eligible  cost
     even if the project meets the 50% criterion set forth in
     40 CFR 35.908(b)(2).  For FY '79, this information is
     required only for the projects on the fundable list.
     This information is not required  on the draft or final
     priority lists submitted in accordance with the August 15
     deadline.  This information is necessary,  however, to
     determine utilization of the I/A  reserve  and  must be
     submitted as a supplement to the  priority list no later
     than December 31, 1978.

o    Date project is expected to be certified  by State to  EPA
     for funding (TN A5).  This date defines whether or not
     the project is on the fundable or extended portion of the
     priority list.

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For Step 3 or 2+3 projects, the total  eligible cost
subdivided by Needs Categories (TN YO, Yl,  Y2, Y3,  Y4,
Y5, Y6).  For FY 79, the State may elect to aggregate
into a single lump sum the costs of Categories IIIb
(Major Sewer System Rehabilitation), IVa (New Collector
Sewers and Appurtances), IVb (New Interceptors and
Appurtances), and V (Correction of Combined Sewer Overflows)
If this option is chosen, this aggregate cost should be
entered in the space on the attached format for Category
Illb and should be marked with an asterisk  (*).  No
entries need be made for any of the other categories
(including I, II, and Ilia).  Entries  may be made in all
applicable categories, however, at the option of the
State and Region.  This information is only required for
projects on the fundable list.

Total eligible cost of the project (TN 29).  This  infor-
mation is required for all projects on the  State project
priority list.

Estimated EPA assistance (TN H7).  This estimated grant
amount should include any potential grant amount from the
reserve for innovative and alternative technology.
Therefore this grant amount may be anywhere between 75% -
85%,  depending on the portion of the  project eligible
for increased funding.

Enforceable requirement to be satisfied by  this project,
including (as appropriate) the relevant NPDES number.
The enforceable requirements must fall into one of  the
following categories:

     A -- Project satisfies the conditions  or limitations
          of a 402 or 404 permit which, if  violated,
          could result in the issuance of a compliance
          order or initiation of a civil  or criminal
          action under Section 309 of  the Clean Water
          Act.  (Include permit number(s)).

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               B -- Permit has  not been issued  but  project  satisfies
                    a condition or limitation which would be
                    included in the permit when issued.

               C — Permit is not applicable but project satisfies
                    a requirement anticipated to be necessary  to
                    meet applicable criteria for best  practicable
                    waste treatment technology  (BPWTT).

               D -- Project does not meet an enforceable require-
                    ment of the Act.

5.   Project Bypass.  Although  readiness for funding may not be
     used as a priority criterion for rating or ranking projects,
     the ability to bypass projects not yet  ready to proceed
     according to schedule is an integral part  of priority  list
     management.  Projects certified by the  State and  agreed to by
     the Regions as not ready for funding before the end of the
     fundable year may be bypassed in favor  of  the  next highest
     ranked priority projects as long as the approved  priority
     system has a procedure to  bypass and reinstate the bypassed
     projects (under specific conditions), and  makes allowance for
     the public participation provisions. If no formal bypass
     procedure exists in the current priority system,  an interim
     procedure for FY 79 must be developed by the State and approved
     by the Region.  Projects that are bypassed retain their relative
     priority rating for consideration on future fundable lists.
     Projects bypassed will be  replaced by the  highest ranking
     priority projects on the extended list  that are ready  to
     proceed. Project applicants that are bypassed  because  they are
     not ready to proceed must  be notified and  the  State must
     certify to EPA that these  projects will not be ready during
     the fundable period.  Projects that become part of the fundable
     list must have met all public participation requirements.

6.   Priority Systems.  Because of the advanced state  of development
     of some State priority lists and the relatively short  period
     of time remaining before the draft lists must  be  submitted to
     EPA, any modification necessary to currently approved  priority
     systems should be accomplished through  a temporary administrative
     agreement between the State and the Region. The  Regions
     should attempt to minimize any program  disruptions that might
     be caused by the modification(s) and assure that  these agreements
     are negotiated expeditiously.  For FY '79  only, States may
     continue to consider geographic region  within  the State in
     developing the priority list, provided  this criteria is^
     already part of their currently approved priority system. In
     FY 80, the State may not consider geographic region as part of
     their priority system.

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                         7
7.   Public Participation.  FY 79 public  hearings,  if  any,  held
     for priority system revision may be  conducted  jointly  with  the
     hearing for the FY 79 priority list. No  project may  be funded
     unless it has met the public participation  requirements.

8.   Priority List/Needs Survey Relationship.  The  State  project
     priority list should be derived from and be consistent with
     the State Meeds Inventory prepared in accordance  with  Section
     516(b)(l)(B) of the Clean Water Act. The "Relevant Needs
     Authority/Facility Number" described above  provides  the direct
     linkage between the priority list and the Needs Survey.

9.   Priority List Update.  Because of the new definition of the
     fundable list, the target certification  dates  and estimated
     grant amount for projects on the fundable and  extended lists
     must be kept current at all  times.  At a minimum, a  complete
     review of the priority list, including the  extended  portion,
     should be performed on a quarterly basis.  Any changes to the
     list should be immediately entered into  RCGfUS.   Regions
     should assure that all bypass provisions and public  partici-
     pation requirements have been met whenever  changes are made to
     the priority lists.

10.  25% Provision for Projects in Categories  Illb  (Sewer System
     Replacement or Major Rehabilitation), IVa (New Collectors and
     Appurtenances), IVb (New Interceptors and Appurtenances), and
     V (Correction of Combined Sewer Overflows).  All  projects or
     parts of projects on the fundable priority  list including
     these categories will be reviewed by the Regional  Administrator
     to determine if they meet enforceable requirements of  the Act.
     Projects which meet the enforceable  requirements  will  be
     eligible for funding.  Projects in these categories  that do
     not meet enforceable requirements will be further examined  in
     the order of the lowest ranked project first.  This  review
     process will continue until  the aggregate of projects  in these
     categories that do not meet the enforceable requirements of
     the Act, but are deemed necessary for pollution control, total
     not more than 25 percent of the allotment for  each State.

11.  Management of Priority List Reserves that are  Subject  to
     Reallotment if not used for their intended  purpose.  Regions
     should assure that sufficient projects appear  on  the fundable
     list to fully utilize the reserve for innovative  and alternative
     technology grant increases and the reserve  for alternative
     systems for small communities before these  funds  are lost to
     reallotment.  To accomplish  this objective  40  CFR 35.915(a)(l)
     (iii) states that higher priority may be granted  to  those Step
     2 and combined Step 2+3 projects utilizing  processes and
     techniques meeting the innovative and alternative guidelines.
     Size of community (according to 40 CFR 35.915-1(e))  may be
     used to establish a higher priority  for  projects  which can  be
     funded to preclude any potential loss of the reserved  funds.

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         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                          WASHINGTON, D.C.  20460
                            OCT 2 3 1978
                                             Construction Grants
                                             Program Requirements Memorandum
                                             PRM No. 79-1
Subject:  Safety Requirements for the Design and Operation
          of Chlorination Facilities Using Gaseous Chlorine

From:     John T. Rhett, Deputy Assistant Administrator   (2^ I*** 7*  A
          for Water Program Operations (WH-546)           /

To:       Regional Administrators (I-X)
          Attn:  Water Division Directors

Purpose:

     This memorandum establishes the policy pertaining to safety require-
ments for the design and operation of Chlorination facilities utilizing
gaseous chlorine.

     While many engineering considerations and operational practices
with regard to chlorine handling are site specific, a number of significant
design specifications and operational procedures should be required as
minimum acceptable practice.  There are numerous publications that
provide detailed information pertaining to this subject, including those
listed in Attachment B.  This memorandum provides guidelines and general
principles to be used in the design and operation of Chlorination
facilities using gaseous chlorine.

Discussion:

     Gaseous chlorine refers to chlorine purchased in its elemental form,
occurring in the gaseous or liquid state.  It is supplied commercially
in pressurized containers sized to contain either 100 pounds, 150 pounds
or 2,000 pounds of chlorine. In addition, chlorine can be purchased in
single unit and multi-unit railroad tank cars, as well as tank trucks.

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     Chlorine is a respiratory irritant, and under conditions of sufficient
concentration and exposure, can cause death by suffocation.  Chlorine,
especially when combined with even small amounts of water, is highly
corrosive, and can cause severe burns when brought into contact with
skin and eyes.  Unfortunately, the toxic and corrosive effects of
chlorine were recently demonstrated by the two publicized railroad tank
car derailments and their subsequent after effects.

     The on-going construction grants program will continue  to generate
significant construction of wastewater treatment facilities  throughout
the country.  Chlorination continues to represent the most commonly used
method of disinfection for sewage, and consequently many new treatment
facilities will include provisions for chlorinating treated  effluent
prior to discharge. As a result, a major part of EPA's overall responsibility
is ensuring that safe chlorination practices are implemented.

     EPA policy is designed to ensure that:

     1.   Chlorination systems are designed to prevent chlorine leaks
and to minimize operator and local resident exposure should  leaks occur.

     2.   Chlorine leaks that do occur are handled safely, quickly, and
with minimal environmental exposure.

Policy:

     Attachment A is guidance for the design and operation of safe
chlorination facilities.  It is intended that in reviewing plans and
specifications and operation and maintenance manuals for those projects
incorporating chlorination processes, Sections I and II of Attachment  A
be used as a technical guide and basis for minimum adequacy  in safety
considerations.  The information contained in the guidance was developed
to serve as part of the overall criteria applicable to the design and
operation of such facilities.  While it is believed that complying with
the guidance will substantially reduce chlorine hazards which can be
potentially dangerous to plant personnel and nearby residents, it is
recommended that the guidance in this PRM be used to supplement other
applicable information on chlorination facilities.

Implementation:

     The measures specified in this memorandum are required  for all
projects that have not yet received Step 3 grants by the date of this
memorandum.  In addition, projects that have already received Step 3
grants should incorporate the sections under operation and maintenance
in the O&M manual.  Where practical, current Step 3 projects should be
encouraged to make revisions to their designs to comply with the measures
specified herein.

Attachments

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                                                       ATTACHMENT  A
              Procedure for the Safety in the Design and
                   Operation of Chlorine Facilities


     This guidance contains a detailed procedure which represents  good
engineering practices for the safety in the design and operation of
chlorination facilities.  Because it is not the intent of the guidance
to modify or replace any appropriate safety requirements and  regulations
published by the Occupational Safety and Health Administration (OSHA),
it is recommended that the guidance be used to supplement the OSHA and
any other appropriate safety requirements.

I.   Design of Gaseous Chlorine Facilities

     A.   If gas chlorination equipment and chlorine cylinders are to be
installed or stored in a building used for  other purposes, a  gas-tight
partition should separate the chlorination  room from any other portion
of the building.  Doors to this room should open only to the  outside of
the building, and should be equipped with panic hardware.  Such rooms
should be at ground level, and should permit easy access to all equipment;
the chlorine storage area(s) should be separated from the chlorine feed
area(s).

     B.   A clear glass, gas-tight window should be  installed in an
exterior door or interior wall of the chlorination room to permit  the
chlorinator(s) to be viewed without entering the room.

     C.   Chlorination rooms should be equipped with heating  and ventilating
equipment designed to maintain the roon(s)  containing the chlorine
containers at approximately 18-21°C (65-70°F) and the room(s) containing
the chlorinator feed equipment at a temperature of 5-10°F higher.

     D.   Containers (except insulated rail or cargo tanks) should be
shielded from direct'sunlight or from overheating above 60°C  (140°F)
any source, either while in storage or in use.  Pairs of level  rails or
properly designed cradles should be provided for storing one  ton cylinders.

     E.   Forced mechanical ventilation should be included that will
provide a complete air change at least every 1-4 minutes.  Because
chlorine gas is heavier than air, location  of air inlets and  outlets
should be carefully considered to ensure that the entire room will  be
thoroughly ventilated.  For example, in the exhaust  ventilation system,
the exhaust outlet should be located near the floor, with the discharge
being positioned outside of the building at a point  where it  will  not
contaminate the air inlet to any buildings  or inhabited areas.  The
fresh air inlet should be located at the opposite end of the  room  from
the exhaust outlet, to facilitate complete  air replacement.

