S UNITED STATES ENVIRONMENTAL PROTECTION AQENCY
i :WASHINGTON> D.C. 20460 ; ^-i ^ ;, -:r
••'••'. •••"". ';.-.: 2G-->.' ;••„ ' ,, _ '...-- •>>cs^..'.J ,
APR 2 3 1984
OFFICEOF
ENFORCEMENT AND
COMPLIANCE M6NITORING
MEMORANDUM
SUBJECT:
FROM: ,
TO:
Water Enforcement/Compliance Guidance^Maftual—
pendium of.. Operative' Pblici.es - .;
Courtney M.
Assistant Administrator for. Enforcement
and Compliance .Monitq^i
E. Ravan .
Admi
(/ Regional .Counsels-^ • .;i. .---: -...-.irt. ;?\"
• Regional Water Mana.geme/ri-t.-Division^ Di-j35;cto^3g&, '^' s _••'•'
'•..-. Director, Off ice. of.,-W.a.'i:er"::Enfo-rcement~ andrP^:tti.i:t.g:
Associate Enforcement'Spuhsel for Water -Etiif^rc;ein^nt
. Director, National Enforcement- Inve.stigati'i^'^Ceriter
Assistant Administrator for Policy, Planning ...
and Evaluation- ; . -...,:-
General. Counsel x -:".-. ' . '•'-
As a part of our effort to produce guidagce"( mapusi'ls {f ar1'";
personnel involved, in. case, developmiaiit activities- -for.Ith4.'^ljna.:te.d
States Environmental Protect ion. Agency;, -we .are transiri^t9tsih^;: tOv;
you the Compendium of Operative Water 'T2nforceme'nt Pbl^ise.ies^.. ,50 «i
The Compendium contains" currently -effective en'forceme'itt ppl4cles
and guidance as well as procedures governirng csertain. aspects
of the day-to-day operation of .iegal and technical .compliance •'
and enforcement activities. " . . " . .; -';:. ' = :•':• . • .-•:•„:-;
While the Compendium is up-to-date', we have 'hote'<|-therein
that some policies are under?.review, and have provided qualifi-
cations for other policies. 'As new.(policies are formulat'e'd ''•
and new guidance is issued,'we will also; inform you of'a'ny
changes. . /
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We intend to update the Compendium periodically and welcome
comments on it or on policy issues which might be addressed in
the future. Ques'tions or comments on the contents of the
Compendium can be addressed to Allen Danzig, of the Office of
Legal and Enforcement Policy (FTS-426-7503, Mail Stop LE-130A).
Attachments
cc: Regional Administrators (w/o attachment)
Regional Enforcement Contacts (w/o attachment)
Chief, Enforcement Section, Lands and Natural Resources
Division, DOJ (w/o attachment)
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TABLE OF CONTENTS
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TABLE OF CONTENTS
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TABLE OF CONTENTS
This compendium contains the following Water Compliance/Enforcement
related policies and guidance currently in effect.
TITLE OF DOCUMENT
DATE' OF DOCUMENT
General Guidance
Guidelines for the Issuing of
Administrative Compliance Orders
Pursuant to Title III, Section
309(a)(3) and (a)(4) of the Federal
Water Pollution Control Act, as amended
(33 U.S.C. 1319 (a)(3) and (a)(4).
Computation of Economic Benefit of
Delayed Compliance Under Civil
Penalty Policy
Statements by Agency Personnel
Purporting to Sanction Source
Actions Which are Inconsistent
with Statutory Requirements
Civil Penalty Policy
Neutral Inspection Plan for the •
NPDES Program
Direct Referral
Municipal and Pretreatment Enforcement
POTW Compliance with NPDES
Permit Effluent Limitations
Coordination Between Regional
Enforcement and Water Programs
Personnel in Implementing
the National Pretreatment
Program
April 18, 1975
September 27, 1-9.78.
May 287 1980
July 8, 1980
February 17, 1981
October 17, 1983
January 5, 1977
November 29, 1978
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Municipal Management
System, (Appendix E Only)
Pretreatment Compliance
Strategy (Short Term)
National Municipal Policy
FY 84 Pretreatment Enforcement
Activities
Section 311 Enforcement
Oil Spill Enforcement
«
Civil Penalties Collected for Violations
of 40 CFR Part 112-Transmittal to USCG
Districts of Deposit in Revolving Fund
Account .
Spill Prevention Control and
Countermeasure (SPCC) Plan Program
Section 404 Enforcement
Letter From Attorney General
to Secretary of the Army
regarding Section 404 of the
Clean Water Act
Solid Waste Discharges under
Consolidated Permit Regulations:
Procedures Pending Corps of
Engineers Agreement with Changed
Definition of Fill Material
Enforcement of Section 404 of the
Clean Water Act
NPDES Permitting
Permits Division Policy Book - Contents
NPDES Permits Authorization
to Discharge
State Regulation of Federal
Facilities Under the Federal
Water Pollution Control Act
Amendments of 1977 (Clean
Water Act) — POLICY GUIDANCE
MEMORANDUM
Confidentiality of NPDES
Permit Applications
March, 1980
October 28, 1983
January 30, 1984
April 13, 1984
January 8, 1974
December 24, 1974
April 23, 1975
September 5, 1979
August 18, 1980
November 25, 1980
June 23, 1982
April 28, 1976
March 10, 1978
April 6, 1978
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Certification and Permitting
of Dischargers Located on
Waters Forming Boundaries
Between States
Use of Biomonitoring in the
NPDES Program
Inclusion of Compliance Schedules in
Se'cond Round Permits and
Newly Issued Permits
Incorporation of Pretreatment Program
Development Compliance Schedules
Into POTW NPDES Permits
Policy for the Second Round Issuance
of NPDES Industrial Permits
Continuance of NPDES
General Permits Under the APA
Policy for the Development of Water
Quality-B-ased Permit Limitations for
Toxic Pollutants
NPDES Hearings
Ex Parte Contacts in NPDES
Adjudicatory Hearing Decisions
NPDES Evidentiary Hearing
Management Program
Drinking Water Enforcement
Regional Guidance - Emergency
Action on Water Supply Hazards
Safe Drinking Water Act Public
Water System Settlements-
Interim Guidance
Public Water Systems Compliance
Policy
Water Supply Guidance on
Expired Exemptions
Draft Enforcement Guidance
Regarding Public Water Systems
in States Which Have Primary
Enforcement Responsibility
April 19, 1978
January 11, 1979
January 19, 1979
January 28, 1980
June 2, 1982
January 16, 1984
February 3, 1984
June 16, 1978
October 3, 1980
December 28, 1976
November 17, 1983
January 18, 1984
January 31, 1984
April 10, 1984
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General ©uidanee
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General Guidance
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i)' UNITED STATES ENVII?ONMl£N : AL 1-RCTLCriCN AL-L.NCY
.-
"*. .v WASHINGTON. f.C. 20-1150
'"I oao'*-
April la, 1975
•:>! i-icr OF !Cf.,''v;;c. .••:£::"
MSHORAMDUM
To: Regional Enforcement Directors
From: Acting Deputy Assistant Administrator for
Water Enforcement
Subject: Guidelines for the Issuing of Administrative
Compliance Orders Pursuant to Title III, Section
309~(a) (3) and- (a) (4) of the Federal Water
Pollution Control Act, as amended (33 U.S.C.
1319(a)(3) and (a)(4))
Attached are guidelines for the use of Section
309 (a) (.3) Administrative Orders in the enforcement process
These requirements and recommendations are the result
of a Headquarters' review of the Section 309 Findings and
Orders issued by the various regions.
i
In line with EPA policy for even-handed not Lena I
enforcement of the Federal Water Pollution Con tr/\l Ac'c,.
as amended, adherence with these guidelines should result
in more general uniformity in the use, preparation and
processing of this valuable enforcement tool.
If you have any questions or comments, olease contact
S. I. Olson, (202) 755-0994.
J . Brian Mo I.lay
Attachment
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Section 30'J(a)(3) Adrr,.i uist.r;it ivc Oruor:;
VLJNUL-:, T.LTL.K, DOCKJ:'" ••.\.viiiLi-. /-.NO i-i--i-:,\i\i'.:.i-: I'/M'-ACI-'AI
Using legal-sise caper, Uho foilovj.::<; ?oi---,ac r.ho'J.i'1 !•.• folio-.
the venue, title, .docked identification and nfaamijle paragraph:
UNITED STATES
ENVIRONMENTAL PROTECTION AGIiUC'/
REGION XI
IN THE MATTER OF
DCE-ROE CHEillCAL COMPANY
PROCEEDINGS UNDER SECTION
309(a) (3) and. (a) (4) ,. FEDERAL WATER
POLLUTION CONTROL ACT, AS AMENDED
(33 U.5.C. Sections 1319(aH3) and
(a)(4) in re MPDES PERMIT NO.
DOCKET MO. XI-75-06
FINDINGS OF VIOLATION
AND
ORDER FOR CGMP MANGE
"The following FINDINGS are made and ORDER issued pursuant to the
authority vested in the Administrator of ths Environmental Protection
|
\gency by the above referenced statute (hereinafter the Ace) and by hi:r.
i .
duly delegated to the Regional Administrators of said Ar-ency."
Venue and Title •-. ' •-*'•'•
The Region identification is added to the venue to establish ':hc
specific venue of the issuing authority. Also, unless the full address
of the Region is given under the Regional Administrator's signature to
the Order or on the blueback cover (which is to be preferred), it would
be helpful to add. it to the venue here.
The offender is net designated in the title as "PERMITTEE" or other-
wise. Although not necessarily objectionable such designation, where
.appropriate, is not required. However, the designation of "DEFENDANT"
definitely would be inappropriate and should not be used.
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To identify the prcc-jcd.i:ic, 5 docket i-.'j;-.i:er is r-./:'..i-.red. r-:!:i;r:r
.han the use of the :-i?Ci:S r.^Ti^r (vhich if used in the :"or-.T- at -nil
should r.ore logically be referred to under the ?rocao:Iir.g- idcntificcition
in the'title). The docket number above ider.tifios the Ordr:r -in hoir.g
the 6th Order issued in 1975 in Region XI and should bo sufficient,
assuming that an Administrative Order docket is kept separate from any
other docket for such natters as adjudicatory hearings. If a ccr^.on
docket is kept (which would appear inadvisable) then a prafi:-: should
be added to the docket nunber thus: "XI-AO-75-Qi?" (Underlining supplied).
Preamble Paragraph.
The preamble paragraph is important not Only to establish the
Administrator's authority to issue the Order but also to ustnblir.h th~
delegation of authority to the Regional Administrator. If the Kccricr.ni
Administrator re-delegates his authority to the Director of the F.agirriai
Enforcement Division under EPA Order 12GO. G • (Sept. 14,.1273), thi:i re-
delegatinn should also be alleged here or in the"prea.Tbla to the Crdcr
portion of the Findings and Order. It should be not'^d that t.hero in .no
authority to re-dsiegate this authority to snyor.2 else. If the re-delegation
is alleged here,the paragraph should be amended by adding:
"which authority has been duly re-delc.c:ated by the .::;egionnl
Administrator of -Region XI to the (undersigned) Director, Knfcrcerr.ent
Division,'Region XI".
AJI Administrative Order can be sighed by a duly authorized Acting
Regional Director. Hov/avar, it should never be signed by anyone
"for" the Regional Director.
Fi:mi:-iG3 or VIOLATION
Most of the Findings and Orders reviewed contain adequate allegations
as to specific permit (or statutory or regulation) rcauirGmnni-<; "iolat-.^d
and Che specific nature of the violations. flow-ever, in scr.,-> cas'.-r; it: is
difficult to determine from the face of a given set of: rind Lnr':i wlietin-'c
the Order v;as necessary, tiinely, and the rcir.edy wna appropriate dtr vhctlsor
the terms of the Order appear too severe or too l^nienf. The KincUnos and
Order should be able to stand by itself without r^ferencr to t:xtrancou.t
facts. Seme of the Findings examined speak to ail the: portintnt factr; <'ir.d
law much as a complaint in a civil action. In sorr.e instance's., it i^- necc^s^.r
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to know fact:; not .o.lloc'jd, although the/ T.V/ be inf^rro.:;, by ::••• LY. i: i"L.-:-.r
to background and c-iior data noc explicitly oreilcd out: in the i ::;-Lrur;:ent
itself. V.'ith these cbservauions in mir.d t'.c folloving r^quir':mr:ntr or
BGCornendations are nade with respect to tie specific facts to bo 'illsged
in the Findings of Violation:
Allegation as to Legal States of ?cr.~i':'.:ee
It is sound legal practice as a practical natter ..-.r.d frcm a iony
ranee Isgal standpoint to spell out the specific legal s'-.atu.s of the
permittee (corporation, partnership, name of municipality) in the first
paragraph of the findings in order to establish of record the yorKcns
designated for service by section 309 (a) (4) .
While objections to personal jurisdiction may not vftcn be r~ir:ed,
it would be good practice to make as positive a record as por:;iL.-li; from
the Findings and Order'and the Return of Service or other file record
such as a copy of a letter of transnittal, v/i-h return receipt attached,
that sufficient service has been made and reasonable nctic-? given. This
practice would se'em particularly acviS'ible in view of the fact that, v/icH
few exceptions, the Regions have been making service by certified r.nil.
(For further ccrrir.ent on this oractice see discussion under ::nr.'/TC"£ infri) .
'': . II
. . V
Statutory Authority
Recite statutory authority under which permit was granted, to vhom
(adding "hereinafter the COMPANY" or "the MUNICIPALITY") , I/ tho riata ifi
and the permit number. In the case of cuch pre=pej::nit violations as
failure to apply for a permit, the pertinent authority under which the
issuing of an Order is authorized should be stated..
The date the pernit was issued is important: in that it .shov/r; how Icricr
the violator has been on notice as to what he was required to do under the
permit.
I/ Where COUPANY is referred to hereinafter, read MUNICIPALITY, if a
municipal corporation is the sobject of the action.
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u:
Permit or .thcr [Jrcvi::ior:s '.•'ioIaCr.-d
In this paragraph detail the specific terms of the pcrr.iit, regulation
or statute involved.
This recital should r.ot or.I1/ spell out what vas' to be den-..- but: vi^:n
it was to be dor.e to avoid, if possible, the need for outside reference or
for attachment of the permit on other voluminous material.
IV
Specific Violatic.-.s
Allege specif ic. violations. If more "than one violation is ir.vclvcd,
use a numbered paragraph or a lettered subnaragrach for each alienee: vioiaticr
V
*
. Requests for Compliance
Recite specific requests to the COMPANY for information, reports,
delayed timetables or whatever is required.
i
This can be done by cataloguing the letters, tslcphon* call;-, etc.
made in an attempt to s'ccure voluntary compliance or by stating that:
repeated attempts wcr-a made "as more fully set out in the log attnciir.c:
hereto as "Attachment A", and then actachir.g such a log and incluriin-: it
by reference. (See Attachment' A for example of appropriate allr.gaticns
and sample log.)
VI .
Ocportunity for Prior Consultation
(SECTION 308 VIOLATION'S Oul//) " • .
Csctiou 3u3(a) (4) requires that whera a violation of s.-jcti.on 300 is
alleged, the Order shall not take effect until the cordon ^: v/honi it
is issued has had an opportunity to confer with the "Admiii.irt.rai:or"
(or his duly nuthorir.ed representative) concerning Uho ailo
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attempt for such a conference would not be fruitful, then tli.lr; •?! lea?*•: ion
can be omitted ar.d the Ordor issued .forth'.-.-: ;:h with n :;!:-V-'.:::.'.:n!. :-.!iot
it shall not start to run until the CCXPAKY has !;COM •-;;.-.".•;•. :•: ••.:.•.••.•:.
to ccr.fer. (c'ec discussion unacr "Effective Dac'j uf Or^er", L::Lr.':.)
rHE ORI;EF. FOR CC::?LIA:;CE
The format for the Order should be as follows:
• • ORDER
«
Preamble Paragraph
"Based on the foreqoing ~Il'.'jI''.CS (ar.d pursuant ~o the authority v!;.sc
in the 'Administrator, Environmental Protection Agency, under "action '.09
(a)(3) of the Act, and by him delegated to th« undersigned) cr (if the
Regional Administrator re-delegates his authority to the' Enforct-ncjn!;
Director, add after "of the Act" - "and by him dele-gated to the P.?.gicr.al
Administrator, which authority has been duly re-delegated to the
undersigned"), i't'is "hereby ordered:".
Where the delegation and re-delegation, if any, has been recited
in the preamble to the Findings (supra), only the underlined portion
Npeed b'e used.
Ter-s of the Orclar
The terms of the Order need only state what the violator is '.r.:oc; fi-
cally ordered to do, th.us:
1. That the Consolidated Chemical Company shall within
days from the effective date of this Order furnish (cr,
complete and submit) to the undersigned (or, if someone else
is designated, "to Mr. Edward Johnson, Enforcement Division,
Environmental Protection Agency, Region XI, Room 5001, Old
National Dank Builcijng, 141'! Main Street, Browstcrvilic,
Centralia, 11101 (555) 123-4567"), the July 197_ Kcport ... a
revised schedule .... a certification that the alleged dis-
charge violation has ceased .... or whatever corrective action
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may be required.
2 , 3, 4 . . . . that, within days fi.-jm the af u.-ct-iv.: -l.rco of
this Order the COMPANY shall, (alleging whctovjr jTunt!.-..-. :;['.'Ci;!ic
•
actions are required) .
5. That the COMPANY shall immediately (or within ci.v/s)
notify'the Agency representative designated above in writing that the
actions hereinbefore required have been taken.
It is important that a tine frame be specified both for the
taJcing of the r.ecassary action ar.d for the report ing to t;ie region
of its accomplishment. This additional roquirenont is e.r.phar.iseci
because it has been noted that in many Crr.ers issued, particular
actions have been ordered to be taken "and the Region advised thot the-
action has been dene", but that no date is. specified for tr.-.» rej.cr!: c:
compliance (cr rioh-ccr.pliance) to be in the hands of an appropriate
Agency official. -- -
Effective Date of Order
Where section 3C8 is not involved, the ORDER can merely recite- that:
"this ORDER siiall become effective upon its receipt by
(service upon) sai,d COMPANY."
Where an opportunity for conference before the OI-X-EU cc:: become
.effective is required by section 308 and this was not done prior to tha-
issuing of the OP.DER, 2/ the last paragraph should read:
"That the COMPANY shall have the opportunity, for a period
of ( ) days from receipt of this ORDEH, to confer with the
following designated Agency representative: George F. Smith,
Assistant Director, Enforcement Divir.io.i, Lnvironmenta.L I/ro^-jct: i on
Agency, Room 5013, Region XI, Old National U.-»nk Uuildino, i-'l-'
2/ See discussion supra at Finding vl (Opportunity For Prior Consultation)
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Main Street, arev/sterviile, Centralia, 11101, (5'53.j U.i-v ,'L2;
*
that this GRDiK shall become effective at the expiration of said
period for consultation; and that the COMPANY shall have. (_)
days from and'after said effective date to comply with the terms
of this CP.DER. To constitute ccrr.pliar.ee, material required to be
submitted by the COMPANY uo the Agency must be in the hands of
• -the designated Agency representative prior to the expiration of
•said (_) day period."
Order Exceeding 3C-Day Limitation
Several Regions have raised the question of whether -in Ci;D£P. under
Section 309 can specify a time in excess of 50 days. On this problem a
memorandum issued on ::arch 20, 1974, by the Assistant Administrator for
^Enforcement and General Counsel to the Region's Enforcement Division
director, states:
"The background to Section 309 makes it clear th?.t Congress
feared "open-ended" orders would be a tool for ellcv/ir/: ~r.e in-
sidious delays that.of ten occurred £:: abatement schedules estab-
lished under prior federal laws. Orders should, therf; lore, r.-qnirs
compliance within 30 cays of issuance with the term;" of the permit
(if one has been issued) or with other applicable requirements
of the law. An order may also contain instructions as to future
compliance requirements beyond. 30 days which would bn confirmed by'
additional orders issued withion 30 days prior to such future dates.
For example, an order might require the submission of overdue
engineering plans within 30 days and also contain a direction that
the discharger adhere to an existing da-te .for commencun-ent of
construction six months hence. If failure to comply with thi;
construction date was considered likely, a second oroi:r could bo
issued 30 days prior thereto confirming tiic earlier di.ri.-ct.Iv-.:.
Obviously, "mult.inle" orders should not bo u.scrf in every case;
in some situations, however, they will prove valuable."
Signing of the Order
When che Order is dated, and signed, u.he nerr.ii of the signir.cr official
(Regional Administrator, Acting Regional Administrator, or Director,
Enforcemen-t Division) should be typed below the signature, toother :.'ith
:he identification of the-Region, thus "Region XI, Environmental "rc-.octie:
\cer.cy". If the address of the Regional office is not giv:n in the venue
ir on a blueback cover (preferred), it should be adeed here.
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SEP.VI::;. .
Section 200 (a) (-1) provide:.; that service of r.ny Ord-.rv i::: •!••'! -j.-ifl. ;
sccti.cn 309 (a) chall be by ;-.crr:--:p..-.l r;qrv: o:;; that wl.on tho '.;)•<•:-.• r i:; :."v;;:^d
to a-corporation, a copy of such Grd™r shall be served on any or-i'rnprJ .TCU
corporate officer and that ccpies shall be sont immediately tc the State
in which the violation occurs and to other affected Statics. (I^.vv.'iiar.is
added.)
•In only a few of the Orders reviewed was per-icp.ol servi ro V.-icio. In
most instances service was made by certified nail, return recei'rt ro::uos'.cd,
of a copy of the Findings and Order covered by a leccar of tranr:ni-tal. Cn
the problum of whether pcrcor.al service of 309 (a) Orders means that an
Order must actually be delivered by hand, the Assistant Administrator for
Enforcement and General Counsel, in his memorandum of Marc!1. 20,' 1974,
(supra)- states:
"The answer is that v.'herrjver possible Order.- s;houl .i ~b'->
delivered in person. This can be done by ^i'A personnel, fr---"oraJ
marshals, professional process servers, or other
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In lih'j case of corporations, tine and vxtjon.';!; in ;.•'..• !::;on.:il :•' -rv.fr'.>
•Jean usually he reduced nhr.rply !>y making :•••. .-vie'.- on Hi" rr.-rj •;?-.-.' V;M '•
^registered agent. Registered agents for foreign corporal: i'.:nr; .-:!:•: -.1 :•;•.;.,.'. 1 •/
/located in the 'State Capitol ci'cy, where the U . S . ' ;::;r;:i.all n;- a;i : ?A
raprasentative is available to make fast, local service at. tii':; coat CJL
only a few dollars. In the case of local corporation:: the :;u;r.e r.i f.uaticn
oftan also exists. Personal service on a registered 5.721-. t alro hr.s the
advantage of making service on ,1 proper party without: the nccr! for
determining and reaching the proper corporate official empower'':'.! to accept
service. (See Attachments C-l and C-2 for Affidavit of Service !;orr.s*)
The use of legal rather than latter size paper a.-.c of a leg=l blue-
back at least en the primary cony of the Findings and Order served, vhile
not necessary, tend to irr.press the person served of the local scricusmss
of the action being taken. (See Attach.r.'.:.-" 3 for proper form in ::illi:ig out
the back of the blue cover.)
As in court actions the original crd.-.-r should bo retained a.'ici i'iaccc:
in a pernanent file with the Docket Clerk, with the affidavit or certificate
of service attached. If service is made by certified --nil, .5 c.-rhcn c^ry
of the letter oT trairsmittal, togetiier with t;;a Post Office rr.-iiling receipt,
and the return receipt, when returned, should be stapled- to the front of
the original Order, just 'as a return of personal service would be:.
FCLLCV;-U? A;;O FILE CLOSING
As good housekeeping practice, and r.or-=s i.-r.-ortir.rly , fro;- ti-o
k.'candpoint of possible rofere-ncc for, or avidence in, future: niirinistyativc
or court actions, it is highly important thac cv';ry f i I'.- con'-oi.:; , -~''. •.'•.'.<^
nini.-u.n, a closing nemo, to the files, delineating the final dispo.-iticit
of the matter.
When a file i.~ cloned out, a brief mcr-.orandUiT. or letter s!:c::idi:-i-
sent to Headquarters acvisir.rj ti:at tr.e action has i:a'.-:n co.T.pl'j ted .
' (Attacnr.cnt D is an example of a file closing nemo rar. dun. )
*V.'hen service is .-?ade by the U.S. Marshall, he will furnish hi-
Return Service forn.
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ALLHUA'HO" OK AT I'KM I1 IT> iK! Si.CUKL T:."L-'IJ!:. ;A
"That, pursuant Co the above-rc-l-^rcp.cud joi-.i lc;;.', ;••." L!I-J ACL, i.u.2
COMPANY vas informed by letter dated Qacer-ber 7, 1973, or -.he ir.ccntLcn
of Ayencv represunUa.ives co visit; .its u.'ii.:! p.l.;uiL in c.:n;uii.-c t i.on with th.j
development of effluent limitation guidelines and standard:; For the iron
and steel manufacturing point source category. Inforn.-u.ion v.-as rcji-iuebtuti
concerning the plant's seanieso tube, 11 inch bar mill and rod mLLl
operation in said letter and again in r.ora detail in d LoCuno ions oi
requirer.snts for conplee'inc the plant Via it Log ouppli.id \iy Ar,^"i;y
representatives ac the cir.c of the visit to cli-i plant en !JocT-.b-»r 1.0-12;
1973. Despite repeated written and teiephcnic requests, aj tr.ure fully set
out in che Log attached hereto as Exhibit A and m.ida a part hereof by
reference, the COM!'A;.T, in violation of section 30." or _;K^ Acl, h.io n«.'t
supplied the requested infcrr..ition."
LOG SAIIPLE
12/4/73
12/7/74
12/10-
4/23/74
4/26/74
5/6/74
Telccn: ELD - E.r. Jones out; roturncj.d call 12/5
•
308 Letter AC - E.I7. Jonas
Plant Visit: Have some data - hold off 10 clay:;
Telcon: ELD - T.C. follo*.v-i:p request" for infor-.ntion
t'ro.Ti A & ij f.'o.
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UNITED ST.-YIT:;
f-:NV IRONMEl-iTAL PROTKC 1' IOM ACKNCY
IN THE MATTER OF
CONSOLIDATED STEEL CURl'OKATLUN
Proceedings Under Section 309(a)(3)
and (a) (4), Federal '.v'.ntcr Pollution
Concrol ACL, as amended (33 U.S.C.
Section 1319(n)(3) and (a)(4))
A:: i: iduvi i of
•STATE OF ILLINOIS
COUNTY OF COOK
SS
, being first: duly s vi-rn (k'.pnsos ;i;u.l s;:vs
that on •*_;_!. ^^7_, at 9&00 '^est Madison Avenue, Ch io.r,;o , liLi;i»is,
he served the annexed Finding of Violation and Order Cor Compliance,
issued , 19 7_, by Alln'n Johnson, Assistant Administrator for"
Enforcement, Environmental Protection Agency, Washington, U.C., in c!u:
above entitlc-c
to and lenvin;
Consolidated otciel Corporation) or ( cliv/.-i
of said Consolidated Sueel Ccrpocaticn, be/siic bein;; a person ol" fnl
age represent Lr.;; hi;;isc If /herself to be .?.u nuciiorir.oil of fir.er/c'.!!p 1 oyc-
of said Consolidated Steel Corporation to accept service of
matter on :hc ConsolidaLed Stc-ul Corporation by !
a true cony thereof, with (Daniel II. Srcith. P. res i ;!t:;i L
Subscribed and sworn to before me, a Notary Public and for the
County of Cook, State of Illinois, this day of , 197
*Scrve Pres ido.n t of Company, if possibJ c; if not serve on bcsl rer-rpor.s ib le
person av;n'lubJe .'ui'.i ui-f. nl torn;: t J ve dc:-. i ,;nutior. u-. r.. ".J;.i!in n<-r, ci:i
General Office Manager (or Richard Roe, Vice 1'res idon c Cor Operal Jons)
he being, .eLc."
ATTACHMENT C- I
-------
L'MLTF.D STATi:::
!•:?•:VJRUNMHi.TAL PKOTrX:!' 1 ON ACKMCV
IN TiiE MATTER Oi-
COnSOLLIUTI-ID STEML CUHI'OKATIiJN
Proceedings Under Section 309(a)(3)
and (a) (•'«) , Federal Water Pollution
Control Act, as amended •( 33 U.S.C.
Section 1319(a)(3) and (a)
Af f i.d;iv i L "I SiM'vire
STATE OF ILLINOIS
COUNTY OF COOK
SS
bcin;j first duly sworn deposes and :;nvs t!i;it '.in
197 , at Suite 401, 918 Sixteenth Street, N.'.•-'.. Ch i c:r.v.o,
Illinois, he served the annexed Finding G'2 Violation and Order !>>r
Compliance issued , 197 , by , Assistant
Administrator for Enforcement, Environmental Protection i\\;cni-y, K,-ir.hin;;ton
D.C., in the nhove entitled ".latter, personally on Consul i d.-icr-.i Slfi.-l
Corporation fay hanJinj; to snd leaving a true; copy thereof v.'it!; Ccor;.7.';-
C. Jones, Senior Process Officer, C D Corporation, said <~! I.1 (".-•> rpor.-it ion
being the aeunt duly ci.-.s ignaced and rei;istci:od by C(jnsr> L.id;n i.-d .SLe-.:l
(a
Illinois.
corporat i.cn)
to
i
receive such service in the St.nto of'
Subscribed cind sworn to before me, a Noi.-jry Public and for
County of Cook, State of Illinois, this day of , 197
ATTACHMENT C-2
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STATES ENViRONMTM fAU :flRO I'llC TION A(,I.NCY
4? WASHINGTON. ".C.-, 2CMGO
orr;ci: OF
MEMORANDUM fi' •
;V ''
TO: The Record - . _,.,
•V) '
FROM: Director, Enforcement Division •• . j
SUBJECT: Section 309 Order Issued Co Cor.sol.j.J;icod Steel
Corporation to Produce Section '30S..D-ji;a
On April 7, L975, at ^t:30 P.M., I r«cuivc
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COMPUTATION OF ECONOMIC BENEFIT OF DELAYED
COMPLIANCE UNDER CIVIL PENALTY POLICY
Note; This policy is based on the old Civil Penalty Policy of
April 11, 1978. EPA approved a new Civil Penalty Policy on
February 16, 1984. However, the "Economic Benefit" Policy remains
effective until EPA develops a medium specific, water penalty
policy.
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" 1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
^/ WASHINGTON. D.C. 20460
September 27, 1978
OFFICE OF ENFORCEMENT
MEMORANDUM
TO: Regional Administrators
Regional Enforcement Directors
FROM: Assistant Administrator for Enforcement
SUBJECT: Computation of Economic Benefit of Delayed
Compliance Under Civil Penalty Policy
»
A principal.objective of the EPA Civil Penalty Policy
(described in my memorandum of April 11, 1978, entitled
"Civil Penalty Policy—Certain Air and Water Act Violators")
is the recovery of the economic benefit that a source enjoys
by postponing pollution control expenditures. The technical
support document attached hereto describes the method for
measuring that benefit.
