Leaking Underground Storage Tank Trust Fund Prevention Cooperative Agreement Guidelines U.S. Environmental Protection Agency Office of Underground Storage Tanks Washington, D.C. EPA-510-K-25-001 MARCH 2025 ------- This page is intentionally blank ------- Table of Contents List of Acronyms 1 Introduction and Purpose 2 Statutory Authority, Regulatory Requirements, And Guidance 2 Cooperative Agreements or Grants 3 Table 1. Assistance Agreement Regulations relevant to UST Program 4 Section 1 - Allowable Uses for STAG and LUST Prevention Money 5 General Information on Allowable Uses 5 Table 2. Allowable Uses for STAG and LUST Prevention Money 6 Equipment Purchases 7 Section 2 - Grant Management and Accounting Information 7 Getting Started for New Project Officers 7 Table 3. Information to include on your Commitment Notice 8 Project or Site Codes 8 Delegation of Authority 8 Statutory Authority 9 Table 4. Correct Statutory and Delegation of Authority to enter in NGGS for LUST Prevention Cooperative Agreements 10 Multiple Appropriations or Split Funding 10 Sample Multiple Appropriation Award Grant Allocation Formula 11 Table 5. Example Multiple Award Funding Allocation 11 Sample Purpose Statement for Multiple Appropriations Award 11 Prohibition of LUST Prevention Grants in Performance Partnership Grants (PPGs) 11 Combining LUST Prevention Funding and SWDA § 2007 STAG Funding in the Same Cooperative Agreement 12 Eligible Applicants and Requirements 12 State Certification or Documentation: Energy Policy Act 12 Project Duration 12 Section 3 ~ Regulatory Requirements and Guidance 14 Project Requirements 14 Cost Sharing 14 Terms And Conditions Example 15 Reporting Requirements 15 ------- State Reporting Requirements and Schedule 15 Environmental Results 15 Section 4 ~ Policy Direction 17 Allocation and Distribution of Money 17 Funding Priorities 17 Workplan Guidance 17 Section 5 ~ Merit Review for Non-Competitive Grants 18 Attachment 1 - Grant Merit Review Checklist 19 ------- List of Acronyms AA Assistant Administrator CFDA Catalog of Federal Domestic Assistance CFR Code of Federal Regulations EPA United States Environmental Protection Agency EPAct Energy Policy Act of 2005 FR Funding Recommendation LUST Leaking Underground Storage Tank LTF LUST Trust Fund MA Multiple Appropriations NPTCD National Policy, Training and Compliance Division NGGS Next Generation Grant System OGC Office of General Counsel OGD Office of Grants and Debarment OLEM Office of Land and Emergency Management OMB Office of Management and Budget OUST Office of Underground Storage Tanks PO Project Officer PPG Performance Partnership Grants RA Regional Administrator STAG State and Tribal Assistance Grants SWDA Solid Waste Disposal Act TCR Technical Compliance Rate UST Underground Storage Tank 1 ------- Introduction and Purpose This guidance: Updates, replaces, and supersedes all previous guidance on this topic including the 2023 and 2008 Office of Underground Storage Tanks Program Guidance for Prevention Assistance Agreements Awarded Under the Leaking Underground Storage Tank Trust Fund Program and the 2009 Supplemental Guidance. Is a resource for regional UST Programs, including Project Officers, working with Regional Grants Management Offices to review, negotiate, and approve underground storage tank prevention assistance agreement proposals from states and territories (hereafter referred to as states), federally recognized Tribes, and intertribal consortia (hereafter referred to as Tribes), to help ensure timely awards. Provides a comprehensive list of allowable and unallowable activities under LUST Prevention and State and Tribal Assistance Grants funding. Incorporates grant merit review requirements and accompanying checklist, as required by updates to OMB's 2 CFR 200 Uniform Grant Guidance, effective Nov 12, 2020. Regions must negotiate and award assistance agreements with LUST Prevention and/or STAG money separately from LUST corrective action cooperative agreements and must ensure that funds are tracked and accounted for appropriately. As part of an agreement with EPA's Office of Grants and Debarment in establishing the 2 CFR §200.205 merit review process, OUST will reviewthisguidance and the merit review process at least once every five years for possible updates. Statutory Authority, Regulatory Requirements, And Guidance The Superfund Amendments and Reauthorization Act of 1986 established the federal LUST Trust Fund to address actual or suspected releases from federally regulated USTs by amending Subtitle I ofthe Solid Waste Disposal Act, also known asthe Resource Conservation and Recovery Act -1 The LTF is financed by a one-tenth of one cent pergallon taxon gasoline, diesel, and aviation fuels.2 All taxes are collected directly by the U.S. Treasury Department and placed in an account that Congress can draw appropriations from. The tax is not permanent and must be reauthorized periodically. The most recent reauthorization happened via the Infrastructure Investment and Jobs Act of 2021. extending the tax through Oct 1, 2026. The Energy Policy Act of 2005 expanded the authorized uses of the LTF2 to allow for specific UST prevention activities outlined in SWDA § 9011.3 EPA interprets SWDA § 9011 in combination with other UST release prevention authorities provided by EPAct to authorize the use of LTF Prevention money for the following major activities for petroleum or hazardous substance USTs: 1 For consistency purposes, SWDA will henceforth be used in this guidance. 