[Federal Register Volume 66, Number 195 (Tuesday, October 9, 2001)]
[Notices]
[Pages 51396-51400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25198]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration


Availability of Final Guidance for Coastal Impact Assistance 
Program

AGENCY: National Oceanic and Atmospheric Administration, U.S. 
Department of Commerce.

ACTION: Notice of Availability of Final Guidance for Coastal Impact 
Assistance Program.

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SUMMARY: Notice is hereby given of the availability of Final Guidance 
for the Coastal Impact Assistance Program (CIAP). The fiscal year 2001 
appropriations for the Departments of Commerce, Justice and State 
created the CIAP.
    The CIAP will direct approximately $145 million to the outer 
continental (OCS) shelf oil and gas producing states of Alaska, 
Alabama, California, Florida, Louisiana, Mississippi and Texas and the 
approximately 150 coastal political subdivisions within those states to 
help mitigate the impacts of OCS activities and protect coastal 
resources. The CIAP requires these states to submit Coastal Impact 
Assistance Plans detailing how the funds will be expended. This 
guidance provides the information necessary for eligible states and 
coastal political subdivisions to develop CIAP plans and submit them to 
the National Oceanic and Atmospheric Administration (NOAA).
    Copies of the Final Guidance for the Coastal Impact Assistance 
Program can be found on the NOAA website at http://www.ocrm,nos.noaa.gov/cpd or may be obtained upon request from: Joseph 
Flanagan, Coastal Programs Division (N/ORM3), Office of Ocean and 
Coastal Resource Management, NOS, NOAA, 1305 East-West Highway, Silver 
Spring, Maryland 20910, tel. 301-713-3155, extension 201, e-mail 
[email protected].

FOR FURTHER INFORMATION CONTACT: Josh Lott, Coastal Programs Division 
(N/ORM3), Office of Ocean and Coastal Resource Management, NOS, NOAA, 
1305 East-West Highway, Silver Spring, Maryland 20910, tel. 301-713-
3155, extension 178, e-mail [email protected].

SUPPLEMENTARY INFORMATION: (1) Program Authorities: Specific authority 
for this Announcement is found in 43 U.S.C. 1331 et seq., as amended, 
December 21, 2000. (2) Catalog of Federal Domestic Assistance Numbers: 
11.419 for NOAA Coastal Zone Management Program Administration.

I. Introduction

    The fiscal year 2001 appropriations act for the Departments of 
Commerce, Justice, and State created the Coastal Impact Assistance 
Program (CIAP) by amending the Outer Continental Shelf Lands Act (43 
U.S.C. 1331 et seq.). The CIAP recognizes that impacts from Outer 
Continental Shelf (OCS) oil and gas activities fall disproportionately 
on the coastal states and localities nearest to where the activities 
occur, and where the associated facilities are located. The CIAP 
legislation appropriates money to the Secretary of Commerce who will 
disburse it to eligible states and coastal political subdivisions, and 
requires the states to submit Coastal Impact Assistance Plans detailing 
how the funds will be expended. This guidance provides information 
necessary for eligible states and coastal political subdivisions to 
participate in the CIAP. Alabama, Alaska, California, Florida, 
Louisiana, Mississippi, and Texas are the seven eligible states. 
Counties, parishes, or equivalent units of government within those 
states lying all or in part within the coastal zone as defined by 
section 304(1) of the Coastal Zone Management Act of 1972, as amended 
(CZMA), are the coastal political subdivisions eligible for CIAP 
funding (Sec. 31(a)(1)), a total of 147 local jurisdictions.
    States must develop CIAP plans and submit them to the National 
Oceanic and Atmospheric Administration (NOAA) by July 1, 2001, and NOAA 
has 90 days from receipt to complete review (Sec. 31(d)(1), (3)). If a 
state has not submitted a plan by July 1, 2001, NOAA will hold the 
funds in escrow provided that the state is making a good faith effort 
to develop and submit its CIAP plan (Sec. 31(c)(4)).

