[Federal Register Volume 70, Number 202 (Thursday, October 20, 2005)]
[Rules and Regulations]
[Pages 61039-61044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-21014]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 35
[FRL-7983-7]
Guidance on Fees Charged by States to Recipients of Clean Water
State Revolving Fund Program Assistance
AGENCY: Environmental Protection Agency.
ACTION: Final guidance.
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SUMMARY: Title VI of the Clean Water Act (CWA) Amendments of 1987
provides flexibility for States to use four percent of all
capitalization grant awards for the reasonable costs of administering
their Clean Water State Revolving Fund (CWSRF) programs. Because many
States have CWSRF administrative costs which exceed the four percent
limit, the U.S. Environmental Protection Agency (EPA) has allowed
States to charge fees on CWSRF loans. This guidance addresses the use
of fees that are charged on loans and included as principal in loans
and the use of fees that are charged on loans but not included as
principal in loans. These requirements will be included as terms and
conditions in all future grant agreements (or operating agreements).
DATES: This guidance is effective October 20, 2005.
FOR FURTHER INFORMATION CONTACT: For technical inquiries, contact Kit
Farber, State Revolving Fund Branch, Municipal Support Division, Office
of Wastewater Management (MC-4204M), U.S. Environmental Protection
Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460. The
telephone number is (202) 564-0601 and the e-mail address is
[email protected].
Copies of this document can be obtained from EPA's Office of
Wastewater Management Web site at http://www.epa.gov/owm/cwfinance/cwsrf.
SUPPLEMENTARY INFORMATION:
Background
The CWA authorizes States to charge interest on loans under the
CWSRF program. At their discretion, States may provide loans at or
below market
[[Page 61040]]
interest rates, including interest free loans. Payments of interest on
loans together with principal repayments must be credited to the CWSRF.
In addition to collecting principal repayments and interest on
loans, some States charge recipients other fees when providing CWSRF
assistance. Fees are used for a variety of purposes but most often to
supplement funds available for administration of the CWSRF. The manner
in which fees are charged to assistance recipients determines the
allowable uses for these funds.
Fees can be grouped into one of two categories. Fees either (1) are
included as principal in loans or (2) are other charges that are not
included in loan principal. This guidance is being issued to address
the two categories of CWSRF loan fees since their use is governed by
two distinct principles.
Fees included in loan principal are funds originating from the
CWSRF, borrowed by the recipient and repaid to the State, most often
for loan origination expenses. The use of fees included in CWSRF loan
principal is subject to the limitations on eligible uses of CWSRF funds
and amounts available for costs of administration found in Title VI of
the CWA. The FY 2006 Appropriations Act eased these limitations for
fees included in loans made in FY 2006 and in earlier years. Congress
may continue extending this provision.
In contrast, other fees charged on loans are paid by the recipient
from non-CWSRF funds. These fees are often based on the outstanding
balance of the loan in much the same way that interest is charged.
These fees may also be charged up-front but are not borrowed from the
CWSRF. Examples of these fees are annual loan servicing fees,
application fees, loan origination fees, and processing fees.
For this guidance, references to loans are meant to also include
any other types of assistance provided by a State to recipients under
the CWSRF program. References to the operating agreement are meant to
also include the intended use plan where either document is
incorporated by reference into the grant agreement.
This guidance was developed with substantial review and comment
from EPA Regional staff, national stakeholder organizations, and a
State/EPA SRF Work Group comprised of State DWSRF managers, State CWSRF
managers, and managers of State financial agencies. Many of the
comments received were incorporated into the final guidance.
Statutory and Executive Order Reviews
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
guidance is not a ``significant regulatory action'' and is therefore
not subject to OMB review. Because this grant guidance is not subject
to notice-and-comment requirements under the Administrative Procedure
Act or any other statute, it is not subject to the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.) or sections 202 and 205 of the
Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). In
addition, this guidance does not significantly or uniquely affect small
governments. This guidance does not have tribal implications, as
specified in Executive Order 13175 (63 FR 67249, November 9, 2000).
This guidance will not have federalism implications, as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999). This guidance
also is not subject to Executive Order 13045 (62 FR 19885, April 23,
1997), because it is not economically significant. This guidance is not
subject to Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355
(May 22, 2001)) because it is not a significant regulatory action under
Executive Order 12866. This guidance does not involve technical
standards; thus, the requirements of section 12(d) of the National
Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do
not apply. This guidance also does not impose an information collection
burden under the provisions of the Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.).
