&EPA
United States
Environmental Protection
Agency
Transition Guidelines for
Brownfields Cleanup Revolving
                   i          o
Loan Fund

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Solid Waste and            EPA-500-F-02-150
Emergency Response       October 2002
(5105T)                   www.epa.gov/brownfields

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                            Table of Contents
I. Introduction and Purpose	1




II. Brief Summary of Major Changes under Brownfields Law	3




III. Questions and Answers on Transition  	4




      * Transition Request Process for BCRLF Pilots	9




IV. Transition Request Submission/Mailing Instruction	13




V. U.S. EPA Regional Office RLF Coordinators	14




Appendix 1. Summary of Major Changes under the Brownfields Law  	15




Appendix 2. Matrix of Major Changes  	21




Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k) .  . 25




Appendix 4. Guidance for Requests for Property-Specific Determinations for Funding	37




Appendix 5. Prohibition on Use of Funds  	45
         EPA encourages Readers to review the Appendices for important information.
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                            QUESTIONS AND ANSWERS
General
Which BCRLF pilots are eligible for transition?	4
Does a BCRLF pilot have to transition?
Can BCRLF coalitions transition?
Is there a deadline for transition?
What is the earliest that a BCRLF pilot could request transition?
Does a BCRLF pilot that transitions have to meet all of the new statutory requirements?
What will be EPA's role in determinations by an RLF grantee to make loans and cleanup
       subgrants?

Loans and Cleanup Subgrants
What funds will be affected by transition under the Brownfields Law?	5
If a BCRLF pilot transitions what happens to loans already made?
How will existing funding structures (70/20/10 or the earlier 85/15) be affected
       by transition?
If a BCRLF pilot transitions, what percentage of funds may be used for loans?
       For cleanup subgrants?
Will loan discounts be available after transition?
Will intra-governmental loans be allowed after transition?
Will intra-governmental cleanup subgrants be allowed after transition?
Who can receive subgrants from the BCRLF pilot that transitions?

Supplemental Funding and New Grant Funding
Can a BCRLF pilot that transitions receive additional funding?	6
Can a BCRLF pilot that does NOT transition receive additional funding?
Can a BCRLF pilot that does NOT transition compete for new grant funding?

Administrative Costs and Cost Share
What are prohibited administrative costs?	7
What are eligible programmatic costs?
How will the 20% cost share requirement be applied?
Can prohibited administrative costs or other ineligible  costs be counted toward an RLF
       cooperative agreement recipient's cost share requirement?
Can the 20% cost share come from eligible programmatic activities?
Can repayments of loans and fees  charged to borrowers be used to meet the
       20% cost share?
Can contributions of labor, material, or services from borrowers be used to meet the
       20% cost share?
Can the cost share by met by other entities contributing to the cleanup?
How is the cost share calculated?

Transition Process
What does a BCRLF pilot have to do to request transition?	8
What is the transition approval process?
Are there new record keeping requirements upon transition?
Will a BCRLF Pilot that transitions be required to meet new performance measures?
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                     I. Introduction and Purpose
       Brownfields Cleanup Revolving Loan Fund Guidelines for Transition under
         The "Small Business Liability Relief and Brownfields Revitalization Act"

Introduction and Purpose
       The Environmental Protection Agency's (EPA or The Agency) Brownfields Economic
Redevelopment Program is designed to empower states, federally recognized Indian tribes, local
governments, communities, and other stakeholders involved in redevelopment to work together
in a timely manner to prevent, assess, and safely cleanup brownfields in order to facilitate their
sustainable reuse.  As part of this Program, EPA has awarded cooperative agreements to States,
and political subdivisions (including cities, towns, counties) to capitalize Brownfields Cleanup
Revolving Loan Fund (BCRLF) pilots to facilitate the cleanup and redevelopment of brownfields
properties. l

       On January 11, 2002, the Small Business Liability and Brownfields Revitalization Act
was signed into law (P.L. 107-118). ("Brownfields Law") This law makes  several significant
changes to EPA's Brownfields Program.  Section 104(k)(3)(D) of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, CERCLA (42 U.S.C. 9601)
added by the new law provides that "[Revolving loan funds that have been established before
the date of enactment..." may be used in accordance with the new law.  A BCRLF2 pilot,
established prior to January 11, 2002, may continue to operate pursuant to the terms and
conditions of its existing cooperative agreement, or it may choose to "transition" under the new
law.  The decision to transition is voluntary.

       This document describes the process for requesting transition under the Brownfields Law
and highlights some opportunities and requirements so that existing BCRLF pilots can determine
whether transitioning is in their best interest. Subject to the availability of appropriations, EPA
will begin implementing the new grant programs under the new law in Federal fiscal year 2003
(beginning October 1, 2002).

       BCRLF pilots choosing to transition under the Brownfields Law will be required to
comply with all requirements of the new law. BCRLF pilots that choose to transition will have
their existing cooperative agreement closed out, and unspent funds will be transferred to a new
replacement "transition" cooperative agreement, i.e.  transition from original funding under
§104(d) to §104(k) authority. Regulations applicable to the new  replacement cooperative
agreement as well  as new cooperative agreements will include 40 C.F.R. Part 31 (Uniform
Administration Requirements for Grants and Cooperative Agreements to State and Local
Governments), and "relevant and appropriate" provisions of the National Oil and Hazardous
Substances Contingency Plan (NCP), as determined by EPA. The Davis-Bacon Act, 40 U.S.C. §
276a et seq. applies. Seepage 12 "Matrix on BCRLF Pilot Transition Process."
       1 There are 143 BCRLF pilots that have been awarded since fiscal year 1997.

        Throughout this document, " Brownfields Cleanup Revolving Loan Fund" (BCRLF) will refer to existing
pilots and "Revolving Loan Fund" (RLF) or RLF cooperative agreement recipients will refer to pilots AFTER they
have transitioned.

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       BCRLF pilots that do NOT choose to transition will continue to operate pursuant to the
terms and conditions of their existing cooperative agreement. The BCRLF demonstration pilot
program was originally funded under §104(d)(l) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (CERCLA).  Regulations
applicable to that program included 40 C.F.R. Part 31 (Uniform Administration Requirements
for Grants and Cooperative Agreements to State and Local Governments), 40 C.F.R. Part 35,
Subpart O (Cooperative Agreements for Superfund Response Actions), and 40 C.F.R. Part 300
(The National Oil and Hazardous Substances Pollution Contingency Plan).
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      II. Brief Summary of Major Changes under the

	Brownfields Law	


Brief Summary of Major Changes under the Brownfields Law

      Major changes from the current EPA brownfields program include:
      /.     A new definition of a brownfield site (See Appendix 3.)  The new definition of a
             brownfield site includes:
             a. Sites contaminated by hazardous substances, pollutants or contaminants,
             petroleum or petroleum product, or controlled substances under §102 of the
             Controlled Substances Act (21U.S.C. 802) may be eligible for grant funding.
             b. "Realproperty " including residential as well as commercial and industrial
             properties.
             c. "Mine-scarred land."
      II.     Revolving Loan Fund (RLF) funding may be used for both loans and cleanup
             subgrants. Intragovernmental loans, i.e., the reimbursable transfer of loan funds
             within the same governmental entity may be made to the RLF recipient; cleanup
             subgrants may NOT be made by the RLF recipient to itself.
      III.    RLF cooperative agreement recipients are prohibited from making loans or
             cleanup subgrants for the response costs at a site for which the recipient of the
             grant or loan is potentially liable under §107 ofCERCLA.
      IV.    RLF cooperative agreement recipients are required to provide a 20% cost share
             of funds awarded by EPA, unless EPA approves a hardship waiver.
      V.     RLF cooperative agreement recipients are prohibited from using grant funding
             for administrative costs. See Appendix 5.
      VI.    RLF cooperative agreement recipients are required to apply provisions of the
             National Oil and Hazardous Substances Contingency Plan (NCP) that EPA
             determines to be  "relevant and appropriate to the program ".
       Each of these major changes is briefly described in Appendix 1.
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          III.  Questions and Answers on  Transition


General

Which BCRLF pilots are eligible for "transition"?
      All BCRLF pilots "established before the date of enactment" of the Brownfields Law on
January  11, 2002,  may transition under the new law.  This provision will allow all 143 BCRLF
pilots to transition if they choose to do so. EPA's regional offices will provide assistance if a
BCRLF  pilot chooses to transition.

Does a BCRLF pilot have to transition?
      No. BCRLF pilots that do NOT choose to transition will continue to operate pursuant to
the terms and conditions of their existing cooperative agreement.

Can BCRLF coalitions transition?
      Yes.  The cooperative agreement recipient (Lead Agency) for a BCRLF coalition must be
able to demonstrate that all coalition members agree to the transition request.  Members of
coalitions are eligible entities and may apply independently for any grant under the new law.

Is there  a deadline for transition!
      No. There is no deadline date for pilots to transition because transitioning is not
mandated. However, EPA is strongly encouraging pilots that choose to transition to do so as
soon as possible, preferably before June 30, 2003 (within the first,  second, or third quarter of
fiscal year 2003).  After June 30, 2003, requests for transition may be  made only during a
specified "open season" to be announced by EPA in fiscal year 2004.

What is  the earliest that a BCRLF pilot could request transition?
      BCRLF pilots may request transition under the new law upon publication and distribution
of these  transition  guidelines.  BCRLF pilots should contact the appropriate EPA Regional
Office.  Copies of the Transition Guidance will be available at all EPA regional offices, in EPA's
Office of Brownfields Cleanup and Redevelopment, and on the EPA's web  site
www.epa.gov/brownfields.

Does a BCRLF pilot that transitions have to meet all of the new statutory requirements?
      Yes.  BCRLF pilots that transition will be required to comply with all of the statutory
requirements specified in the new law. For example, the new law specifically prohibits the use
of a grant, subgrant, or loan for response costs at a site for which the recipient of the grant or
loan is potentially  liable under §107 of CERCLA.  The new law prohibits the RLF cooperative
agreement recipient from using grant or loan funds for administrative  costs. Other prohibitions
on the use of funds are also applicable. Further, the new law requires  the RLF cooperative
agreement recipient to provide a 20% cost share of the total federal funds awarded.

What will be EPA's role in determinations by an RLF grantee to  make loans and cleanup
subgrants?
      EPA  expects to be substantially involved in overseeing and monitoring the RLF program.
EPA will approve  the substantive terms of RLF loans and cleanup subgrants. Substantial
involvement by EPA generally covers such administrative activities as: monitoring, review and
approval of procedures for loan  recipient selection; review of project phases; approval of the
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substantive terms included in certain types of contracts, as well as loans and subgrants to help
the cooperative agreement recipient verify that the costs incurred in these transactions are
eligible expenses under CERCLA §104(k). Substantial involvement also includes reviewing and
approving sites to determine eligibility; reviewing financial and environmental status reports;
and monitoring the RLF grantee's fulfillment of all reporting, record keeping, and other program
requirements.  The exact terms of EPA's substantial involvement will be negotiated between the
RLF grantee and the EPA Regional office.

Loans and Cleanup Subgrants

What funds will be affected by transition under the new law?
       BCRLF pilot funds affected by transition are all funds not expended for loans or
otherwise legally encumbered or expended at the time of the transition. The 20% cost share will
apply to the funds transitioned as well as any  subsequent supplemental funds provided to the
RLF recipient.

If a BCRLF pilot transitions what happens to loans already made?
       BCRLF loans are subject to terms and conditions existing at the time of their execution.
       1. In cases in which a loan has been made under an existing BCRLF cooperative
agreement, that cooperative agreement will remain in effect until the loan has been fully paid out
to a borrower.  This cooperative agreement will continue to operate pursuant to the terms and
conditions of the existing agreement.  It will not be closed out until all loan monies have been
paid out to the borrower. Accordingly, administrative costs anticipated to manage these loans
will also remain a part of the existing cooperative agreement. For example, funds to be used for
anticipated administrative costs to be incurred by a Fund Manager to oversee the day-to-day
management of an outstanding loan may  remain under the existing cooperative agreement. An
estimate of these costs and how the estimate was derived must be included in the materials
submitted at the time of transition.

(Note: Any program income (i.e., principal repayments and interest received on a loan) received
after the date of transition may become apart of the new replacement "transition" cooperative
agreement.)

       2.  All other funds under the existing BCRLF will be part of the transition. A new
replacement "transition" cooperative agreement will be in effect under the new law.

       For example, if a BCRLF pilot was awarded $1,000,000 and has made a $400,000 loan
that has been fully paid out to the Borrower, and expended $15,000 for other eligible and
allowable purposes, then the remaining sum of $585,000 will be transitioned. Seepage 12 -
"Matrix on BCRLF Pilot Transition Process"

How will existing funding structures (70/20/10 or the earlier  85/15) be affected by transition?
       BCRLF pilots awarded in!997, 1999,  and 2000, generally provide 85% of their funding
to capitalize the loan fund and 15% for general administrative costs. BCRLF pilots awarded in
2001 and 2002 were required to use at least 70% of the cooperative agreement funds to capitalize
the cleanup loan fund; and were allowed  to use up to 20% of the cooperative agreement funds as
direct financial assistance to carry out cleanup responsibilities  as lead agency. The remaining
10% of the cooperative agreement funds  were to be used for general administrative costs.
       RLF grants under the new law will not have an analogous funding structure.
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If a BCRLF pilot transitions what percentage of funds may be used for loans? For cleanup
subgrants?
       Consistent with the intent of the new law to promote the long-term availability of funds
from the revolving loan fund, it is EPA policy that at least 60% of the funds transitioned by a
BCRLF pilot must be used to capitalize the loan pool and eligible programmatic costs. No
more than 40% of the funds awarded may be used for cleanup subgrants and eligible
programmatic costs.