II. Funding Allocations

    The total fiscal year 2001 appropriation is $149,670,000 (this is 
$150 million less the 0.22% across the board reduction mandated in the 
appropriations act). Congress authorized and appropriated funds for the 
CIAP for fiscal year 2001 only. NOAA may utilize no more than five 
percent of the available funding to cover some of the costs of program 
administration. These costs include legal and program work for 
developing and implementing the program; financial assistance expertise 
to ensure prompt delivery of funds; technical assistance to address 
other statutory requirements such as the National Environmental Policy 
Act (NEPA), Endangered Species Act (ESA), the Essential Fish Habitat 
provisions of the Sustainable Fisheries Act, Coastal Barrier Resources 
Act, National Historic Preservation Act, Americans with Disabilities 
Act, and others; technical needs for funding formula development; and 
other costs such as printing and public notices. Until the state plans 
have been submitted, it is difficult to predict the costs of complying 
with NEPA, ESA, and other federal authorities. If less than five 
percent is required for program administration, we will look to 
reallocate the remaining funds to the states and coastal political 
subdivisions.
    The CIAP legislation allocates funds to eligible states and coastal 
political subdivisions according to a formula based on revenues from 
OCS leases, shoreline mileage and population of coastal political 
subdivisions, and distance from coastal political subdivisions to the 
OCS leased tracts. NOAA completed and released the allocations on April 
16, 2001.

III. Developing the Coastal Impact Assistance Plan

    Each Governor must designate a state agency to develop the Coastal 
Impact Assistance Plan. Coastal political subdivisions must supply a 
point of contact to the Governor's designated agency and a description 
of how they will expend their allotted funds. The local projects will 
be incorporated into the state plan and the Governor must certify that 
the uses of funds by the coastal political subdivisions are consistent 
with the authorized uses of funds specified in Sec. 31(e) 
(Sec. 31(d)(2)(C)). Federal funds appropriated to the states under 
sections 306 or 309 of the CZMA may be used to develop the plan. See 
section IV.A. for more information on how states and coastal political 
subdivisions may incur CIAP costs before the funds are disbursed.

A. Public Participation

    The CIAP legislation requires local input and public participation 
in the development of the plan (Sec. 31(d)(1)). This can be achieved 
through a variety of means: use of advisory committees; commission 
meetings; informal public workshops; or formal public hearings. At a 
minimum, states should involve the public in plan development, provide

[[Page 51397]]

adequate public notice of plan availability, and a 30-day public 
comment period.
    States should complete the 30-day public review period prior to 
July 1, 2001 so that the plans may be revised as necessary based on 
public comments before they are submitted by the statutory deadline. 
States may submit a draft plan to NOAA at the same time it is made 
available for public review. This will expedite NOAA's review and 
approval and allow NOAA to disburse the funds as quickly as possible.

B. Level of Detail

    The plan must describe the individual state and local projects in 
as much detail as available. For most projects, a total budget will be 
sufficient, rather than a budget broken down into object class 
categories (e.g., personnel, equipment, contracts, etc.). However, NOAA 
reserves the right to request additional budget detail for large or 
complex projects. given the extremely ambitious schedule established in 
the legislation, and that state and local funding allocations were not 
completed until April 16, 2001, NOAA understands that many specific 
state and local projects may not be finalized by the July 1, 2001 due 
date. In addition, some states may want to spend more time working with 
state and local agencies to encourage the most beneficial use of funds. 
Therefore, NOAA will approve plans that describe generally how the 
state and coastal political subdivisions will expend their funds, i.e., 
by specifying the types of eligible projects they may undertake rather 
than complete project descriptions. However, NOAA must approve the 
specific projects and comply with NEPA, etc., before the funds are 
disbursed and the projects are undertaken. Before the funds are 
disbursed, the state, and coastal political subdivisions will submit a 
project description in sufficient detail to allow NOAA to review and 
approve it in accordance with the CIAP legislation.
1. Deadline
    The CIAP legislation has a deadline of July 1, 2001, for submittal 
of CIAP plans. NOAA cannot extend the deadline beyond that date. 
However, the CIAP legislation gives NOAA the authority to hold funds in 
escrow for a state provided that the state is making a good faith 
effort to develop and submit, or update, a CIAP Plan) Sec. 31(c)(4)). 
We recognize the difficult time lines and will use this authority to 
hold funds in escrow while a state completes its Plan. Our goal is to 
ensure that all states and counties receive their share of the CIAP 
funding in a timely manner, and we will work with you to see that this 
happens. States that are not going to meet the July 1, 2001 deadline 
should submit a letter or e-mail to NOAA briefly describing their plan 
development process and a target date for plan submittal.