Because this guidance includes binding legal requirements, it is
considered a rule and subject to the Congressional Review Act (CRA) (5
U.S.C. 801 et seq.). The CRA generally provides that before a rule may
take effect, the agency promulgating the rule must submit a rule
report, which includes a copy of the rule, to each House of the
Congress and to the Comptroller General of the United States. EPA will
submit a report containing this guidance and other required information
to the U.S. Senate, the U.S. House of Representatives, and the
Comptroller General of the United States prior to publication in the
Federal Register. This guidance is not, however, a ``major rule'' as
defined by 5 U.S.C. 804(2).
Dated: September 26, 2005.
Benjamin H. Grumbles,
Assistant Administrator, Office of Water.
Fees Charged by States to Recipients of Clean Water State Revolving
Fund Program Assistance
Table of Contents
I. Fees Included as Principal in Loans
A. Applicability
B. Limitation on Using CWSRF to Cover Administrative Costs
C. FY 2006 Appropriations Act Provisions
D. Implementation Under the FY 2006 Appropriations Act
E. Implementation for Fees Collected on Loans Made After FY 2006
II. Fees Charged on CWSRF Assistance But Not Included as Principal
in Loans
A. Applicability
B. Purpose
C. Program Income
1. Definition of Program Income
2. Allowable Uses of Program Income
D. Fees Other than Program Income That Are Not Included as
Principal in Loans
E. Implementation of Guidance
F. Records Retention
I. Fees Included as Principal in Loans
A. Applicability
This section applies where States include fees in a CWSRF loan and
the total amount of the loan includes not only the cost of project
construction but also the amount of the fee. Particularly, this
guidance applies to fees included in loan principal that are charged to
borrowers for CWSRF administrative costs. Even though the borrower pays
the fee, the amount of the fee originated in the CWSRF and will be
repaid to it. For example,
--The State charges the loan recipient an administrative fee based on a
percentage of the principal amount of the loan similar to a loan
origination fee;
--The recipient borrows funds from the CWSRF to cover the project costs
and the fee;
--The loan proceeds are disbursed to the recipient;
--The recipient pays the State the fee; and
--The State deposits the collected amount into an account outside the
CWSRF.
The amount borrowed to finance the fee is rolled into the total amount
of the loan. Loan repayments consist of the principal amount borrowed
for construction, the amount borrowed to finance the fee, and any
interest charged on the loan.
Costs of issuing bonds that are initially paid from bond proceeds
are not restricted under this guidance even if those costs are
subsequently allocated to the borrower and included in loan principal.
B. Limitation on Using CWSRF To Cover Administrative Costs
Because fees included in loan principal originate in the CWSRF, use
of these amounts is governed by the CWA. For fees included in loans
issued in FY 2006 or prior years, Congress, through
[[Page 61041]]
the FY 2006 Appropriations Act, eased the CWA's four percent limit on
administration costs. In the absence of additional legislative relief,
fees included in loans issued after FY 2006, i.e., after September 30,
2006, are again subject to the CWA's provisions governing
administration costs.
The CWA states that the CWSRF may be used ``for the reasonable
costs of administering the fund and conducting activities under this
title, except that such amounts shall not exceed four percent of all
grant awards to such fund under this title.'' [CWA section 603(d)(7)].
CWSRF regulations define allowable administrative costs to ``include
all reasonable costs incurred for management of the CWSRF program and
for management of projects receiving financial assistance from the
CWSRF. Reasonable costs unique to the CWSRF, such as costs of servicing
loans and issuing debt, CWSRF program start-up costs, financial
management and legal consulting fees, and reimbursement costs for
support services from other State agencies are also allowable.'' [40
CFR 35.3120(g)(2)].
The language of the CWA places a ceiling on the amount of all CWSRF
moneys that may be used by the State at no more than four percent of
the amount of all capitalization grant awards. Further, the CWSRF
regulations state: ``Money in the CWSRF may be used for the reasonable
costs of administering the CWSRF, provided that the amount does not
exceed four percent of all grant awards received by the CWSRF.'' [40
CFR 35.3120(g)(1)].