(Note: Accounting to differentiate loans and cleanup subgrants made will be necessary. All
subgrants are subject to grant rules.)

Will loan discounts be available after transition?
       No. EPA has determined that loan discounts will not promote the long-term availability
of funds from the revolving loan fund under the new law.

Will intra-governmental loans be allowed after transition?
       Yes.  Intragovernmental loans, i.e., the reimbursable transfer of loan funds within the
same governmental entity, may be made by the RLF recipient.

Will intra-governmental cleanup subgrants be allowed after transition?
       No. Cleanup subgrants, unlike loans, may NOT be made by  the RLF recipient within the
same governmental entity that receives the RLF grant, (e.g. one department of a city government
"subgrants" to another department of the same governmental entity). This would be consistent
with either the new law or the "Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments, 40 C.F.R. Part 31. A BCRLF pilot
that transitions may, however, award a subgrant to another eligible governmental entity (e.g. a
state or county that has an RLF may make a subgrant to a township). Further, eligible
governmental entities may apply  separately for $200,000 Cleanup Grants from EPA under
Section 104(k)(3)(A)(ii).

Who can receive subgrants from the BCRLF pilot that transitions?
       RLF subgrants for cleanup may be made to another eligible entity, or nonprofit
organization based on several specific considerations  for the cleanup of sites owned by the
eligible entity or nonprofit organization that receives a cleanup subgrant.

Supplemental Funding and New Grants

Can a BCRLF pilot that transitions receive additional (supplemental) funding?
       Yes.  Upon transition a BCRLF pilot may apply for additional, non-competitive
supplemental funding.  Supplemental funding selection will  be based on the availability of funds.
Supplemental funding selection will be made by the Agency on a "rolling basis" to the extent
funds are available. For many pilots the opportunity to receive supplemental funding may be a
significant consideration  to transition.

       The Agency will consider supplemental funding based on the following statutory
considerations including the number of sites and number of communities addressed; the demand
for funding by eligible entities that have not previously received a grant under the new law; the
demonstrated ability of the eligible entity to use the revolving loan fund to enhance remediation
and provide funds on a continuing basis; and such other factors as the Agency considers
appropriate to carry out the RLF. In the past EPA has required BCRLF pilots to demonstrate:

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that loans have been made and significantly depleted existing available loan funds and that
there will be a community benefit from supplemental funding.  The Agency will continue to
require a similar demonstration under the new law.

       It is EPA policy that at least 60% of the supplemental funding received by an RLF
must be used to capitalize the loan pool and eligible programmatic costs.  No more than 40% of
the funds awarded may be used for cleanup subgrants and eligible programmatic costs.

Can a BCRLFpilot that does NOT transition receive additional (supplemental) funding?
       No. Under the new law, non-competitive supplemental funding is available only to
cooperative agreement recipients who are awarded competitive RLF capitalization cooperative
agreements, or to a BCRLF pilot that transitions.

Can a BCRLF pilot that does NOT transition compete for new grant funding?
       Yes. For a list of entities eligible to apply for grant funding see Appendix 2.

Administrative Costs and Cost Share

What are prohibited administrative costs?
       The Brownfields Law prohibits the use of any "part of a grant or loan" for the payment of
an administrative cost. Direct administrative costs are prohibited costs. The new  law provides
that the administrative cost prohibition does not apply to: investigation and identification of the
extent of the contamination; design and performance of a response action; or monitoring of a
natural resource. Under  new law, BCRLF pilots that choose to transition will no longer be
able to use their grant funds to pay for prohibited administrative costs.  See Appendix 5.

What are eligible programmatic costs?
       Eligible programmatic costs are expenses incurred for activities that are integral to
achieving the purpose of the grant, even if EPA considered the costs to be "administrative" under
the prior Brownfields Program. See Appendix 5.

How will the 20% cost share requirement be applied?
       In the case of BCRLF pilots transit!oning under the new law, the 20% cost share will
apply to the EPA funds not previously loaned or otherwise legally expended or encumbered
under the existing BCRLF and to any subsequent supplemental funds provided to  the RLF
recipient.

       The cost share requirement may be in the form of a contribution of cash, labor, material,
or services from non-Federal sources unless EPA determines that the cost share would place an
undue hardship on the eligible entity. A BCRLF pilot requesting transition may petition EPA to
waive the cost share based on a claim for undue hardship. To petition EPA, a BCRLF pilot must
submit a letter to the EPA Brownfields Project Officer requesting a hardship waiver and the
specific circumstances to support the request. EPA will consider a hardship waiver to the cost
share requirement on a case-by-case basis. For factors EPA will  consider in making a hardship
waiver determination See Appendix 1.

       Eligible programmatic costs may be used to meet the RLF capitalization grant 20% cost
share.
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Can prohibited administrative costs or other ineligible costs be counted toward an RLF
cooperative agreement recipient's cost share requirement?
       No. Under 40 C.F.R. 31.24, grant recipients can only use eligible and allowable costs to
meet their cost share requirements.

Can the 20% cost share come from eligible programmatic activities?
       Yes.  Eligible programmatic costs may be used to meet the RLF capitalization grant 20%
cost share.

Can repayments of loans and fees charged to borrowers be used to meet the 20% cost share?
       Yes.  Under 40 C.F.R. 31.25(g), program income, including repayment of loans made
after the date of transition or fees charged to borrowers, may be used to fund expenditures
toward meeting the 20% cost share. However, if a BCRLF pilot plans to use anticipated
program income to help meet the cost share, the request for transition must demonstrate how
alternative sources for obtaining cash, labor, material or services can be used to meet the cost
share if program income is less than anticipated during the performance period for the
cooperative agreement.

Can contributions of labor,  material, or services from borrowers be used to meet the 20% cost
share?
       Yes.  EPA will allow contributions of labor, material, or services from borrowers to count
toward the cost share if the RLF cooperative agreement recipient can demonstrate that the
accounting system used is able to track and provide adequate documentation for such
contributions.

Can the cost share be  met by other entities contributing to the cleanup (i.e., borrowers, State
contributions or other third-party non-Federal entities)?
       Yes.  States and other third-party non-Federal entities may contribute funds, labor,
services, or materials to be counted towards the cost share requirement. The costs for 3rd party
contributions must be allowable under 40 C.F.R. 31.24. Generally  other sources of federal
funds including other EPA grants and cooperative agreements cannot be used to meet the cost
share requirement, some Federal grant programs have specific authority that allow grants to be
used to meet cost share requirements. For example, the Department of Housing and Urban
Development's Community  Development Block Grant program funding (42 USC 5305(a)(9))
contains a specific authorization that allows these Federal grant funds to be used as a match for
other Federal grants.  Local governments that choose to transition their BCRLF pilots may use
state grants to meet their cost share requirements to the extent allowed by state law.

How is the cost share  calculated?
       The 20% cost share will apply to the transitoned funds. For example, if a BCRLF  pilot
is transitioning $500,000 in funds, the 20% cost share is calculated by multiplying $500,000 by
20%.  In this example, the cost share would be $100,000.  The workplan and budget for the new
"transition" cooperative agreement would total $600,000 (i.e., $500,000 in transitioned funds
plus the $100,000 cost share).
Transition Process for BCRLF Pilots
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What does a BCRLFpilot have to do to request a transition?
       Your EPA Regional Office is available to provide assistance regarding the transition
process. Seepage 14 for a list of Brownfields RLF Coordinators. A BCRLF pilot must notify
both the EPA Regional Brownfields Project officer and the Regional Grants Management Office
that the pilot will be requesting a transition. A BCRLF pilot will be asked to submit formal
documentation to process the transition. This documentation should include a cover letter signed
by the authorized representative of the BCRLF pilot and should include a statement that the pilot
understands and agrees to comply with the provisions of the new law. In addition, the pilot must
provide the following:

       1.     Application for Assistance/Amendment (Standard Forms 424, 424A, and 424B);
             including detailed information showing how the figures were derived for each
             object class category  in which funds  are shown in Standard Form 424A.

       2.     Revised work plan narrative specifying additional and modified tasks including
             those activities or services contributed as the cooperative agreement recipient's
             cost share.

       3.     Revised budget information, including:
             »•     A breakdown of funds expended or otherwise legally encumbered under
                    the BCRLF to identify the amount remaining in the account for transition.
                    Submittal of a Financial Status Report (Standard Form 269) can be used to
                    certify transition amount.
                    •      For existing BCRLF cooperative agreements which will remain in
                           effect until a loan has  been fully paid out to the borrower,  include
                           an estimate of any administrative costs anticipated to manage the
                           outstanding loan.  The estimate and a description of how the
                           estimate is derived must be included as part of the financial status
                           report.
             >     A clear identification of the 20% cost share (based on the funds
                    transitioned)
             >     Identification of the amount of the funding to be used to capitalize the loan
                    program and the amount to be used for cleanup subgrants. (EPA requires
                    that a minimum of 60% of the your awarded funds be utilized to capitalize
                    the loan pool based on the funds transitioned.)
             >     Amount to be used to purchase insurance for site cleanup, if applicable
             »•     Local governments only: Identification of the amount, if any, up to 10% of
                    grant funds transitioned, to develop and implement a brownfields
                    program.3
             >     Identification of the amount anticipated for use to cleanup petroleum-
                    contaminated brownfields.

What is the transition approval process?
       3 The Small Business Liability Relief and Brownfields Revitalization Act §104(k) (4)(C) provides that local
governments receiving a brownfields grant from EPA may use up to 10% of the grant funds to develop and
implement a brownfields program that may include: monitoring the health of populations exposed to one or more
hazardous substances from a brownfield; and monitoring and enforcement of any institutional control used to prevent
human exposure to any hazardous substance from a brownfield site.

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       When a transition request has been received, the EPA's Regional office will review the
application package to ensure that it includes all of the required documentation. EPA will advise
the BCRLF pilot if revisions or additional information is needed.  Upon final negotiation of the
revised application and workplan, a new replacement "transition" cooperative agreement with
revised terms and conditions will be sent to the grantee for review and signature.  Upon signature
of the new cooperative agreement, the RLF  recipient will proceed under the new law and the
terms and conditions of the new cooperative agreement.  BCRLF  pilots requesting transition may
not begin operation under the new law until a new RLF cooperative agreement has been
executed.

       Note:
       1. For pilots with outstanding loans, the EPA Region will  prepare an amendment to the
existing BCRLF cooperative agreement to deobligate unspent funds.

       2. For BCRLF pilots that do not have outstanding loans, the EPA Region will prepare an
amendment to the existing BCRLF cooperative agreement to deobligate unspent funds and close
out the existing cooperative agreement.

       In the interim period between the submission of a transition application and the award of
the new cooperative agreement, BCRLF pilots should note that reimbursement of pre-award
costs (i.e., prior to award of the new RLF replacement "transition" cooperative agreement)
requires careful consideration on the part of the recipient. The Agency is not obligated to
reimburse recipients for pre-award costs and recipients incurring pre-award costs do so at their
own risk. Therefore, care should be given by the BCRLF pilot regarding costs expended in the
interim period in anticipation of approval.

Are there new record keeping requirements upon transition?
       Upon transition, costs incurred under the new law must be tracked separately from those
incurred under the previous program. In addition, the following types of expenditures will need
to tracked separately:  the matching share; any costs incurred for petroleum-related activities;
and any costs related to program development and implementation (Note: local governments will
have to identify and track the amount, if any,  up to 10% of grant funds transitioned, to develop
and implement a brownfieldsprogram).

       The length of time that records must be retained has been reduced.  The current BCRLF
was awarded under 40 C.F.R. Part 35, Subpart O.  This regulation governed Superfund
cooperative agreements made under §104(d) of CERCLA and required that all records be
retained for a minimum of 10 years. With the enactment of §104(k) of CERCLA, EPA has
determined that the replacement transition cooperative agreement will by governed by 40 C.F.R.
Part 31 which requires maintenance of all pertinent records for three years following submittal of
the final Financial Status Report for the RLF cooperative agreement. EPA may require a longer
record retention period for records pertaining to the earning of income (e.g., after the cooperative
agreement has expired but where loan repayments continue to be made); where there is any
pending litigation, claim or audit involving such records; or if such longer period is deemed
appropriate. At the end of the three year period written approval must be received from EPA
prior to destruction of any records.
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Will a BCRLF Pilot that transitions be required to meet new performance measures?
      Yes. New performance measures will be required.