2 Refer to 26 U.S.C. 4041, 4081 and 9508. 2 ------- Inspections and other enforcement activities. Operator training. Secondary containment support activities. Delivery prohibitions. Public reporting requirements. EPA's annual appropriation acts authorize financial assistance to Tribes for developing and implementing programs to manage USTs in Indian country. The EPAct (SWDA § 9013) also required EPA to develop a strategy for Tribal partnership and a Report to Congress. Prior to passage of EPAct, Congress authorized and appropriated STAG funds for UST prevention activities, as authorized by SWDA§ 2007(f)(2). EPA continues to receive a small STAG appropriation to fund UST prevention cooperative agreements to states for activities similar to those authorized by SWDA § 9011, as well as any UST prevention activities not authorized by § 9011. The language included annually in the STAG appropriation (reproduced below) for the SWDA § 2007(f)(2) program authorizes EPA to supplement grants awarded under LUST-funded SWDA § 9011 grants with STAG money appropriated for SWDA § 2007(f)(2) without regard to general legal restrictions on using two appropriations for the same activities: XXX shall be for grants to States under section 2007(f)(2) of the Solid Waste Disposal Act, which shall be in addition to funds appropriated under the heading "Leaking Underground Storage Tank Trust Fund Program" to carry out the provisions of the Solid Waste Disposal Act specified in section 9508(c) of the Internal Revenue Code other than section 9003(h) of the Solid Waste Disposal Act. Additional information on the UST Prevention program's statutory authority may be found in the Catalog of Federal Domestic Assistance Listing # 66.804 for the UST Prevention. Detection, and Compliance Program. As noted in the CFDA and the EPA Policy for Competition of Assistance Agreements, EPA allocates LUST Prevention3 funding to States and Tribes non-competitively. Cooperative Agreements or Grants EPA has discretion to award either grants or cooperative agreements to states and Tribes for UST prevention activities. The difference between a grant and a cooperative agreement is the degree of EPA's involvement in the activities that a state or Tribe will need to carry out with EPA financial assistance. If EPA's involvement is substantial, a cooperative agreement is the appropriate funding vehicle; if that involvement is not substantial, a grant is the appropriate vehicle. Section 7 of EPA Order 5700.5A1: EPA's Policy for Competition of Assistance Agreements provides additional 3 These funds allocated in the UST Program to prevent UST releases are called LUST Prevention because they come from the LUST Trust Fund, although the program is referred to as the UST Program. 3 ------- guidance on determining whether to award a grant or a cooperative agreement. EPA has determined that UST prevention assistance agreements funded with LUST Trust Fund and/or STAG funding are to be issued as cooperative agreements. Table 1. Assistance Agreement Regulations relevant to UST Program. Assistance Agreement (Grants and Cooperative Agreement) Regulations Citations Uniform Administrative Requirements, Cost Principles, And Audit Requirements Federal Awards 2 CFR Parts 200 and 1500 Grants And Cooperative Agreements With State And Local Governments 2 CFR Parts 200 and 1500 Nondiscrimination In Programs Or Activities Receiving Federal Assistance From The Environmental Protection Agency4 40 CFR Part 7 Public Participation 40 CFR §25.11 Intergovernmental Review Of Environmental Protection Agency Programs And Activities 40 CFR Part 29 Cost Principles, And Audit Requirements For Federal Awards 2 CFR Parts 200 and 1500 Payment 2 CFR §200.3, §200.305 Cost Sharing Or Matching 2 CFR § 200.306 Program Income 2 CFR § 1500.8 and 2 CFR § 200.307 Disposition of Equipment And Supplies 2 CFR § 200.313 and 200.314 Procurement 2 CFR § 200.317-200.326 and 2 CFR § 1500.10-1500.11 Financial Reporting 2 CFR § 200.328 Monitoring And Reporting Program Performance 2 CFR § 200.329 Subrecipient And Contractor Determinations And Requirements For Pass- Through Entities 2 CFR §200.331 and 2 CFR § 200.332 and 2 CFR § 200.333 Records Retention 2 CFR §200.334 through § 200.337 and 2 CFR § 1500.6, 2 CFR §200.334 through §200.338 and 2 CFR §1500.7 Remedies For Noncompliance And Termination 2 CFR §§ 200.208, § 200.339 and § 200.340 Quality Assurance 2 CFR § 1500.12 Government-Wide Debarment And Suspension (Non-procurement) 2 CFR Part 180 4 Pursuant to a permanent injunction issued by the U.S. District Court for the Western District of Louisiana on August 22, 2024, the EPA will not impose or enforce any disparate-impact or cumulative-impact-analysis requirements under Title VI against any entity in the State of Louisiana. Please visit: https://www.epa.gov/external-civil-rights/notice- compliance-permanent-iniunction-louisiana-v-epa-et-al for additional information. 