The measurement of economic benefit of delayed com-
pliance was described in a general manner in earlier guidance.
It was also reviewed in greater detail in regional seminars
held earlier this year. The method of measuring economic
benefit' described in the attached technical support document
differs from that earlier guidance only in that it now
recognizes that some sources may have financial structures
that include preferred stock as well as common stock and
long-term debt. Accordingly, for sources that have issued
preferred stock, the method requires certain information
regarding such stock that was not previously required..
To facilitate its use, the method described in the
attachment to the memorandum has been reduced to a set of
mathematical formulae; even the formulae, however, involve
fairly lengthy calculations. To simplify these calculations,
EPA has developed a computer program that is available to
state and federal enforcement officials. Subsequent
guidance will describe the computer program and its usage.
JJ
H/v*
~7
Marvin B. Durning
Attachment
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« UNITED STATES ENVIRONMENTAL.PROTECTION AGENCY
\, -•/ WASHINGTON. D.C. 20460
OFFICE OF ENFORCEMENT
TECHNICAL SUPPORT DOCUMENT
FOR THE
CIVIL PENALTY POLICY
SEPTEMBER 1978
FOR DETERMINING THE ECONOMIC BENEFIT
OF DELAYED COMPLIANCE PURSUANT
TO THE EPA CIVIL PENALTY
POLICY ISSUED ON
APRIL 11, 1978
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ACKNOWLEDGEMENT
The material contained in this manual.
has been based largely upon the tech-
nical support document being prepared
for regulations that will be proposed
for implementation of Section 120 of
the Clean Air Act.
That document is being prepared foir
the Economic Analysis Division of the
Office of Planning and Evaluation,
U.S. Environmental Protection Agency,
by Putnam, Hayes and Bartlett, Inc.,
Newton,- Massachusetts.
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90
TABLE OF CONTENTS
COMPUTATION OF ECONOMIC BENEFIT OF DELAYED
COMPLIANCE UNDER CIVIL PENALTY POLICY
TECHNICAL SUPPORT DOCUMENT
I. Introduction 1
II. Explanation of the Two Components of
.Economic Benefit of Delayed Compliance 1
III. Determining the Amount of the Benefit
of Delayed Compliance ......... 2
A. Pollution Control Costs the Source
Would Have Incurred had it Achieved
Timely Compliance 3
* — •
B. Discounting of Cash Flows 4
C. Pollution Control Costs the Source
Will Experience When, After--Delay,
it Actually Makes the Expenditures
Necessary to Achieve Compliance . . 5
D. The Economic Benefit of Delayed-
Compliance 6
Financial Parameters to be Used in Cal-
culating the Economic Benefit of Delayed
Compliance and Sources of that Data . . 7
A. Total Deferred Capital Cost of
Pollution Control Equipment .... 8
B, Annual Operating and Maintenance
Ex^snss that Should Ha.Tre Been Tn
in First Year of Operation- 9
C. Investment Tax Credit . 9
D. Marginal Income Tax Rate 10
E. Annual Iii-CldCJ.GH Ro.L« of Pollution
Control Equipment 10
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110.
F. Source's Rate of Return on Equity . 11
G. Interest Rate on Source's Long-Term
Debt 11
H. Preferred Stock Dividend Rate ... 12
I. Equity Share of Violator's Total
Investment 12
J. Preferred Share'of Violator's Total
Investment 12
K. Income Tax Depreciation Method ... 13
L. Depreciable or Tax Life of Pollution
Control Equipment 13
M. Useful Life of Pollution Control
Equipment . . '. 13
N. Period of Delayed Compliance ...... 13
0. Length of Time Between Beginning of
Delayed Compliance Period and Time •
Penalty Will be Imposed ....... 14
V. Assumptions Underlying the Calculation of
Economic Benefit of Delayed Compliance 14
A. The Relative Mix of Debt, Preferred
Stock and Common Equity Associated
With the Acquisition of Pollution
Control Equipment is the Same as that
of the Source's Overall Capital Struc-
ture as Shown on Its Balance Sheet . 15
B. Cash Flows are Discounted Using the
Equity Method 15
C. The Computation of Economic Benefit
of Delayed Compliance Assumes that the
Civil Penalty Will Not be a Deductible
Expense to the Source 16
D. Cash Flows Take Place at the End of
the Year 16
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E. The Rate of Inflation of Pollution
Control Operating and Maintenance
Expenditures is the Same as That for
Pollution Control Equipment Costs . 16
F. A Continuous Sequence of Replacement
Cycles is Required 17
G. Capital and Operation and Maintenance
Expenditures are Instantaneously
Incurred on the Dates That Compliance
was Required 17
H'. Long-Term Debt Incurred to Finance
Pollution Control Equipment Is Retired
By.End of Depreciable Life of Equip-
ment 18
Derivation of Formulae to Measure Economic
Benefit of Delayed Compliance 18
A. Pollution Control Cash Flows .... 19
B. Discounting Cash Flows .........'23
C. The Economic Benefit of Delayed
Compliance 26
VII. Calculation of Economic Benefit of Delayed
Compliance Obtained by Violators Other
Than Privately-Owned Sources Subject to
the Federal Income Tax 27
Appendix A - Definition of Symbols ... 29
Appendix B - Investment Tax Credit
Qualification 31
Appendix C - Depreciation ....... 32
Appendix D - Tax Rate Adjustments ... 34
Appendix E - Sample Calculation of
Economic Benefit ..-.,- . = . . . . 35
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V
A. Cash Flows Over the Useful Life of the
Pollution Control Investment That Should
Have Been Made 37
B. Present Value of Pollution Control Equip-
ment Costs That Should Have Been Incurred 39
C. Present Value of Pollution Control Costs
That Will Be Incurred • . . . . 41
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I. Introduction
The decision to install pollution control equipment
necessitates an initial capital investment as well as a long
term commitment to the payment of operation and maintenance
expenses. While such a decision will lead to improved
environmental quality, it ddes not necessarily yield any
direct economic benefit to the source. If financial resources
were not used to implement the source's decision to install
pollution control equipment, they presumably would be invested
in activities which would be economically beneficial to the
source. Thus, from a strictly economic point of view, it is
usually in a source's best interest to delay the commitment
of funds for pollution control equipment.
The EPA Civil Penalty Policy is designed to eliminate
this incentive to avoid or delay compliance; and this
technical support document is designed to describe in
greater detail the concept of economic benefit of delayed
compliance, to provide an exact method for calculating that
benefit, and to provide additional information that may be
helpful in making such calculations.
The method described in this document should be used in
most instances to calculate the economic benefit of delayed
compliance. It is recognized, however, that there may be
unusual circumstances in which a different method of measur-
ing economic benefit may be appropriate. The acceptability
of any such alternative method will have to be: determined on
a case-by-case basis.
II. Explanation of the Two Components of Economic Benefit
of Delayed Compliance
•The economic benefit of delayed compliance has two
components: (1) the returns which can be earned on capital
that should have been invested in the pollution control
equipment whose purchase was delayed (or that was saved by
not having to pay interest on capital that would have been
borrowed), and (2) the operating and maintenance costs
avoided as a result of not having installed the equipment.
The first component arises because'owners of noncomplying
sources have the opportunity to either invest their funds in
projects other than pollution control equipment (and
-------
that, unlike such equipment, would yield a. monetary return)
or to avoid paying interest on capital that would have been
borrowed.
The second component of benefit of delayed compliance
is based on the operating and maintenance costs which would
have been incurred -if the pollution control equipment had
been installed. These include the costs of labor, raw
materials, energy and any other expenditures directly
associated with the operation of the pollution control
equipment. Delaying compliance allows these expenditures to
be avoided altogether. Therefore, the noncomplying firm
benefits by retaining these funds which should have been
spent in order to achieve compliance (and, additionally, by
investing these funds in income producing ways).
The two components of economic benefit can be quanti-
fied using generally accepted economic and. financial
principles and estimates of a number of parameters.
An explanation of these parameters and their relation-
ship to the calculation of the economic benefit of delayed
compliance follows.
III. Determining the Amount of the Benefit of Delayed
Compliance
The direct costs associated with installing pollution
control equipment are the original purchase cost of the
capital equipment, the costs associated with financing the
purchase or construction of the equipment, and the annual
operating and maintenance expenditures,
In addition to the direct costs, other indirect finan-
cial impacts result from the purchase of equipment. Depreci-
ation, for example, has the effect of reducing income tax
liability in years subsequent to the original investment.
Similarly, the original purchase may result in an investment
tax credit, which operates as if a discount were given on
the purchase price. Both of these lower the net cost to the
source.
To calculate the source's total economic cost of
installing equipment to comply with pollution control
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-------
to a single economically equivalent value. Because these
various costs do not all occur at the same time, they must
first be converted into values which are comparable with
respect to the time-value of money (that is, the sooner a
cost must be incurred, the greater is its economic impact.)
This conversion is accomplished by discounting all estimated
future costs to "present value" equivalents, a technique
described below.
The economic benefit of delaying compliance with pol-
lution control requirements is the difference between the
total economic cost that should have been incurred to comply
with environmental requirements and that which will actually
have to be incurred to come into compliance with those
requirements.
A.- Pollution Control Costs the Source would have
Incurred had it Achieved Timely Compliance
1. Initial Capital Outlay
The direct costs and indirect financial
impacts associated with the initial capital outlay to
purchase and install pollution control equipment are equal
to the cost of purchasing or constructing the equipment,
less the amount of any applicable investment tax credit.
The investment tax credit constitutes a reduction in tax
liability which has the effect of a discount on the purchase
price.
2. Annual Capital-Related Costs
The direct costs and indirect financial
impacts associated with financing and depreciating pollution
control equipment are .the cash flows occurring in subsequent
years as a direct result of the initial capital expenditure.
Depreciation does not itself involve a cash outflow; however,
its effect is to reduce pre-tax income and hence to reduce
the source's income tax. If the source had installed the
equipment, the tax saving in subsequent years associated
.with depreciation would have the effect of reducing the cost
of such equipment. The other annual capital-related cash
flows are those which arise from the financing of the
incremental capitaj. outlay for the pollution control equip-
ment in question. If the equipment is partially financed
-------
with debt, both principal and interest payments will result.
The payment of interest will, of course, give rise to
associated tax savings. Similarly, if preferred stock is
used, its redemption and its dividends will give rise to
cash outflows, although no tax savings will occur here.
3. Operation and Maintenance Costs
The final category of cash flows consists of
those resulting from operating and maintenance expenditures.
Since these costs are tax deductible, the relevant cash
flows are simply the after-tax value of their estimated
amount in each year. These cash flows are assumed to
increase each year due to inflation.
B. ( Discounting of Cash Flows
Once all' present and future direct costs and
indirect financial impacts have been determined, they must
be converted into a single, present-value cost of the pol-
lution control equipment. This is done by converting each
amount into values which are discounted. This is necessary
because two cash flows of equal dollar value occurring many
years apart do not have equal financial impacts on the
source. This differential arises because the firm can
invest funds at some positive rate of return. If a dollar
of expenditure can be postponed for one year, that dollar
can be invested in the interim. At the end of the year the
dollar of expenditure can be made and the return on the
investment during the intervening period accrues to the
benefit of the source.
The technique used to compensate for this effect
is called discounting. Discounting involves reducing the
value of future cash flows to amounts which are equivalent
in terms of present dollars. Suppose, for example, that a
source faced with a $100 expenditure could delay that
expenditure by one year (For simplicity, assume no infla-
tion. Inflation must, of course, be, and is, taken into
account in estimating future expenditure requirements.) If
the firm could invest money for that year at a 10 percent
return, it would not need to put aside a full $100 to make
the payment one year later. In fact, if it invested only
$90.91 at a 10 percent return, that amount would grow to
$100 in one year. Therefore, $90.91 is the present value,
at 10 percent, ot a $iuO cash flow one year in the
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Similarly, $82.64 invested at 10 percent would grow to
$100 in two years (it would grow to $90.91 in one year and
to $100 in the second year). $82.64 is therefore the present
value, at 10 percent, of a $100 cash flow two years hence.
The present value of cash flows for other numbers of years
in the future is found in a similar fashion. The formula for
discounting is given by:
Present Value = Future Value
j
(1+E)
where E = the discount rate.
j = the number of years in the future in which the
cash flow occurs.
Future Value = the cash flow expected in the future.
Applying this technique to-all future pollution control
cash flows converts each of them into its present value
equivalent.. The sum of these individual values represents
the equivalent after-tax cost, in terms of a single present
value, of all future cash flows arising out of the require-
ment to purchase and operate pollution control equipment.
C. Pollution Control Costs the Source will Experience
when, After Delay, it Actually Makes the
Expenditures Necessary to Achieve Compliance.
For each polluting facility there is a date by
which compliance should have been achieved. Therefore, for
purposes of calculating the penalty, it is assumed that all
capital expenditures should have been made by that date and
that operating and maintenance expenditures should begin on
that date.
-------
In computing the economic benefit of delayed compliance
there are two sets of cash flows (or costs and indirect l
financial impacts) to be considered. The first consists of
the flows that the source would have experienced had it made
the expenditures necessary to come into compliance on time.
These include the cash flows attributable to the purchase
and operation of the original equipment as well as those
associated with all future replacement cycles. The second
set of cash flows consists of those which the source will
experience when, following the delay, it actually makes the
expenditures necessary to come into compliance. This second
set of cash flows will have three properties:
1. It will be similar to the first
set in that it will have the same
sequence of capital expenditures,
depreciation tax savings, operating
and maintenance flows, etc.
2. Each cash flow will occur at some
time after it would--have occurred if
the expenditures necessary for timely
compliance had been made.
3. The magnitude of each of its
individual component flows will be
greater than the corresponding flow .
in the first set. This results from
the fact that any given cost will
have inflated during the period
of projected delay.
D. Economic Benefit of Delayed Compliance
The present values of both sets of cash flows
(those which should have been incurred to come into timely
compliance and those that actually will be incurred to
come into compliance) can be calculated in the manner
described above. The present value of the second set
W-LJ.-L oti j_uwt:.L , ZeJ. J.SC uiiiy Luc .uaCi, Luo.L u.& j-ci'y j-iiy cJOiuu l-
yields a financial benefit to the source. It is the
difference between the first set of cash flows -and the
second set of cash flows that is the economic benefit
the source gained from having delayed its compliance.
-------
IV. Financial Parameters to be Used in Calculating the
Economic Benefit of Delayed Compliance and Sources
of that. Data
Calculation of the economic benefit of delayed com-
pliance requires estimates of a large number of financial
parameters, many of which are peculiar to the noncomplying
source. This section defines these parameters and identi-
fies sources from which their actual numerical values may be
drawn.
The correct values for these parameters are the ones
that pertain to the particular source involved, since it is
the economic benefit of delay obtained by that source that
is being sought through the civil penalty authority. In
some instances, however, it will not be possible or, if
possible, not desirable, to obtain specific information
regarding the source prior to the time that civil penalty
evaluations must be prepared. In those cases, reasonable
estimates can be made from the data contained in the sources
referenced, below.
Except for the parameters.concerning the capital and
operation and maintenance cost of.the pollution control
equipment, the values for parameters must be estimated based
upon likely values that will pertain in the indefinite
future.
The best approximation of these parameters should be
the average values which have occurred over the recent
years, except when those values are clearly atypical. For
example, if the recent rates of return on book equity have
been very low or. even negative, the average of such values
should not be used. In such cases, it is obvious that the
violator would expect to make a. reasonable profit in future
years. Otherwise it would hot make economic sense for the
source to remain in business. As described below, in such
cases, the published industry average value may be the best
available estimate of the anticipated future value.
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A. • Total Deferred Capital Cost of Pollution Control
Equipment
This is an estimate of the capital expenditures
that should have been made for purchase and installation of
the required pollution control equipment. It includes not
only direct purchase costs, but also such expenditures as
site preparation and engineering design. It is measured in
constant dollars as of the first day of noncompliance..
In the event that contracts have been signed for con-
struction or 'purchase of the required equipment, they should
be used as the basis for such costs. Other possible bases
include engineering estimates, quotations from equipment
manufacturers, and the actual cost experience of other
sources which have installed similar equipment.
If a violator installed some, but not all of the equip-
ment that was required for pollution control compliance and
is in violation because the equipment constructed or
installed is insufficient, then the appropriate value for
total deferred capital investment expenditure is equal to
the additional capital expenditure required for compliance.
If the violator installed all of the pollution control
equipment required for compliance but is in violation because
the equipment is inadequate or ineffective, then the amount
of deferred capital expenditure depends upon the reasonable-
ness of the source's expectation that the installed equip-
ment would satisfy pollution control requirements. If
equipment was reasonably calculated to achieve compliance,
then there has been no inappropriate deferral of capital
expenditure, notwithstanding the fact that additional capital
expenditures are now required. In making this determination,
it is important to insure that sufficient consideration was
given to providing adequate capacity for continuous control
and that reasonable design and construction standards were
observed in installing or constructing the pollution control
equipment. It is also important to insure that the inade-
quacy or ineffectiveness is not attributable to increased
levels of production or to production process changes.
-------
If the violator installed all of the pollution control
equipment required for compliance but under conditions in
which, it was not reasonable to expect that pollution control
requirements would be satisfied, then the total deferred
capital expenditure is equal to the amount that will have to
be expended to come into compliance. No reduction or credit
will be allowed for the amounts actually expended.
B. Annual Operating and Maintenance Expense that
Should Have Been Incurred in First Year of
Operation
This parameter is an estimate of the annual cost
of operating and maintaining the required pollution control
equipment. It must be expressed' in the same terms as
capital costs. That is, the amount should represent the
annual operating and maintenance expense in constant dollars
as of the beginning of the first year of noncompliance.
There is a provision in the formulation which automatically
adjusts, future years' operating and maintenance expense for
anticipated inflation.
• Losses in production and incremental energy costs which
will be incurred as a direct result' of operating the pol-
lution control equipment should be counted as an expense in
this category. On the other hand, the value of any by-
product recovery resulting from such operation should be
deducted.
Sources of estimates for operating and maintenance
expense include equipment manufacturers and engineering
consultants. These estimates should include all recommended
operating and maintenance procedures, training and planning
costs, cost of warranties, record-keeping and costs of
monitors.
G. Investment Tax Credit
This is a reduction in Federal income taxes
payable as a result of making qualified capital investments.
It is equal to a specified percentage of the portion of .the
initial capital costs which qualify under IRS regulations.
The investment tax credit is included in the formulation
because it has the effect of reducing the cash outflow
required to purchase the pollution control equipment.
-------
10
The applicable percentage is given in the Internal
Revenue Code as are the criteria for qualifying investments.
If not all of the initial capital cost qualifies for the
investment tax credit/ an adjustment must be made as described
in Appendix B.
D. Marginal Income Tax Rate
This rate is the average anticipated future value
of the fraction of the last dollar of taxable income which
must be paid by the source to Federal, State and local
governments.'- It is the amount by which taxes would increase
if taxable income were to increase. It is different than
the average tax rate (i.e., total tax divided by taxable
income).
The tax rates' of the various levels of government are
specified by statute and typically depend on the level of
taxable income reported by the owner-of the polluting
facility. A formula for computing the marginal income tax
rate for a firm subject to income taxation by more than one
level of government is given in Appendix D.
E. Annual Inflation Rate of Pollution Control
Equipment
This is the annual rate at which both capital and
operating and maintenance costs are expected to grow. These
cost increases are the result of inflation of various
factors such as labor, capital goods and energy.
For purposes of computing the economic benefit of
delayed compliance, the compounded change in the Chemical
Engineering Plant Cost Inflation Index1 may be used as an
estimate of the future rate of increase in pollution control
expenditures. For the years 1970-1977, this rate was 7.2
percent. The Chemical Engineering Plant Cost Index is based
on a weighted' average cf four components. These are;
fabrication and equipment, engineering and supervision,
construction labor and building costs. The weights are
determined by a survey made by Chemical Engineering maga-
zine. The cost components' are derived from the producer
price indices compiled by the Bureau of Labor Statistics.
1
Chemical Engineering, McGraw-Hill, Inc., April 28, 1975,
and subsequent issues.
-------
11
There is no widely available index of pollution control
equipment costs as such. The Chemical Engineering index is
based on factors which are clearly important components of
such costs. The principal alternative considered was to use
some broader and more universally recognized index, such as
the GNP implicit price deflator. This was considered to be
a greatly inferior choice since it is based primarily on
factors only loosely related to the cost of pollution control
equipment.
F. Source's Rate of Return on Equity
This is the percentage used as the basis for
discounting cash flows occurring in future years to equiv-
alent present values. It is the average anticipated future
value of the source's annual after-tax income divided by
the total value of common shareholder interest.
Where this value cannot be estimated for any particular
source (as, e.g., when recent rates of return have been
unusually low or even negative) it is sufficient to use the
industry average _return on the book equity value. Such
rates are reported by the Federal Trade Commission in its
Quarterly Financial Report for Manufacturing, Mining and
Trade Corporations. •It is based on a. large sample of sources
in each industry and, subject to the limitations found in
all accounting data, represents an accurate estimate of the
past performance of U.S. industries.
G. Interest Rate on Source's Long-Term Debt
This is the rate of interest which would be paid
by the source if additional long-term debt were to be incurred.
The interest rate may be estimated as the current rate of
interest on bonds of a grade equal to that of the source's
bonds having the highest rating as published in Standard and
Poor's The Outlook.
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12
If a source's debt is not rated, the interest rate may
be estimated as the current rate of interest on grade "A"
corporate bonds, published in Standard and Poor's The Outlook
or in Standard and Poor's Statistical Service, "Current
Statistics".
H. Preferred Stock Dividend Rate
This is the rate paid by the source to its
preferred stockholders. Like return on equity and interest
rate-, dividends paid on preferred stock represent a cost of
long-term financing.
If a source has preferred stock outstanding which has a
rating, the preferred stock dividend rate may be estimated
as the current yield on stock of that rating as reported in
Standard and Poor's The Outlook . If the stock is not
publicly traded or has no rating, the rate may be estimated
as the current preferred stock yield on grade "A" issues
published in Standard and Poor's The Outlook or in Standard
and Poor's Statistical Service, "Current Statistics".
I. Equity Share of Violator ' s Total Investment
This parameter is equal to the proportion of the
source's long-term financing which is provided by common
shareholders. It is a fraction, the numerator of which is
the sum of all common equity accounts on the source's
balance sheet including common stock, retained earnings,
capital surplus and any other accounts representing common
equity investments . The denominator of the fraction is
given by adding to the numerator the sum of the preferred
stock account plus all long-term debt incurred by the owner
(excluding portions of such debt in the current account) .
J. Preferred Share of Violator's Total Investment
This share is the fraction of loner— tisnr f
provided by preferred stock. The numerator is given by the
preferred stock accounts in the source's balance sheet and
the denominator by the source's long-term debt plus its
preferred stock plus its common equity interest.
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13
K. Income Tax Depreciation Method
Computation of the economic benefit of delayed
compliance involves consideration of depreciation-related
tax benefits of an investment in pollution control equipment.
The source may choose the method of depreciation to be used,
subject to conformity with Internal Revenue guidelines.
The computer program used by EPA to calculate the
penalty automatically selects the depreciation method which .
results in the lowest cost of compliance (hence the least
amount of economic savings due to delayed compliance). This
is based on the assumption that the source would use the
depreciation method which resulted in the lowest possible
cost of compliance.
L. Depreciable or Tax Life of Pollution Control
Equipment
The depreciation life is the minimum number of
years over which a particular investment Ln pollution control
equipment may be depreciated. A data source for this value
is the lower limit on the asset depreciation range for the
appropriate class of assets as given in the Internal Revenue
.Service publication Revenue Procedure 77-10.
M. Useful Life of Pollution Control Equipment
The useful life of the pollution control equipment
is the number of years it can be expected to operate before
replacement.
A source of data for the useful life of various types
of pollution control equipment is the asset guideline period
developed by the Internal Revenue System for certain asset
classes. These are provided by the Internal Revenue Service
in Revenue Procedure 77-10. They represent IRS estimates
of the average lives of assets within a particular industry.
They were based upon a study of actual asset lives and they
are continually updated as the need arises.
N. Period of Delayed Compliance
The period of delay used to measure economic benefit
should be the period of time that violations resulting from
a failure to make pollution control expenditures can be
proven. Typically, that period will be equal in length to
the period that such expenditures were or will be unjustifi-
ably delayed.
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14
In actions under the Clean Water Act, .the period should
commence July 1, 1977,' unless an earlier compliance date was
required by the terms of the violator's discharge permit.
In the case of violators of the Clean Air Act, the period
should begin on August 7, 1977, or, if later, .the earliest
provable date of violation. (it should be noted that many
Air Act violators had long been in violation on August 7,
1977, and had, by that time, already obtained a substantial
benefit through their compliance delay.) In both Air and
Water Act cases, the period of delayed compliance should
extend until full compliance is or will be obtained, except
in the case 'of major stationary source Air Act violators
which will be out of compliance beyond August 7, 1979. In
that case, the period of delayed compliance should only
extend to August 7/ 1979, or such later date as the man-
datory, administratively-imposed noncompliance penalties
will commence pursuant to Section 120 of the Clean Air Act.
r-'
The period of delayed compliance continues until all
violations resulting from delayed expenditure are eliminated.
The period does not end simply when all required expendi-
tures have been made unless compliance is also achieved
then. This* is because sources should have reasonably
anticipated start-up or post-construction compliance delays
and have planned accordingly.
O. L'ength of Time Between Beginning of Delayed
Compliance Period and Time Penalty will be Imposed
The method of measuring economic benefit described
above determines that value as of the beginning of the
period of noncompliance. Because this amount must be
adjusted to its present value as of the time of assessment,
the period of time between the beginning of the noncom-
pliance period and the time of penalty assessment must be
determined.
V. Assumptions Underlying the Calculation of Economic
Benefit of Delayed Compliance
The method described herein for calculating the economic
benefit of delayed compliance was based upon several important
assumptions, many of which were only implicit in the discus-
sion in. the previous section. The following identifies
those assumptions and explains why they were made.
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15
A. The relative mix of debt, preferred stock and
common equity associated with the acquisition
of pollution control- equipment is the same as
that of the source's overall capital structure
as shown on -its balance sheet.
On the balance sheet of any source, total net
assets, including net working capital, are exactly equal to
total long-term financing (long-term debt, preferred stock,
and equity). Any increase in net assets must be accompanied
by a similar change 'in long-term financing. It has been
assumed in developing the method set forth herein that
relative proportions of the long-texm-financing associated
with the acquisition of pollution control equipment are the
same as those of the source's overall capital structure.
B. Cash flows are discounted using the equity method.
The rate used to discount future cash flows is the
source's, rate of return on equity. This equity discounting
method is one of several different approaches to evaluating
capital investments which have been developed. No single
one has won universal acceptance from financial theorists.
However, despite the theoretical and computational dif-
ferences among the various approaches, in mosl: practical
applications they tend to give results which differ only
slightly.
The equity discounting method is based on an analysis
of the cash flows affecting common shareholders. All cash
flows arising out of debt or preferred stock financing are
netted out. The residuals, which represent amounts avail-
able for distribution to common shareholders, are then
discounted at the rate of return on equity.
This method has several advantages. The most important
is that it meas-ures the benefit of noncompliance from the
point of view of the true beneficiary, the common stock-
holder. The benefit obtained from delaying pollution control
expenditures does not directly benefit the bondholders of
the company. They will continue to receive the same interest
payments as before.' When their bonds mature they will be
paid, the face value of the bonds. Similarly, preferred
stockholders will receive no direct benefit from delay.
Therefore, any delay primarily benefits the common stock-
holders since they are the owners of such residual amounts.
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16
C.. The computation of economic benefit of. delayed
compliance assumes that the civil penalty will
not be a deductible expense to the source.
In calculating the costs on which the economic
benefit of delayed compliance is based, the normal tax
consequences of interest, depreciation, etc., are taken into
account- In addition, .in setting a civil penalty amount so
that it imposes the same after-tax burden as timely com-
pliance, it is assumed that the penalty will not be allowed
as an income, tax deduction. If the civil penalty were
allowed as a deductible expense for tax purposes, the
penalty would have to be adjusted upward so that its after-
tax cost to the firm would be equal to the otherwise .
appropriate civil penalty.
D. Cash flows take place at the end of the year.
While expenditures such as- those for operating and
maintaining equipment obviously are incurred throughout the
course of the year, the assumption that all cash flows take
place at the end of each .year greatly simplifies the compu-
tation of economic benefit through delayed compliance. Its
effect is to lower the penalty very slightly from the level
it would have if these expenditures were assumed to be made
on a continuous basis throughout the year.
E. The rate of inflation of pollution control
operating and maintenance expenditures is
the same as that for pollution control
equipment costs.
Most of the Environmental Protection Agency's
studies of pollution control costs have estimated operating
and maintenance expenses as a constant fraction of capital
costs. This relationship between the two, in addition to
the fact that no clear reason was observed for using
5Sw5.IT5.t£ ITatlesS , J-SCi Lu Lllfe uS« Oi. a. 3J.liy-i.ts
rate.
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17
P. A Continuous Sequence of Replacement Cycles
is Required.
As the equipment approaches the end of its useful
life, it is replaced at a cost which reflects the rate of
inflation. This process continues for an indefinite period,
implying that the underlying source of pollution is never
eliminated.
This is a more prudent assumption than choosing either
that the equipment is needed only for a fixed number of
replacement cycles or a fixed number of years. The former
assumption is unreasonable in that it implies the economic
life of the underlying source of pollution somehow depends
on that of the pollution control equipment. The latter is
unworkable because it would require the selection of an
arbitrary horizon 'at some distant time in the future. (It
would be extremely difficult to provide a reasonable esti-
mate of the period of need for pollution control equipment,
that is, the life of the underlying source of pollution.)
Fortunately, however, the effect of discounting is to reduce
the importance of distant cash flows. That is, the present
value of cash flows occurring twenty or thirty years in the
future is very small and hence the effect of these flows on
the penalty is likewise very small. This, plus the increased
computational convenience *and the ability to avoid having to
choose a fixed horizon, led to the adoption of the con-
tinuous replacement assumption.
G. Capital and Operation and Maintenance Expenditures
are Instantaneously Incurred on the Dates That
Compliance was Required.
It is assumed herein that the capital expenditures
associated with delayed compliance were made in a single
payment on the first day that the source will or should have
come into compliance, and that no operating and maintenance
expenditures were required prior to that time. If these
expenditures instead involve a series of payments made prior
to the date the source will or should have come into compli-
ance, then additional costs will have been avoided prior to
the date compliance was required, but corresponding, compen-
sating amounts will actually have been incurred (and not
avoided) prior to the date that compliance will be scheduled.
The assumption, therefore, greatly simplifies penalty calcu-
lations but does not significantly affect the accuracy of
these calculations.
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18
H. Long-term Debt Incurred to .Finance Pollution
Control Equipment Is Retired by End of
Depreciable Life of Equipment.'
