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Notice

Final Additions to the Final Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems; Final Allocation Methodology for Funding to States for the Operator Certification Expense Reimbursement Grants Program

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AGENCY:

Environmental Protection Agency.

ACTION:

Final notice.

SUMMARY:

In this notice, the Environmental Protection Agency (EPA) is finalizing additions to the Final Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems, which were published in the Federal Register on February 5, 1999 (64 FR 5916). Specifically, EPA is finalizing its approach and schedule for review of state operator certification programs for the purpose of making Drinking Water State Revolving Fund (DWSRF) withholding determinations, and clarifying the meaning of the term “validated exam” in the Guidelines. In addition, EPA is also finalizing the allocation methodology and the process that will be used to award grants to states for the operator certification expense reimbursement grants program. This notice also provides the amount of funding that each state is eligible to receive from the grants program.

DATES:

This final notice is effective April 8, 2001.

ADDRESSES:

Public comments on the Proposed Additions to the Final Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems; Proposed Allocation Methodology for Funding to States for the Operator Certification Expense Reimbursement Grants Program are available for review at Water Docket (docket #W-98-07), Environmental Protection Agency, Room EB57, 401 M Street, SW, Washington, DC 20460. For access to the Docket materials, call (202) 260-3027 between 9 a.m. and 3:30 p.m. Eastern Time for an appointment and reference Docket #W-98-07.

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FOR FURTHER INFORMATION CONTACT:

For technical inquiries, contact Jenny Jacobs, Office of Ground Water and Drinking Water (4606), U.S. EPA, 1200 Pennsylvania Avenue NW, Washington, DC 20460. The telephone number is (202) 260-2939 and the e-mail address is jacobs.jenny@epa.gov. For copies of this notice and EPA's Final Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems, contact the Safe Drinking Water Hotline, toll free at (800) 426-4791. Copies can also be obtained from EPA's website at http://www.epa.gov/​safewater/​opcert/​opcert.htm. EPA plans to republish the guidelines with the revisions made today and post them on EPA's website at http://www.epa.gov/​safewater/​opcert/​opcert.htm.

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SUPPLEMENTARY INFORMATION:

Regional Contacts

I. Linda Tsang, U.S. EPA Region I, One Congress Street, Suite 1100 (CMU), Boston, MA 02114, (617) 918-1395

II. Gerard McKenna, U.S. EPA Region II, Drinking Water Section, Water Programs Branch, 290 Broadway, New York, NY 10007-1866, (212) 637-3838

III. Barbara Smith, U.S. EPA Region III, Drinking Water Branch (3WP22), 1650 Arch Street, Philadelphia, PA 19103-2020, (215) 814-5786

IV. Janine Morris, U.S. EPA Region IV, Atlanta Federal Center, 61 Forsyth Start Printed Page 19940Street, Atlanta, GA 30303-8960, (404) 562-9480

V. Charles Pycha, U.S. EPA Region V, Water Division, 77 West Jackson Boulevard, Chicago, IL 60604-3507, (312) 886-0259

VI. Marvin Waters, U.S. EPA Region VI, Drinking Water Section (6WQ-SD), 1445 Ross Avenue, Dallas, TX 75202-2733, (214) 665-7540

VII. Robert Dunlevy, U.S. EPA Region VII, Water, Wetlands and Pesticides Division, 501 9th Street, Kansas City, KS 66101, (913) 551-7798

VIII. Anthony Q. DeLoach, U.S. EPA Region VIII, Municipal Systems Unit, Drinking Water/Wastewater (8P-W-MS), 999 18th Street, Suite 500, Denver, CO 80202-2466, (303) 312-6070

IX. Kevin Ryan, U.S. EPA Region IX, Drinking Water Office (WTR-6), 75 Hawthorne Street, San Francisco, CA 94105, (415) 744-2052

X. Bill Chamberlain, U.S. EPA Region X, Office of Water, Drinking Water Unit (OW-136), 1200 6th Avenue, Seattle, WA 98101, (206) 553-8515

Table of Contents

I. General Information

II. Additions to the Final Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems

A. Program Submittal Schedules

1. Background

2. Response to Comments on Major Issues

3. Final Review Process and DWSRF Withholding Determinations for Revised State Operator Certification Programs

4. Final Review Process and DWSRF Withholding Determinations for Substantially Equivalent State Operator Certification Programs

B. Exam Validation

1. Background

2. Response to Comments on Major Issues

III. Operator Certification Expense Reimbursement Grants Program

A. Background

B. Response to Comments on Major Issues

1. General Expense Reimbursement Grants Program

2. Match Requirement on Remaining Expense Reimbursement Grant Funds

3. Expense Reimbursement Grants Program Allocation Methodology

4. Other Issues

C. Final Approach for Administration of the Grants Program

D. Final Program Funding and Allocation Methodology

I. General Information

The operator certification final guidelines were developed to meet the requirements of section 1419(a) of the Safe Drinking Water Act (SDWA), as amended in 1996. Section 1419(a) directs the Environmental Protection Agency (EPA) to develop guidelines specifying minimum standards for certification and recertification of operators of community and nontransient noncommunity public water systems and to publish those guidelines by February 6, 1999. The final guidelines were published in the Federal Register on February 5, 1999 (64 FR 5916)—see Docket #W-98-07, Operator Cert., II-A.1.

EPA planned to include with the final guidelines a section addressing information on submittal schedules and the withholding process. However, when EPA published the final guidelines, this section was not included to allow more time for the Agency to consider issues raised during the public comment period on the draft guidelines. EPA decided to seek additional public comment and accordingly, on July 20, 2000, published a notice in the Federal Register (65 FR 45057) soliciting comments on Proposed Additions to the Final Guidelines for Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems. The Federal Register notice also requested comments on a Proposed Allocation Methodology for Funding to States for the Operator Certification Expense Reimbursement Grants Program. The public record for both of these proposals was established under Docket #W-98-07.