C. Project Funding

    Only the designated state agency and eligible coastal political 
subdivisions are guaranteed to receive funds under the CIAP 
legislation. However, the designated state agency and coastal political 
subdivisions may make sub-awards to other state or local agencies, 
universities, or other entities. The state or a coastal political 
subdivision may make sub-awards to municipalities within the coastal 
zone or coastal watershed for authorized projects. All projects do not 
need to be undertaken solely within the state's coastal zone; for 
example, the state or a coastal political subdivision may fund a 
watershed management plan that includes areas beyond the state's 
coastal zone. Coastal political subdivisions may combine their 
allocations to fund larger, mutually beneficial projects, or a state 
may choose to contribute some of its funding to a coastal political 
subdivision to allow that locality to fund a larger project. A coastal 
political subdivision may not receive less than its authorized 
allocation, however, unless the Governor or NOAA finds that its 
proposed uses of funds are inconsistent with the CIAP legislation, or 
the coastal political subdivision chooses to give up some of all of its 
allotted funds (see section D. Governor's Certification below).

D. Governor's Certification

    Each coastal political subdivision must supply a point of contact 
and description of how it will expend its allotted funds. The coastal 
political subdivision must supply this information to the Governor, for 
the Governor to include in the plan. The Governor must certify that the 
uses of funds for local projects are consistent with the uses specified 
in the CIAP legislation (Sec. 31(d)(2)(C)). However, the Governor may 
not direct local funds toward or away from any authorized uses, with 
the exception of the limitation on infrastructure and other public 
service needs discussed in section IV of this document. If the Governor 
or NOAA find that uses of funds proposed by some coastal political 
subdivisions are inconsistent with the CIAP legislation, and the 
subdivisions are not making a good faith effort to revise the uses of 
their funds, or if some coastal political subdivisions choose not to 
participate in the CIAP, NOAA will allocate those funds to the 
remaining coastal political subdivisions in the state.

E. Plan Outline

    To expedite disbursement of funds, NOAA recommends that the plan be 
written and submitted in sufficient detail to serve as a grant 
application. The CIAP legislation includes five elements which must be 
included in the plan, detailed in Sec. 31(d)(2)(A)-(E). To ensure the 
required elements are included in the plan, NOAA recommends the 
following outline:
1. Designated State Agency
    The CIAP legislation requires that the plan provide the name of the 
state agency that will have the authority to represent and act for the 
State in dealing with the Secretary for purposes of the program 
(Sec. 31)(d)(2)(A)). The seven governors have already designated 
agencies to serve as CIAP points of contact NOAA will assume that the 
currently designated agency remains the point of contact until we 
receive different information from the Governor. The Governor may make 
this determination at any time, even after plan approval.
2. Certification
    The CIAP legislation requires a certification by the Governor that 
the uses of funds proposed by the coastal political subdivisions are 
consistent with the requirements of the program (Sec. 31(d)(2)(A)); and 
that ample opportunity has been accorded for public participation in 
the development of the plan (Sec. 31(d)(2)(D)). The certification can 
take the form of a letter from the Governor submitting the plan to 
NOAA, or an opening statement from the Governor in the plan itself. The 
plan should be submitted to the Secretary of Commerce.
3. Public Participation
    This section should describe how the public and coastal political 
subdivision were involved in the development of the CIAP Plan (see 
section III.A. above)
4. Implementation Program
    The CIAP legislation requires that the state plan contain ``a 
program for the implementation of the plan which describes how the 
amounts provided under this section will be used'' (Sec. 31(d)(2)(B)). 
NOAA anticipates that this section will be the bulk of the plan and 
will be central to NOAA's determination whether a state plan is 
consistent with the purposes specified

