Guidelines for Implementing the Hardship Grants Program for Rural Communities

SUMMARY: The Environmental Protection Agency is publishing the final

Guidelines for Implementing the Hardship Grants Program for Rural

Communities, including the funding allotment. (Catalogue of Domestic

Federal Assistance #66.470)

ADDRESSES: Write to Stephanie vonFeck (4204), Environmental Protection

Agency, 401 M Street SW, Washington, DC 20460, or via Internet at

[email protected] for copies of the final Guidelines.

FOR FURTHER INFORMATION CONTACT: Stephanie vonFeck (4204),

Environmental Protection Agency, 401 M Street SW, Washington, DC 20460,

(202)260-2268.

SUPPLEMENTARY INFORMATION: These Guidelines implement a $50 million

grant program contained in the Omnibus Consolidated Rescissions and

Appropriations Act of 1996 (Pub.L. 104-134). The Agency will make

grants to States, which in turn can provide assistance to improve

wastewater treatment services in poor, rural communities with

populations of 3,000 or fewer where such services are currently

inadequate. The Hardship Grants Program for Rural Communities will be

coordinated with the Clean Water State Revolving Fund (SRF) program and

in accordance with the SRF program regulations at 40 CFR part 35,

subpart K and existing Agency grant regulations and procedures,

including 40 CFR part 31.

The Hardship Grants Program for Rural Communities may be subject to

your State's intergovernmental review process under Executive Order

12372, and/or the consultation requirements of Section 204,

Demonstration Cities and Metropolitan Development Act of 1966, 42

U.S.C. 3334 (the Act). Applicants must contact their State's Single

Point of Contact (SPOC) for intergovernmental review as early as

possible to find out whether Hardship grant applications (CFDA #66.470)

are subject to the State's Executive Order 12372 review process and, if

so, what material must be submitted to the SPOC for review. If the

application is for a community within a ``metropolitan area'' as that

term is defined at 42 U.S.C. 3338(4), then the requirements of the Act

are applicable. You must notify area-wide metropolitan or regional

planning agencies and or general government units authorized to govern

planning for the locale of your project of your intended application.

SPOCs and other reviewers should send their comments concerning

Hardship Grant applications to the appropriate Regional State Revolving

Fund Coordinator no later than 60 days after receipt of an application

and other required material for review. In accordance with 40 C.F.R.

29.8(c) a 60 day review is mandatory for projects subject to the Act.

Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business

Regulatory Enforcement Fairness Act of 1996, EPA submitted a report

containing this document and other required information to the U.S.

Senate, the U.S. House of Representatives and the Comptroller General

of the General Accounting Office prior to publication of this document

in today's Federal Register. This document is not a ``major rule'' as

defined by 5 U.S.C. 804(2).

Dated: March 17, 1997.

Dana Minerva,

Acting Assistant Administrator.

Appendix--Hardship Grants Program for Rural Communities

Background

On May 16, 1995, the House passed the Clean Water Amendments of

1995 (H.R. 961), a bill to reauthorize the Clean Water Act. Section

102(d) of this bill authorizes $50 million for each of Fiscal Years

1996 through 2000 for grants to States, which the States in turn can

use to provide assistance for the wastewater needs of poor, rural

communities. Although no further action was taken on H.R. 961, the

Omnibus Consolidated Rescissions and Appropriations Act of 1996 (Pub.

L. 104-134), which the President signed into law on April 26, 1996,

provided $50 million for these grants in FY 1996, stating that they are

to be used in accordance with section 102(d) of H.R. 961. This sum is

to be taken from the $1.3485 billion reserved for capitalization grants

to State Revolving Funds (SRF) under title VI of the Clean Water Act.

Section 102(d) of the House Clean Water Act reauthorization bill

(H.R. 961) reads, in pertinent part:

(T)he Administrator may make grants to States to provide

assistance for planning, design, and construction of publicly owned

treatment works and alternative wastewater treatment systems to

provide wastewater services to rural communities of 3,000 or less

that are not currently served by any sewage collection or wastewater

treatment system and are severely economically disadvantaged, as

determined by the Administrator.

The relevant clause in the ``State and Tribal Assistance Grants''

language of the Omnibus Appropriations Act reads:

Provided Further, That of the funds made available under this

heading for capitalization grants for State Revolving Funds under

title VI of the Federal Water Pollution Control Act, as amended,

$50,000,000 shall be for wastewater treatment in impoverished

communities pursuant to section 102(d) of H.R. 961 as approved by

the United States House of Representatives on May 16, 1995 . . .

Although the legislative history to H.R. 961 does offer some

instruction on how to define a ``severely economically disadvantaged''

community, additional documented direction from Congress about this new

program is scant (Attachment A contains excerpts from both the

legislative history to section 102 and the Omnibus Appropriations Act

provision). In the absence of detailed guidance from Congress, the

Agency plans to administer this program in concert with existing

programs and procedures to the maximum extent possible.