As indicated above, the pollution control invest-
ment is assumed to have been financed by the same methods
and in the same relative proportions as the source itself is
financed (i.e., if the source's long-term financing is one-
third preferred stock and one-third equity or common stock,
then the pollution control equipment is assumed to have been
financed by the same methods and in the same proportions).
Each year, as the book value of the pollution control
equipment is reduced through depreciation, the principal
balance on long-term debt and the amount of outstanding
preferred stock is assumed to be correspondingly and pro-
portionally, reduced, by bond and preferred stock redemption
payments, so that the relative financing proportions are
preserved with, respect to the outstanding book value.
Accordingly, when the equipment has been fully depreciated,
all outstanding bonds and preferred stock associated with
financing the acquisition and installation of the pollution
control equipment, will,- correspondingly, be assumed to have
been retired.
VI. Derivation of Formulae to Measure Economic Benefit of
Delayed Compliance.
This section generally describes the procedure used to
determine the economic benefit of delayed compliance. This
section follows the same general outline in deriving the
formulae used to calculate that benefit.
In most instances the formulae will have to be applied
for each item of equipment. Where items of equipment have
the same useful .and depreciable tax lives and where the same
period of delayed compliance and inflation rate are involved,
it is possible to combine capital and operation and main-
tenance expenditure amounts and determine total economic
benefit in a single calculation.
All symbols are defined in Appendix A to this section.
A complete description of the parameters used and their
sources is given in Section V.
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19
A. Pollution Control Cash Flows .
The computation of the benefit from delaying pol-
lution control investment requires that cash flows be
estimated for a continuous series of pollution control
equipment replacement cycles and that- these cash flows be
reduced to a single present value. The simplest approach to
calculating the present value of all < future flows is to
calculate the present value of cash flows in the initial
useful life cycle and to then use that value as a basis for
all others. The derivation described below uses such an
approach .
The first cash flow results from the initial investment
of equity. It may be expressed as:
%
El = II * Q ' . (1)
where II = the capital cost of the "pollution control equip-
ment.
Q =» the fraction of the source's capital structure
made up of equity.
From this quantity must be subtracted an amount to
reflect the effect of the investment tax credit. This
amount may be expressed as:
ITC = II * t (2)
ITC
where t = the investment tax credit rate.
ITC
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20
The investment tax credit rate must be adjusted if not all
of the investment qualifies, for the credit. This adjustment
is explained in Appendix 3. Further, if rapid amortization
is selected (see Appendix C) only one-half of the normal
investment tax credit is allowed.
Additional cash flows result from capital-related
expenditures which occur over the depreciable life of the
equipment. These amounts account for tax depreciation
effects and for the cash flows associated with financing the
pollution control equipment. The effect of depreciation is
to reduce the source's, tax liability. The cash flow related
to depreciation in year j may be expressed' as:
»
DEP = II * d * t
j • j TR (3)
where d. = the fraction of the original cost depreciated
J in year j (see Appendix" C).
= the source's marginal income tax rate (see
Appendix D)..
^ '
The other annual capital-related cash flows consist ofI
principal repayments and financing charges (i.e., interest
and dividends) on the debt and preferred stock issued to
finance the equipment purchase. The fraction of the initial
investment financed by debt may be expressed as:
DEBT SHARE = II * B " (4)
where B = the fraction of the firm's capital structure made
up of. debt. Debt is assumed to be repaid each year in
proportion to the depreciation of the asset. That is, at
the end of each year the same fraction of the principal is
repaid as the original book value of the investment is
depreciated. Therefore, the repayment of principal in year
j may be expressed as:
PRIN = d * II * B (5)
. J J
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21
Interest is assumed to be paid at the end of each year
on the principal outstanding at the beginning of that year.
(INTEREST CHARGE) = R * (PRINCIPAL OUTSTANDING) (6)
j INT j
where R = the source's interest rate.
INT
Since interest is tax deductible, only the after-tax effects
should be considered in calculating "the cash flow. Therefore,
the interest .payment cash flow in year j becomes:
INT = R * (PRINCIPAL OUTSTANDING) * (1-t ) (7)
j INT j TR
The principal outstanding is the original amount borrowed, .
II * B, less the amount which has been repaid prior to the
beginning of the year. The ampunt repaid prior to the
beginning of year j is: • --- *
j-l
(AMOUNT REPAID) = Z II * d * 3 (8)
k=O . te
The principal outstanding at the beginning of year j is the
amount initially borrowed less the amount repaid by the end
of year j-l. • .
j-l
(PRINCIPAL OUTSTANDING). = II * B - £ II * d *B (9)
3 k=0 k
Combining equations (7) and (9) yields a formula for the
interest-related cash flow in year j:
j-l
INT = R * II * B * (1-t ) * (1 - 2 d ) (10)
j INT TR k=O fc
The fraction of the ini'tial pollution control investment
that would be financed" fay preferred stock may be expressed
as follows:
PREFERRED SHARE = II * F (11)
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22
where F is the fraction of preferred stock in the source's
capital structure. Just as the additional debt is repaid
over the depreciable life of the pollution control equipment,
it is assumed that the preferred stock must be redeemed as
the asset is depreciated. At the end of each year, the same
fraction of the preferred stock is redeemed as the original
book value of the investment is depreciated. Redemption in
year j is given by:
PREF = d * II * F (12)
j J
Dividends on preferred stock are assumed to be paid at
the end of each year on the amount of stock outstanding at
the beginning of the year.
DIV = R * (PREFERRED OUTSTANDING) (13)
j DIV ' j
where R . = the dividend rate on preferred stock.
DIV
These dividends are not tax-deductible. The preferred stock
outstanding in any year is the original amount issued, II *
F, less the amount redeemed prior to the beginning of the
year. The amount redeemed prior to year j is:
j-l
' (AMOUNT .REDEEMED) . = Z II * d * F (14)
3 k=O k
The amount of preferred^stock outstanding at the beginning
of year j is equal to trie amount originally issued less the
amount redeemed.
j-l
(PREFERRED OUTSTANDING). = II * F E II * d * F (15)
: k=0 k
The dividend paid at the end of year j is found by combining
equations (13) and (15) . ,
j-l
DIV. = R * II * F * (1 - I dj (16)
1 DIV k=Q K
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23
The final category of cash flow is that associated
with annual operating and maintenance expenditures. These
expenses increase each year at the inflation rate. Like
interest and dividend payments, they are assumed to be paid
at the end of the year. They are tax deductible so their
associated cash flows must reflect the effect of income
taxes. If Mj is the cash flow resulting from operating and
maintenance expense in year j, and MQ is the annual operating
and maintenance expense in current dollars, the resulting
cash flow may be expressed as:
M = M * (1-t ) * (1+1)
10 TR
M = M"'* (1+1) = M * (1-t ) * (l+I)2
21 0 TR
M = M * (1-KE) = M * (1-t ) * (1+1)3 (17)
j j-1 , ° TR
B. Discounting Cash Flows
»
The cash flows just calculated must next be dis-
counted to their present values. The cash flows related
to the initial equity investment and the investment tax
.credit, take place immediately; therefore, no discounting
is required to convert them to their present value. Using
equations (1) and (2), that present value is given by:
PV = El - ITC
INITIAL
= II * Q - II * tITC
= II * (Q - tITC) (18)
The present value of the net cash flows associated
with the additional capital-related cash flows may be
calculated in three steps. First, the total cash flow in
year j is given by algebraically summing the individual
components. The second step is to discount this sum to
determine its present value. These two steps are combined
in a single equation as follows:
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24
-DEP + PRIN + INT -I- PREF 4- DIV
J J J j 1
ANNUAL j
CAPITAL (1+E)
RELATED. (19)
:
where E = the discount rate.
The negative sign preceding the depreciation cash flow
results from the fact that this component represents a
reduction in cash outflow. The third step is to sum the
individual present values for each year of the depreciation
life of the equipment (n years).
n
PV = Z PV
ANNUAL j=l ANNUAL
CAPITAL • CAPITAL
RELATED RELATED j (20)
The final category, operating and maintenance cash
flows, must be considered over the entire useful life of the
equipment. The present value of the flow in year j is given
by: .
M.
PV = J
OSM: ~7I^P <2D
The present value over the. N years of useful life is given
by summing the present values for each year:
N
PV = r PV
O&M j*! .OfiMj (22)
The present value of all cash flows resulting from the
purchase and operation of pollution control equipment through-
out: the N year life of the original squipir.snt, PV^-p^/ ^
given by summing the contributions of each of the three
types of pollution control expenditures.
PV1 = PV + PV -(• PV
PCE INITIAL ANNUAL OSM
CAPITAL
(23)
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25
The present value of all cash flows associated with the
initial useful life cycle must next be expanded to include
the present value of cash flows in all future replacement
cycles. This can be accomplished by recognizing that any
given future cycle is identical to the original one except
that its costs have increased by the inflation rate. For
example, the replacement made in year N, when the original
equipment wears out, gives rise to cash flows whose present
value in year N is equal to:
PV1 * (1+DN
PCE
where I = the annual inflation rate.
The 'initial present value of these flows (at time zero) is
then determined by discounting:
PV1 * (1+I)N
PCS
N
(1+E)
where E = the discount rate.
The present value of the cash flows from the original cycle
and all future replacement cycles is therefore given by
summing:
PV
PCE
PCE
4-
(1+I)
1- *
PCS (1+E)
N
vr
"*
PCE (1+E)
pv-1- *
PCE
E >
(24)
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26
C. The Economic Benefit of Delayed Compliance
The quantity just calculated is the present value.,
as of the day on which compliance should have been achieved,
of all future pollution control cash flows which the source
would have experienced had it not delayed. If compliance
is delayed, inflation will result in the source's facing
higher costs. Once it does comply, the present value of
those costs, as of the day on which compliance is actually
achieved, is given by:
PV1 = PV * (1-KL)L (25)
DELAY PCE
where I = the annual inflation rate.
L = the period of delayed compliance..
The present value as of the day on which compliance should
have been achieved is given by discounting:
PV^DELAY
PV =
DELAY (1+E)L
where E = the discount rate.
The-economic benefit from delay is thus given by the differences
between these-two present values:
ECONOMIC BENEFIT = PV - PV
PCS DELAY
PV *
PCF
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27
VII. Calculation of Economic Benefit of Delayed Compliance
Obtained by Violators Other Than Privately Owned
Sources Subject, to the Federal Income Tax
The method described herein for calculation of economic
benefit assumes that the source is a privately-owned entity
subject to federal and perhaps state and local income taxes.
There are sources other than these, however, within the scope
of the EPA Civil Penalty Policy (e.g., public sector sources
such as, state or municipal sources or publicly-, not
investor-, owned utilities). For such sources, the economic
benefit of delayed compliance can be determined by adapting
the method presented here.
Public sector sources typically do not have an annual
taxable "income";, accordijigly, the income dependent para-
meters should be set equal to zero for such sources (i.e.,
the tax depreciation method used, the marginal income tax
rate, and the investment tax credit).
One income dependent parameter, the depreciable life,
should not be set equal to zero. That is because the
•depreciable life .period is also used as the-period of time
over which debt incurred to finance the pollution control
equipment is repaid. Accordingly, the value of that para-
meter should be set equal to the debt retirement period that
the source uses for such equipment.
Public sector sources additionally do not finance
pollution control expenditures through the issuance of any-
thing analagous to either preferred or common stock. Their
share of such expenditures is typically financed entirely
through long-term debt. Accordingly, the parameters related
to common or preferred stock financing should also be set
equal to zero (i.e., equity share of violator's total invest-
ment and the preferred stock share of the violator's total
investment) .
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28
Since public sector sources do not use anything compar-
able to equity financing and do not have a taxable "income",
there is no quantity analagous to a rate of return on equity
that can be used to discount future cash flows. Some of
these sources may have established discount factors to evalu-
ate alternative capital expenditure programs. If so, the
source's own discount factor may be used. If they have not.
established discount factors, the rate used for inflation of
pollution control equipment may be used as the discount rate
(i.e., in applying the calculation method described herein,
the rate of return on equity (or discount rate) should be
set equal to the inflation rate of the pollution control
equipment).
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29
APPENDIX A
DEFINITION OF SYMBOLS
B = the fraction of debt in the owner's capital
structure (book value).
Capital = the sum of the stockholders' or owners'
net equity, preferred stock and long-term
• debt accounts at book value.
DEP = the net after tax cash flow in year j resulting
j , from depreciation of the initial investment.
d = the fraction of original asset value depreciated
j in year j.
DIV = the dividend payment.in year j on the preferred
j stock used to finance the initial investment.
E =• the discount rate.
El ' = the amount of cash provided by equity
investors to finance the initial investment.
F = the fraction of preferred stock, (at book
value) in the owner's capital structure.
I = the annual rate of inflation for pollution
control expenditures.
INT = the interest payment cash flow (after the
j effect of taxes) in year j on the debt used
to finance the initial investment.
II = the initial investment in pollution control
equipment; the amount which will be capitalized
on the books of the firm and amortized over
the life of the equipment.
ITC = the investment tax credit.
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30
j, k = indices, usually indicating the year or
quarter in which a cash flow occurs.
L = the period of delayed compliance.
M. = the operating and maintenance expense in
3 year j.
N = the useful life of the pollution control
equipment.
n ' = the depreciation life of the pollution control
equipment.
P^ = the penalty payment to be made at the begin-
ning of quarter k.
PV = the present value of a cash flow.
PREF.: = the repayment or reallocation of debt in
year j.
Q . = the fraction, of common equity (at book value)
in the owner's capital structure.
RTAI_ = the annual rate of interest on long-term
iNT debt.
= the investment tax credit rate.
= the marginal income tax rate' (tpED is the
marginal federal rate and ts&L is the
marginal state and local rate!.
W. = the fraction of common stock held by
i 3 . shareholder j.
Y = the statutorv investment tax credit rate.
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31
APPENDIX. B
INVESTMENT TAX CREDIT QUALIFICATION
Only certain assets qualify for 'the investment tax
credit, a notable exception being most buildings. If the
installation of pollution control equipment involves expendi-
tures which will be capitalized and amortized over the tax
life of the equipment, but which do not qualify for the
investment tax credit, the calculation of the credit must be
adjusted.
Let Iqual ke t^ie investment which qualifies for the
investment tax credit and let Inon be capitalized expendi-
tures not qualifying for the credit. (^cmal + Xnon = IIf
the initial investment) . If the investment tax credit rate
specified in the Internal Revenue Code is Y percent, the
adjusted rate for use in the noncompliance penalty calcula-
tion is:
tITC = T3ual * y
An adjustment must also be made i.f the pollution control
equipment has a tax life of less than seven years. Values
of "Y" in these cases are given by:
Depreciable Life Y
(years) (Percent)
Less than 3 0 -
At least 3 but less, than 5 3.33
At least 5 but less than 7 6.67
7 or more 10.00
-------
. 32
APPENDIX C
DEPRECIATION
The cash flow resulting from depreciation is given
by:
DEP . = d * II * t
D j TR
where d. is the fraction of the original cost depreciated in
year j and t,.,^ is the marginal income tax rate. The value of
dj^ will depena on the method of depreciation used by the owner
or the facility. Formulae for the more common methods are
shown.
Straight line. Under this method, depreciation is
the same during each year of the equipment's tax life (n) .
Sum of years digits. Under this method, depreciation in
year j is given by:
d = 2 * (n-j+1)
j n * (n+1)
Double declining balance. Under, this method, depreciation
in any year is the product of the remaining book value and
twice the straight line rate. Switching to the straight line
method is permitted after part of the asset has been depreciated.
This switch, properly timed, increases the present value of the
depreciation tax shield. The formula for double declining
balance depreciation in year j is:
(1 - S
k=0
a. = max
j-l
(1 - Z d.)
k=o ^'
where "max" means that the rr-»at-_pr of the tt-.'o qu3.r.-
right of the bracket should be chosen.
-------
33
Rapid Amortization. A'firm generally empolys a
depreciation method which minimizes the present value
of its future accelerated depreciation methods, the most
common of which are described above. Special rules
governing the depreciation of pollution control equip-
ment allow even faster write-offs than the accelerated
methods, often resulting in still greater reductions
in the present value of future tax liability. This
approach, known as rapid amortization, was provided for
in the Tax Reform Act of 1976.
The rules of rapid amortization are as follows:
Divide the investment into'two parts:
i the .amount which would be depreciated
during the first 15 years under straight
line depreciation, and
ii the residual.
The first part may be depreciated on a straight
line basis over 5 years.. Only one-half of the
normal investment tax credit may be taken on
this part*
The second part may be depreciated over the full
" tax life of the investment using whichever
depreciation method the owner chooses. The full
investment tax credit may be taken on this part.
The formula for the fraction depreciated in year
j is most easily developed by considering the two parts
.separately. The fraction in year j for the first part is
given by:
dl = L * f
3 -5
where: 15
n
f = min 1.0
The fraction of the second part depreciated in
year j is given by the formula shown above depending on
the method used. This must be multiplied by (1-f), the
fraction of the initial investment in the second part.
d. = (1-f) * (standard fraction given above)
The depreciation fraction for year j under rapid
amortization is then given by summing the two components:
d. = d^- 4- d2
-------
34
APPENDIX D
TAX RATE ADJUSTMENTS
The calculation of the economic benefit of
noncompliance requires use of the firm's marginal income
tax rate. For most large corporations operating in states
with no state income tax, this figure would be 48 percent.
However, state income taxes on a non-corporate form of
organization complicate the matter. This appendix dis-
cusse's the adjustments necessary to deal with these two
factors.
State and Local Income Taxes
Firms in some locations are subject to income
taxation by more than one level of government. If state
and local income taxes are deductible on the federal return,
the rate of taxation on income t^, must be computed accor-
ding to the following procedure:
Let tpED.be the federal marginal tax rate and
tS$L be tiie raar9:i-nal rate on state and local returns. Taxes
paid to state and local governments are deductible expenses
on the federal return. Hence, this after-tax rate is given
by:
* (1-tpED)
The overall tax rate is the sum of federal and state and
local effects. It is given by:
4- — -h • 4- +• * M -f- 1
^TR. CFED S&L \-L~1-FED'
It is possible that certain local income taxes
will be allowed as deductions when state income taxes are
computed. In such cases, t_ 'is given by:
O 6tJ_i
= tS + tL * (1-tgO
The assumption used in employing the tax rate,
and its components, tpEn and tg&L/ was that these rates
represent the marginal income tax rates applicable to the
owning source. If there is. more than one owner, as might
be the case if the source were a partnership or a Subchapter
3 curporation, the rate used, in calculating the economic
benefit of delayed compliance should be a weighted average
of the rates appropriate to each owner.
-------
35
The formula for either t or t would then be
given by: FED S&L
^ - -r -_
1-1 22
W t + W t + +' W
K
= I \\
. k=l
where:
t = the weighted average marginal income tax rate.
W,= the fraction owned by the k owner.
th
t, = the marginal income tax rate of the k owner.
K = the number of owners.
-------
36
• APPENDIX E
SAMPLE CALCULATION OF ECONOMIC BENEFIT
To illustrate the calculation of economic benefit of
delayed compliance the following sample is provided for
a .hypothetical discharger in the following economic
situation:
Delayed Capital Cost of Pollution
Control Investment
Annual O&M Cost of Delayed Pollution
Control Investment
Investment Income Tax Credit
Marginal Income Tax Rate (Combined
state and federal)
Inflation Rate for Pollution Con-
trol Investment
Discharger's Interest Rate on Bor-
rowed Capital (long-term debt)
Equity Share of Discharger's
Total Investment
Preferred Stock Share of Source's
Total Investment
Depreciation Method Used
Depreciable Life of Equipment
Useful Life of Equipment
Overall After-Tax Rate of Return
on Discharger's Book Equity
Period of Delayed Compliance
Period of Time from Beginning of Delayed
Compliance to Time Penalty is to hs»
O*a 4-«a f in TTI^/^ == M/^-M *a a e eiiTn«a O
-------
37
A. Cash Flows Over the Useful Life of the Pollution
Control Investment that Should Have Been Made.
The first step in the calculation of the economic
benefit of delayed compliance is the identification of all
cash flows (including both direct costs and indirect finan-
cial impacts) that would have occurred over the useful life
of the pollution control equipment that should have been
constructed or installed (including the initial capital
investment, those cash flows associated with financing the
balance of the capital cost of the investment, and those
associated with the operation and maintenance of that
equipment).
The following table identifies those cash flows for 'the
hypothetical situation described by the values assigned
above to the parameters .used to determine the economic bene-
fit of delayed compliance. The footnotes that accompany the
table indicate how the financing assumptions described above
are used to calculate these costs.
-------
A. CASH FLOWS OVEU THE USEFUL LIF13 OF'THE POLLUTION CONTROL INVESTMENT THAT SHOULD HAVE BEEN HADE
Invest- Interest Total
Annual ment Balance Debt on Deduction Total Total
Year Depre- Book on Pay- Debt Annual Related to Tax Operating Cash
(End) elation Valuu Debt 1) ment 3) Balance O6M 0) Investment-!) Savings 5) Expense 6) Flow 7)
1
2
3
4
5
(i
7
ft
9
10
14,286
14,286
14,206
14,286
14,286
14,286
14,284
-
-
-
100,001)
85,711
71,421)
57,142
42,055
28,57:)
14,28)
-
-
-
-
40,000
34,286
28,572
22,858
17,144
11,430
5,716
-
. -
-
-
5,714
5,714
5,714
5,714
5,714
5,714
5,716
-
-
-
2,800
2,400
2,000
1,600
1,200
800
400
-
-
-
15,900
16,854
17,865
18,937
20,073
21,278
22,554
23,908
25,342
26,863
32,986
33,540
34,151
34,823
35,559
36,364
37,240
23,908
25,342
26,863
16,493
16,770
17,076
17,412
17,780
18,182
18,620
11,954
12,671
13,431
10,700
19,254
19,865
20,537
21,273
22,078
22,954
23,908
25,342
26,863
50,000 2)
7,921
8,198
8,504 '
8,840
9,208
9,610
10,048
11,954
i
12,671 t
13,431
11) The discharger's debt/equity ratio is assumed to remain constant. Accordingly, the.$100,000 Investment is
financed by using $60,000 of firm capital and by borrowing $40,000.
;>) The initial cash flow, at the beginning of year one, is the $60,000 of the source's capital, less an Investment
tax crecUt of. $10,000.
3) It iti assumed that the iebt is repaid over the depreciable life of the pollution control investment.
4) Total deductions relate! to Investment = Annual O&M + Depreciation + Interest on Debt Balance.
5) Tax Savings = Marginal Income Tax Rate X Total Deductions Related to Investment.
ft) 'total Operating Expense - Annual O&M t Interest on Debt Balance.
7) Net Cast) Flow - Operating Expenses t Debt Repayment - Tax Savings
8) Annual CfcM Cost is inflated at rate equal to overall Inflation Rate.
NOTE: Figures may be sllglitly off due to rounding error.
-------
39
B. Present Value of Pollution Control Equipment Costs
that Should Have Been Incurred
The next step in calculating the economic benefit of
delayed compliance is the calculation of the present value
of the annual cash flows that should have occurred over the
useful life of the pollution control equipment.
Year
(End)
1
2
3
4
5
6
7 "
8
9
10
Net
Cash
Flow
50,000
7,921
8,198
8,504-
8,840
9,208
9,610
10,048
11,954
12,671
13,431
Discount
Factor 9)
1.000
.909
.826
.751
.683
• .621
.564
.513
- .467
.424
.386
Present Value
of Net Cash
' Flow
50,000
7,201
6,775
6,389
6,038
5,718
5,425
5,157
5,577
5,374
5,178
108,831 :
'The total present value of the cash flows that should
have occurred over the useful life of the pollution control
equipment is then converted into the total present value of
all cash flows that will occur during that useful life period
and during all future replacement cycles. This may be done
using the formula described in section VI, on page 26, above.
9) Equal to 1/(1 •*• rate of return on equity) Year
-------
40
Value (in year Present
year indicated) Value of
Year
(End)
0
10
20
30
40
50
0
0
0
Inflation
Factor 10)
1
1.79
3.21
5.74
10.29
18.42
o •
0
0
of the next re-
placement cycle
108,831
194,900
349,036
625,070
1,119,405
2,004,684
0
0
0
Discount
Factor 11)
1
.386
.148
.057
.022
.008
0
0
0
the next
Replacement
Cycle
108,331
75,142
51,882
35,822
24,733
17,077
0
0
0
Total Present
value of all
replacement
cycles 12) $351,577
10) Equal to ( 1 4- inflation rate) Year
11) Equal to I/ (1 4- rate of return on equity) Year
12) Given by formula described above in Section VI on
page 26. •
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41
C. Present Value of Pollution Control Costs
That Will Be Incurred.
The present value of the pollution control cash flows
that will result from the pollution control facility that
was or will actually be constructed may be determined by
the formula described above in section VI and page 27.
PV = PV _ '
DELAY PLE ( 1 + I ) •
( 1 + E )
- $351,577 ( 1 + 0.06 ) 3'
( 1 -h 0.10 )
PV
DELAY = $314,601
D. The Economic Benefit of Delayed Compliance
The economic benefit that" the source gaiaed through
its three years of delayed compliance is the difference
between the costs that it should have incurred ,to come
into timely .compliance and the lower costs that • it will
actually incur/i.e.,
Present value of cash
flows that SHOULD
have been incurred ' 351,5',77
Present value of cash
flows that WILL
actuallv be incurred 314,60,"
Economic Benefit of
Delayed Compliance $36,976
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INSTRUCTIONS FOR CALCULATING
CIVIL PENALTIES
DUE TO
DELAYED COMPLIANCE
March 1979
Environmental Protection Agency
Office of Enforcement
-------
INTRODUCTION
These instructions are intended to be used in con-
junction with the September, 1978, Civil Penalty Policy
Technical Support Document. Portions of that document
have been summarized to create this calculation "cookbook1
which stands on its own. However, you should still refer
to the Technical Support Document for amplified explana-
tions. Throughout these instructions, for the purpose of
convenience, the economic savings of delayed compliance
«
component of the civil penalty will be referred to as
the civil penalty. Please remember, however, that these
instructions relate only to that economic benefit compo-
nent.
Questions and suggestions on this paper should be
directed to:
Terri Bishop (EN 341)
Compliance Analysis Section
Compliance Monitoring Branch
Division of Stationary Source
Enforcement
-------
I. DATA NEEDED TO DETERMINE ECONOMIC SAVINGS OF PRIVATELY-
OWNED TAX PAYING SOURCES " '•
The information needed to determine the value of economic
**
savings due to delayed compliance includes (A) information
which confirms the period of time of non-compliance (in months)
and the period of time between the start of non-compliance and
assessment of the penalty (in months); (B) data associated
with the delayed pollution control investment; and (C) finan-
»
cial information related to the specific source. *•
A. AGENCY-RELATED INFORMATION REGARDING NON-COMPLIANCE
The period- used to measure economic savings should be
the period of time that required capital expenditures were or
will be delayed. In actions under the Clean Water Act, the
period should commence July 1, 1977, unless an earlier date
was required by the terms of the violator's discharge permit.
In the case of violators of the Clean Air Act, the period
should begin on August 7, 1977 or the earliest provable date
of violation, if that date is later. In both cases, the
period of delayed compliance should extend until full compli-
ance is or will be obtained; however, there is an exception
in the case of major stationary source Air Act violators
-------
that will be out of compliance beyond August 7, 1979. In
these cases, the period of delayed compliance should only
extend to August 1, 1979, when the mandatory, administra-
tively-imposed non-compliance penalties will "commence.
The method of measuring economic savings computes
that value as of the beginning of the period of noncorapli-
ance. Because this amount must be adjusted to its present
value as of the time of assessment, the period of time
between the beginning of the noncompliance period and the
time of penalty assessment must be determined.
In the sample case of Company X the non-compliance
period has been determined to be from 8/77 to
6/78 (10 months). The period between noncorapli-
ance and assessment of penalty has been determined
to be from 8/77 to 2/78 (6 months).
B. DATA RELATING TO THE DELAYED POLLUTION CONTROL
INVESTMENT
The following information related to the delayed
pollution control investment is required: (1) the deferred
capital investment cost; (2) the deferred annual O&M cost;
(3) the useful life of the control equipment; (4) its de-
preciable tax life; and (5) the annual rate of inflation
-------
4.
for such equipment and its operating and maintenance expenses
1. Capital Investment Cost: This consists of
«^
all capital expenditures that should have been made for
purchase and installation of the required pollution con-
trol equipment. It includes only those expenditures which
are normally capitalized and depreciated over the life of
the equipment.
\
If the violator, after having made approved invest-
ments in pollution control equipment, -remains in violation
due to inadequate or ineffective equipment, then there is
no inappropriate deferral of capital expenditure. Where
the expenditures were not made with the approval of en-
forcement officials or were not reasonably calculated
by the source owner to achieve compliance, then the deferred
capital amount should be based upon the expenditures that
will be required to achieve compliance.
When several types of equipment can be used to achieve
compliance, the civil penalty should be based on the cheap-
est, since this is the cost avoided.
-------
The capital values used to determine the economic
savings of delayed compliance should be the values that
existed as of the beginning of the delayed compliance
period. It is therefore important to relate "any cost
figures to the dollar value of the equipment at the
beginning of the noncompliance period.
The equipment in the case of Company X
is a wet scrubber. One million, two hundred
thousand dollars ($1,200/000) is the cost of
the equipment as of the installation date
(6/78). Converting this cost to a value at
the beginning of the noncompliance period is
shown on page 2 of the Worksheet. The result-
ing amount is then entered on the Penalty Data
Sheet.
SOURCES:
1. Quotations from various publications
such as the MeIIvane Manual
2. Ouotes from vendors
3. Engineering estimates
4. Headquarters (Enforcement Office)
-------
2. Operating and Maintenance Expense. This is
an estimate of the annual cost of operating and maintain-
ing the required pollution control equipment (excluding
i*.
annualized interest). It must be expressed in terms of
the amount of operations and maintenance expense avoided
in the first year of noncompliance. There is a provision
in the formulation which automatically adjusts future
years' operating and maintenance expense for anticipated
inflation.
In the case of Company X, the operations and
maintenance cost for the scrubber has been
entered on the Penalty Data Sheet as 10% of
the capital cost.
SOURCES:
Same as Capital Investment Cost
3. Useful Life. This is the expected number of
years which the pollution control equipment can be operated
before it must be replaced.
-------
In determining useful life of control equipment,
use the asset guideline period for the appropriate industry
as given in Revenue Procedure No. 77-10.
««.
The useful life for Company X is IS years.
SOURCES:
1. The Company
2. I.R.S. Revenue Procedure 177-10
4. Tax Life. This is 'the minimum number of years
over which £ particular investment in pollution control equip-
ment may be depreciated.
A short tax life has an effect similar to that
of accelerated depreciation. It serves to move forward in
time the benefit of depreciation, thus increasing the present
value of its benefit. Reducing the tax life therefore reduces
the cost of compliance and lowers the savings from noncompliance,
-------
(NOTE: Both useful and tax life must be integers.
If rounding is required, round up for use-
ful life and down for tax life. This errs
slightly in favor of the source.)
The tax life or depreciable life for Company X has
been entered as 12 years. This figure represents
the lower limit of the asset depreciation range for
Company X's industry.