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     F.   Exhaust equipment should be automatically activated by external
light switches.  That is, an operator should be able to turn the lights
on outside of the chlorination room and thereby activate the ventilation
system prior to entering the enclosed area.   Other automatic systems,
including door-activated mechanisms, should also be considered.

     G.   Emergency showers and eye baths should be located near, but
external to, the chlorination facilities.

     H.   For facilities having a design hydraulic capacity of five
million gallons per day or more, an automatic chlorine detection system
should be included as part of the chlorination facility.  The detection
system should sound alarms and activate flashing Ivgh^s that are audible
and visible within the POTW.  Connection of the alarm system to the
local police station, POTW operator's area,  or both, is also recommended
where practical.  Consideration of such detection and alarm systems
should also be given in the case of smaller facilities, where the
potential benefits are sufficient to warrant the additional cost and
associated increase in operational complexity.

II.  Operation and Maintenance

     The following procedures should be included in operation and
maintenance manuals for treatment facilities which incorporate chlorination
processes.  While the following criteria are related primarily to the
operation and maintenance of chlorination systems, they should also be
read in the context of their applicability to the design of treatment
plants.

     A.   Loading and Unloading of Chlorine

          1.   DOT regulations (174.560) provide that single-unit railroad
     tank cars must be unloaded on a private track.  This requirement
     applies to all EPA supported projects.

          2.   Whenever practicable, single and multi-unit tank cars
     should be delivered at a deadend siding(s) used only for chlorine
     delivery, with insurance that the tracks are level.  The car(s)
     should be protected by a locked derail, a closed and locked switch,
     or preferably both.

          3.   Railway flat cars delivering one ton containers should
     also be delivered on a special siding assigned to chlorine unloading
     only.

          4.   Chains, rope slings, or magnetic hoists should never be used.
     When cylinders are to be lifted, forklift trucks or hoisting equipment
     with special cradles or carriers designed for chlorine equipment  should
     be utilized.

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     5.   Tank barge unloading facilities should be in compliance with
the Army Corps of Engineers and Coast Guard Regulations.

B.   Handling of Chlorine Containers

     1.   One ton cylinders should be stored on properly designed
cradles or pairs of level rails.  Chocks should be placed to prevent
the containers from rolling when unattended.

     2.   100 and 150 pound cylinders should be secured with safety
chains in storage and during transport.

     3.   Containers should never be piled on top of one another.

     4.   Containers should be stored in a manner that will  prevent
them from being hit by vehicles or other heavy objects.

     5.   Chlorine should not be stored with other compressed
gases.

     6.   Empty containers should be so tagged, and should be
stored separately from full containers.

     7.   Cylinders should be used in the order in which they are
received, to prevent valve packing from becoming dry and developing
leaks.

     8.   Only approved tools designed for use with chlorine containers
should be used.  For example, hand trucks specifically designed for
100 and 150 pound cylinders should be used instead of rolling them
on the rim.

     9.   Chlorine cylinder emergency repair kits should be  readily
available.

C.   Leak Detection and Emergency Procedures

     1.   Each POTW should have a formal written set of emergency
procedures that includes the items discussed below, prior to startup
of the chlorination facilities.  In addition, operator's manual
must include pre-planned procedures in the event of a catastrophic
leak or container rupture.

     2.   Self-contained positive pressure helmets, with their own
compressed air supply and full  facepiece, should be available for
emergency use.  The canister type gas mask is specifically not
recommended.  The helmets should be located at readily accessible
points, away from the area(s) likely to be contaminated with chlorine
gas.  Spare air supply cylinders should also be on site for  use
during prolonged emergencies.

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     Helmets and breathing air supply tanks should be routinely
inspected and maintained in good condition.  They should be cleaned
after each use, and also cleaned routinely at regular intervals.
When needed, air supply tanks should be refilled at stations where
proper air compressor equipment is used to filter out oil  in a
contaminated air environment.

     Specifications for properly designed positive pressure helmets  for
chlorine service can be obtained from the U.S.  Bureau of Mines,
OSHA, or NIOSH,  In addition, potential users of these helmets, as
well as users of other emergency equipment, should have formal
training in their use and should also be required to have regular
practice sessions.

     3.   A strong solution of aqueous ammonia (18° Baume or higher)
should be available for use in locating the source of leaks.  Dense
white clouds of ammonium chloride are formed by the reaction of the
ammonia and chlorine, thus confirming the source of the chlorine
leak.

     4.   Repair of any chlorine leaks should be performed by at
least two people wearing self-contained air breathing equipment.
If such repairs must be made below grade, persons entering the area
must also wear safety harnesses which are connected to ropes extending
to a higher level where additional people are stationed to assist
in emergency rescue operations.

     5.   Piping and valves in chlorine rooms should be color coded
and properly labeled for rapid identification.

     6.   If a container is leaking chlorine, it should be turned,
if possible, so that gas instead of liquid escapes.  The quantity
of chlorine that escapes from a gas leak is about one-fifteenth the
amount that escapes from a liquid leak through the same size hole.

     7.   If possible, a leaking container should be moved to an
isolated spot where it will do the least harm.

     8.   Never immerse or throw a leaking chlorine container into
a body of water.  The leak will be aggravated and the container may
float when still partially full of liquid chlorine, allowing gas
evolution at the surface.

     9.   Emergency kits should be readily available for the quick
repair of chlorine leaks.  Information on emergency kits is available
from the Chlorine Institute, New York, NY (see Reference 1).

     10.  In the event of an emergency, technical assistance can be
obtained by calling CHEMTREC (Manufacturing Chemists Association,
Chemical Transportation Emergency Center) at 800/424-9300.  This is
a 24-hour toll-free service.

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                                                          ATTACHMENT B

                              REFERENCES
1.   "Chlorine Manual," The Chlorine Institute, Inc.  342 Madison Avenue,
     New York, NY, December, 1972.

2.   "WPCF Manual of Practice No. 1 - Safety in Wastewater Works,"  Water
     Pollution Control Federation, 1975.

3.   "WPCF Manual of Practice No. 4 - Chlorination of Wastewater,"  Water
     Pollution Control Federation, 1976.

4.   "WPCF Manual of Practice No. 8 - Wastewater Treatment Plant Design,"
     Water Pollution Control Federation, 1977.

5.   "Liquid Chlorine" Technical and Engineering Service Bulletin No.  7,
     Allied Chemical, Morristown, NJ.

6.   "Chemical Safety Data Sheet SD-80, Properties and Essential Information
     for Safe Handling and use of Chlorine," Manufacturing Chemists
     Association, 1970.

7.   "Standards for Waste Treatment Works, Municipal  Sewerage Facilities,"
     New York State Department of Environmental Conservation, 1970.

8.   "Chlorine Handbook," Diamond Shamrock Chemical  Company,  1976.

9.   "Dow Chlorine Handbook," Dow Chemical U.S.A., 1975.

10.  Sax, Irving N., Dangerous Properties of Industrial  Materials,  Van
     Nostrand Reinhold Company, 1975.

11.  White, George C., Handbook Of Chlorination, Van  Nostrand Reinhold Company,
     1972.

12.  "Hazardous Materials Regulations of the Department  of Transportation,
     Including Specifications for Shipping Containers,"  R.M.  Grazianos Tariff
     Publishing.                                                       «

13.  "Chlorine Detector Saves a Life," Public Works,  March, 1978.

14.  "Safe  Handling of Compressed Gases and Containers,"  Compressed Gas
     Association, Inc., 1974.

15.  "Supplement  to Federal  Guidelines: Design, Operation  and Maintenance
     of Wastewater Treatment Facilities," Technical Bulletin  No.  D-71-1,
     U.S. Environmental Protection Agency, September,  1970.

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*
 \
 ?    UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
 ?                     WASHINGTON, D.C.  20460


                           NOV 1 3 1978
                                                        OFFICE OF WATER AND
                                                       HAZARDOUS MATERIALS
                                          CONSTRUCTION GRANTS
                                          PROGRAM REQUIREMENTS MEMORANDUM
                                          PRM No. 79-2
SUBJECT:  Royalties for Use of or for Rights in Patents

FROM:     John T. Rhett, Deputy Assistant AdministratorW^&n
          for Water Program Operations (WH-546)         / ">

                                                       '  rf>
          Frances E. Phillips, Associate General Counsel -^^
          Grants, Contracts and General AdministratTao_^A-Y§4.j

To:       Regional Administrators
          Attn:  Water Division Directors
 Purpose

     This memorandum sets forth Agency policy and procedures concerning
 the allowable cost associated with the procurement of the right to use,
 or the rights in, a patented product, apparatus or process which is
 necessary for the proper performance of a construction grant agreement
 or subagreement thereto.

 Discussion

     Questions have been raised about the allowability of royalties for
 the use of or for rights in patents.  Royalties are itemized costs or
 charges in the nature of patent royalties, license fees, patent or
 license amortization costs, or the like.  Such royalties are paid to
 a patent licensor either by the grantee or by a contractor, who in
 turn separately charges the grantee for this actual cost.

     This memorandum addresses the payment of royalties during the
 construction of the waste treatment works, as distinguished from the
 grantee's periodic payment of royalties for the right to operate under
 a patent.  Periodic payments are operating costs and are not within the
 purview of this memorandum.  Any part of a license fee, beyond a mere
 royalty, which can be attributed to services rendered by the licensor is
 also beyond the purview of this memorandum.

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     There are a.t least two occasions when the grantee may be  obligated
to pay a royalty for the use of or for rights  in patents:

     1.   The treatment works design includes  a patented  product,
apparatus, or process, or

     2.   A patented product, apparatus or process may be necessary for
the proper performance of a subagreement to a  construction grant.

Policy

     Royalties for the use of or for rights in patents, are allowable
costs within the limits of the principles and  procedures  contained herein.

Implementation

     1.   The grantee shall report to the EPA  Project Officer, with copies
for the EPA Regional Counsel, the following information,  if applicable,  for
each item of royalty in excess of $1,000 which the grantee will be
obligated to pay as an actual cost:

          a.   Name and address of licensor;

          b.   Date of license agreement;

          c.   Patent Numbers;

          d.   Brief description, including any part or model
     numbers of each contract product, apparatus or process
     which the separate royalty is payable;

          e.   Percentage or dollar rate or royalty per unit or
     other method of determining the royalty;

          f.   Unit price of contract items;

          g.   Number of units;

          h.   Total dollar amount of royalties; and

          i.   Current license agreements.

     2.   Prior to selecting a patented product, apparatus, or process for
the treatment works, on which an item of royalty must be paid, the grantee
must consider:

          a.   The necessity and reasonableness of the royalty.

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          b.   The royalty in any cost-effective analysis and as
     an evaluation factor in any bid analysis;

          c.   The use of performance type specifications for
     competitive procurement of a royalty-free product, apparatus
     or process; and

          d.   The use of Step 3 bid alternatives to each proposed
     patented product, apparatus, or process on which a royalty
     must be paid.

     3.   The grantee shall obtain and submit to the EPA Project Officer,
with copies for the EPA Regional Counsel, as soon as the patented product,
apparatus or process, on which a royalty must be paid, has been proposed
in the facilities plan or design, a copy of the proposed license agreement.

     4.   Royalties on a patent necessary for the proper performance of
the grant agreement or any subagreement thereto and applicable to grant
products, apparatus or processes, are allowable unless:

          a.   The Federal government has title to the patent or
     a royalty fee license with the right to sub-license the grantee;

          b.   The patent has been adjudicated to be invalid, or has
     been administratively determined to be invalid by an Agency
     of the Federal government;

          c.   The patent or license agreement is considered to be
     unenforceable by the grantee or an Agency of the Federal
     government;

          d.   The patent either has expired or will expire prior to the
     incurrence, by the grantee, of any possible infringement liability.

          e.   The grantee has received from a patent attorney, an opinion
     that the patent is either not infringed or invalid.