During the public comment period, EPA received approximately 150 comments from 20 commenters. Comments were received from one federal agency, 15 states, two associations representing states, one association representing water systems, and one United States Congressman. Approximately 50 comments were received on the proposed additions to the final guidelines and approximately 100 comments were received on the proposed methodology for allocating expense reimbursement grants. Parts II and III discuss EPA's response to comments on major issues relating to the July 20, 2000 proposal.

Paperwork Reduction Act

Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), EPA must obtain approval from the Office of Management and Budget (OMB) to collect information from the states required under the operator certification guidelines as well as the operator certification expense reimbursement grants program. EPA is expecting to obtain approval of an Information Collection Request (ICR) for this information by April 2001. Advance notice of the ICR (EPA ICR #1955.01) is required to be published in the Federal Register for public comment before it is submitted to OMB. This notice was published in the Federal Register on February 28, 2001 (66 FR 12776). EPA may not conduct, or sponsor, and a person is not required to submit to a collection of information unless the Agency has OMB approval for collection of the information. The ICR approval will be posted on EPA's website at http://www.epa.gov/​safewater/​opcert/​opcert.htm.

II. Additions to the Final Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems

A. Program Submittal Schedules

1. Background

Under section 1419(b) of the SDWA, beginning two years after the date on which EPA publishes guidelines for the certification (and recertification) of operators of community and nontransient noncommunity public water systems (or February 5, 2001), “EPA shall withhold 20 percent of the funds a state is otherwise entitled to receive under (SDWA section 1452) unless the state has adopted and is implementing a program * * * that meets the requirements of the guidelines.” Section 1452 establishes a Drinking Water State Revolving Fund (DWSRF) program to assist public water systems to finance the costs of infrastructure needed to achieve or maintain compliance with SDWA requirements and to further the public health objectives of the Act. Section 1452 authorizes EPA to award capitalization grants to states, which in turn provide low cost loans to eligible systems and other types of assistance. Under section 1452, states can also set aside a portion of their capitalization grants to use for activities relating to implementation of the public water system supervision (PWSS), source water protection, operator certification, and capacity development programs. States must meet the requirements contained in the operator certification final guidelines to avoid withholding of DWSRF capitalization grant funds. There are no other sanctions for states with operator certification programs that fail to meet the requirements of the final guidelines. All DWSRF funds withheld by EPA will be reallotted to states who are implementing a program that meets the guidelines using the formula originally used to allot those funds. A state that has not met the requirements of the guidelines is not eligible to Start Printed Page 19941receive funds made available by a reallotment of withheld funds.

In developing an approach for reviewing state operator certification programs and making withholding decisions, EPA sought to: (a) Establish a consistent date for all states to meet the requirements of the guidelines; (b) provide states with sufficient time to make changes in their programs in response to EPA review before EPA permanently withholds funds; and (c) allow future operator certification program approval or withholding decisions to be made at the beginning of the federal fiscal year so that states can plan for their use of DWSRF program funds.

States have two options for submitting their programs to EPA for review. Section 1419(c) of the SDWA recognizes that some states may have existing operator certification programs that meet the public health objectives of the guidelines and allows those states to submit their existing programs as “substantially equivalent” to the guidelines instead of requiring those states to make revisions to their programs. Alternatively, states that must make changes to their existing programs may submit revised programs to meet the requirements of the guidelines.

The final review process described in this notice covers the deadlines for states to submit their operator certification programs to EPA, time frames for EPA to review state programs, time frames for states to address any identified deficiencies, and time frames for EPA to make withholding decisions. DWSRF withholding decisions will be made on an annual basis once a state has received EPA approval that its program meets EPA's guidelines. Annual decisions will be based upon a state's ongoing implementation of its operator certification program.

Section A.2 of this notice explains EPA's response to comments on major issues. Section A.3 of this notice explains EPA's final schedule for states that submitted revised operator certification programs. Section A.4 of this notice explains EPA's final schedule for states that submitted their existing operator certification programs as “substantially equivalent” programs. Sections A.3 and A.4 will be included as part of the operator certification final guidelines in Section III (Program Submittal Process), Subsection A (Submittal Schedule and Withholding Process), under Subsections 1 and 2, respectively.

2. Response to Comments on Major Issues

a. Additional Flexibility Regarding the Term “Adopt”. Eight commenters stated that EPA should give states additional flexibility with regard to the February 5, 2001 deadline for submitting programs that meet the operator certification final guidelines. Two commenters believed that EPA should not begin withholding DWSRF funds from any state until two years after these additions to the final guidelines are finalized because the guidelines have been amended. One commenter stated that delays caused by legislative adoption schedules should not be the only reason for allowing states additional time for completing the rulemaking process. The commenter believed all states should be given an opportunity to complete their rulemaking process in a way that will provide for reasonable, enforceable rules that protect public health and meet EPA requirements and that those states should have until September 30, 2002 to have rules effective. Another commenter stated that EPA's requirement that states submit adopted regulations without first having legislative approval is not realistic since states do not adopt regulations until they have legislative approval.

EPA believes that it is not appropriate to extend the deadlines for states to submit operator certification programs or for EPA to begin withholding of DWSRF funds since the additions to the final guidelines do not change any of the requirements concerning the content of state operator certification programs. EPA is now providing the full flexibility allowed under the law for states to correct any program deficiencies before EPA makes a decision to permanently withhold DWSRF funds. The content of state operator certification programs as specified in the nine baseline standards published in the final guidelines has not been amended by adding the schedules for EPA's review of state programs and for making DWSRF withholding decisions or by publishing the allocation methodology for the expense reimbursement grants program. EPA will maintain the deadlines for states to submit operator certification programs and for EPA to begin withholding of DWSRF funds.

