tor may publish from time to time concerning treatment works design.

§ 35.835-7 Operation and maintenance.

No grant may be awarded unless the applicant has made provision satisfactory to the Regional Administrator that the treatment works will be maintained and operated in accordance with such requirements as the Administrator may publish from time to time concerning methods, techniques and practices for economic, and efficient, effective operation and maintenance of treatment works. Such provision shall include, but not be limited to, (a) an operation and maintenance manual, including emergency readiness plan, (b) properly trained personnel, and (c) operational reports.

§ 35.835-8 Operation during construction. Where an existing waste treatment facility is to be modified or enlarged, no grant may be awarded unless the applicant provides assurance satisfactory to the Regional Administrator that the treatment works will be operated during construction to obtain optimum treatment of sewage.

§ 35.835-9 Postconstruction inspection.

No grant may be awarded unless the State Water Pollution Control Agency provides assurance satisfactory to the Regional Administrator that the State will inspect the treatment works not less frequently than annually for the 3 years after such treatment works is constructed and periodically thereafter to determine whether such treatment works is operated and maintained in an efficient, economic, and effective manner.

§ 35.840 Supplemental grant conditions.

In addition to the EPA general grant conditions (Appendix A to this subchapter), each wastewater treatment works construction grant shall be subject to the following conditions:

(a) All measures required to minimize water pollution to affected waters shall be undertaken in the planning and construction processes of the treatment plant to be financed in part by the Federal grant. To achieve this end, regard shall be given to the selection of a plantsite compatible

with the protection of the natural environment and the watershed natural cover, engineering and work measures to assure minimal siltation and bank erosion from the construction process, and other measures which reduce water pollution to a minimum.

(b) Construction work will be performed by the lump sum (fixed) price or unit price contract method; adequate methods of advertising for and obtaining sealed competitive bids will be employed prior to award of the construction contract; and the award of the contract will be made to the responsible bidder submitting the lowest responsive bid, which shall be determined without regard to State or local law whereby preference is given on factors other than the amount of the bid.

(c) The project will not be advertised or placed on the market for bidding until the final plans and specifications have been approved by the Regional Administrator, and the appropriate State water pollution control agency and the applicant has been so notified.

(d) On construction contracts exceeding $100,000, the contractor must furnish performance and payment bonds, each of which shall be in an amount not less than 100 per centum of the contract price. Construction contracts less than $100,000 shall follow the State or local requirements relating to bid guarantees, performance bonds, and payment bonds. In all cases, the contractor must maintain during the construction phase of the contract adequate fire and extended coverage, workmen's compensation, public liability and property damage insurance. Proceeds of the performance and payment bonds and fire and extended coverage insurance shall, in the discretion of the Regional Administrator, be applied to meet the cost of construction of the project.

to

(e) The construction of the project, including the letting of contracts in connection therewith, shall conform the applicable requirements of State, territorial, and local laws and ordinances except as provided in § 35.840 (b) and (d).

(f) Any construction contract must provide that representatives of the Environmental Protection Agency and

the State will have access to the work whenever it is in preparation or progress and that the contractor will provide proper facilities for such access and inspection. The contract must also provide that the Grants Officer, the Comptroller General of the United States, or any authorized representative shall have access to any books, documents, papers, and records of the contractor which are pertinent to the project for the purpose of making audit, examination, excerpts, and transcriptions thereof.

(g) The grantee will provide and maintain competent and adequate engineering supervision and inspection for the project to insure that the construction conforms with the approved plans and specifications.

(h) The applicant will demonstrate to the satisfaction of the Regional Administrator that he has or will have a fee simple or such other estate or interest in the site of the project, and rights of access, as the Regional Administrator finds sufficient to assure undisturbed use and possession for the purpose of construction and operation for the estimated life of the project; and in the case of projects serving more than one municipality, that the participating communities have such interests or rights as the Regional Administrator finds sufficient to assure their undisturbed utilization of the project for the estimated life of the project.

