2024-14656. Applicability Date for the Office of Management and Budget's Regulatory Revisions

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice of applicability date.

SUMMARY:

The Environmental Protection Agency (EPA) is applying the Office of Management and Budget's final rule and final guidance revising the termination provisions of its regulations to financial assistance agreements that are awarded, or amended to add funds, on or after July 1, 2024 as specified in the terms and conditions of awards.

DATES:

The revised version of 2 CFR 200.340 will apply to EPA financial assistance agreements awarded or amended to add funds on or after July 3, 2024.

FOR FURTHER INFORMATION CONTACT:

EPA's Office of the Administrator (Attention: Hieu Le) at [e-mail] or [phone].

SUPPLEMENTARY INFORMATION:

As codified at 2 CFR 1500.2, EPA has adopted OMB's Federal Financial Assistance regulations (subparts A through F of 2 CFR part 200), including any amendments. EPA implements any amendments to OMB's regulations when such changes become effective. On April 22, 2024, OMB finalized several revisions and updates to its Federal Financial Assistance regulations. See Guidance for Federal Financial Assistance, 89 FR 30046 (April 22, 2024). OMB made the changes effective October 1, 2024, but authorized Federal agencies to apply the changes to Federal awards issued prior to October 1, 2024. Specifically, OMB stated: “Federal agencies may elect to apply the final guidance to Federal awards issued prior to October 1, 2024, but they are not required to do so. For agencies applying the final guidance before October 1, 2024, the effective date of the final guidance must be no earlier than June 21, 2024.” 89 FR 30046 (April 22, 2024).

OMB's final rule revised, among others, the termination provisions of 2 CFR 200.340. Specifically, OMB revised 2 CFR 200.340(a)(4) to clarify that an agency may terminate a Federal award if it no longer effectuates the program goals or agency priorities ( e.g. unilateral termination) but only when such language is clearly and unambiguously included in the terms and conditions of the award. OMB also revised 2 CFR 200.340(b) to require agencies to “clearly and unambiguously specify all termination provisions in the terms and conditions of the Federal award.” 89 FR 30046, 30169 (emphasis added), April 22, 2024. As authorized under OMB's final rule, and in an effort to provide clarity on termination of its awards as expeditiously as possible, EPA has decided to apply the revised version of 2 CFR 200.340 to EPA financial assistance agreements awarded or amended to add funds on or after July 1, 2024. This will allow EPA to implement the revised version of 2 CFR 200.340 through the terms and conditions of awards, as determined by EPA on or after that date. Consistent with the revised termination provision, EPA will clearly and unambiguously specify all termination provisions in the terms and conditions of applicable awards, including an express authorization for unilateral termination when dictated by case- or program-specific needs. Any subsequent changes to the grounds for unilateral termination of an assistance agreement must be agreed to by both EPA and the financial assistance agreement recipient and authorized by 2 CFR 200.340 or a successor regulation in effect at the time of award or the amendment adding additional funding.

EPA intends to implement all other revisions to title 2 of the Code of Federal Regulations described in the April 22, 2024 (89 FR 30046), OMB final rule and notification of final guidance in awards made or amended to add additional funds on or after October 1, 2024.

Janet McCabe,

Deputy Administrator, U.S. Environmental Protection Agency.