The SDWA allowed two years from February 5, 1999 (when the final guidelines were published) for states to revise their programs to meet the guidelines. However, EPA realized that, in some states, two years might not be an adequate amount of time to complete the regulatory process since states are required to go through long stakeholder processes and rule adoption processes. As a result, these states would not be able to submit a complete operator certification package (with signed Attorney General statement certifying that rules are adopted) by the February 5, 2001 deadline. EPA worked with states that believed they would not be able to submit a complete package by the deadline. If a state's legislative schedule would not allow it to have final regulations certified by the Attorney General by February 5, 2001, the state had to submit regulations that had been adopted by the implementing agency or agencies but were awaiting legislative approval, a schedule for final adoption by the state legislature, and a full description of how the state's program complied with the requirements of the guidelines. The state must submit its Attorney General's certification immediately upon approval of regulations by the legislature, but no later than September 30, 2002. EPA worked with states on a case-by-case basis through these issues. EPA believes that it has provided the maximum time it can for submissions of programs under the statute because the statute requires EPA to begin withholding DWSRF funds on February 5, 2001, unless a state “has adopted and is implementing” a program that meets the guidelines. Generally, if a state has not adopted regulations, it cannot be “implementing” them. Fifty of fifty-one programs were submitted by the February 5, 2001 deadline. The state that did not submit its program had already received its DWSRF grant for fiscal year 2001 funds and thus was not subject to withholding.

b. “Hold Back” of DWSRF funds. Four commenters believed that states should not be penalized by a “hold back” of DWSRF funds while EPA reviews state operator certification programs. Several commenters expressed concern that EPA will be slow in reviewing state operator certification programs. One commenter thought that EPA does not have the statutory authority to hold back DWSRF funds. Two commenters were unclear when held back DWSRF funds would be returned to states. Two commenters stated that EPA cannot hold back or withhold DWSRF funds from a substantially equivalent program unless it has been “disapproved”.

Section 1419(b) of the SDWA requires that EPA withhold 20 percent of the funds a state is otherwise entitled to receive under SDWA section 1452 unless a state has adopted and is implementing a program that meets the requirements of EPA's operator certification guidelines beginning two years after the date on which EPA Start Printed Page 19942publishes guidelines for the certification of operators of community and nontransient noncommunity public water systems (or February 5, 2001). EPA developed the concept of holding back DWSRF funds to provide additional time for states to meet the guidelines while still meeting the statutory requirement to begin withholding on February 5, 2001.

The “hold back” concept was initially used during the review and approval of state capacity development programs which have DWSRF withholding provisions. In the operator certification program, the concept serves several purposes: it allows states to have two full years from the date that the final guidelines were published to adopt programs that meet the guidelines and to submit their program to EPA, and it gives adequate time for EPA to review state programs and for states to address any identified deficiencies before EPA makes a decision to permanently withhold DWSRF funds.

State programs were due to EPA for review no later than February 5, 2001. EPA is committed to completing its review of a state's program within six months of the submittal date (no later than August 5, 2001) and either approving the program or giving the state a list of deficiencies. If the state receives a list of deficiencies, it will have until September 30, 2002 to receive program approval before EPA permanently withholds DWSRF funds. If a state has DWSRF funds held back, those funds will be released to the state once it has received approval of its operator certification program.

EPA agrees with the commenters who believe that DWSRF funds cannot be held back or withheld from a state that had submitted a “substantially equivalent” program until the program has been disapproved. Pursuant to section 1419(c) of the SDWA, “substantially equivalent” programs were required to be submitted to EPA for review no later than August 5, 2000. Three states submitted their operator certification programs for review to EPA as “substantially equivalent”. EPA has reviewed and approved all of those programs.

c. Annual State Operator Certification Program Submittals. Two commenters stated that EPA does not have statutory authority to withhold DWSRF funds on an annual basis. Four commenters stated that EPA should allow states to comment on the content of packages submitted for the purposes of making annual determinations on implementation of programs. Three commenters believed that states should have more time to correct deficiencies found in annual submittals before a withholding occurs. One commenter supported the time frames as proposed.

EPA believes it has statutory authority to make withholding decisions on an annual basis. Section 1419(b) of the SDWA gives EPA a starting date of two years after publishing the final guidelines to begin withholding DWSRF funds unless the state has “adopted and is implementing” an operator certification program that meets the guidelines. Based on this statutory language, EPA has concluded that the withholding decision is an ongoing requirement to be applied each time a state is entitled to receive funds under section 1452. Annual submittals will allow EPA to determine if a state “is implementing” an operator certification program that complies with the guidelines.

EPA agrees that states should be allowed to comment on the contents of packages for state operator certification program annual submittals. EPA will work with states to specifically define the contents of annual submittals.

EPA encourages states to provide their annual package by June 30 of each year to allow for sufficient time for review and revisions. EPA believes that states will have sufficient time to correct program deficiencies identified during the review of annual submittals since the submittals will primarily consist of a report on the state's ongoing progress in implementing its operator certification program. EPA intends to work with states on an ongoing basis to address implementation problems when they occur rather than wait for the annual review.

d. Attorney General's Certification. One commenter expressed concern that the guidelines require a state to submit an Attorney General's certification as to its legal authority to implement and enforce the requirements of an operator certification program. Specifically, the commenter stated that, in some states, this type of certification is not part of the administrative rule promulgation process. According to the commenter, while legal review may be performed, it may not be done by the Attorney General.

EPA did not specifically request comment on this issue in the July 20, 2000 proposal. However, EPA did solicit comment on this issue in the March 27, 1998 Public Review Draft Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems. In the final guidelines, EPA requires that states submit an Attorney General's certification, (or certification from delegated counsel), that confirms that states: (1) Have the legal authority to implement the program requiring the certification of operators of all community and nontransient noncommunity water systems and (2) can require that the systems comply with the appropriate requirements of an operator certification program. EPA will accept this certification from a delegated counsel, for example the counsel for the agency that administers the operator certification program, as long as the state submits proper documentation of the delegation. EPA does not feel that this is an unreasonable burden on states since it is generally required as part of the primacy revision package that is submitted when states are revising their regulations to meet EPA's drinking water standards. Such a certification is the best way of providing EPA with assurance that the submitted program is legally sound and can thus be implemented by the state.