SOURCE:
1. The Company
2. I.R.S. Revenue Procedure £77-10
5. Inflation Rate. This is the annual rate at
which both capital and operating and maintenance costs are
expected-to grow over the useful life of the equipment.
These cost increases are the result of various factors
affecting supply and demand for particular products, as well
as general inflationary pressures in the economy.
The future rate of inflation shall be estimated
as an average of inflationary trends in recent years. In-
flation rates specific to pollution control equipment or
-------
similar products would be appropriate. Lacking equipment-
specific data, it is acceptable to use the recent 5 year
average inflation rate for plant construction, as identi-
fied in Chemical Engineering magazine.
The average annual inflation rate for Company X
for 1972 through 1977 is 8.3 percent. It was
calculated on Page 2 of the Worksheet and then
entered on the Penalty Data Sheet.
SOURCES:
1. Chemical Engineering's Annual Index
(summary attached)
2. Equipment-specific annual index
C. FINANCIAL DATA RELATED TO THE VIOLATOR
The following information related to the violator's
financial status is required: (1) stockholder's equity;
(2) capitalization; (3) the violator's rate of return on book
equity; (4) the violator's equity, preferred stock, and debt
shares of the investment; (5) his combined marginal federal
and state income tax rate; (6) his method of depreciating
-------
10.
pollution control equipment; (7) his federal investment tax
credit for pollution control equipment; (8) the interest '
rate that the violator pays on his long-term debt; and (9)
the dividend rate paid on preferred stock.
The specific data relating to the violator's
financial condition that are needed to measure economic
savings are the anticipated values of these factors over the
useful life of the pollution control investment that was
delayed. A good approximation of these factors is usually
found by taking the average values which have occurred over
the recent years, except when those values are clearly a-
typical. For example/ if the recent rates of return on
book equity have been small or even negative, those values
should not be used. In such cases, it is obvious that the
violator would expect to be able to make a profit in future
years or it simply would not make economic sense to remain
in business. In these instances, the average rate of return
for the appropriate industry should usually be used.
1. Stockholder's Equity. This is that portion
of the violator's assets against which the stockholders have
claim. It is the sum of the capital stock contributed by
the stockholders as permanent capital, plus retained earnings
-------
11.
(total cumulative earnings less amounts distributed to stock-
holders as dividends), plus capital surplus (all other addi-
tions to common equity that do not represent earned surplus),
minus treasury stock (capital stock which has" been issued and
paid for in full and later reacquired by the issuing corpora-
tion as a result of a purchase or donation).
The.stockholder's equity for Company X has been
computed from the sample data for Company X on
page 1 of the Worksheet.
SOURCES:
1. Financial statement from Moody's
2. Annual Reports filed with S.E.C.
3. Violating firm
2. Capitalization. Capitalization is the sum of the
violator's long-term debt (liabilities such as mortgage notes
payable and bonds that will not mature for a comparatively
long period of time, usually more than one year), plus its
preferred stock and its stockholders' equity.
-------
12.
The capitalization figures for Company X were taken
from its financial statements as shown on Page 1 of
the Worksheet.
SOURCES:
1. Financial statement from Moody's
2. Annual reports filed with S.E.C.
3. Violating firm
3. Rate of Return on Book Equity. This is the rate
(expressed as a decimal fraction) which will be used as a
basis for discounting future years' cash flows. Such.discount-
ing is necessary to convert cash flows occurring in different
years to present values.
The discount rate may be thought of as the return
available on alternative investments which the owner may make.
Viewed this way, the greater the discount rate — the greater
is the opportunity gained when investment in pollution control
equipment is delayed, and hence the greater is the benefit of
delayed compliance. The discount rate is normally estimated
by the firm's rate of return on equity (equal to its after tax
-------
13
profit, net of preferred, divided by the stockholders'
equity). An alternative basis for estimating a company's
available return on equity is the 2-
-------
14.
Debt.share of investment is the portion of long
term financing provided by other lenders. It is equal to
long term deist divided by capitalization.
**
Equity is typically the most expensive form of
long-term financing. Therefore, the greater the share of
equity, the greater the total cost of financing. This, leads
to increased savings from delaying compliance.
Debt is typically the least expensive form of
long-term financing. Therefore, an increase in the debt share
*
leads to decreased savings from delay in compliance.
Preferred stock normally has the smallest share
of long term financing. It is generally less expensive than
common equity financing but more expensive than debt. If
the preferred stock share increases, the effect on savings
from delaying compliance depends on how the debt and common
equity shares are affected.
The equity, debt, and preferred stock shares of
investment for Company X were taken from the
sample data, computed on the Worksheet and then
entered on the Penalty Data Sheet.
-------
15,
SOURCES:
1. 3-5 year average from Moody's
2. Annual reports
3. F.T.C.'s Quarterly Financial Report
4. Headquarters (Enforcement Office)
5. Violating firm
5. Marginal Income Tax Rate. This is the fraction
of the last dollar of taxable income which must be paid by
the owner to federal, state and local governments. It is the
amount by which taxes would increase if taxable income were
to increase. It is different from the average tax"rate (i.e.,
the total tax divided by total taxable income). For a source
subject to the maximum federal tax rate of 0.43, one may
determine the amount of state tax included in the combined
rate by multiplying the state tax rate times (1 minus .48).
The combined marginal tax would then be that portion of the
state tax included, plus the .48 required by federal statute.
The marginal income tax rate is included in the
formulation because it in essence represents the share of
certain expenditures which are borne by the government. For
example, operating and maintenance expenses are ordinarily
-------
16.
deductible expenses, hence they reduce the amount of the
violator's income that is subject to tax. The greater the
tax rate/ the greater is the corresponding savings in tax
liability for a given amount of operations arid maintenance
expense. Similarly/ depreciation of capital assets reduces
taxes because it reduces the amount of pre-tax income, subject
to taxes. As with operations and maintenance expenses/ the
greater the tax rate the greater the reduction in tax liabi-
lity for a given size depreciation expense. Since tax
savings from deductions of both operating expenses and depre-
ciation is greater with a higher tax rate, the effect of a
higher rate is to reduce the cost of compliance.-
Company X 'is located in Alabama. Its marginal
income tax rate was taken from the Marginal
Federal/State Tax Rate Table (attached).
SOURCE:
1. Marginal Federal/State Tax Rate Table
6. Depreciation Methods. Depreciation is a mecha-
nism to allow the cost of the equipment to be distributed
systematically over its useful life. One effect of deprecia-
tion is to shield income from taxation by reducing pre-tax
-------
17.
income in the years following purchase of the equipment.
Accelerated depreciation results in a dispropor-
tionately large fraction of these tax savings* occurring in
the earlier years of an asset's life. It therefore increases
the present value of the tax shield, in effect reducing the
cost of the asset. Accelerated depreciation therefore leads
to reduced cost of compliance and reduced savings from non-
compliance .
For civil penalty purposes, the following de-
preciation methods are used:
a. The Straight-Line Method: The depreciation
is computed by dividing the original cost into equal amounts
over the equipment's tax life. This means that if the control
equipment cost $200,000 and it has a 10 year tax life, with
no salvage value, there will be a yearly depreciation of $20,000
($200,000 divided by 10).
b. The Double-Declining Balance Method; This
depreciation is computed by charging a constant percentage
against the undepreciated balance each year. That fraction
is equal to twice the straight line rate. In addition, at
-------
18.
some point the depreciation may be shifted to a straight-line
basis to write off the remaining book value.
To illustrate this depreciation method/ assume
that the same $200/000 equipment with a 10 year tax life is
depreciated using the double declining balance method.
Year
1
2
3
4
5
6
7
8
9
10
Book Value
Beginning
of Period
Annual
Depreciation
Book Value
End of
Period
$200/000
$160,000
$128,000
$102,400
$ 81,920
$ 65,536
$ 52/429
$ 39/322
$ 26,215
$ 13/108
c. The
$40,000
$32,000
$25,600
$20,480
$16,384
$13,107
$13/107
$13,107
$13/107
$13/108
Sum-of-the-Years-Diaits
$160,000
$128,000
$102,400
$ 81,920
$ 65/536
$ 52,429
$ 39,322
$ 25,215
$ 13/108
-0-
Method: This dt
preciation is computed by summing the years' digits and making
a fraction by using the total as the denominator and each year's
digit (beginning with the last year) as the numerator to
depreciate the cost of the equipment. A piece of equipment
with a ten-year life would be depreciated by summing the •
years' digits (1+2+3+4+5+6+7+8+9+10 =» 55 - the denominator).
-------
19.
The depreciation for the first year would then be 10/55, the
next year 9/55, then 8/55....etc. of the cost of the equip-
ment.
w
Where the useful life of the equipment is
relatively long, the denominator may be calculated with the
following formula, where N is the number of years of useful
life:
(M-4
X N = denominator
For example, if the useful life of the equip-
ment were 10 years:
X 10 • 55
The following illustrates the use of this
method with the above example:
Year
1
2
3
4
5
6
7
8
9
10
Fraction
10/55
9/55
8/55
7/55
6/55
5/55
4/55
3/55
2/55
1/55
Depreciation
5 36,364
32,727
29,091
25,455
21,818
18,182
14,545
10,909
7,273
3,636
-------
20
SOURCE:
1. The Violating Company
7. Investment Tax Credit, This is a reduction in
federal income taxes that results from making qualified cap-
ital investments. The investment tax credit is, in effect/
a tax rebate given on the purchase of qualified depreciable
equipment. However, instead of giving.the investor the
rebate in cash, the Treasury lets the investor take the
credit as a direct reduction of the tax he owes; Thus, if in
1979 the firm's qualified investments amounted to 5150,000,
the firm would serid IBS $15,000 less in taxes than it other-
wise would. The investment tax credit is set by statute at
10%.
The investment tax credit is included in the
formulation because it has the effect of reducing the cash
outflow required to purchase the pollution control equip-
ment. Thus, the higher the investment tax credit rate, the
lower the cost of compliance and the lower the amount saved
by noncompliance.
-------
21.
The investment tax credit for Company X is 10%,
SOURCE:
1. I.R.S. Code, Chapter 1, Subpart B -
Rules for Computing Credit for Invest-
ment in Certain Depreciable Property.
8. Interest Rate. This is the rate of interest which
would be paid by the owner if additional debt were to be acquired.
Like the rate of return on common equity, the
interest rate represents the cost of part of the funds used
to finance the pollution control equipment. The greater
the intarest rate, the greater the cost of compliance and the
greater the savings from noncompliance.
Lacking a specific long-term debt issue by
the violator within a year of the beginning of the period of
noncompliance, use an interest rate based on the bond rating
assigned the company's most recently issued bonds by Moody's
rating service.
The interest rate for Company X (taken from the
sample data) has been entered as 3%.
-------
SOURCES:
Company-specific debt obligations from
Moody's or similar financial sources
Interest for ,"A" rated corporate bonds"
as given in Moody's.
22,
9. Preferred dividend rate. The method used for
determining the preferred dividend rate is identical to that
used to select the interest rate. The quality rating of the
firm's preferred shares is found in Moody's Bond Record in the
Preferred Stock section. If the stock is not rated, an "a"
rating is assumed.
Average yields are reported for only "aa", "a",
and "baa" preferred stocks issued by utilities. However,
these figures should be used for non-utilities as well. If
the stock has a rating of "baa" or lower, use the "baa" average
yield. Preferred rated "aa" or higher should use the "aa"
yield.
Company X has no preferred stock.
SOURCE:
1. Moody's Bond Record
-------
23,
II. CALCULATION OF ECONOMIC SAVINGS OF VIOLATORS OTHER
THAN PRIVATSLY-OWNED, TAX PAYING SOURCES~~
Appropriate data for calculating the economic savings
of violators that are not privately owned business organi-
zations subject to the federal income tax will have to be
individually considered. Generally/ economic savings for
such sources can be determined by treating the pollution
capital expenditures as ones that would have been paid for
entirely by using long-term debt. Accordingly, the only
financial data generally needed for such violators are:
1) the source's interest rate on its long-term
debt;
2) the percentage rate of return on investment
actually used by the source to evaluate
alternative investments (i.e., the rate
analogous to a private company's rate of
return on book equity);
3) the capital investment cost and the annual
cost of the operation and maintenance expenses
that were avoided;
4) the useful life of the pollution control
equipment that was deferred; and
5) the inflation rate associated with the
pollution control equipment that has been
delayed
6) tax credit =» 0
7) tax rate = 0
-------
WORKSHEET
1976
1975
1974
1973
1972
STOCKHOLDERS' EQUITY = Capital Stock par value
+ Retained earnings ' +
+ Capital surplus +
- Treasury stock
Stockholder's equity =
CAPITALIZATION = Long term debt
•f Preferred stock -»-
•f Stockholders' Equity +
*
Capitalization =
$ 19,869
108,401
66,632
123
194,779
$ 19,869
95,231
66,632
123
181,609
$ 19,869
94,469
66,632
123
180,847
$ 19,069
82,019
66,632
123
168,391
$ 19,869
79,511
66,626
123
165,883
SOURCE: Sample Data for Company X
$ 65,429
0
194,779
260,208
$ 29,000
0
181,609
210,609
$ 33,000
0
180,847
213,847
$ 40,693
0
168,391
209,084
$ 62,990
0
165,803
228,873
SOURCE: Sample Data for Company X
RETURN ON EQUITY = After tax profits - Pref. Stock
Stockholders * Equity ~
RETURN =
Industry's Avg. Source's
or SIC Average Return = .1386
EQUITY SHARE OF
INVESTMENT = Stockholders' Equity
Capitalization
Average Equity Share = .7968
$ 32,999
194,799
- .169
SOURCE? Sa
$194,779
260,208
= .748
$ 38,438
181,609
= .211
mple Data I
$181,609
210,609
= .862
$ 35,451
180,847
= .196
cor Company
$180,847
213,847
= .845
$ 13,458
168,391
= .079
X
$168,391
209,084
= .805
$ 6,430
165,883
= .038
$165,883
228,873
= .724
SOURCE: Sample Data for Company X
-------
1976
1975
1974
1973
1972
SHARE OF INVESTMENT = Long Term Debt
Capitalization
Average Debt Share - .2032
$ 65,429
200,208
= .252
$ 29,000
210,609
= .138
$ 33,000
213,047
= .155
$ 40,693
209,084
= .195
$ 62,991
228,87
= .276
SOURCE: Sample Data for Company X
PREFERRED SHARE OF INVESTMENT = Preferred Stock
Capitalization
Not Applicable
(Would be computed in same manner as equity)
share
INFLATION FACTOR
1977 index = 204. 1 _ ,
1^2 index TTTt ~ 1'
Average annual inflation rate = (Inflation factor)*'-* = 1.083
= 8.3 percent
Monthly inflation rate = (1.083)1/12 = 1.0066
= 0.66 percent
CONVERT CAPITAL COST TO DOLLARS AS OF FIRST DAY OF NONCOMPLIANCE
Deflated Cost
(1
_ Actual Cost _
Monthly Inflation Rate)'101111111™111?"
1,200,000
(1 -i- .0066)10
1,200,000
1.0684
1,123,138
-------
CIVIL PENALTY DATA SHEET
SOURCE NAME/LOCATION:
Company X/Alabama
PROCESS:
CAPITAL COST:
ANNUAL 0 & M:
DEPRECIABLE
LIFE (YRS):
USEFUL LIFE
(YRS):
MONTHS OF
VIOLATION:
MONTHS TO
SETTLEMENT:
PENALTY AMT:
Scrubber
$1,123,138
S 112,314
12
13
10
6
$ 92,480
COMMON FINANCIAL PARAMETERS
Tax Credit Rate » .1
Federal & State Income Tax Rate = .506
Inflation Rate = .083
Rate of Return on Equity « .14
Interest Rate = .08
Preferred Dividend Rate a o
Equity Share of Investment = .7968
Preferred Stock Share = o
Debt Share = .2032
Depreciation by Sum of Years Digit
Standard Amortization
-------
TAX
1978
Cmanret .-mil..., __ ,, MARGINAL
STATE STATE TAX FEDERAL TAX TAX RATS
Alabama 5% 4fla ~ne,
Alaska 18* 4438% -f°f6
Arizona 10.5 48 534!
Arkansas 6 48 - 5112
California 9 48 52fil
Colorado 5 48 ' *|o6
Connecticut 8 4S s-jV*
Delaware 7.2 4| '""
Dis. of Col. 8 48 'file
£10rida 5 48 *fo6
Georgia 6 43 -?r°
- Hawaii 6.435 43 'Ittfi
Idaho 6.5 41 -|"|
Illinois 4 ?| 'f™
T_j.-,_, , 48 .5008
Indiana 3 48
Iowa 10 J| -'If6
Kansas 5 48 -f~
Kentucky 5.8 43 5^,
Louisiana 4 - 48 *500a
Maine 7 4| -JJJJ
Maryland 7 4| -|J|J
Massachusetts 7.5 43 '|,q
Michigan 7.3 43 '|;rfi
Minnesota 12 48 -|"J
Mississippi • 4 43 SOOa
Missouri 5 43 -|°°8
Montana 6.25 43 5.°?.
Nebraska 2.75 43 494!
New Hampshire 7 43 "efr^
New Jersey 5.50 48 'Inlfi
New Mexico 5 43 '|°|6
New York 9 48 5263
North Carolina 6 . 43 "Ji??
North Dakota 6 43 •?,,,
Ohio 8 4J .-|"|
Oklahoma 4 43 :"J|
Oregon 6 43 '|???
Pennsylvania 9.5 43 „£?
Rhode Island 8 43 '?;fj
South Carolina 6 43 •!,,?
South Dakota 5.50 48 'Insl
Tennessee 6 ' 43 *f?lf
rT*-ah /r . 31X*
Ll-an ° 48 S717
Vermont 7.5 43 'f^2
Virginia 6 43 -|"
west Virginia 6 43 'J,1"
Wisconsin 7.9 43 '|rf*
• J A ^» v.
-------
INFLATION RATE INDEX
FOR
CHEMICAL ENGINEERING PLANT COS:
ANNUAL INDEX
1970
1971
1972
1973
.1974
1975
1976
1977
1978
SOURCE:
125 . 7
132.2
137.2
- • *
144.1
165.4
182.4
192.1
204.1
213.8
Chemical Engineering
-------
FEDERAL TRADE COMMISSION RETURN ON EQUITY STATISTICS
(Percent)
w
Industry Five-year Average (1974-73)2
All Manufacturing Corporations 13.9
Nondurable Manufacturing Corporations 14.4
Pood and Kindred Products . 14.0
Tobacco Manufactures 16.6
Textile Mill Products _. . 8.1
Paper and Allied Products 13.9
Printing and Publishing • 15.2
Chemicals and Allied Products 15.9
Industrial Chemicals and Synthetics1 14.5
Drugs1 13.5
Petroleum and Coal Products 14.9
Rubber and Miscellaneous Plastic Products 11.2
Other Nondurable Manufacturing Corporations 13.0
Included in major industry above.
2Data for 1978 includes first three quarters only. Quarterly
statistics can be found in the Federal Trace Commission's
Quarterly Financial Report.
-------
-2-
Industry Five-year Average (1974-78)2
w
Durable Manufacturing Corporations 13.3
Stone, Clay and Glass Products 12.1
Primary Metal Industries 9.4
Iron and Steel1 9.3
Nonferrous Metals1 3.3
Fabricated Metal Products 15.3
Machinery, Except Electrical . 15.2
Electrical and Electronic Equipment 12.8
Transportation Equipment ' 13.0
Motar Vehicles and Equipment1 13.1
Aircraft, Guided Missiles and Parts1 13.2
Instruments and Related Products 15.8
Other Durable Manufacturing Corporations 13.5
Included in major industry above
for 1978 includes first three cuarters only. Quarterly
statistics can be found in the Federal Trade Commission 's
Quarterly Financial Report.
-------
INSTRUCTIONS FOR USING THE PROGRAMS TO CALCULATE ECONOMIC SAVINGS
There are two programs available for calculating the economic
savings component of the civil penalty. The first, CIVPEN, is
intended to be used largely for illustrative calculations and
in response to requests for copies of the program. CIVPEN is
written in the FORTRAN computer language and is designed to
correspond closely to the September 1978 Technical Support
Document for the Civil Penalty Policy.
•
The second program, CPREPEAT, performs the same calculations as
CIVPEN but allows multiple calculations without having to re-
enter all parameters. That is, it is possible to calculate
economic savings using one set of numbers and then make new
calculations by changing only as many input parameters as desired.
Creating this flexibility for the user required adding substantial
complexity to the program. It is therefore suggested that copies
of this program not be released.
CIVPEN
1. Sign on EPA's WCC computer system.
2. Type EXEC CIVPEN:EPABOH (key return). The system
will print: Job submitted, job started, and
request the first data input, INITIAL CAPITAL
INVESTMENT^, -in the next several seconds or
minutes, depending on user demand.
Additional questions will follow each data input
(and "return"). Caution; When user demand is
high, response time can be very slow. Be certain
the computer has given you your complete prompt
before answering input questions. A prompt is
generally a two digit alpha-numeric job identifier
and a question mark (e.g., 2B?).
When a percent is called for, it should be entered
as a decimal. For example, an interest rate of 9
percent would be entered as .09.
3. To make a copy of the program, type LOAD CIVPEN:EPABOH
(key return) and then type LIST (key return). A
complete listing will take approximately 10 minutes.
TCS Financial Consultants
-------
-2-
Instractions (cont.)
CPREPEAT
Sign on EPA's WCC computer system.
Type EXEC CPREPEAT:EPABOH (key return). The system
will print: Job submitted, job started, and request
the first data input, INITIAL CAPITAL INVESTMENT*,
in the next several seconds or minutes, depending
on user demand.
Additional questions will follow each data input
(and "return"). Caution; When user demand is high,
response time can be very slow. Be certain the
computer has given you your complete prompt before
answering input questions. A prompt is generally
a two digit alpha-numeric job identifier and a
question mark (e.g., 2B?).
When the calculations have been completed and the
results printed, the computer will ask how many
changes are to be made. Typing in a C (zero) causes
the program to stop. Typing in a number from 1 to
12 causes a series of questions to be asked con-
cerning the item number to be changed and its new
value. Asking for more than 12 changes will cause
the program to request all 17 input parameters.
Typing in 999 will result in a list of all current
variable values being printed.
Caution: Changes are cumulative. That is, if you
change the value of a parameter, the old value is
lost. You must therefore be careful to keep track
of the current values of each'of the parameters as
you make changes. After you have made several
changes, it is wise to have a current list printed
by typing 999 as described above.
TCS Financial Consultants
-------
'NiTED STATES ENVIRONMENTAL PROTECTION AGENCY"
WASHINGTON. O.C. 2C-lcQ
- UAV 9 ?
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. 3.C. 20-cO
2 8 1330-
MEMORANDUM
SUBJECT: Statements by Agency Personnel Purporting to
Sanction Source Actions Which Are Inconsistent
With Statutory Requirements
TO: Regional Administrators
Regions I-X
This memorandum restates EPA policy against making any
formal or informal commitment to refrain from taking enforce-
ment action against, or other-vise to sanction activities by,
sources that violate statutory or regulatory requirements
administered by the Agency. Unless the procedures contained
in the relevant statute, regulation or permit are followed,
•the policy generally forbids sanctioning the construction or
opera-ion of any source -without a required permit, or the
operation of any' source in violation of an applicable emission
or discharge limitation.
Failure to adhere to this policy may have effects that
reach beyond a specific source or Region. Any commitment not
to enforce a statutory requirement against a particular source
may severely hamper later enforcement efforts not only against
that source but also against other sources that may claim to be
similarly situated.
I recognize that exceptions may arise under this policy,
and that a' commitment may be appropriate in a very unusual case.
Because the need for national consistency in this area is
essential, any written or oral commitment on the part of a
Regional office not to take action under an Agency administered
statute must receive advance concurrence by the Assistant Admin-
istrator for Enforcement. If a Regional Enforcement Director
believes the Agency should make such a commitment, she or he
should first discuss the matter with the appropriate Headquarters
Deputy Assistant Administrator. This should normally be done in
the context of a written memorandum to the Assistant Administra-
tor, sen- to the attention of the appropriate Headquarters Deputy
Assistant Administrator, fully explaining all relevant facts.
-------
This policy does not change the manner in which the Agency has
dealt with bypass or upset situations affecting NPDES permittees,
or other situations covered by specific regulations. Upset and
bypass situations will continue to be handled by the Regional
Enforcement Division Director, or the Director of the State
agency, as set forth in 40 CFR §122.14(k)-(1). Please ensure
•that all appropriate members of yoxf staff rally understand this
oolicv..
cc:
Deputy Assistant Administrators
for Enforcement
Enforcement Division Directors
Reaions I-X
-------
CIVIL PENALTY POLICY
Note: This policy is dated July 8, 1980. EPA approved a new
Civil Penalty Policy on February 16, 1984. However, the water-
specific parts of the July 8, 1980 policy remain effective until
EPA develops a medium specific, water penalty policy.
-------
f \ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
'' ' WASHINGTON. D.C. 20460
OFFICE OF ENFORCEMENT
CIVIL PENALTY POLICY
JULY 8, 1980
For application of Section 309(d) of the Clean Water
Act and Section 113(b) of the Clean Air Act to
Certain Water Act Violators and Air Act
Stationary Source Violators
-------
TABLE OF CONTENTS
CIVIL PENALTY POLI.CY - CLEAN WATER ACT VIOLATORS AND
STATIONARY SOURCE VIOLATORS OF THE CLEAN AIR ACT
I. Preamble 1
II. Statutory Basis for Civil Penalty 3
III. Types of Violations to Which Policy
Applies 3
IV. Use of the Penalty Policy in Enforcement
Actions 5
V. Determining the Amount of the Statutory
Maximum Penalty and of the Minimum Civil
Penalty :• ... 7
VI. Determining the Minimum Penalty, Acceptable
for Settlement 9
* .
VII. Explanation of Factors Considered in
Determining Minimum Amount of Civil .
Penalty "10
A. Harm or Risk of Harm to Health or
the Environment .x . 10
B. Economic Benefit of Delayed
Compliance 11
C. Violator's Recalcitrance, Defiance,
or Indifference to the Requirements
of the Law . . 12
D. Extraordinary Costs of Enforcement
Action 12
E. Mitigation for Noncompliance Caused
•by the Government Itself 13.
-------
F.- Mitigation for Impossibility 13
G. Other Bases for Mitigation 14
H. Specified Clean Air Act Factors 14
VIII. . Approved Environmentally Beneficial
Expenditures in Lieu of Payment of
Penalty Sum to State or Federal Treasury
(i.e., "Credits Against Penalty") 15
A. Use of Credit to Satisfy or
Offset Penalty 15
B. Criteria for Acceptable Credits .... 16
C. Constraints on Federal Enforcement
Officials with Respect to Payment
of Penalties and Use of Credits in
Lieu of Penalties 18
D. Discretionary Nature of Credit 18
E. Consideration of After-Tax Effects
of Credit Expenditures 18
a *
IX. Penalty Postponement or Forgiveness Based
Upon Inability to Pay 19
X. Time Period for Application of Civil
Penalty Policy 20
XI. Application of Civil Penalty Policy to
Different Types of Sources - Private,
Public, Regulated Utilities, etc 22
A. Privately-Owned or Operated Sources
(other than Regulated Utilities) ... 22
B. Publicly-Owned Utilities and Investor-
Owned, Regulated Utilities 22
C. State and Municipal Facilities (Other
than Utilities) 23
D. Federal Facilities (Other than
Utilities 23
-------
XII. Federal-State Cooperation in Implementing
this Policy • 24
XIII. Effective Date of this Civil Penalty
Policy 24
XIV. Previous Civil Penalty Policy Superseded 25
-------
I. Preamble
The objective of this civil penalty policy is to assist
in accomplishing the goals of environmental laws by deterring
violations and encouraging voluntary compliance.
The elements of the policy reflect years of experience
by federal, state and local enforcement officials, adapted
to present conditions and needs. The policy has had the
benefit of much informed comment in meetings of federal, state,
and local officials in every region, in written comments, and
in a working group of federal and state enforcement officials.
The policy is based upon the main themes of the Clean Air
and Water Acts, in which Congress required all citizens, private
firms and public bodies to join in a common effort to restore
and maintain the quality of the nation's air and waters, and
to do so consistently in all parts of the country, in accordance
with statutorily mandated time schedules. The theme of national
consistency has been reinforced by the Clean Air Act Amendments
of 1977, which directed the Administrator of the Environmental
Protection Agency to promulgate regulations designed to assure
fairness and uniformity in implementing and enforcing the Act
by the EPA Regional Offices and the states (Clean Air Act,
Section 301).
The national, response to the Air and Water Acts is
encouraging. The overwhelming majority of citizens, private
firms and public bodies have met the deadlines and complied
with what was required of them. A minority have not. This
penalty policy will keep faith with those who joined the
common effort. It will help maintain the voluntary compliance
on which achievement of our environmental goals depends.
The Clean Air and Water Acts authorize civil penalties
up to stated maximums. This policy enunciates general principles
for determining appropriate penalties that the government will
seek in individual cases. It is based primarily on four
considerations—the harm done to public health or the
environment; the economic benefit gained by the violator;
the degree of recalcitrance of the violator; and any unusual
or extraordinary enforcement costs thrust upon the public.
The policy recognizes appropriate mitigating circumstances
or factors. Each of these penalty considerations and each of.
the mitigating factors is well founded in law and is consistent
with statutory requirements.
-------
-2-
While fulfilling its primary objective to deter violations
and encourage compliance, this policy has very significant
additional justifications and benefits as well:
A. The policy is fair:
1. in an ethical sense, because it
will assure that violators of the
law do not economically benefit
from their violation/
•
2. in an economic sense, because it will
assure that violators do not gain an
economic advantage over others who
incurred costs to obey the law, and
3. in a geographic sense, for it will
assure that no area of the country can
offer lenient enforcement as an advantage
to its industries or a lure to the industries
of other areas.
B. The policy seeks to improve the operation of the
market sector of our economy by more fully
imposing onto polluting firms costs otherwise
thrust upon the public. By internalizing more
of the social costs of producing goods or
services, it makes prices of goods or services
better reflect the resources used in their
production, and .allows the market system to
better allocate resources.
C. The policy seeks to compensate the public for
harm done to public health or the environment,
or for unusual or extraordinary enforcement expenses.
D. The policy seeks to make efficient use of govern-
ment resources by removing economic incentives to
violate environmental laws- thus maintaining high
voluntary compliance rates. Because there are
hundreds of thousands of pollution sources, even
a small decline in compliance rates brings major
new requirements for enforcement resources.
Because this policy is to be used by many federal, state
and lcco.1. snfcrcsmcnt officials throughout the country.- It has
been drafted in general form. It is a policy for determining
what civil penalties the government will seek when civil
actions are taken, not a policy to determine which enforcement
actions should be taken. Enforcement strategy or priorities
are determined elsewhere, not by this policy.