Information About the Brownfields Law

        BCRLF pilot recipients are encouraged to review the new law and guidelines for grant
proposals to obtain a better understanding of these requirements for themselves. Information and
summaries of the new law may be found on EPA's web site at www.epa.gov/brownfields.
Additional information may also be found through the legislative reference system called
"Thomas" on either the U.S. Congress House of Representatives site or the Senate site:
www.house.gov or www.senate.gov.
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                       Matrix on BCRLF Pilot Transition Process
BCRLF PILOT Status     Process To Transition to RLF Under New Law
 NO BCRLF FUNDS
 SPENT
• Close out existing cooperative agreement.  EPA deobligates, recertifies, and
reobligates simultaneously unspent funds to new replacement "transition"
cooperative agreement
*•       Requires transition application related to the amount unspent, showing
        matching share and including new budget/workplan to incorporate new
        statutory requirements
•Replacement "transition" cooperative agreement grant is under §104(k)
authority
 BCRLF FUNDS
 SPENT FOR
 ADMINISTRA TIVE
 COSTS ONLY
• Close out existing cooperative agreement.  EPA deobligates, recertifies, and
reobligates simultaneously unspent funds to new replacement "transition"
cooperative agreement
*•       Requires transition application related to the amount unspent, showing
        matching share and including new budget/workplan to incorporate new
        statutory requirements
•Replacement "transition" cooperative agreement grant is under §104(k)
authority.
 BCRLF WITH
 LOANS MADE
• Close out existing cooperative agreement.  EPA deobligates, recertifies, and
reobligates simultaneously unspent funds to new replacement "transition"
cooperative agreement
*•       Requires transition application related to the amount unspent, showing
        matching share and including new budget/workplan to incorporate new
        statutory requirements
• Closeout of the existing cooperative agreement will be possible in those cases
in which all loans previously made have been fully paid out.
• If loans have been made under the existing cooperative agreement but have
NOT been fully paid out:
*•       The funds associated with the loans (including administrative expenses)
        will remain in the existing cooperative agreement
>•       The existing cooperative agreement will remain open until the loans
        have been fully paid out.
>•       Funds other than the loan funds (described above) will be transferred to
        the new "transition" cooperative agreement.
*•       Program income associated with these loans but received after the date
        of transition will be counted as part of the transitioned funds and can be
        used to satisfy the 20% match requirement of the new "transition"
        cooperative agreement (See 40 C.F.R. 31.25(g)(3))
*•       An existing cooperative agreement and the  new replacement
        "transition" cooperative agreement may be in existence at the same
        time.
•Replacement "transition" cooperative agreement grant is under §104(k)
authority.
 Note: (1) "Replacement" means the deobligation of BCRLF funds under §104(d) and the reobligation of
 the same funds as an RLF under the authority of §104 (k). (2)Note: BCRLF refers to pilots existing under
 the original Brownfields program; RLF refers to cooperative agreements under the  new law.
Transition Guidelines - Questions and Answers on Transition
                                                             Page 12

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    IV. Transition Request Submission and Mailing
                          Instructions
BCRLF pilots choosing to transition under the new law must send a 2 copies of the
Transition application to:
          U.S. EPA Regional Office:

          Original
          Signed Copy    ATTN: Grants Management Officer

          Copy          ATTN: Brownfields Project Officer
          * See page 14 for a listing of EPA Regional Offices and Revolving
          Loan Fund Coordinators.
Transition Guidelines - Transition Request Submission/Mailing Instructions       Page 13

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    V. U.S. EPA Regional Office RLF Coordinators
Regions and States
EPA Region 1
James Chow
EPA Region 2
Larry D'Andrea
EPA Region 3
Sherry
Gallagher
EPA Region 4
Wanda Jennings
EPA Region 5
Alan Baumann
EPA Region 6
Roger Hancock
EPA Region 7
Debi Morey
EPA Region 8
Tom Pike
EPA Region 9
Susanne Perkins
EPA Region 10
Timothy
Brincefield
CT, ME, MA,
NH, RI, VT
NJ, NY, PR, VI
DE, DC, MD,
PA, VA, WV
AL, FL, GA, KY,
MS, NC, SC, TN
IL, IN, MI, MN,
OH,WI
AR, LA, NM,
OK, TX
IA, KS, MO, NE
CO, MT, ND,
SD, UT, WY
AZ, CA, HI, NV,
AS, GU
AK, ID, OR, WA
Address and Phone Number
One Congress Street, Suite 1100 (Mailcode HIO)
Boston, MA 02114-2023
Phone (617) 918-1394 Fax (617) 918-1291
290 Broadway, 18th Floor
New York, NY 10007
Phone (212) 637-4314 Fax (212) 637-4360
1650 Arch Street (3HS34)
Philadelphia, PA 19103-2029
Phone (215) 814-3211 Fax (215) 814-5518
Atlanta Federal Center (SNFC-EPA Mail Room)
61 Forsyth Street
Atlanta, GA 30303
Phone (404) 562-8682 Fax (404) 562-8628
77 West Jackson Boulevard (SE-4J)
Chicago, IL 60604-3507
Phone (312) 886-3058 Fax (312) 886- 6741
1445 Ross Avenue, Suite 1200 (6SF-PB)
Dallas, TX 75202-2733
Phone (214) 665-6688 Fax (214) 665-6660
901 N. 5th Street (SUPR/STAR)
Kansas City, KS 66101
Phone (913) 551-7593 Fax (913) 551-8688
999 18th Street, Suite 300 (EPR-SA)
Denver, CO 80202- 2466
Phone (303) 312-6982 Fax (303) 312-6067
75 Hawthorne Street, SFD 1-1
San Francisco, CA 94 105
Phone (415) 972-3208 Fax (415) 947-3526
1200 Sixth Avenue (ECL-1 12)
Seattle, WA 98 101
Phone (206) 553-2100 Fax (206) 553-0124
Transition Guidelines - U.S. EPA Regional Office RLF Coordinators
Page 14

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  Appendix 1. Summary of Major Changes under the
                             Brownfields Law
       Major changes from the current EPA brownfields program include:
       /.     A new definition of a brownfield site (See Appendix 3.) The new definition of a
             brownfield site includes:
             a.  Sites contaminated by hazardous substances, pollutants or contaminants,
             petroleum or petroleum product, or controlled substances under §102 of the
             Controlled Substances Act (21U.S.C. 802) may be eligible for grant funding.
             b.  "Realproperty " including residential as well as commercial and industrial
             properties.
             c.  "Mine-scarred land."
       II.     Revolving Loan Fund (RLF) funding may be used for both loans and cleanup
             subgrants. Intragovernmental loans, i.e., the reimbursable transfer of loan funds
             within the same governmental entity may be made to the RLF recipient; cleanup
             subgrants may NOT be made by the RLF recipient to itself.
       III.    RLF cooperative agreement recipients are prohibited from making loans or
             cleanup subgrants for the response costs at a site for which the recipient of the
             grant or loan is potentially liable under §107 ofCERCLA.
       IV.    RLF cooperative agreement recipients are required to provide a 20% cost share
             of funds awarded by EPA, unless EPA approves a hardship waiver.
       V.     RLF cooperative agreement recipients are prohibited from using grant funding
             for administrative costs. See Appendix 5.
       VI.    RLF cooperative agreement recipients are required to apply provisions of the
             National  Oil and Hazardous Substances Contingency Plan (NCP) that EPA
             determines to be "relevant and appropriate to the program ".
       Each of these major changes is briefly described. BCRLF pilots are encouraged to
review the new law to obtain a better understanding of these requirements for themselves.

I.  Definition of Brownfield Site

       EPA may provide funding to plan, identify, investigate, assess, and clean up brownfields
properties.  A "brownfield site" is defined to mean as "real property, the expansion,
redevelopment, or reuse of which may be complicated by the presence or potential presence of a
hazardous substance, pollutant or contaminant." (§101(39)(A)). Certain facilities are excluded
from the definition of a brownfield site. See Appendix 3.

       However, certain sites that are excluded from funding eligibility because the sites fall
within the scope of the statutory exclusions from the definition of "brownfield site" may qualify
for brownfields funding, if a property-specific determination is made that the site meets the goals
and criteria of the brownfields program and the criteria set forth in the statute.  EPA may award
financial assistance to an eligible entity for assessment and cleanup activities at an excluded site,
if it is found that  such financial assistance will protect human health and the environment, and
either promote economic development or enable the creation of, preservation of, or addition to
parks, greenways, undeveloped property, other recreational property, or other property, used for

Appendix 1. Summary of Major Changes  under the Brownfields Law                Page 15

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nonprofit purposes. Sites not eligible for a property-specific funding determination are those
sites or facilities: that are listed, or proposed for listing on the National Priorities List; subject to
a unilateral administrative order, a court order, an administrative order on consent or judicial
consent decree issued or entered into by parties under CERCLA; and that are subject to the
jurisdiction, custody, or control of the United States government, except for land held in trust by
the United States for an Indian tribe.

       Eligible brownfields sites may include sites that are
              •      contaminated by  petroleum or a petroleum product
              •      contaminated by  controlled substances (meaning a drug or other substance
                    as defined in section 102 of the Controlled Substances Act (21 U.S.C.
                    802).
                    mine-scarred lands.

       Generally, petroleum sites are included in the definition of a brownfield site and may
receive financial assistance from EPA for assessments and cleanup.  The Brownfields Law
restricts eligibility for brownfields funding to petroleum contaminated sites that EPA or the state
determines are (1) of "relatively low risk" compared with other "petroleum-only" sites in the
state; and (2) for which there is no viable responsible party and will be assessed, investigated, or
cleaned up by a person that is not potentially liable for cleaning up the site.  In addition,
petroleum contaminated sites must not be subject to a corrective action order under the RCRA
9003(h). Petroleum sites that have received specific cleanup assistance under Subtitle I of
RCRA from the Leaking Underground Storage Tank trust fund are excluded from receiving
financial assistance, unless a property-specific funding determination from EPA is obtained.

       EPA's preliminary view is that "mine-scarred" lands are those lands, associated waters,
and surrounding watersheds where extraction, benefication, or processing of ores and minerals
(including coal) has occurred. 40 C.F.R. 261.4(b)(7).  See Appendix 3 for additional
information..

       Brownfields sites also include all "real property." Residential properties, as well as
commercial and industrial  properties, are included under the new definition. In particular, sites
eligible for funding include residential property that is contaminated by controlled substance(s)
(e.g. former drug labs). (21 USC 812)

II.  RLF funding may be used for both loans and cleanup subgrants

       Under the new law, a Revolving Loan Fund (RLF) may make both loans (including loan
guarantees) and cleanup subgrants to eligible entities. Consistent with the intent of the new law
to promote the long-term availability of funds from the revolving loan fund, it is EPA policy that
at least 60% of the funds transitioned by a BCRLF pilot must be used to capitalize the loan
pool and eligible programmatic costs.  No more than 40% of the funds awarded may be used for
cleanup subgrants and eligible programmatic costs.

       EPA expects to be  substantially involved in overseeing and monitoring the RLF program.
EPA will approve the substantive terms of RLF loans and cleanup subgrants.  Substantial
involvement by EPA generally covers such administrative activities as: monitoring, review and
approval of procedures for loan recipient selection; review of project phases; approval of the
substantive terms included in certain types of contracts, as well as loans and subgrants to help
the cooperative agreement recipient verify that the costs incurred in these transactions are


Appendix 1. Summary of Major Changes under the Brownfields Law                 Page 16

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eligible expenses under CERCLA §104(k). Substantial involvement also includes reviewing and
approving sites to determine eligibility; reviewing financial and environmental status reports;
and monitoring the RLF grantee's fulfillment of all reporting, record keeping, and other program
requirements. The exact terms of EPA's substantial involvement will be negotiated between the
RLF grantee and the EPA Regional office.

       A. Loans under the RLF

       Like the current program, new RLF grant recipients or BCRLF pilots transitioning under
the new law will be able to make one or more loans (or loan guarantees) to an eligible entity, a
site owner, a site developer, or another person.  In addition, new RLF grant recipients or BCRLF
pilots transitioning under the new law may continue to make intragovernmental loans, i.e.,  the
reimbursable transfer of loan funds within the same governmental entity.  The law does not limit
the amount of funding an RLF recipient may lend a borrower for any one site, however, the
ability to enhance cleanup and provide funds on a continuous basis is a factor that will be
considered if a RLF grantee or transitioned BCRLF pilot applies for supplemental funding.

       B. Cleanup Subgrants under the RLF

       While loans are  generally preferred because repayment of the loans will extend the life
and expand the utility of federal  expenditures under this program, the new law allows new RLF
grant recipients  or transitioned BCRLF pilots to make one or more cleanup subgrants. The
cleanup subgrants, unlike the loans, may NOT be made within the same governmental entity
that receives the RLF grant.4

       RLF subgrants for cleanup may be made to another eligible entity, or nonprofit
organization based on several specific considerations for the clean up of sites owned by the
eligible entity or the nonprofit organization that receives the cleanup subgrant.5

       The RLF cooperative agreement recipient must take into consideration (§104(k)(3)(C)):
                     the extent to which the cleanup subgrant will facilitate the creation of,
                     preservation of, or addition to a park, a greenway, undeveloped property,
                     recreational property, or other property used for nonprofit purposes;
                     the extent to which the cleanup subgrant will meet the needs of a
                     community that has inability to draw on other sources of funding for
                     environmental remediation and subsequent redevelopment of the area in
                     which a brownfield site is located because of the small population or low
                     income of the community;
       4 Under CERCLA §104(k)(3)(B)(ii), the eligible governmental entity "providing assistance" may make
subgrants to a different eligible entity or to a nonprofit organization.  In addition, under the "Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and Local Governments, 40 C.F.R. Part 31, Section
31.3 defines a grantee as "the entire legal entity even if only a particular component of the entity is designated in the
grant award document" and further defines a subgrantee as "...the government or other legal entity ...which is
accountable to the grantee for the use of the funds provided."