3. Final Review Process and DWSRF Withholding Determinations for Revised State Operator Certification Programs

The final approach for review of a state's initial operator certification program and for making withholding decisions is: (Diagram 1 has been added as a visual aid)

  • A state must submit its initial operator certification program to EPA for review by February 5, 2001. If a state does not submit its program to EPA by February 5, 2001, the state will immediately lose 20% of unawarded FY 2001 funds. The guidelines require states to submit an Attorney General's certification, a full description and explanation of how the state's operator certification program complies with the requirements of the guidelines and a copy of the state's operator certification regulations.
  • Between February 5, 2001, and September 30, 2002, EPA will hold back 20% of unawarded FY 2001 and FY 2002 funds from any state that submits its program to EPA by the February 5, 2001 deadline but that has not yet received EPA approval of its program.
  • Within six months of a state's submittal date, EPA will complete its review of state programs that were submitted by the February 5, 2001 deadline. At that time, EPA will determine that either the state's program meets EPA's guidelines or will provide a list of deficiencies to the state.
  • A state has until September 30, 2002 to correct deficiencies and receive EPA approval of its operator certification program in order to receive any FY 2001 and FY 2002 funds that were held back from the state. Held back Start Printed Page 19943funds will be released to the state once the state receives EPA approval of its operator certification program.
  • On September 30, 2002, a state that does not have an EPA approved program will lose any FY 2001 and FY 2002 funds that have been held back.
  • On October 1, 2002, a state that does not have an EPA approved program will lose 20% of its FY 2003 funds.

Withholding decisions will also be made annually based on a review of the state's annual operator certification program. Annual reviews can be based on a state's fiscal year or any schedule agreed to by the state and EPA. Schedules should be developed that allow adequate time for review and revisions, if necessary, between submittal and withholding decisions. States are encouraged to submit a package showing how they are meeting the requirements of the guidelines by June 30 to allow for adequate time for review and revisions. The final approach for withholding decisions based on a state's annual operator certification program submittal is:

  • Any state that has received EPA approval of its initial operator certification program before September 30, 2000 is required to undergo its first annual review of its operator certification program on or before September 30, 2001. If, after reviewing the state's annual submittal, EPA finds that the state's operator certification program does not meet the guidelines, the state will permanently lose 20% of its FY 2002 funds on October 1, 2001.
  • Any state that receives EPA approval of its initial operator certification program between October 1, 2000 and September 30, 2001 is required to undergo its first annual review of its operator certification program between October 1, 2001 and September 30, 2002. If, in reviewing the state's annual submittal, EPA finds that the state's operator certification program does not meet the guidelines, the state will permanently lose 20% of its FY 2003 funds on October 1, 2002.
  • On or before September 30, 2003, and annually thereafter, EPA will review a state's operator certification program and make any necessary determinations to withhold funds from the upcoming fiscal year's allotment.
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4. Final Review Process and DWSRF Withholding Determinations for Substantially Equivalent State Operator Certification Programs

The final approach for review of a state's initial operator certification program is: (Diagram 2 has been added as a visual aid)

  • A state must submit its program to EPA for review by August 5, 2000. Any state program that is submitted after August 5, 2000 will be considered a revised program and will follow the schedule for revised programs.
  • Within six months of a state submittal, and no later than February 5, 2001, EPA will complete its review of a state program. At that time, EPA will either make a determination that the program is substantially equivalent or will issue a Notice of Disapproval and will provide a list of deficiencies to the state.
  • A state has six months after receipt of a Notice of Disapproval to correct deficiencies and submit the changes to EPA. EPA will approve or disapprove the state's program by September 30, 2001.

The final approach for withholding decisions based on a state's initial operator certification program submittal is:

  • After February 5, 2001, if a state program is submitted and EPA has issued a Notice of Disapproval, 20% of unawarded FY 2001 funds will be held back (but not permanently withheld).
  • If a state corrects deficiencies and its program is approved by September 30, 2001, held back FY 2001 funds will be released to the state as soon as the state receives program approval from EPA.
  • On October 1, 2001, a state with a disapproved program will permanently lose any held back funds from FY 2001, plus 20% of FY 2002 funds.

Withholding decisions will also be made annually based on a review of the state's annual operator certification program. Annual reviews can be based on a state's fiscal year or any schedule agreed to by the state and EPA. Schedules should be developed that allow adequate time for review and revisions, if necessary, between submittal and withholding decisions. States are encouraged to submit a package showing how they are meeting the requirements of the guidelines by June 30 to allow for adequate time for review and revisions. The final approach for withholding decisions based on a state's annual operator certification program submittal is:

  • Any state whose program is approved on or before September 30, 2000 is required to undergo its first annual review of its operator certification program on or before September 30, 2001.
  • If, in reviewing the state's annual submittal, EPA finds that the state's operator certification program does not meet the guidelines, the state will permanently lose 20% of FY 2002 funds on October 1, 2001.
  • On or before September 30, 2002, and annually thereafter, EPA will review a state's operator certification program and make any necessary determinations to withhold funds from the upcoming fiscal year's allotment.
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B. Exam Validation

1. Background

The Final Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems contains nine baseline standards that states are required to adopt and implement in their operator certification programs. Baseline Standard No. 3, Operator Qualifications, specifies that state programs must require that, for an operator to become certified, the operator must “take and pass an exam that demonstrates that the operator has the necessary skills, knowledge, ability and judgement as appropriate for the classification”. Furthermore, this baseline standard specifies that “all exam questions must be validated”. However, it does not require that the entire exam be validated. This situation is not entirely consistent with the definition of validated exam at the end of the final guidelines. In the guidelines, EPA defines a validated exam to be “an exam that is independently reviewed by subject matter experts to ensure that the exam is based on a job analysis and related to the classification of the system or facility”. In the July 20, 2000 proposal, EPA solicited and received comments on the resolution to this apparent inconsistency.

