Proposal Guidelines for Brownfields Assessment, Revolving Loan Fund, and Cleanup Grants

Grant funds may not be used for the payment of:

• A penalty or fine.

• A federal cost-share requirement (for example, a cost share required by other federal funds).

• An administrative cost (see below).

• A response cost at a brownfield site for which the recipient of the grant or loan is potentially liable under CERCLA §107.

• A cost of compliance with any federal law, excluding the cost of compliance with laws applicable to the cleanup.

• Unallowable costs (e.g., lobbying and fund raising) under OMB Circulars A-21, A-87, or A-122, as applicable.

Administrative Cost Prohibition

The Brownfields Law prohibits the use of any "part of a grant or loan" for the payment of an administrative cost. In implementing this prohibition, EPA has made a distinction between prohibited administrative costs and eligible programmatic costs.

1. Administrative Costs. Prohibited administrative costs are direct costs, including those in the form of salaries, benefits, contractual costs, supplies, and data processing charges, incurred to comply with most provisions of the Uniform Administrative Requirements for Grants contained in 40 CFR Part 30 or 40 CFR Part 31. Direct costs for grant administration are ineligible even if the grantee or subgrantee is required to carry out the activity under the grant agreement. Prohibited administrative costs also are all indirect costs under OMB Circulars A-21, A-87, and A-122, and Subpart 31.2 of the Federal Acquisition Regulation.

2. Statutory Exclusions. The administrative cost prohibition does not apply to direct costs for:

   1. Investigation and identification of the extent of contamination;

   2. Design and performance of a response action; or

   3. Monitoring of a natural resource.

3. Programmatic Costs. EPA has determined that the administrative cost prohibition does not apply to "programmatic" costs, i.e., costs for activities that are integral to achieving the purpose of the grant, even if EPA considered the costs to be "administrative" under the prior brownfields program. For example, the prohibition does not apply, under a revolving loan fund grant, to costs incurred in making loans (such as the costs of loan processing, legal fees, and professional services) or overseeing the borrower's activities to ensure compliance with relevant and appropriate requirements of the National Contingency Plan (see 40 CFR §300.700 et seq.). These costs are programmatic, not administrative. Direct costs, as defined in the applicable OMB Cost Principle Circular, for the following programmatic activities are not subject to the administrative cost prohibition:

   1. In the case of grants for site characterization and assessment, expenses for inventorying, characterizing, assessing, and conducting planning related to brownfield sites.

   2. In the case of grants for capitalization of revolving loan funds:

      1. expenses for making and managing loans;

      2. expenses, including financial management expenses, for operating the revolving fund; and

      3. expenses for making and managing subgrants under CERCLA §104(k)(3)(B)(ii).

   3. In the case of grants for direct use by eligible entities and nonprofit organizations in remediation of brownfield sites under CERCLA §104(k)(3)(A)(ii), expenses for site remediation activities.

   4. In the case of grants for implementation of brownfields programs under CERCLA §104(k)(6), expenses for providing training, research, and technical assistance.

   5. Costs incurred for complying with procurement provisions of 40 CFR Part 30 and 31 are considered eligible programmatic costs only if the procurement contract is for services or products that are direct costs for performing activities specified above in Section B, "Statutory Exclusions," or Section C, "Programmatic Costs."

   6. Costs for performance and financial reporting required under 40 CFR 30.51 and 30.52, and 40 CFR 31.40 and 31.41 are eligible programmatic costs. Performance and financial reporting are essential programmatic tools for both the recipient and EPA to ensure that grants are carried out in accordance with statutory and regulatory requirements.

Eligible programmatic costs can include expenses for travel, training, equipment, supplies, reference materials, and contractual support if those costs are reasonable and allocable to tasks specified in a grantee's approved scope of work for carrying out the activities described in Section B, "Statutory Exclusions," or Section C, "Programmatic Costs."

Eligible programmatic costs may be used to help meet the RLF capitalization grant and direct cleanup grant recipients' 20 percent cost share. Prohibited administrative costs may not be used to meet recipients' cost share.

For further information on these prohibitions, contact your Regional Brownfields Contact listed in Appendix 1.