       5 The cleanup subgrants made under an RLF cooperative agreement are not the same as  "direct cleanup
grants" which may also be awarded by EPA under the  new law. Direct cleanup grant funding is limited to $200,000
and is awarded by EPA to eligible entities AND NON-PROFIT ORGANIZATIONS described in section
Appendix 1. Summary of Major Changes under the Brownfields Law                 Page 17

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              •      the extent to which the cleanup subgrant will facilitate use or reuse of
                    existing infrastructure;
              •      the benefit of promoting the long-term availability of funds from a
                    revolving loan fund for brownfield remediation; and
                    other similar factors EPA considers appropriate.

       Non-profit subgrantees must expend subgrant funds in accordance with  40 C.F.R. Part
30 and OMB Circular A-122 (nonprofit organizations).  Subgrants made to eligible entities that
are governmental organizations are subject to 40 C.F.R.Part 31 and OMB Circular A-87 (state,
tribal and local governments). All costs incurred by subgrantees must be eligible costs. In other
words, subgrantees cannot use cleanup funds for prohibited administrative costs, or for other
costs prohibited by the new law. See Appendix  5.

III.    RLF cooperative agreement recipients are prohibited from making loans or cleanup
       subgrantsfor the response costs at a site for which the recipient of the grant or loan is
       potentially liable under §107 ofCERCLA.

       The new law states that no part of a grant or loan may be used for the payment of  "a
response cost at a brownfield site for which the recipient of the grant or loan is potentially liable
under section 107. " (§104(k)(4)(B)(I)(IV))

IV.    RLF cooperative agreement recipients are required to provide a 20% cost share of
       funds awarded from EPA, unless EPA approves a hardship waiver.

       The new law requires that RLF recipients pay a 20% cost share of the total federal
award. In the case of BCRLF pilots transit!oning under the new law, the 20% cost share will
apply to the EPA funds not previously loaned or otherwise legally expended or encumbered
under the existing BCRLF and to any subsequent supplemental funds provided to  the RLF
recipient.

       The cost share requirement may be in the form of a contribution of cash, labor, material,
or services from non-Federal sources unless EPA determines that the cost share would place an
undue hardship on the eligible entity.  A BCRLF pilot requesting transition may petition EPA to
waive the cost share based on a claim for undue  hardship.

       To petition EPA, a BCRLF pilot must submit a letter to the EPA Brownfields Project
Officer requesting a hardship waiver and the specific circumstances to support the request. EPA
will consider a hardship waiver to the cost share requirement on a case-by-case basis.  Factors
that EPA will consider include:
              (A) bankruptcy, receivership, or similar indicators of financial distress, OR
              (B) evidence that the eligible entity is unable to commit its own funding or in-
kind contribution to the project due to:
                    (1) a loss or diminution of sources of revenue,
                    (2) low per capita income,
                    (3) an unemployment rate above the national average,
                    (4) unemployment or economic adjustment problems resulting from severe
short-term or long-term changes in economic conditions, or
                    (5) a reduced tax base due to unforeseen economic conditions.
              (C)  evidence of the presence of factors that the  applicant for the hardship waiver
believes are relevant to  a decision by EPA to waive the cost share requirement.


Appendix 1. Summary of Major Changes under the Brownfields Law               Page 18

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       RLF cooperative agreement recipients (including BCRLF pilots that transition) cannot
meet the cost share requirement with prohibited administrative costs, or other unallowable costs.
Under 40 C.F.R. 31.24, cooperative agreement recipients can only use eligible and allowable
costs to meet their cost share requirements. To be allowable, the costs must be reasonable and
allocable to an activity described by the scope of work and not otherwise prohibited. If the cost
share is in the form of a contribution of labor, material or other services, it must be an eligible
and allowable expense under the grant and not an ineligible expense such as administrative or
indirect costs. States and other third-party non-Federal entities may contribute funds, labor,
services, or materials to be counted towards the cost share requirement.  The costs for 3rd party
contributions must be allowable under 40 C.F.R. 31.24.  Generally, other sources of federal
funds including other EPA grants and cooperative agreements cannot be used to meet the cost
share requirement unless the grant making authority contains a specific provision that allows the
Federal grant to be used as a cost share. For example, the Department of Housing and Urban
Development's Community Development Block Grant program funding (42 USC 5305(a)(9))
contains a specific authorization that allows these Federal grant funds to be used as a cost share
for other Federal grants.  Local governments that transition their BCRLF pilots may use state
grants to meet their cost share requirements to the extent allowed by state law.

       Under 40 C.F.R. 31.25(g),  program income, including repayment of loans made after the
date of transition or fees charged to borrowers, may be used to fund expenditures toward meeting
the 20% cost share.  EPA will not allow contributions of labor, material, or services^row
borrowers to count toward the RLF cooperative agreement recipient's cost share unless the
recipient can demonstrate that the accounting system used is able to track and provide adequate
documentation for such contributions.  However, if a BCRLF pilot plans to use anticipated
program income to help meet the cost share, the request for transition must demonstrate how
alternative  sources for obtaining cash, labor, material or services can be used to meet the cost
share if program income is less than anticipated during the performance period for the
cooperative agreement.

       Finally, the cost share requirement must be included in the approved budget and tracked
and reported to EPA by the grant recipient.

       Eligible programmatic costs may be used to help  meet the RLF cooperative agreement
recipient's  20% cost share requirement. See Appendix 5 for discussion of eligible programmatic
costs.

V.     RLF cooperative agreement recipients are prohibited from using grant funding for
       administrative costs.

       The Brownfields Law prohibits the use of any "part of a grant or loan" for the payment of
an administrative  cost. Direct administrative costs are prohibited costs.  The new law provides
that the administrative cost prohibition does not apply to: investigation and identification of the
extent of the contamination; design and performance of a response action; or monitoring of a
natural resource.  EPA has determined that the administrative cost prohibition does not apply to
"programmatic" costs, i.e., costs for activities that are integral to achieving the purpose of the
grant, even if the Agency considered costs to be "administrative" under the prior Brownfields
Program.  Under  new law, BCRLF pilots that choose to transition will no longer be able to use
their grant funds to pay for prohibited administrative costs.  See Appendix 5 for a discussion
of the administrative cost prohibition and the eligibility of programmatic costs.  Please note
Appendix 1. Summary of Major Changes under the Brownfields Law                Page 19

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particularly that prohibited administrative costs include all indirect costs under OMB Circular
A-87.
 VI.  RLF cooperative agreement recipients are required to apply provisions of the National
 Oil and Hazardous Substances Contingency Plan (NCP) that EPA has determined are
 "relevant and appropriate to the program."

        EPA may require a BCRLF pilot that transitions, or new RLF cooperative agreement
 recipients, to apply parts of the NCP to the extent the provisions are "relevant and appropriate
 to the program. " Relevant and appropriate provisions will be addressed through terms and
 conditions in the new replacement transition cooperative agreement. For those pilots choosing to
 transition, new terms and conditions will be negotiated with the Region. These terms and
 conditions are expected to provide the cooperative agreement recipient with program flexibility.
 For example, an existing BCRLF pilot is now required to have a site manager who is a
 government employee.  Upon transition, a new term and condition may allow oversight of a
 cleanup to be conducted by an independent, qualified environmental professional.

        EPA preliminary view is that NCP requirements for public information and community
 relations as well as the analysis of alternatives may be relevant and appropriate.  Similarly,
 preparation of a community relations plan that includes reasonable notice of the proposed
 cleanup plan, opportunity for community involvement, and response to community comments on
 the plan may be relevant and appropriate.  Consideration of cleanup alternatives6 (which may
 include "no action") implemented through a simple, concise evaluation may be considered
 relevant and appropriate. The RLF  cooperative agreement recipient may be required to include
 information about the site and contamination issues; cleanup objectives; cleanup alternatives to
 address effectiveness, implementability, and cost; and the proposed cleanup plan.
         For cleanup of contamination caused by petroleum releases from underground storage tanks, a party to a cooperative
agreement with EPA typically considers a range of proven cleanup methods to address such contamination. This consideration
includes identification of contaminant sources, exposure pathways and an evaluation of corrective measures; and for UST
petroleum cleanup projects conducted in this manner, the cleanup constitutes, the required analysis of cleanup alternatives.
Appendix 1. Summary of Major Changes under the Brownfields Law                 Page 20

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              Appendix 2. Matrix of Major Changes
                    Major Changes Affecting Transitioning BCRLF Pilots"
                  AND FY2003 New Revolving Loan Fund (RLF) Guidelines
                               Old BCRLF PILOTS
                                  New RLF
 Requirements for old BCRLF
 pilots and new RLF
 cooperative agreement
 recipients or transitioning
 pilots
Pre Legislation BROWNFIELDS
PROGRAM - through FY2002
"OLD FUNDING"
 The BCRLF demonstration pilot
program was originally funded under
§104(d)(l) of the Comprehensive
Environmental Response,
Compensation, and Liability Act of
1980, as amended (CERCLA).
Regulations applicable to that program
included 40 C.F.R. Part 31 (Uniform
Administration Requirements for Grants
and Cooperative Agreements to State
and Local Governments), 40 C.F.R. Part
35, Subpart O (Cooperative Agreements
for Superfund Response Actions), and
40 C.F.R. Part 300 (The National Oil
and Hazardous Substances Pollution
Contingency Plan).
New Law (P.L. 107-118) - Beginning
2003
"NEW FUNDING"
The BCRLF pilots choosing to transition
under the new law (§ 104(k)) will be
required to follow the new law.
Regulations applicable to the transition as
well as new cooperative agreements will
include 40 C.F.R. Part 31 (Uniform
Administration Requirements for Grants
and Cooperative Agreements to State and
Local Governments), and "relevant and
appropriate" provisions of the NCP as
determined by EPA.
 Funding for BCRLF and RLF
 Cooperative Agreements
BCRLF cooperative agreement awards
of up to $1,000,000 per eligible entity.
Proposals from coalitions were
permitted
Initial Revolving Loan Funds (RLF)
awards may be up to $1,000,000 per
eligible entity. Proposals from
coalitions are permitted. EPA may
provide supplemental funding.
Appendix 2. Matrix of Major Changes
                                                            Page 21

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                     Major Changes Affecting Transitioning BCRLF Pilots"
                   AND FY2003 New Revolving Loan Fund (RLF) Guidelines
                                Old BCRLF PILOTS
                                    New RLF
 List of Eligible Governmental
 Entities for RLF Awards is
 Expanded
Eligibility for cooperative agreements
was limited to states, political
subdivisions, and Indian Tribes.
Eligibility has been expanded to include:
>       A general purpose unit of local
        government
>       A land clearance authority or
        other quasi-governmental
        entity  that operates under the
        supervision and control of or
        as an agent of a general
        purpose unit of local
        government
>       A governmental entity created
        by the State legislature;
>       A regional council or group of
        general purpose units of local
        government
>       A redevelopment agency that
        is chartered or otherwise
        sanctioned by a State
>•       A State
>       An Indian Tribe other than in
        Alaska
>       An Alaska Native Regional
        Corporation and an Alaska
        Native Village Corportion as
        those terms are defined in the
        Alaska Native Claims
        Settlement Act (43 U.S.C. 1601
        and following) and the
        Metlakatla Indian community

-       AND, existing BCRLF pilots
        choosing to transition under new
        law or apply  for new cooperative
        agreements under the new law
  Flexibility to Make BOTH
  RLF Loans and RLF
  Cleanup Subgrants
Must use at least 70% of capitalization
to make BCRLF Loans; 20% may be
used as direct financial assistance to
carry out lead agency responsibilities;
and, 10% may be used for general
administrative costs
It is EPA policy that at least 60% funds
tof capitalize RLF loan pool and eligible
programmatic costs. No more than
40% for cleanup subgrants and eligible
programmatic costs.
Appendix 2. Matrix of Major Changes
                                                               Page 22

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                      Major Changes Affecting Transitioning BCRLF Pilots"
                   AND FY2003 New Revolving Loan Fund (RLF) Guidelines
                                 Old BCRLF PILOTS
                                    New RLF
 Eligibility for RLF Loans
Loans may be made to any public or
private entity if:
                                 A.      is authorized to enter into a
                                         loan agreement
                                 B.      is an owner/operator of a site
                                         AND falls under a statutory
                                         CERCLA liability exemption
                                         OR EPA would not pursue the
                                         party under CERCLA
                                 C.      is an owner/operator who
                                         acquired property after the
                                         time of disposal and did not
                                         cause or contribute to the
                                         contamination
                                 D.      is NOT a generator or
                                         transporter of contamination at
                                         the site
                                 E.      is NOT a party suspended or
                                         debarred
Loans may be made to any eligible
entity, a site owner, a site developer, or
other person
who among other things:
A.      is authorized to enter into a
        loan agreement
B.      on or before the date of
        acquiring property, carried
        out all appropriate inquiries to
        meet the definition of
        "innocent landowner."