2. Response to Comments on Major Issues

Two commenters supported validating the complete exam. Four commenters were unsure of how EPA is amending the validated exam language. One commenter thought that states should conduct exam validation workshops. Five commenters thought that requiring the complete exam to be validated would reduce the number of different exams that a state would be able to administer because of the high cost of validating complete exams, which could result in a reduction of the effectiveness of a state's program. Several commenters felt that states should be able to replace individual questions on exams from a database of validated questions as necessary without re-validating the entire exam. Two commenters thought that the process should be left up to states.

EPA believes that examinations given by states must contain validated questions and that each state must have a process for ensuring that all of the subject areas necessary to test an operator's knowledge, skills, ability and judgement for a particular classification level are appropriately covered in each certification exam. This process should include a review of the exam by subject matter experts, as determined by the state, to ensure that the exam is based on a job analysis and related to the classification of the system or facility. EPA encourages states to develop a database of validated exam questions which will allow states the flexibility to offer a variety of exams for each class of operator. Because EPA has decided not to mandate a “validated exam” as opposed to an exam of validated questions, the language in Baseline Standard No. 3 will not be changed. EPA is deleting the definition of “Validated Exam” from the guidelines.

EPA has awarded a grant to the Association of Boards of Certification to develop a guidebook on exam validation to assist states with the validation process. The guidebook is scheduled to be completed in August 2001. As noted earlier in this notice, EPA plans to republish the guidelines with the revisions made today and post them on EPA's website at http://www.epa.gov/​safewater/​opcert/​opcert.htm.

III. Operator Certification Expense Reimbursement Grants Program

A. Background

Section 1419(d) of the SDWA requires EPA to reimburse the costs of training, including an appropriate per diem for unsalaried operators, and certification for persons operating community and nontransient noncommunity public water systems serving 3,300 persons or fewer that are required to undergo training pursuant to the operator certification final guidelines. The reimbursement is to be provided through grants to states. Each state is to receive an amount sufficient to cover the reasonable costs for training all such operators in the state. The amount each state will receive to cover the reasonable costs for training will be determined by the Administrator of EPA. Section 1419(d) also authorizes an appropriation of $30 million in funding for this reimbursement each year from FY 1997 through FY 2003 and stipulates that, if this appropriation is not sufficient, EPA shall reserve funds in an amount sufficient to satisfy these expenses from the national DWSRF program appropriation. Because there has been no appropriation from Congress for the expense reimbursement grants program, it is EPA's intention to reserve funds for expense reimbursement from the national DWSRF program appropriation.

The grants are first to be used to provide reimbursement for training and certification costs of persons operating community and nontransient noncommunity water systems serving 3,300 persons or fewer. If a state has reimbursed all such costs, the state may, after notice to the Administrator, use any remaining funds from the grant for any of the other purposes authorized for capitalization grants under section 1452 of the SDWA.

B. Response to Comments on Major Issues

1. General Expense Reimbursement Grants Program

Five commenters believed that the funds for the expense reimbursement grants program should not be taken from the national DWSRF appropriation and that EPA should request the funding from Congress. One commenter suggested that EPA identify the amount of funds that will be reserved for this program and two commenters stated that EPA did not factor in inflationary costs between FY 1999 and FY 2003.

Section 1419(d) of the SDWA authorizes an appropriation of $30 million in funding for the expense reimbursement grants program each year from FY 1997 through FY 2003 and stipulates that, if this appropriation is not sufficient, EPA shall reserve these funds from the national DWSRF program appropriation. Because there has been no appropriation from Congress for this program, EPA must take the funding from the annual DWSRF program appropriation. EPA appreciates the concerns of the commenters that believe EPA should have separately requested funds for this purpose. However, EPA must consider all aspects of the program as it weighs priorities in preparing funding requests. EPA has estimated that the amount of funding necessary for expense reimbursement is approximately $134 million. To date, EPA has reserved $74,934,000 ($15 million from the FY 1999, $30 million from the FY 2000 and $29,934,000 from the FY 2001 DWSRF appropriations, respectively). EPA intends to reserve the remaining amount needed to fully fund the program (approximately $59 million) from the FY 2002 and FY 2003 DWSRF appropriations. Although EPA did not include a factor for inflation, the Agency believes that the assumptions that were used to calculate the amount of funding necessary to fund the expense reimbursement grants program will cover increases in costs due to inflation.

One commenter asked that EPA clarify that all operators (public, private, federal) are eligible. One commenter requested that EPA define what documentation operators would have to provide to receive reimbursement from the states. Start Printed Page 19948

Section 1419(d) of the SDWA specifies that “the Administrator shall provide reimbursement for the costs of training, including an appropriate per diem for unsalaried operators, and certification for persons operating systems serving 3,300 persons or fewer that are required to undergo training” pursuant to the final guidelines. Any operator of a system that meets this criteria is eligible for reimbursement. EPA believes that the requirements that operators must meet to prove the need for reimbursement should be left up to each state.

Three commenters asked EPA to clarify if costs incurred since FY 1997 are reimbursable and if EPA will allow “retroactive reimbursement”. Under certain circumstances, EPA will allow “retroactive reimbursement” (referred to as “pre-award costs”) if a state provides justification for doing so in its grant application. Generally, EPA does not allow pre-award costs that were incurred more than 90 calendar days prior to the award. EPA may allow for reimbursement of costs incurred more than 90 calendar days prior to the award on a case-by-case basis if the “pre-award costs” are in conformance with the requirements set forth in OMB Circular A-87 and with applicable Agency regulations, policies, and guidelines. However, because the final guidelines were not published until FY 1999, EPA will not allow “pre-award costs” that were incurred prior to February 1999. EPA will determine whether pre-award costs are allowable as part of its review of the application for assistance.