     5.   The grantee shall determine whether any of the circumstances of
paragraph 4 above exist.  The grantee may also be advised by EPA to
make a study of the validity, infringement or other aspects relating to
the enforceability of the patent.  All costs incurred by the grantee in
making the required determinations and studies will be allowable,
provided that prior approval of the anticipated costs has been received
from the EPA Project Officer, with the advice of the EPA Patent
Counsel, Office of General Counsel.  Written reports of such determinations
and studies shall be submitted to the EPA Project Officer, with copies
for the EPA Regional Counsel.

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     6.   If the implementation of the facilities  plan  would  obligate
the grantee to the payment of royalties for the use of  or rights  in
patents in excess of $5,000, the grantee's public  hearing,  held in
accordance with 40 CFR 35.917-5, shall include a discussion of the
proposed or selected patented product, apparatus or process,  and  afford
concerned commercial interests adequate opportunity to  express their
views.

     7.   Special care should be exercised by the  grantee in  determining
reasonableness of the royalties where they may have been arrived  at  as
a result of less than arm's length bargaining; e.g.:

          a.   Royalties to be paid to persons, including
     corporations, affiliated with the party requiring  payments
     of such royalty or license fee;

          b.   Royalties to be paid to unaffiliated parties,
     including corporations, under an agreement between the person
     requiring payment and the patent licensor which was entered
     into in contemplation that the EPA grant or grantee's  contract
     would be awarded; or

          c.   Royalties to be paid under an agreement  between
     the person requiring payment and the patent licensor which
     was entered into after the award of the grant by EPA or  the
     contract by the grantee.

     8.   In any case involving a patent formerly  owned by the grantee's
contractor, the amount of royalty allowed will not exceed the cost
which would have been allowed had the contractor retained title thereto.

     9.   The royalty shall not exceed the lowest  rate  at which the
licensor has offered or licensed a public or private entity.

     10.  When negotiating the royalty, the grantee should consider  the
technical and financial risk that they must assume and  the future
commercial benefits that may accrue to the licensor as  a result of  the
grantee's utilization of the patent.

     11.  EPA payment will normally not be made on a royalty until  Step 3.
Certain exceptions  should be allowed when the use  of a  patented product,
apparatus, or process is necessary for the proper  performance of the
grant agreement, or a subagreement, during Step 1  or 2.  The grantee's
license or other agreement whereby the grantee was obligated to pay
a royalty, must be  submitted with the request for  EPA payment.  If  the
grantee's payment is made to a licensee, a copy of that licensee's
agreement with its  licensor must be submitted with the  request
for EPA payment.

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SS
\
     UNITED STATES I
                      WASHINGTON, D C. 20460
5    UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       NOV 1 5 1978
                                         CONSTRUCTION GRANTS
                                         PROGRAM REQUIREMENTS MEMORANDUM
                                         PRM 79-3
 SUBJECT:   Revision  of Agency  Guidance  for Evaluation of Land
           Treatment Alternatives  Employing Surface Application
                n /AnvV-^X
 FROM:      Thomas\ G>-kl»mTng,  Assistant Administrator
           Water and Waote  Management   (WH-556)
                       i I         I
 TO:        Regional  Administrators  (Regions I thru X)
 I.    PURPOSE

      This  memorandum consolidates  and  updates Agency policy and guidance
 for evaluation of land  treatment alternatives using slow rate, rapid
 infiltration,  or  overland  flow  processes  in the Construction Grants
 Program,   It provides guidance  on  the  extent and nature of material to
 be  included  in facility plans to ensure that these land treatment alter-
 natives  have been given thorough evaluation.

 II.   DISCUSSION

      Evaluation of land treatment  in facilities planning has been
 mandatory  under PL 92-500  (the  Act) since July 1, 1974.  The EPA con-
 struction  grants  regulations as published in the Federal Register
 vol.  39, no. 29,  February  11, 1974, provided for coverage of land
 application  techniques  in  facility planning [35.917-1(d)(5)(iii)].
 Three land application  (land treatment) techniques were included in the
 description  of alternative techniques  for best practicable treatment
 published  in October 1975.  Many other technical information bulletins,
 PGM's, and PRM's  have been issued  as guidance for the evaluation of land
 treatment  alternatives  in  the Construction Grants Program.

      This  approach was  used to  provide the latest information available
 to  the Regional Offices with a  minimum of delay.  While the objective of
 timely distribution of  technical information and guidance has been
 achieved,  this piecemeal distribution  has also resulted in some disparities
 in  the interpretation and  implementation of policy.

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     Distribution of the Process Design Manual  for Land Treatment of
Municipal Wastewater (EPA 625/1-77-008) consolidates most of the technical
information on surface application approaches into a single reference
source.  This consolidation of technical information provides a sound
basis from which to establish more consistent and effective implementation
of Agency policy on land treatment alternatives using the slow rate,
rapid infiltration, or overland flow processes.

     In the process of coordinating with the Regions on specific projects
involving land treatment, OWPO staff has had the opportunity to review a
number of selected facility plans with respect to their handling of land
treatment alternatives.  In addition to providing information pertinent
to the specific projects being evaluated, this review has been used to
determine what, if any, changes in guidance are needed to achieve more
consistent and complete evaluation of land treatment alternatives.
Areas being considered include technical assistance and staff training
as well as revision of guidance documents.

     The results of this review to date show that land treatment technologies
have had and continue to have inadequate assessment in many instances.
In addition and for substantially more cases, detailed coverage of land
treatment has missed the mark for a variety of reasons.  Three of the
frequently encountered reasons are:  (1) overly conservative and,
consequently, costly design of slow rate (irrigation) systems, (2)
failure to consider rapid infiltration as a proven and implementable
land treatment alternative, and (3) provision for a substantially higher
and more costly level of preapplication treatment than is needed to
protect public health and ensure design performance.

     Such inadequate assessment of land treatment alternatives has led
to rejection of land treatment in cases where it appears that a thorough
assessment would identify less costly alternatives utilizing the recycling
and reclamation advantages of land treatment.  Consistent with the
revised construction grants regulations resulting from enactment of
PL 95-217, award of Step 1 grants and subsequent approval of facility
plans must ensure that the selected alternative is cost-effective and
emphasizes energy conservation and recycling of resources.  This is
important both to meet the statutory requirements of the law and to
provide the maximum pollution control benefits attainable with the funds
allocated to the Construction Grants Program.

     The Administrator's memorandum of October 3, 1977, emphasizes that
the Agency grants program will include thorough consideration of land
treatment as compared to conventional treatment and discharge to surface waters,

     This program requirements memorandum is designed to consolidate the
existing base of guidance into a uniform but still flexible set of
guidelines for slow rate, rapid infiltration, and overland flow systems.
This should improve our capability to effectively and consistently
implement the Agency policy on recycling and reclamation through land
treatment alternatives.

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III. POLICY
     The Administrator's memorandum of October 3, 1977 (Attachment A)
spells out three major points of policy emphasis on land treatment of
municipal wastewater as follows:

     1.   The Agency will press vigorously for implementation of land
          treatment alternatives to reclaim and recycle municipal
          wastewaters.

     2.   Rejection of land treatment alternatives shall be supported  by
          a complete justification (reason for rejection shall  be well
          documented in the facilities plan).

     3.   If the Agency deems the level of preapplication treatment to
          be unnecessarily stringent, the costs of achieving the excessive
          level of preapplication treatment will not be considered as
          eligible for EPA cost sharing when determining the total cost
          of a project.

     These points highlight the Agency's role in implementing the legislative
mandates of PL 92-500 and PL 95-217.  PL 92-500 required EPA to encourage
waste treatment management that recycles nutrients through production  of
agriculture, silviculture, or aquaculture products.  PL 95-217 re-
emphasizes the intent to encourage innovative/alternative systems including
land treatment with many tangible incentives including (1) the "115%"
cost preference, (2) 85% Federal grants with the specific set asides,
(3) the eligibility of land for storage, and (4) 100% grants for modification
or replacement if project fails to meet design criteria.  It is imperative
that the Agency moves positively and uniformly to implement land treatment
which is clearly identified as an innovative/alternative technology
which recycles nutrients and conserves energy in conjunction with wastewater
management.

IV.  IMPLEMENTATION

     The guidance detailed in this PRM will apply to all facility
planning grants (Step 1) awarded 30 days after the date of this PRM.   In
addition it should be applied on a case-by-case basis to those unapproved
facility plans for which it appears that further assessment of land
treatment alternatives could result in: (1) the timely and effective
implementation of a reclamation and recycling alternative; and (2)
benefits to the applicant while making better use of EPA construction
grant funds.

     A.   Action Required

     Facility plans in which land treatment alternatives are eliminated
with only cursory coverage will be rejected as not fulfilling Agency
requirements.  A facility plan should not be approved until  the coverage
of these land treatment alternatives satisfies the guidance detailed

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below.  As a minimum, the coverage of these land treatment processes
will include assessment of at least one slow rate (irrigation)  alternative
and one rapid infiltration alternative.  Coverage of an overland flow
alternative will be optional (case-by-case) until additional  information
which is presently being developed furnishes design information for
routine construction grant implementation.   The technical  design basis
of these land treatment alternatives will  be in accordance with the "EPA
Design Manual on Land Treatment" (EPA 625/1-77-008), and "Costs of
Wastewater Treatment by Land Application"  (EPA 430/9-75-003).   To be
adequate, coverage of these land treatment  alternatives shall  include
enough detail to support development of costs, except in those  cases
where thorough screening for available sites shows no suitable  sites
within economic transport distances.  Designs for slow rate systems and
rapid infiltration systems will  include preapplication treatment which
is in accord with the discussion of preapplication in the Design Manual
(pages 5-26 thru 5-30) and summarized in Attachment B.

     A universal requirement to reduce biochemical oxygen demand and
suspended solids to 30 mg/1 and to disinfect to an average fecal coliform
count of 200/100 ml will be considered as excessively stringent preappli-
cation treatment if specified for all land  treatment alternatives.
States shall be requested to reconsider use of such universal  and
stringent preapplication treatment requirements when it is established
that a lesser level of preapplication treatment will protect the public
health, protect the quality of surface waters and groundwater,  and will
ensure achievement of design performance for the wastewater management
system.

     States should be encouraged to adopt standards which avoid the use
of uniform treatment requirements for land  treatment systems,  including
a minimum of secondary treatment prior to application to the land.  The
EPA guidance on land treatment systems specifies ranges of values and
flexible criteria for .evaluating factors such as preappl ication treatment,
wastewater application rates and buffer zones.  For example, simple
screening or comminution may be appropriate for overland flow systems in
isolated areas with no public access, while extensive biochemical oxygen
demand and suspended solids control with disinfection may be called for
in the case of slow rate systems in public  access areas such as parks or
golf courses.

     B.   Specific Guidance

     The scope of work for preparation of a facility plan will  provide
for thorough evaluation of land treatment alternatives.  This evaluation
of land treatment alternatives may be accomplished in a two-phase approach.
Such a two-phase approach would provide flexibility for establishing
general site suitability and cost competitiveness before requiring
extensive on-site investigations.  The first phase of the two-phase
approach would include adequate detail to establish whether or not sites
are available, wastewater quality is suitable, and land treatment is

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cost competitive.   The second phase would include in-depth investigation
of sites and the refinement of system design factors to complete all  of
the requirements for preparing a facility plan.   Approval  of a facility
plan will ensure that the following details for  evaluation of land
treatment are clearly delineated in the plan.

     1.   Site Selection.   A regional  map shall  be included to show  the
     tracts of land evaluated as probable land treatment sites.  The
     narrative discussion of site evaluation should detail the reasons
     for rejection of tracts as well as the availability of tracts used
     in the preliminary design for land treatment alternatives.
     Table 2-2 of the Design Manual (Attachment  C) delineates general
     site characteristics for land treatment alternatives  which the
     narrative should cover in detail.