(i) The grantee agrees to construct the project or cause it to be constructed in accordance with the application and plans and specifications approved by the Regional Administrator.

(j) In addition to the notification of project changes pursuant to 40 CFR 30.900, a copy of any construction contract, or modifications thereof, and of revisions to plans and specifications must be submitted to the Regional Administrator through the State water pollution control agency.

(k) In addition to the notification of project changes required pursuant to 40 CFR 30.900, prior approval by the Regional Administrator and the State water pollution control agency is required for project changes which (1) substantially alter the design and scope of the project, (2) alter the type

of treatment to be provided, (3) substantially alter the location, size, capacity, or quality of any major items of equipment; or (4) increase the amount of Federal funds needed to complete the project: Provided, That prior EPA approval is not required for changes to correct errors, minor changes, or emergency changes. No approval or disapproval of a project change pursuant to 40 CFR 30.900 or this section shall commit or obligate the United States to any increase in the amount of the grant or payments thereunder, but shall not preclude submission or consideration of a request for a grant amendment pursuant to 40 CFR 30.900-1.

[37 FR 11660, June 9, 1972, as amended at 40 FR 20083, May 8, 1975]

§ 35.845 Payments.

Installment payments of the Federal grant shall be made upon request of the applicant and shall be based on the cost of the work performed, materials and equipment furnished, and services rendered in connection with an approved project. Payments will generally be made in four installments, except as the Regional Administrator may otherwise direct. Final payment will be made only after a final inspection by an EPA representative upon completion of the project.

Subpart D-Reimbursement Grants

AUTHORITY: Sec. 206, Federal Water Pollution Control Act Amendments of 1972, as amended by Pub. L. 93-207 and section 29 of Pub. L. 95-217.

SOURCE: 43 FR 7426, Feb. 23, 1978, unless otherwise noted.

§ 35.850 Purpose.

(a) This subpart governs funding under section 206(a) of the Federal Water Pollution Control Act, as amended, for publicly owned sewage treatment works on which construction was initiated after June 30, 1972, but before July 1, 1973, which was authorized by Pub. L. 95-217, December 27, 1977.

(b) Funding under section 206 for publicly owned sewage treatment works on which construction was initi

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ated after June 30, 1956 but before July 1, 1972, and for which applications were due January 31, 1974, is governed by the applicable provisions of the previously promulgated Subpart D regulations (39 FR 3678, January 29, 1974 and 39 FR 49855, November 21, 1974).

§ 35.855 Project eligibility

Grants may be made for reimbursement of State or local funds used for public sewage treatment works projects on which construction was initiated after June 30, 1972, but before July 1, 1973, and for which a grant was awarded under section 8 of Pub. L. 84660.

§ 35.860 Eligible and ineligible costs.

(a) Eligible costs of construction include costs of preliminary planning to determine the economic and engineering feasibility of treatment works; the engineering, architectural, legal, fiscal, and economic investigations and studies, surveys, designs, plans, working drawings, specifications, procedures, and other action necessary to the construction of treatment works; the erection, building, acquisition, alteration, remodeling, improvement, or extension of treatment works; and the inspection and supervision of the construction of treatment works.

(b) Ineligible costs include collector sewer lines and land acquisition.

§ 35.865 Applications.

(a) An application for a grant must be received by the appropriate Regional Administrator on or before March 27, 1978.

(b) An application for reimbursement shall be made in writing (if mailed, a return receipt should be requested) and shall contain the following information:

(1) Brief description of project. (2) Total actual or estimated eligible cost of project as of March 27, 1978.

(3) Total amount of Pub. L. 84-660 funds and any other Federal assistance received to date.

(4) Amount of additional Federal financial assistance requested under section 206 of the Act.

(5) The dates (actual or estimated) of initiation and completion of construction.

(6) Evidence of approval by State agency.