[[Page 51398]]

in the CIAP legislation. A suggested format for this section is the 
following:
    (1) a brief description of what the state hopes to achieve under 
the plan;
    (2) a description of the major activities and/or categories to be 
funded under the plan (e.g., infrastructure, habitat restoration, 
acquisition, construction, etc.);
    (3) a description of how the state will implement the plan (e.g., 
through state agencies, requests for project proposals, competitive 
grants, etc.); and
    (4) an estimate of the amount of funds that will be spent on each 
activity or category.
    When describing specific projects, the plan should describe the 
projects in the following manner:
    (1) a one or two paragraph abstract plus up to two pages of 
background/additional detail, if necessary;
    (2) a brief explanation of how the project is consistent with at 
least one of the uses authorized by the program; and
    (3) the total cost of the project (NOAA reserves the right to 
request additional budget detail for large or complex projects).
    The overall plan must contain a single budget broken down by object 
classes. See sections III.B-D of this document for more information on 
project selection and funding. All projects in the plan must be 
consistent with the uses of funds specified in the legislation.
5. Coordination With Other Federal Resources and Programs
    The CIAP legislation requires that plans contain measures for 
taking into account other relevant federal resources and programs. 
(Sec. 31(d)(2)(E)) Examples of other federal resources and programs 
include: Coastal Zone Management Programs; National Estuarine Research 
Reserves; National Marine Sanctuaries; National Estuary Programs; 
National Wildlife Refuges and other preservation areas; restoration 
programs such as NOAA's Community-Based Habitat Restoration and Damage 
Assessment and Restoration Programs; federally funded conservation, 
development, or transportation projects; and federally mandated 
activities such as wetlands or endangered species protection. Projects 
funded under the CIAP should be consistent with other federal programs.
    The plan should describe generally how the activities funded under 
the CIAP take into account other federal programs. This could be done 
through the public involvement process by ensuring that federal 
agencies are able to review and comment on the plan, through an 
existing state clearinghouse process whereby specific funding proposals 
are brought to the attention of federal and state agencies, or through 
similar means.
    Specific activities funded under the CIAP should be coordinated 
with federal resources and programs wherever possible. For example, a 
state or local government could use some CIAP funds to expand or 
improve an existing restoration project, or acquire habitat areas 
needed to protect endangered species, or develop and implement regional 
restoration plans, or to apply best management practices to reduce 
nonpoint source pollution from land-based activities.
6. Coastal Political Subdivision Information
    The CIAP legislation requires that the plan identify a contact for 
each coastal political subdivision (Sec. 31(d)(2)(C)). The list may be 
attached to the plan and should include the name of each coastal 
political subdivision, the name of the subdivision's contact and the 
contact's phone number and e-mail address. The legislation also 
requires that the plan contain a description of how coastal political 
subdivisions will use the amounts provided by the program. This section 
should contain a description of each political subdivision's plan that 
follows the format described in III.E.4.

F. Plan Amendments

    Section 31(d)(4) of the CIAP legislation states that any amendment 
to the CIAP Plan shall be prepared according to the requirements and 
procedures of the Plan itself, including public involvement, Governor's 
certification, etc. For ease of administration, NOAA will use a similar 
process for reviewing plan amendments as we do for reviewing changes to 
state Coastal Zone Management Programs. There is an abbreviated process 
for minor changes and a more involved process for major changes. NOAA 
realizes that some minor changes to CIAP Plans may not constitute 
``amendments'' and may be undertaken simply by notifying NOAA of the 
proposed change.
    The plan amendment process may also be used by states to obtain 
NOAA approval of specific state or local projects after the overall 
CIAP Plan has been submitted. However, NOAA may not disburse the funds 
to be expended on those projects until the specific projects have been 
approved.