          Categorical elimination of land treatment for lack of a
     suitable site (during phase one of a two-phase evaluation) should
     be documented with support materials showing how the  applicant made
     the determination.  For example, elimination for lack of suitable
     soils should be documented with soils information from the area
     Soil Conservation Service representatives or other soil scientists
     who may be available.  Any categorical elimination of land treatment
     should demonstrate that additional engineering necessary to overcome
     site constraints would make the alternative too costly to fund in
     accordance with the cost-effectiveness requirements of the law.

     2.   Loading Rates and Land Area.    The values for these parameters
     evaluated in the facility plan should concur with the technically
     established ranges for application rates and land area needed for
     a system.  The cost of land treatment is sensitive to these factors
     and overly conservative design unduly inflates the cost of technically
     sound alternatives.  Designs in a  facility  plan should fall within
     the general ranges given in Table  2-1 and Figure 3-3  of the Design
     Manual.  Designs falling outside of these ranges should do so only
     because of extenuating circumstances peculiar to the  site.  These
     extenuating circumstances should be discussed in detail.  Table  2-1
     (Attachment B) is recommended as a quick reference for determining
     that designs are reasonable.

     3.   Estimated Costs.  The estimated costs  of land treatment
     alternatives should be comparable  to those  obtained by using
     EPA 430/9-75-003 pages 59-127, updated using local construction
     cost indices.  Cost estimates generated by  using this source are
     being compared to actual costs for recently constructed facilities.
     If this comparison shows that ^;he  curves in EPA 430/9-75-003 need
     adjustment, corrected curves will  be made available as necessary.

          Elimination of land treatment in the cost-effective analysis
     because of land costs or transport costs should be documented by
     means of an actual evaluation for  the cost  of land or cost of

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transport. This evaluation should show clearly that the cost of
land or the cost of transport does rule out land treatment using
the approach shown in "Cost-Effective Comparison of Land Application
and Advanced Wastewater Treatment"  (EPA 430/9-75-016).  Examples
on pages 23-24 (Attachment D) of that source show how to make these
comparisons.

4.   Preapplication Treatment.  The level  of preapplication treatment
prior to storage or actual application to the land should be in
accordance with the guidance given for screening wastewaters to be
applied to the land in the Design Manual.   A universal  minimum of
secondary treatment for direct surface discharge as published in
the August 17, 1973 Federal Register and later modified (Federal
Register July 26, 1976 and October 7, 1977) will not be accepted
because it is inconsistent with the basic concepts of land treatment.
Imposition of a defined discharge criteria at an intermediate point
in a treatment train is, in most instances, an unnecessarily
stringent preapplication treatment requirement as stated in the
Administrator's memorandum dated October 3, 1977.  Criteria imposed
at an intermediate point should be for the purpose of ensuring
overall system performance in the same context that primary sedi-
mentation precedes biological secondary treatment by trickling
filter or activated sludge processes.

     Assessment of the level of preapplication treatment proposed
should be in accord with the discussion in Section 5.2 (pages 5-26
to 5-30) of the Design Manual.  Guidelines for evaluating the level
of preapplication for slow-rate, rapid infiltration, and overland
flow systems in relation to existing state regulations, criteria
and guidelines are included in Attachment E.  Preapplication
treatment criteria more restrictive than the ranges of treatment
levels described in Appendix E will be considered unnecessarily
stringent unless justified on a case-by-case basis.  When the more
stringent preapplication treatment criteria cannot be justified,
the EPA will consider that portion of the project to meet'EPA
guidance as eligible for Agency funding.  The costs of the additional
preapplication increment needed to meet more stringent preapplication
treatment requirements imposed at the state or local level  would  be
ineligible for Agency funding and thus would be paid for from state
or local funds.

5.   Environmental Effects.  Assessing the environmental effects  of
land treatment alternatives involves a somewhat different concept
than for conventional treatment and discharge to surface waters.
The assessment for land treatment shdtild include emphasis on the
quality and quantity of both surface and groundwater resources; on
energy conservation as well as energy demands; on pollutant (resource)
recycling as well as chemical needs, and on land use in the overall
coverage of environmental effects.

-------
          The assessment should determine that the proposed land treatment
     system is in accord with Agency policy on groundwater protection.
     The Agency policy for groundwater resulting from land treatment
     systems is set forth in the criteria for Best Practicable Waste
     Treatment Technology (BPWTT).   These criteria specify that the
     groundwater resulting from a land treatment system must meet different
     requirements depending on current use and quality of the existing
     groundwater.  The basic thrust of these criteria is to protect
     groundwater for drinking water purposes by specifying adherence to
     the appropriate National Primary Drinking Water Standards.   The
     BPWTT criteria further require land treament systems which are
     underdrained or otherwise designed to have a surface discharge  to
     meet the standards applicable  to any treatment and discharge
     alternative.  The criteria are fully described in 41 FR 6190
     (February 11, 1976) which is attached as Appendix F.

          An overall Agency policy  statement on groundwater protection
     is scheduled for issuance in the near future.   The draft Agency
     groundwater policy is generally consistent with present criteria
     for land treatment systems.  However, any revisions to the present
     guidance on site evaluation and system monitoring as a result of
     this statement will have to be accounted for as they are developed.
     In the meantime, existing guidance should be used to evaluate
     groundwater influences.
Attachments

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V.   REFERENCES

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

     October 3, 1977 memorandum from Administrator:"EPA  Policy  on
     Land Treatment of Municipal  Wastewater".

     "Cost of Wastewater Treatment by Land Application"  Technical  Report
     EPA-430/9-75-003 June, 1975.

     "Cost-Effective Comparison of Land Application  and  Advanced
     Wastewater Treatment"  Technical Report EPA-430/9-75-016,
     November, 1975.

     Secondary Treatment Information Federal  Register  38(129),
     August 17,, 1973, pgs  22298-22299.

     Secondary Treatment Information Federal  Register  41(1440,
     July 26, 1976, pp. 30786-30789.

     Suspended Solids Limitations Federal  Register 42(195),
     October 7, 1977, pp. 54664-54666.

     Water Quality Criteria 1972  EPA-R3-73-033, March 1973,  pp. 323-366.

     Quality Criteria for Water,  USEPA, July,  1976.

     Alternative Waste Management Techniques  for Best  Practicable
     Waste Treatment  EPA 430/9-75-013, October, 1975.

     Final Construction Grants Regulations  Federal  Register  39, No. 29
     February 11, 1974.

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VI.  ATTACHMENTS

     Attachment A   Administrator's Oct. 3, 1977 memo "EPA Policy on
                    Land Treatment of Municipal  Wastewater"
     Attachment B   Table 2-1 from Design Manual
     Attachment C   Table 2-2 from Design Manual
     Attachment D   Pages 23-24 from EPA 430/9-75-016
     Attachment E   Guidance for assessing level of preapplication
     Attachment F   Alternative Waste Management Techniques (BPWTT)

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                                                            ATTACHMENT A
          UNIT£D STATES ENVIRONMENTAL PROTECTION AGENCY

                           WASHINGTON. D.C.  20460

                                 OCT   3 1977
                                                                 THE ADMINISTRATOR
SUBJECT:  EPA Policy on Lan
          Wastewater

FROM:     The Administr

TO:       Assistant Administratork and
          Regional Administrators  (Regions I-X)


     President Carter's recent Environmental Message to the Congress
emphasized the design and construction of cost-effective publicly owned
wastewater treatment facilities that encourage water conservation as
well as adequately treat wastewater.  This serves to strengthen the
encouragement under the Federal Water Pollution Control Act Amendments
of 1972 (P.L. 92-500) to consider wastewater reclamation and recycling by
land treatment processes.

     At the time P.L. 92-500 was enacted, it was the intent of Congress
to encourage to the extent possible the development of wastewater manage-
ment policies that are consistent with the fundamental ecological principle
that all materials should be returned to the cycles from which they were
generated.  Particular attention should be given to wastewater treatment
processes which renovate and reuse wastewater as well  as recycle the
organic matter'and nutrients in a beneficial manner.  Therefore, the
Agency will press vigorously for pub!icly owned treatment works to
utilize land treatment processes to reclaim and recycle municipal wastewater.

RATIONALE

     Land treatment systems involve the use of plants  and the soil to
remove previously unwanted contaminants from wastewaters.  Land treatment
is capable of achieving removal levels comparable to the best available
advanced wastewater treatment technologies while achieving additional
benefits.  The recovery and beneficial reuse of wastewater and its
nutrient resources through crop production, as well as wastewater
treatment and reclamation, allow land treatment systems to accomplish
far more than most conventional treatment and discharge alternatives.

-------
     The application of wastewater on land is a practice that has  been
used for many decades; however, recycling and reclaiming wastewater that
may involve the planned recovery of nutrient resources as part of  a
designed wastewater treatment facility is a relatively new technique.
One of the first such projects was the large scale Muskegon,  Michigan,
land treatment demonstration project funded under the Federal Water
Pollution Control Act Amendments of 1966 (P.L. 84-660), which began
operations in May 1974.

     Reliable wastewater treatment processes that utilize land treatment
concepts to recycle resources through agriculture, silviculture and
aquaculture practices are available.  The technology for planning,
designing, constructing and operating land treatment facilities is
adequate to meet both 1983 and 1985 requirements and goals of P.L. 92-
500,

     Land treatment is also presently in extensive use for treatment of
many industrial wastewaters, particularly those with easily degraded
organics such as food processing.  Adoption of suitable in-plant pretreatnent
for the ~enoval of excessive metals and toxic substances would expand
f>e potential for land treatment of industrial wastewater and further
enhance the potential for utilization of municipal wastewater and  sludges
far agricultural purposes.

APPROACH

     Because land treatment processes contribute to the reclamation and
recycling requirements of P.L. 92-500, they Should be preferentially 'j
considered as an alternative wastewater management technology.  Such
consideration is particularly critical for smaller communities.  While
it  is recognized that acceptance* is not universal, the utilization of}
land treatment systems has the potential for saving billions of dollars.
This will benefit not only the nationwide water pollution control  program,
but will also provide an additional mechanism for the recovery and   b
recycling of wastewater as a resource.

     EPA currently requires each applicant for construction grant funds
to make a conscientious analysis of wastewater management alternatives
with the burden upon the applicant to examine all available alternative
technologies.  Therefore, if a method that encourages water conservation.
wastewater reclamation and reuse is not recommended,  the applicant should
be  required  to provide complete  justification for the rejection of"
land treatment.

     Imposition of stringent wastewater  treatment requirements prior to
land application nas quite often nullified the cost-effectiveness of
land treatment processes  in the  past.  We must ensure  that appropriate
Federal , State and local  requirements and regulations are imposed at the

-------
                                   3

proper point in the treatment system and are not used in a  manner  that
may arbitrarily block land treatment projects.   Whenever States  insist
u_por placing unnecessarily stringent preapplica tio_n treatment require-
ments upon land treatment, such as requiring EPA secondary  effluent
quality in all  cases prfor to application on the land,  the  unnecessary
wastewater treatment facilit^es^will not be funded by EPA.   This  should
encourage the States to re-examine-and revise their criteria, and  so
reduce the cost burden, especially to small communities, for construction
and operation of unnecessary or too costly facilities.   The reduction of
potentially toxic metals and organics in industrial discharges to  municipal
systems often is critical to the success of land treatment.  The  development
and enforcement at the local level of pretreatment standards that  are
consistent with national pretreatment standards should  be required as an
integral  part of any consideration or final selection of land treatment
alternatives.  In addition, land treatment alternatives must be  fully
coordinated with on-going areawide planning under section 208 of  the
Act.  Section 208 agencies should be involved in the review and  development
of land treatment options.

