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(b) The authorization to incur costs in subsection (a) above is <br />not an authorization to reimburse those costs and does not nean or imply that <br />such costs will be reimbursed out of grant funds. The Recipient and Participating <br />Parties may voluntarily, at their own risk, and upon their awn credit and <br />expense, incur costs as authorized in subsection (a) above, but their authority <br />to reimburse or to be reimbursed out of grant funds shall be governed by the <br />provisions of this Gant Agseemmt applicable to the payment of costs and the <br />release of funds by the Secretary. <br />(c) Neither the Recipient nor any Participating Party shall incur <br />any costs in connection with any activity to be paid for, in whole or in part, <br />with grant funds, even though such costs will not be reimbursed out of grant <br />funds, unless such costs could be incurred pursuant to subsection (a) of this <br />Section 3.02 if such costs were to be paid out of grant funds. <br />(d) Prior to the issuance by the Secretary of the envirormental <br />releases required by 24 C.F.R. Part 5s, the Recipient may not use any funds, <br />including local funds, to take any action with respect to the Project where <br />such action might have an adverse environmental effect, would limit choices <br />among competing alternatives, or might alter the environmental premises on <br />which the pending clearance is based in such a fashion that the validity of <br />the conclusions to be reached would be affected. <br />Section 3.03 Authorization by the Secretary for the Recipient to <br />Draw Grant Ftux7s <br />(a) No costs may be paid out of grant funds prior to the issuance <br />by the Secretary of the environmental releases required by 24 C.F.R. Part 58, <br />a written approval by the Secretary of required evidentiary materials as specified <br />in Exhibits E and F of this Grant Agreement, and written authorization from the <br />Secretary to draw grant funds under the Letter of Credit. <br />(b) All certifications and other materials required by this Grant <br />Agreerent to be submitted to the secretary as conditions precedent to the <br />Recipient's authority to pay costs out of grant funds shall be submitted by <br />the Recipient prior to any draw of grant funds under the Letter of Credit. <br />(c) Unless Exhibit E or F of this Grant Agreement authorizes the <br />phasing or staging of the Recipient's draw of grant funds, then upon a finding <br />by the Secretary that the Recipient has submitted, in a timely manner and in <br />acceptable form and content, all of the evidentiary materials specified in <br />Exhibit E of this Grant Agreement and upon approval by the Secretary of said <br />evidentiary materials; and if no default has occurred, as defined in <br />subsection (a) of section 7.01 of this Grant Agreement, the Secretary shall <br />Promptly issue to the Recipient a written authorization to draw grant funds under <br />the letter of Credit for the purposes authorized by this Grant Agreement. <br />(d) If Exhibit E or F of this Grant Agreement authorizes the <br />Phasing or staging of the Recipient's draw of grant funds, then upon a finding <br />by the secretary that the Recipient has submitted, in a timely manner and in <br />acceptable form and content, all of the evidentiary materials specified in <br />Exhibit E of this Grant Agreement to be submitted to and accepted by the <br />Secretary for any particular phase or stage of the draw of grant funds; and upon <br />approval by the Secretary of said evidentiary materials; and if no default has <br />occurred, as defined in subsection (a) of Section 7.01 of this Grant Agreement, <br />the Secretary shall promptly issue to the Recipient a written authorization to <br />draw grant funds under the Letter of Credit in accordance with any requirements <br />or authorizations described in Exhibit E or F respecting the particular phase or <br />stage of the draw of grant funds. <br />(e) Prior to the Recipient's payment of any costs with grant funds, <br />and prior to the Recipient's drawing of any grant funds under the Letter of Credit, <br />the Recipient shall not have been served by the Secretary with any notice suspending <br />the Recipient's authority to draw grant funds under the Letter of Credit, nor be in <br />breach of the Recipient's obligation to report a default, pursuant to subsection (a) <br />of Section 5.05 of this Grant Agreen-ent. <br />Revised 5/01 <br />