C.      is NOT using the funds to pay
        for response costs at a site for
        which they are potentially
        liable under §107 of CERCLA.

D.      is NOT a party suspended or
        debarred
 Eligibility for RLF
 CLEANUP Subgrants
The BCRLF may NOT provide
subgrants for cleanup.
Subgrants for cleanup may be provided
to:
A.      any eligible entity (other than
        the recipient of the grant)
B.      a nonprofit organization
The property  must be OWNED by the
entity or nonprofit receiving the grant
and the decision to make the subgrant
must take into account the following
considerations:
*•       extent grant facilitates
        creation, preservation or
        addition to a park or
        greenspace, undeveloped
        property, or other property
        used for nonprofit purposes;
*•       extent grant meets needs of
        community that has inability
        to draw on other resources for
        cleanup and subsequent
        redevelopment because of the
        small population or low
        income of the community;
*•       extent grant will facilitate
        reuse of existing
        infrastructure;
*•       the benefit of promoting the
        long-term availability of funds
        from a brownfields revolving
        loan fund.
*•       other similar factors  EPA
        considers appropriate.
Appendix 2. Matrix of Major Changes
                                                                Page 23

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                     Major Changes Affecting Transitioning BCRLF Pilots"
                   AND FY2003 New Revolving Loan Fund (RLF) Guidelines
                                 Old BCRLF PILOTS
                                    New RLF
 Definition of Brownfields
 Site is expanded to reach
 petroleum sites, mine
 scarred land and drug lab
 sites.
Abandoned, idled or underused
industrial and commercial facilities
where expansion or redevelopment is
complicated by real or perceived
environmental contamination.
CERCLA EXCLUDES petroleum
from the definition of hazardous
substances.
•        "Real property" the expansion,
         redevelopment, or reuse of
         which  is complicated by the
         presence or potential presence
         of a hazardous substance,
         pollutant, or contaminant.
         Expressly includes  'relatively
         low risk' petroleum sites, mine
         scarred lands, and sites
         contaminated by a controlled
         substance (i.e., drug labs). The
         definition excludes certain
         types of sites including
         facilities listed (or proposed
         for listing) on the National
         Priorities List.
Appendix 3: Guidance on Sites Eligible
for Brownfields Funding Under
CERCLA §104(k).
  Use of EPA funding for
 Administrative Costs
10% - 15% of cooperative agreement
award to RLF recipient may be used to
cover the recipient's general
administrative costs depending on
financial structure of the pilot.
Administrative costs are prohibited
under the RLF cooperative agreement.
Certain programmatic expenses
including direct costs for managing the
RLF will be eligible. Appendix 5:
Prohibition on Use of Funds.
  Cost Sharing Fund
  Requirements
No cost share funds required by
cooperative agreement recipient.
New 20% cost share requirement.  Cost
share may be in the form of case, labor,
material, or services. A cost share may
not be required if EPA determines that
the cost share would place an undue
hardship on the eligible entity.
 Meeting NCP
 Requirements
All environmental response
requirements must be conducted in
accordance with CERCLA and
consistent with the NCP.
NCP requirements apply ONLY to
extent they are relevant and appropriate
to the program as determined by EPA.
 Regulations Regarding
 Administration of BCRLF
 Cooperative Agreements
The requirements of 40 C.F.R. Part 31
and 40 C.F.R. Part 35 Subpart O must be
met.
40 C.F.R. Part 35 Subpart O
requirements not imposed under new
law. Grants are subject to 40 C.F.R.
Part 31.
 Recordkeeping
 Requirements
Cooperative agreement recipients and
borrowers must maintain documentation
for a minimum of 10 years after
completion of the cleanup activity
supported by each loan and must obtain
written approval from the U.S. EPA
prior to destroying records (40 C.F.R.
35.6705).
        Records must be kept for at
        least 3 years from the
        grantee's submission of its
        final expenditure report in
        accordance with 40 CFR 31.42.

        BCRLF pilots that transition
        must keep separate records for
        activities and expenditures
        prior to transition and
        activities and expenditures
        following transition. Records
        following transition must be
        able to differentiate petroleum
        and non-petroleum grants,
        cost-share requirements, etc.
Appendix 2. Matrix of Major Changes
                                                                Page 24

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 Appendix 3.  Guidance on Sites Eligible for Brownfields

                Funding Under CERCLA §104(k)


Contents                                                                    Page

3.1   Introduction	26

3.2   General Definition of Brownfield Site	26

3.3   Additional Areas Specifically Eligible for Funding 	26
      3.3.1  Contamination by Controlled Substance	27
      3.3.2  Contamination by Petroleum or Petroleum Product	27
      3.3.3  Mine-scarred Lands  	28

3.4   Particular Classes of Sites Not Eligible for Funding or Eligible Only Under Property-
      specific Determinations 	29
      3.4.1  Facilities Subject to CERCLA Removal Actions	31
      3.4.2  Facilities Subject to Unilateral Administrative Orders, Court Orders,
            Administrative Orders on Consent or Judicial Consent Decree Issued to or
            Entered into by Parties Under CERCLA  	32
      3.4.3  Facilities Listed (or Proposed for Listing) on the National Priorities List. ... 32
      3.4.4  Facilities to which a permit has been issued by the United States or an
            authorized state under the Solid Waste Disposal Act (RCRA), the Federal Water
            Pollution Control Act, the Toxic Substances Control Act, or the Safe Drinking
            Water Act	32
      3.4.5  RCRA Sites 	33
      3.4.6  Land disposal units that have filed a closure notification under Subtitle C of
            RCRA and to which closure requirements have been specified in a closure plan
            or permit.	34
      3.4.7  Facilities that are subject to the jurisdiction, custody or control of the United
            States government	34
      3.4.8  Sites Contaminated with PCBs	35
      3.4.9  Exclusion of LUST Trust Fund Sites	36
Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
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    Appendix 3: Guidance on Sites Eligible for Brownfields Funding
                        Under CERCLA Section 104(k)

3.1    Introduction

The information provided in this appendix should be used by applicants as a guide in
determining the eligibility of any property for brownfields funding. The following guidance
provides the EPA's preliminary views on the types of sites that may be appropriate for funding.
EPA is providing this information as guidance to applicants to assist you in developing your
proposals for funding under CERCLA §104(k). This guidance provides preliminary
interpretations and policy guidance that EPA intends to use as a guide when we exercise our
authority to award funds under §104(k). However, we believe that further development may
impact our view of these  provisions, and we will reevaluate our preliminary views in light of the
factual information we receive with each proposal, as well as over the course of implementing
the §104(k) grant program.

This guidance does not impose legally-binding requirements. Applicants are free to raise
questions about the appropriateness of these preliminary views, and EPA will consider whether
these preliminary views are appropriate at that time.  Any decision by EPA to apply this
preliminary guidance will be made based on the applicable statutory provisions.

3.2    General Definition ofBrownfield Site
  The new Brownfields Law defines a "Brownfield Site" to mean:

        " ...real property, the expansion,  redevelopment, or reuse of which may be
        complicated by the presence or potential presence of a hazardous substance,
        pollutant, or contaminant.'"

  Brownfield sites include all "real property," including residential, as well as commercial
  and industrial properties.
3.3    Additional Areas Specifically Eligible for Funding

The Brownfields Law identifies three types of properties that are specifically eligible for
funding:

*•      Sites contaminated by controlled substances.

>      Sites contaminated by petroleum or a petroleum product.

>      Mine-scarred lands.

See below for guidance on determining the scope of each of these three types of sites.
Applicants should identify properties included within their funding proposals that fall within the
scope of any of the following three areas.
Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
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3.3.1   Contamination by Controlled Substance

Sites eligible for funding include real property, including residential property, that is
contaminated by a controlled substance. A "controlled substance" is defined under the
Controlled Substances Act as "a drug or other substance, or immediate precursor, included in
schedule I, II, III, IV,  or V of part B of this title (21 USC Section 812). The term does not
include distilled spirits, wine, malt beverages, or tobacco..."

For example, sites eligible for brownfields funding may include private residences, formerly
used for the manufacture and/or distribution of methamphetamines or other illegal drugs where
there is a presence or potential presence of controlled substances or pollutants, contaminants, or
hazardous substances  (e.g., red phosphorous, kerosene, acids).

3.3.2   Contamination by Petroleum or Petroleum Product

Petroleum-contaminated sites (except those sites receiving LUST trust fund monies) are eligible
for brownfields funding.  Petroleum-contaminated sites (or portions of properties contaminated
with petroleum) that are eligible for brownfields funding include certain sites that are not
underground storage tank (UST) sites, as described below.  Petroleum is defined under
CERCLA as "crude oil or any fraction thereof which is not otherwise specifically listed or
designated as a hazardous substance under that section."

Applicants should note that the Brownfields Law restricts eligibility for brownfields funding to
petroleum contaminated sites that EPA or the state determines:

1.     Are of "relatively low risk" compared with other "petroleum-only" sites in the state; and

2.     For which there is no viable  responsible party and will be assessed, investigated, or
       cleaned up by  a person that is not potentially liable for cleaning up the site.

In addition, petroleum-contaminated sites must not be subject to a corrective action order under
the Resource Conservation and Recovery Act (RCRA) §9003(h) order.

In the case of proposals that  include requests for an assessment or direct clean up grant, or a
grant for a revolving loan fund, to address  petroleum-contaminated sites, applicants are
encouraged to indicate whether the site meets each of the criteria listed above.  An explanation
of each of these three  criteria is provided below.

Relatively Low Riski

Applicants whose brownfield site(s) include properties or portions of properties contaminated
with petroleum or petroleum products are encouraged to provide information in their proposal
indicating that the property represents a relatively low risk (compared to other petroleum-only
sites).  Our preliminary view is that  the following types of petroleum-contaminated sites are high
risk sites, or are not of "relatively low risk."  Our preliminary view is that petroleum-
contaminated sites that do not fall within scope of high risk sites, will be considered to be
"relatively low-risk" sites.
Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
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•      "High risk" sites currently being cleaned up using LUST trust fund monies.

•      Any petroleum-contaminated site that currently is subject to a response under the Oil
       Pollution Act (OPA).

Note: Any site that does not fall under any of the provisions listed above would be considered to
be of relatively low risk for purposes of determining eligibility for a brownfields grant.

"No Viable Responsible Party "and "Cleaned Up by a Person Not Potentially Liable":

Brownfields funding may be awarded to eligible entities for the assessment and cleanup of
petroleum-contaminated sites in those  instances where the eligible entity has not caused or
contributed to the petroleum contamination. When responding to the threshold criteria in their
funding proposals, applicants are asked to indicate whether or not the applicant owns the site or
sites for which funding is requested and describe whether the applicant is responsible for any of
the environmental concerns at the site(s).

Please note that eligibility for a brownfields grant DOES NOT waive liability under RCRA
Subtitle I, OP A, or any applicable state underground storage tank regulations.

"Not Subject to any Order Issued under RCRA 9003(h) ":

Any site that is under a RCRA Subtitle I corrective action  order (RCRA §9003(h)) is not
eligible for a grant.

Applicants should note that any determination that a site is of "relatively low risk" has meaning
solely for the purposes of determining  eligibility for a brownfields grant and has no effect  on
potential liability under RCRA §9003(h) (for the costs of corrective action and enforcement) or
liability under other federal statutes such as under §31 l(c) of the Clean Water Act (CWA) and
§1002 of OP A (for removal costs and damages that result from the discharge of oil into
navigable waters).

3.3.3  Mine-scarred Lands

Under the new Brownfields Law, mine-scarred lands are eligible for brownfields funding.
Applicants for brownfields funding that include properties within their proposal that they
believe fall within the following definition of mine-scarred lands are encouraged to provide in
the site description section of their  proposals information identifying and describing such
properties.

EPA's preliminary view is that "mine scarred lands" are those lands, associated waters, and
surrounding watersheds where extraction, beneficiation or processing of ores and minerals
(including coal) has occurred. For  the purposes of this section, the definition of extraction,
beneficiation, and processing is the definition found at 40 CFR 261.4(b)(7).

Mine-scarred lands include abandoned coal mines and lands scarred by strip mining.
Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
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Examples of coal mine scarred lands may include, but are not limited to:

•      abandoned surface coal mine areas,
•      abandoned deep coal mines,
       abandoned coal processing areas,
       abandoned coal refuse areas,
       acid or alkaline mine drainage, and
       associated waters affected by abandoned coal mine (or acid mine) drainage or runoff
       including stream beds and adjacent watersheds.