     Research will be continued to further improve criteria for  preappli-
cation treatment and other aspects of land treatment processes.   This
will add to our knowledge and reduce uncertainties about health  and
environmental factors.  I am confident,  however, that land  treatment  of
municipal wastewaters can be accomplished without adverse effects  on
human health if proper consideration is  given to design and management
of the system.
   n
INTER-OFFICE COORDINATION

   3  'The implementation of more recent mandates from the Safe Drinking
Viatel Act (P.L. 93-532), the Toxic Substances Control Act (P.L.  94-469),
and She Resource Conservation and Recovery Act of 1976  (P.L. 94-580)
must1be closely coordinated with the earlier mandate to recycle  wastes
and fully evaluate land treatment in P.L. 92-500.  Agencywide coordination
is especially important to the proper management of section 201  of P.L.
92-500, because the construction and operation of thousands of POTW's
involve such a  broad spectrum of environmental  issues.   A concerted
ef-fort must be  made to avoid unilateral  actions, or even the appearance
of unilateral actions, which satisfy a particular mandate of one  Act
while inadvertently conflicting with a major Agency policy  based  upon
another Act.  The intention of P.L.  92-500, as it concerns  land  treatment,
is compatible with the pertinent aspects of more recent environmental
1egislation.

ACTION REQUIRED

     Each of you must exert maximum effort to ensure that the actions of
your staffs reflect clearly visible encouragement of wastewater  reclamation
and recycling of pollutants through land treatment processes in  order to
move toward the national goals of conserving water and  eliminating the
discharge of pollutants in navigable waters by 1985.

-------
     This policy will  apply to all  future municipal  construction grant
activities, as well as all  current  grant applications  in  the Step  1
category that have not been approved as  of this  date.   Detailed information
and guidance for implementation of  this  policy  is  under preparation and will
be issued in the near future.

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                                                  ATTACHMENT D
Example No. 2
Requirements.  An  existing 20-mgd activated sludge plant  is

required to upgrade  its  effluent quality to meet the  following

criteria:

                         BOD -  10 mg/1

                         SS  -  10 mg/1

                         N   -   3 mg/1

                         P   - 0.5 mg/1



Alternatives.  It  is evident from a review of Table  2 that

the only methods of  treatment capable of providing the neces-

sary degree of treatment are AWT-4 and irrigation.   In this
example, the cost  of AWT-4 is compared with that of  irrigation

under varying conditions of conveyance distance  (Case A)  and

land costs  (Case 3).  Since secondary treatment  is existing,
activated sludge or  aerated lagoon will not be necessary.
Case A  -  Consider a moderately favorable site  for
           irrigation, a distance of 5 miles away  from
           the  existing treatment plant site.  How
           much can be paid for land and have  the
           irrigation system competitive with  the
           AWT-4 system?

              Table  12.  COST COMPARISON FOR CASE A
Treatment •
.T.ethod
AWT-4

Irrigation




Cost component
AWT-4
Existing activated
sludqe adjustment
Total
Irrigation system
Aerated lagoon
adjustment
Land cost
Subtotal
Amount available
for land =• (28.0-13.0)
Total area, acres
Cost
C/1,000 gal. Source
44.
-(16.
28.
24.
-(4.
-IS.
13.
15.
4 ,300
3
0)
0
0
3)
7)
0
0

Figure
Figure
Figure
Figure
Table

Table
1
1
1
1
7

7
                    Allowable cost/acre
                     20 mqd (15»/1,000 gal.MlO3)
                       (0.0154)(4,300 acres)
4,500
                               23

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Conclusions.   Under the assumed site conditions for the
irrigation system, as much as $4,500 per acre could be paid
for land and have the irrigation system competitive with
AWT-4.
Case B  -  Consider a moderately favorable irrigation site
           at a cost of $2,000 per acre.  How far away from
           the existing treatment plant could the site be
           and have the irrigation system competitive with
           AWT-4?
             Table 13.  COST COMPARISON FOR CASE B
Treatment
method
AWT— 4-
Irrigation




Cost component
From Case A
Irrigation system
Aerated lagoon adjustment
Conveyance cost
Subtotal
Amount available for
conveyance = (28.0 - 18.0)
Allowable distance, miles
Cost
C/1,000 gal
28
24
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10
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.0
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-3)
.7)
.0
.0

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Figure
Figure
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Table
	
Table

1
1
1
7

4
Conclusions.  Under the assumed site conditions  for  the
irrigation  system, wastewater  could be  conveyed  as  far as
33 miles and have irrigation be competitive with AWT-4.
Special conditions such as river or highway crossings and
easements may add substantial  costs and reduce this  distanc
somewhat.
                               24

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                                                       ATTACHMENT E


       Guidance for Assessing Level  of Preapplication Treatment


I.   Slow-rate Systems (reference sources include Water Quality Criteria
     1972, EPA-R3-73-003, Water Quality Criteria EPA 1976,  and  various
     state guidelines).

     A.    Primary treatment - acceptable for isolated locations with
          restricted public access and when limited  to crops  not for
          direct human consumption.

     B.    Biological treatment by lagoons or inplant processes  plus
          control of fecal coliform count to less than 1,000  MPN/100  ml
          acceptable for controlled agricultural irrigation except for
          human food crops to be eaten raw.

     C.    Biological treatment by lagoons or inplant processes  with
          additional BOD or SS control as needed for aesthetics plus
          disinfection to log mean of 200/100 ml (EPA fecal coliform
          criteria for bathing waters) - acceptable  for application in
          public access  areas such as parks and  golf courses.

II.  Rapid-infiltration  Systems

     A.    Primary treatment - acceptable for isolated locations with
          restricted public access.

     B.    Biological treatment by lagoons or inplant processes  - acceptable
          for urban Icoations with controlled public access.

III.  Overland-flow Systems

     A.    Screening or comminution - acceptable  for  isolated  sites with
          no public access.

     B.    Screening or comminution plus aeration to  control odors  during
          storage or application - acceptable for urban  locations  with
          no public access.

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              ATT'iCIIflEilT F
 WEDNESDAY, FEBRUARY 11, 1976
PART IV:
ENVIRONMENTAL
   PROTECTION
     AGENCY
 ALTERNATIVE WASTE
   MANAGEMENT
 TECHNIQUES FOR BEST
 PRACTICABLE WASTE
     TREATMENT
      Supplement

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 6190
                                                           NOTICES
    ENVIRONMENTAL PROTECTION
                AGENCY
                [FRL 482-6]

 ALTERNATIVE   WASTE   MANAGEMENT
    TECHNIQUES FOR BEST PRACTICABLE
    WASTE TREATMENT
               Supplement
   Pursuant to Section 304 (d) (2)  of  the
 Federal  Water  Pollution Control Act
 Amendments  of  1972  (Pub.  L.  92-500),
 the  Environmental  Protection Agency
 (EPA), gave notice on October 23, 1975
 (40 FR 49598)  that  Alternative  Waste
 Management Techniques for Best Prac-
 ticable Waste Treatment has been pub-
 lished  In  final  form.  The final  report
 contains the criteria for best practicable
 waste treatment technology  and  infor-
 mation on  alternative waste manage-
 ment techniques.
   The criteria for Best Practicable  Waste
 Treatment  for Alternatives   employing
 land application  techniques  and land
 utilization  practices required  that the
 ground water resulting from  land  appli-
 cation of wastewater meet the standards -
 for chemical quality  [Inorganic chemi-
 cals] and pesticides [organic  chemicals]
 specified in  the EPA Manual for Evalu-
 ating Public Drinking Water Supplies in
 the case of groundwater  which poten-
 tially can be  used  for drinking  water
supply. In addition to the standards for
 chemical  quality  and  pesticides,  the
bacteriological standards [microbiologi-
 cal contaminants] specified in the EPA
Manual for  Evaluating Drinking Water
 Supplies were  required hi the  case of
 groundwater which is presently  being
 used as a  drinking water supply. The
pertinent section of the EPA Manual for
Evaluating Public, Drinking Water Sup-
plies was included as Appendix D of the
Alternative  Waste Management Tech-
niques for Best Practicable Waste Treat-
ment report.
  Also specified in the Criteria for Best
Practicable  Waste Treatment is   that
 "any chemical, pesticides,  or bacterio-
logical standards for drinking  water sup-
ply sources hereafter issued by EPA shall
automatically apply in lieu of  the stand-
ards  in the EPA Manual for Evaluating
Public  Drinking  Water Supplies.  The
National   Interim   Primary   Drinking
Water  Regulations  were  published  In
final form on December 24,  1975.
  In consideration  of  the  foregoing,
Chapter H and Appendix D of Alterna-
tive Waste Management Techniques for
Best Practicable Waste Treatment shall
read as follows.

  Dated: February 4,1976.
                 RUSSELL E. TRAIN,
                       Administrator-
               CHAPTER H
    CBITEBIA FOB BEST PRACTICABLE WASTE
               TREATMENT
  Applicants  for construction grant  fundc
authorized by Section 201 of the Act must
have evaluated alternative waste treatment
management  techniques and selected  the
technique which will provide for the appli-
  cation of best practicable  waste treatment
  technology. Alternatives must be considered
  In three broad broad categories: treatment
  and discharge Into  navigable waters, land
  application and  utilization practices,  and
  reuse of treated wastewater. An alternative
  Is "best practicable"  If It Is determined
  to be cost-effective In accordance with the
  procedures set forth In 40  CFR  Part 35
  (Appendix  B  to this document) and if  It
  will  meet the  criteria set forth below.
   (A)  Alternatives  Employing  Treatment
  and  Discharge Into Navigable Waters. Pub-
  licly-owned treatment  works  employing
  treatment and discharge Into navigable wa-
  ters  shall, as a TiiniTrmm  achieve the degree
  of treatment attainable by the application
  of secondary treatment as denned In 40 CFR
  133'  (Appendix C). Requirements for addi-
  tional treatment, or  alternate  management
  techniques, wUl depend on several  factors,
  Including availability of cost-effective tech-
  nology, cost and the specific characteristics
  of the affected receiving water body.
   (B) Alternatives Employing  Land  Appli-
  cation Techniques   and  Land Utilization
  Practices. Publicly-owned treatment works
  employing land application techniques  and
 land utilization practices which result In a
 discharge to navigable waters shall meet the
  criteria for treatment and discharge under
  Paragraph (A)  above.
   The ground water resulting from the land
 application of  wastewater, including the af-
 fected native ground water, shall meet the
 following criteria:
   Cage 1: The  ground water can potentially
 be used for drinking water supply.
   (1) The maximum  contaminant levels for
 Inorganic chemicals and organic chemicals
 specified  in the National' Interim  Primary
 Drinking  Water Regulations (40 CFR 141)
  (Appendix D) for drinking water supply sys-
 tems should not be exceeded except  as indi-
 cated below (see Note  1).
   (2) If  the  existing  concentration of  a
 parameter exceeds  the  maximum contami-
 nant levels for-Inorganic chemicals or organic
 chemicals, there should not be an increase
 In the concentration  of that parameter due
 to land application of wastewater.
   Case. II:  The ground water is used  for
 drinking water supply.
   (1) The criteria for Case I should be met.
   (2) The maximum microbiological con-
 taminant  levels for drinking water  supply
 systems specified  In  the  National  Interim
 Primary  Drinking  Water Regulations  (40
 CFR  141) (Appendix  D) should not be  ex-
 ceeded In cases where the ground water Is
 used  without disinfection (see Note 1).
   Case rH:  Uses other than drinking water
 supply.
   (1) Ground water criteria should be estab-
 lished by  the Regional Administrator based
 on the present or potential use of the ground
 water.
   The Regional  Administrator In conjunction
 with  the  appropriate  State officials and the
 grantee shall   determine on  a site-by-site
.basis the  areas, in the vicinity of a  specific
 land  application site  where  the criteria In
 Case  I, H. and m shall apply. Specifically
 determined shall be the monitoring require-
 ments appropriate for the project site. This
 determination shall be made with the objec-
 tive of protecting the ground water  for use
 as a  drinking  water supply and/or  other
 designated uses as appropriate and prevent-
 ing Irrevocable  damage to ground water. Re-
 quirements shall Include provisions for mon-
 itoring the effect on the native ground water.
   (C)  Alternatives Employing Reuse. The
 total quantity of any pollutant In the effluent
 from  a reuse project  which Is  directly at-
 tributable to the effluent  from a publicly-
 owned treatment works shall not exceed that
 which would have been  allowed under Par-
 agraphs (A)  and (B) above.
   NOTE 1.—Any amendments of the National
 Interim Primary Drinking Water Regulations
 and any National Revised Primary Drinking
 Water Regulations hereafter Issued by EPA
 prescribing standards  for public water sys-
 tem relating to inorganic chemicals, organic
 chemicals  or microbiological contamination
 shall automatically apply In the same man-
 ner as the National Interim Primary Drink-
 ing Water Regulations.