Basic Principles for Administering Rural Community Hardship Grants

EPA Regions will be responsible for awarding grants to the States,

pursuant to a delegation of authority signed by the Administrator

(Attachment B). States will make grant awards to individual communities

or projects or will provide technical assistance to qualifying

communities. The award of grants or the provision of technical

assistance by a State to benefit qualifying communities will be

referred to in these guidelines as hardship assistance. The definition

of technical assistance is provided under the heading ``Eligible

Projects''.

Except as described in the following section, the Agency will

administer the rural community hardship grants in conjunction with the

Clean Water State Revolving Fund program (CW SRF), because the CW SRF

capitalization grant appropriation is the source for these funds and

because the program provides an established funding mechanism in each

State. By combining CW SRF loans and grants, more qualifying

communities will benefit from the limited funding that is available.

The communities would also continue to have a stake in their projects,

and thereby an incentive to keep project costs low.

[[Page 13523]]

In addition to the CW SRF capitalization grant, States will be

awarded a separate grant consisting of funds which can be awarded as

hardship assistance to qualifying communities. These funds are in

addition to the CW SRF capitalization grant awarded to the State.

Communities that apply for CW SRF loans and that qualify according to

the criteria established in these guidelines and any additional State

guidelines would then be able to receive hardship assistance in an

amount that would make that CW SRF loan affordable.

The loan amount must account for at least 15 percent of the CW SRF-

eligible cost of the project before the Agency will consider it an SRF

project. Otherwise, the project will be governed by the guidelines

described under the following heading below: ``Projects receiving less

than 15 percent in SRF funding or hardship assistance only''. All

communities seeking hardship assistance must apply for an SRF loan. The

State will then determine the appropriate mix of hardship grant and SRF

loan funds.

Administering this program in conjunction with the CW SRF program

has a number of other advantages. The approach will encourage

communities to move forward with needed project construction, rather

than wait to receive grant funding for the entire cost of those

projects. Projects in communities that receive hardship assistance will

receive public review and approval because they will be listed on the

State's CW SRF Intended Use Plan (IUP). These projects will also

undergo an environmental review, under State Environmental Review

Procedures (SERP) established for the CW SRF program, and will comply

with other SRF requirements which are more streamlined than the

requirements that apply to projects funded with direct Federal grants.

For example, compliance with cross-cutting Federal environmental

authorities can be accomplished in conjunction with the SERP. A listing

of cross-cutting Federal authorities currently applicable in the CW SRF

program is attached (Attachment C).

EPA's general grant regulations at 40 CFR part 31 and other Agency

regulations that apply to grant recipients (e.g., 40 CFR part 32,

debarment, suspension, and drug-free workplace requirements), will

apply to the State as the grant recipient, in the same manner as they

apply to the State as the recipient of CW SRF capitalization grants.

Because projects receiving hardship assistance will be projects listed

on the State's CW SRF IUP and will also be receiving SRF loans, the

States must follow the Agency's SRF regulations at 40 CFR part 35,

subpart K, with respect to the recipients of that assistance. The CW

SRF regulations prescribe rules for drawing cash and for the specific

types of assistance CW SRF can provide. The rules for drawing cash for

hardship assistance are described under the heading ``Allocation of

grant funds'' below.

In addition to hardship assistance for rural communities described

in these guidelines, there are a number of other Federal programs that

provide loan and grant assistance for the wastewater needs of rural

communities. The water and wastewater loan and grant program

administered by USDA's Rural Utility Service and the Department of

Housing and Urban Development's Community Development Block Grants are

just two examples. Often, these other Federal programs can provide

assistance for costs that would be ineligible under the statutory

provisions being implemented in these guidelines (e.g., indoor plumbing

may be funded by CDBG funds in limited circumstances). The Agency

expects that State officials will take these other programs' benefits

into account in devising the most effective assistance package for a

rural community.

Projects Receiving Less Than 15 Percent in SRF Funding or Hardship

Assistance Only

If a qualifying community cannot afford a loan for at least 15

percent of a project's CW SRF-eligible cost, the State may elect to

provide less than a 15 percent CW SRF loan or hardship assistance

alone. In these cases, provisions in the general grant regulations at

40 CFR part 31 and other rules that apply to subrecipients of grants,

but not to SRF loan recipients (e.g., 40 CFR part 32; debarment,

suspension, and drug-free workplace requirements), will apply to the

recipient of the hardship assistance. In addition to the general grant

regulations, which prescribe rules on financial management, procurement

and record keeping practices of subgrantees, projects receiving

hardship assistance alone or less than 15 percent SRF funding must

comply with Federal cross-cutting authorities and with Agency

regulations implementing the National Environmental Policy Act at 40

CFR part 6. The State will be responsible for ensuring that communities

receiving hardship assistance alone or less than 15 percent SRF funding

are aware of requirements imposed upon them by Federal statute and

regulation. As part of the Hardship Grant agreement, the State and EPA

will negotiate their respective roles for ensuring that these projects

comply with 40 CFR part 31 and Federal cross-cutting authorities.