4 ------- Section 1 Allowable Uses for STAG and LUST Prevention Money General Information on Allowable Uses The extent of allowable activities in the UST Prevention program depends largely on whether the recipient is a Tribe or state. More specifically, Tribes may use LUST Prevention money broadly to support any actions necessary to implement the UST prevention program, as highlighted in EPA's Strategy For An EPA/Tribal Partnership To Implement Section 1529 Of The Energy Policy Act Of 2005. States may use LUST Prevention money for activities that are reasonably necessary to carry out the major prevention activities outlined in EPAct, described below. States may use STAG money for all similar activities as LUST prevention money, as allowed by language in EPA's annual appropriation acts. In addition, states may use STAG money for additional state UST program and capacity- building activities associated with their UST programs but not specifically identified in EPAct.5 A more comprehensive description of the EPAct requirements states must meet can be found in the UST Prevention guidelines listed below. All state requirement activities listed in these guidelines are eligible for LUST prevention money, including: Inspecting USTs (Section 1523 of EPAct). QperatorTraining (Section 1524). Public Record (Section 1526). Delivery Prohibition (Section 1527). Financial Responsibility and Installer Certification (Section 1530). Secondary Containment (Section 1530). Table 2 below provides more specific examples of state activities that are and are not eligible for LUST prevention and STAG money, based on both the EPAct and subsequent EPA policy decisions. This list is not exhaustive, it represents the most common questions received on eligibility of using LUST and/or STAG funding money. 5 The list of eligible STAG activities does not apply to GAP funding, which has its own set of allowable and eligible activities found in Guidance on the Award and Management of General Assistance Agreements forTribes and Intertribal Consortium. 5 ------- Table 2. Allowable Uses for STAG and LUST Prevention Money. Allowable activities using STAG and/or LUST Prevention Funding UST compliance inspections, including training or oversight of inspectors. Enforcement activities, including issuing administrative orders and bringing actions for UST violations, including delivery prohibition. Database management activities, including inputting data and developing a public facing website, associated tracking, and enforcement related activities, and updating notification/registration forms. Training and outreach to UST owners and operators about their EPAct regulatory requirements, which may include equipment (such as spill kits). State program approval activities that are specifically related to EPAct regulatory requirements, such as developing enforcement policy for inspections. Performing state financial responsibility assurance and enforcement activities that fall under SWDA § 9004(f)(l)(A)(ii) or (iii). Allowable activities using STAG Funding Only (Unallowable with LUST P money) Activities not specifically related to EPAct requirements, such as developing regulations or interpretations on the 2015 UST regulation, records maintenance of leak detection monitoring, tank closure activities, financial responsibility activities, field constructed airport and hydrant systems activities, or outreach or compliance assistance not related to EPAct. Participation in equipment certification or materials approval activities. Participation in a leak detection workgroup. Participation in standards development activities. Conducting UST compatibility activities. Performing contractor certifications, such as installer, remover, tester, or repairers. Performing activities related to the interim prohibition in SWDA § 9003(g). Activities NOT Allowable with either LUST P or STAG funding Working on permitting programs not directly linked to delivery prohibition. Conducting LUST corrective actions that EPA can fund under SWDA § 9003(h)(7), such as site investigation, assessment, or cleanup of a suspected or actual release. Absent EPA approval as a participant support cost program (2 CFR § 200), equipment for which UST owners and operators are responsible to comply with UST requirements such as, testing petroleum UST operation and maintenance equipment, (such as purchasing spill kits, the replacement/repair of leaking tanks, UST installation, or UST removal and demolition activities). Responding to petroleum releases from vehicle accidents. Using funds to support state fund administrative costs or to help meet the state cost-share requirement. Performing any UST testing activities. Paying fines or penalties. Performing general training activities for UST staff not related to their credentials. 6 ------- Equipment Purchases. State and Tribal award recipients may use LTF money to purchase necessary equipment (items with a unit acquisition price over $10,000, unless the state has a lower threshold) and supplies for petroleum and hazardous substance UST release prevention, including UST compliance, enforcement, oversight, or program administration activities. For example, a state or Tribe may purchase a vehicle for its inspection program, provided they can demonstrate it is more cost effective to purchase the vehicle than to lease it on a long-term basis. When award recipients purchase equipment and supplies for UST release prevention at a single UST facility, they: Should account for these costs by charging them only to that UST facility. May use equipment at multiple UST facilities and then should allocate the costs of equipment over $10,000 among the UST facilities where the equipment is used. An