-------
-3-
II. Statutory Basis for Civil Penalty under Water and
Air Acts
Civil penalties are provided for in Section 309(b) of
the Clean Water Act, which subjects violators to civil penalties
of up to $10,000 per day of such violation. The Water Act has
no further statutory criteria for determining the precise
amount of the penalty, leaving that to be determined by the
court. Authority for such civil penalties has been in the
Act since its passage in 1972.
Since 113(b)of the Clean Air Act provides for civil penalties
of up to $25,000 per day of violation and requires courts to "take
into consideration (in addition to other factors) the size of the
business, the economic impact of the penalty on the business and
the seriousness of the violation." The authority for civil
penalties was added by the Amendments of 1977. There was no
authority for civil penalties in the Air Act prior to these
amendments, at least for violations such as the ones within the
scope of this policy.
In addition to adding civil penalty authority in Section 113,
the Clean Air Act Amendments of 1977 also established, in Section 120,
mandatory administratively imposed, noncompliance penalties.
Regulations implementing Section 120 noncompliance penalties
have now -been promulgated. Such noncompliance penalties are .not
covered by this civil penalty policy, and nothing stated in this
policy should be taken to refer to them in any way, except
that provision has been made in this civil penalty to avoid
duplication of penalties based upon the economic benefit of
delayed compliance during the same time period (see discussion
in part X below.)1
III. Type's of Violations to Which Policy Applies
The civil penalty policy is to be used by federal, state
and local officials in enforcement actions involving certain
violations of the Clean Air Act, as amended, and certain
violations of the Clean Water Act, as amended.
1
The preamble to EPA1s final noncompliance penalty regulations
provides that no notices of noncompliance will be issued, or
penalties assessed, prior to January 1, 1981. For purposes
of determining an appropriate civil penalty, EPA will only
calculate the economic benefit of" delayed compliance prior
to this date.
-------
-4-
The policy applies to major and.minor water pollution
sources which violate those requirements of the Water Act made
subject to civil penalties by Section 309(d), and to major
and minor stationary air pollution sources which violated those
requirements of the Clean Air Act made subject to civil penalties
by Section 113(b).3
The application of this civil penalty policy to situations
in which full compliance is required prior to operation (as,
e.g., under the New Source Performance Standards under Section 111
of the Clean Air Act) should not be interpreted as suggesting
that noncompliance can be tolerated if penalties are paid.
1 cont.
With respect to any emission limitation or other requirement
approved or promulgated by the Administrator after August 7, 1977,
which is either more stringent than those in effect at that time
or which establishes a requirement-where none existed before,
Section 120(g) of the Act provides that the effective date for
noncompliance penalties will be the date that full compliance
is required with such limitation or requirement (though not
later than three years from such approval or promulgation, nor
earlier than the effective date that noncompliance penalties
begin with respect to violations of existing limitations).
2
i.e., violators of effluent limitations under Section 301
of the Clean Water Act; water quality related effluent limitations
under Section 302; national standards of performance under Section 306;
toxic and pretreatment standards under Section 307; monitoring
under Section 308; aquaculture under Section 310; disposal of
sewage sludge under Section 405; violators of permit conditions
or limitations under Section 402 and 404; and violators of orders
issued under Section 309(a).
3
i.e., violators o£ an administrative order issued under Section 113(a)
of the Clean Air Act; a state implementation plan requirement
approved under Section 110; a New Source Performance Standard under
section 111; National Emission Standards for Hazardous Air Pollutants
under Section 112; a compliance date extension issued to a source
converting to coal under 119(g) (as in effect prior to August 7, 1977);
a delayed compliance order issued to a source converting to coal under
113(d)(5); a nonferrous smelter order undei Section 113; certain
requirements relating to monitoring under Section 114; a require-
ment imposed in a delayed compliance order under Section 113(d);
and attempts to construct or modify a major stationary source
in any area for which the Administrator has found, under |
Section 113(a)(5), that the state is not acting in compliance with
applicable requirements for issuance of permits to construct or
modify sources in nonattainment areas.
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This policy applies to past and future violations of the
above-mentioned requirements of the Clean Air and Water Acts
where the violation results from the source's failure to make
capital or operation and maintenance expenditures necessary to
bring itself into initial compliance with the requirements (e.g.,
failure to install equipment, buy and use complying fuel, carry
out a process change, etc.).
The policy does not apply to violations following initial
compliance or to violations of an intermittent or transient kind,
such as spills, violations of emission or discharge limits through
accidents or when attributable solely to the failure to adequately
operate or maintain pollution control equipment. Civil penalties
are probably desirable in most actions against such violations, but
the appropriate amount of such penalties is not set by this policy.
This policy does not apply, of course, to penalties for
criminal violations, nor for violations of court decrees. In
most cases that are settled, it will be desirable to include
stipulated contempt penalty amounts in the consent decree. Such
amounts are not subject to the civil penalty statutory limits and
are not covered by this policy.
While'this policy has been limited at this time to circum-
stances where its application is clearly appropriate, experience
will undoubtedly indicate other circumstances to which it should
be extended. Such situations will be considered on a case-by-case
basis.. Penalties appropriate for other violations under the Clean
Air and Water Acts, and under other Acts, will be the subject of
future guidance.
IV. Use of the Penalty Policy in Enforcement Actions
This civil penalty policy is intended to be used by
federal and state enforcement officials and, in appropriate
cases., by local officials (e.g., local air pollution control
agencies operating under authority of state air pollution
laws). It is to be used in civil actions in state and
federal courts, and in state and local administrative
proceedings.
Enforcement actions must seek both expeditious compliance
and adequate civil penalties. The penalties to be sought in
accordance with this policy are in no way a substitute for
compliance nor do they preclude injunctive relief or other
non-dupl'icative remedies.
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The goal of an enforcement action where this policy applies
is both compliance (including interim controls) and appropriate
penalties. Compliance and penalties should not be in any way
traded off against each other. Compliance with the law is
mandatory, and whereas details of technology or schedules may
differ, enforcement officials should not bargain for compliance
(or interim controls) by offering any reduction in penalties.
Even in the period before the statutory deadlines, the
Clean Water and Air Acts required compliance immediately or
as expeditiously as practicable. After the deadline has
passed, it is even more urgent that violators be brought
quickly into compliance.
The penalty policy, moreover, already is structured
to provide a. strong economic incentive for rapid compliance,
for the more rapid the compliance the lower the penalties
under this policy. Such an effect is automatically built into
the method of calculating the economic benefit of delayed
compliance, for 'one of the major factors-of the formula is
the length of the period of noncompliance. The penalty factors
of harm to the environment and recalcitrance of the violator
.may. also lead to penalty reductions as the speed of compliance
increases. In the case of major source violators of the Air Act,
moreover, the requirement of mandatory, administratively assessed
noncompliance penalties adds additional economic incentive for
rapid compliance.
Additionally, it must be kept in mind that penalties are
authorized and intended to deter violations and encourage
compliance. Penalties are not effluent or discharge fees.
Payment of penalties does not give any right or privilege
to continue operation in violation of law or to slow down
compliance.
When civil enforcement actions are brought in courts, the
question of penalties will arise in three contexts—filing the
civil complaint, determining the minimum amount acceptable in
settlement, and presentinq argument to the court (and possibly
affidavits or testimony, as well) for its consideration in setting
penalties at trial.
The Agency is prepared to settle enforcement actions brought
under this policy. Where settlement is not possible, the Agency
is obviously free to claim penalty amounts up to the statutory
svaxisiusi, vhich will generally be the amount claimed in the
complaint.-
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The methodology of this penalty policy will be used to'
determine a "minimum civil penalty" which would typically be
presented to the court as an appropriate penalty to be imposed.
In addition, the methodology will be used to determine a
lower "minimum civil penalty acceptable for settlement" (set out
in Part VI) to be used for settlement negotiations.
This policy will allow enforcement officials to arrive
at fair, consistent and rationally based penalty sums while
providing a lower minimum figure as an encouragement to settlement
if enforcement officials believe that settlement is desirable.
By providing them with a minimum settlement figure, this
policy gives the enforcement officials responsible for the action
a range in which to exercise their discretion to settle or .not to
settle (i.e., between the statutory maximum and the minimum sum
acceptable in settlement as determined by this policy).
Where the state or local administrative bodies are taking
enforcement 'actions artd have authority to administratively impose
civil penalties, the minimum penalty figure determined for settle-
ment purposes in civil actions should also serve as the minimum to be
imposed in the administrative action. The administrative body,
however, will want to consider its statutory maximum penalty
authority and the minimum civil penalty and will probably want
to impose penalties above the settlement amount. This is
particularly the case since the administrative*body will
probably have already decided the case regarding the violation,
and reductions for settlement will no longer be relevant.
V. Determining the Amount of the Statutory Maximum
Penalty and of the Minimum Civil Penalty
The minimum civil penalty should be determined by the factors
and method set out below. The civil penalty so determined will,
in most cases, be lower than the statutory maximum sum. Where
the civil penalty sum so determined is higher, this information
may be used in settlement negotiations or litigation but the
statutory maximum is, of course, all that may be requested by
the government or imposed by the court.
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The amount of the minimum civil penalty should be determined
as follows:
Step 1 - Factors Comprising Penalty
Determine and add together the appropriate
sums for each of the four factors or elements
of this policy, namely:
the sum appropriate to redress
the harm or risk of harm to
public health or the environment,
the sum appropriate to remove the
economic benefit gained or to be
gained from delayed compliance,
the sum appropriate as a penalty
for the violator's degree of recalci-
trance, defiance,'or indifference to
requirements of the law, and
the sum appropriate to recover unusual
or extraordinary enforcement costs
thrust upon the public.
Step 2 - Reductions for Mitigating Factors
Determine and add together sums appropriate
as reductions for mitigating factors, of
which the most typical are the following:
the sum, if any, appropriate to
reflect any part of the noncompliance
attributable to the government itself,
the sum appropriate to reflect any
part of the noncompliance caused by
factors completely beyond the violator's
control (floods, fires, etc*).
Step 3 - Summing of Penalty Factors and Mitigating
Reductions
Subtract the total reductions of Step 2 from
the total pen^i-t-y <">f step 1. The result is
the minimum civil penalty. If no settlement
can be reached with the defendant:, this sum
would typically be presented to the court as
an appropriate penalty to be imposed.
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In some unusual cases, the penalty amount determined in
this manner may be larger than the violator can reasonably
be expected to pay while bringing itself expeditiously into
compliance and continuing to do business. In such cases,
enforcement officials may recommend that the penalty be post-
poned or forgiven in part or in total.
VI. Determining the Minimum Penalty Acceptable for Settlement
Many cases may, of course, be settled prior to trial and
result in consent decrees or orders, rather than being litigated
to conclusion. The objectives of the enforcement action are still
the same, however — full and expeditious compliance (including
interim controls), and penalties. In cases in which enforcement
officials think settlement is appropriate, they may, as an
encouragement to settlement, reduce the penalty below the lesser
of the statutory maximum and the sum determined to be the
minimum civil penalty. This reduction, however, may not be
greater than the percentage which reflects the likelihood of
being unable to establish the violation or violations.
»
Example;
Assume statutory maximum penalty = $5,000,000
(200 days of violation @ $25,000/day)
Assume minimum civil penalty = $2,000,000
Assume estimate of government's chance of proving
violation at trial = 80% (or, chance of being
unable to prove violation = 20%)
The maximum reduction permitted for settlement
is, therefore, $400,000 (20% X $2,000,000)
The minimum civil penalty acceptable for settlement
is, therefore, $1,600,000 (80% X $2,000,000 or
$2,000,000 - $400,000) (i.e., range for settlement
negotiation = $5,000,000 to $1,600,000)
It is assumed that enforcement actions will not be taken
unless the evidence of violation is strong; therefore, in most
cases, the percentage of. reduction should not be large—probably
not more than 25%. Unusual circumstances may, however, exist
where larger reductions are appropriate.
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It is not required, of course, that enforcement officials
handling an enforcement action reduce the penalty for settlement,
or that they reduce it in any given amount. Defendants who
settle quickly will undoubtedly stand better chances of receiving
such reductions than those who do not.
It should be noted, moreover, that the reduction relates
only to the degree of uncertainty of proving that the violation
or violations resulted from the source's failure to make capital
or operation and maintenance expenditures necessary to bring
itself into initial compliance. It does not relate to uncertainty
as to the court's decision on compliance schedules and penalties.
Enforcement officials should carefully and thoroughly prepare
the facts and reasoning supporting their penalty request, and
should not be reluctant to present these arguments to the court.
Judges are accustomed to deciding such matters, and will
make better decisons after receiving well-reasoned recommendations
based on fair principles consistently applied.
There may be extraordinary instances where the minimum
settlement penalty amount is more than the violator is.able to
pay. In such cases, it may be appropriate to agree to a post-
ponement of the penalty or payment over time, or, in an extreme
case, to a further reduction of the penalty. Further guidance
on handling .these extraordinary instances is set out below.
VII. Explanation of Factors Considered in Determining
Minimum Amount of Civil Penalty
A. Harm or. Risk of Harm to Health or the Environment
The extent that the violation harms or poses risks
of harm to public health or the environment must be carefully
considered in setting the appropriate penalty, for violations
which involve such harm or risk are certainly very serious.
For example, a violation involving discharges of toxic chemicals
into waters which enter or threaten to enter public drinking
water supplies certainly causes or threatens serious harm to
public health. It may also destroy or threaten valuable
fishing or recreational resources.
Similarly, a violating air pollution source in an area
which has not attained the primary (i.e., health protective)
ambient air standard is contributing to a health hazard or is
actually causing harm to residents of the area.
All pollutants introduced into the environment create
some narm or risk, of course, and it will oe difficult in many
cases to precisely quantify the harm or risk caused by the
violation in question. The penalty amount attributable to
such public harm or risk will have to be determined on the facts
of each specific case.
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Estimated costs of environmental restoration may be
useful in quantifying harm to the public, and traditional
personal injury .damage concepts may be helpful in quantifying
injuries to public health. It may also be possible to use
the recreational values developed by various public agencies
to assist in quantifying environmental harm.
B. Economic Benefit of Delayed Compliance
Violations which are the subject of this policy
usually consist of a failure to install and operate required
pollution control equipment within time limits set by law,
or a failure to utilize fuels o'r raw materials with lower
pollutant content.
Delaying the purchase and operation of pollution
control equipment results in economic savings or gains to
the owner or operator of a facility. These savings or gains
arise from two distinct sources:
the opportunity to invest the capital'
funds not spent to purchase and install
pollution control equipment during the
period of noncompliance, and
the avoidance of the operation and main-
tenance expenses associated with the
pollution control equipment during the
period of delayed compliance (labor,
materials, energy, etc.). These costs
avoided represent a permanent savings
to the owner or operator; they may, of
course, also be invested in income-producing
ways.
The economic benefits attributable to delaying capital
expenditures and avoiding operation and maintenance expenses have
been combined in a single formula. Because these benefits occur
over a period of time, both past and future in some cases, the
formula reduces these benefits to a present dollar value by
standard accounting methods, and also takes into account tax
effects, and other appropriate economic factors. .The formula
is further described in a technical support document dated
September 27, 1978, subject: Computation of-Economic Benefit
of Delayed Compliance under Civil Penalty Policy. The formula
described in that memorandum should be utilized in calculating
economic benefit for the purpose -of arriving at appropriate
penalty amounts. It is recognized, however, that there may be
unusual circumstances in which a different method of measuring
economic benefit may be appropriate. The acceptability of any
such method will have to be determined on a case-by-case basis.
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C. Violator's Recalcitrance, Defiance, or Indifference
to the Requirements of the Law
Good faith efforts to obey the law are expected of
all subject to its jurisdiction. Except as provided below
in Sections E and F (pp. 13 and 14) assertions of "good
faith" should not be considered as a basis for reducing the
otherwise appropriate penalty. Courts traditionally consider
the degree of the violator's recalcitrance, defiance,
purposeful delay or indifference to its legal obligations
in setting penalties. Enforcement officials should do so also,
and should not hesitate> to include a sum in the civil penalty
to reflect such factors'where they exist.
Care should be exercised, however, not to seek to
add such an element of penalty on a person, firm, or entity
for exercising, without purpose of delay, its lawful rights
to challenge agency determinations in administrative or
court proceedings. A violator which has complied with all
requirements that were not disputed while challenging the
rest has not been, on these grounds alone, recalcitrant,
defiant or indifferent. Such a violator is on a different
footing from one which used a challenge of one aspect of its
compliance requirement to delay all compliance, or which
made frivolous challenges for purposes of delay. This latter
mode of behavior may indeed constitute recalcitrance, defiance,
or indifference so'as to justify adding an element of penalty.
If a violator, in good faith, did challenge agency
determinations without purpose of delay, but did not prevail,
and by virtue of the litigation has missed a deadline, or other-
wise failed to comply, it.is nevertheless in violation, and
subject to the civil penalty factors other than the one related
to the recalcitrance, defiance, or indifference of the violator —
i.e., harm or risk to public health or the environment, economic
benefit of delayed compliance, and extraordinary enforcement
costs. When a source decides to challenge an agency requirement,
it assumes the risks of not prevailing in its challenge. Violators
"litigate on their own time." U.S. Steel v. Train, 556 2d 822,
(7th Cir. 1977) .
D. Extraordinary Costs of Enforcement Action
Although attorney's fees•and court costs cannot be
recovered by the federal government in civil enforcement actions,
there are situations when it is appropriate to consider unusual
expenses incurred in detecting the violation, defining its
extent, and in bringing the enforcement action.
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Where, for example, a source has disregarded its
obligation to identify its own pollutant discharges and apply
for a permit, and the government, as a result, must undertake
such work, the government's costs in identifying the discharges
may be included in the amount sought. Or, for example, where
the violator's sampling and analytical procedures are so
deficient that the government must conduct significant sampling
on its own to confirm discharge levels, the expense of such
sampling may be added to the sum of civil penalties sought.
Those costs which are routinely incurred by state and federal
enforcement officials need not, however, be sought as part of
a civil penalty.
E. Mitigation for Noncompliance Caused by the
Government Itself
When failure to comply or compliance delay was caused
by, requested by, or attributable to the government, civil
penalties are not appropriate. When the failure to delay
was partially caused by the government, the penalties may
be reduced in proportion to the relative share of government
responsibility or in proportion to the period of delay caused
by the government. It is expected that mitigation on this
basis will only be permitted when the government was clearly
responsible for the delay, as, for example, it may have been
in a small number of cases under the Water Act. In these-
instances, a discharger challenged conditions of an NPDES
permit, requested an adjudicatory hearing, prosecuted its
request expeditiously and in good faith, and may have been
delayed by the Agency's lack of resources to provide prompt
hearings for all those who challenged their permits.
States and the federal government are not bound by
the acts of the other, but they will, of course, want to be
informed of and consider carefully the acts of the other in
connection with penalty decisions.
F. Mitigation for Impossibility
Where delayed compliance was, in fact, attributable
to causes absolutely beyond the control of the violator (such as
floods, fires, and other acts of nature) and was not due to
fault or negligence, a civil penalty is not required—even in
instances where as a result of the impossibility the violator •
has enjoyed an economic benefit. If only a portion of the
period of delayed compliance is attributable to such factors
beyond the violator's control, a civil penalty should be
sought only for that period of noncompliance that was not
attributable to such factors.
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G. Other Bases for Mitigation
There may also be other unforeseeable mitigation
circumstances because of which all or a part of the otherwise
appropriate civil penalty should not be sought, as, for example,
when it was not technically possible to comply. Acceptability
of such a situation as a mitigating circumstance will have to be
considered on a case-by-case basis, keeping in mind also the
"technology forcing" aspects of the laws. Another instance
in which all or part of an otherwise appropriate civil penalty
might not be sought 'would be where emergency needs require that
sources be operated even though they fail to comply with discharge
or emission limitations. Obviously, situations involving unusual
mitigating circumstances must be looked at individually since the
full range of such circumstances cannot be predicted.
Since the Water Act and the Air Act impose absolute
duties of compliance, requiring sources to take whatever measures
are possible to come into compliance by the legally established
dates, the burden is clearly upon the violator to establish a
compelling reason why a civil penalty should be mitigated. This
burden should only be considered satisfied where urgent efforts
are made to comply but actual impossibility or government conduct
alone precluded compliance, or where a similar mitigating circumstance
caused the delay. Only in'these instances have violators really
made what should be considered a "good faith" effort that excuses
noncompliance. All dischargers must be held to a standard that
requires careful and diligent planning and an urgent, serious
effort to come into compliance in a timely manner.
H. Specified Clean Air Act Factors
The civil penalty policy factors.described above
include consideration of the three factors specified in Section 113
of the Clean Air Act. The "size of the business" is reflected
in the economic benefit of delayed compliance since less expensive
control equipment is typically required for smaller businesses
and the benefit of delaying installation of such equipment is
correspondingly less. The "economic impact of the penalty on
the business" is considered by the penalty deferral or reduction
that is allowable where violators lack the ability to immediately
pay the full amount.of the penalty (see section IX below). The
third factor, the "seriousness of the violation," is taken into
account by looking at the harm done to public health and the
environment (violations may, though, be cpnsidered as serious,
even though they do no measurable or quantifiable harm to the
environment) and the violator's recalcitrance, defiance or
indifference to the requirroeuLs of the lav:.
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VIII. Approved Environmentally Beneficial Expenditures
In Lieu of Payment of Penalty Sum to State or
Federal Treasury (i.e., "Credits Against Penalty")
A. Use of Credit to Satisfy or Offset Penalty
Occasions have arisen in enforcement actions where
violators have offered to make expenditures for environmentally
beneficial purposes above and beyond expenditures made to comply
with all existing legal requirements, in lieu of paying penalties
to the treasury of the enforcing government. Courts have
sometimes accepted such payments, and in some circumstances
such arrangements are acceptable under this penalty policy.
For ease of reference (but without characterizing them for
any other legal purposes—e.g., tax deductibility) such
alternative ways for a violator to satisfy the penalty instead
of paying the penalty sum to the federal, state, or local
treasury are referred to herein as "credits" against the
penalty.
might be:
Examples of possible credits against a penalty
(1) construction and operation of approved
pollution control equipment in addition to that
required for compliance with existing requirements
which will achieve a significant further increment
of environmental benefit above all present require-
ments of federal, state or local law.
(2) financial contributions to a private or
governmental body or agency for environmentally
approved uses—e.g., restoring fish and wildlife
resources, carrying out environmental studies or
research of a high priority need, improving the
ability of citizen or public interest groups
to monitor and assist in enforcing the law.
Credits, however, will not be given for expen-
ditures that would properly be required as part of
equitable relief being sought for the violations,
such as cleaning up the pollution, restoring the
areas affected, or reimbursing the government's
costs of doing so, unless.these costs have been
included in the penalty sum. In all events, the
financial contributions must be acceptable to the
enforcing agency. Credits for high priority research
are desirable, but the research must be closely
scrutinized to insure it is beneficial from the
point of view of the enforcing agency, not merely
from the point of view of the violator.
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B. Criteria for Acceptable Credits
In determining whether a proposed expenditure is
creditable against the penalty, the following criteria must
be satisfied:
(1) The penalty sum itself will generally be
stated in the order, decree or judgment as
determined, before any credits are allowed, and
this amount should be clearly identified as a
penalty.
(2) The expenditure proposed for credit must
be approved by enforcement officials in advance
of the entry of the decree, order, or judgment
in the case, must be clearly delineated therein, and
must be enforceable along with other elements of
the decree, e.g., subject to stipulated contempt
penalties or to the court's continued contempt authority
for the full length of time over which expenditures
are to be made.
(3) The.item to be acquired by additional expendi-
ture for which credit is given must be described
with sufficient precision to bind the violator
to the agreed expenditure level. Where the
credit is for the construction and operation of
additional pollution control equipment that
will bring about a greater degree of control than
that required by law (and a considerably reduced
discharge or emission level) an agreement should
be obtained from the violator that it will treat
the reduced discharge or emission, in all respects,
as a requirement of law for the period that it has
agreed to operate such equipment.
(4) The proposed expenditure must be clearly
for environmental benefits above and beyond
the requirements of law. Interim controls and
expeditious compliance are required by law (not
jusi-c waiting for ths ls.st day before the
statutory deadline) and are not appropriate for credit.
(5) Environmental, laws require compliance at all
times. Good engineering practice, therefore,
includes design of pollution control systems
with sufficient capacity and reliability to provide
a margin of safety to ensure such continuous com-
pliance. Expenditures for this margin of safety
are to assure compliance with the requirements of •
law and are not eligible for credits.
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(6) If in accomplishing the required level of
pollution control, the violator necessarily
will accomplish a higher level of control, there
can be no credit for such incidental benefit.
(e.g., to accomplish 80% removal of a pollutant,
the violator must necessarily purchase and operate
equipment which removes 85% of the pollutant.)
(7) Studies or research and development which are
necessary parts of compliance with legal require-
ments are not eligible for credits (e.g., studies
assessing the feasibility and costs of alternative
methods of compliance or prototype research and
development). Research and development work
eligible for credit should be work from which
the public in general can benefit. To insure this,
the following measures should be required:
(a) the enforcing agency should insure
that adequate reporting procedures are
required. These procedures should include
an initial research and development plan,
periodic progress reports, and a comprehensive
final report that documents startup and the
first year of operations if a facility was
involved;
(b) _the.enforcement agency or its contractors
should.be given the right to obtain first hand
information about the work by inspecting all
documents associated with it and by making
on-site inspections; and
(c) the source should agree that all domestic
patents, design rights and trade secrets that
result from the work, will be placed in the
public domain.
In most instances the research and development should
be related to the violation, but other instances can be considered
on a case-by-case basis. As stated above, credits for research
or studies will be closely scrutinized.
(9) Expenditures accepted for credit may only
be expenditures that the violator agrees it may
not later use (or sell to anyone else to be
used) as a credit against any other existing
provisions of environmental law (such as emis-
sion offset to allow the construction or modifica-
tion of a major stationary source in an area where
national air quality standards are not being
satisfied) and the decree must so provide.
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C. Constraint's on Federal Enforcement. Officials
With Respect 'to Payment of Penalties and Use
of Credits In Lieu of Penalties
The Air and Water Acts both authorize civil penalties
which are payable only to the United- States Treasury. State
statutes may differ, but most provide for payment of the penalties
to the State Treasury.
Civil enforcement actions to enforce the Air or
Water Acts whether settled or litigated to conclusion will
end in orders, decrees, or judgments of a court. In such
actions there are limitations governing the positions to be
taken by federal enforcement officials. In settling cases,
federal enforcement officials may accept proposals for
expenditures as credits against penalties and recite them,
as well as the penalty sum, in the proposed consent decree,
but it must be kept in mind that such provisions as well as
the entire decree are subject to approval by the court.
With respect to credit for proposed contributions
to third parties, federal enforcement officials may not
agree with defendants as to such payments in lieu of paying
the penalty to the United States Treasury, for that prefers
a third party as recipient of the payment over the United
States, and prefers one third party potential recipient over
another.
State and local enforcement officials may or may
not be as constrained with respect to proposing contributions
to third parties. Accordingly, the appropriateness of state
or local government officials proposing credits for contributions
to third parties must be governed by their own policies.
D. Discretionary Nature of Credit
Acceptance of a proposed credit is purely discretionary
with federal, state, and local enforcement officials. Enforcement
officials may, of course, insist on payment of the penalty into
the treasury. The statutes provide for penalties. Violators
have no "rights" to credits against these penalties.
E. Consideration of After-Tax Effects of Credit
Expenditures
The amount of the credit to be given £or proposed
expenditures is governed by the rule that it must have the
same after-tax effect on the violator as payment of the penalty
sum would have. Since the penalty sum is immediately payable upon
entry of the order, decree or judgment, any proposed credit which
includes other than immediate payment of the full sum must be
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reduced to an equivalent present value by standard accounting
methods. Where the expenditure proposed for credit is construction
and operation of additional pollution control equipment, the formula
for computing economic benefit of delayed compliance (see paragraph
VII.E. above) should be used to compute the present value of the
credit. It should be noted that this formula assumes that the
expenditures will receive normal tax treatment (deductibility or
credit against tax) and accounts for that. The present value resulting
from use of this formula may, therefore, be used dollar-for-dollar
as credit against the penalty.
IX. Penalty Postponement or Forgiveness Based Upon Inability
To Pay
In some instances, the indicated appropriate civil penalty
may be so severely disproportionate to the resources of the
owner or operator of the violating facility that its imposition
would cause the owner or 'operator very serious economic hardship.
In such unusual cases, enforcement officials may recommend to
the court that it postpone or forgive the otherwise appropriate
penalty, in part or in total as circumstances may indicate.
While the appropriate civil penalty amount may be post-
poned or reduced in such circumstances, no such concession
may be made with respect to the cost of coming into com-
pliance. Except .as the Air and Water Acts may themselves
provide, compliance is required in every case, regardless of
cost and regardless of the violator's financial situation.
Clearly the burden is on the violator to establish its
inability to pay. This burden can only be satisfied when
the violator has produced adequate evidence to establish
its financial condition and when the enforcement officials
involved have obtained a competent review of the violator's
financial condition. Mere statements of inability to pay
are not enough, and a violator making such a claim must be
willing to make full disclosure of its financial affairs to
enforcement officials and the court under circumstances that
assure such disclosure is accurate and complete.
If review by persons competent to assess the violator's
financial condition and prospects indicates that the violator's
resources would-not permit it to finance its compliance, and
also pay the penalty, then, if adequate interest can Be arranged,
the penalty may be paid over time.
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If even payment over time is not possible, then the
penalty may be reduced to an amount commensurate with the
resources of the violator (taking into account the cost of
compliance).
In making a determination of the violator's ability to
pay, it is important to insure that the economic condition
of the violator has not been distorted by transactions with
parent companies or shareholders or by unusual or uncon-
ventional accounting practices. Where such distortion has
taken place, parent company and shareholder or other owners'
resources should be considered in determining whether or not
the violator is able to pay the civil penalty. In all cases,
review of financial information by persons competent in
financial affairs should be obtained.
X. Time Period for Application of Civil Penalty Policy
In general, this civil penalty policy would appropriately
apply to violations of the kinds covered which have occurred
since enactment of the Air Act in 1970 and the Water Act in 1972.
In determining the penalty sum, both with respect to the
statutory maximum and the minimum civil penalty, the period of
violation should begin with the earliest provable date of
violation and continue until the violator has installed and
operated the required equipment, made the required process change,
or converted to the complying fuel and thus brought itself into
compliance.
Under the Water Act, this general rule will be applied
in this civil penalty -policy, since authority for civil penalties
has existed since 1972. Consequently, the period covered and
the noncompliance period commence on the date when the schedule
requirements of a National Pollutant Discharge Elimination System
(NPDES) permit were violated or on July 1, 1977, (the statutory
deadline for best practicable control technology or secondary
treatment), whichever is earlier. The period of noncompliance
ends when the violator has brought itself into full compliance
with statutory (including permit) requirements.
Under the Air Act, there are other considerations which,
as a matter of policy, lead to application of a different rule
regarding the time period for application of this civil penalty
policy. The Air Act has had authority for criminal or civil
injunctive relief since 1970, but general authority for civil
penalties was not added until the amendments of 1977, which
-.-..-.i- effect August 7. 1977. Whether, as a matter of law, civil
-------
-21-
penalties are authorized in civil enforcement actions commenced
or amended after August 7, 1977, for violations occurring before
August 7, 1977, may be debated, but regardless of that, and
without conceding any issue of law, as a decision of policy, this
civil penalty policy will be applied by federal enforcement
officials only to those violations of the Air Act occurring
after August 7, 1977.