Grants to States

The Agency will make hardship rural community program grants to the

States separately from CW SRF capitalization grants. Before receiving a

grant and no later than one year from the date of publication of

funding allotment in the Federal Register, the Governor of the State

must submit a Notice of Intent to use the grant for the purposes of the

program. If the Governor elects not to submit a Notice, grant funds

available to that State will then be allocated among those States that

have furnished a Notice. Grant funds will be available for obligation

to the State for two years from the date of publication of funding

allotment in the Federal Register. Funds not obligated during that

period will be reallotted and awarded to States that have received an

obligation of all such funds during that period. All reallotted funds

will be available for obligation within two years of the date of

reallotment.

The State must specify which department of government will receive

and administer the grant funds. The department or agency that receives

the hardship assistance grant does not need to be the same department

that administers the State Revolving Fund. However, close coordination

between these programs is necessary to meet the requirements of these

guidelines. If an agency other than that which administers the State

Revolving Fund will administer the Hardship Grant program, a memorandum

of understanding (MOU) or similar agreements between the agencies will

be required in the Hardship Grant application to EPA. MOUs should

clearly delineate the division of management responsibilities among

agencies.

The Hardship Grants Program for Rural Communities may be subject to

your State's intergovernmental review process under Executive Order

12372, and/or the consultation requirements of Section 204,

Demonstration Cities and Metropolitan Development Act of 1966, 42

U.S.C. 3334 (the Act). Applicants must contact their State's Single

Point of Contact (SPOC) for intergovernmental review as early as

possible to find out whether Hardship grant applications (CFDA #66.470)

are subject to the State's Executive Order 12372 review process and, if

so, what material must be submitted to the SPOC for review. If the

application is for a community within a

[[Page 13524]]

``metropolitan area'' as that term is defined at 42 U.S.C. 3338(4),

then the requirements of the Act are applicable. You must notify area-

wide metropolitan or regional planning agencies and/or general

government units authorized to govern planning for the locale of your

project of your intended application. SPOCs and other reviewers should

send their comments concerning Hardship Grant applications to the

appropriate Regional State Revolving Fund Coordinator no later than 60

days after receipt of an application and other required material for

review. In accordance with 40 CFR 29.8(c) a 60 day review is mandatory

for projects subject to the Act.

The costs of administering the program shall not be deducted from

the hardship assistance grant. Administration funds must not be from

any fees or other charges imposed on the communities likely to be

served by the grant. Administering the program does not include the

costs of providing technical assistance to benefit qualifying

communities.

Allocation of Grant Funds

The $50 million dollars appropriated by the Consolidated Omnibus

Appropriations and Rescissions Act of Fiscal Year 1996 (P.L. 104-134)

for hardship grants are allotted among the 50 States, Puerto Rico, and

the territories as of the date of this Federal Register notice.

Attachment D provides the funding allotment. The District of Columbia

and the former trust territory of Palau will not receive hardship grant

funds. The District of Columbia has no qualifying communities. Palau no

longer receives new Federal assistance for infrastructure needs (Pub.

L. 99-239; Compact of Free Association Act).

Comments from both Congress and States indicate that the CW SRF

formula would not sufficiently target the hardship funds to areas of

the country with the most potential need. Two program requirements are

included in the formula for allocation. Lack of access to centralized

wastewater collection and treatment systems and per capita income are

the indicators of hardship need that will help target the funds to

areas of the country with the greatest need. The first of these factors

is weighted 75 percent and the second 25 percent. More weight is given

to households without access to wastewater treatment systems because it

represents a stronger indicator of environmental problems.

National data regarding these indicators was obtained from the 1990

Census of Housing and the 1990 Census of Population published by the

U.S. Bureau of the Census. The 1990 Census provides the most up-to-date

data for rural areas nationwide. The Bureau of the Census provides a

data threshold for rural populations of 2,500 or fewer. This population

threshold is the closest available from the Bureau of the Census to the

3,000 person population limit of the hardship grants program. Because

communities must be rural, both indicators of need used in the

allotment formula are narrowed to rural populations within States. For

instance, data for households without access to centralized wastewater

treatment in each State relates only to households in rural areas of

2,500 or fewer people that do not have access to centralized treatment.

Per capita income data in each State is related to rural areas of 2,500

or fewer people where the per capita income is not greater than 80% of

national per capita income. Due to lack of consistent household and

income data for the Territories, the Territories are allotted funds

based on their CW SRF allotment formula. More details on the allotment

methodology are available in Attachment E.

The Territory of Guam, Territory of American Samoa, the

Commonwealth of the Northern Mariana Islands, and the Virgin Islands do

not operate CW SRF programs and instead receive their SRF allotments

for use as construction grants under title II of the Clean Water Act

(Pub. L. 101-144, as amended by Pub. L. 101-302). These jurisdictions

may receive hardship assistance for the entire cost of a project

benefiting a qualifying community or to supplement a construction grant

that is made for a project benefiting a qualifying community.

Indian Tribes are not treated as States under the hardship grant

program. Instead, Tribes receive one-half of one percent of the CW SRF

appropriation for use as construction grants (Clean Water Act section

518(c), 33 U.S.C. 1377(c)). Nonetheless, data for Indian Tribe

communities that qualify under the criteria described in these

guidelines are included in the Census data used to develop the State

allocation formula. Indian Tribes may receive hardship assistance from

the State, either for the entire cost of a project, to supplement a

construction grant, or to supplement a CW SRF loan. States are

encouraged to provide due consideration to all qualified applicants,

including Indian Tribes, when developing their IUPs and apportioning

hardship assistance among qualifying communities.