exception may be made for equipment used at a large number of UST facilities (such as response vehicles or field equipment) where it would be impractical to allocate costs to individual sites. In these cases, the equipment and supplies should be charged by activity only. States should charge equipment and supplies that they use at multiple sites and that cost less than $10,000 to the UST facility(ies) that predominantly benefits from the use of the equipment and supplies. When states share purchased equipment for more than one UST facility7 they should develop a usage rate to facilitate allocating these costs to UST facilities. They should base the rate on the estimated life of the equipment. For example, if a piece of equipment is expected to last 1,000 hours and its cost (purchase price, plus estimated maintenance, less salvage value) equals $10,000, then the usage rate would be $10.00 per hour. States should set up a system to record by UST facility the hourly usage of each piece of equipment and then apply the equipment usage rates to calculate direct equipment charges. Section 2 -- Grant Management and Accounting Information. Getting Started for New Project Officers. This section provides information for new POs and those new to the UST Prevention cooperative agreement process. Other useful resources for new POs to consult are the Grants Assistance Agreement Almanac and the EPA Policies and Guidance for Grants. The Next Generation Grants System is EPA's grants management system. All UST Prevention cooperative agreements are both discretionary and non-competitive. There are currently three CFDAs associated with the UST and LUST programs, but the only correct one to use for Prevention cooperative agreements is #66.804 - Underground Storage Tank (UST) Prevention, Detection, and 1 ------- Compliance Program.6 See Table 3 below for details on what information should be included on a Commitment Notice. Table 3. Information to include on your Commitment Notice. Element Data to Enter Line 001 Site Name Name Req. No. Set by your FCO Fiscal Year The current Fiscal Year Appropriation Code F/LUST and/or E/STAG BO Code Your region, then F PRC 602DJ6 Object Class 4187 Amount The requested amount Site project See below Cost Org. Code Not needed l/D Not needed Description Not needed Project or Site Codes There is a general rubric for funding commitment notices for LUST Prevention cooperative agreements in NGGS. According to the Agency's Funds Control Manual. LUST Prevention cooperative agreements require a seven-digit project orsite code. The correct code may be entered using the following rubric: Characters 1 and 2 indicate the EPA Region, such as 01. Characters 3, 4, and 5 should be entered as "00G," with the G signifying a state or tribal cooperative agreement. Characters 6 and 7 should be entered as "AA," which indicates EPAct or LUST prevention money. There is no requirement for a project or site code for grants funded with STAG appropriations and the program code is L. Delegation of Authority NGGS allows selection of three separate delegations in the same funding recommendation via a dropdown menu, including: 1. EPA Delegation 1-114 Approving Assistance Agreements with Federally Recognized Tribes 6 The other two CFDAs include #66.805 - Leaking Underground Storage Tank Trust Fund Corrective Action Program. which is used for cooperative agreements in the LUST state fund cleanup program. Separate grant guidance is available at State Grant Policy and Guidance for LUST Corrective Action Cooperative Agreements; and #66.816 - Headquarters and Regional Underground Storage Tanks Program, which is used for grants that either promote the prevention, compliance, and identification of USTs or to support activities that promote corrective action, enforcement, and management of releases from UST systems in Indian Country (depending on appropriation). 8 ------- for Programs to Manage Hazardous Waste and Underground Storage Tanks and for Leaking Underground Storage Tank Activities 2. EPA Delegation 8-14 State Underground Storage Tank Financial Assistance Program and State Program Submittals, which authorizes RAs to approve STAG funded financial assistance agreements under SWDA 2007(f)(2). The RAs may, in turn, redelegate authority to the Division Director level; and 3. EPA Delegation 8-38 Grants and Cooperative Agreements for Subtitle I. authorizes the OLEM Assistant Administrator and RAs to take all necessary actions to approve LUST funded prevention grants or cooperative agreements with states and tribes. The OLEM AA may in turn, redelegate the authority to the OUST Office Director and the Regions may redelegate to the Division Director level. Statutory Authority For the UST Program, EPA primarily awards cooperative agreements to states, interstate agencies, Tribes, and intertribal consortia using appropriations from the LTF. However, EPA also awards a limited amount of STAG money, as authorized by SWDA § 2007, to a few states that undertake UST prevention activities not authorized by the LTF. EPA does not award STAG money to Tribes for UST prevention activities because Tribes are authorized to use LUST Prevention money for all UST prevention activities. Table 2 provides a list of Allowable Uses for STAG and LUST Prevention money. Table 4 below illustrates the correct, statutory authority, delegation of authority, and statutory