Federal Assistance Manual Chapter 3-01

CHAPTER 3-01 REGULATORY PROGRAMS OVERVIEW

• 3-01-00 Background
  
• 3-01-10 Allocation of Funds
  
• 3-01-20 Use of Title V Regulatory Grant Funds to Cover Certain Bond Forfeiture Costs

3-01-00 BACKGROUND

1. Section 102 of the Surface Mining Control and Reclamation Act (SMCRA) establishes that one of the purposes of SMCRA is to "assistthe States in developing and implementing a program to achieve the purposes of this Act...". To do that, Section 705 authorizes the Secretary to provide assistance to States in developing, administering and enforcing State programs. When a State elects to administer an approved program on Federal lands, through a cooperative agreement, the Secretary is authorized to increase the amount of financial assistance to cover costs the Department would otherwise incur in regulating coal mining on those lands.

2. The Federal regulations implementing SMCRA established programs to encourage and assist State agency implementation of Title V. 30 CFR Chapter VII describes the funding of the initial regulatory program through interim grants; the development of a permanent program through program development grants; the implementation of the Small Operator Assistance Program (SOAP) through SOAP operational grants; the implementation of an approved permanent program through administration and enforcement grants; and funds cooperative agreements if a State elects to regulate coal mining and reclamation operations on Federal lands.

3-01-10 ALLOCATION OF FUNDS

1. Each applicant shall submit to the appropriate RCC/FO approximately eighteen (l8) months prior to the beginning of the Federal fiscal year for which a grant will be requested, a projection of its program budget by functional categories (permitting, inspection and enforcement, SOAP administration, lands unsuitable and other administrative costs), object class categories (personnel and fringe benefits, travel, equipment, supplies, contractual, indirect charges and other) if applicable, the costs of administering the program on Federal lands and SOAP operational grant estimates. The Director will use these budget summaries in preparing Federal budget estimates.

2. Each applicant shall submit to the appropriate RCC/FO approximately three (3) months prior to the beginning of the Federal fiscal year for which a grant will be requested, a projection of its program budget, including functional and object class categories.

3. The Director shall allocate to the States the full amount requested and approved in each State's program budget submitted as part of its grant application, provided that the amount available in the Federal budget is sufficient.

4. If the funds available to the Director for grants are insufficient to cover the total grant and Federal lands funding needs of all States, the Director shall allocate as much of each State's requested and approved budget estimate as possible and, at least, sufficient funds to cover the portion of each State's requested and approved budget estimate actually within the current fiscal year.

5. Allocation of a specific amount of funds to a State does not assure that grants for that amount will be approved. Each State must apply to OSM and secure approval for grants in accordance with the requirements set forth in the Act, 30 CFR Chapter VII, and this Manual.

6. State regulatory program (Title V) grants are funded from annual (one-year) appropriations. These funds are available for obligation by the Federal grantor agency only to meet bona fide needs of the fiscal year for which they were appropriated; the authorization to obligate these funds expires at the end of the fiscal year for which they were appropriated. Because of its one year authorization limit, funds appropriated for State regulatory program grants must be used to obligate grants with performance periods that begin in the current fiscal year. Performance periods may not be modified to circumvent this policy.

3-01-20 USE OF TITLE V REGULATORY GRANT FUNDS TO COVER CERTAIN BOND FORFEITURE COSTS.

This section provides guidance on which activities associated with bond forfeiture sites are allowable as program costs under the regulatory grant program, and which costs must be funded from either the proceeds of the forfeited bond or by other State resources.

1. Permanent Program Forfeiture Sites
   1. Administrative costs not directly associated with site-specific reclamation work may be funded by a grant if such costs are part of the forfeiture process or if the activities would have been performed had there been no forfeiture. Thus, site inventories and priority ranking activities, forfeiture processing, site inspections and contract monitoring (to the extent that it does not exceed the level of effort that would have been expended had there been no forfeiture) may be allowable program costs.

   2. Costs associated with site-specific activities directly related to completion of the reclamation plan cannot be paid from grant funds. Therefore, redesign of a reclamation plan after forfeiture and the reclamation work itself are not allowable costs under a regulatory program grant. Similarly, the costs of issuing design and reclamation contracts on forfeiture sites must be funded from the proceeds of forfeited bonds or by other State resources.

2. Initial Program Forfeitures Sites
   1. The Surface Mining Control and Reclamation Act of 1977 (SMCRA) did not require bonds during the initial regulatory program; hence, under section 505(b) of SMCRA, any State bonding requirements for initial program sites would be considered more stringent environmental controls. Therefore, administrative costs related to bond forfeiture on initial program sites may be allowable program costs for grant purposes.

   2. Administrative costs associated with bid preparation are allowable program costs to the extent that they do not include the costs of designing or redesigning the reclamation plan. Eligible costs include those related to bid specification preparation, such as planimeter work and office calculations needed to determine areas and volumes. To the extent that they would be incurred regardless of the quality of the reclamation plan, design or other permittee-supplied data included within the permit at the time of forfeiture, the expenses of site visits and limited surveys to obtain data necessary for the preparation of bid specifications would also be allowable program costs. Such visits and surveys would include those conducted to estimate or confirm drainage control needs, backfilling and grading volumes or the size of areas in need of revegetation or soil amendments.

   3. Ineligible costs include those related to the preparation of new maps, plans or drawings and those related to site surveys conducted for the purpose of horizontal or vertical control, acquisition of photogrammetric data or preparation of a new reclamation plan or design. The costs of the reclamation work itself are also ineligible.

   FEDERAL ASSISTANCE MANUAL
   January 2, 1998

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   Page Master: Marie Sibrell
   Office of Surface Mining
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