When the grant is awarded to the State, the Agency will make funds

available for cash draws through the Automated Clearinghouse (ACH)

process established in each State for EPA grants. The State may then

draw cash through the ACH for the expenses involved in providing

technical assistance and to reimburse communities as construction

proceeds.

Within one year of the end of the period of availability, the State

must enter into commitments to provide hardship assistance to benefit

qualifying communities in an amount equaling 105 percent of the amount

of the grant.

State Match

In order to increase the amount of funds available for the purpose

of this program, each State will provide a 5 percent match for the

grant. The source of the match must be identified on or before the date

the Federal award of the grant is made, with actual cash being required

at the time of cash draw from the ACH. Matching funds must not be from

any fees or other charges imposed on the communities likely to be

served by the grant. The State cannot use SRF assets to acquire the

match.

Funding from other Federal assistance programs may be used for

matching funds if specifically allowed by the laws and procedures of

those programs. Funding from the Environmental Protection Agency may

not be used as match for this program.

Obligations of the States as a Grantee

The State must comply with the Agency's general grant regulations

at 40 CFR part 31 to the extent that they involve matters that are not

addressed by these guidelines for administering the particular

requirements of section 102(d) of H.R. 961 and the Omnibus

Appropriations Act. The part 31 regulations contain requirements on

applying for the grants, maintaining finances in accordance with State

rules, and auditing the grants.

Other matters related to the State's operation of the program

should be negotiated between the State and the Regional office, and

should be specified in the State's CW SRF Operating Agreement (OA) or

in the hardship grant agreement itself. The State must also furnish a

statement signed by the State's Attorney General certifying that the

State has the legal authority to receive and administer the grant in

accordance with these guidelines and that the State can legally bind

itself to the terms of the grant agreement. This Attorney General's

certification can be done in conjunction with the Attorney General's

certification required for CW SRF capitalization grants under 40 CFR

35.3110(d)(2).

All projects that the State intends to provide hardship assistance

must

[[Page 13525]]

appear in the CW SRF IUP, including individual projects and the

provision of technical assistance. The State agency that is receiving

the grant should consult State community development or rural

assistance departments for assistance in identifying qualifying

communities. Progress on hardship assistance projects must be described

in the State's CW SRF Annual Report. A database being developed for the

hardship grants program in conjunction with the SRF Information

Management System States are required to provide data to EPA Regional

offices for inclusion in the information system.

Qualifying Communities

In consultation with the Regional office, the State may provide

hardship assistance, including technical assistance, to benefit any

community of more than a single household but no more than 3,000

inhabitants that is identified by the State as a rural community, is

not a remote area within the corporate boundaries of a larger city, and

satisfies the criteria described below. In cases where the entire State

is divided into incorporated areas, the State should propose, as part

of its application for Regional approval, a method for delineating

rural communities.

In the legislative history to the Clean Water Amendments of 1995,

national per capita income and unemployment rates are the criteria

recommended by the sponsors of section 102(d) for determining whether a

community is ``severely economically disadvantaged'' (House debate,

remarks of Mr. Shuster, Cong. Rec. H5008, May 16, 1995). Consequently,

a community may qualify for hardship assistance if, on the date the

community applies for assistance:

The community lacks centralized wastewater treatment or

collection systems or needs improvements to onsite wastewater treatment

systems and the State determines that assistance will improve public

health or reduce an environmental risk; and

Per capita annual income of residents served by the

project does not exceed 80 percent of national, per capita income,

based on data available as indicated in the following paragraphs; and

On the date the community applies for assistance, the

local unemployment rate exceeds by one percentage point or more the

most recently reported, average yearly national unemployment rate.

Due to the shortage of up-to-date income and unemployment

information for hardship communities, States will have the flexibility

to determine the source of the data and the methodology used to compare

communities to these standards. This information should be included in

the State's hardship grant application and is subject to Regional

approval.

Per Capita Income Data

There are two sources of national per capita income data--the

Bureau of the Census and the Bureau of Economic Analysis (BEA). The

most recent, comprehensive nationwide survey of per capita income was

provided by the Bureau of the Census in 1990. This income data is

periodically updated. The Bureau of the Census measures per capita

income by cash equivalents. In 1994, the updated national per capita

income reported by the Bureau of the Census was $16,555, 80 percent of

which is $13,244.

The Bureau of Economic Analysis also measures per capita income.

However, their measure includes cash income as well as other income,

such as benefits, food stamps, etc. BEA's 1994 national per capita

income was $21,696,80 percent of which is $17,357.

Local level data is also available to varying degrees from the

Bureau of the Census and the Bureau of Economic Analysis. The 1990

Census has the most recent comprehensive local level data available. In

1994 the Bureau of the Census updated per capita income data for the

nation, States, and metropolitan statistical areas. BEA updates their

per capita income yearly to the county level. The latest county level

BEA data is for 1994. States and communities may also choose to

generate local level data by performing a survey of the community.

