SUPPLEMENTARY INFORMATION:

A supporting document titled Supporting Statement A explains in detail the information that EPA will be collecting and is available in the public docket for this ICR. The docket can be viewed online at www.regulations.gov or in person at the EPA Docket Center, WJC-West, Room 3334, 1301 Constitution Ave. NW, Washington, DC. The telephone number for the Docket Center is 202-566-1744. For additional information about EPA's public docket, visit http://www.epa.gov/​dockets.

This notice allows 60 days for public comments. Pursuant to section 3506(c)(2)(A) of the PRA, EPA is soliciting comments and information to enable it to: (i) evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility; (ii) evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (iii) enhance the quality, utility, and clarity of the information to be collected; and (iv) minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval. At that time, EPA will issue another Federal Register notice to announce the submission of the ICR to OMB and the opportunity to submit additional comments to OMB.

Abstract: The information collection activities will occur primarily at the program level through the State Capitalization Grant Agreement/Intended Use Plan and Annual Report, Annual Report, State Audit, and reporting through the SRF data system. The information on the Intended Use Plan (IUP) is needed annually to describe how the state intends to use available State Revolving Fund (SRF) funds for the year to meet the objectives of the Clean Water Act (CWA) or Safe Drinking Water Act (SDWA) and to further the goal of protecting public health and water quality. The Annual Report is needed to provide detailed information on how the state program has met its goals and objectives of the previous one or two fiscal years as stated in the IUP and grant agreement. The CWA and SDWA require this information to ensure the national accountability, adequate public review and comment, fiscal integrity, and consistent management needed to achieve public health and CWA and SDWA compliance objectives.

Title VI of the CWA of 1987 established the Clean Water State Revolving Fund (CWSRF) program, which replaced EPA's Construction Grants Program. As outlined in 40 CFR part 35, subpart K, State Water Pollution Control Revolving Funds, and EPA guidance, each state and Puerto Rico has its own CWSRF. The 1996 SDWA Amendments created the Drinking Water State Revolving Fund (DWSRF). Much like the CWSRF, each state and Puerto Rico has its own DWSRF, outlined in 40 CFR part 35, subpart L.

A state's CWSRF and DWSRF include funds provided by Federal capitalization grants, repayments from prior assistance agreements, interest that has been repaid to the SRF, and investment income. In some cases, a state SRF secures additional funding though bond proceeds. Each state designs and operates its own revolving fund to provide financial assistance to eligible recipients for water pollution control and drinking water protection activities.

The CWSRF and DWSRF were established as low-interest sources of funding for a wide range of water infrastructure projects and have the flexibility to use options beyond low-interest loans. States have the authority to use the SRFs to issue and refinance loans, purchase or guarantee local debt, and purchase bond insurance. States may also set specific terms such as interest rates and repayment periods. The CWSRF can also issue loan guarantees, and in 2009, Congress authorized states to provide further financial assistance via the CWSRF program in the form of grants, principal forgiveness, and negative interest rate loans. Under the DWSRF, a state may establish disadvantaged community criteria and offer negative interest rates, principal forgiveness, and/or an extended repayment term to communities meeting such criteria.

Congress provides EPA annual appropriations for providing capitalization grants to state SRFs. EPA awards these grants to each state upon a state's submission of a grant application, which includes an IUP. While EPA provides oversight that ensures that states' procedures are consistent with the CWA or SDWA and accompanying regulations, the CWA and SDWA authorize states to structure and manage their SRF programs to meet state objectives and address state water quality and public health priorities. Additional information about the CWSRF and DWSRF are available at www.epa.gov/​cwsrf and www.epa.gov/​dwsrf, respectively.

This proposed ICR renewal provides updated estimates of the reporting burden associated with the information collection activities for both the DWSRF and CWSRF. As further noted below and in Supporting Statement A, the estimated reporting burden hours for this proposed ICR is lower than under the currently approved ICR. The individual information collections covered under this ICR are briefly described below.