One commenter asked EPA to define “reasonable costs”. Three commenters suggested that EPA define the term “unsalaried”.

A state will be required to submit an application for federal assistance which will include a workplan describing how the state intends to use the funds. EPA will review eligible costs as part of its review of the workplan. However, EPA believes that, generally, any costs that are associated with activities conducted to train and certify operators are considered “reasonable” costs (such as those described in Part III, section B. of this notice). Where clarification of this term is necessary in the context of a state program, EPA expects the state to provide a relevant definition. EPA defines the term “unsalaried operator” to mean a person who is not paid in any manner by the system owner to perform the duties and responsibilities of a certified operator. EPA does not consider an operator who is paid by the system owner on an hourly basis to be “unsalaried”.

Nine commenters suggested that EPA consider allowing states to use expense reimbursement grant program funds to administer the program because they do not believe that states should have to use the 10% State Program Management set-aside from the DWSRF program for this purpose.

EPA agrees with these commenters and will allow states to use a reasonable amount of the expense reimbursement grant funding for administrative purposes. Because the exact percentage for administration will vary by state, each state will be required to submit this information to EPA in its application for federal assistance.

One commenter suggested that the funding mechanism should be extended beyond FY 2003.

Under section 1419(d) of the SDWA, the Administrator of EPA is only authorized to provide grants for reimbursement through FY 2003. Congressional action is required in order to extend funding beyond that date.

2. Match Requirement on Remaining Expense Reimbursement Grant Funds

EPA's intention to reserve funds for the expense reimbursement grants program from the national DWSRF program appropriation has triggered questions concerning whether EPA should require a 20% state match pursuant to section 1452(e). Two commenters indicated that there should be no match requirement on initial grants. Two commenters supported a requirement for a 20% match on remaining funds only if the funds are used for infrastructure projects. Two commenters opposed a match requirement on remaining funds.

Although the funds are appropriated under section 1452, the expense reimbursement grants program is authorized under section 1419(d). Therefore, there is no 20% match requirement for initial grants because there are no matching requirements for funds awarded pursuant to section 1419(d). However, states that use any remaining portion of the expense reimbursement grant funds for purposes authorized under SDWA section 1452, must provide the 20% match, since a match is required for capitalization grant funds received under section 1452.

3. Expense Reimbursement Grants Program Allocation Methodology

The information in parentheses after each assumption is a summary of information from the July 20, 2000 proposal.

a. Assumption 1 (Eligible Systems = community water systems + nontransient noncommunity water systems serving 3,300 persons or fewer): The majority of commenters (nine) on this assumption supported basing the methodology on the number of community water systems and nontransient noncommunity water systems serving 3,300 persons or fewer. EPA agrees with these commenters.

Three commenters asked when EPA would recalculate the total number of eligible systems which are used in Assumption #1 of the grant allocation methodology. Some commenters felt that EPA underestimated the total number of systems that are eligible for reimbursement, and felt that EPA should use the number of systems that were reported in the most recent EPA PWSS Annual Compliance Report. EPA believes it should use the most current data available. The most recent PWSS Compliance Report has inventory information from 1998.

The July 20, 2000 proposal for the allocation methodology for expense reimbursement grants used Safe Drinking Water Information System (SDWIS) inventory data from February 1999. This notice uses more current SDWIS inventory information from the database that was frozen in the third quarter of FY 2000 (July 2000).

b. Assumption 2 (number of operators: 2 per system or 1.5 per system or 2 per community water system/1 per nontransient noncommunity water system): Nine commenters supported the option of two operators per system; one commenter supported the option of two operators per community water system and one operator per nontransient noncommunity water system; one commenter supported the option of 1.5 operators per system; one commenter supported three operators per system for a small percentage of systems.

EPA will base the allocation methodology on the assumption that two operators per system will need to be trained and certified. This option was supported by most commenters and takes into account the turnover of operators at small systems.

c. Assumption 3 (number of unsalaried operators = 1/2 of eligible operators): EPA received no comment on this assumption and therefore will make no changes to it.

d. Assumption 4 (Amount of Per Diem = $100): One commenter supported $100/day; one commenter thought that states should be able to set their own rates; one commenter suggested that the per diem rate is too low. Start Printed Page 19949

The assumption of $100 per diem rate is used only as an average for the purposes of calculating allotments. The final allocation methodology will continue to use this rate. EPA agrees that states should be allowed to set their own per diem rate. Therefore, states are not required to use the $100 per diem rate in their programs.

e. Assumption 5 (Days of Per Diem = 4): Some commenters felt that EPA should increase the number of days of per diem allowed. EPA believes that four days of per diem is an appropriate amount of per diem. The amount of per diem that is estimated is directly tied to the number of training classes that an operator will be required to attend. These training classes can be required to be taken either as part of the initial certification requirements (usually training courses to prepare for the exam) or as part of certification renewal. This grant program is targeted at small system operators and small system operators are not required to attend as many classes as large system operators. Additionally, because many states do not require that operators take training to become initially certified, most operators usually do not take training until they are ready to renew certification.