                APPENDIX D
        GROUND  WATER  REQUIREMENTS
   The  following,  maximum  contaminant
 levels contained in the National Interim Pri-
 mary Drinking Water  Regulations (40 CFR
 141) are reprinted for convenience and clar-
 ity. The National Interim Primary Drinking
 Water Regulations were  published in final
 form In the FEDERAL  REGISTER on  Decem-
 ber 24, 1975.  In  accordance with the criteria
 for best practicable waste treatment, 40 CFR
 141 should .be consulted in Its entirety when
 applying the standards contained therein to
 wastewater  treatment  systems employing
 land appplicatlon techniques and land uti-
 lization practices.
   Maximum  contaminant  levels  for  Inot-
 ganiff chemicals. The following are the max-
 imum  levels of  Inorganic chemicals  other
 than fluoride:
                                 Level
                              (milligrams
 Contaminant:                  per liter)
    Arsenic 	    0.05
    Barium	    1.
    Cadmium	    0. 010
    Chromium  	    0.05'
    Lead  	    0.05
    Mercury  	    0.002
    Nitrate (aaN)	   10.
    Selenium	    0.01
    Silver	   0.05

  The  maximum  contaminant  levels for
fluoride are:
Temperature
degrees
Fahrenheit «

53.8 to 58.3 	
58.4 to 63.8 	
63.9 to 70.6 	
70.7 to 79.2.'.
79.3 to 90.5 	
Degrees Celsius
12 apd below .. 	
... 12.1 to 14.6 	
... 14.7tol7.a 	
... 17.7 to 21,4 	 	
21.5 to 28.2 	
...-28.3 to 32.5 	
•Level
(milligrams
-per liter)
2.4
2.2
2.0
1.8
1.6
1.4
         average of the  mftriTmiTn dally air tem-
perature.
  Maximum contaminant levels for organic
chemicals. The following are the maximum
contaminant levels for organic chemicals:
                                 Level
                               (milHorom
(a) Chlorinated hydrocarbons:   per liter)
    Endrln (1,2,3,4,10,10-Hexachloro-
      6,7 - epoxy - l,4,4a,S,6,7,8,8a-oc-
      tahydro-I,4-endo,endo -  5,8-dl-
      methano naphthalene)	0.0002
    Undane (1,2,3,4,5,6 - Hexachloro-
      cycloh'exane, gamma Isomer) — 0. 004
    Methoxychlor  (1,1,1-Trlchloro-g,
      2-bls [p-methoxyphenyl] eth-
      ane)  	0.1
    Toxaphene (CltH,0Cl, - Technical
     .chlorinated camphene, 67 to 69
     percent chlorine.)	0.006
(b) Chlorophenoxys:
    2,4-D (2,4-Dlchlorophenoxyacetlc
     acid) 	0.1
    2,4,5-TP Silvex (2,4,5-Trlchloro-
     phenoxyproplonic acid)	0.01
                              FEDERAb REGISTER,  VOL. 41, NO.  29—WEDNESDAY,  FEBRUARY 11,  197*

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                                                           NOTICES
                                                                               6191
  Maximum  microbiological  contaminant
levels. The maximum contaminant levels for
conform bacteria,  applicable to  community
water  systems" and  non-community  water
systems, are as follows:
  (a) When the membrane niter technique
pursuant  to I 141.21 (a)  is used, the number
of conform bacteria  shall not exceed any of
the following :
  (1) One per 100 milliliters as the  arith-
metic  mean of  all  samples  examined per
month pursuant to §  141.21 (b) or (c);
  (2) Pour per 100 milliliters In more than
one sample when less than 20 are examined
per month; or
  (3) Four per 100 milliliters in more than
five percent of the samples when 20 or more
are examined per month.
  (b)  (1)   When  the  fermentation  tube
method and  10 milliliter standard portions
pursuant to  § 141.21 (a)  are  used, collform
bacteria shall not be  present in any of the
following:
  (1) More than 10 percent of the portions in
any  month pursuant to § 141.21  (b) or (c);
  (ii) Three  or more portions in more than
one  sample  when less than 20 samples are
examined per month; or
  (ill)  Three or more  portions in more than
Sve  percent  of the samples when 20 or more
samples are examined per month,
  (2) When  the  fermentation tube method
and  100 mllllliter standard portions pursuant
to § 141.21 (a) are used,  collform  bacteria
shall not be present In'any of the following:
  (i)  More than 60 percent of the portions
in any  month  pursuant to 5 141.21  (b) or
(c);
  (ii) Five portions In more than one sample
when less than five samples are examined
per month; or
  (ill) Five portions In more than 20 percent
of the samples when flve  or more samples
are examined per month.
  (c) For community  or  non-comnumlty
systems that are required to sample at a rate
of less than 4  per month, compliance with
Paragraphs (a), (b) (l),or (2) shall be based
upon sampling  during a 3 month period, ex-
cept  that, at the discretion of the State,
compliance may  be based  upon  sampling
during a one-month period.

  [FB Doc.75-3932 Filed 2-10-^6;S:4i> am]
                              FEDERAL REGISTER. VOL 41, NO. 29—WEDNESDAY, FEBRUARY 11, 1976

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      UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                        WASHINGTON, DC  20460
                           NCV 1 7 1978
                                                       OFFICE OF WATER AND
                                                       HAZARDOUS MATERIALS
                                        Program Requirements Memorandum
                                        PRM No. 79-4

Subject:  Discount Rate

From:     John T.  Rhett,  Deputy Assistant .Administrator Ogjfc* f */S
          for Water Program  Operations  (WH 546)         p

To:       Water Division  Directors
          Regions  I -  X


     Enclosed is a copy of the notice published by the Water Resources
Council of the new discount  rate of  6 7/8 percent.  The new rate was
effective as of October 1, 1978.  Cost-effectiveness analyses in new
facility planning  starts  are to be based upon the rate of 6 7/8 percent.

     We have arranged  to  distribute  the enclosed information to consulting
engineers through  the  newsletter of  the Consulting Engineers Council.
Please distribute  copies  of  this information to the States for use in
their programs.

Enclosure

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FEDERAL REGISTER, VOL 43,  NO. 209—FRIDAY,  OCTOBER 27, 1978
        [84  0-01-M]                 50276

            WATER RESOURCES COUNCIL

         PRINCIPLES AND STANDARDS FOR PLANN'NG
           WATER AND RELATED LAND RESOURCES
                 Chonge in Dttcount Rote

          Notice is hereby given that the inter-
        est rate to be used by Federal agencies
        in the formulation and evaluation of
        plans for water and related land  re-
        sources is 7"/8  percent  for the period
        October 1, 1978-through and including
        September 30, 1979.
          The  rate has been computed in  ac-
        cordance  with Chapter IV,  D., "The
        Discount  Rate" in the "Standards  for
        Planning  Water and Related Land Re-
        sources"  of  the  Water  Resources
        Council,  as amended  (39  FR  29242),
        arid  is  to  be used by all Federal agen-
        cies  in plan formulation and  evalua-
        tion of  water and related land  re-
        sources projects for the purpose of dis-
        counting  future benefits and comput-
        ing  costs,  or otherwise  converting
        benefits  and costs to a common tune
        basis.
          The Department of the Treasury on
        October  19, 1978 informed the Water
        Resources ConncO  pursuant to chap-
        ter RT, D.,  it; that the interest rate
        would  be 7%  percent based upon the
        formula  set forth  in chapter  IV,  D.,
        (a-): "*  * * the average yield during the
        preceding Fiscal Year OP. interest- hear-
        ing  marketable   securities   of  the
        United States which, at the time the
        computation is made, have terms of 15
        years or more remaining to maturity
        • * *." However,  chapter  IV,  D..  (a)
        further  provides  '" '  *  r,hat  in  no
        event shall the rate be raised  or low-
        ered more than one-quarter of 1 per-
        cent for  any year."  Since  the  rate in
        fiscal year 1978 was 6%  percent (42 FR
        58232), the rate for fiscal year 1979 is
        6% percent.
          Dated: October 24, 1978.
                            LEO M. EISEL,
                                  Director.
         [FR Doc 78-30408 Piled 10-26-78; 8.45 anil

FEDERAL REGISTER, VOL. 43, NO. 210—MONDAY, OCTOBER 33, 1978
         [1505-01-M]                 50537

            WATER RESOURCES COUNCIL

         PRINCIPLES AND STANDARDS FOR PLANNING
           WATER AND RELATED LAND RESOURCES

                 OKI no* in Discount Rote

                      Correction

          In  FR  Doc. 78-30408 appearing  at
         page 50276 in the issue for Friday, Oc-
         tober 27, 1978,  in the first paragraph
         of the document, the  interest rate re-
         ferred to as  "* * " 7"/s  percent" should
         have read "* "  • 6V8  percent * " "".

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                           WASHINGTON, D.C.  20460


              DEC 28 1978                    Construction Grants
                                             Program Requirements Memorandum
                                             PRM No. 79-5
SUBJECT:  Construction Incentive Program

FROM:     John T. Rhett, Deputy Assistant Administrator
          for Water Program Operations  (WH-546)         /

TO:       Regional Administrator
          Regions I-X
Purpose

     This memorandum provides guidance and policy pertaining to the
application of the construction incentive (CI) clause to the construction
phase of a project (Step 3).

Discussion

     The construction incentive program provides a mechanism by which
contractors on construction grant projects can be motivated to use their
construction expertise to improve contract performance and thereby
create an overall reduction in the total cost of the contract.  This
motivation is commonly achieved through monetary incentives and its
success has been well demonstrated in direct procurement by other
Federal agencies and in private enterprise.

     Section 212(2) (c) of the Federal Water Pollution Control  Act
Amendments of 1972 requires the use of a cost-effective approach to
wastewater treatment projects.  This requirement is being met primarily
by applying a cost-effectiveness analysis in the Step 1 project and
value engineering in Step 2.  It is now clear that the application of a
cost reduction incentive program, which is commonly called value engineering
in other Federal agencies, to a project during construction can also be
potentially effective in reducing project costs.

     Because experience in construction incentive approaches under a
grant program is limited, program participation by the grantee and
contractors is voluntary.  However, technical and cost data for each
construction incentive change proposal (CICP) submitted by the contractor
must be carefully reviewed.  Accordingly, necessary arrangements will  be
made with the Corps of Engineers (COE) to provide the needed expertise
and resources for the CICP review process.

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Po1i cy:

     By this memorandum, the grantee may include a CI clause,  (see
attached), as part of the construction bid package using the procedures
described in this memorandum.

     In order to ensure that each CICP will  be properly reviewed and
implemented, the number of projects to have  the CI clause should be
limited by the Region.  The actual number of CI clauses authorized will
depend on a number of factors determined through experience in imple-
menting the program, including the time needed to review and process
each CICP and the nature of the CICP's received.  In addition, the use
of the CICP clause is limited to projects having a Step 3 eligible cost
exceeding $10 million.  The Region should report to Headquarters whenever
a contract is allowed to include the CI clause.  Headquarters  concurrence
is necessary for approval or rejection of each major CICP received.  (See
A-3 under Procedure).

     The prime contractor and his subcontractors may participate in  the
construction incentive program when the CI clause is part of the approved
bid package.  However, participation of subcontractors must be through
the prime contractor. In addition, the sharing arrangement must be
mutually agreed upon by the prime contractor and the subcontractor prior
to the submittal of a construction incentive change proposal (CICP).

     To ensure the program's effectiveness and integrity, individuals
and firms who have prior involvement in the  project design or  in other
value engineering activity prior to Step 3 grant are not eligible to
participate, directly or indirectly, in the  development and preparation
of a CICP or monetary sharing of any resulting savings.

     While the CICP is being processed, the  contractor should  continue
the construction activity as scheduled.  The additional engineering  fees
associated with the evaluation and implementation of the CICP  are grant
eligible.

