1. Of the funds granted annually pursuant to Sections 402(g)(1) and 402(g)(5) of SMCRA, a State may retain and deposit up to ten percent (10%) into either a special fund account established under law or an acid mine drainage fund (i.e., the sum of the deposits into both accounts may not exceed 10% of the (g)(1) and (g)(5) funds granted annually). Additional conditions for the special set-aside fund are as follows:
   1. Set-aside awards shall be funded with the same State/Federal share proportion as the composition of the States' AML grant distribution in the year the award is made;

   2. After deposit into the special fund, the set-aside money, plus any interest earned, will be considered State funds;

   3. Monies in the special fund may be spent by the State after September 30, 1995, but solely to achieve the coal priorities outlined in Section 403(a);

   4. Should the Secretary withdraw or terminate a State regulatory program, the 10 percent set-aside program will not be available to the State beginning in the fiscal year following the year of withdrawal or termination.

2. All funds and interest received by the State under the set-aside program can be used to fulfill another Federal grant program's matching requirement, as long as the goals of the other Federal grant program are comparable to those of the set-aside program.

FEDERAL ASSISTANCE MANUAL
January 2, 1998