language to enter on the Funding Recommendation in the NGGS, depending on both the recipient and the appropriation(s) used. 9 ------- Table 4. Correct Statutory and Delegation of Authority to enter in NGGS for LUST Prevention Cooperative Agreements. Grantee Funding Source Statutory authority (line A.15) Delegation of authority (line A.16) Statutory Language State STAG SWDA § 2007 8-14 State Underground Storage Tank Financial Assistance Program and State [Appropriations are available] "to be used to make grants to the states for purposes of assisting the states in the development and implementation of approved State underground storage tank and release detection, prevention, and correction programs under subchapter IX." Program Submittals State LUST Prevention SWDA § 9011 8-38 Grants and Coooerative Agreements (Subtitle 1). "Funds made available under section 6991m(2)(D) of this title from the Trust Fund may be used to conduct inspections, issue orders, or bring actions under this subchapter (1) by a State, in accordance with a grant or cooperative agreement with the Administrator, of State regulations pertaining to underground storage tanks regulated under this subchapter; and (2) bythe Administrator, fortanks regulated under this subchapter (including under a State program approved under section 6991(c) of this title." State STAG & LUST Prevention SWDA § 2007 and §9011 8-14 and 8-38. See two responses above. Tribe LUST Prevention SWDA § 9013 and the most recent EPA annual appropriation s act 1-114 Approving Assistance Agreements with Federally Recognized Tribes for Programs to Manage Hazardous Waste and Underground Storage Tanks and for Leaking Underground Storage Tank Activities. Annual Appropriations (must be reauthorized and updated every year) "Provided, That the Administrator is authorized to use appropriations made available under this heading to implement section 9013 of the Solid Waste Disposal Act to provide financial assistance to federally recognized Indian tribes for the development and implementation of programs to manage underground storage tanks. Multiple Appropriations or Split Funding POs may combine LUST Prevention and STAG funding allocated to a state into a single assistance agreement. In so doing, regions must follow EPA's policy on "split funding" or multiple appropriation grants, as specified in the EPA Order 5730.2. Multiple Appropriations Awards Policy, and provide adequate justification, for example, combining two allocations minimizes the administrative burden on the state. POs must also develop a proportional charging allocation methodology for single assistance 10 ------- agreements, and per the request of the Research Triangle Park Finance Center, include these charging allocations in the FR to facilitate grant expenditures. States do not need to account for LUST prevention and STAG money separately, but they must follow their existing procedures for complying with the financial management and audit standards in 2 CFR Part 200. As part of justifying a multiple appropriations grant, POs must include in the FR a description of the methodology for charging payments that reflect the proportional benefit to each appropriation. The allocation methodology should include the following: Define what will be allocated. For example, grant funding for (insert scope of work narrative), Describe the allocation methodology, including the allocation statistic proposed to distribute costs among subobjectives; the method used to derive the statistic; and the total cost including the portion of the cost to be disbursed by the subobjective, and Define the time-period for the methodology. Sample Multiple Appropriation Award Grant Allocation Formula Table 5 below provides an example of a multiple award funding allocation. Table 5. Example Multiple Award Funding Allocation. Project or Description Appropriation Funding Request Funding % Conducting UST compliance inspections, includingtraining and oversight of inspector. E (STAG) $150,000 10% Conducting UST compliance inspections, includingtraining and oversight of inspector. F (LUST prevention) $1,500,000 90% Total $1,650,000 100% Sample Purpose Statement for Multiple Appropriations Award The purpose of this project is to assist state UST program managers who implement leak detection, prevention, and related enforcement to manage state USTs that measure results in support of the mission-based goals of the national UST program. Prohibition of LUST Prevention Grants in Performance Partnership Grants (PPGs) Although grants may be combined with both LUST prevention and STAG appropriations, states cannot combine these grants with a STAG-funded PPG. This is because the statute authorizing PPGs requires that PPG funding come from the "categorical" STAG appropriation or that Congress otherwise authorize including grant funds in a PPG.7 This restriction does not apply to grants 7 Refer to Omnibus Consolidated Rescissions and Appropriations Act of 1996, (Pub. L 104-134; 110 Stat. 1321,1321- 11 ------- funded exclusively with STAG money. Combining LUST Prevention Funding and SWDA § 2007 STAG Funding in the Same Cooperative Agreement Although LUST Prevention cooperative agreements are prohibited for inclusion in PPGs, LUST Prevention funds and STAG funds available for SWDA § 2007 grants may be combined in a single grant under the Multiple Appropriations (MA) Award