Implementation:

     Effective immediately, the grantee may  include the EPA/CI clause  as
part of the construction bid package for projects having a Step 3
eligible cost of more than $10 million when  approved in accordance with
this memorandum.

Procedure:

A.   Inclusion of the CI Clause in a Contract

     The grantee may submit a written request for inclusion of the CI
clause in a contract.  Ideally, such requests should be made prior to
applying for the Step 3 grant.  The Region should respond to such requests
in writing and when the request is approved, a copy of the approval
correspondence should be forwarded to Headquarters for information.

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B.   Approval of a CICP

     When a CICP is submitted by the contractor in response to the CI
clause, the grantee will proceed with the following procedural steps:

     1.   Expeditiously distribute copies of the CICP to the following
          offices for review:

          a.  3 copies to the Regional EPA
          b.  1 copy to the State agency
          c.  1 copy to the project designer

     2.   The Region will forward 1 copy of the CICP to Headquarters and
          1 copy to the appropriate office of the COE for technical  and
          cost review.

     3.   When a CICP having a potential gross cost reduction of more
          than $500,000 is received, the Region should immediately
          notify Headquarters.  Upon receipt of the notice, a special
          team of Headquarters staff with the necessary construction
          experience will be designated to provide assistance to the
          grantee and Region in the review and approval of the CICP.

     4.   The grantee will provide follow-up coordination with the
          project designer, State and EPA.

     5.   The grantee will review all comments and, when appropriate,
          call a special meeting with all concerned parties to resolve
          any outstanding comments.

     6.   Subject to State and EPA concurrence, the grantee will notify
          the contractor in writing of the conclusion of the meeting and
          the decision made on the CICP.

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                     Construction Incentive Clause
                  The EPA Construction Grants  Program
I.    Purpose
     This clause defines a "construction incentive  change  proposal"
     (CICP) and establishes the policy and  procedures  for  the  application
     of CICP's in the Step 3 grant process  of the EPA  Construction
     Grants Program.
II.   CICP
     A.    Definition:   A CICP is  a formally written  proposal  for  a
          change order during the construction  of  a  wastewater  treatment
          project funded under the EPA Construction  Grants  Program.   A
          CICP must be initiated, developed and identified  as such  by
          the contractor or his subcontractor.   A  CICP  must result  in a
          gross capital  saving of $50,000 or more.

          A CICP must  result in a net capital cost reduction  while
          causing no increase in  the total  life cycle cost  of the
          project and  meeting the following conditions.

          1.    The required function, reliability  and safety  of
               the project will be maintained.

          2,    The proposed change will  not result in any contract
               rebidding.

          3.    The proposed change must  be  in compliance with Section
               204(a)(6) of the Federal  Water Pollution Control Act
               Amendments  of 1972 which  prohibits  proprietary and
               restrictive specifications for bids in connection
               with construction  grant projects.

          4.    The proposed change will  not cause  undue interruption
               of the  contract work.

          5.    The proposed change must  be  in compliance with local
               permits and regulations.

     B.    Applicability:  Subject to the EPA's  approval this  clause
          applies to all contracts for the  construction of  wastewater
          treatment projects funded under the EPA  Construction  Grants
          Program (Step 3  grants).

     C.    Content:  A  CICP must contain  pertinent  information and
          supporting documents for evaluation by the involved contracting
          authority.  As a minimum, the  following  information should  be
          included.

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1.    Name of individuals  associated  with  the  development
     and preparation of the CICP.

2.    A detailed description and duly signed plans  and  speci-
     fications as presently designed and  the  proposed  changes.
     Clear identification of any advantages and  disadvantages
     for each change.

3.    A detailed procedure and schedule  for implementing
     the proposed change.  This should  include all  neces-
     sary contract amendments.   Also indicated must be the
     latest date the CICP must be approved for implementation.

4.    A summary of estimated costs to include  the following:

     a.   project construction costs before and  after
          the CICP.  This should be  a detailed estimate
          identifying the following  items for each trade
          involved in the CICP:

          1.  quantities  of materials and equipment
          2.  unit prices of materials  and equipment
          3.  labor hours and rates  for installation
          4.  subcontractor and prime contractor mark-ups

     b.   operation and maintenance  costs before and
          after the CICP;

     c.   costs for implementing the CICP not included in
          item 4a above;

     d.   contractor's share of the  savings based  on para-
          graph III below;

     e.   other data as required in  section 35.938-5(b)(c)
          •and (d) of the construction grants  regulations;

     f.   time required for executing the proposed change;

To the extent indicated below, contractors may restrict the
Environmental Protection Agency's and the project  owner's  use
of any construction incentive change proposal or the supporting
data submitted pursuant to this program.   Suggested wording
for inclusion in CICP's is provided  below:

     "This data furnished pursuant to the construction incentive
     clause of contract	shall  not be disclosed beyond
     that which is necessary to accomplish the review, or
     duplicated, used, or disclosed, in whole or in part,  for
     any purpose other than to evaluate a value  engineering
     proposal submitted under said clause. This restriction
     does not limit the Government's right to use  information
     contained in this data if it is or has been obtained, or
     is otherwise available, from the contractor,  or from

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               another source, without limitations.  If such a proposal
               is accepted by the owner under said contract after the
               use of this data in such an evaluation, the United States
               Environmental Protection Agency and the project owner
               shall have the right to duplicate, use, and disclose any
               data reasonably necessary to the full utilization of such
               proposal as accepted, in any manner and for any purpose
               whatsoever, and have others so do."

     The grantee may, subject to approval by the State and EPA, modify,
accept or reject the CICP.  However, if a CICP were modified or were not
acted upon within the time frame specified in the CICP, the contractor
may withdraw, in part or in whole, the CICP.  In any event, the grantee
will not be liable for the cost of developing the CICP withdrawn or
rejected.

     When a CICP is accepted by the grantee, the processing procedure
specified under Section 35.938-5 for change orders should be used and
approval of the CICP by the State and EPA is required.  When a CICP is
rejected, the contractor may not appeal to EPA.

III. Sharing Provisions

Construction Cost Sharing

     Upon acceptance of a CICP, the contractor will share the net capital
savings pursuant to this contract based on the formula below.  Computation
for the net savings is to be based on the following formula:

     Net Savings = Initial contract cost - (revised contract cost + CICP
                    development cost + CICP implementation cost)

     The CICP implementation cost should include, when appropriate,
consultant's fee for reviewing and redesigning the changes.  However,
costs for processing the CICP incurred by the grantee, State and EPA are
excluded.

     The contractor's cost for developing the CICP is limited to that
directly associated with the preparation of the  CICP package.   When
approved, such costs will  be reimbursed to the contractor.   However,
any costs which cannot be satisfactorily substantiated will be rejected
and will not be subject to reimbursement.

Sharing Formula

     a.   when the total  net savings based on the computation above is
          $1 million or less, the contractor will  receive 50% of the
          saving

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b.   when the total  cumulative net savings exceed $1  million,  the
     contractor's share will  be computed based on the following
     formula:

     y  =  .2x + 300,000

     where:

          y = contractor's share in dollars
          x = total  net saving in dollars

     For example, if the total net saving is $3.572 million  --

          y  = .2($3,572,000) + 300,000

             =  $1,014,400

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1/fal









                                                                         17J717




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       \
       I   UNITED  STATES ENVIRONMENTAL PROTECTION  AGENCY
%„	,tp


-------
                                   -2-

     Following revision, the State priority system must be submitted to
the Regional Administrator for review and approval.  The Regional
Administrator will issue written notification that the system is designed
to obtain compliance with the enforceable requirements of the Act.

     The following guidance supersedes the requirements listed in  PRM
78-13.  All of the new regulatory requirements that must be incorporated
into the State priority system prior to preparing the FY 80 project
priority lists are discussed in this guidance.  The Regions should
insure that this guidance is understood by the States and closely
coordinate the review processes so that the program can move expeditiously
without disruption.
POLICY
     1.   Submission and review of priority lists.

          Under Section 35.563, the State must submit a preliminary
     project priority list to the Regional Administrator by May 1  of
     each year for review.  A final project priority list must be submitted
     for review by the Regional Administrator before July 15.   The
     Regional Administrator will review the final  State project priority
     list within 30 days of submission to ensure compliance with the
     approved State priority system and this policy memorandum.  Question-
     able projects should be identified during this 30 day period.  No
     priority list is to be accepted as final by the Region until  all of
     the required information has been received for each project and the
     public participation requirements have been met (see S35.915(d) and
     35.915(e).  The Regional Administrator must notify the State in
     writing upon final acceptance of the priority list.  No project may
     be funded from the State priority list until  the Regional Administrator
     has issued the written notification of acceptance and the accepted
     list has been entered into the Grants Information Control System
     (GICS).

          After receipt, the preliminary State priority list should be
     entered into GICS.  The GICS files should be updated as changes and
     modifications are made.  The final list is to be generated from the
     GICS file.  Following acceptance by the Regional Administrator, the
     information contained in the GICS file will be considered as the
     official list for funding and management purposes.

     2.   Key Elements.

          A.  State project priority system -  a program and action plan
     that describes the methodology used to rate and rank projects that
     are considered eligible for assistance.  The system should set
     forth the administrative, management, and public participation
     procedures required to develop and revise the State project priority

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                              -3-

list.  The system should be clear in its stated priority determinants,
incorporate reasonably understandable mathematical computation
processes and be used consistently for rating all projects included
on the State project priority list especially to satisfy the public
participation requirements of 40 CFR 25.

     B.  State project priority list - a listing of projects in
order of priority for which Federal assistance is expected during a
five-year planning period starting with the beginning of the next
fiscal year.  This list must be consistent with the most recently
published Needs Survey inventory (see §35.915(b)).  The list will
include both a fundable and planning portion.  The two portions of
the list are contiguous and distinguished only by an imaginary
funding line drawn immediately below the last project that is
planned for funding with available funds during the first year of
the five-year period.

     C.  Project rating criteria - Under S35.915(a)(l), the State
must base its project priority system on the severity of the pol-
lution problem, the existing population affected by the project,
and the need for preservation of high quality waters.  At the
State's option, projects may be rated by specific needs categories.
The State may give additional priority points for Step 2, Step 3
and combined Step 2+3 projects which meet the innovative and alter-
native technology guidelines as stated in § 35.915(a)(l)(iii) of
the Construction Grant Regulations. The State may also consider the
needs of small and/or rural communities. Other criteria, consistent
with these listed, may be considered.  The State may not consider
the project area's development needs, economic factors, the geo-
graphical region within the State, or future population growth
projections.

     In addition to the above, the Agency has determined that a
rigorous review is necessary for projects designed for treatment
more stringent that secondary. The Appropriations Conference Com-
mittee agreed that grant funds may be used for projects providing
greater than secondary only if the incremental cost of the advanced
treatment is $1 million or less, or if the Administrator personally
determines that advanced treatment is required and will result in
significant water quality and public health improvements. The
projects or portions of projects which do not meet these criteria
should be given a lew priority and deferred.  Detailed guidance
implementing these requirements is in preparation.

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                              -4-

D.  Project ranking - A numerical ordering of projects that may be
eligible for funding under the Clean Water Act.   This  ranking is
determined by the State project priority rating  system.   The rating
criteria used to establish the project ranking must be clearly
delineated in the approved State priority system and applied
consistently to all projects included on the priority  list.

E.  Fundable portion - that portion of the priority list which
includes projects scheduled for award of grant assistance during
the first year (funding year) of the five-year planning  period.
The total expected grant assistance for all projects included in
the fundable portion of the list need not exceed the total  funds
expected to be available during the year less all applicable
reserves.  The fundable portion of the list may  not necessarily
contain a sufficient number of projects to use all available funds.
The projects scheduled for funding beyond the current fiscal year
constitute the planning portion of the priority  list.

F.  Planning portion - that portion of the State priority
list containing all of the projects outside the  fundable portion of
the list that may, under anticipated allotment levels, receive
funding during the five-year planning period. At the States option,
projects may be included beyond the five-year planning period.  As
a minimum, this list must include:

          (i)  All future Step 3 projects that will be generated
     from currently active Step 2 projects or Step 2 projects that
     are included on the list, where it is expected that the associated
     Step 3 grant will be awarded within the five-year period.