(c) The applicant must furnish such other information as may be required for determination of eligibility for and amount of reimbursement under this subpart.

§ 35.870 Grant amount.

(a) For a project described in § 35.855, the grant amount shall not exceed a total amount equal to the difference between the amount of Federal financial assistance, if any, received under Pub. L. 84-660 (as amended) for the project, and 50 percent of the allowable costs of the project (or 55 percent of the costs where the Administrator determines that project construction was undertaken in conformity with a comprehensive metropolitan treatment plan). However, reimbursement for project costs from all Federal grant sources may not exceed 80 percent of the costs of the project.

(b) A reimbursement grant will be rounded to the nearest hundred dollars. Reimbursement grants will not be awarded to projects entitled to reimbursement of less than $1,000.

§ 35.875 Initiation of construction.

The phrase "initiation of construction," as used in this subpart, means the issuance to a construction contractor of a notice to proceed, or, if no such notice is required, the execution of a construction contract.

§ 35.880 Disputes.

Determinations by the Regional Administrator concerning applicant eligibility, the amount to which an applicant is entitled, or allowability of costs shall be final and conclusive unless appealed within 30 days in accordance with the "Disputes" article (Article 8) of the EPA General Grant Conditions (Appendix A to Part 30 of this subchapter). (See also Subpart J to Part 30 of this subchapter.)

Subpart E-Grants for Construction of Treatment Works-Clean Water Act

AUTHORITY: Sections 109(b), 201 through 205, 207, 208(d), 210 through 212, 215 through 217, 304(d)(3), 313, 501, 502, 511, and 516(b) of the Clean Water Act, as amended, 33 U.S.C. 1251 et seq.

SOURCE: 43 FR 44049, Sept. 27, 1978, unless otherwise noted.

§ 35.900 Purpose.

(a) This subpart supplements the EPA general grant regulations and procedures (Part 30 of this chapter) and establishes policies and procedures for grants to assist in the construction of waste treatment works in compliance with the Clean Water Act.

(b) A number of provisions of this subpart which contained transition dates preceding October 1, 1978, have been modified to delete those dates. However, the earlier requirements remain applicable to grants awarded when those provisions were in effect. The transition provisions in former §§ 35.905-4, 35.917, and 35.925-18 remain applicable to certain grants awarded through March 31, 1981.

(c) Technical and guidance publications (MCD series) concerning this program which are issued by EPA may be ordered from: General Services Administration (8FFS), Centralized Mailing List Services, Building 41, Denver Federal Center, Denver, Colo. 80225. In order to expedite processing of requests, persons desiring to obtain these publications should request a copy of EPA form 7500-21 (the order form listing all available publications), from EPA Headquarters, Municipal Construction Division (WH-547) or from any regional office of EPA.

§ 35.901 Program policy.

The primary purpose of Federal grant assistance available under this subpart is to assist municipalities in meeting enforceable requirements of the Act, particularly, applicable national pollution discharge elimination system (NPDES) permit requirements. The Regional Administrator and States are authorized and encouraged to administer this grant program in a manner which will most effectively

achieve the enforceable requirements of the Act.

§ 35.903 Summary of construction grant program.

(a) The construction of federally financed waste treatment works is generally accomplished in three steps: Step 1, facilities plans and related elements; step 2, preparation of construction drawings and specifications; and step 3, building of a treatment works.

(b) The Regional Administrator may award grant assistance for a step 1, step 2, or step 3 project, or, as authorized by § 35.909, for a project involving a combination of step 2 and step 3 (step 2+3 grant). For a step 1, step 2, or step 3 grant award, a "project" may consist of an entire step or any "treatment works segment" (see § 35.905) of construction within a step. In the case of step 2+3 grant awards, a project must consist of all associated step 2 and step 3 work; segmenting is not permitted.

(c) Grants are awarded from State allocations (see § 35.910 et seq.) under the Act. No grant assistance may be awarded unless priority for a project has been determined in accordance with an approved State priority system under § 35.915. The State is responsible for determining the amount and timing of Federal assistance to each municipality for which treatment works funding is needed.