Though the CWSRF and DWSRF information collection activities closely mirror each other, there are several key differences. Specifically, under the SDWA, the DWSRF program includes several set-aside programs that are funded through DWSRF capitalization grants. These set-aside programs cover activities that are separate from the funding provided by the DWSRFs for eligible water infrastructure projects. The use of the set-aside funds must be tracked through the various DWSRF information collection activities, including the IUPs and Annual Reports. The CWA does not provide similar set-aside programs for the CWSRFs.

(1) Capitalization Grant Agreement/Intended Use Plan

The Capitalization Grant Agreement is the principal instrument by which the state commits to manage its revolving fund program in conformity with the requirements of the CWA or SDWA. The grant agreement contains or ( printed page 24233) incorporates by reference the IUP, application materials, payment schedule, required certifications, Operating Agreement (if used), and other documentation required by the EPA Regional Administrator. Information on how an SRF program intends to use its funds for the upcoming year to meet the objectives of the CWA or SDWA can be found in the IUP. The agreement is a general instrument to legally commit the state and EPA to execute their responsibilities under the CWA or SDWA.

(2) Annual Report

The Annual Report indicates how the state has met its goals and objectives of the past fiscal year as stated in the grant agreement and the IUP. The Report provides information on loan recipients, loan amounts, loan terms, project categories of eligible costs, and similar data on other forms of assistance. The Report also describes the extent to which the existing CWSRF or DWSRF financial operating policies, alone or in combination with other state financial assistance programs, will provide for the long-term fiscal health of the Fund and carry out other key provisions of the CWA or SDWA. Financial information from the Annual Report may be entered into the SRF Data System, which is further described in (4) below.

(3) State Audit

A state must comply with the provisions of the Single Audit Act Amendments of 1996. The Audit must contain an opinion on the financial condition of the SRF programs, a report on its internal controls, and a report on compliance with applicable laws and the CWA or SDWA. The EPA also recommends, that each state conduct an annual independent audit of its SRF programs, consistent with best management practices.

(4) Financial and Project Data

To meet the CWA and SDWA objectives of “promoting the efficient use of fund resources,” states must enter financial data, including project commitments and disbursements, into the SRF Data System on an annual basis. These data, also available to the public, are used by EPA to assess compliance with the Program's mandate to use all funds in an “expeditious and timely” manner and achieve maximum public health and environmental benefits from the Fund. Project-level data are collected on a quarterly basis via the SRF Data System to ensure CWA and SDWA eligibility and to highlight environmental and health benefits from SRF projects.

(5) SRF Public Awareness Requirements and Activities

Per EPA Grants Policy Issuance (GPI) 14-02: Enhancing Public Awareness of EPA Assistance Agreements, SRF borrowers must publicize EPA's involvement in project funding up to the funding amount in each year's capitalization grant. The SRFs have various options to meet this requirement.

The SRFs will collect information from states to provide examples for case studies, fact sheets, and recognition programs. With the exception of some public awareness requirements, the respondents are the state agencies responsible for operating the SRFs.

Form Numbers: None.

Respondents/affected entities: Entities affected by this action are states and local governments.

Respondent's obligation to respond: Required to obtain or retain a benefit per the Clean Water Act Title VI and the Safe Drinking Water Act Section 1452.

Estimated number of respondents: 1,440.

Frequency of response: Varies by requirement ( i.e., quarterly, semi-annually, annually).

Total estimated burden: 93,553 hours (per year).

Burden is defined at 5 CFR 1320.03(b).

Total estimated cost: $12,892,005 (per year), includes $100,000 annualized capital or operation & maintenance costs.

Changes in Estimates: There is a decrease of 14,966 hours in the total estimated respondent burden compared with the ICR currently approved by OMB. This decrease is driven by the end of capitalization grants appropriated by the Infrastructure Investment and Jobs Act (IIJA) to both SRF programs after Fiscal Year 2026 although reporting associated with these IIJA funds will continue. However, there is an increase in overall burden of $313,055, driven primarily by an overall increase in hourly wages.

91 FR 24231