Since EPA is finalizing the allocation methodology to assume that small system operators will be required to attend two training classes and since EPA believes that most training courses will last not more than one day, EPA believes that two days of per diem for each training class is adequate. Therefore, EPA believes that a total of four days of per diem is sufficient for this assumption.

f. Assumption 6 (Cost of Training Classes = $300/class): Two commenters thought that the estimated cost of training classes is too low. EPA believes that the estimated cost of $300 per class is reasonable and therefore will maintain the figure. When EPA began developing these assumptions, the Agency proposed this cost per class to the Operator Certification State-EPA Work Group, which was instrumental in assisting EPA in the development of the operator certification final guidelines. The group contained state representatives who are involved with operator training and those representatives supported EPA's proposed cost of $300/class. EPA also has taken into consideration that there are organizations (such as the National Rural Water Association) that offer free training to small system operators.

g. Assumption 7 (number of Training Classes = 2 per operator): Four commenters indicated that they thought that more than two classes should be used (two indicated 3 classes, one indicated 4 classes) because they believe that small system operators will be required to attend more classes in order to comply with state training and certification requirements. EPA believes that the assumption of two classes per operator to complete a training cycle is reasonable based on reviews of state programs. In most states, small system operators are not required to attend as many classes as large system operators; also many states do not require that operators take training to become initially certified. Training for most operators usually does not occur until the operator is already certified and is ready to renew certification.

h. Assumption 8 (Certification/Renewal fee = $75): One commenter supported a $200 fee. Based on reviews of state operator certification programs, EPA believes that $100 is a more reasonable estimate for this assumption because it should cover the exam fee and the application fees for initial certification or certification renewal.

i. Assumption 9 (Round trips for Mileage = 2): One commenter supported 3 round trips. EPA believes the number of round trips should coincide with the number of training classes, and therefore will leave the number of round trips at two.

j. Assumption 10 (Number of Miles per Round Trip = 200): Two commenters supported 400 miles per round trip; two commenters thought that the mileage estimate is too low; and one commenter suggested that western states should get more mileage consideration due to the greater geographic area of the states. EPA believes that an estimate of 200 miles per round trip is reasonable for distance traveled by operators to attend training classes.

k. Assumption 11 (Cost per Mile = 31.5 cents): Four commenters suggested that the mileage reimbursement rate should reflect 32.5 cents per mile. EPA agrees with commenters and has changed the mileage reimbursement rate to reflect the current General Services Administration mileage reimbursement rate of 32.5 cents per mile.

4. Other Issues

One commenter suggested that reimbursement should cover lost wages; one commenter suggested that it should be clarified that the proposed methodology assumptions are EPA's and that state assumptions may differ.

EPA disagrees with the commenter who suggested that reimbursement should cover lost wages. Section 1419(d) of the SDWA requires that “the Administrator shall provide reimbursement for the costs of training, including an appropriate per diem for unsalaried operators, and certification for persons operating systems serving 3,300 persons or fewer that are required to undergo training” pursuant to the operator certification final guidelines. EPA does not believe that lost wages are part of the cost of training and certification because decisions to withhold wages from salaried operators attending training classes are those of water system owners. The assumptions that EPA is using to estimate the amount of funding needed for its expense reimbursement grants program are EPA's assumptions only. They affect the allotment of funds to states, but do not directly govern the use of the funds. States will be given broad discretion on how to implement the expense reimbursement grants program to best meet the needs for operator training and certification in each state and to minimize administrative expenses in carrying out this program. The dollar amounts assigned to assumptions such as per diem rates, mileage reimbursement rates, and certification fees will likely vary from state to state. States will be required to explain to EPA in their applications for federal assistance how they will manage their programs.

C. Final Approach for Administration of the Grants Program

A state may apply for and receive its expense reimbursement grant funds in accordance with the requirements of 40 CFR part 31 (Uniform Administrative Requirements for Grants and Cooperative Agreements to States and Local Governments) once its operator certification program has received approval from EPA. A state has two years from the date of initial program approval to apply for and receive its initial expense reimbursement grant. Funds not obligated within this two year period will be reallotted to states for use in the DWSRF program based on the formula used to allot the DWSRF funds. As mentioned previously, EPA has estimated that the amount of funding necessary for the expense reimbursement grants program is approximately $134 million and has reserved $74,934,000. EPA considered allowing a state, once its operator certification program is approved, to apply for and receive its full allotment for this grant. However, EPA believes that it would be unfair to award states their full allotment since a state's full allotment is based on funds that have not yet been reserved. If the entire $134 million fails to be appropriated, this Start Printed Page 19950could mean that some states would not receive a grant because all funds would be gone. EPA believes that the most equitable way to award these funds is to award a state its percentage of funds based on what has currently been reserved. By awarding these partial amounts, EPA will be able to guarantee that every state gets its share of expense reimbursement grant funds, regardless of when it received program approval from EPA. EPA will notify states of the availability of future funds.

In order to receive funding, a state must submit an application for an expense reimbursement grant. A state must submit a workplan on how funds are to be used in meeting the requirements of section 1419(d) and an annual progress report showing how funds were expended. States are given broad discretion on how to implement the expense reimbursement grants program to best meet the needs of the systems in the state and to minimize the administrative expenses in carrying out this program. States may use a reasonable amount of the expense reimbursement grant funding for administrative purposes.

EPA will determine whether pre-award costs are allowable, in accordance with the requirements of 40 CFR part 31, as part of its review of the application for assistance. Any cost that is associated with training and certifying operators is considered a “reasonable” cost. EPA will review eligible costs as part of its review of the workplan. EPA defines the term “unsalaried operator” to mean a person who is not paid in any manner by the system owner to perform the duties and responsibilities of a certified operator. EPA does not consider an operator who is paid by the system owner on an hourly basis to be “unsalaried”.

After a state has reimbursed all costs pursuant to section 1419(d)(1), the state may, after notice to the Administrator of EPA, use any remaining funds from the grant for any of the other purposes authorized for capitalization grants under section 1452 of the SDWA. The notification for using the remaining expense reimbursement grant funds for any of the other purposes authorized for capitalization grants under section 1452 must include supporting documentation that the state has met the requirements for training and certifying its operators. The state is also required to explain in a workplan how the remaining funds will be used. A state is required to provide a 20% match if any remaining funds from the expense reimbursement grant program are used for other purposes authorized for capitalization grants under section 1452.