(d) An applicant will initially define the scope of a project. The State may revise this initial project scope when priority for the project is established. The Regional Administrator will make the final determination of project scope when grant assistance is awarded (see § 35.930-4).

(e) For each proposed grant, an applicant must first submit his application to the State agency. The basic grant application must meet the requirements for the project in § 35.9203. If grant assistance for subsequent related projects is necessary, the grantee shall make submissions in the form of amendments to the basic application. The State agency will forward to the appropriate EPA Regional Administrator complete project applications or amendments to them for

which the State agency has determined priority. The grant will consist of the grant agreement resulting from the basic application and grant amendments awarded for subsequent related projects.

(f) Generally, grant assistance for projects involving step 2 or 3 will not be awarded unless the Regional Administrator first determines that the facilities planning requirements of §§ 35.917 to 35.917-9 of this subpart have been met. Facilities planning may not be initiated prior to approval of a step 1 grant or written approval of a "plan of study" accompanied by a reservation of funds (see § 35.925-18 and definition of "construction" in § 35.905).

(g) If initiation of step 1, 2, or 3 construction (see definition of "construction" in § 35.905) occurs before grant award, costs incurred before the approved date of initiation of construction will not be paid and award will not be made except under the circumstances in § 35.925-18.

(h) The Regional Administrator may not award grant assistance unless the application meets the requirements of § 35.920-3 and he has made the determinations required by § 35.925 et seq.

(i) A grant or grant amendment awarded for a project under this subpart shall constitute a contractual obligation of the United States to pay the Federal share of allowable project costs up to the amount approved in the grant agreement (including amendments) in accordance with § 35.930-6. However, this obligation is subject to the grantee's compliance with the conditions of the grant (see § 35.935 et seq.) and other applicable requirements of this subpart.

(j) Sections 35.937-10, 35.938-6 and 35.945 authorize prompt payment for project costs which have been incurred. The initial request for payment may cover the Federal share of allowable costs incurred before the award except as otherwise provided in § 35.925-18. Before the award of such assistance, the applicant must claim in the application for grant assistance for that project all allowable costs incurred before initiation of project construction. An applicant may make no subsequent claim for payment for

such costs. The estimated amount of any grant or grant amendment, including any prior costs, must be established in conjunction with determination of priority for the project. The Regional Administrator must determine that the project costs are allowable under § 35.940 et seq.

(k) Under section 204(b) of the Act, the grantee must comply with applicable user charge and industrial cost recovery requirements; see §§ 35.925-11, 35.928 et seq., 35.929 et seq., 35.935-13, 35.935-15, and Appendix B to this subpart.

(1) The costs of sewage collection systems for new communities, new subdivisions, or newly developed urban areas should be included as part of the development costs of the new construction in these areas. Under section 211 of the Act, such costs will not be allowed under the construction grant program; see § 35.925-13.

(m) The approval of a plan of study for step 1, a facilities plan, or award of grant assistance for step 1, step 2, or step 3, or any segment thereof, will not constitute a Federal commitment for grant assistance for any subequent project.

(n) Where justified, a deviation from any substatutory requirement of this subpart may be granted under § 30.1000 of this chapter.

(0) The Act requires EPA and the States to provide for, encourage and assist public participation in the Construction Grants Program. This requirement for public participation applies to the development of the State water pollution control strategy, the State project priority system, and the State

project priority list, under § 35.915; to the development of user charge and industrial cost recovery systems, under §§ 35.925.11, 35.928, and 35.929; and to the delegation of administrative responsibilities for the Construction Grants Program under Subpart F of this chapter.

(p) Requirements regarding the award and administration of subagreements are set forth in §§ 35.935 through 35.939.

[43 FR 44049, Sept. 27, 1978, as amended at 44 FR 10302, Feb. 16, 1979]