Income survey tools are used for the U.S. Department of Housing and

Urban Development's Community Development Block Grant program that can

be modified for use in this program.

Options for comparing local data to national data include, but are

not limited to:

Comparing a community's 1990 Census data to national data

from the 1990 Census;

Adjusting 1990 Census data for a community to a more

recent year, using State multipliers, so that it is comparable to the

latest national Census data;

Surveying a community to gather up-to-date local data for

comparison to either Census or BEA data as appropriate; or

Using county BEA data to qualify the county as a whole for

the income requirement. Small communities within that county that meet

the other criteria of size, rural, lack of access to wastewater

systems, and unemployment would then qualify for funding.

Unemployment Data

Unemployment data is available from the Bureau of Labor Statistics

(BLS). The unemployment rates are updated monthly for the national,

State, and county level. Average yearly unemployment is computed by

adding the last 12 monthly unemployment rates and dividing by 12 for

both the national and county level. States are free to use county BLS

data to qualify the county as a whole for the unemployment requirement.

Small communities within that county that meet the other criteria of

size, rural, lack of access to wastewater systems, and per capita

income would then qualify for funding. States and communities may also

choose to generate community level unemployment data by performing a

survey of the community.

Eligible Projects

A State can provide assistance from the grant for the planning,

design and construction of publicly owned treatment works and

alternative wastewater systems. Publicly owned treatment works and

alternative treatment systems include those defined in section 212 of

the Clean Water Act which are commonly funded under the CW SRF program

and with construction grants under Title II of the Act. States should

consider how projects receiving hardship assistance will best meet the

objectives of their watershed plans or the Intended Use Plan, where

watershed plans are not available, when selecting projects for funding.

Recipients of hardship assistance should consider the cost-

effectiveness of alternative means for addressing its wastewater

treatment needs.

The sponsors of H.R. 961 viewed the assistance options under

section 102(d) broadly, stating in the Committee Report that they

include ``training, technical assistance and educational programs

relating to the operation and maintenance of such sanitation

services.'' (H. Rept. 104-112, p. 101). The decision on the level of

funding to provide for planning, design and construction versus

training, technical assistance and education programs is at the State's

discretion. However, onsite technical assistance may only be provided

to qualified communities and the primary purpose of technical seminars

and other training must be to train qualified communities.

[[Page 13526]]

Obtaining Hardship Rural Community Assistance

Before the State may offer hardship assistance, it must ensure that

projects in qualifying communities appear in the CW SRF Intended Use

Plan (IUP). The State should explain in its IUP the level of SRF loan

and hardship grant assistance that may be available for these

communities. Hardship grants should be available only to the extent

that an SRF loan is not affordable. In the State's CW SRF Annual Report

(section 606(d) of the Clean Water Act), which contains information

relating to the goals, objectives, and accomplishments set out in its

IUP, the State must also report on the progress of its hardship grant

assistance efforts.

Qualifying communities should apply for hardship assistance when

applying for CW SRF loans under procedures established for the State's

CW SRF program. The State and the community can then decide on the

appropriate mix of SRF loan funds and hardship assistance. If a

community cannot afford a 15% SRF loan, it may receive more than an 85%

grant or hardship assistance only and proceed under the general grant

regulations at 40 CFR part 31, as described previously.

Attachment A--Hardship Grants for Rural Communities

From the Omnibus Consolidated Rescissions and Appropriations Act of

1996 (Pub. L. 104-134):

State and Tribal Assistance Grants

For environmental programs and infrastructure assistance . . .

Provided Further, that of the funds made available under this

heading for capitalization grants to State Revolving Funds under

title VI of the Federal Water Pollution Control Act, as amended,

$50,000,000 shall be for wastewater treatment in impoverished

communities pursuant to section 102(d) of H.R. 961 as approved by

the United States House of Representatives on May 16, 1995 . . .

From H. Rept. 104-384 (Conference Report to accompany H.R. 3019,

which would be enacted as the Omnibus Consolidated Rescissions and

Appropriations Act of 1996):

From within the amount appropriated for wastewater

capitalization grants, $50,000,000 is to be made available for

wastewater grants to impoverished communities pursuant to section

102(d) of H.R. 961 as approved by the House of Representatives on

May 16, 1995. The Conferees expect the Agency to closely monitor

state compliance with this provision to assure that funds are

obligated appropriately and in a timely manner. Unused funds

allocated for this purpose are to be made available for other

wastewater capitalization grants.

From section 102(d) of H.R. 961, the Clean Water Amendments of

1995, adding subsection (5) to section 104(q) of the Federal Water

Pollution Control Act:

(5) Small Impoverished Communities--

(A) Grants.--The Administrator may make grants to States to

provide assistance for planning, design, and construction of

publicly owned treatment works and alternative wastewater treatment

systems to provide wastewater services to rural communities of 3,000

or less that are not currently served by any sewage collection or

wastewater treatment system and are severely economically

disadvantaged, as determined by the Administrator.

