UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                                                            WSG 168A
                                                               Date Signed: May 18, 2004

MEMORANDUM

SUBJECT:   Modifications of Policy Regarding Use of the Drinking Water State Revolving
             Fund Capacity Development Ste-Aside for Routine Compliance Monitoring

FROM:      Benjamin Grumbles
             Acting Assistant Administrator

TO:          Regional Administrators
             Regions 1-10
       I am writing to modify Agency policy regarding the use of the Drinking Water State
Revolving Fund (DWSRF) capacity development set-aside for routine compliance monitoring
costs. On September 4, 2003, the Agency determined that the DWSRF capacity development set-
aside authorized by section 1452(k)(l)(B) of the Safe Drinking Water Act, as amended, should
not be used for long-term, routine compliance monitoring.1 Since several States were using the
set-aside for monitoring, the policy established a transition period to minimize program
disruption.  The policy established January 1, 2005, as the date by which State were to stop use of
the set-aside funds for routine monitoring.

       In response to concerns that recently have come to my attention, I am adjusting the
timeline set forth in the policy. Because some State Legislatures only meet every other year, a
deadline of January 1, 2005, may not afford such States an opportunity to work with their
legislatures to secure alternative funding for routine activities. In order to address this concern, I
am extending the deadline for transition from use of the set-aside to January 1, 2006. If any
States currently using the set-aside face extraordinary barriers to transitioning away from such use
by January 1, 2006, then I ask that you negotiate a reasonable time frame with them on a case-by-
case basis.

       If you have questions, please feel free to contact me or have your staff contact Charles
Job,  Infrastructure Branch Chief, at (202) 564-3941.
1 "Eligibility of Routine Compliance Monitoring Costs under the Drinking Water State Revolving
Fund Capacity Development Set-Aside"; DWSRF 03-04; September 4, 2003; From: Cynthia
Dougherty, Director, Office of Ground Water and Drinking Water; To: Water Division Directors
Regions I-X.

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