Accordingly, under the .Air Act, for purposes of computing
the statutory maximum penalty, the period of noncompliance will
commence with August 7, 1977, or the date of earliest provable
violation, whichever is later. For purposes of computing
the minimum civil penalty, the period of noncompliance used will
also be as stated in the previous sentence, except that when
considering the sum to be included for the violator's recalcitrance,
defiance, or indifference to its legal obligations, the entire
record of the violator should be considered.
When determining a civil penalty under "the Air Act a
special consideration also applies concerning the end date of
the period of noncompliance, but only with respect to the
element of the penalty based on removing the economic benefit
of delayed compliance.
As indicated earlier, Section 120 of the Air Act requires
EPA to assess and collect noncompliance penalties against certain
categories of stationary sources. The purpose of these admin-
istratively imposed penalties is to recapture the economic value
which a delay in compliance may have to the source owner or operator.
EPA will not issue any notices of noncompliance or assess and'
collect any noncompliance penalties prior to January 1, 1981.
While the authority to collect noncompliance penalties (Section 120)
is independent of and additional to the authority to seek civil
penalties (Section 113), federal enforcement officials will not
seek double recovery of any portion of the economic value attributable
to-.delayed compliance. Accordingly, when the period of noncompliance
will extend beyond January 1, J.981, the economic benefit element of
the civil penalty should be based only upon the noncompliance that
will have occurred prior to that date.
Sources subject to judicial orders or that have negotiated
consent decrees with EPA, will not have their civil penalties
recalculated. Additionally, even if a consent decree has not
been approved by the court., the amount of the penalty need not be
recomputed if it is clear that agreement has been reached on all
material terms, including the penalty amount, and among all parties,
including EPA where it is a party. -In all other settlements, the
economic benefit components of the civil penalty will be based
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-22-
upon noncompliance which will occur up to January 1, 1981, or the
date for final compliance specified in the consent decree,
whichever is earlier. In this way the policy will provide an
incentive for expeditious and fair settlements, while honoring
the Agency's commitment not to seek double recovery of any
portion of the economic benefit element attributable to delayed
compliance.
In all other respects, however, in Air Act cases, both when
computing the statutory maximum penalty and when determining
the minimum civil penalty (or the minimum acceptable for
settlement), the period of noncompliance continues until the
violator has brought itself into full compliance with the
requirements of the law.
Where state or local government civil penalty authority
existed prior to August 7, 1977, then that additional authority
might, of course, be used by the state to extend the period of
noncompliance.
XI. Application of Civil Penalty Policy to Different Types of
Sources - Private, Public, Regulated Utilities, etc.
Congress, in enacting the civil penalty provisions of the Air
and Water Acts, and in the Air Act's (Section 120) administratively
imposed noncompliance penalties, made no exemptions or distinctions
for classes or types of violators on the basis of ownership or
form.of organization. This civil penalty policy seeks to- carry out
Congress' fair, evenhanded, consistent approach, but recognizes
obstacles in a few situations.
A. Privately-Owned or Operated Sources (other than
Regulated Utilities)
This penalty policy, as described above, applies in
full in civil enforcement actions against privately-owned and
operated sources other than regulated^ utilities. Extraordinary
situations, if any, can be handled on a case-by-case basis.
B. Publicly-Owned Utilities and Investor-Owned,
Regulated Utilities
Publicly-owned utilities and investor-owned, regulated
utilities 'are to be treated equally.
Penalties will be sought from utilities whose violations
come within the scope of this policy. The focus of these penalties
will be on deterrence. That is,- penalties should be in sufficient
amounts to deter future violations. Penalties should include
appropriate amounts for environmental harm or risk of harm caused
by the source's violations and recalcitrance or indifference of the
source to its legal obligations as well as any extraordinary
enforcement costs which the government has been forced to pay-
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-23-
C. State and Municipal Facilities
In enforcement actions against state or municipal
facilities, including publicly-owned treatment works, this civil
penalty policy applies, except with respect to the penalty element
for economic benefit of delayed compliance.
Because state and municipal budgeting and financial
decisions are generally concerned with the allocation of tax
derived public funds to provision of public services, rather than
the sale of goods or services for profit, recovering the economic
benefit of delayed compliance is somewhat less applicable. In all
such cases, the economic benefit of delayed compliance should be
calculated and considered as a guide, but in determining the
minimum civil penalty and the minimum civil penalty acceptable for
settlement, enforcement officials may recommend that this factor
be discounted or eliminated in cases where they think it is
appropriate. Because the other elements (harm or risk; recalci-
trance; extraordinary enforcement expense) are not always susceptible
to precise quantification, the appropriate minimum civil penalty
or the minimum civil penalty acceptable in settlement for such
facilities can only be determined on a case-by-case basis.
The only further guidance with respect to penalties
in such cases is as follows:
\. Enforcement officials should not excuse all
civil penalties except in extraordinary situations,
for that would create a double standard of more
lenient treatment for public agencies than private
individuals or firms.
2. Civil penalties for violations by state or
municipal facilities should be in sufficient amounts
to deter future violations, considering the elements
of this penalty policy, size of the facility, and the
duration of the violation, and in a municipal case, the
size and the resources of the municipality. To
achieve a deterrent effect, civil penalties for
violations by state or municipal facilities should
.bear some relationship to the population served by
the violating facility and upon which the burden
of the penalty will fall.
D. Federal Facilities (Other than Utilities)
Because of recent amendments to the Air Act a'nd
the Water Act and the federal mechanism that exists for the
payment of penalties, federal facilities present a significantly
different problem from other violating sources. Accordingly,
guidance as to them will be provided elsewhere.
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-24-
XII. Federal-State Cooperation in Implementing this Policy
As part of their efforts to enforce air and water pollution
laws, many federal, state, and local enforcement officials will
be using this penalty policy. To assist in achieving consistency
in its application, a method of consultation among federal, state
and/or local enforcement officials has been devised to insure
that appropriate penalties will be sought in specific cases.
XIII. Effective Date of this Civil Penalty Policy
Many of the factors comprising this penalty policy have
been used by federal and state enforcement officials for years.
EPA's civil penalty policy has been more fully articulated over
the last year.
On June 3, 1977, guidance was provided to EPA regional
offices by the Office of Enforcement regarding criteria for
settlement of civil penalty aspects of enforcement cases under
the Water Act. This guidance included most of the factors now
more fully 'explained in this document, including, for example,
recovery of the economic benefit of delayed compliance, harm
to the public/ and recalcitrance of the violator. EPA's intention
to take enforcement action against major source violators of
the Water Act and to seek civil penalties, including sums to take
away the economic benefit of delayed compliance, was announced
at a press conference on June 21, 1977, by Assistant Administrator
Thomas C. Jorling.•
Further elaboration of this Water Act civil penalty policy
was provided by an Office of Enforcement memorandum to EPA
regional offices dated June 28, 1977.
The Air Act Amendments became effective on August 7, 1977,
including authority for civil penalties, and regions were
advised on September 2, 1977 that civil penalties should only
be sought for violations occurring or continuing after
August 7, 1977.
The first comprehensive version of this consolidated Air
and water Act civil penalty policy was distributed to federal
and state enforcement officials on November 23, 1977, and took
effect on that'date.
In addition to these general communications, this civil
penalty policy was explained at meetings and workshops of
federal, state, and local officials, at press conferences
and other gatherinys at Washington, D.C= .- and in all regions
of the country in the last half of 1977 and early 1978. This
policy has had the benefit of comments, discussion and analysis
over many months.
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-25-
The civil penalty policy (including its predecessors as
explained above) covers all Air and Water Act cases within
its scope, as follows:
all Water Act cases not concluded prior
to June 2, 1977, and
all Air Act cases not concluded prior to
August 1, 1977.
The application to Water Act cases concluded after
June 3, 1977 and Air Act cases concluded after August 7, 1977-,
but prior to the date of this memorandum, is governed by
the guidance extant and in effect at the time the case was
concluded, including any case-by-case guidance given.
For purposes of this policy, a case was concluded if it
is clear that agreement had been reached on all material terms,
including penalties, and among all the parties, including EPA
where it was a party. Where the agreement had been reduced to
writing so as to memorialize its terms, it was clearly concluded.
Other situations will have to be individually considered.
Enforcement officials aware of civil enforcement actions
which they believe should not be included within the coverage
of this policy or its predecessors should present the facts
or circumstances for consideration.
XIV. Previous Civil Penalty Policy Superseded
This civil penalty policy supersedes all previous Air Act
stationary source and Water Act civil penalty policy, including
the following, but only to the extent that such previous policy
was inconsistent herewith:
(1) U.S. Environmental Protection Agency, Office
of Enforcement guidance letter entitled "Settlement
of Section 309(d) Enforcement Cases for Monetary Amounts"
dated June 3, 1977, signed by Stanley W. Legro, Assistant
Administrator for Enforcement.
(2) U.S. Environmental Protection Agency, Office
of Enforcement guidance letter entitled "Settlement
of Section 309(d) Enforcement Cases for Monetary
Amounts—Policy Background" dated June 28, 1977
signed by Stanley W. Legro, Assistant Administrator
for Enforcement.
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-26-
(3) U.S. Environmental Protection Agency, Office
of Enforcement guidance letter entitled "Civil
Penalties under Section 113(b) of the Clean Air
Act Amendments of 1977," dated September 2, 1977,
signed by Richard D. Wilson, Acting Assistant
Administrator for Enforcement.
Jeffrey G. Miller
Acting Assistant Administrator for Enforcement
U.S. Environmental Protection Agency
-------
"** - \ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
§ WASHINGTON. D.C. 20460
OFFICE OF ENFORCEMENT
MEMORANDUM
SUBJECT: Neutral Inspection Plan
FROM: Edward A. Kurent
Director, Enforcemen^D-i
TO: ' Regional Enforcement Division Directors
Regional S&A Division Directors
Director, NEIC
Attached is the final Neutral Inspection Plan which was
developed for the NPDES Compliance Inspection Program. This plan
fulfills the requirements for performing neutral compliance inspec-
tions based on the Marshall v Barlow's, Inc. ruling. The Neutral
Inspection Plan must be used to target all inspections which are
not based on some type of probable cause. Copies of this plan were
distributed to each Region last year for comments.
The selection of candidates for neutral inspections each year
will be based on only two factors; the length of time since the
last inspection and geographic grouping (to minimize-the use of
resources). The initial selection process will be done by computer
using the Permit Compliance System (PCS). Selecting specific per-
mittees for inspections will then be based on common geographic
areas. For example, a permittee with a low priority for inspection
may be chosen if it is in close physical proximity to a permittee
with a very high priority for inspection.
This plan will not be used to target all NPDES compliance
inspections, only those based on administrative factors. We expect
that the portion of inspections which are not based on some form of
civil probable cause (DMR data, citizen, complaints) will be very
small. Indeed, some Regions plan all their inspections based on
probable cause for violations. In these cases, no Neutral Inspec-
tion Plan would be needed. Similarly, some Regions (along with the
States) are able to inspect each major permittee once a year. Since
this Neutral Inspection Plan is based on annual planning, it would
not be needed in these cases.
-------
Several Regions commented that the significance of the
discharger should be a factor. Since this plan will be applied
only to major permittees, we believe this issue is basically
addressed. In addition, when the new major/minor designation sys-
tem is complete, PCS will be able to use potential for a permittee
to discharge toxics as a factor in the neutral inspection process.
Without this information in PCS, it would be necessary to perform
a review of every major permittee to determine the toxics discharge
potential. This would place an unreasonable burden on Regional
enforcement programs.
If you have any questions or comments on this plan, please
contact me or Brian Maas of the Enforcement Division staff at
755-0994.
Attachment
-------
CRITERIA FOR NEUTRAL SELECTION OF
NPDES COMPLIANCE INSPECTION CANDIDATES
-------
2
inspections based on administrative factors; and 2) those
inspections based on specific evidence of an existing •
'violation, e.g. civil probable cause.
•c
Inspection's based on the second category are not
neutral since they are based on prior knowledge of apparent
or probable permit violations. Factors which constitute
specific evidence include: 1) violations reported on recent
DMR's; 2Y citizen complaints; 3) response to emergency
situations, such as threats to public health or safety;
4) follow-up to previous inspections which indicated
violations; and 5) specific enforcement case support.
For targeting inspections which rely strictly on
administrative factors, the Agency has developed the
following neutral inspection plan.
B. UNIVERSE OF NPDES INSPECTION CANDIDATES
The EPA., upon the presentation of credentials, has the
authority to enter and inspect all NPDES permitted facilities
at any time regardless .of other factors such as "major" or
"minor" designations. Because of limited resources, not all
facilities are targeted for inspections each year. The
frequency with which compliance inspections are performed
is based on the discharger's environmental significance,
available resources, the types and mix of inspections being
employed, climatic and geographical influences en ir.spection
logistics, and other factors influencing compliance monitor-
• ing such as the ability to follow up on inspection findings.
-------
3
C. BASIC SELECTION CRITERIA
When targeting permittees of neutral compliance
inspections, the time that has passed since the last inspec-
tion and the geographical grouping of the permittees are the
only factors which may be considered. Other information, such
X\ ^^ ' ••*' ""
as data from DMR's which indicated apparent violations, would
not be used since this would constitute probable cause under
the civil standard. However, the existence of such data would
not preclude the facility from being considered for a neutral
inspection if this neutral plan is followed during the
selection process.
The only permittees who would not be considered when
targeting neutral compliance inspections are permittees who
are in current litigation with EPA. This does not apply to
state litigation. '' - .
D. NEUTRAL COMPLIANCE INSPECTIONS
To target inspections based on a neutral inspection plan,
-Regions will first determine the length of time that has
passed since the last EPA or state inspection for all major
permittees. This.can be done easily using the capabilities
of the Permit Compliance System (PCS) available in each EPA
Regional Office. A PCS report can be generated which .will
print out each major permittee in order by the date of the
last inspection. Appendix A contains a sample list which
the PCS System can generate. A. separate report should be
-------
4
generated for each state in the Region. In some cases, it
may be appropriate to use subdistricts (by county) of a state
depending on the organizational structure in a specific state
or Region. The permittees which are highest on the list
(greatest time since last inspection) will have the highest
priority for neutral inspections.
In order to minimize use of Agency resources, inspection
targeting should be based on both the priority list and
geographical grouping. For example, any permittee on the list
may be targeted for an inspection if it is in close physical
proximity to a facility which is very high o.n the list. This
is extremely important as it allows the most .efficient use of
the limited inspection resources. The PCS System can give the
names and most recent -inspection dates for all permittees'
which are in the same county as a permittee which is selected
for an inspection.
The priority list will identify only those facilities
which are possible targets for-.compliance inspections during
%
the current fiscal year. The exact timing of these inspec-
tions during the fiscal year will be at the discretion of
the Regional Office, based on logistics and specific Regional
needs. • .
The list of permittees targeted for inspections may be
amended at any time during the fiscal year. Similarly, before
the start of a new fiscal year,- Regional Offices should
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5
reassess all permittees regardless of whether all previously
targeted inspections have been completed for the current
fiscal .year.
INSTRUCTIONS FOR TARGETING INSPECTIONS BASED ON THE POINT'
ASSESSMENT SYSTEM
To use the neutral inspection plan, Regional Offices will
first determine the percentage of inspection resources that
will be devoted to neutral administrative inspections. This
will depend, to a large extent, on the ongoing enforcement
case load and the percentage of major permittees which have
probable violations of effluent limitations and compliance
schedules. For example, a Region may allocate the following
resources for neutral inspection activities:
a) 10% of the Compliance Sampling Inspection resources;
b) 25% of the Performance Audit Inspection re-sources;
and
c) 50% of the Compliance Evaluation Inspection
resources.
•• *
The remaining Regional inspection resources would be
reserved for inspections based on probable cause and specific
enforcement case support.
The Region should next determine the approximate number
of neutral inspections that can be completed using the
resources allocated for each inspection type (CSI, CEI, PAI).
This number will be flexible depending on the type and/or the
number of outfalls and size of the permitted facility.
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6
For each state, starting with 'the permittees highest on
the list, proceed down the priority list until about one third
of the neutral inspection resources for that state have been
allocated. For.example, if the allocated inspection resources
for neutral inspections in a particular state are enough for
30 inspections, approximately the first 10 permittees on the
priority list would be targeted. The Region should then use
the remaining 20 inspections for permittees which are grouped
with the already targeted candidates based on common geographi
cal and/or special technical considerations. For example, a
Region may target a sampling inspection at a facility with a
high point rating, and then target several more sampling-
inspections, CEI's or PAI's in the same geographic area. This
would allow all these inspections to be done on one inspection
trip.
Regions may target inspections to single facilites at
times, such as when the facility is in close proximity to
Regional Offices or Field Offices.
A specific percentage of inspection resources are set
aside each fiscal year for enforcement case support activi-
ties and emergency response. By the last quarter of the
fiscal year, Regions should know to what extent these
set-aside resources will be available for routine inspections.
To the extent that these resources become available, they
should be utilized to inspect the remaining permittees on the
priority list,
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Appendix A
The following two pages are sample printouts from the Permit
Compliance System (PCS) for the State of New Jersey. Printout 1
gives a partial listing of major NPDES facilities in order by the
date of the last inspection. Permittees with no date listed for
inspections have not had an inspection which was noted in PCS.
These permittees will have the highest priority for neutral
inspections.
Printout 2 is a list of permittees and inspection dates by
county (for New Jersey). This Printout is used to identify per-
mittees which may be in close physical proximity to facilities
which were chosen for inspections from Printout 1.
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NAME .
ATLANTIC COUNTY S'.A,' •
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CUT OF ECC HAflOOn
TOWN OF IIAHMONIOM' '
BUEI4A BOROUGH MUA
SCIENTIFIC CHEMICAL PROCESSING
JOIflT MTC RUTN-E, RUTH-CARL,
DIAMOND SHAMROCK' CORP
TECHNICAL OIL PRODUCTS INC
HAfiiESON GAS PROD. CO,
ROYCE CNEHICAL CO
MAPCAL PAPER MILLS INC
BEtiOlX CORP. . "
ABCX CUni'ORMIOS,
INlEKhEDlAJIES OIV-TENN, CHEH.
H/.CKE!I5ACK HUER COMPANY
Cr EOGEHA1ER
r.oiOR' co HAHHAH
LEVER BROTHERS CO,
TRANSCONTINENTAL CAS PIPE LINE'
BERGEN COUNTY UTILITIES AUTH,
UNIVERISAL OIL PROD,
NOHTHHEST UERGEN COUNTY 3JA,
HArfARD CORPOiUTIOll '
MO, ARLINGTON LYNOMUnST JNT MTO
PUULK SERVICE EL-EC & GAS
BOROUGH OF FAIR LAHII IIJ . •
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CITY OF BOROENTQHII OPH
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THE PERMIT CO^VANCE SYSTEM
ALL HAJOfl FACILITIES AND THEIfl LATEST INSPECTION
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-------
Printout 1
ALL
- . THE PERMIT COMPLIANCE SYSTEM. ,
MAJOR FACILITIES AND THEIR LATE3T INSPECTION
9|25.MONDAY, JUNE
NAME
PS"lG CO HARRISON. CA3 PLANT
PUBLIC SERVICE CLEC t CAS
PUOLIC SERVICE ELEC 4 CAS
PUOLK StRVICE ELEC I CAS
NL INDUSTRIES
V.KJFTAUY PAPEIIOOARD CO,
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-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
VACHtMCTOM. OC JtfeMO
DCT 17 PF3 :' orric«or
! • ' * * *'"* '. CMrOttCKMKWT CO
MEMORANDUM
SUBJECT: Direct Referral
FROM: Richard H. Mays
Senior Enforceme
TO: Associate Enforcement Counsel*
Attached is a letter of agreement between the Deputy
Administrator, on behalf of EPA, and the Acting Assistant*
Attorney General for Land and Natural Resources, on behalf
of the Department of Justice, regarding the referral of
certain types of cases from the Regional Offices directly
to the Department of Justice for a period of one year on
an experimental basis.
You vill note that this agreement does not go into
effect until December 1, 1983, and that Courtney Price
vill distribute a memorandum within EPA explaining this
agreement and how it vill be implemented vithin the Agency.
Courtney vould like to have the assistance of each of you
and your staffs in developing the guidance memorandum which
vill implement this agreement. Please review the agreement
in your respective offices and submit any suggestions you
may have for its implementation.
This office needs to closely monitor both the efficiency
and the effectiveness of this method of handling referrals.
Therefore, it is an important responsibility to assure that
this guidance memorandum receives careful and thoughtful
consideration. Please have your respective comments submitted
to me by Wednesday, October 26, 1983 to enable us to prepare
and distribute a guidance memorandum to the Regions veil In
advance of December 1« 1983. -
Attachment
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UNITED STATES £UV1RDT/;,, *'":""
Land and natural Resources Division - ,;ir .>: ,;. V" "
U.S. Department of Justice - :. '• " * *.' "~
Washington, D.C. 20530 . /- ^'''•.':".'
~-1.
" t'-
Dear Bank: . ; ;-;ii:> = .*.~ *£r ir?"
-'. ...... ..>.r~;".'' • • *"y *• v -Jj
" - ' . eir r?-rr
As a result of our meeting on Thursday, September 8,' 198«~» -<
and the subsequent discussions of respective staffs, we are in
agreement that, subject to the conditions set forth below, the
classes of cases listed herein will be referred'directly from
EPA's Regional Offices to the Land and Natural Resources Division
of the Department of Justice in Washington* D.C.
The terms, conditions and procedures to be followed in
implementing this agreement are:
1. The Assistant Administrator for Enforcement and Compliance
Monitoring will vaive for a period of one year the requirement
of the Assistant Administrator's prior concurrence for referral
to the Department of Justice for the following classes of
judicial enforcement cases:
(a) Cases under Section 1414(b) of the Safe Drinking Water
Act which involve violations of the National Interim
Primary Drinking Water Regulations, such as reporting or
monitoring violations, or maximum contaminant violations;.
(b) The following cases under the Clean Water Act:
(i) cases involving discharges without a permit
. by Industrial dischargers;
(ii) all cases against »inor industrial dischargers;
(ill) cases Involving failure to vonifor or. report by
industrial dischargers;
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-2-
(iv) referrals to collect stipulated penalties from
industrials under consent decrees;
(•v) referrals to collect administrative spill penalties
under Section 311(j) of the CKA;
i • f r
(c) All cases under the Clean Air ftrt except the following:
(i) cases Involving the steel Industry;
.* - » ^
(ii) cases involving non-ferrous smelters;
*••" '.-' • ' • . -
(iii) cases involving National Emissions Standards for
Hazardous Air Pollutants;
(iv) cases involving the post-1982 enforcement policy*
2. Cases described in Section lr above, shall be referred
directly from the Regional Administrator to the Land and
Natural Resources Division of OOJ in the following sianner:
i •
(a) The referral package shall be forwarded to the Assistant
Attorney General for Land and Natural Resources, U.S.
Department of Justice (DOJ), vith copies of the package
being simultaneously forwarded to the U.S. Attorney
-(USA) for the appropriate judicial district in which
the proposed case is to be filed (marked "advance copy-
no action required at this time'), and the Assistant
Administrator for Enforcement and Compliance Monitoring
(DECK) at EPA Headquarters. OECM shall have the following
functions vith regard to said referral package:
:
(i) OECM shall have no responsibility for review of
such referral packages, and the referral shall be
: effective as of the date of receipt of the package
by DOJ; however, OECM shall comment to the Region
upon any apparent shortcomings or defects which
it nay observe in the package. DOJ may, of course,
continue to consult with OECM on such referrals.
Otherwise.- OECM shall be responsible only for
• , routine oversight of the progress ani sar.agewent.
of the case consistent with applicable present
and future guidance. OECM shall* however, retain
final authority to approve settlements on behalf
of EPA for these cases* as in other cases.
• - *' -* "
(ii) The t«ferrsl p»rk»gc shall be In the format and
contain information provided by guidance seTnorsrid*
as may be promulgated from time to time by OECM ir
consultation with DOJ and Regional representative;
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-3-
(iii) DOJ shall, vithin 30 days from receipt of the
referral package, determine (1) whether the .Lands
Division of DOJ will have lead responsibility lor
the case; or (2) whether the DSA will have lead
responsibility for the case.
While it is agreed that to the extent feasible,
cases in wfoich the OSA will have the lead till be
transmitted to the DSA for filing and handling
within this 30-day period, if DOJ determines that
the case requires additional legal or factual
development at DOJ prior to referring the matter
to the USA, the case may be returned to the
Regional Office, or may be retained at the Lands
Division of DOJ for further development, including
requesting additional information from the Regional
Office. In any event, DOJ will notify the Regional
Office, DECK and the DSA of its determination of
the lead role within the above-mentioned 30-day
period.
(iv) Regardless of whether DOJ or the DSA is determined
to have lead responsibility for management of
the case, the procedures and time limitations Bet
forth in the KOU and 28 CFR 50.65 et seq., shall
remain in effect and shall run concurrently with
the management determinations made pursuant to
this agreement.
3. (a) All other cases not specifically described in paragraph
1, above, which the Regional Offices propose for judicial
enforcement shall first be forwarded to DECK and the
appropriate Headquarters program office for review.
A copy of the referral package shall be forwarded simul-
taneously by the Regional Office to the Lands Division of
DOJ and to the OSA for the appropriate judicial district,
the USA's copy being marked "advance copy-no action require
at this time.*
i
(b) OECM shall review the referral package within twenty-one
(21) calendar days of the date of receipt of said package
from the Regional Administrator and shall, vithin said
time period, make a determination of whether the case
should be (a) formally referred to DOJ, (b) returned to
the Regional Administrator for any additional development
which may be required; or (c) whether the Regional
Administrator should be requested to provide any additional
material or information which may be required to satisfy
the necessary and essential legal and factual requirements
for that type of case.
-------
e transmitted by appropriate lette
or memorandum signed by the AA for DECK (or her designe ^
within the aforementioned twenty-one day period. Should"
OECM concur in the proposed referral of the case to DOJ*
tbe actual referral shall be by letter from the AA for
DECK (or her designee) signed within fourteen days of
the termination of the aforementioned twenty-one day
review period. Copies of the letters referred to herein
shall be sent to the Assistant Attorney General for the
Lands Division of DOJ. .
-------
Municipal and
Pretreatment
Enforcement
-------
Municipal and
Pretreatment
Enforcement
-------
F UNITED STATES ENVIRONMENTAL PROTECTION AGENCY'
GTON. D.C. :
> r. ;,i — .-.—*-
'•"V". O 1^77
^
V/ASHI.NGTON. D.C. 20460
OFFICE OP THE
ADMINISTRATOR
MEMORANDUM ' .
TO i Regional Administrators
FROM: . 'Deputy Administrator /-/
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- 2 -
Municipalities' are responsible and accountable for achieving the
effluent limitations required in their NPDES permits whether or not they
have the in-house capability to deal with the problem underlying the
violation.. It is the municipality' s responsibility to seek and secure
whatever technical assistance or training is-necessary to solve that
problem. EPA must insist that municipalities accept and carry out that
responsibility and must take enforcement action against those that are
unwilling to do so. _ ' • •
Although it is recognized that EPA and the States are currently
providing limited technical and training assistance, most of such
assistance and training must be provided by the private sector. "While
the private sector can undoubtedly develop the capability to provide
such services when a sufficient demand is made on it for those services,
to date that demand has not been strongly made. Consequently, many
consultants, equipment manufacturers and systems vendors have not yet
developed a significant capability to render technical assistance or
training. EPA and.the States must expand their present efforts to
'encourage and stimulate development of private sector capability and
expertise to meet these needs. Aggressive enforcement of municipal
permits and an insistence that municipalities seek needed technical, and
training services should provide an incentive for the private sector to
develop the needed capability.•
In those few cases where a municipality has recognized the need of
outside assistance to meet permit effluent limitations and has unsuccess-
fully sought that assistance, formal enforcement might be a futile response.
EPA or State assistance might be appropriate in such a situation. Since
it is the municipality's responsibility to seek that assistance,, it should
be given normally'at the municipality's request rather than on the initia-
tive of EPA or the State. And since a demand must be placed on the private
sector if it is to develop the capability of providing such assistance,
EPA should not normally provide the assistance unless the municipality has
unsuccessfully sought it elsewhere. Consequently, EPA and State technical
and training capabilities will be helpful in the short term to fill gaps in
local- and private sector capabilities to resolve POT!'? compliance problems.
To the extent that EPA capabilities in this regard exist at the present
time, however, they should not be expanded, but should be reduced as
private sector capabilities mature.
Any technical or training assistance provided by EPA must be provided
in a manner compatible with our primary role as regulators. It should be
regarded as but one option available to the regulator in a-particular case
and not as the sole option or the* option-of choice in all cases. The
inability to provide technical assistance in a given case or the failure
to achieve the required effluent limitations after the. provision of such
-------
assistance should never preclude"the use of more demanding regulatory.
options. Where technical assistance is provided, it uust be done in ci •
manner-that will not prejudice the Agency's case in a subsequent enforce-. . .
pant action if the effluent limitations are not achieved after assistance
has been provided.
. I recognize that many people, both within and outside the Agency,
believe.that.EPA should conduct a strong program of technical assistance
to individual communities in addition to its enforcement role. In the
abstract, this proposition may appear attractive. • As a practical matter, • •
however, an active assistance role confuses and undercuts the predominantly
regulatory role .that the F.-7PCA has fashioned for the Agency. . I-Ioreover,
limitations on existing and foreseeable resources sake it wholly unrealistic
to think that we have or could develop the capacity to provide technical
assistance in any significant number of cases as part of our' national •
progran. Thus we have no choice but to accept our role as being predominantly
regulatory. Within this context, we can and should conduct an active role
in manpower training, technology 'transfer and the dissemination of technical
assistance on a general basis rather, than an individual case basis.
I also specifically do not intend to restrict by this means any
activities we may be able to undertake in the neglected .field of manpower
training.• • _ . • ...
In summary, let me make clear that our philosophy toward operating
POTWs is regulatory and that the responsibility for meeting applicable
permit requirements rests squarely on the POTWs. To date the compliance
> assurance program has been successful in securing compliance.from industry.
It is our responsibility to make sure that it is equally effective in
securing compliance from municipalities.