(B) Authorization.--There is authorized to be appropriated to

carry out this paragraph $50,000,000 per fiscal year for fiscal

years 1996 through 2000.

From H. Rept. 104-112, to accompany H.R. 961, the Clean Water

Amendments of 1995:

Wastewater Treatment in Impoverished Communities. Section 102(d)

authorizes $50 million per year for fiscal years 1996 through 2000

for EPA to award grants to States for funding the planning, design

and construction of POTWs in small, impoverished communities of

3,000 people or less that lack sewage treatment systems and are

severely economically disadvantaged.

In communities with these circumstances, the committee believes

the award of federal grant monies is justified for the protection of

human health and the environment, and as further insurance for the

government's investment, grant monies may be used for training,

technical assistance and education programs relating to the

operations and maintenance of such sanitation services.

Despite enactment of the Federal Water Pollution Control Act of

1972 and the expenditure of billions in federal funds for the

construction of POTWs (sic), thousands of small communities still

are not served by central wastewater treatment facilities today.

Many small impoverished communities lack the resources even to repay

low or zero-interest loans under the current SRF structure. Without

financial assistance, untreated human sewage will continue to flow

from pipes and seep from poorly functioning septic systems and

privies, posing human health and environmental risks.

The Committee anticipates working closely with the Administrator

to develop appropriate criteria regarding ``severely economically

disadvantaged.''

From House debate on H.R. 961 (Congr. Rec. H5008, 104th Congress,

1st session); Remarks of Mr Shuster, Chairman, Transportation and

Infrastructure Committee:

Administration of the funding provisions need additional

clarification. Section 102(d) of H. R. 961 authorizes the

Administrator of EPA to make grants to the States for planning,

design, and construction of publicly owned treatment works in rural

communities of 3,000 people or less which are severely economically

disadvantaged. The committee report states the committee's intention

to work closely with the Administrator to develop appropriate

criteria regarding severely economically disadvantaged. I wish to

clarify that the committee considers eligible communities as those

having a per capita income of no more than 80 percent of the

national average and an unemployment rate of 1 percent or more above

the national average.

Attachment B--Memorandum

SUBJECT: Proposed Delegation of Authority to Approve Grants and

Cooperative Agreements for Water Infrastructure Projects for Fiscal

Year 1996 and Subsequent Years to the State and Tribal Assistance

Grants Account and any Successor Accounts--DECISION MEMORANDUM

FROM:

Robert Thorlakson, Director /s/

Office of Water/Office of Research and Development Human Resources

Staff

David R. Alexander, Director /s/

Organization and Management Consulting Services

TO: The Administrator

THRU: AX

Issue: The Office of Water (OW) proposes delegating to Regional

Administrators (RAs) the authority to approve grants and cooperative

agreements for water infrastructure projects and grants to States for

providing assistance to ``severely economically disadvantaged rural

communities'' from funds appropriated in Fiscal Year 1996 and

subsequent years to the State and Tribal Assistance Grants Account and

any successor accounts.

Background

The Fiscal Year 1995 Appropriations Act for VA, HUD, and

Independent Agencies (P.L. 103-327) authorized the award of grants for

50 water infrastructure projects identified in the Conference Report

(H.R. Report No. 715, 103d Congress, 2d Sess. at 39-43 (1994)). The

authority to award these grants was delegated to Regional

Administrators by Delegation No. 1-92, 1200 TN 373, dated 10/31/94).

All funds available for the 50 projects under this appropriation have

been awarded.

The EPA section of the Omnibus Consolidated Rescissions and

Appropriations Act of 1996 (P.L. 104-134) authorizes $306.5 million in

grant funding for 22 water infrastructure projects including some for

which funds have been provided by P.L. 103-327 and for which additional

grants have been awarded from funds provided by

[[Page 13527]]

Continuing Resolutions (CRs) enacted prior to the enactment of P.L.

103-134. Close coordination with State and local agencies requires

award and administration of these grants and cooperative agreements at

the regional level.

Analysis and Review

A new delegation is needed to allow Regional Administrators to

award the remaining funds authorized by P.L. 104-134 for

Congressionally-designated water infrastructure projects and grants to

States for providing assistance to ``severely economically

disadvantaged rural communities'' because these grants will be subject

to different terms and conditions--for example those concerning local

cost-share arrangements--than those awarded with funds provided by P.L.

103-327 and the FY 1996 CRs. Further, the FY 1996 Appropriations Act

(P.L. 104-134) is the only statutory authority to award grants to many

of the projects, so delegations already issued for other statutes (such

as the Clean Water Act) are insufficient to allow Regional

Administrators to award the grants. The new delegation of authority has

been written so it will cover grants for similar water infrastructure

projects authorized by future appropriations to the State and Tribal

Assistance Grants Account or successor accounts.

The delegation proposal was distributed under the Directives

Clearance Record review process to 15 offices. Three offices and three

regions submitted comments. The Office of Grants and Debarment (OGD)

and Region 8 submitted comments relating to the appropriate level for

redelegation authority. The OGD also proposed adding an additional

reference and deleting another reference. The Office of General Counsel

had editorial comments and reviewed language changes proposed by other

reviewers. Region 2 comments suggested that this delegation provide

authority to award grants to States for providing assistance to

``severely economically disadvantaged rural communities.'' No issue

resolution was requested by any office or regions and editorial

comments submitted were incorporated into the final delegation.

