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process, the Agency may approve a waiver when it is established that the grant recipient cannot meet the matching funds requirement. The Agency may waive all or part of the recipient's matching funds requirement only after a finding by the Agency that:

(1) There is a need for a waiver because providing the "match" would constitute an unusual financial hardship,

(2) A good faith effort at raising the "match," including obtaining in-kind services, has failed, and

(3) The waiver is necessary to facilitate public participation in the selection of remedial action at the facility.

(c) Where a recipient who has obtained a grant subsequently obtains a waiver of the matching funds requirement, the grant agreement must be amended. (See 40 CFR Part 30, Subpart G.)

(d) No waivers will be granted by the Agency once the Record of Decision (ROD) has been issued at the last operable unit at the site.

§ 35.4095 Subagreement review.

Each applicant must inform EPA of any proposed subagreement between the recipient and the technical advisor and must provide EPA the opportunity to review the subagreement before it is awarded.

§ 35.4100 Disputes.

(a) If the Agency administers the Technical Assistance Grant Program, the Agency shall review disputes between Agency officials and the applicant or recipient in accordance with its dispute resolution procedures set forth at 40 CFR Part 30, Subpart L.

(b) If the State administers the Technical Assistance Grant Program, any applicant or recipient who has been adversely affected by a State's action or omission may request Agency review of such action or omission, but must first submit a petition for review to the State agency that made the initial decision. The State must provide, in writing, normally within 45 days of the date it receives the petition, the basis for its decision regarding the disputed action or omission. The final State decision must be

labeled as such and, if adverse to the applicant or recipient, must include notice of the right to request Agency review of the State decision under this section. A State's failure to address the disputed action or omission in a timely fashion, or in writing, will not preclude Agency review.

(1) Requests for Agency review must include:

(i) A copy of any written State decision.

(ii) A statement of the amount in dispute.

(iii) A description of the issues involved, and

(iv) A concise statement of the objections to the State decision.

(2) The request must be filed by registered mail, return receipt requested, within 30 days of the date of the State decision or within a reasonable time if the State fails to respond in writing to the request for review.

(c) The Agency shall determine whether the State's review is comparable to a dispute decision official's (DDO) review pursuant to 40 CFR Part 30, Subpart L. If the State's review is comparable, the Regional Administrator will conduct the Agency's review of the State's decision. If the State's review is not comparable, an Agency DDO will review the State's decision and issue a written decision. If the Agency DDO issues a decision, the applicant or recipient may request a Regional Administrator's review of the decision. The applicant or recipient may request an EPA Assistant Administrator review of a Regional Administrator's decision pursuant to Subpart L.

§ 35.4105 Audits.

(a) Records and audit-recipient. (1) Each recipient shall keep and preserve full written financial records accurately disclosing the amount and the disposition of any funds, whether in cash or in-kind, applied to the technical assistance grant project, and shall comply with the terms and conditions of the grant agreement.

(2) Such records shall be retained for three years from the date of the final Financial Status Report, or until any audit, litigation, cost-recovery.

and/or any disputes initiated before the end of the three-year retention period are settled, whichever is longer. A recipient must obtain EPA's prior written approval to destroy records after the record retention period.

(b) Records and auditcontractor(s). (1) The recipient shall require its contractor(s) to keep and preserve detailed records in connection with the subagreement, reflecting acquisitions, work progress, reports, expenditures, and commitments and indicating their relationship to established costs and schedules.

(2) The recipient shall require its contractor(s) to keep such full written financial records to adequately establish compliance with the terms and conditions of the subagreement. Such records shall be retained for three years from closeout of the subagreement, unless audit, litigation, cost-recovery, and/or any disputes are initiated before the end of the three-year retention period. The recipient shall require its contractor(s) to obtain its prior written approval before the contractor(s) destroys any records after the record retention period. The recipient shall not give such approval without first obtaining EPA's approval.

(Approved by the Office of Management and Budget under control numbers 20300020 and 2050 0083)

§ 35.4110 Reports.

(a) Progress reports. Each recipient shall submit quarterly progress reports to EPA for the technical assistance grant project 45 days after the end of each calendar quarter. Progress reports shall fully describe in chart or narrative format the progress achieved in relationship to the approved schedule, budget, and the technical assistance grant project milestones. Special problems encountered must be explained.

(b) Financial status report. Each recipient shall submit to EPA a financial status report annually, within 90 days after the anniversary date of the start of the technical assistance grant project, and within 90 days after the end of the grant budget period and project. A recipient shall submit to the Agency a financial status report on

SF-269 or on the appropriate State form if the State is administering the Technical Assistance Grant Program.

(c) Final report. Each recipient shall submit to EPA a draft of the final report for review no later than 90 days prior to the end of the technical assistance grant project and a final report within 90 days of the end of the project. The report shall document technical assistance grant project activities over the entire period of grant support and shall describe the recipient's achievements with respect to stated technical assistance grant project purposes and objectives.

(Approved by the Office of Management and Budget under control numbers 20300020 and 2050-0083)

§ 35.4115 Availability of information.