Examples of non-coal hard rock mine scarred lands may include, but are not limited to:

•      abandoned surface and deep mines,
       abandoned waste rock or spent ore piles,
       abandoned roads constructed wholly or partially of waste rock or spent ore
       abandoned tailings, disposal ponds, or piles,
       abandoned ore concentration mills,
•      abandoned smelters,
•      abandoned cyanide heap leach piles,
•      abandoned dams constructed wholly or partially or waste rock, tailings, or spent ore
•      abandoned dumps or dump areas used for the disposal of waste rock or spent ore,
       acid or alkaline rock drainage, and
       waters affected by abandoned metal mine drainage or runoff including stream beds and
       adjacent watersheds.

3.4    Particular Classes of Sites Not Eligible for Funding or Eligible Only Under Property-
       specific Determinations

EPA excludes the following types of facilities from funding eligibility unless the applicant
fulfills the requirements for demonstrating that the site meets the criteria for a property-specific
determination for funding (see Appendix 4 Guidance for Requests for Property-Specific
Determinations for Funding).  Applicants  are encouraged to indicate within the site description
section of their proposal if any  site or property included within the scope of their funding
proposal falls within the scope  of any of the categories of sites listed below. When requesting a
property-specific determination for funding, applicants should follow the instructions provided
in Appendix 4 for indicating that brownfields funding at such sites will ensure protection of
human health and the environment and promote economic development or the creation or
preservation of greenspace or recreational  areas. (Note: The following discusses limitations on
funding particular classes of sites.  Many of these limitations reflect policy decisions. Where the
limitations  are based on statutory provisions, we have noted that.)

Also, please note that in providing funding for brownfield sites, and given that a limited amount
of funding is available for brownfields grants, EPA's goal is to not provide  funding to sites to
where EPA has a planned or ongoing enforcement action.  While EPA does not intend that the
existence of a planned or ongoing enforcement action will necessarily disqualify  a site from
receipt of brownfields funding, EPA does believe it is necessary that EPA be aware of the
existence of any such action in making funding decisions.  As  a result, EPA will conduct an
investigation to evaluate whether a site is,  or will be, subject to an enforcement action under
CERCLA or other federal environmental statutes. EPA is requesting that applicants identify


Appendix 3. Guidance on Sites Eligible for Brownfields  Funding Under CERCLA §104(k)
                                                                                Page 29

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ongoing or anticipated environmental enforcement actions related to the brownfield site for
which funding is sought.

The Brownfields Law also excludes three types of properties from funding eligibility and does
not allow EPA the opportunity to provide funding for these properties after making a property-
specific determination.  These three types of properties include: 1) sites listed on the NPL, 2)
facilities subject to unilateral administrative orders, court orders, administrative orders on
consent or judicial consent decree issued to or entered into by parties under CERCLA, and 3)
facilities that are subject to the jurisdiction, custody or control of the United States government.
        Sites Not Eligible for Funding Without a Property-Specific Determination

   1.     Facilities subject to planned or ongoing CERCLA removal actions.

   2.     Facilities that are subject to unilateral administrative orders, court orders,
         administrative order on consent or judicial consent decree or to which a permit has
         been issued by the United States or an authorized state under the Solid Waste
         Disposal Act (as amended by the Resource Conservation and Recovery Act
         (RCRA)), the Federal Water Pollution Control Act (FWPCA), the Toxic
         Substances Control Act (TSCA), or the Safe Drinking Water Act (SDWA).

   3.     Facilities subject to corrective action orders under RCRA (§ 3004(u) or §3008(h))
         and to which a corrective action permit or order has been issued or modified to
         require the implementation of corrective measures.

   4.     Facilities that are land disposal units that have filed a closure notification under
         subtitle C  of RCRA and to which closure requirements have been specified in a
         closure plan or permit.

   5.     Facilities where there has been a release of poly chlorinated biphenyls (PCBs) and
         are subject to remediation under TSCA.

   6.     Portions of facilities for which funding for remediation has been obtained from the
         Leaking Underground Storage Tank (LUST) Trust Fund.

   Guidance regarding the scope of each of the funding restrictions listed above is provided
   below.
Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
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             Sites NOT Eligible for Brownfields Fund and NOT Eligible for a
                            Property-Specific Determination
   1.     Facilities listed (or proposed for listing) on the National Priorities List (NPL).

   2.     Facilities subject to unilateral administrative orders, court orders, administrative
         orders on consent or judicial consent decree issued to or entered into by parties
         under CERCLA.

   3.     Facilities that are subject to the jurisdiction, custory or control of the United States
         government.  (Note: Land held in trust by the United States government for an
         Indian tribe is eligible for brownfield funding.
3.4.1   Facilities Subject to CERCLA Removal Actions

Properties (including parcels of properties) where there are removal actions may not receive
funding, unless EPA makes a property-specific determination of funding eligibility.

EPA's preliminary view is that a removal may be identified by the occurrence of one of the
following events, whichever occurs first in time: EPA issues an action memo, EPA issues an
EE/CA approval memo; EPA mobilizes onsite; or EPA issues a notice of federal interest to one
or more potentially responsible parties (PRP(s)), which in emergencies may be made verbally.

Our preliminary view is that, for the purposes of eligibility to receive brownfields funding, and
for no other reason, a removal is complete, i.e., when the actions specified in the action
memorandum are met, or when the contractor has demobilized and left the site (as documented
in the "pollution report" or POLREP.).  Once a removal action is complete, a property is eligible
for brownfields funding without having to obtain a property-specific funding  determination.
Applicants applying for brownfields funding for sites at which removal actions are complete
must include documentation of the action being complete with their funding proposal.

Parcels of facilities not affected by removal action at the  same property may apply for
brownfields funding and may be eligible for brownfields funding on a property-specific basis.
Property-specific funding decisions will be made in coordination with the on-scene coordinator
(OSC) to ensure that all removals and clean up activities  at the property are conducted in safe
and protective manners and to ensure that the OSC retains the ability to address all risks and
contamination.

Please note that if a federal brownfields-funded site assessment results in identifying the need for
a new removal action, the grantee may continue to expend assessment grant funds on additional
assessment activities.  However, any additional expenditure of federal brownfield funds and any


Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
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additional site assessment activities should be conducted in coordination with the OSC for the
site.

Any property or site where there are removal actions may be eligible for brownfields funding if a
grant or loan applicant can demonstrate that brownfields funding will ensure protection of
human health and the environment and promote economic development, or the preservation of
greenspace. EPA will consider providing funding to an eligible entity for assessment or clean up
activities at the site, on a property-specific basis (see guidance on documenting eligibility for
property-specific funding determinations provided below).

3.4.2  Facilities Subject to Unilateral Administrative Orders, Court Orders, Administrative
       Orders on Consent or Judicial Consent Decree Issued to or Entered into by Parties
       Under CERCLA

Sites subject to administrative orders, court orders, and consent or judicial consent decrees
issued or entered into by parties under the provisions of CERCLA are not eligible for funding,
even on a property-specific basis. Therefore, applicants should not include such sites within the
scope of their brownfields funding proposals.

3.4.3  Facilities listed (or proposed for listing) on the National Priorities List

CERCLA sites listed on the NPL and sites proposed to be listed on the NPL are not eligible for
brownfields funding. In addition, these sites are not eligible for funding on a property-specific
basis. Therefore,  applicants should not include proposed or listed NPL sites within the scope of
brownfields funding proposals.

3.4.4  Facilities to which a permit has been issued by the United States or an authorized state
       under the Solid Waste Disposal Act (RCRA), the Federal Water Pollution Control Act,
       the Toxic Substances Control Act, or the Safe Drinking Water Act

Generally, in cases where a property or a portion of a property is permitted under the Resource
Conservation and Recovery Act, §1321 of the Clean Water Act, the Safe Drinking Water Act,
and/or the Toxic Substances and Control  Act, the property, or portion of the property, may not
receive funding, without a property-specific determination. Therefore, applicants should review
the following guidance regarding which types of permitted facilities may not receive funding
unless EPA makes a property-specific determination to provide funding. Applicants should note
that the exclusion for permitted facilities  does not extend to facilities with National Pollutant
Discharge Elimination System (NPDES)  permits issued under the authorities of the Federal
Water Pollution Control Act, but is limited to facilities issued permits under the authorities of the
Oil Pollution Act  (i.e., §1321 of FWPCA).

In cases where one or more portions of a  property are not eligible for funding, the applicant
should identify the specific permit and situation that causes the property to be excluded.  In
addition, the applicant must include, within the proposal, documentation that federal brownfields
funding for the assessment or clean up of the property will further the goals established for
property-specific funding determinations (see attached guidance on property-specific funding
determinations).
Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
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Any property or site that has been issued a permit under the federal environmental statutes listed
above (and in accordance with any additional guidelines provided below) may be eligible for
brownfields funding if a grant or loan applicant can demonstrate that brownfields funding will
ensure protection of human health and the environment and promote economic development, or
the preservation of greenspace.  EPA will consider providing funding to an eligible entity for
assessment or cleanup activities at the  site, on a property-specific basis (see guidance on
documenting eligibility for property-specific funding determinations provided below).

In some cases, a facility may not have  a permit or order because they are not in compliance with
federal or state environmental laws requiring that they obtain a permit or the facility has failed to
notify EPA of their regulatory status. Such facilities are not eligible for brownfields funding.
For example, a RCRA treatment unit operator is required to obtain a permit and/or notify EPA of
its operation. An operator that fails to  fulfill those obligations will likely not have a permit or
order as EPA will be unaware of their existence. Therefore, it is EPA's preliminary view that
such facilities are ineligible to receive brownfields funds as a result of their failure to comply
with a basic regulatory requirement.  Additional guidance on the eligibility of RCRA-permitted
facilities, including facilities under administrative or court orders, including corrective action
orders is provided below.

3.4.5  RCRA Sites

Excluded RCRA Facilities

EPA's preliminary view is that the following types of RCRA facilities may not receive funding
without a property-specific determination:

•      RCRA-permitted facilities.

       RCRA interim status facilities with administrative orders requiring the facility to conduct
       corrective action or otherwise address contamination, including facilities with orders
       issued under the authorities of RCRA §3008(a), §3008(h), §3013, and §7003.

•      Facilities under court order or under  an administrative order on consent or judicial
       consent decree under RCRA  or CERCLA that require the facility to conduct corrective
       action or otherwise address contamination at the facility.

       Land disposal units that have notified EPA or an authorized state of their intent to close
       and have closure requirements  specified in closure plans or permits.

However, if a grant or loan applicant is requesting a grant for property that is excluded, the
applicant may still be eligible for a brownfields grant, if the applicant can demonstrate that
funding will ensure protection of human health and the environment and promote economic
development, or the preservation of greenspace.  EPA will consider providing funding to an
applicant for assessment or cleanup activities at such a site on a property-specific basis (see
guidance on documenting eligibility  for property-specific funding determinations below).

RCRA Facilities that are Eligible for Funding
Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
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EPA's preliminary view is that the following types of RCRA facilities would not fall within the
scope of the exclusion and would be eligible for funding:

       RCRA interim status facilities that are not subject to any administrative or judicial order
       or consent decree;

       RCRA interim status facilities that are subject to administrative or judicial orders that do
       not include corrective action requirements or any other cleanup provisions (e.g., RCRA
       §3008(a) orders without provisions requiring the owner/operator to address
       contamination); and

       Parcels of RCRA facilities that are not under the scope of a RCRA permit or
       administrative or judicial order.

In addition, any property or site that has been issued a permit under RCRA may be eligible for
brownfields funding if a grant or loan applicant can demonstrate that brownfields funding will
ensure protection of human health and the environment and promote economic development,  or
the preservation of greenspace. EPA will consider  providing funding to an eligible entity for
assessment or clean up activities at the site, on a property-specific basis (see guidance on
documenting eligibility for property-specific funding determinations provided below).

3.4.6  Land disposal units that have filed a closure notification under Subtitle C of RCRA
       and to which closure requirements have been specified in a closure plan or permit.

RCRA hazardous waste landfills that have submitted closure notifications, as required under 40
CFR 264.112(d) or 265.112(d) generally will not be funded.  This may include permitted
facilities that have filed notification of closure  and for which EPA and/or an authorized state is
proceeding with final closure requirements for the facility.  For interim status facilities, this is
done through approval of a closure plan submitted with closure notification; for permitted
facilities, this is routinely done as a modification to the permit, requested by the facility at the
time of closure notification.

Please note that RCRA hazardous waste landfills that have submitted closure notifications may
be eligible for brownfields funding if a grant or loan applicant can demonstrate that brownfields
funding will ensure protection of human health and the environment and promote economic
development, or the preservation of greenspace.  EPA will  consider providing funding  to an
eligible entity for assessment or cleanup activities at the site, on a property-specific basis (see
guidance on documenting eligibility for property-specific funding determinations provided
below).

3.4.7  Facilities that are subject to the jurisdiction, custody or control of the United  States
       government.

Facilities owned by, or under the custody or control of the federal government are not eligible
for brownfields funding, even on a property-specific basis.  EPA's preliminary view is  that this
exclusion may not extend to:

•      Privately-owned, Formerly Used Defense Sites (FUDS)
Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
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•      Privately-owned, Formerly Utilized Sites Remedial Action Program (FUSRAP)
       properties
•      Other former Federal properties that have been disposed of by the U.S. government

Also note that land held in trust by the United States government for an Indian tribe is not
excluded from funding eligibility.