The four percent limitation applies to all moneys originating or
deposited in the CWSRF. Both the moneys paid by the State directly from
the CWSRF for administration and the amounts loaned from the CWSRF to a
recipient for repayment to the State for administrative costs are
applied against the four percent ceiling. If CWSRF moneys are loaned
and repaid to the State for administration costs, the amount disbursed
is considered used for administration costs at the time it is disbursed
from the fund. A fee charged that is not used for administrative costs
(but utilized for other eligible uses of the fund) is not counted
toward the four percent limit. Similarly, the four percent does not
apply to fees paid by loan recipients that do not originate from CWSRF
funds (not included in the loan) and are not deposited into the CWSRF.
C. FY 2006 Appropriations Act Provisions
In the FY 2006 Appropriations Act, Congress gave States temporary
relief from the four percent limit on administration costs. The FY 2006
Act provides:
* * * notwithstanding section 603(d)(7) of the Federal Water
Pollution Control Act, as amended, the limitation on the amounts in
a State water pollution control revolving fund that may be used by a
State to administer the fund shall not apply to amounts included as
principal in loans made by such fund in the fiscal year 2006 and
prior years where such amounts represent costs of administering the
fund to the extent that such amounts are or were deemed reasonable
by the Administrator, accounted for separately from other assets in
the fund, and used for eligible purposes of the fund, including
administration.''
The relief provided by the Appropriations Act applies to fees
included in CWSRF loans made in FY 2006 and prior years only. Such fees
must be used for eligible purposes of the fund, including
administration, and are not limited by the CWA's four percent ceiling
on administration costs if they are accounted for separately from other
CWSRF moneys and are deemed reasonable by EPA. Provided the fee amounts
are accounted for separately, States may hold fees originating in CWSRF
loans either inside or outside the CWSRF. Absent Congressional
extension of this provision, however, after September 30, 2006, the
four percent limitation again applies to costs of program
administration. If, on the other hand, Congress substantively alters
the provision pertaining to the four percent limitation, this guidance
will be reviewed to determine if changes are needed to reflect such
changes.
Of course, States may use fees collected for any of the uses
specified as eligible under the CWA, not just administration. Pursuant
to section 603(d) of the CWA, the only permissible uses of the CWSRF
are loans, certain refinancings, guarantees of and purchasing insurance
for certain local financings, as a source of revenue or security for
repayment of CWSRF bonds, to guarantee loans of sub-state revolving
funds, to earn interest, and for costs of administration. These
activities must be undertaken for eligible purposes: ``for providing
assistance (1) for construction of treatment works (as defined in
section 212 of this Act) which are publicly owned, (2) for implementing
a management program under section 319, and (3) for developing and
implementing a conservation and management plan under section 320.''
[CWA section 601(a)].
To summarize:
Under the Appropriations Act provisions, States may use fees
included in loans in excess of the CWA's four percent ceiling on CWSRF
moneys used for fund administration if:
--The fees were included as principal in CWSRF loans made during FY
2006 or prior years; and
--EPA determines the fees were reasonable in amount; and
--The fees were accounted for separately from other fund assets.
D. Implementation Under the FY 2006 Appropriations Act
EPA Regional Offices should identify which States have included
fees in loans and determine the reasonableness of the fees included in
loans made in FY 2006 and prior years. If used for eligible purposes,
fee amounts collected that were previously described in a State's
Intended Use Plan or other document approved by EPA may be deemed
reasonable.
For fees already collected, States must identify (1) the amount
collected that was included in loan principal; (2) the amount expended;
(3) the purposes for which the fees were used; and (4) the amount still
remaining. The Regional Offices and Headquarters will work together
with each State to ensure compliance with the FY 2006 Appropriations
Act and to determine what actions are necessary where State actions are
not in conformance with the Appropriations Act.
States must ensure that fee amounts unused and uncollected fees
(and interest earnings thereon) included in loans made prior to the end
of FY 2006 will also be used only for eligible CWSRF purposes and will
be accounted for separately.