Policy. The Office of General Counsel (OGC) has advised that appropriations for LUST prevention grants and SWDA § 2007 grants are legally available for the same types of activities based on the language in EPA's annual appropriation act. Other requirements of the MA Policy such as developing an allocation formula for distributing charges between LUST prevention and SDWA § 2007 STAG apply. In practice, many of the administrative efficiencies achieved under PPGs may be accomplished by combining grants with LUST prevention and STAG appropriations. Decisions on PPG use are typically made by the grantee, in consultation with the regional PO, as the grantee will realize the administrative efficiencies. Eligible Applicants and Requirements These cooperative agreements or grants are only available to states or tribes and intertribal consortia meeting the requirements as described in the Federal Register Vol. 67. No. 213. pp. 67181-67183. Update to EPA Policy on Certain Grants to Intertribal Consortia, and 40 CFR 35.504. LUST Prevention cooperative agreements authorized by Section 2007(f) of the SWDA are only available to states. While tribes are technically authorized to access STAG funds, EPA has made the policy determination that STAG funds be limited to use for the states. State Certification or Documentation: Energy Policy Act States must either submit certification indicating they meet the applicable Energy Policy Act provisions or submit documentation describing their efforts to meet the requirements. Regional offices maintain the credentials or documentation for states' programs; tribes are not required to provide certification. A state must complete this or a similar certification form and submit it to the region. The region reviews this form and drafts a memo to OUST, indicating the state either meets the program provisions or has an acceptable plan in place to help achieve compliance, for example, the 3-year inspection cycle mandate. OUST reviews regional memos and state certifications, and when agreeing with regional findings, releases grant money for the award. Project Duration 299 (1996)) and the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1998, (Pub. L. 105-65; 111 Stat. 1344,1373 (1997)). 12 ------- The terms of the assistance agreement, including budget and project period duration are determined at the time of the award by the specific EPA regional Grants Office in consultation with the regional UST program. 13 ------- Section 3 -- Regulatory Requirements and Guidance The following regulations apply to all Prevention related cooperative agreements: 2 CFR Part 200. the Uniform Grant Guidance, government-wide policies and procedures for the award and administration of grants. 40 CFR Part 33 Disadvantaged Business Enterprise Rule. 2 CFR Part 1500. a subset of the Uniform Grant Guidance that includes EPA-specific grant requirements. 40 CFR Part 35. Subparts A and Bthat includes policies and procedures for providing assistance agreements through state and tribal continuing environmental program grants. Project Requirements States must agree to comply with guidelines EPA issued to implement Title XV, Subtitle B of EPAct as a term and condition of receiving UST prevention grants. See the grant guidelines on EPA's Energy Policy Act of 2005 and Underground Storage Tanks web page for specific guidelines about each relevant section, such as requirements on delivery prohibition, inspecting USTs, operator training, of EPAct. These guidelines do not apply to tribal LUST Prevention cooperative assistance agreements. Cost Sharing When receiving an assistance agreement awarded under SWDA § 9011 and other applicable provisions of Subtitle I of SWDA, states will, per EPA policy, provide a 25 percent cost share. The cost share is based on total project costs. The cost share is consistent with the cost share requirement in 40 CFR § 35.335 for release prevention and detection grants funded with STAG appropriations under Section 2007(f)(2) of the SWDA. States may meet the cost share requirement by any means authorized by the cost share provision of 2 CFR § 200.306. If states ask for documentation of the cost share requirement, regions may provide states a copy of the revised version of Assistance Listing 66.804. In addition, OLEM provided notice of the cost sharing requirement in Federal Register Vol.73, No. 61, pp.16674 - 16675, State Cost Share Requirement for Leaking Underground Storage Tank (LUST) Prevention Assistance Agreement and Authority to Provide LUST Prevention Assistgnce Agreements to Tribes. When a state receives a combined LUST prevention and STAG grant, the 25 percent cost share is based on total project costs under the combined grant. States need not track their expenditures for cost sharing separately for LUST activities and STAG activities. Consistent with 40 CFR §35.735, there is no cost share requirement for UST Prevention cooperative agreements for tribes awarded pursuant to annual appropriation acts. OUST decided not to require a tribal cost share, as there is no such requirement described in the SWDA or the annual appropriation acts. 14 ------- For states, EPA may make exceptions to the 40 CFR § 35.335. State And Local Assistance, Maximum Federal Share for STAG agreements to waive or reduce the 25 percent match or cost sharing requirement. The state cost share provision in 40 CFR § 35.335 