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UNITED STATES ENVIRONMENTAL PROTECTION .^AGENCY
WASHINGTON. D.C. 20460
KOV 2 9 1978
MEMORANDUM
TO: Regional Administrators w/o attachments
Regional Water Division Directors
Regional Enforcement Division Directors
FROM: Deputy Assistant Administrator for Water Programs Operations
(WH-546)
Deputy Assistant Administrator for Water Enforcement (EN-335)
SUBJECT: Coordination Between Regional Enforcement and Weter Programs
Personnel in Implementing the National Pretreatment Program
.. the general pretreatment regulation (40 CFR Part.403) promulgated
_cn. June 26, 1978, requires that certain publicly owned treatment works
'(POTWs) develop pretreatment programs to control the introduction of
industrial wastes into POTVs. The-successful implementation of these
pretreatment programs requires a careful integration of Regional
Enforcement Division-efforts in overviewing the creation of such
programs and Construction Grants efforts in providing funding for the
development of these programs. The purpose of this memorandum is to
outline the respective roles of these two groups with regard to the
initial stages of POTW p-etreatment program development. The recom-
mendations in this memorandum reflect the proposals for coordinating
Enforcement and Construction Grants activities found in the Interim
National Municipal Policy and Strategy, October, 1978, and the latter
document should be read in concert with this memorandum.
Identification of POTWs Required to Develop a Program
The pretreatment regulation specifies that two groups of POTWs
should be required to develop a pretreatment program (see section
403.8). First, all POTWs with an average design flow greater than
5 million gallons per day (mgd) and receiving .industrial wastes which
1) pass through the POTW untreated, 2) interfere w\th the operation of'
the POTW or, 3) are otherwise subject to pretreatment standards
developed under section 307 of the Clean Water Act are required to
develop a program. In addition, the Regional Administrator or Director
of the State NPDES program may require that POTWs with an average
design flow of 5 mgd or less develop a pretreatment program if their
industrial influent meets any of the three criteria listed above.
-------
A computer print-out of all POTWs in each Region broken down by
majors and minors is attached to this memorandum. The Regional
Enforcement Division should take ±he lead in developing from the
attached computer print-out: 1) a list of those POTWs (both above and
below 5 mgd) in non-NPDES States which should develop a pYetreatment
program and, 2) a list of those POTWs above 5 mgd in NPDES States which
must be required to develop a program. The Regional Water Division
must assist .in this effort and provide such necessary information as
is available in the Water Division files. Attachment A suggests means
by which the Regional office can identify these POTWs.
In compiling the non-MPDES State list, the Regional office should
check the appropriate boxes next to the POTW name on the computer
print-out. Copies of this print-out should then be forwarded to the
Permits and Municipal Construction Divisions at Headquarters.- A copy
of this print-out should also be maintained by both the Enforcement and
Water Divisions in the Regional office and both Divisions should be
consulted on any changes to the list.
The NPDES State list should be sent to NPDES States to assist them
in identifying appropriate POTWs. NPDES States will be responsible for
adding to the Regional list those POTWs with flows of 5 mgd and less
which wil-1 be subject to the program development requirement. Once the
NPDES State has developed a list of all POTWs within its jurisdiction
which will be required to implement pretreatment programs, it should
forward this list to the Grants and Enforcement personnel in the Regional
office who will, in turn, send this information on to Headquarters.
Lists of those POTWs .in both NPDES and non-NPDES States which will
be required to develop a program should be sent to the Headquarters
Permits and Municipal Construction Divisions no later than January 15,
1979. The cover memorandum transmitting the completed lists should be
signed jointly by the Directors of the Regional Water and Enforcement
Divisions.- These lists will eventually be incorporated into the Permit
Compliance System (PCS) which will provide a convenient mechanism for
tracking and updating progress in developing POTW pretreatment programs.
Application for Construction Grants Amendment
Cr.Cc the HatS Cf PCTWS required "tu develop a yrctrealjnent program
have been compiled,- the- Construction Grants staff should notify the
appropriate POTWs .in NPDES and non-NPDES States of the need to apply for
an amendment to their existing Step 1, 2 or 3 grant 1n order to acquire
funding for the development of a pretreatment program (see Construction
Grants regulation 40 CFR 35.907). Concurrent notice of POTWs which
should apply for grant amendments should be sent to Grant personnel in
NPDES and non-NPDES States so that the States may plan future funding
requirements. Existing construction grants should be amended no later
than June 30, 1979, to provide pretreatment program funding.
-------
As individual POTWs apply for and are awarded an amendment to
their construction grant for pretreatment program .implementation,
this information should be conveyed to Regional Enforcement personnel.
As will. be seen in the subsequent discussion, timing of the construc-
tion grants award can have an impact on the development of the
pretreatment compliance schedule incorporated into the POTW's NPDES
permit. '.
Reissuance of Permits to Include Pretreatment Requirements
The pretreatment regulation requires that NPDES permits for POTWs
which are required to develop a POTW pretreatment program incorporate a
compliance schedule for the development of such a program [see 40 CFR
403.8(d)]. This compliance schedule should be incorporated into the
POTW's permit upon reissuance at the end of the existing permit term or
at the time the permit is modified or reissued to grant a section
301(i)(l) time extension or a section 301(h) modification of secondary
treatment requirements. In addition, a POTW's NPDES permit may be
modified in mid-term to incorporate a schedule for the development of a
POTW pretreatment program where, the operation of a POTW without a
pretreatment program poses significant public health, environmental or
related concerns, or where a pretreatment program compliance schedule
must be developed to coordinate with construction grant awards. A
detailed explanation of the development and application of pretreatment
compliance schedules will be found in Attachment B along with a model
compliance schedule. ' .
The pretreatment strategy envisions the type of close-coordination
between Enforcement and Construction Grants staffs outlined in the
Interim National Municipal Policy and Strategy for developing these
compliance schedules. Both the Construction Grants regulation (40 CFR
35.907, 35.920-3) and the pretreatment regulation (40 CFR 403.8) impose
time limitations on the various activities to be undertaken in the
pretreatment compliance schedule. The pretreatment compliance schedule
incorporated into a POTW's NPDES permit should contain milestones
derived from the grants process. As the discussion in Attachment B
indicates, in order to develop a compliance schedule which meets both
the pretreatment and Construction Grants regulatory requirements, the
Enforcement staff must coordinate with Construction Grants staff in
determining the current grant status of the permittee and the schedule
for receipt of future grant funding.
Enforcement of POTW Pretreatment Programs
Tne preceding discussion of coordination between Construction
Grants and Enforcement in developing POTW pretreatment programs should
not be understood to imply that availablity of funding is a prerequisite
to the development of a pretreatment program. 'The requirement to
develop a pretreatnent program should be enforced and not dependent on
-------
Federal funds. The development of pretreatment programs is critical;
it is the main tool to address toxic discharges from POTW's. The costs
of developing such programs are not capital costs and they, can be
recovered from users of the municipal system in most cases'. In
balancing these considerations, the Agency's policy is to enforce
requirements for municipalities to develop pretreatr.ent programs
without dependence on Federal funding.
This policy applies equally to funding the operation of municipal
pre treatment programs once they are developed and running. They are
expected to be self-supporting. A user charge system may be used for
this purpose.
If you have any questions on the implementation of this coordination
effort or its relation to the Interim National Municipal Policy and
Strategy, please feel free to contact Nancy Hutzel or Shanna Hal pern
18-755-0730) in the Permits Division or Ron DeCesare (8-426-8945)
in the Municipal Construction Division.
Attachments
cc: Regional S&A Division Directors
KEIC-
-------
ATTACHMENT A
Procedures to Identify PDTWs Which Kill be Required to Develop
POTW Pretreatment Programs
i
The permit-issuance authority (Regional office or NPDES State) must
have the ability to determine which of its municipal permittees will
be required to develop a POTW pretreatment program. As section 403.8(a)
of. the pretreatment regulation explains, POTWs required to develop a
program will include those POTWs with a design flow over 5 mgd receiving'
from industrial users wastes which:
o pass through the POTW untreated
o interfere with the operation of the treatment works
o are subject to pretreatment standards developed under the authority
of section 307(b) or (c) of the CWA.
In determining which POTWs are above 5 mgd, the permit-issuance authority
should look at average design flow. In addition, if one permittee
controls several treatment works, the cumulative flow of the treatment
works should be considered in calculating average design flow. For
example, one Regional Authority controlling 3 treatment works with
average design flows of 3,2 and'1.5 mgd respectively would be viewed,
for the purposes of the pretreatment.regulation, as a single operation
with an average design flow greater than 5 mga.
A recommended first step in determining which POTWs over 5 mgd fall
within the 3 categories listed above would be to determine which POTWs
receive wastes from one or more industries within tne 21 industrial
categories listed in the NRDC Consent Decree (for reprinting of Consent
Decree see The Environmental Reporter-Cases, 8 ERC 2120). EPA antici-
pates that categorical pretreatment standards under section 307(b)
and (c) will be developed for almost all industrial subcategories
within the 21 industrial categories listed in the NRDC Consent Decree.
A possible approach to detecting these sources would be to examine
. industrial inventories such as the Dun and Bradstreet Market Identifiers,
the Directory of Chemical Producers, published Dy tne Stanford Research-
Institute, and the State inaustrial directories to determine which of .
the listed sources are within the State or Region and discharging into
POTWs. . ' '-. .
A second step in identifying POTWs required to develop a POTW pretreat-
ment program might be to look at those POTtfs which are not meeting their
NPDES permi't conditions. Such permittees would be likely candidates
for a pretreatment program aimed at controlling pollutants which
interfere with the operation of or pass-through the POTW.
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IDENTIFYING
POTWs
Section 403.8(a) of the pretreatment regulation also gives the permit-
issuance authority the ability to require the development of a pre-
trestment program by POTWs with average design flows of 5 mgd or less.
It is recommended that the permit-issuance authority require the
development of a program wherever the POTV meets one of the 3 criteria
outlined earlier. The permit-issuance authority is strongly urged to
exercise its option to extend the requirement to develop a pretreatment
program as broadly as possible.
The burden of proof for demonstrating that a program is not needed
should rest on the POTW. Where there is some doubt that a certain POTW
has industrial influent subject to pretreatment requirements, the POTW
can be allowed to show that it need not develop a program. In such
cases, a clause should be inserted in the municipal permit along with
the compliance schedule for the development of a pretreatment program.
This clause would state that if the industrial waste inventory required
by the compliance schedule demonstrates that the POTW has no contribution
of industrial wastes which would be subject to pretreatroent requirements,
the POTW would not be required to continue development of the program.
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ATTACHMENT B
GUIDANCE ON PREPARING COMPLIANCE SCHEDULES FOR
*
DEVELOPING POTW PRETREATMEMT PROGRAMS-
GENERAL COMMENTS:
Section 403.8(d) of the general pretreatment regulation (40 CFR
part 403) requires that NPDES permits for'POTWs which are required to
develop a POTW pretreatment program incorporate a compliance schedule
for the development of such a program. In some cases, this compliance
schedule will be incorporated into affected POTW permit upon reissuance
at the end of its existing term.
In many cases, however, the compliance schedule will be .incorporated.
into the POTW permit in mid-term through a permit modification. It is
anticipated that in many instances this pretreatment compliance schedule
'will be inserted into the NPDES permit for applicable POTWs when the
permit is modified or reissued in mid-term in connection with a 301(1 HI)
determination (i.e., the determination as to whether or not the schedule
for development of secondary treatment should be extended under the
provisions of section 301 (i HI) of the Act, see 40 CFR 124.104).
Similarly, a POTW which is required to develop a pretreatment program
will have a pretreatment compliance schedule inserted in its NPDES
permit if that permit is modified or reissued in..order to grant
a waiver of secondary treatment requirements under the provisions of
section 301(h) of the Act. (See proposed 40 CFR Part 233.) In addition,
a POTW permit will be modified in mid-term to incorporate a schedule
for the development of a POTW pretreatment program, where the operation
of a POTW without a pretreatment program poses significant public
health, environmental or related concerns, or where a pretreatjnent
program compliance schedule must be developed to coordinate with
construction grant awards.
The compliance schedule will require that the permittee develop
the authorities,"procedures and resources, as defined by 40 CFR 403.8
and 403.12, which comprise an approvable POTW pretreatment program.
The activities listed in the attached model compliance schedule summarize
the more detailed requirements found in sections 403.8 and 403.12 of
the pretreatment regulation. It is recommended that the permit-issuance
authority review the more detailed requirements set forth in the %
reoulatfon before developing the pretreatment compliance schedule, and
insert additional schedule activities where appropriate.
There are several time limitations'imposed by the pretreatment
regulation and the construction grant regulation (40 CFR part 35)
which should be considered in establishing compliance schedule dates.
The pretreatment regulation provides that the compliance schedule will
require the development and approval of a POP*' pretreatment program as
soon as reasonable and within 3 years .after the schedule is incorporated
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COMPLIANCE SCHEDULE
GUIDANCE
into a POTW's permit but in no case later than July 1, 1983 (see §403.8),
Since up to 6 months must be allowed for the program approval process
according to section 403.11 of the pretreatment regulation, the compli-
ance schedule date for submission of a pretreatment program for approval
(activity 8 of the compliance schedule) should be 2-1/2 years from the
incorporation of a compliance schedule or January 1, 1983, whichever is
sooner.
Provisions of the construction grants regulations impose what may
be in some cases stricter time constraints on the development of an
approvable program. For example, section 35.920-3 of the construc-
tion grants regulation provides that no grantee may receive a Step 3
grant after December 31, 1980, until it has developed an approvable
pretreatment program. Thus, a permittee which is scheduled to receive
a' Step 3 construction grant in January 1981 will be required to develop
an approvable program at the outside by January 1981. However, if that
same permittee received a compliance schedule for the development of a
pretreatment program in December 1978 it would be allowed, by the
pretreatment regulation, an outside date of June 1981 (i.e., 2-1/2
years from the incorporation of the compliance schedule) to develop an
approvable program. In this case, the more stringent time limitation,
i.e., that posed by the construction grant regulation, would apply.
As the example above indicates, in developing the schedule date
for the submission of an approvable pretreatment program, the permit-
issuance authority must use that date prescribed by either the pretreat-
ment regulation or the construction grants regulation which provides the
shortest time for the development of the program. In addition, the
permit-issuance authority may impose reasonable time limitations which
are more restrictive.
DEVELOPMENT OF THE PRETREATMENT COMPLIANCE SCHEDULE
It is apparent from the general discussion above that several
different regulatory provisions influence the development of the
schedule date for submitting a POTW pretreatjnent program for approval
(compliance schedule activity 8). Regulatory limitations on the time
frame for developing a program can be summarized as follows:
o approval within 3 years from the incorporation of a
pretreatment compliance schedule in the municipal permit
(application for approval within 2-1/2 years). See 40 CFR
403.8.
o approval by July 1, 1983 (application for approval by
January 1, 19S3). See 40 CFR 403.a.
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COMPLIANCE SCHEDULE
GUIDANCE
o approval prior to payment of grants beyond 90* of the Step 3
funding (application for approval 6 months before'this date).
See 40 CFR 35.935-19.
o development of an approvable pretreatment program by the
end of the Step 2 grant for certain permittees. See 40
CFR 35.920-3.
o approval by whatever more stringent time limit is imposed
by the permit-issuance authority.
In addition, the construction grant regulation imposes an interim
time limitation on the development of compliance schedule activities
1-3. According to this regulation, grantees with amended Step 1 grants .
must have completed activities 1-3 by the time of application for the
Step 2 grant if the Step 2 is to be awarded after Oune 30, 1980.
Facilities reauired to develop a POTW pretreatment program can
generally be divided into 4 groups depending upon the applicablity of
the time limitations discussed above. See attached Chart A.
GROUP 1 Facilities which will have received Step 1 and 2 construction
grants or amendments before June 30, 1980, and a Step 3
construction grant before December 31, 1980. .
If a grantee is scheduled to receive its Step 2 and 3 construction
grants before June 30, 1980 and December 31, 1980, respectively, the
construction grant regulation (40 CFR 35.935-19) requires that, in most
cases, the grantee have an approved POTW pretreatment program before it
receives the last 10% of its Step 3 grant funding. This means that the
grantee would be required to apply for POTW pretreatment program
approval at least 6 months before it is scheduled to receive payment
beyond 90% of its Step 3 funding.*
The pretreatment regulation (40 CFR 403.8(d)) provides that such a
grantee should request approval of the POTW pretreatment program within
2-1/2 years from the incorporation of a pretreatment compliance schedule
into its NPDES•permit or by January 1, 1983, whichever is sooner.
In developing the compliance schedule for permittees in this
group, the perait-issuance authority should determine which of the
above dates provides for the earliest development of a POTW pretreatment
program. This date should then be used as the pretreatment compliance
schedule deadline for activity 8.
*As a 6 months period is needed to approve a POTW pretreatment program,
in order to receive approval of a.program by the date upon which the
grantee is scheduled to receive payment beyond 90% of its Step 3
funding, the application for approval must be submitted 6 months
earlier.
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COMPLIANCE SCHEDULE
GUIDANCE
Dates for the remaining compliance schedule activities are
negotiable with the permittee. Generally, however, the .deadlines
for completing activities 1-3 should not exceed 15 months from the
initiation of the compliance schedule.
Facilities receiving their Step 3 grant before June%30, 1980,
shall be subject to the same time limitations described above.
GROUP 2 Facilities which will have received Step 1 and 2 construction
grants before June 30, 1980, and a Step 3 construction grant
after December 31, 1980. •
The construction grant regulation provides that a grantee which is
scheduled to receive a Step 3 grant after December 31, 1980, must have
completed compliance schedule activities 1-7 before it can receive its
Step 3.funding. Therefore, in developing the compliance schedule, the
permit-issuance authority should use as an outside compliance date for
activities 1-7 the date for completion of the Step 2 grant as determined
by the construction grants compliance schedule as long as this data would
not be later than 2-1/2 years from the initiation of the pretreatment
compliance schedule or Janurary 1, 1983, whichever is sooner.
The compliance date for pretreatment compliance schedule activity
8 (request for program approval) should not exceed 2-1/2 years from the
initiation of the compliance schedule, January 1, 1983, or 6 months
before the permittee is scheduled to receive payment beyond 90% of its
Step 3 funding, whichever is sooner.
Again, the interim pretreatment compliance schedule dates are
negotiable. It is recommended that the completion date for activities
1-3 not exceed 15 months from the initiation of the compliance schedule.
GROLP 3 Facilities which will receive a Step 2 construction grant after
June 30, 1980, and a Step 3 construction grant before December 31,
1980.
Under to the construction grant regulation, in order to receive a
Step 2 grant after June 30, 1980, a grantee must first have completed
activities 1-3 of the pretreatment compliance schedule. The permit-
issuance authority should therefore ensure that the compliance schedule.
dates for the completion of activities 1-3 do not exceed the scheduled
date for the completion of the i>tep 1 grant activities. The permit-
issuance authority may at its discretion impose a more stringent time
limitation for the'compl etion of these activities. It is recommended
that the completion date for activities -1-3 not exceed 15 months from
the initiation of the compliance schedule.
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COMPLIANCE SCHEDULE
GUIDANCE
The construction grant regulation provides.that grantees which
will receive a Step 3 grant before December 31, 1980,"must have an
approved pretreatment program in order to receive the final 10% of the
Step 3 grant funds. The final compliance date for activity 8 of the
pretreatment compliance schedule therefore should be no -later than
6 months* before the date upon which the grantee is scheduled to
receive payment beyond 90« of the Step 3 grant funding unless this date
exceeds 2-1/2 years from the initiation of the compliance schedule, or
January 1, 1983, in which case the final date for activity 8 should be
no later than January 1, 1983, or 2-1/2 years from the initiation of
the compliance schedule, whichever is sooner.
The interim dates for activities 4-7 are negotiable with the
permittee.
GROUP 4 Facilities which will receive a Step 2 construction'grant
after June 30, 1980, and a Step 3 construction grant after
December 31, 1980.
The construction grant regulation provides that in order to
receive a Step 2 grant after June 30, 1980, a grantee must first have
completed -activities 1-3 of the pretreatment compliance schedule. The
permit issuance authority should therefore ensure that the compliance
schedule dates for the completion of activities 1-3 do not'exceed the
schedule date for the Step 2 grant application. The permit-issuance
authority may impose a more stringent time limitation for the completion
of.these activities. It is-recommended that the completion date for
activities 1-3. not exceed 15 months from the initiation of the compliance
schedule.
In order to receive a Step 3 grant after December 31, 1980, a
facility in this category "must also have completed compliance schedule
activities 4-7. The final compliance dates for activities 4-7 should
therefore be no later than the completion date for the facilities
Step 2 grant as determined by the construction grants schedule. If the
scheduled completion date for the Step 2 construction grant activities
is later than 2-1/2 years from the initation of the compliance schedule
or January 1, 1983, then the final compliance date for activities 4-7
should not exceed January 1, 1983, or 2-1/2 years from the initiation
of the compliance schedule, whichever is sooner.
In establishing the pretreatment compliance schedule dates for
activities'4-7, sufficient time must be allowed for the grantee to
accomplish activity 8 (application for program approval) by January 1,
1983, 2-1/2 years from the initiation of the pretreatment compliance
schedule, or 6 months before the permittee is scheduled to receive
payment-beyond 905. of its Step 3 funding*, whichever is sooner.
* See footnote, page 3
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MODEL PRETREATMENT COMPLIANCE SCHEDULE LANGUAGE
Under the authority of section 307(b) and 402(b)(8) of--the Clean
Water Act, and implementing regulations (40 CFR 403), the permittee is
required to develop a pretreatment program. This program shall enable
the permittee to detect and enforce against violations of categorical
pretreatment standards promulgated under section 307(b) and (c) of the
Clean Water Act and prohibitive discharge standards as set forth in
40 CFR 403.5. . • . .
The schedule of compliance for the development of this pretrea'tment
program is as follows. The permittee shall:
ACTIVITY
NO. ACTIVITY DATE
Submit the results of an industrial user sur-
vey as required by 40 CFR 403.8(f)(2)(i-iii),
including identification of industrial users
and the character and volume of pollutants
contributed to the POTW by the industrial
users. '
Submit an evaluation of the legal authorities
to be used by the'permittee to. apply and
enforce the requirements of sections 307(b)
and (c) and 402(b)(8) of the Clean Water Act,
including those requirements outlined in
40 CFR 403.8(f)(l).
Submit a determination of technical informa-
tion (including specific requirements to
specify violations of the discharge prohi-
bitions in 403.5) necessary to develop an
industrial waste ordinance or other means of
enforcing pretreatment standards.
Submit an evaluation of the financial
proerams and revenue sources, as required by
40 CFR 403.8(f)(3), which will be employed
to implement the pretreatment program.
Submit design of a monitoring program which
will implement the requirements of 40 CFR
403.8 and 4U3.12, and in particular those
requirements referenced in 40 CFR
403.8(f)(l)(iv-v), 403.8(f)(2)(iv-vi) and
403.12(h-o),{1-n).
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CHAR'-
OUTSIDE PRETREATMENT COMPLIANCE DATES BASED ON CONSTRUCTION GRANT AWARDS AND PRETREATMENT REQUIREMENTS*
JUNE 30, 1980
DECEMBER 31, 1980
2-1/2 YEARS FROM INITIATION OF
COMPLIANCE SCHEDULE, JANUARY 31,
1983, OR 6 MONTH!. BEFORE THE
FINAL 10* OF STEP 3 GRANT
WHICHEVER IS SOONER
Group
1 Step 1 Step 2
Awarded Awarded
2 Step 1 Step 2
Awarded Awarded1
3 Step 1
Awarded
t\ Step 1
Awarded
Step 3
Awarded
Step 2 /Activities 1-3 ^ Step 3
Awarded I. due by appllca- JAwarded
\ tlon for Step 2/
Step 2 /Activities 1-3 \
Awarded! due by appllca- I
[ tlon for Step 2/
Actlvl
Step 3 /Activities 1-7 \
Awarded! due by appllca- 1 Actlvl
\ tlon for Step 3/
Actlvi
Step 3 /Activities 4-7 \
Awarded 1 due by appllca- ] Actlvl
\ tlon for Step 3/
les 1-8 Due
y 8 Due
les 4-8 Due
y 8 Due
^Interim dates are negotiable and are established by the permit-Issuance authority
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6 Submit list of monitoring equipment required
by the POTW to implement the pretreatment . ''
program and a description of municipal
facilities to be constructed for monitoring
or analysis of industrial wastes.
7 Submit specific POTW effluent limitations
for prohibited pollutants (as defined by 40
CFR 403.5) contributed to the POTW by
industrial users.
8 Submit a request for pretreatment program
approval (and removal credit approval, if
desired) as required by 40 CFR 403.9.
The terms and conditions of the POTW pretreatment program, when
approved, shall be enforceable automatically through the permittee's
NPDES permit.
Quarterly Reporting
The permittee shall report to the permit-issuance authority on a
quarterly basis the status of work completed on the POTW pretreatment
program. Reporting periods shall end on the last day .of the months of
March, June, September and December. The report shall be submitted to
the permit-issuance authority no later than the 28th day of the month
following each reporting period.
Removal Allowances
Any application for authority to revise categorical pretreatment
standards to reflect POTW removal of pollutants in accordance with the
requirements of 40 CFR 403.7 must be submitted to the permit-issuance
authority at the time of application for POTW pretreatment program
approval or at the time of permit expiration and reissuance thereafter.
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DOCUMENT C
Explanation of Procedural/Funding Requirements
for State Pretreatment Programs
Procedures/Funding to Identify POTWs Which Will be Required to
Develop POTW Pretreatanent Programs
The State must have the ability to determine which of its municipal
permittees will be required to develop a POTW pretreatznent program.
As section 403.8(a) of the pretreatment regulation explains, POTWs
required to develop a program will include those POTWs with a
design flow over 5 mgd receiving from industrial users wastes
which: '
o pass through the POTW untreated
o interfere with the operation of the treatment works
o are subject to pretreatsient standards developed under the
. authority of section 307(b) or (c) of the CWA.
In determining-which POTWs are above 5 mgd, the State should look.
at average design flow. In addition, if one permittee controls
several treatment works, the cumulative flow of the treatment works
should be considered in calculating average design flow. For
example, one Regional Authority controlling 3 treatment works with
average design flows of 3, 2 and 2 mgd respectively would -be
viewed, for the purposes of the pretreatnent regulation, as a
single operation with an average design flow greater than 5 mgd.
A recommended first step in determining which POTrfs over 5 mgd
should be required to develop a pretreatnent program would be to
determine which POTWs receive wastes from one or more industries
within the 21 industrial categories listed in the NRDC Consent
Decree (for reprinting of Consent Decree see The Environmental
Reporter-Cases. 8 ERC 2120). EPA anticipates that categorical pretreatment
stanaaras under section 307(b) and (c) will be developed for almost
all industrial subcategories within the 21 industrial categories
listed in the NRDC Consent Decree. A possible approach to detecting
these sources would be to examine industrial inventories such
as the Dunn and Bradstreet Market Indicator and the Directory of .
Chemical Producers, puDiished by the Stanford Research institute,
to aetermine wnich of. the listed sources are within the State and
.discharging into POTWs.
A second step in identifying POTrts required to develop a POTW
pretreatment program might be to look at those POTWs which are not
meeting their permit conditions. Such permittees would be likely
candidates for a pretreatment program aimed at controlling pollutants
which interfere with the operation of the POTtf.
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Section 403.8(a) of the pretreatment regulations also gives the
State authority to require the development of a pretreatment
program by POTWs with average design flows of 5 mgd or less. It is
recommended that the State require the development of a program
" wherever the POTW receives industrial wastes from sources in one
or more of the 21 industrial categories listed in the NRDC Consent
Decree, is not meeting its permit conditions or where municipal
sludge is not meeting applicable requirements. The State is
strongly urged to exercise its option to' extend the requirement to
develop pretreatment program as broadly as possible. The burden of
proof for demonstrating that a program is not needed should rest on
the POTW. Where there is some doubt that a certain POTW has
industrial influent subject to pretreatanent requirements, the POTW
can be allowed to show that it need not develop a program. In such
cases, a clause can be inserted in the municipal permit along with
the compliance schedule for the development of a pretreataent
program. This clause would state that if the industrial waste
inventory required by the compliance schedule demonstrates that the
POTW has no significant contribution of industrial wastes which
would be subject to pretreatment requirements, the POTW would not
be required to continue development of the program.
In brief narrative form, the State should explain those procedures
it has currently developed for identifying POTWs above and below 5
mgd required to develop a pretreatment program. The narrative
should be accompanied by a statement of the resources currently
• devoted to this undertaking. If a program to identify appropriate
POTWs is planned for the future, the State should indicate what
approaches to identifying POTWS will be used and what criteria will
be applied in identifying the pollutants and industries subject to
pretreatment requirements. The State should also describe briefly
its planned procedures for providing technical and legal assistance
to POTWs where help is needed in developing a POTW pretreatment
program.
£» Procedures/Funding to Notify POTWs of Pretreatment Requirements
The State should indicate those procedures it has developed to
notify POTWs of applicable pretrea"&nent requirements as set forth
in 40 CFR 403.8(2)(iii-). This may consist of a mailing system for
distributing information such as copies'of the pretreatsnent regula-
tion and any guidance on developing a POTW pretrea-dnent program
prepared by the State or EPA. Any such distribution system should
. be coordinated with similar information networks employed by State"
personnel in charge of £PA construction grants.
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3. Procedures/Funding to Incorporate Pretreatment Requirements in Municipal
Permits
Where States currently have the authority to revoke and reissue or
modify municipal permits to incorporate an approved pretreatoent
program or a compliance schedule for developing such a program,
(see Attorney General's Pretreatment statement section 2) they will be required
to exercise this authority. Otherwise, a State must include a
modification clause in appropriate POTV permits which calls for the
incorporation of pretreatment requirements at a Tatar date. The
State should indicate to EPA the priorities it will use for incorporat-
ing pretreatment requirements into POTV permits and an estimate
of the additional resources, if any, which will be required to
carry out this task. For example, the State should indicate to the
best of its ability:
o the number'of municipal permits which will incorporate pretreatment
requirements at the same time as they are revoked and reissued
or modified for the purpose of meeting the provisions of 301 (i)
or 301 (h) of the Clean Water Act;
o "the number of expiring municipal permits not receiving 301(i) or
301 (h) modifications which wi-.Tl incorporate pretreatment conditions
upon reissuance
o the number of municipal permits to be revoked and reissued or
modified to include an approved pretreatoent program or a
compliance schedule for developing such a program
Procedures/Funding to Hake Determinations on Requests for POTV
Pretreatment Program Approval and Removal Allowances
The State must have the procedures and funding to receive and make
determinations on requests for POTV pretreatment program and
removal allowance approval. In general this responsibility will
require that the State have procedures and funding to:
o comply with the public notice provisions of section 4Q3.11(b)(l)
of the regulation which requires the State to:
1. mail notices of the request for approval to adjoining
States whose waters may be affected;
2. mail notices of the request to appropriate area-wide planning
•agencies (Section 208 of the CWA) and other persons or organiza-
tions with an interest in the request for program approval or
removal allowance;
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3. publish a notice of the request in the largest daily newspapers
of the municipality in which the POTW requesting program
or removal allowance approval is located. These notices
shall indicate that a comment period will be provided for
interested parties to express their views on the request for
program approval or removal allowance.
o Provide a public hearing if requested by any affected of interested
party as provided for in section 403.1Kb)(2). Notice of such a
hearing will be published in the same newspapers where the
original notice of request for program or removal credit approval
appeared.
o Make a final determination on the request if EPA has not objected
in writing to the approval of the request during the comment ,
period*. In making the final determination, the State should
take into consideration views expressed by interested parties
during the comment period and hearing, if held.
o Issue a public notice of the final determination on the request.