D. Final Program Funding and Allocation Methodology

EPA has determined that $134,330,540 will be needed for the expense reimbursement grants program between FY 1999, when the final operator certification guidelines were published, and FY 2003, the last year for which these grants are authorized. This estimate represents the amount of funding that EPA believes is necessary to initially train and certify operators of community and nontransient noncommunity water systems serving 3,300 persons or fewer to meet the requirements of the guidelines. EPA has developed this estimate based on the assumptions listed below:

Funding Assumptions

1. Total number of community and nontransient noncommunity water systems serving 3,300 or fewer persons = 65,209 (from SDWIS database)

2. 2 operators per system

3. 1/2 of the operators would be unsalaried and therefore would be eligible for per diem

4. Per diem = $100/day (Per diem is a daily allowance that would cover the costs of lodging and meals; for unsalaried operators only)

5. Four days of per diem assumed for class attendance (two days per training class)

6. The cost of all training classes estimated at $300/class

7. Two training classes per operator for initial certification or certification renewal

8. $100 fee for initial certification/certification renewal

9. For mileage purposes, assume two round trips (one round trip for each training class)

10. Number of miles per round trip = 200

11. Mileage reimbursement estimated at $.325/mile (for all operators)

EPA determined the allotment for each state by substituting the number of community and nontransient noncommunity water systems serving 3,300 persons or fewer for a particular state under Assumption #1. EPA believes that this allocation methodology is both equitable and easily understood. The number of systems serving 3,300 persons or fewer is readily available from EPA's national SDWIS database. For example, if a state has 1,000 eligible water systems, the allocation would be calculated as follows:

Funding Assumptions

1. Total number of community and nontransient noncommunity water systems serving 3,300 or fewer persons = 1,000 systems

2. Number of operators per system = 2 x 1,000 = 2,000 operators

3. 1/2 of the operators would be unsalaried and therefore would be eligible for per diem = 2,000 x 1/2 = 1,000 operators

4. Per diem = $100/day (Per diem is a daily allowance that would cover the costs of lodging and meals; for unsalaried operators only) = 1,000 x $100 =$100,000 per diem

5. Four days of per diem assumed for class attendance (two days per training class) = 4 x $100,000 = $400,000 (total amount of per diem)

6. The cost of all training classes estimated at $300/class

7. Two training classes per operator for initial certification or certification renewal = 2 x $300 x 2,000 = $1,200,000 (cost of training classes)

8. $100 fee for initial certification/certification renewal = $100 x 2,000 = $200,000 (certification fee)

9. For mileage purposes, assume two round trips (one round trip for each training class)

10. Number of miles per round trip = 200 x 2 = 400 total miles

11. Mileage reimbursement estimated at $.325/mile (for all operators) = 400 x $.325 x 2,000 operators = $260,000 total for mileage

By adding the dollar amounts calculated under assumptions 5, 7, 8 and 11, the total amount of the grant is found to be $2,060,000. Table 1 contains the state by state expense reimbursement grant allocations based on the above funding assumptions and allocation methodology. Start Printed Page 19951

Table 1.—State Expense Reimbursement Grant Allotments

State or territoryNo. of eligible systems (CWS + NTNCWS)Percent of allotmentAllotment based on available funds (FY 1999- FY 2001)Potential total allotment
Alabama3510.54$403,347$723,060
Alaska6310.97725,1051,299,860
American Samoa210.0324,13243,260
Arizona9101.401,045,7141,874,600
Arkansas7121.09818,1851,466,720
California3,9126.004,495,4198,058,720
Colorado8881.361,020,4331,829,280
Commonwealth of the Northern Mariana Islands350.0540,22072,100
Connecticut1,1091.701,274,3922,284,540
Delaware3100.48356,232638,600
Florida2,7314.193,138,2905,625,860
Georgia1,7542.692,015,5843,613,240
Guam70.018,04414,420
Hawaii980.15112,615201,880
Idaho9611.471,104,3201,979,660
Illinois1,8222.792,093,7263,753,320
Indiana1,4912.291,713,3623,071,460
Iowa1,2041.851,383,5602,480,240
Kansas8911.371,023,8801,835,460
Kentucky3230.50371,171665,380
Louisiana1,2371.901,421,4812,548,220
Maine7311.12840,0181,505,860
Maryland1,0241.571,176,7152,109,440
Massachusetts4920.75565,3751,013,520
Michigan3,0164.633,465,7946,212,960
Minnesota1,4652.251,683,4843,017,900
Mississippi1,1671.791,341,0422,404,020
Missouri1,5072.311,731,7483,104,420
Montana7871.21904,3701,621,220
Nebraska7561.16868,7471,557,360
Nevada3610.55414,838743,660
New Hampshire1,0941.681,257,1552,253,640
New Jersey1,2981.991,491,5782,673,880
New Mexico7161.10822,7811,474,960
New York3,2605.003,746,1836,715,600
North Carolina2,7864.273,201,4925,739,160
North Dakota3310.51380,364681,860
Ohio2,2223.412,553,3804,577,320
Oklahoma1,1651.791,338,7432,399,900
Oregon1,1231.721,290,4802,313,380
Pennsylvania3,1294.803,595,6466,445,740
Puerto Rico3570.55410,242735,420
Rhode Island1260.19144,791259,560
South Carolina7771.19892,8791,600,620
South Dakota4740.73544,690976,440
Tennessee4470.69513,664920,820
Texas4,6817.185,379,1059,642,860
Utah4210.65483,786867,260
Vermont6230.96715,9121,283,380
Virginia1,7472.682,007,5403,598,820
Virgin Islands3010.46345,890620,060
Washington2,4313.732,793,5495,007,860
West Virginia6981.07802,0971,437,880
Wisconsin2,0083.082,307,4654,136,480
Wyoming2900.44333,249597,400
Total65,209100.0074,934,000134,330,540
Start Signature
Start Printed Page 19952

Dated: April 6, 2001.

Diane C. Regas,

Acting Assistant Administrator, Office of Water.

End Signature End Supplemental Information

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[FR Doc. 01-9482 Filed 4-17-01; 8:45 am]

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