is not based on a statutory requirement contained in the applicable grant making authority, § 2007(f)(2) of the Solid Waste Disposal Act. If states request a waiver or reduction of the 25 percent cost share requirement for STAG funded SWDA § 2007(f)(2) assistance agreements, regional offices will need to formally request a waiver to 40 CFR § 35.335 from the Director of OGD's National Policy, Training and Compliance Division (NPTCD) from the provision of EPA's grant regulations as provided in 2 CFR 1500.4. See NPTCD's deviation or waiver procedures. Similarly, although the 25 percent cost share for UST Prevention cooperative assistance agreements is not covered by 40 CFR §35.335, any Region requesting a waiver from the policy- based cost share requirement for LUST prevention assistance agreements must follow the same procedures used for waivers under 2 CFR § 1500.4. Regions may request waivers on a limited basis. Please contact OUST to inquire about the process. Terms And Conditions Example. In the terms and conditions section of a grant award, regions must include a term and condition that the state grantee complies with provisions of the Energy Policy Act for all their UST grants. The following is a sample term and condition: "The recipient understands it is subject to requirements described in current EPA guidelines implementing Subtitle B, Underground Storage Tank Compliance Act, of Title XV of the Energy Policy Act, that are effective as of the date of this award or funded amendment Reporting Requirements Reporting requirements are identified at 2 CFR § 200.329. POs may include additional information regarding the content and frequency of reporting requirements in the terms and conditions of the assistance agreements, provided the frequency of reporting is consistent with regulatory limits. State Reporting Requirements and Schedule State reporting requirements and schedule for UST prevention assistance agreements are identified in the National Program Guidance and in the semiannual report of UST performance measures. Environmental Results Regions must negotiate grant-specific performance measures with each state or tribe. These measures are tailored for each state or tribe, and eligibility requirements are based on funding type. 15 ------- Negotiations occur once a grantee submits a draft workplan for regional review and priorto formal submission in www.grants.gov. Refer to the National Program Guidance for OLEM(updated annually) for national performance measures for LUST prevention activities. Specific national LUST prevention environmental results include the UST technical compliance rate (TCR). 16 ------- Section 4 -- Policy Direction Allocation and Distribution of Money LUST Prevention and STAG appropriations are distributed to the Regions using an allocation formula OUST developed, as required by 40 CFR 35.332 and program policy. This formula calculates the amount of financial need by establishing a base amount for each state and then considering the number of federally regulated USTs in each state. States may make requests to regions for a certain amount of money to come from STAG, as this money may be more widely used to support prevention related activities not specifically outlined in the Energy Policy Act. Regional offices are empowered to make the final determination on the actual amounts each state and Tribe should receive. Funding for Tribes is not included in the formula. However, funds are distributed to the tribes based on needs identified by the Regions and informed by the EPA's national Tribal funding panel. Funding Priorities LUST Prevention program funding is used to provide resources to states and tribes for their UST programs. Specific examples of funded projects include inspections, enforcement, developing leak prevention regulations, and other program infrastructure. Regions should give priority to funding inspections in states that are out of compliance with EPAct requirements and to assisting states with adopting measures, for example, delivery prohibition, secondary containment, operator training, as required by EPAct and EPA's grant guidelines. Workplan Guidance As part of the Office of Management and Budget's updates to 2 CFR Part 200 Uniform Grant Guidance, we added this section to provide guidance on what should be included in a prevention assistance grant workplan. However, oversight of grant workplans is a regional responsibility and there is no expectation OUST will review workplans. States and Tribes must submit applications for LUST prevention or STAG grants, and they must include budgets and workplans. The budget should include a breakdown of associated costs of each planned activity and output. The workplan should include a proposed schedule for each activity, specifying target dates and milestones fortimely project completion. EPA's regional grants office determines the scope of work of each prevention grant at the time of the award. 