Recommendation

This delegation is needed immediately to respond to the numerous

requests from grantee agencies who have already developed applications.

We recommend that you approve the proposed delegation by signing below.

Approved: Carol M. Browner.

Dated: June 21, 1996.

Attachment

Delegation of Authority--Grants and Cooperative Agreements for

Water Infrastructure Projects from Funds Appropriated for FY 1996 and

Subsequent Years to the State and Tribal Assistance Grants Account and

Any Successor Accounts.

Delegations Manual

[1200 TN 425]

June 21, 1996.

General, Administrative, and Miscellaneous

1-102. Grants and cooperative agreements for water infrastructure

projects from funds appropriated for fiscal year 1996* and subsequent

years to the State and Tribal Assistance Grants Account and any

successor accounts.

1. Authority: To approve grants and cooperative agreements for

water infrastructure projects and grants to States for providing

assistance to ``severely economically disadvantaged rural communities''

from funds appropriated for Fiscal Year 1996* and subsequent years to

the State and Tribal Assistance Grants Account and any successor

accounts and to perform other activities necessary for the effective

administration of those grants and cooperative agreements.

---------------------------------------------------------------------------

* The Omnibus Consolidated Rescissions and Appropriations Act of

1996 (P.L. 104-134).

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2. To Whom Delegated: Regional Administrators.

3. Redelegation Authority: This authority may be redelegated to the

Division Director or equivalent level and may not be redelegated

further.

4. Limitations: a. This delegation applies only to those grants and

cooperative agreements for which there is no authority other than the

statute making appropriations to the State and Tribal Assistance Grants

Account and any successor accounts in Fiscal Year 1996* and subsequent

years.

b. Awards are subject to guidance issued by Office of Wastewater

Management and Office of Comptroller.

5. Additional References: a. Authority to execute (sign) these

financial assistance agreements is delegated to the Regional

Administrators under Delegation 1-14, ``Assistance Agreements'';

b. 40 CFR Part 31,

c. 40 CFR Part 40 for Demonstration grants,

d. 40 CFR Part 35, Subpart K, and

e. EPA Assistance Administration Manual.

Attachment C--Cross-Cutting Federal Authorities Applicable as of June

1996

(Note: This list is subject to change. For further information

about the applicability of specific requirements, please contact the

appropriate Regional Office of EPA.)

Environmental

Archeological and Historic Preservation Act of 1974, PL 93-291

Clean Air Act, 42 USC 7506(c)

Coastal Barrier Resources Act, 16 USC 3501, et seq.

Coastal Zone Management Act of 1972, PL 92-583, as amended

Endangered Species Act, 16 USC 1531, et seq.

Executive Order 11593, Protection and Enhancement of the Cultural

Environment

Executive Order 11988, Floodplain Management

Executive Order 11990, Protection of Wetlands

Farmland Protection Policy Act, 7 USC 4201, et seq.

Fish and Wildlife Coordination Act, PL 85-624, as amended

National Historic Preservation Act of 1966, PL 89-665, as amended

Safe Drinking Water Act, section 1424(e), PL 920523, as amended

Wild and Scenic Rivers Act, PL 90-542, as amended

Economic

Demonstration Cities and Metropolitan Development Act of 1966, PL 89-

754, as amended

Section 306 of the Clean Air Act and Section 508 of the Clean Water

Act, including

Executive Order 11738, Administration of the Clean Air Act and the

Federal Water Pollution Control Act with Respect to Federal Contracts,

Grants, or Loans

Social

Age Discrimination Act, PL 94-135

Civil Rights Act of 1964, PL 88-352

Section 13 of PL 92-500; Prohibition against sex discrimination under

the Federal Water Pollution Control Act

Executive Order 11246, Equal Employment Opportunity

Executive Orders 11625 and 12138, Women's and Minority Business

Enterprise

Rehabilitation Act of 1973, PL 93-112 (including Executive Orders 11914

and 11250)

Miscellaneous

Uniform Relocation and Real Property Acquisition Policies Act of 1970,

PL 91-646

Executive Order 12549, Debarment and Suspension

[[Page 13528]]

Attachment D--Fiscal Year 1996 Allotment of Hardship Grant Assistance

----------------------------------------------------------------------------------------------------------------

Households w/o

access Income based State

State allocation allocation allocation

@$37.5M (75% @$12.5M (25% @$50M

of $50 M) of $50 M)

----------------------------------------------------------------------------------------------------------------

