Section 262.5 - Under what general circumstances will we determine that a State has reasonable cause?(a) We will not impose a penalty against a State if we determine that the State had reasonable cause for its failure. The general factors a State may use to claim reasonable cause include:(1) Natural disasters and other calamities (e.g., hurricanes, earthquakes, fire) whose disruptive impact was so significant as to cause the State's failure;(2) Formally issued Federal guidance that provided incorrect information resulting in the State's failure; or(3) Isolated problems of minimal impact that are not indicative of a systemic problem.(b)(1) We will grant reasonable cause to a State that:(i) Clearly demonstrates that its failure to submit complete, accurate, and timely data, as required at § 265.8 of this chapter, for one or both of the first two quarters of FY 2000, is attributable, in significant part, to its need to divert critical system resources to Year 2000 compliance activities; and(ii) Submits complete and accurate data for the first two quarters of FY 2000 by September 30, 2000.(2) A State may also use the additional factors for claiming reasonable cause for failure to comply with the five-year limit on Federal assistance or the minimum participation rates, as specified at §§ 261.52 and 264.3 and subpart B of part 260 of this chapter.(c) In determining reasonable cause, we will consider the efforts the State made to meet the requirement, as well as the duration and severity of the circumstances that led to the State's failure to achieve the requirement.(d)(1) The burden of proof rests with the State to fully explain the circumstances and events that constitute reasonable cause for its failure to meet a requirement.(2) The State must provide us with sufficient relevant information and documentation to substantiate its claim of reasonable cause.64 FR 17890, Apr. 12, 1999; 64 FR 40291, July 26, 1999