Also note that eligibility for brownfields funding does not alter a private owner's ability to cost
recover from the federal  government in cases where the previous federal government owner
remains liable for environmental damages.

3.4.8   Sites Contaminated with PCBs

The Brownfields Law excludes, from funding eligibility, portions of facilities where there has
been a release of PCBs that are subject to remediation under TSCA.

EPA's preliminary view is that all portions of properties are eligible for brownfields site
assessment grants, except where EPA has initiated an involuntary action with any person to
address PCB contamination. Also, it is our preliminary view that all portions of properties are
eligible for cleanup and RLF grants, except where EPA has an ongoing action against a disposer
to address PCB contamination.

Therefore, portions of properties that are excluded from funding eligibility include those portions
of properties where:

•      There is a release (or disposal) of any waste meeting the definition of "PCB remediation
       waste"  at 40 CFR 761.3;  and

•      At which EPA has an initiated an involuntary action with any person to address the PCB
       contamination. Such involuntary actions could include:
              •      Enforcement action for illegal disposal,
              •      Regional Administrator's order to characterize or remediate a spill or old
                    disposal (40 CFR 761.50(b)(3)),
              •      Penalty  for violation of TSCA remediation requirements,
              •      Superfund removal action, or
                    Remediation required under RCRA §3004(u) or §3004(v).

PCBs may be remediated under any one of the following provisions under TSCA:

       Section 761.50(b)(3), the directed characterization, remediation or disposal action.
•      Section 761.61(a), the  self-implementing provision.
       An approval issued under Section 761.61(c), the risk-based provision.
       Section 761.61(b) to the level of PCB quantification (i.e., 1 ppm in soil).
•      An approval issued under Section 761.77, the coordinated approval provision.
•      Section 761.79, the decontamination provision.
       An existing EPA PCB  Spill Clean-Up Policy.
•      Any future policy or guidance addressing PCB spill cleanup or remediation specifically
       addressing the remediation of PCBs at brownfield sites.
Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
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Note that any portion of a property where EPA has initiated an involuntary action with any
person to address PCB contamination and portions of properties where EPA has an ongoing
action against a disposer to address PCB contamination may be eligible for brownfields funding
if a grant or loan applicant can demonstrate that brownfields funding will ensure protection of
human health and the environment and promote economic development, or the preservation of
greenspace. EPA will consider providing funding to an eligible entity for assessment or cleanup
activities at the site, on a property-specific basis (see guidance on documenting eligibility for
property-specific funding determinations provided below).

3.4.9   Exclusion ofL VST Trust Fund Sites

The Brownfields Law excludes from eligibility for funding (unless EPA makes a property-
specific determination for funding) those sites (or portions of properties) for which assistance for
response activity has been obtained under Subtitle I of RCRA from the LUST trust fund. EPA's
preliminary view is that this provision may exclude:

•      UST sites where money is being spent on  actual assessment and/or cleanup of
       UST/petroleum contamination.

However, in cases where an UST site is located in a state where the state agency has used LUST
trust fund money for state program oversight activities but has not expended LUST trust funds
for specific assessment and/or cleanup activities at the site, the site would not necessarily be
excluded from  eligibility for brownfields funding.

Such sites may receive brownfields funding on a property-specific basis, if it is determined that
brownfields funding will protect human health and the environment and the funding will
promote economic  development or enable the creation of, preservation of, or addition to
greenspace (see guidance on documenting eligibility for property-specific funding
determinations provided below).

Examples of "excluded" sites (i. e., sites receiving LUST trust fund monies) we would consider
to be good  candidates to receive brownfields grants or loans

       All  UST fields pilots (50 pilots)

•      Sites (or portions of properties) where an assessment was completed using LUST trust
       fund monies and the state has determined  that the site is a low priority UST site and
       therefore additional LUST money cannot be provided for the cleanup of petroleum
       contamination, but the site still needs some cleanup and otherwise is a good candidate for
       economic revitalization.

•      Sites (or portions of properties) where LUST money was spent for emergency activities,
       but  then the site was determined to be ineligible for further expenditures of LUST trust
       funds, yet the site needs additional funding for continued assessment and/or cleanup that
       will contribute to economic revitalization  of the site.
Appendix 3. Guidance on Sites Eligible for Brownfields Funding Under CERCLA §104(k)
                                                                                Page 36

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    Appendix 4. Guidance for Requests for Property-

	Specific Determinations for Funding	



   Guidance for Requests for Property-Specific Determinations for Funding

4.1   Overview	38

4.2   Funding Limitations 	38

4.3   Criteria for Determining Eligibility for Funding on a Property-Specific Basis ... 40
      4.3.1  Protection of Human Health and the Environment	41
      4.3.2  Promote Economic Development  	41
      4.3.3  Creation of, Preservation of, or Addition to Parks, Greenways,
            Undeveloped Property, other Recreational Property, or
            Other Property Used for Nonprofit Purposes  	41
      4.3.4  Other Documentation	42

4.4   Properties Not Eligible for Brownfields Funding	42

4.5   Additional Information on Potential for Continual Funding at Sites Subject to
      Removal Actions 	43

4.6   Additional Information on Potential Funding for Petroleum-contaminated Sites . 43

4.7   Eligible Response Sites / Enforcement Limits	44
Appendix 4. Guidance for Requests for Property-Specific Determinations           Page 37

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                                    APPENDIX 4

       Guidance for Requests for Site-by-Site Determinations for Funding

4.1    Overview

Grant applicants must determine if any of the properties, or facilities, included in their proposal
require a property-specific determination. A list of the categories of facilities that only are
eligible for funding via a site-by-site determination is provided below.

If an applicant includes within the scope of a grant proposal a facility that requires a property-
specific funding determination, the proposal must include, on a separate page, the following
information (to the extent this information replicates information requested elsewhere in the
proposal, the applicant may directly copy the text to this page):

1.     Basic site identification information and eligible entity identification information.
2.     The specific circumstance that requires the grantee to request a property-specific
       determination (from the list in Section 3.4 of Appendix 3).
3.     A short explanation of why the site falls within the identified circumstance requiring the
       property-specific funding determination.
4.     An explanation of how providing brownfields funding for the site will meet the criteria
       necessary for making a property-specific funding determination (see below).
5.     The degree to which other funding is or is not available for the assessment or cleanup of
       the site.
6.     A explanation of whether or not the applicant is responsible for the contamination at a
       site.

The information provided will be used in making a property-specific determination for funding
purposes, which will take place during the proposal evaluation process.

4.2    Funding Limitations

Although the statutory definition of "brownfield site" is broad, Congress limited the extent to
which  brownfields/Mttrfi'ttg may be provided to eligible entities to assess and clean up sites that
are being addressed under other federal programs. In addition, the Brownfields Law prohibits
the use of grant and loan funds for the payment of response costs at sites for which the funding
recipient of the grant or loan is potentially liable under §107 of CERCLA.7 (See Appendix 5 for
additional prohibitions on the use of brownfields  funding.)

The types of facilities that Congress excluded from funding eligibility are listed below.
However, certain facilities listed below as excluded from funding eligibility, may  still qualify for
brownfields funding. The types of facilities marked with an asterisk (*) below are eligible for
brownfields funding, if a property-specific determination is made that funding for assessment or
       7 Applicants also should note that the Brownfields Law contains other prohibitions on the use of grant and
loan monies, including the use of grant and loan monies for paying penalties, administrative costs, federal cost-share
requirements, and the cost of complying with any federal law (see §101(k)(4)(B)).

Appendix 4. Guidance for Requests for Property-Specific Determinations             Page 38

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cleanup activities will meet the criteria set forth in the statute and meet the goals and criteria of
the brownfields program.

•      Facilities subj ect to planned or ongoing removal actions under CERCLA. *
       Facilities currently listed, or proposed to be listed, onNPL.
       Facilities subject to a unilateral administrative order, a court order, an administrative
       order on consent or a judicial consent decree under CERCLA.
•      Facilities that have been issued or entered into a unilateral  administrative order, a court
       order, an administrative order on consent, or judicial consent decree or to which a permit
       have been issued by the U.S. or an authorized state under RCRA, FWPCA, TSCA, or
       SDWA.*
       Facilities subject to RCRA corrective action (§3004(u)  or §3008(h)) to which a corrective
       action permit or order has been issued or modified to require the implementation of
       corrective measures.*
•      Land disposal units that have submitted a RCRA closure notification or that are subj ect to
       closure requirements specified in a closure plan or permit.*
       Facilities subject to the jurisdiction, custody, or control of a department, agency, or
       instrumentality of the U.S., except for land held in trust for an Indian tribe.
       Portions of facilities where there has been a release of PCBs and is subject to TSCA
       remediation.*
•      Facilities receiving monies for cleanup from the LUST trust fFund.*
 * Sites eligible for property-specific funding determinations.

The types of facilities marked with an asterisk above may qualify for brownfields funding if EPA
makes a property-specific determination that brownfields funding  will protect human health and
the environment and will either promote economic development or the creation, preservation, or
addition to parks, greenways, undeveloped property, other recreational property, or other
property used for nonprofit purposes. A determination of eligibility for funding will be made by
EPA at the time of proposal evaluation.

Grant applicants must determine whether the property or properties that are the subject of their
proposal fall within the scope of one or more of the funding exclusions listed above.  Actual
determinations of eligibility or exclusion will be made by EPA. However, if one or more sites
that are the subject of a grant proposal fall within the scope of any of the facility types listed
above, the grant proposal should specifically identify the site or sites, identify the applicable
funding exclusion from the list above, and describe why each site falls within the  exclusion.
Descriptions summarizing the scope of each of the funding exclusions listed above are provided
in Appendix 3 of these guidelines.
Appendix 4. Guidance for Requests for Property-Specific Determinations             Page 39

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4.3    Criteria for Determining Eligibility for Funding on Property-Specific Basis

Certain sites that are excluded from funding eligibility because the sites fall within the scope of
the statutory exclusions from the definition of "brownfield site"may qualify for brownfields
funding, if a property-specific determination is made that the sites meet the goals and criteria of
the brownfi elds program and the criteria set forth in the statute.  The following types of facilities,
although excluded from the definition of brownfield site above, are eligible for property-specific
determinations for brownfields funding:

1.      Facilities subj ect to planned or ongoing removal action under CERCLA.

2.      Facilities to which a permit has been issued by U.S. or authorized state under RCRA,
       FWPCA, TSCA, SDWA.

3.      Facilities subject to RCRA orders requiring corrective action (§3004(u) or §3008(h)).

4.      Land disposal units that have submitted a RCRA closure notification or that are subj ect to
       closure requirements specified in a closure plan or permit.

5.      Portions of facilities where there has been a release of PCBs and is subject to TSCA
       remediation.

6.      Facilities receiving monies for cleanup from the LUST trust fund.

In the case of each type of facility listed above, the new legislation allows EPA to award
financial assistance to an eligible entity for assessment or cleanup activities at the site, if it is
found that financial assistance will:

1.      Protect human health and the environment, and

2.      Either:
              promote economic development, or

       -      enable the creation of, preservation of, or addition to parks, greenways,
              undeveloped property, other recreational property, or other property used for
              nonprofit purposes.

Grant proposals for brownfields funding that include, within the scope of planned assessment or
cleanup activities, sites, properties or facilities that potentially fall within any of the funding
exclusions listed above, should specifically identify such sites and explain,  in as much detail as
possible, why the availability of brownfields funding will protect human health and the
environment and promote economic development or the  creation or preservation of
greenspace (or other listed objectives).  Information provided by the applicant in addressing
these criteria will be used in documenting the EPA's decision in making property-specific
determinations for funding eligibility.
Appendix 4. Guidance for Requests for Property-Specific Determinations             Page 40

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4.3.1   Protection of Human Health and the Environment

Grant applicants must provide a detailed discussion of how financial assistance for brownfields
assessment or clean up activities at each site for which a property-specific determination for
funding eligibility must be made will result in the allocation of funding in accordance with
legislative intent.  Each proposal for financial assistance, including a recipient of a revolving
loan fund grant seeking EPA approval of loans, whose proposal includes one or more sites for
which a property-specific determination must be made must include a discussion of how
brownfields funding will ensure protection of human health and the environment.
Documentation supporting a determination that brownfields funding will ensure protection of
human health and the environment should include documentation of one or more of the
following:

•      Specific examples of human health risks that will be mitigated by activities funded under
       a brownfields grant.
•      Specific environmental improvements that can reasonably be expected to result from
       activities funded under a brownfields grant.
•      Specific examples of contamination that will be addressed, including the specific
       hazardous substances, pollutants, or contaminants of concern and the environmental
       media that will be addressed.
•      Description of how the proposed cleanup and redevelopment of the property will ensure
       that the property will be protective of human health and the environment and that the
       remedy will be both  protective and consistent with the planned reuse of the property.

4.3.2   Promote Economic Development

Applicants also must provide detail on how financial assistance will promote economic
development or the creation of, preservation of, or addition to parks, greenways, undeveloped
property, other recreational property, or other property used for nonprofit purposes.
Documentation of economic development activities should include information such  as the
following:

•      A description of economic development activities that can reasonably be expected to
       occur as a result of brownfields funding (e.g., number of jobs created, estimated increase
       in the property and/or profits/sales tax base to  community, additional business expansion
       or new business relocation that may occur within the community).