E. Implementation for Fees Collected on Loans Made After FY 2006
In the absence of future legislative provisions to the contrary,
fees included in CWSRF loans made after September 30, 2006, are subject
to the four percent ceiling on administration costs. Fees assessed in
this manner will be deemed reasonable provided they do not cause the
effective rate of the loan (which includes both interest and fees) to
exceed the market rate. Fees and earnings thereon must be used for
eligible CWSRF purposes whether held inside or outside the fund.
States that include fees in loan principal may need to modify their
operating agreements and other program implementation documents
pursuant to this guidance. Each grant agreement or operating agreement
entered into after September 30, 2006, must contain provisions to
identify the fees included in CWSRF loans and specify the uses of those
fees consistent with this guidance. Each grant agreement or operating
[[Page 61042]]
agreement incorporated therein by reference must also provide that, for
loans made after FY 2006, amounts paid from the CWSRF for fund
administration will be limited to an amount equal to four percent of
capitalization grant awards. This limit applies to administration
amounts paid directly by the State and to amounts disbursed from the
CWSRF to a loan recipient and repaid to the State for payment of
administration costs. The grant agreement must also require the State
to maintain records which account separately for fees collected and
also account for CWSRF funds used for CWSRF administrative purposes.
The next intended use plan prepared by the State after the effective
date of this guidance must identify the type of fees charged on loans,
the fee rate, and the amount of fees available for future use. Finally,
the annual report must identify the fees included in CWSRF loans, the
amount of fees collected, and their use.
II. Fees Charged on CWSRF Assistance But Not Included as Principal in
Loans
A. Applicability
This section addresses the use of fees that are charged on CWSRF
loans but not included as principal in loans; and discusses the
application of the CWA and the program income provisions of EPA's
regulations at 40 CFR part 31 to these fees. For this guidance, the
term ``fees that are charged on CWSRF loans'' is meant also to include
any other CWSRF loan charges and the income thereon. Costs of issuing
bonds that are initially paid from bond proceeds are not restricted
under this guidance even if those costs are subsequently allocated to
the borrower and included in loan principal.
B. Purpose
There are several purposes for this guidance. First, this guidance
clarifies how the program income regulation at 40 CFR 31.25 applies to
the CWSRF program. Second, this guidance establishes the parameters for
uses of certain program income where additional flexibility is allowed
under Sec. 31.25. Third, this guidance establishes the allowable uses
of earnings from fees not covered by the program income provisions of
Sec. 31.25. This guidance is intended to protect the long-term health
of the fund.
Many States charge fees on CWSRF loans issued. Most of these fees
are used for supplementing CWSRF moneys available to pay administration
costs. However, there has been a wide spectrum of use beside fund
administration; some related to water-quality purposes and others not
related even to environmental purposes.
Further, the States and EPA recognize that there is often a direct
trade off between the interest rate charged on loans and the fee rate
charged on loans. In general, there is a limit to the amount States can
charge borrowers before they turn elsewhere for financing. When the fee
rate goes up, the interest rate must go down in order to keep the loan
affordable and competitive. While loan interest earnings add to the
assets of the program, fees are often held outside the fund and used
for ancillary purposes. Unlike loan interest earnings, therefore, fees
do not add to the assets available to the program or support its
growth. The practice of lowering the interest rate on a loan in order
to charge a fee reduces the future funding capacity of the program when
the fee is not used directly for program purposes.
C. Program Income
1. Definition of Program Income
Program income is defined at 40 CFR 31.25(b) as ``gross income
received by the grantee or subgrantee directly generated by a grant
supported activity, or earned only as a result of the grant agreement
during the grant period.'' Fees collected or loan charges in addition
to principal and interest that are not deposited as loan repayments are
``income received by the grantee * * * directly generated by a grant
supported activity''. The State is receiving income as a result of an
activity that is established and operated with the support of a Federal
capitalization grant.
According to part 31, income ``directly generated by a grant
supported activity'' is considered program income. Under the CWSRF
program, grant supported activities are those activities funded in an
amount equal to the dollar amount of the Federal capitalization grant,
i.e., funds directly made available by the capitalization grant. Income
earned from fees charged on CWSRF loans made from funds directly made
available by the capitalization grant is program income and subject to
the requirements of the general grant regulations.