IV. Authorized Uses of Funds

    The legislation identifies several categories of authorized uses of 
funds (Sec. 31(e)). The specific authorized uses of funds are:
    1. Uses set forth in new section 32(c)(4) of the Outer Continental 
Shelf Lands Act proposed by the amendment to H.R. 701 of the 106th 
Congress as reported by the Senate Committee on Energy and Natural 
Resources. Those use are:
    (A) Activities which support and are consistent with the Coastal 
Zone Management Act, including National Estuarine Research Reserve 
programs, the National Marine and Management Act, or the National 
Estuaries program;
    (B) Conservation, restoration, enhancement or protection of coastal 
or marine habitats including wetlands, estuaries, coastal barrier 
islands, coastal fishery resources and coral reefs, including projects 
to remove abandoned vessels or marine debris that may adversely affect 
coastal habitats;
    (C) Protection, restoration and enhancement of coastal water 
quality consistent with the provisions of the Coastal Zone Management 
Act (16 U.S.C. 1451 et seq.), including the reduction or monitoring of 
coastal polluted runoff or other coastal contaminants;
    (D) Addressing watershed protection or other coastal or marine 
conservation needs which cross jurisdictional boundaries;
    (E) Assessment, research, mapping and monitoring of coastal or 
marine resources and habitats, including, where appropriate, the 
establishment and monitoring of marine protected areas;
    (F) Addressing coastal conservation needs associated with seasonal 
or otherwise transient fluctuations in coastal populations;
    (G) Protection and restoration of natural coastline protective 
features, including control of coastline erosion;
    (H) Identification, prevention and control of invasive exotic and 
harmful non-indigenous species;
    (I) Assistance to local communities to assess, plan for and manage 
the impacts of growth and development on coastal or marine habitats and 
natural resources, including coastal community fishery assistance 
programs that encourage participation in sustainable fisheries; and
    (J) Projects that promote research, education, training and 
advisory services in fields related to coastal and Great Lakes living 
marine resource use and management;
    2. Projects and activities for the conservation, protection or 
restoration of wetlands;
    3. Mitigating damage to fish, wildlife or natural resources, 
including such activities authorized under subtitle B of the title IV 
of the Oil Pollution Act of

[[Page 51399]]

1990 (oil spill removal and contingency planning);
    4. Planning assistance and administrative costs of complying with 
the provisions of this section;
    5. Implementation of Federally approved marine, coastal, or 
comprehensive conservation management plans; and
    6. Onshore infrastructure projects and other public service needs 
intended to mitigate the environmental effects of Outer Continental 
Shelf activities (up to 23 percent of allocation).
    Please note that the CIAP legislation limits funds spent on 
category six above to 23 percent of the total funds allocated to each 
state (including the portion allocated to coastal political 
subdivisions). Thus, each plan may expend up to 23 percent on onshore 
infrastructure projects and other public service needs, but there is no 
restriction on whether portions of the state or local allocations, or 
both, are used for these purposes. The state plan must clearly identify 
which projects fall into this category and the Governor must ensure 
that no more than 23 percent of the funds are spent on eligible onshore 
infrastructure projects and other public service needs. The 
descriptions of these types of project must include information on how 
the projects meet the statutory requirement of mitigating the 
environmental effects of Outer Continental Shelf activities.
    For CIAP purposes, NOAA has developed proposed definitions of 
infrastructure and non-infrastructure:
    Infrastructure--Construction of public services and facilities 
(such as buildings, roads, bridges, sewer and water lines, wastewater 
treatment facilities, detention/retention ponds, seawalls, breakwaters, 
piers, port facilities) needed to support commerce as well as economic 
development. Infrastructure encompasses land acquisition, new 
construction, and upgrades and repairs to existing facilities.
    Non-infrastructure--Projects that involve construction-type 
activities that are not considered infrastructure include: wetlands/
coastal habitat protection and restoration, vegetative erosion control, 
and beach re-nourishment (however, sea walls, breakwaters, etc., that 
may accompany beach re-nourishment projects are considered 
infrastructure). Small scale construction projects for public access 
and resource protection purposes (similar to CZMA section 306A 
projects) such as boardwalks, dune walkovers, hiking trails, 
recreational boat ramps, and picnic shelters, as well as land 
acquisition associated with these projects, are not considered 
infrastructure.