Each recipient shall ensure that all final written products developed by a contractor for the recipient under its grant are disseminated by providing copies of such documents to EPA for the local Superfund information repository.

§ 35.4120 Budget period.

The budget period may not exceed three years. A technical assistance grant project period may be comprised of more than one three-year budget period.

§ 35.4125 Federal facilities.

EPA will determine the eligibility of any group of individuals who may be affected by a release or a threatened release at a Federal facility for a technical assistance grant under this regulation.

§ 35.4130 Conflict of interest and disclosure requirements.

(a) The recipient shall require each prospective contractor on any subagreement to provide, with its bid or proposal:

(1) Information on its financial and business relationship with all PRPs at the site, and with their parent companies, subsidiaries, affiliates, subcontractors, and current clients or attorneys and agents (this disclosure requirement encompasses past and anticipated financial and business rela

tionships, including services related to any proposed or pending litigation, with such parties);

(2) Certification that, to the best of its knowledge and belief, it has disclosed such information or no such information exists; and

(3) A statement that it shall disclose immediately any such information discovered after submission of its bid or proposal or after award. The recipient shall evaluate such information and shall exclude any prospective contractor if the recipient determines the prospective contractor's conflict of interest is significant and cannot be avoided or otherwise resolved.

(b) Contractors and subcontractors may not be technical advisors to recipient groups at the same NPL site for which they are doing work for the Federal or State government or any other entity.

PART 39-LOAN GUARANTEES FOR CONSTRUCTION OF TREATMENT

WORKS

Sec.

39.100 Purpose.

39.105 Definitions.

39.110 Application.

39.115 Conditions of loan guarantee. 39.120 Limitation on assistance. 39.125 Determination of eligibility for assistance and issuance of guarantee. 39.130 Determination of reasonable rates. 39.135 Loan terms.

39.140 Loan proceeds.

39.145 Loan payments by borrower. 39.150 Defaults and remedies.

AUTHORITY: Pub. L. 94-558, Sec. 213, Federal Water Pollution Control Act, as amended (86 Stat. 816 et seq. (33 U.S.C. 1281 et seq.) as amended).

SOURCE: 42 FR 25666, May 18, 1977, unless otherwise noted.

§ 39.100 Purpose.

This part implements section 213 of the Federal Water Pollution Control Act Amendments of 1972, as amended, by establishing policies and procedures to ensure that inability to borrow necessary funds from other sources on reasonable terms does not prevent the construction of any wastewater treatment works for which a grant has been, or will be, awarded in compliance with the Act. It provides for the

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The following words and terms shall have the meaning set forth below:

(a) Act. The Federal Water Pollution Control Act Amendments of 1972, as amended (Pub. L. 92-500, 33 U.S.C. 1281 et seq.).

(b) Bank. The Federal Financing Bank established pursuant to the Federal Financing Bank Act of 1973 (12 U.S.C. 2281 et seq.).

(c) Guaranteed Loan Program. The program established pursuant to Pub. L. 94-558 which amended the Act by adding section 213.

(d) Loan agreement. A written agreement between the Bank and the guaranteed borrower stating the terms of the loan.

(e) Loan guarantee agreement. A written agreement between EPA and the guaranteed borrower stating the terms of the loan guarantee.

(f) Local share. The amount of the total grant eligible and allowable project costs which a public body is obligated to pay under the grant.

(g) Note. An evidence of the debt, including a bond, obligation to pay, or other evidence of indebtedness where appropriate.

(h) Public body. A State, interstate agency, a municipality, or an intermunicipal agency, as defined below:

(1) State. A State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Trust Territory of the Pacific Islands.

(2) Interstate agency. An agency of two or more States established by or pursuant to an agreement or compact approved by the Congress, or any other agency of two or more States, having substantial powers or duties pertaining to the control of water pollution.

(3) Municipality. A city, town, borough, county, parish, district, associa

tion, or other public body (including an intermunicipal agency of two or more of the foregoing entities) created by or pursuant to State law, or an Indian Tribe or an authorized Indian tribal organization, having jurisdiction over disposal of sewage, industrial wastes, or other wastes, or a designated and approved management agency under section 208 of the Act. This definition excludes a special district, such as a school district, which does not have as one of its principal responsibilities the treatment, transport, or disposal of liquid wastes.

(i) Reasonable terms. Rates determined by the Secretary of the Treasury with relationship to the current average yield on outstanding marketable obligations of municipalities of comparable maturity.

§ 39.110 Application.

(a) Who may apply. A public body which has applied for a grant under Title II of the Act (including grantees whose projects are eligible for reimbursement under section 206 of that title) or which has committed itself to finance the local share of any project(s) for which a grant has been awarded, or for which an application is being processed, may apply through the State agency to the appropriate Regional Administrator for a loan and the commitment to guarantee such loan to finance the local share of such project.

(b) Financing. Applications for loan guarantees will be limited to:

(1) Financing that portion of the local share for which permanent financing has not been arranged.