The regulations make a distinction between program income earned
during the grant period and program income earned after the grant
period. ``During the grant period'' is defined as ``the time between
the effective date of the award and the ending date of the award
reflected in the final financial report'' [40 CFR 31.25(b)]. For the
CWSRF program, the ``ending date of the award'' is the date reported in
the final Financial Status Report (FSR) as the end of the period
covered by that FSR. Once a State has submitted a final FSR for a
particular capitalization grant, fees collected after the end of the
period covered by that FSR from loans awarded with that capitalization
grant are considered to be earned after the grant period.
Section 31.25 further illustrates what is, and what is not, program
income. Program income is described as ``fees for services performed''
[40 CFR 31.25(a)], but it does not include ``(T)axes, special
assessments, levies, fines, and other such (governmental) revenues * *
* Sec. '' [40 CFR 31.25(d)]. The ``government revenues'' exception was
intended to exclude from the program income rules those revenues
collected under the general taxing power of the government grant
recipient. The fees collected in the CWSRF program are income for
services performed, similar to fees charged by banks on private loans.
States and EPA will negotiate specific options for calculating the
amount of program income earned. It is important that States are able
to account for program income and the amount of fees collected that are
not program income as outlined below. Following are three examples that
might serve as models in determining the amount of program income
earned. Each method could be further refined to account for income
earned during the grant period and amounts earned after the grant
period:
(1) Program income may be calculated on a project-by-project basis
by identifying those projects funded with capitalization grants and
determining the amount of fees collected from these projects.
(2) Program income may be calculated based on the amount of
capitalization grants awarded by multiplying the amount of
capitalization grants by the fee rate charged.
(3) Program income may be calculated by pro-rating the total fees
collected between the Federal loan assistance and the non-Federal loan
assistance provided. The calculation for program income would be to
multiply total fees collected by the ratio of capitalization grants to
total loan assistance provided. The remaining fees would not be
considered program income.
2. Allowable Uses of Program Income
Pursuant to 40 CFR 31.25(g)(1) program income must be used to
``reduce the Federal agency and grantee contributions rather than to
increase the funds committed to the project'' unless used for one or
both of the following alternatives as provided by the grant agreement:
[[Page 61043]]
(1) ``added to the funds committed to the grant agreement by the
Federal agency and the grantee * * * [and] be used for the purposes
and under the conditions of the grant agreement'' [40 CFR
31.25(g)(2)] or
(2) ``used to meet the cost sharing or matching requirement of
the grant agreement'' [40 CFR 31.25(g)(3)].
Pursuant to section 603(d) of the CWA, the permissible uses of the
CWSRF are loans, certain refinancings, guarantees of and purchasing
insurance for certain local financings, as a source of revenue or
security for repayment of CWSRF bonds, to guarantee loans of sub-state
revolving funds, to earn interest, and for costs of administering the
CWSRF. These activities must be undertaken for eligible purposes: ``for
providing assistance (1) for construction of treatment works (as
defined in section 212 of this Act) which are publicly owned, (2) for
implementing a management program under section 319, and (3) for
developing and implementing a conservation and management plan under
section 320.'' [CWA section 601(a)]. Therefore, under the CWSRF, the
alternative uses of program income are for these purposes and to
provide the required State match. If program income earnings are held
outside the CWSRF, their use for administration costs is not counted
against the CWA's four percent ceiling on administration costs.
EPA has the express authority to limit the use of program income
earned after the grant period [40 CFR 31.25(h)]:
``There are no Federal requirements governing the disposition of
program income earned after the end of the award period (i.e., until
the ending date of the final financial report * * *), unless the
terms of the agreement or the Federal agency regulations provide
otherwise.''
EPA guidance will allow program income earned after the grant
period to be used for a broad range of water quality-related purposes.
This guidance requires the inclusion of a grant condition in all
capitalization grants awarded or a provision in the operating agreement
after the effective date of this guidance so that in addition to the
purposes allowed for program income earned during the grant period,
amounts collected after the grant period may be used for various water
quality activities. Such activities include, but are not limited to:
Water quality monitoring; developing total maximum daily loads (TMDLs);
permits under the National Pollutant Discharge Elimination System
(NPDES) program; unified watershed plans; water quality restoration
plans; source water assessments; wastewater treatment operator training
programs [CWA section 104(g)(1)]; grants and loans for planning,
designing, and building water quality projects; and management of other
State financial assistance programs for water quality-related purposes.