          (ii) All future Step 2 and Step 3 projects that will be
     generated from completed or currently active Step 1 projects
     or Step 1 projects that are included on the fundable list,
     where it is expected that the associated Step 2 or Step 3
     grant(s) will be awarded within the five-year period.

          (iii) All Step 1 projects anticipated  to be funded
     during the second year of the five-year planning period.

3.  Funding assumptions.

     Guidance for making funding assumptions that are necessary for
development of the five-year planning list will  be issued immediately
upon approval and release of the President's Budget, expected
January 20, 1979.  Adjustments may be made annually as actual
appropriations are determined.

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4.  Obligation of funds.

     Allotted funds may be obligated at any time during the funding
year, beginning on the first day of the fiscal year or at such time
that the Regional Administrator accepts the States project priority
list and it is entered into GICS in its final form, whichever is
later.  No grant(s) may be made after the last day of any fiscal
year in the absence of a revised and updated priority list that has
been submitted, reviewed and accepted as provided in §35.915(e).

5.  Required priority list information.

     The following information is required for all projects on the
State project priority list, except as otherwise noted.  The
Grants Information Control System (GICS) transaction number is
included in parentheses for clarity after each listing.  The Region
should refer to the GICS data element dictionary for the precise
definition of each element.

o    State assigned EPA project number (TN 01, 54, 03).

o    Legal name and address of applicant if known (TN 12, 51,
     14, 52).

o    Short project name or description (TN 20).

o    Priority rating and rank of each project, based on current
     priority system (TN H8, 59).

o    Project step number (TN 87).

o    Relevant Needs authority/facility number (TN 32).  This
     is a unique number assigned in connection with the Needs
     Survey which identifies the facility and the cognizant WWT
     authority.  If an authority/facility number has not been
     assigned, enter "NO NUMBER".  If multiple facilities are
     applicable within a single authority, enter the first six
     positions followed by "XXX".  If multiple authorities exist,
     then enter the word "MULTIPLES" instead of the nine digit
     authority facility number.

o    Parent project number (i.e., EPA project number for the
     nredecessor project) (TN B2).

o    For Step 2, 3, or 2+3 projects, code indicating an alter-
     native system for small community (TN 33).  Enter "D" if the
     project is for a highly dispersed section of a larger community

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                              -6-

     or "R" if the project is for  a rural  community with a population
     of 3,500 or less.   This requirement does not apply to any
     State in which the reserve is not mandatory or which has  not
     voluntarily established an appropriate set aside (see
     §35.915 (e)).

o    For Step 2, 3, or 2+3 projects, that amount (if any) of
     the eligible cost to apply to innovative processes (TN Y7)  and
     alternative techniques (TN Y8). This information is necessary
     to determine utilization of the I/A reserve.

o    The date that the project is  expected to be certified by  State
     to EPA for funding (TN A5).  This date can be used to further
     define whether or not the project is on the fundable or
     planning portion of the priority list.

o    For Step 3 or 2+3 projects, the total eligible cost sub-
     divided by Needs Categories (TN YO, Yl, Y2, Y3, Y4, Y5, Y6).
     Transactions numbered YO through Y6 are reserved for the  cost
     information associated with needs categories I, II, IIIA,
     IIIB, IVA, IVB and V respectively.  This information is
     required for all projects on  the fundable list.  The infor-
     mation concerning categories  IIIB, IVA, IVB and V is required.
     At the option of the State, however, the aggregate amount for
     projects or portions of projects in these later four categories
     can be stored in data element Y3.

o    Total eligible cost of the project (TN 29).

o    Estimated EPA assistance (TN  H7). This, estimate should include
     only the portion fundable at  75 percent of the eligible cost
     of the project.  Expected grant increase amounts for innovative
     or alternative processes and  techniques should not be included.

o    Enforceable requirement to be satisfied by this project (TN
     Zl).  The enforceable requirements must be described by one of
     the following combinations of codes.  Transaction number Zl is
     a two position data field.  The first position of this field
     must include one of the four alphabetic characters as follows:

          A -- Project satisfies the conditions or limitations
               of a 402 or 404 permit which, if violated, could
               result in the issuance of a compliance order or
               initiation of a civil or criminal action under
               Section 309 of the Clean Hater Act. (Include primary
               permit number in area reserved for TN C2).

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                              -7-

          B — Permit has  not been issued but project satisfies
               a condition or limitation which would  be  included  in
               the permit  when issued.

          C -- Permit is not applicable but project satisfies
               a requirement anticipated to be necessary to  meet
               applicable  criteria for  best practicable  waste
               treatment technology (BPWTT).

          D -- Project does not meet an enforceable require-
               ment of the Act.

     The second position of TN Zl  is to be used  to further describe
     the project.  The two following alphabetic  characters are
     included for this purpose:

          Y -- The project in its  entirety satisfies  the enforceable
               requirements of the Act for the condition stated in
               the preceding character position.

          P -- Portions of the project do not satisfy the enforceable
               requirements of the condition stated in the preceding
               character position.

6.  Project bypass.

     Although readiness for funding may not be used as a priority
criterion for rating projects, the ability to bypass  projects  not
yet ready to proceed according to  schedule is an integral part of
priority list management.   Projects initially scheduled for funding
but which are determined by the State and agreed to by the Regions
as not ready for funding before the end of the fundable year may be
bypassed in favor of the highest ranking project included on the
planning portion of the list as long as the approved  priority
system has such a procedure to bypass and, under specific conditions,
reinstate the bypassed project(s).

     Before bypassing any  project, the State must notify the
applicant and NPDES authorities.  The State must then advise EPA
that the bypassed project(s) will  not be ready during the funding
period. The State must also assure that the desired bypass is  in
full conformance with all  State and local regulatory  requirements.
Projects that are bypassed should  retain their relative priority
rating for possible reinstatement or consideration on future funding
lists.  Projects that are bypassed will be replaced by the highest
ranking priority projects  which meet the enforceable  requirements
of the Act.  Project applicants that are bypassed because they are

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                              -8-

not ready to proceed must be promptly notified.  A project must be
reinstated if it is subsequently determined that it can be made
ready for funding during the fundable year and uncommitted funds
are available to fully fund the project.  Projects that are considered
for funding through the bypass process must have previously met all
public participation requirements.

7.  Public participation.

     Before the State submits its annual project priority list to
the Regional Administrator for review, the State shall insure that
adequate public participation has taken place as required by
S35.915(d).  A public hearing must be held to discuss the proposed
State priority list and any revisions that were made to the State
priority system.  This public hearing may be conducted jointly with
any regular public meeting of the State agency providing that the
public (statewide) receive adequate and timely notice of the meeting
including an opportunity to obtain and review a copy of the proposed
priority list.  Attendees at the meeting must be allowed to express
their views concerning the list.  The State priority system must
describe the public participation policy and procedures which are
applicable.  The States policy must conform to the requirements of
40 CFR 25.

8.  Priority list update.

     Because of the definition of the fundable list (adopted in
FY 79) the target certification dates and estimated grant amount
for projects on the fundable and planning portions of the list must
be kept current at all times.  At a minimum, a complete review of
the priority list, including the planning portion, should be performed
on a quarterly basis.  Any changes to the list should immediately
be entered into GICS.  Regions should assure that the bypass provisions
and public participation requirements have been met whenever changes
are made to the priority lists.

9.   25% Provision for Projects in Categories 11 IB. .(Sewer System
     Replacement or Major Rehabilitation), IVA (New Collector?
     and Appurtenances), IVB (New Interceptors and Appurtenances),
     and V (Correction of Combined Sewer Overflows).

     All projects or parts of projects on the fundable list which
are in these categories will be reviewed by the Regional Administrator
to determine if they meet the enforceable requirements of the Act.
Projects which meet the enforceable requirements are acceptable on
the priority list.  Projects in those categories that do not meet
an enforceable requirement will be further examined under the
S35.915(g)(2).  This review process will continue until the aggregate
of projects in these categories total not more than 25 percent of

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                              -9-

the current year allotment for each State.  Projects or portions of
projects which would require use of funds beyond the 25 percent
level may be removed in accordance with S35.915(g)(l).

10.  Management of priority list reserves that are subject to
     reallotment if not used for their intended purpose.

     Regions should assure that sufficient projects appear on the
fundable list to fully utilize the reserve for innovative and
alternative technology grant increases and the reserve for al-
ternative systems for small communities before these funds are lost
to reallotment.  To accomplish this objective, the State may assign
a higher priority to those Step 2, Step 3 and combined Step 2+3
project utilizing processes and techniques meeting the innovative
and alternative guidelines (see S35.915(a)(l)(iii)). Under §35.915-
l(e), the size of community may also be used to establish a higher
priority for alternative systems for small community projects in
order to preclude any potential loss of the reserved funds.  When
it is determined that a sufficient number of projects are not
included to fully use these reserves, the State should be so
advised.

11.  Priority list/Needs survey relationship.

     The State project priority list should be derived from and be
consistent with the most recently published State Needs Inventory
prepared in accordance with Section 516(b)(l)(B) of the Clean Water
Act.  The "Relevant Needs Authority/Facility Number" mentioned in
item 5 above provides the direct linkage between the priority list
and the Needs Survey.

12.  Priority list/WQM plans relationship.

     In developing its annual priority list, the State must
consider the construction grant needs and priorities set forth in
certified and approved State and areawide water quality management
(WQM) plans as provided in Sections 35.915(a) and 35.915(c)(l).   In
the information about the priority list which the State circulates
before the public hearing required by S35.915(d), the State shall
indicate how it considered such WQM information.  Information
regarding the projects consistency with approved water quality
management plans must be provided as part of the priority list
submission.  Where plans have not been approved a statement should
be provided to indicate why the project appears on the priority
list.

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                                   -10-

     13.   Priority List/Financial  Management System Relationship.

          The Financial Management System (FMS) provides for the
     recording and reporting of construction grant obligations, outlays
     and certain related balances  by Source of Funds, Program Element/
     Account Number and other interest categories.  The Program Element/
     Account Numbers relate specifically to year of fund appropriation
     accounting and will be used to track the set-aside residuals.  Two
     accounts have been established as of this time, one for State
     Management Assistance (ABA 880) and the other for Innovative processes
     (ABA 881) funds.  Account Number ABA 881 will be used only for
     tracking the 1/2 of 1 percent reserve (see §35.915-1(b)).   Two
     additional accounts are presently planned to provide for alternative
     technology and rural or small community set-asides.  The account
     numbers and additional detail will be provided by the Financial
     Systems Branch.

          The accounting information that is available from FMS is not
     a duplication of data contained in GICS elements 19, 31, Y7 and Y8.
     The data in the GICS elements are estimates made at the time of
     preparing the State project priority list.  The data in the FMS
     account fields represents actual obligation made at time of project
     grant award.  Both sources of information, FMS and GICS, will be
     used to track and determine availability of funds for each of the
     regulatory funding set-aside and reserve categories.


ASSISTANCE

     The Priorities and Needs Assessment Branch has prepared Cross
Reference Index listing sorted by Facility Name, GICS Number, Needs
Number and NPDES Number.  Upon completion in October, 1978, these listings
were forwarded to the Regions for use in preparing and reviewing the
FY 79 State priority list.  In addition, the Branch is prepared to
assist the Regions and/or States where possible in preparing the required
Priority lists.  If it becomes apparent that any State is experiencing
difficulty in making either the revisions to their Priority System or
timely preparation of the FY 80 project priority list, please advise me
or James A. Chamblee.  It is imperative that the priority list development
be well managed for FY 1980 and beyond.  We shall be reluctant to concur
with any deviations in the future which extends a priority list beyond
the end of a fiscal year.

     Please direct questions concerning this program guidance memorandum
to James Chamblee or Joseph Easley.  They may be reached by FTS 426-
4443.
                                                 •U.S. GOVERNMENT PRINTING OFFICE: 1979 0-281-147/3

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MCD-02.7

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