(2) Refinancing that portion of the local share of those projects on which construction has not been completed and for which the public body initially held a public solicitation on a bond issue, received no bids, and subsequently accepted or negotiated financing at interest rates greater than 10 percent.

(c) Application requirements. The application shall include documentation of the following:

(1) Inability to obtain necessary financing. The applicant shall document that it is unable to obtain on reasonable terms as defined in § 39.105(i)

sufficient credit to finance the local share of the project(s). Such documentation shall include:

(i) The results of any public solicitation for bids for obligations to finance the local share or (ii) a certification, acceptable to the Administrator, from a municipal bond underwriter(s), which submitted or might normally have submitted a bid for the obligations. An applicant with an obligation to pay the local share not in excess of $250,000 may obtain certification from two or more local or regional banks to meet paragraph (c)(1)(ii) of this section. An applicant representing communities with a population of 10,000 or less must also submit a written statement from an authorized representative of the Farmers Home Administration that grants, loans, or loan guarantees are not available from Farmers Home Administration in an adequate amount or within a reasonable time, as determined by the Administrator.

(2) Ability to repay. The application for a loan guarantee shall be accompanied by an official statement intended to provide EPA with the information needed to reach an informed judgment as to whether there is reasonable assurance of repayment. The official statement must conform to the guidelines for such statement which are available to applicants from the EPA regional office upon request.

(3) Legal authority of applicant. The application shall be accompanied by a legal opinion establishing that the applicant has legal authority to obligate itself for payment of the local share, to comply with the loan conditions, and to issue the obligations, and that the obligations will be legal and binding obligations.

(4) Assurances. The application shall be accompanied by assurances set forth in an ordinance or other evidence of authority acceptable to the Administrator that it can and will comply with all of the conditions set forth in § 39.115.

(d) Fees. The following fees will be charged in order to make the program self-sustaining. These fees may be revised from time to time as determined by the Administrator.

(1) Application processing. EPA will charge a non-refundable minimum fee of $1,000 or % of one percent of the loan amount, whichever is greater, but not to exceed $25,000 for processing applications. This fee will be submitted with the application and will be retained by the EPA whether or not a loan is consummated.

(2) Fee for issuance of a commitment to guarantee. A fee will be charged for the issuance of a commitment to guarantee a loan. This fee will be 1⁄2 of 1 percent of the principal amount of the loan, and shall be placed in a contingency reserve to offset defaults. This fee is contingent upon the loan being obtained by the applicant and is payable within 30 days of the date of loan approval.

(e) Format. The Administrator may, from time to time, prescribe a form or format for the submission of the application or any portion thereof.

§ 39.115 Conditions of loan guarantee.

Any loan guarantee made pursuant to this part shall be subject to the following conditions:

(a) Step 1 or Step 2. Each public body applying for a loan guarantee for the local share of Step 1 or Step 2 costs must assure that:

(1) It will repay the loan using all local resources legally available; and

(2) Any funds due to the public body from the amounts appropriated under section 206 of the Act may be used if such use is necessary for repayment.

(b) Step 3. Each public body applying for a loan for the local share of Step 3 costs must assure that:

(1) It will repay the loan using all local resources legally available and, if necessary, (i) all or any portion of the funds retained by it under section 204(b)(3) of the Act, and (ii) any funds due to such grantee from the amounts appropriated under section 206 of the

Act;

(2) The facilities are maintained in good repair and operating condition during the period in which the notes or the obligations financed by the Bank are outstanding;

(3) Adequate insurance and bonding are maintained to protect the guarantor;

(4) Financial reports and records necessary to reflect the planned and actual receipt of revenues for repayment are maintained and preserved until 3 years after the notes or the obligations financed by the Bank have been retired.

(5) Revenue plans adequate to assure repayment of principal and interest of the notes or the obligations financed by the Bank are adopted; and (6) The Administrator is promptly notified whenever it appears that projected annual revenues will be insufficient to meet payments for principal, interest, and operating and maintenance costs. Such notification shall include a description of the steps being taken to remedy the problem.

(c) Other covenants. Among other covenants made by the public body in the loan guarantee are the following;

(1) Application of loan proceeds. The loan proceeds shall only be applied to the payment of costs associated with the project for which EPA has awarded grant assistance in accordance with § 39.140.

(2) Payment. The public body covenants that if amounts adequate for the payment of principal and interest are not available when due and payable, appropriate steps will be taken to levy sufficient additional taxes, fees, or charges and to make such payments in a timely manner.

(3) Accounts and reports. The public body shall keep complete and accurate books, records, and accounts relating to the loan, the loan guarantee, and the funds and accounts used to pay the amounts due on the loan. Such books, records, and accounts shall be subject to inspection by the Administrator or the Comptroller General of the United States at reasonable times.

(4) Status of other encumbrances. The public body will not on or after the date of execution of the loan guarantee by EPA, create or suffer to be created any lien or charge, which would constitute a lien prior to the lien created to secure the loan. Any bonded indebtedness or liens created by the public body on or after the date of execution of the loan guarantee by EPA and associated with the treatment works being constructed with Federal grant assistance may, at the

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