States may also use program income earned after the grant period for
the combined financial administration of the CWSRF and DWSRF Funds
where the programs are administered by the same State agency.
D. Fees Other Than Program Income That Are Not Included as Principal in
Loans
Fees collected, that are not included as principal in loans, from
activities financed with CWSRF funds other than those directly made
available by the capitalization grant are not program income. Under
section 602(a) of the CWA, EPA may include conditions in grant
agreements in addition to those required to be included by Title VI of
the CWA. In keeping with the Agency's mission, EPA has determined that
water quality activities should be the beneficiary of any funds
generated by the CWSRF program. EPA will treat funds deriving from
CWSRF fees that are not program income the same as moneys from program
income earned after the grant period, both types of funds being
eligible for use in water quality activities. States may also use these
fees for the combined financial administration of the CWSRF and DWSRF
Funds where the programs are administered by the same State agency.
Further, interest earnings on program income collected during or
after the grant period and interest earnings on other fees that are not
program income under this section must be used only for water quality
activities or for the combined financial administration of the CWSRF
and DWSRF Funds where the programs are administered by the same State
agency.
E. Implementation of Guidance
Each grant agreement (or operating agreement, if the operating
agreement is incorporated by reference into the grant agreement) must
contain a provision that allows the use of program income earned during
the grant period for the specific purposes identified in 40 CFR
31.25(g)(2) and (3). Failure to specify the permitted uses of program
income in the grant agreement or operating agreement, will cause such
earnings to be deducted from the grant amount pursuant to Sec.
31.25(g)(1). The grant agreement or operating agreement should also
state that if program income is deposited into an account outside the
fund, it may be used to supplement fund administration costs above the
CWA's four percent ceiling on administration costs.
All grant agreements or operating agreements subsequent to the
effective date of this guidance must contain a provision that
identifies the ways in which the State will use program income
collected after the grant period or other fees collected that are not
considered program income. The uses specified must be consistent with
this guidance. Fees collected from any loans awarded after the grant
agreement or operating agreement become effective must be used only for
the specified purposes.
The grant agreement must also require the State to maintain records
which account separately for fees collected and specify how those
amounts were used. States must account separately for program income
earned during the grant period, program income earned after the grant
period, and amounts collected that are not program income under this
section if the uses of these amounts is different. Conversely, if the
State is using all fees collected only for the purposes prescribed for
program income earned during the grant period, then it need not account
separately for the different types of fees collected. Similarly, if the
State is using program income earned after the grant period and non-
program income only for purposes related to water quality, it need not
account separately for these types of fees collected. For example, if
the State is using all fees collected for the cost of administering the
CWSRF, the State need only report the total amount of fees collected
and used for this purpose. If the State is using program income earned
during the grant period for CWSRF administration and is using all other
fees for water quality purposes, the State need only report the amount
of fees collected and used for each of these two purposes. If fees
collected are deposited in the CWSRF then their use is limited to those
purposes identified in Title VI of the CWA. Further, the use of such
fees for administering the fund would be subject to the CWA's four
percent ceiling on administration costs. Fees collected that the State
intends to use as State match must be so designated before being
deposited in the CWSRF.
The next intended use plan prepared by the State after the
effective date of this guidance must identify all types of fees charged
on loans, including the fee rate, and the amount of fees available. The
State's annual report (submitted under section 606(d) of the CWA) must
identify the types of fees charged on loans, the amount of fees
collected, and how those amounts were used. Several examples of how to
measure program
[[Page 61044]]
income are provided above under Definition of Program Income.
States must ensure that the future use of program income collected
during the grant period but not yet used is in accordance with the
Agency's regulations and this guidance. EPA will work with States
individually to determine what actions are necessary to address
situations where fee amounts were used inconsistently with the
applicability of the program income regulations to the CWSRF program.
F. Records Retention
CWSRF programs also must comply with requirements of 40 CFR
31.42(c)(3) pertaining to the retention of records for program income
earned after the grant period. According to the regulation, ``the
retention period for the records pertaining to the earning of the
income starts from the end of the grantee's fiscal year in which the
income is earned.'' The length of the retention period is ordinarily
three years, as set forth in Sec. 31.42(b).
[FR Doc. 05-21014 Filed 10-19-05; 8:45 am]
BILLING CODE 6560-50-P