A. Incurring Costs before CIAP Plan Approval

    States and coastal political subdivisions may request ``pre-award 
costs,'' i.e., costs incurred by the state and/or counties prior to 
plan submittal and approval. Pre-award costs would allow states and 
coastal political subdivisions to use CIAP funds to pay for eligible 
costs incurred before the CIAP plans are approved and funds disbursed. 
Only pre-award costs incurred after March 1, 2001, when NOAA released 
the preliminary draft CIAP guidance, may be recovered by CIAP funds. 
States or coastal political subdivisions may begin work on eligible 
projects prior to the disbursement of funds at their own risk, i.e., 
funding is not guaranteed until NOAA reviews and approves the state 
CIAP plan.

V. Plan Review and Approval

    NOAA has 90 days from receipt of the plan to review it and make an 
approval decision. NOAA's review will be based on the five program 
approval criteria specified in the CIAP legislation (Sec. 31(d)(2)(A)-
(E)). This includes a review of the Governor's certification that all 
uses of local funds are consistent with the legislation. If NOAA does 
not approve the plan, NOAA will work with the state to revise it until 
it can be approved, and hold the funds in escrow until the plan is 
approved as called for in the CIAP legislation (Sec. 31(4)). If the 
state is not making good faith effort to develop, submit, or update the 
plan, NOAA may allocate those funds to the remaining states and coastal 
political subdivisions.

VI. Compliance With Federal Authorities

    The approval of CIAP plans and disbursement of funds are federal 
activities subject to authorities such as the National Environmental 
Policy Act (NEPA), Endanagered Species Act (ESA), the federal 
consistency provisions of the CZMA, the Essential Fish Habitat 
provisions of the Sustainable Fisheries Act, Coastal Barrier Resources 
Act, National Historic Preservation Act, and Americans with 
Disabilities Act. As the federal funding agency, NOAA is responsible 
for complying with these and other relevant authorities before 
disbursing funds.
    NOAA is working to determine the best process for complying with 
these authorities. NOAA is now developing an Environmental Assessment 
for our approval of the seven state CIAP plans, and reviewing specific 
project proposals to determine what additional reviews will be 
necessary. NOAA may ask for the states' assistance in providing 
information on specific projects to facilitate this task and the 
disbursing of funds. Such information could include an assessment of 
the projects' potential impacts on threatened and endangered species 
and their habitats, coastal resources, and the coastal environment.
    NOAA uses a ``Section 306A Project Checklist'' for construction and 
land acquisition projects funded under section 306A and CZMA. The 
checklist is used to ensure funded projects comply with NEPA, ESA, and 
other federal programs. We have distributed a modified checklist that 
states and counties have the option of using as a screening tool for 
CIAP projects to ascertain which projects require additional NEPA, ESA, 
or other compliance review beyond the initial Environmental Assessment 
on the state CIAP plan. The checklist was reviewed by the Office of 
Management and Budget under the Paperwork Reduction Act and has been 
forwarded to the states. The use of the checklist does not affect the 
eligibility of any project under the CIAP.

A. Federal Consistency

    State and local agencies applying for CIAP funds may be subject to 
federal consistency under 15 CFR part 930, subpart F (Federal 
assistance activities). Pursuant to section 31(d)(2)(C) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et seq), as amended by the 
Department's of Commerce, Justice, and State, the Judiciary, and 
Related Agencies Appropriations Act, the Governor of each participating 
state must certify that all state and local expenditures are consistent 
with the overall CIAP plan. Thus, federal consistency can be conducted 
for the plans and in that case consistency would not be required for 
each expenditure proposal. A consistency certification would need to be 
prepared even in cases where the state agency responsible for preparing 
the CIAP plan is also the state coastal management agency designated 
under the CZMA and the CZMA federal consistency regulations (15 CFR 
Sec. 930.11(o)). This will ensure compliance with the public 
participation requirements under the CZMA. Described below are the 
general federal consistency requirements for federal assistance 
activities.