•      A description of how the redevelopment of the brownfields  property will contribute to
       community-wide redevelopment and revitalization plans with a specific emphasis on how
       funding for the brownfields redevelopment is integral to the success of the community-
       wide plan.

•      A description of new businesses or business expansions that are planned for the
       brownfields property.

4.3.3   Creation of, Preservation of, or Addition to Parks, Greenways, Undeveloped Property,
       other Recreational Property, or Other Property Used for Nonprofit Purposes

If brownfields funding will be used by the applicant to preserve or create greenspace,
recreational areas, undeveloped property, or property to be used for nonprofit purposes, the


Appendix 4. Guidance for Requests for Property-Specific Determinations             Page 41

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applicant should provide specific documentation of these activities in the proposal.  Grant
proposals should provide specific information documenting how brownfields funding will result
in the creation of, preservation of, or addition to parks, greenways, undeveloped property, other
recreational property, or other property used for nonprofit purposes should include information
such as:

•      A description of the proposed park, recreational property, greenspace, undeveloped
       space, or other type of property to be used for nonprofit purposes, including size, use, and
       surrounding environment that will be  preserved or created as a result of brownfields
       funding.

•      An  assessment of how the property  will be used and by whom.

•      A description of how the property will be integrated with surrounding properties or
       environments.

•      A description of how the property will be maintained or preserved for its continued use
       as a greenspace, recreational area, etc.

When documenting compliance with these  criteria, applicants may copy information provided
elsewhere in their proposal, if such information directly addresses the criteria. However, all
documentation must be comprehensive and specific to actual events that will be mitigated or can
reasonably be expected to occur as a result of federal brownfields funding, should the applicant
receive brownfields funding.

4.3.4   Other Documentation

Property-specific brownfields funding determinations will be made based upon the availability
of funding  and the extent to which applicants can provide documentation that funding for
particular sites offers opportunities to protect human health and the environment and enhance
economic development or create or preserve greenspace (as the criteria  is described above).
However, at the  same time, Congress explicitly prohibited the use of federal brownfields funding
to reimburse liable parties for response costs.  The statute prohibits grant and loan monies from
being used for the payment of response costs at brownfield sites for which the recipient of a
grant or loan is potentially liable (§101(k)(4)(B)(i)(IV)).  Applicants are encouraged to address,
in the body of the proposal, why federal funding is appropriate for brownfields assessment
and/or cleanup at the site, given that brownfields funding cannot be used to reimburse liable
property owners for response activity costs.

4.4    Properties Not Eligible for Brownfields Funding

Grant applicants must keep in mind that the legislation excludes certain types of facilities from
qualifying for the property-specific funding determinations and therefore from federal
brownfields financial assistance. Sites or facilities that may not be included within the scope of
a grant proposal  and for which brownfields grants and loans cannot be made available regardless
of property-specific circumstances include the following types of sites  or facilities:

•      Facilities listed  or proposed for listing on the NPL.
Appendix 4. Guidance for Requests for Property-Specific Determinations             Page 42

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•      Facilities subject to a unilateral administrative order, an administrative order, a court
       order, an administrative order on consent, or judicial consent decree issued or entered
       into by parties under CERCLA.
•      Facilities that are subject to the jurisdiction, custody, or control of the United States
       government, except for land held in trust by the U.S. for an Indian Tribe.

Applicants should note that the discussion of property-specific determinations for funding sites
that are otherwise excluded from funding eligibility that is provided here only applies to funding
determinations. This discussion does not apply to, or have bearing on, any other property-
specific determinations or other aspects of the brownfields program.  For example, a property-
specific determination for funding purposes in no way affects a facility's or an entity's status
with regard to EPA's enforcement and cost recovery authorities.

4.5    Additional Information on Potential for Continual Funding at Sites Subject to
       Removal Actions

Some brownfield sites that receive federal brownfields assessment grants may, as a result of the
federally-funded site assessment require a CERCLA removal action. Under the Brownfields
Law (§ 101(39)(B)(i)), sites that are subject to planned or on-going removal actions under
CERCLA are excluded from funding eligibility. However, such sites may receive federal
brownfields funding, if a property-specific determination is made that such funding will meet the
property-specific determination criteria. Applicants should follow the procedures listed in the
previous section to request a property-specific determination. (Note: If a removal action is
required at a site where an assessment grant exists, the grantee does not need to obtain the
property-specific determination noted above. However, grant recipients must obtain approval
from the EPA removal OSC prior to any onsite work commencing).

Grant applicants requesting federal brownfields funding and recipients of revolving loan fund
grants seeking EPA approval of loans for sites at which a CERCLA removal action is planned or
on-going must document in their proposals (or loan approval requests) that the requested funding
will be used in accordance with legislative intent.  Therefore, proposals must include a
discussion of how brownfields grant or loan funds will ensure protection of human health and the
environment and provide detail on how financial assistance will promote economic development
or the creation of, preservation of,  or addition to parks, greenways, undeveloped property, other
recreational  property, or other property used for nonprofit purposes. Requests for property-
specific determinations for funding for the assessment or clean up of properties where there is a
planned or ongoing removal action will be considered in the following circumstances:  1) when it
is clear a follow-on response action will be required to address long-term threats at a site; and 2)
in cases where portions of a site are not under the current scope of a planned or ongoing removal
action.

In addition to the specific criteria listed above, applicants also should explain in their proposal
the extent to which other funding sources are not available for the assessment and/or clean up of
the site or property. Federal brownfields funding cannot be used to reimburse liable parties for
response costs.  In addition, federal brownfields funding may not be used for an ensuing removal
action. Applicants should specifically address, in the body of the proposal, why federal funding
is appropriate for brownfields assessment and/or cleanup at the site, given the Congressional
intent not to reimburse liable property owners for response activity costs.

4.6    Additional Information on Potential Funding for Petroleum-contaminated Sites


Appendix 4. Guidance for Requests for Property-Specific Determinations             Page 43

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As noted above, portions of facilities receiving assistance for response activities from the LUST
trust fund are excluded from eligibility for brownfields funding. However, these facilities are
eligible for funding on a property-specific basis. To assist applicants in determining whether
their sites are good candidates for property-specific funding determinations, below are examples
of "ineligible" sites {i.e., sites receiving LUST trust fund monies) EPA considers to be
potentially good candidates to receive brownfields grants or loans under the property-specific
determination provisions of the Brownfields Law (i.e., CERCLA §101(39)(C)).

       All UST fields pilots.
•      Sites (or portions of properties) where an assessment was completed using LUST trust
       fund monies and the state has not determined the site to be a "high risk"site and, although
       an assessment was completed using LUST trust fund monies, the site needs further
       assistance to conduct a cleanup.  Although the site is otherwise a good candidate for
       economic  revitalization, additional LUST money cannot be provided for the cleanup of
       petroleum contamination.
•      Sites (or portions of properties) where LUST money was spent for emergency activities,
       and are otherwise determined to be ineligible for further LUST trust funds, yet the site
       needs additional funding for continued assessment and/or cleanup that will contribute to
       economic  revitalization of the site.

4.7    Eligible Response Sites /Enforcement Limits

The Brownfields Law limits EPA's enforcement and cost recovery authorities at "eligible
response sites" where a response action is conducted in compliance with a state response
program.  Section 101(40) defines an "eligible response site" by referencing the general
definition of a "brownfield site" in §101(39)(A) and incorporating the exclusions at §101(39)(B).
The law places further limitations on the types of sites included within the  definition of an
eligible response  site, but grants EPA the authority to include within the definition of eligible
response site, and on a property-specific basis, some facilities that are otherwise excluded from
the definition. Such property-specific determinations must be based upon a finding that limits on
enforcement will  be appropriate,  after consultation with state authorities, and will protect human
health and the environment and promote economic development or facilitate the creation of,
preservation, or addition to a park, a greenway, undeveloped property, recreational property, or
other property used for nonprofit purposes. While the criteria appear similar to those for
determining eligibility for funding on a property-specific basis, the determinations are distinct,
will be made through a separate process, and may not be based on the same information
requested in this document for property-specific funding determinations.
Appendix 4. Guidance for Requests for Property-Specific Determinations             Page 44

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           Appendix 5. Prohibitions on  Use of Funds


Grant funds may not be used for the payment of:

•      A penalty or fine.
•      A federal cost-share requirement (for example, a cost share required by other federal
       funds).
•      An administrative cost (see below).
•      A response cost at a brownfield site for which the recipient of the grant or loan is
       potentially liable under CERCLA §107.
       A cost of compliance with any federal law, excluding the cost of compliance with laws
       applicable to the cleanup.
•      Unallowable costs (e.g. lobbying and fund raising) under OMB Circulars A-21
       (universities),  A-87 (state, tribal, and local governments), or A-122 (nonprofit
       organizations), and Subpart 31.2 of the Federal Acquisition Regulation (commercial
       organizations), as applicable.

The following discussion of the administrative cost prohibition is provided to you for illustrative
purposes only. If you receive a grant as a result of this competition, your agreement will include
a more detailed term and condition specifying requirements for complying with the
administrative cost prohibition.

Administrative Cost Prohibition

The Brownfields Law prohibits the use of any "part of a grant  or loan" for the payment of an
administrative cost. In implementing this prohibition, EPA has made a distinction between
prohibited administrative costs and eligible programmatic costs.

A.     Administrative Costs. Direct administrative costs are prohibited costs, including those in
       the form of salaries, benefits, contractual costs, supplies, and data processing charges,
       incurred to comply with most provisions of the Uniform Administrative Requirements for
       Grants contained in 40 CFR Part 30  or 40  CFR Part 31. Direct costs for grant
       administration are ineligible even if the grantee or subgrantee is required to carry out the
       activity under the grant agreement.  Prohibited administrative costs also are all indirect
       costs under OMB Circulars A-21, A-87, and A-122, and Subpart 31.2 of the Federal
       Acquisition Regulation.

B.     Statutory Exclusions.  The Brownfields Law provides that the administrative cost
       prohibition does not apply to:

       1. Investigation and identification of the extent of contamination;

       2. Design and performance of a response action; or

       3. Monitoring of a natural resource.
Appendix 5. Prohibition on Use of Funds                                         Page 45

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Using these statutory exclusions as a guide, EPA has developed the following guidelines on
eligible "programmatic" costs.

C.     Eligible Programmatic Costs. Eligible programmatic costs are expenses incurred for
       activities that are integral to achieving the purpose of the grant, even it EPA considered
       the costs to be "administrative" under the prior brownfields program. For example,
       programmatic costs are eligible under a revolving loan fund grant if incurred in making
       loans (such as the costs of loan processing, legal fees, and professional services) or
       overseeing the borrower's activities to ensure compliance with relevant and appropriate
       requirements of the National Contingency Plan (see 40 CFR §300.700 et seq.). These
       costs are programmatic, not administrative.  Direct costs, as defined in the applicable
       OMB Cost Principle Circular, are eligible for the following programmatic activities and,
       therefore,  are not subject to the administrative cost prohibition:

       1.      In  the case of grants for site characterization and assessment, expenses for
              inventorying, characterizing, assessing, and conducting planning related to
              brownfield sites.

       2.      In  the case of grants for capitalization of revolving loan funds:

              (a) expenses for making and managing loans,

              (b) expenses, including financial management expenses, for operating the
              revolving fund, and

              (c) expenses for making and managing subgrants under CERCLA
       3.      In the case of grants for direct use by eligible entities and nonprofit organizations
              in remediation of brownfield sites under CERCLA §104(k)(3)(A)(ii), expenses
              for site remediation activities.

       4.      In the case of grants for implementation of brownfields programs under CERCLA
              §104(k)(6), expenses for providing training, research, and technical assistance.

       5.      Costs incurred for complying with procurement provisions of 40 CFR Part 30 and
              31 are considered eligible programmatic costs only if the procurement contract is
              for services or products that are direct costs for performing activities specified
              above in Section B, "Statutory Exclusions,"  or Section C, "Programmatic Costs."

       6.      Costs for performance and financial reporting required under 40 CFR 30.51 and
              30.52, and 40 CFR 31.40 and 31.41 are eligible programmatic costs. Performance
              and financial reporting are essential programmatic tools for both the recipient and
              EPA to ensure that grants are carried out in accordance with  statutory and
              regulatory requirements.

Eligible programmatic costs can include expenses for travel, training, equipment, supplies,
reference materials, and contractual  support if those costs are reasonable and allocable to tasks
specified in a grantee's approved scope of work for carrying out the activities described in
Section B, "Statutory Exclusions," or Section C, "Programmatic Costs."


Appendix 5. Prohibition on  Use of Funds                                           Page 46

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Eligible programmatic costs may be used to help meet the RLF capitalization grant and direct
cleanup grant recipients' 20 percent cost share. Prohibited administrative costs may not be used
to meet recipients' cost share.

For further information on these prohibitions, contact your Regional Brownfields Contact listed
on page 14.
Appendix 5. Prohibition on Use of Funds                                          Page 47

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