17 ------- Section 5 -- Merit Review for Non-Competitive Grants In August 2020, the Office of Management and Budget announced changes to the Uniform Grant Guidance at 2 CFR Part 200. The most substantiative change to the grant rules was the requirement for all Agency non-competitive grants to establish a formal merit review process. This requirement necessitates the regional project officer to certify that the grant meets program objectives, and that the grantee can meet requirements of the workplan, given their past performance. It requires that the merit review process and checklist be reviewed periodically, which OUST will conduct at least every five years. The checklist in Appendix 1 is effective as of November 13, 2020, and applies to all new grants awarded after that date. It does not apply to supplemental grants where work has not changed and there are no performance issues with the grantee, nor to any incremental funding amendments. This checklist should be added to Section M of the FR in NGGS. 18 ------- Attachment 1 -- Grant Merit Review Checklist Merit Review Checklist For Applications For New Awards And Supplemental Amendments - STAG UST Categorial And LUST Prevention Grants (Federal Assistance Listing # 66.804) Note: OGD approved this version on March 19, 2021. Review of Grant # Review conducted by (Name and title e.g., project officer) Review conducted on (Date) This checklist was developed to comply with the merit review requirements for non-competitive grant applications under 2 CFR 200/Uniform Grant Guidance. It was developed for use by Regional project officers to complete before submitting their funding request to the Regional grant office. Effective as of November 12, 2020, this checklist will be necessary for all new awards, as well as for supplemental amendments where the work is significantly different from the underlying grant and depending on how the grantee has been performing under the grant. It is not required for incremental or unfunded amendments to the grant. This checklist and the STAG UST categorial and LUST Prevention grant merit review process will be reviewed by the UST program manager on at least a five year cycle, in compliance with the periodic review requirements under 2 CFR 200.205. For grants funded with both STAG and LUST Prevention Funding, project officers are to use the criteria for both funding sources when analyzing the merits of the application. Section 1 describes the determination on whether a merit review is needed for an application for a supplemental amendment. If the answer to both questions is no, you do not need to do a merit review for the application. If the answer to either question is yes, then a merit review based on this checklist is required for the application. Sections 2-4 establishes the process for conducting merit review and is needed for all new awards, and supplemental amendments based on the section 1 analysis. 19 ------- Section #1 - Supplemental Funding Applications Merit Review Determination 1. Are the activities to be performed under the supplemental funding application significantly different from the activities in the underlying grant? YES NO 2. Have there been any significant issues with the grantee's performance and reporting so far under the grant that there are concerns whether the grantee can successfully achieve the program objectives. This includes not meeting the 3-year EPAct inspection cycle and not having a plan for coming back into compliance. YES NO If you have answered no to both questions, sign and date the form and your review is complete. If you answered yes to either of these questions, please continue to section #2. Section #2 - New Merit Review Process 3. Does the grantee's application meet the following criteria: a. STAG grants only-For STAG grants funded under SWDA§ 2007, the proposed workplan complies with the workplan requirements outlined in 40 CFR 35.107. and the feasibility requirements listed in 40 CFR 35.111. namely that the grant is feasible "given the applicant's existing circumstances, past performance, program authority, organization, resources, and procedures." b. LUST prevention grants only - For LUST grants funded under SWDA § 9011, the proposed workplan is feasible given the applicant's existing circumstances, past performance, program authority, organization, resources, and procedures. c. The grantee's workplan complies with the allowable activities authorized by SWDA § 9003(i), 9003(j), 9005(c), 9010, 9011, and 9012, and as outlined on page 6 of the Office of Underground Storage Tanks (OUST) Program Guidance for FY 2008 Prevention Funding for Assistance Agreements Awarded under the Leaking Underground Storage Tank (LUST) Trust Fund Program (May '08). a) YES NO N/A b) YES NO N/A c) YES NO 20 ------- Section #3 - Factors in Considering the Grant Amount 4. Notwithstanding that the applicant's annual allocation allotment is determined by OUST's LUST prevention allocation formula, does the workplan justify this year's funding amount as originally requested? YES NO 5. If the originally requested amount is not justified, have you worked with the grant applicant to resolve these issues and requested modifications to their workplan that ensures a successful grant? YES NO N/A Section #4 - Grant compliance with LUST program objectives 6. The objective of the LUST Prevention program, as listed in Assistance Listing 66.804, is to assist states, Territories, Tribes, and Intertribal consortia in developing and implementing UST programs for leak prevention, compliance, and other activities authorized by the Energy Policy Act of 2005. Does the proposed workplan help achieve these program objectives? YES NO 7. If yes, please provide a brief description of how the grantee is likely to be successful in achieving program objectives. 21 ------- |