[Federal Register Volume 62, Number 54 (Thursday, March 20, 1997)]
[Notices]
[Pages 13522-13529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7070]



[[Page 13521]]

_______________________________________________________________________

Part X





Environmental Protection Agency





_______________________________________________________________________



Rural Communities Hardship Grants Program Implementation Guidelines; 
Notice

Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / 
Notices

[[Page 13522]]



ENVIRONMENTAL PROTECTION AGENCY

[FRL-5711-8]


Guidelines for Implementing the Hardship Grants Program for Rural 
Communities

ACTION: Notice of Availability of 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 
<a href="/cdn-cgi/l/email-protection#b6c0d9d8d0d3d5dd98c5c2d3c6ded7d8dfd3f6d3c6d7dbd7dfda98d3c6d798d1d9c0"><span class="__cf_email__" data-cfemail="562039383033353d78252233263e37383f33163326373b373f3a7833263778313920">[email protected]</span></a> 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:
    <bullet> 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
    <bullet> 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
    <bullet> 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:
    <bullet> Comparing a community's 1990 Census data to national data 
from the 1990 Census;
    <bullet> 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;
    <bullet> Surveying a community to gather up-to-date local data for 
comparison to either Census or BEA data as appropriate; or
    <bullet> 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).
---------------------------------------------------------------------------

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


[[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


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