ALABAMA......................................................... $1,107,300 $348,500 $1,455,800

ALASKA.......................................................... 132,500 61,600 194,100

ARIZONA......................................................... 316,200 128,300 444,500

ARKANSAS........................................................ 670,300 362,000 1,032,300

CALIFORNIA...................................................... 1,232,500 194,700 1,427,200

COLORADO........................................................ 310,000 168,400 478,400

CONNECTICUT..................................................... 448,400 4,200 452,600

DELAWARE........................................................ 133,200 22,700 155,900

DIST. OF COLUMBIA............................................... 0 0 0

FLORIDA......................................................... 1,303,300 207,400 1,510,700

GEORGIA......................................................... 1,514,800 378,300 1,893,100

HAWAII.......................................................... 57,400 52,000 109,400

IDAHO........................................................... 230,600 138,100 368,700

ILLINOIS........................................................ 784,300 532,900 1,317,200

INDIANA......................................................... 1,052,400 345,700 1,398,100

IOWA............................................................ 325,600 511,500 837,100

KANSAS.......................................................... 266,000 385,400 651,400

KENTUCKY........................................................ 1,051,300 313,100 1,364,400

LOUISIANA....................................................... 770,900 296,900 1,067,800

MAINE........................................................... 569,800 74,000 643,800

MARYLAND........................................................ 513,100 44,900 558,000

MASSACHUSETTS................................................... 651,600 10,600 662,200

MICHIGAN........................................................ 1,879,100 401,600 2,280,700

MINNESOTA....................................................... 746,200 504,900 1,251,100

MISSISSIPPI..................................................... 758,500 286,500 1,045,000

MISSOURI........................................................ 914,400 547,500 1,461,900

MONTANA......................................................... 214,000 127,200 341,200

NEBRASKA........................................................ 156,200 316,200 472,400

NEVADA.......................................................... 67,600 27,100 94,700

NEW HAMPSHIRE................................................... 425,500 22,800 448,300

NEW JERSEY...................................................... 396,700 19,200 415,900

NEW MEXICO...................................................... 258,600 131,100 389,700

NEW YORK........................................................ 1,894,800 257,200 2,152,000

NORTH CAROLINA.................................................. 2,326,300 365,800 2,692,100

NORTH DAKOTA.................................................... 101,800 182,800 284,600

OHIO............................................................ 1,462,500 522,900 1,985,400

OKLAHOMA........................................................ 568,100 421,500 989,600

OREGON.......................................................... 506,800 174,500 681,300

PENNSYLVANIA.................................................... 2,166,900 610,900 2,777,800

RHODE ISLAND.................................................... 104,200 0 104,200

SOUTH CAROLINA.................................................. 954,000 210,900 1,164,900

SOUTH DAKOTA.................................................... 111,500 210,800 322,300

TENNESSEE....................................................... 1,246,600 309,400 1,556,000

TEXAS........................................................... 2,050,500 892,100 2,942,600

UTAH............................................................ 104,200 186,500 290,700

VERMONT......................................................... 290,500 42,500 333,000

VIRGINIA........................................................ 1,220,700 155,600 1,376,300

WASHINGTON...................................................... 774,700 161,800 936,500

WEST VIRGINIA................................................... 657,400 260,200 917,600

WISCONSIN....................................................... 1,034,500 321,300 1,355,800

WYOMING......................................................... 85,400 54,600 140,000

AMERICA SAMOA................................................... 33,600 11,200 44,800

GUAM............................................................ 24,300 8,100 32,400

N. MARIANAS..................................................... 15,600 5,200 20,800

PUERTO RICO..................................................... 487,300 162,400 649,700

TT OF PALAU..................................................... 0 0 0

VIRGIN ISLANDS.................................................. 19,500 6,500 26,000

-----------------------------------------------

TOTAL....................................................... 37,500,000 12,500,000 50,000,000

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[[Page 13529]]

Attachment E--Allotment Methodology for the Hardship Grants Program

The 1990 Census of Housing provides information on the structural

characteristics of homes, including the type of sewage disposal.

Specifically, Table 13 of the Census of Housing provides the number of

housing units in rural areas that are served by public sewers, septic

tanks and cesspools, and other means. The State allotment for the

households portion of the funding is computed by taking the total

number of rural households served by septic tanks and cesspools and

other means (excluding sewered households and farms) within each State

divided by the national number of rural households served by septic

tanks and cesspools and other means. This percentage is multiplied by

$37,500,000, which is 75 percent of $50,000,000 appropriated for the

program, to provide the dollar amount for the households without access

portion of the allotment for each State. Some administrative

adjustments were then made to the final States'' allocation to

accommodate the use of CW SRF allotment percentages for the

Territories.

The 1990 Census of Population provides per capita income (PCI)

data. A computer file was generated by the Bureau of the Census to

provide the number of communities in each State that have rural

populations of 2,500 or less and had a per capita income less than 80

percent of the National per capita income. The per capita allotment

percentage was computed by dividing the number of people in each State

in communities less than 2,500 that meet the 80 percent PCI criteria by

the national population in communities of less than 2,500 that meet the

80 percent PCI criteria. This percentage is multiplied by $12,500,000,

which is 25 percent of $50,000,000, to provide the dollar amount for

the income portion of the allotment for each State. As with the

household formula, CW SRF percentages were used for the Territories and

administrative adjustments were made to the final States'' allocation.

The funding level from both parts of the formula are added together

to provide the total funding allotment for each State.

[FR Doc. 97-7070 Filed 3-19-97; 8:45 am]

BILLING CODE 6560-50-P