Review Procedures

    Federal consistency review for federal assistance activities is 
normally conducted through procedures established by states pursuant to

[[Page 51400]]

Executive Order 12372--intergovernmental review of federal programs. 
The agency preparing the CIAP plan should submit the plan for 
consistency review through the intergovernmental review process or 
directly to the state coastal management agency responsible for 
implementing the coastal management program (CMP). In addition to the 
plan, the state agency should provide a brief evaluation of the 
relationship of the proposed activities in the plan and any reasonably 
foreseeable effects on the state's coastal uses or resources to the 
CMP's enforceable policies. 15 CFR Sec. 930.94(c).
    Please contact the federal consistency coordinator in your state 
coastal management agency or the CIAP contacts at NOAA for further 
information on federal consistency.

VII. Disbursing the Coastal Impact Assistance Program Funds

    NOAA will award individual grants directly to the state and all 
coastal political subdivisions within the state. The NOAA Grants 
Management Division has developed a streamlined grant application 
process for CIAP awards. Subsequent to NOAA approval of the state CIAP 
plans, the state and local CIAP points of contact will be receiving a 
``Coastal Impact Assistance Program Award Notification'' letter 
containing information on how to access CIAP funds and information on 
Administrative/Programmatic requirements. The state and local 
recipients of CIAP awards will fill out several standard forms, sign 
the notification letter, and return the package to NOAA.
    States and coastal political subdivisions will be able to draw down 
funds on a ``pay as you go'' basis. This means that funds may be drawn 
down a reasonable amount of time in advance of when they are needed in 
order to comply with 15 CFR Part 24.21.
    The CIAP legislation does not have a time limit for use of the 
appropriated funds. However, a NOAA grant to a state or coastal 
political subdivision will need an end date. NOAA will issue grants 
with a 3-year award period. A no-cost extension of the award period 
could be requested if necessary.

A. Trust Funds

    The CIAP legislation allows states and coastal political 
subdivisions to deposit funds in trust funds dedicated to uses 
consistent with the legislation (Sec. 31(e)). Trust funds should be 
established in accordance to relevant state or local laws and 
procedures. However, the Department of Commerce has determined that any 
interest generated from the trust fund must be returned to the federal 
government. The ``Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments'' (15 CFR part 
24) provide that advance payments made to a recipient are to be placed 
in an interest-bearing account until actually disbursed and that the 
interest earned is to be returned to the Federal government. The issue, 
then, is whether placing the money in the trust funds constitutes a 
``disbursement.'' The Department of Commerce has determined that 
placing the CIAP grant money in the trust fund would not be considered 
a disbursement and therefore the interest would need to be returned to 
the federal government.

VIII. Compliance With Authorized Uses of Funds

    The CIAP legislation states that if NOAA finds that a state or 
coastal political subdivision has expended funds inconsistent with the 
specified uses, NOAA will not disburse any further amounts under the 
CIAP until the funds in question have been repaid or obligated for 
authorized uses (Sec. 31(f)). NOAA would cease disbursing funds 
directed only toward the specific jurisdiction, not all funds covered 
under a single grant, under this scenario.
    To ensure all funds are spent on authorized uses, the states and 
coastal political subdivisions will submit annual progress reports to 
NOAA until all funds have been expended. NOAA will accept separate 
reports from the state and each coastal political subdivision, so the 
state will not need to receive and collate local reports (the state may 
choose to receive local reports). The report must include all uses of 
state and local funds. At a minimum, the report should include:
    (1) The status of each project, including accomplishments to date, 
estimated time for completion, and explanation for any anticipated 
delays;
    (2) any approved amendments and/or extensions to the CIAP plan; and
    (3) for completed projects, submittal of relevant work products 
(e.g., reports, data sets, links to on-line photographs, etc.)
    If some or all the funds have been deposited in a trust fund, the 
trust fund must report annually on the uses of those funds.

    Dated: October 3, 2001.
Jamison S. Hawkins,
Deputy Assistant Administrator, Ocean Services and Coastal Zone 
Management, National Oceanic and Atmospheric Administration, Department 
of Commerce.
[FR Doc. 01-25198 Filed 10-5-01; 8:45 am]
BILLING CODE 3510-08-M