This notice shall be sent to all persons who submitted comments
and/or-participated in the public hearing. In addition, the
notice will be published in the same newspapers as the original
notice of request for approval was" published.
The State shoul d-indicate to EPA by October 10, its current ability
to carry out these responsibilities, focusing primarily on staffing
and funding avail ability. This assessment should be based on an
estimate of the number of POTrts which will be scheduled to receive
POTW pretreatment program and removal allowance approval during the
remainder of the State's" budget year. The State should then
indicate the projected resource levels for POTW pretreatroent
program and removal allowance approval in each of the budget years
19.79-1983 based on the estimated number of POTVs requesting, program I
and removal allowance approval during each of these years. Finally, '
the State should explain how it can insure, to the best of its !
ability, that the funding required to carry out this activity will
be available each year.
5. Procedures/Fund": nc for Identifying and Noti tying Industrial
Users Suoject to P re treatment Reoin rements
The prstreatment regulations provide that where a POTW is not
required to develop a POTW pretreatment program, the State will
assume responsibility for identifying industrial users of the POTw
which mignt be subject to ore-treatment stsr.dsrds. Tue Seals may
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devise its own methods for obtaining this information, including
requiring -the POTW to identify the industrial users in question.
Reference to the Dunn and Bradstreet and Directory of Chemical
Producers listings, as mentioned earlier, may provide a convenient
first step. In many cases this Information may already have been
provided by the POTW through part 4 of the municipal permit applica-
tion form. Through whatever means it chooses, the State should
.insure that all industrial users which fall within one or more of
the 21 industrial categories listed in the KRDC Consent Decree are
identified. In addition, the State should identify as subject to
pretreatment standards all industrial users which contribute
pollutants which interfere with the operation of the treatment
works or pass through the POTW untreated.
Once the app'ropriate industrial users have been identified, the
State must ensure that they are notified of all applicable existing
pretreatment standards and of applicable pretreataient standards
which might be forthcoming. Acceptable procedures would include
a mailing list for industrial users or an arrangement with the POTW
requiring it to provide the requisite notice.
The State should indicate by October 10, whether it has presently
in operation effective procedures for identifying and notifying
industrial users currently or potentially subject to pretreatment
standards. If such procedures are not currently on line, if
for example, information supplied by part 4 of the municipal
. application 'form is not sufficiently detailed to -provide the
required information, the State should indicate how it plans to
develop the ability to identify and notify appropriate industrial
users. The description of these procedures should be accompanied
by an assessment of resources needed to implement them, the current
availability of resources to meet this need and plans for obtaining
additional resources if required.
6. Procedures/Funding for Identifying the Character and Volume of
Pollutants Contributed by Industrial Users to POTWs
Section 403.10{f)(2)(i) of the pretreatment regulation provides
that where a POTW is not required to develop a POTW pretreatment
program, the State will be required to carry out those procedures
which would otherwise have been the responsiblity of the POTW. One
of these responsiblities is the identification of the character
and volume of pollutants, being contributed to the POTW by sources
subject to pretreatment requirements (see 403.8(f)(2)(ii)).
Industrial users subject to pretreatment requirements include those
which are subject to pretreatment standards promulgated under
section 307(b) and (c) and/or, contribute pollutants which interfere
with the operation of the POTW or which pass through the POiW
untreated. This responsibility is complicated by the fact that
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analytical and monitoring techniques are not yet available to
provide a quantitative analysis of the presence of many of the
pollutants in question. In recognition of this problem, EPA
recommends that States follow the procedures outlined below in
developing their inventory of industrial waste contribution.
o The first step in the waste inventory should be a qualitative
analysis of pollutants being contributed by all industrial
sources within the system. The individual industrial users
should be asked to provide information on the type and approximate
quantity of pollutants discharged by the facility. This information
should be derived entirely from knowledge of the facility's
process and.should not require any sampling at the source.
o Second, the State should review this qualitative information on
the pollutants being discharged into the system and remove from
further consideration those pollutants which are not within the
129 pollutants to be regulated with national pretreawient
standards and/or which are known not to interfere with the operation
of the POTW or pass through the POTV untreated.
o Third, the State (or POTW if the State so directs) will then
sample the influent to the POTW to determine which of the
pollutants remaining after step two appear in significant
concentrations in the influent to the POT*'. In carrying out
this sampling, the State should use those sampling and analytical
techniques set forth in 40 CFR part.136. If a pollutant
• appears at such a low concentration that it is .highly unlikely
that it would have an adverse effect on the operation of the
POTW, pass through untreated, or if the pollutant does not
appear at all in the influent to the POTW, it should be excluded
from further consideration.
o Fourth, the analysis in preceeding steps has resulted in a list
of those pollutants contributed to the system which may affect
the operation of the POTW or pass through the POTV untreated.
The next step is to determine which industrial users have such
pollutants in their effluent.
o Fifth, those industrial users identified in step four will be'
required to do sampling and analysis to quantify the amounts of
those pollutants being discharged oy tnat source into the POTW.
If necessary, the Stats may then impose upon that industrial
user an effluent limitation which will ensure that such pollutants
are discharged at levels which will not interfere witn the
operation of the treatment works or pass through in unacceptable
amounts.
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o Finally, as Federal pretreatment standards for industrial
subcategories are promulgated, the State will require that
industrial users belonging to those subcategories sample
and analyze their effluent to quantify the amount of pollutants
regulated by the standard being discharged by that industrial
user.
The above procedures can be characterized as a 2-part program.
Initially, prior to the development of sampling and analytical
techniques for many of the complex pollutants regulated within the
21 industrial categories (and approximately 400 industrial subcate-
gories) set forth in the NRDC Consent Decree, the State will focus
on identifying and quantifying only those pollutants which interfere
with the operation of the treatment worts. Then, as Federal
pretreatment standards for the 129 pollutants in the 21 industrial
categories energe, along with recommended sampling and analytical
techniques for such pollutants, the State will be required 'to
elicit specific quantitative information on the character and
volume of pollutants discharged by indstrial users regulated by
Federal standards.
POTWs which are required to develop a POTW pretreatment program are
responsible for carrying out the industrial waste inventory in lieu
of the State (see 403.8(f)(ii) and step 2 of the municipal pretreat-
ment compliance schedule). The State should recommend that this
2-step program be used by such POTWs.
The State should indicate to EPA by October 10 its current ability
to carry out the industrial waste characterization program described
above. Particular attention should be paid to the availability of
resources to implement trris survey, the technical ability of the
State to sample influent to POTWs as required by step 3 above, and
the State's technical ability to develop effluent limitations for
industrial users where necessary to control'the introduction of
pollutants which interfere with'the operation of the POTW. The
State should discuss those resources and technical abilities which
it will need to acquire to fully implement the components of the
industrial waste inventory described above.
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8
>. Procedures/Funding to Make Determinations on Requests for Fundamentally
Different Factor Variances
Section 403.13 of the pretreatment regulation provides that States
will.be responsible for considering requests for fundamentally
different factors variances. Any interested person believing that
factors relating to an industrial user are fundamentally different
from the factors considered during the development of a categorial
pretreatoent standard applicable to that user may apply for a
fundamentally different factors variance allowing a modification of
the discharge limit specified in that standard.
The State must have procedures to review such requests, and make a
determination to deny the request or recommend to EPA that'the
request be approved. In making this determination, the State must
consider the factors outlined in 403.13(c) and (d). The State
should submit to EPA by October 10, 1978, a discussion of its current
ability to consider requests for fundamentally different factor
variances. Emphasis should be placed on current funding avail ability
and projected funding needs. In addition, the State should
identify the existing or required technical expertise it will need
to evaluate the various factors listed in 403.13(c) and (d).
8. Procedures/Funding to Ensure Compliance with Pretreatment Standards
and Permit Conditions
i a POTW is not required to develop a POTW pretreatment program,
State will be required to ensure that industrial users of that
Where
the S- _ _ _ _n_ . .. ______ _____
POT* subject to pretreatment standards comply with those standards.
In order to do so, the State must develop procedures which include
the following:
o Where State law provides adequate authority, the State should
have the technical ability to review the technology which the
industry proposes to install in order to meet State or Federally
imposed pretreatment standards.
o Once the compliance date for a pretreatment standard has passed,
the State must have procedures to receive and analyze the report
submitted by the industry, in compliance with the requirements
of 4Q3.12U), indicating whether or not the industry has complied
with applicable effluent limitations.
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o The State must develop the administrative and technical ability
to receive and analyze the periodic reports submitted by industrial
users indicating continued compliance with pretreatzient standards
{see 4Q3.12(e)).
o The Stats must ensure that it has adequate resources and technical
expertise to determine, independent of reports submitted by
the industrial user, that the user is in compliance with.applicable
pretreatment standards. For example, the State should have
procedures for scheduling periodic checks on industrial users
to spot-check compliance, sampling the effluent at the industrial
sources and analyzing this effluent to ensure compliance. with
applicable limitations.
Where"a POTW pretreatment program has been developed and the POTW
has been granted a removal allowance for certain pollutants, the
State must have procedures.to:
o receive and analyze periodic reports from the POTW indicating
• continued removal at the rate allowed by the POTW's permit and
continued compliance with sludge requirements;
o sample and analyze the influent to and effluent from the POTW to
determine, independent of reports submitted by the POTW, that the
POTW is maintaining the approved level of removal and is in
compliance with all applicable sludge requirements.
It is recognized that the sampling and analytical requirements
explained in this section may impose a substantial resource burden
on the State. While it is preferred that the State develop its own
technical expertise, an acceptable alternative would be for the
State to contract with private consultants, universities or other
groups with sufficient technical expertise to carry out the sampling
and analytical requirements described in this section.
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PRETREATMENT COMPLIANCE STRATEGY
Note; This policy contains the "Short Term Pretreatment Compliance
Strategy." The long term policy is under development and will be
subsequently added to the Compendium.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OCT 2 8 1983
OFFICE OF
WATER
MEMORANDUM .
SUBJECT:' Pretreatment Compliance Strategy
FROM: Bruce R. Barrett, Director
_
Office of Water Enf orcement~and Permits (EN-335)
TO.: Water Management Division Directors
Regions I-X
.Attached is the Pretreatment Compliance Strategy developed by
the Pretreatment Compliance Strategy Task Force which I established
in May, 1983. The task force is comprised of representatives from
all ten Regions, OWPO, OWRS and the States of North Carolina and
Illinois. The Office of Enforcement and Compliance Monitoring has
also provided comments throughout the development of the strategy.
The strategy, as attached, includes both a short term ( FY 1984-
1985) and a proposed long term ( FY- 1985 and beyond) phase. The
short term strategy, being final, should be implemented as soon as
possible. The short term strategy describes EPA' s compliance
response to those POTWs which did not complete approvable pretreat-
ment program development by September 30, 1983 and those industries
which viol-ate schedules or effluent limits associated with specific
categorical standards. Of specific concern will be those categorical
standards, electroplating and metal finishing, which have compliance
deadlines in FY 84. Regions should be prepared to address any
compliance problems associated with these industries in FY 84. An
estimated 720 POTWs located in non-approved States are in non-
compliance with the pretreatment program development requirements
as of October 1, 1983.
The long term strategy describes the pretreatment compliance
goals for FY 1985 and beyond. This is the implementation phase of
the pretreatment compliance program. This phase deals w'ith compliance
monitoring of POTWs and categorical industries, response to non-
compliance by these entities and EPA'-s overview of States that are
approval authorities.
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PRETREATMENT COMPLIANCE STRATEGY
I. INTRODUCTION
The U.S. Environmental Protection Agency's (EPA) pretreatment
program, established pursuant to Clean Water Act sections 307, 308,
and 402 as implemented by regulations set forth at 40 C.F.R. §403,
is designed to protect receiving waters and Publicly Owned Treatment
Works (POTWs) from industrial pollutants discharged into POTW
collection systems. These pollutants may interfere with treatment
processes, contaminate sludges so as to inhibit effective sludge
management, or pass through treatment processes and pollute
receiving waters.
EPA's pretreatment regulations establish three major elements
of the pretreatment program:
0 General discharge prohibitions that apply to all contributing
industries;
.° Administrative mechanisms to ensure that general discharge
;- --prohibitions, categorical standards, and local limitations
are applied and enforced; and
.° Reporting requirements for contributing industries and
POTWs.
POTWs that receive substantial quantities of industrial waste
flows are required by the regulation to develop pretreatment programs
to ensure that their contributing industries comply with general
prohibitions, categorical standards, and other requirements.
These POTW pretreatment programs will control the introduction
of industrial pollutants through the establishment of limitations
on industrial facilities contributing pollutants to POTWs. EPA
envisions that POTWs will act as the primary controlling authority
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-2-
over industrial dischargers to POTW collection systems. However,
EPA and many States have concurrent authority to enforce pretreat-
ment requirements and will do so, if necessary.
The pretreatment program uses the terms "control authority"
and "approval authority". "Control authority" is that entity
(POTW, State or EPA) responsible for achieving and maintaining
compliance with the pretreatment program requirements. If a
POTW has an approved pretreatment program, it is the "control
authority"; if not, either the State or EPA is the control authority
depending on whether EPA has approved State administration of
the pretreatment program.
The "approval authority" is that entity (State or EPA) respon-
sible for overviewing the control authority's implementation of
an approved pretreatment program.
II. SHORT TERM STRATEGY - FY 84 and 85
A. Objective
The objective of the short term strategy is to see that
all POTWs required to develop and implement pretreatment programs
do so in the shortest possible time. This is necessary to (1)
ensure that POTWs have maximum control over, and responsibility
for the integrity of their treatment systems and (2) facilitate
compliance with categorical standards by indirect dischargers.
B. Compliance Follow-Up
Pretreatment regulations (40 C.F.R. §403.8(b)), established
July 1, 1983, as the deadline for approval of POTW pretreatment
programs. Adequate notice and time for development of pretreatment
programs has been provided for POTWs which are required, by their
permits, to develop pretreatment programs.
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-3-
A substantial number of POTW pretreatment programs, as of
July 1, 1983, were not approved and, therefore, the POTWs are
in violation of their NPDES permits. EPA intends to address
these violations in the following manner:
1. For POTWs who were unable or unwilling to submit
an approvable program,1 on or before September 30,
1983, compliance schedules will be established through
administrative orders, judicial orders or other appropriate
mechanisms for establishing enforceable schedules.
2. Compliance schedules in enforcement actions will require
that all submissions of prepared POTW pretreatment
programs be received as soon as possible, but no later
than September 30, 1984.2 It is expected that approval
.of all required POTW programs will be completed no
later than March 31, 1985.
approvable POTW pretreatment program contains: legal authority
to apply and to enforce the requirements of Sections 307(b) and
(c), and 402(b)(8) of the CWA and any regulations implementing
those sections (403(f )(!)); procedures to ensure compliance with
the requirements of the POTW pretreatment program (403(f)(2));
and sufficient funding and qualified personnel to carry out the
program authorities and procedures (403(f)(3)).
is anticipated that, most compliance schedules will require the
POTW to submit a pretreatment program prior to September 30, 1984
and in only rare instances will this deadline be extended.
-------
Judicial enforcement should be initiated in appropriate cases
against POTWs that violate pretreatment administrative orders,
exhibit continued recalcitrance, or substantially violate other
pretreatment requirements.
EPA will also enforce categorical standards. In non-approved
cities in non-approved States, EPA will enforce standards directly
against indirect dischargers. This may include conducting compliance
inspections at indirect dischargers when needed. In approved
cities that are not enforcing categorical standards, EPA will
use appropriate enforcement mechanisms against both the POTW and
the indirect dischargers. EPA's enforcement response in these
situations wi«ll be consistent with the enforcement responses set
forth in the policies governing the enforcement of the NPDES
program.
[The following long term strategy is still in the
developmental stage and is being circulated for
review and comment. When finalized, the long term
strategy will be the second phase of the Pretreatment
Compliance Strategy.]
III. LONG TERM PROGRAM STRATEGY (DRAFT)
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3832
Federal Register / Vol. 49. No. 20 / Monday. January 30, 1984 / Notices
ENVIRONMENTAL PROTECTION
AGENCY
lwH-FRL2515-€]
Notice of National Municipal Policy on
Publicly-Owned Treatment Works.
AGENCY: Environmental Protection
Agency.
ACTION: Notice of National Municipal
Policy.
SUMMARY: This notice sets forth the
Environmental Protection Agency's
policy on ensuring that all publicly-
owned treatment works (POTW) comply
with the statutory requirements and
compliance dead-lines in the Clean
Water Act (CWA). The policy describes
the Agency's intention to focus its
efforts on POTWs that previously
received Federal funding assistance and
are not in compliance, on all other major
POTWs, and on minor POTWs that are
contributing significantly to an
impairment of water quality. It also
describes how the Agency expects EPA
Regions and States to carry out the
intent of the policy. The purposes of the
policy are to achieve maximum
improvement in water quality in
accordance with the goals of the CWA,
and to protect the public's investment in
rastewater treatment facilities.
The Agency has recently proposed a
regulation that redefines secondary
treatment pursuant to the 1981 '
amendments to section 304(d) of the
CWA, 48 FR 52258, November 16,1983.
This related action will help provide
reasonable certainty regarding POTWs
applicable effluent limits and will
facilitate implementation of this policy.
EFFECTIVE DATE; This policy will be
effective January 30,1984.
FOR FURTHER INFORMATION CONTACT:
Robert W. Zeller, Ph. D., U.S.
Environmental Protection Agency, EN-
338, 401 M Street. SW., Washington,
D.C., 20460 (202) 475-8304.
Dated: January 23.1984.
William D. RuckeUhaus.
Administrator.
Statement of Policy
'When the Clean Water Act (CWA)
was passed in 1972, Congress gave
municipalities until J977 to comply with
its requirements. Congress authorized
the'Environmental Protection Agency
(EPA) to extend the deadline to 1983 and
then again to July 1,1988, for some
municipalities. In addition. Congress
amended the Act in 1981 to modify the
basic treatment requirements. Therfore,
Congress has authorized EPA to give
some municipalities several additional
years to achieve compliance and has
also provided more reasonable
treatment requirements for certain types
of facilities.
The CWA requires all publicly-owned
treatment works (POTWs) to meet the
statutory compliance deadlines and to
achieve the water quality objectives of
the Act. whether or not they receive
Federal funds. The EPA will focus on
POTWs that previously received Federal
funding assistance and are not currently
in compliance with their applicable
effluent limits, on all other major
POTWs, and on minor POTWs that are
contributing significantly to an.
impairment of water quality. EPA's goal
will be to obtain compliance by POTWs
as soon as possible, and no later than
July 1,1988. Where there are
extraordinary circumstances that
preclude compliance of such facilities by
July 1.1988, EPA will work with States
and the affected municipal authorities to
ensure that these POTWs are on
enforceable schedules for achieving
compliance as soon as possible
thereafter, and are doing all they can in
the meantime to abate pollution to the
Nation's waters.
Implementation Strategy
The Agency is committed to pursuing
a clear course of action that fulfills the •
intent of Congress and results in the
maximum improvement in water quality.
The Agency is also committed to
protecting the public's financial
investment in wastewater treatment
facilities. To meet these objectives, the
Agency expects EPA Regions and States
to adhere to the National policy stated
above and to use the following
mechanisms to carry out the intent of
this policy.
EPA Regions will cooperate with their
respective States to develop strategies
that describe how they plan to bring
noncomplying facilities into compliance.
These strategies should include a
complete inventory of all noncomplying
facilities, should identify the affected
municipalities consistent with, the
National policy, and should describe a
plan to bring these POTWs into
compliance as soon as possible. Regions
and States will then use the annual
State program grant negotiation process
to reach agreement on the specific
activities they will undertake to carry
out the plan.
Based on the information in the final
strategies, the permitting authority
(Region or approved NPDES State) will
require affected municipal authorities to
develop one of the following as
necessary:
Composite Correction Plan: An
affected municipality that has a
constructed POTW that is not in
compliance with its NPDES permit
effluent limits will be required to
develop a Composite Correction Plan
(CCP). The CCP should describe the
cause(s) of noncompliance, should
outline the corrective actions necessary
to achieve compliance, and should
provide a schedule for completing the
required work and for achieving
compliance.
Municipal Compliance Plan: An
affected municipality that needs to
construct a wastewater treatment
facility in order to achieve compliance
will be required to develop a Municipal
Compliance Plan (MCP). The MCP
should describe the necessary treatment
technology and estimated cost, should
outline the proposed sources and
methods of financing the proposed
facility (both construction and O&M),
and should provide a schedule for
achieving compliance as soon as
possible.
The permitting authority will use the
information in these plans and will work
with the affected municipality to
develop a reasonable schedule for
achieving compliance. In any case
where the affected municipal authority
is unable to achieve compliance
promptly, the permitting authority will,
in addition to setting a schedule for
achieving full compliance, ensure that
the POTW undertakes appropriate
interim steps that lead to full
compliance as soon as possible. Where
there are extraordinary circumstances
that make it impossible for an affected
municipal authority to meet a July 1.
1988 compliance date, the permitting
authority will work with the affected
municipality to establish a fixed date
schedule to achieve compliance in the
shortest, reasonable period of time
thereafter, including interim abatement
measures as appropriate. The general
goal is to establish enforceable
compliance schedules for all affected
municipalities by the end of FY 1985.
. Once schedules for affected
municipalities are in place, the
permitting authority will monitor
progress towards compliance and will
take follow-up action as appropriate.
Nothing in this policy is intended to
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Federal Register / Vol. 49. No. 20 / Monday, January 30, 1904 / Notices 3833
impede or delay any ongoing or future
enforcement actions.
Overview
EPA Headquarters will overview the
implementation of this policy to ensure
that actions taken by Regions and States
are consistent with National policy and
that the Agency as a whole is making
progress towards meeting the statutory
deadlines and achieving the water
quality objectives of the Act.
Dated: January 23,1984.
William D. Ruckelshaus,
Administrator.
|FR Doc. 84-2433 Filed 1-27-84:8:45 am|
BILJJNG CODE 6S6O-50-M
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MUNICIPAL MANAGEMENT SYSTEM
Note; The Municipal Management System was based on the National
Municipal Policy of October, 1979, which was superseded by the new
National Municipal Policy of January 30, 1984. Appendix E of the
Municipal Management System remains the only effective section of
the document.
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EPA
United Slates
Environmental Protection
Agency
Office of
Water Program Operations
Washington DC 20460
Office of Water Enforcement •'
Water
Municipal
Management
System
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Appendix E
NONCOMPLIANCE RESPONSE GUIDE
.This is a guide for Construction Grant and Enforcement offi-
cials in the exercise of their enforcement discretion. It serves
three main purposes. First,' it establishes enforcement responses
that are appropriate, both in terms of their severity and the
availability of Agency resources for different types of permit or
grant violations. Secondly, given the resource constraints in the
various Grants and Enforcement units, it assures a relatively
uniform application of enforcement responses to comparable levels
and types of violations around the country. Finally, it acts as a
standard against which any MMS program can be evaluated.
It should be emphasized that this guide is to be used when
considering the most appropriate response to a permit or grant
violation. Thus, the suggested responses or alternatives may not
be the only ones appropriate in achieving compliance. The guide
should not be woodenly applied in any particular case. Each
violation of an NPDES permit or grant schedule is a violation of
"the Federal Water Pollution Control Act for which the full array
of enforcement responses provided in the Act is available.
Determining the most appropriate response (or set of responses)
requires consideration of 1) the severity of violation in terms of
the degree of variance from the permit/grant condition, 2) . the
impact on the environment and the integrity of the NPDES program,
3) the enforcement history of the permittee in terms of past
violations and good faith, 4) the impact on. other dischargers, 5)
the availability of enforcement resources within the enforcement
unit, the prosecutorial branch of government, and the judiciary,
6) the importance of the violation in comparison with other
violations that must be dealt with by limited resources, and 7)
considerations of fairness and equity.
In any particular case these factors may lead to an enforcement
response different from that suggested in the guide. In most cases,
it is anticipated that responses to violations will be made within
i the framework of responses outlined in the guide.
The following table displays most of the standard responses
which may be made to noncompliance with construction grant and/or
NPDES permit requirements. Some of the responses have very broad
applications. The table gives users an idea of the scope or range
of options which may be considered when responding to permit or
grant violations. Since there is to be no unilateral response (on
the part of only one program) to a grant-related permit violation,
the following examples serve to indicate the flexibility that may
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E2
be desirable, in bringing a permittee back into compliance. Any
sequence of grant responses or enforcement actions should not de-
viate from the levels outlined in Table 2 such that the response
is not appropriate to the severity of the violation. For example,
"documented phone calls" or "letters" (Bl, 2) may be used to
gather information .or to alert a permittee in the early stages of
almost any type of violation or apparent violation. Other
responses have a much more limited application. For example, to
"withhold up to 10% of grant payment" (A4) would be effective only
near the completion of a grant project in Step 1, 2, or 3, and
would be most effective at the tine of close-out of a Step 3
grant. Similarly, "sewer bans/restrictions" (B5(b), CIO) would be
most effective where a community is undergoing significant growth
and where the violation is so clear and serious as to offset the
political outcry certain to be triggered by imposition of a ban or
restriction.
In general, the responses escalate in impact as one moves
down the list within each category, i.e. A7 ("stop payment") is
much more serious a grant management action than A2 ("impose
grant conditions"). Likewise, B4 ("Show Cause hearing") is much
more serious an enforcement action than Bl ("documented phone
call").
However, responses ranked close to one another within a given
category may in some cases differ more with respect to the circum-
stances in which they are usable than with respect to the overall
impact. For example, A3 ("withdraw authorization to advertise for
bids" ) would be effective where a grantee was delaying initiation
of facility construction to press ahead with sewer construction to
accommodate new development, while A4 ("withhold up to 10%) would
be most effective near closeout of a Step 3 grant. Neither is
more serious than the other in terms of impact.
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E3
SAMPLE RESPONSES TO MUNICIPAL NONCOMPLIANCE
A. Grant Management Actions (EPA/State)
1. Deny/defer award
2. Improve grant conditions (to assure "catch-up")
3. Withdraw authority to advertise for bids
•4. Withhold up to 10% of grant payment
5. Disallow costs related to noncompliance
6. Suspend work (conditional, unconditional)
7. Stop payment
8. Terminate grant
9. Recover funds
10. Annul grant (partial, total)
11. Suspend grant eligibility
B. Enforcement Actions (EPA/State)
1. Make documented phone call
2. Send letter:
a. informal inquiry
b. instructional
c. Section 308
d. warning, "no action"
e. warning, time-controlled
'f. "Show Cause"
3. Issue NOV to State or 309 Administrative Order
4. Hold "Show Cause" hearing
5. Refer to Justice, possibly-request:
a. court-appointed master
b. 402(h) connection ban/restriction
c. adjustment of grantee on project priority list
C. State Actions
1. Decertify plant operator (temporarily/permanently)
2. File a complaint vs. engineer's license
3. Establish prequalification procedures for consulting
engineers
4. Publish list of "eligible" consulting engineers,
contractors
5. Publish list of plants with design problems and the
responsible consulting engineers
6. Withhold 'approval of trust report required for funding of
local share
7. Hold "Show Cause" hearings
8. Impose administrative fines
9. Take over operation of plant and bill the community
10. Sewer bans/restrictions
11. Issue State order
12. Refer to State Attorney General
D. General' Sanctions (EPA)
1. Withhold approval of Corps of Engineers Section 404
(dredging) permits
2. Deny certificate of adequacy for actions by other Federal
agencies
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NATIONAL ENFORCEMENT RESPONSE GUIDANCE - ALL WiJOR PERMITTEES
HEPORTING VIOLATIONS
TYPE VIOLATION
1. Failure to report.
2. Failure to report.
2. Failure to report.
4. Failure to report.
5. Failure to report.
6. Failure to report.
7. Failure to report.
CIRCUMSTANCES
Routine permit requirement.
Isolated instance. Also, any
special, one-time report.
Failure to respond to initial
call by submitting report or
refusing to acknowledge re-
quirement.
Failure to respond to NNC or
repeated attempts to contact
by phone. Documented lack of
cooperation.
Long-tern disregard of re-
quirements, violation of AO,
documented lack of cooperation,
and coincident effluent or
schedule violations.
Failed to report effluent
violation(s) within 5 days
of occurence. Not fully
aware of problems.
Knowingly failed to submit
report within 5 days of
effluent violation (s) .
8.
Reporting False
information.
9.
Reporting false
information.
Failure to report effluent
violation(s) within 5 days
of occurence and serious
environmental damage takes
place or public health
endangered.
Permittee satisfactorily
explains how error made.
Permittee's culpability
unmistakable. 'Intent1
can be established.
BASIC APPROACH
Industrial: Phone call follow-
up. Request immediate sub-
mittal by specified date.
Municipal: Contact Grants.
Initiate phone follow-up.
Industrial: Issue notice
(letter) of noncompliance
(NNC)-1
Municipal: Contact Grants.
If no legitimate delays,
issue NNC. Otherwise, set
new deadline.
Industrial: Proceed with AO.
Continue to document case.
Municipal: Contact Grants.
Take Grant Management actions
as appropriate. Document case.
Industrial: Proceed with re-
ferral. Continue to contact
and document case.
Municipal: Coordinate with
Grants. Take Grant Management
actions. If ineffective,
escalate and/or initiate
referral.
Industrial: Phone follow-up
to request immediate sub-
mi ttal. Issue NNC.
Municipal: Contact Grants.
Initiate phone follow-up.
Issue NNC.
Industrial: Issue NNC. Cite
legal liability for con-
tinued reporting violations.
If violation continues, pro-
ceed as in 3 above.
Municipal: Contact Grants.
Same as industrial.
Industrial: Proceed with AO
or referral depending on
impact of violation and
'intent' to avoid responsi-
bility.
Municipal: Contact Grants.
Take Grant Management actions.
If ineffective, escalate as
in industrial.
Industrial: Issue NNC. Cite •
severe legal liability for
false reporting.
Municipal: Contact Grants.
Issue NNC citing severity
of violation.
Industrial: Proceed with
criminal referral.
Municipal: Proceed with
criminal referral.
1 A NMC should cite the facts about the violation (including dates), identify the permit
requirement(s) violated, refer to the legal liability which may be incurred, and require
an explanation (by date certain), not only of the incident, but also of the steps taken
to return to compliance.
2 This guidance does not attempt to draw the line between 'minor' or 'insignificant'
unreportod data and that information which is critical in making a compliance determination
«- <>«?».•.•»;*.:.»*• .*<»,-•; c;~n ill -roe:-.^r,o«.e cVinnlA en(~<->iiraoo n rhanoe in rcoortind behavior.
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VIOLATION
1. Failure to meet interim
requirement.
GRANT/COMPLIANCE SCHEDULE EVENTS
CIRCUMSTANCES
Will not result in violation
of final requirement or other
interim dates.
2.
Failure to meet interim
requirement.
3.
4.
5.
6.
Failure to meet interim
requirement.
Failure to meet final
requirement.
Failure to meet final
requirement.
Failure to meet final
requirement.
7.
Failure to meet final
requirement.
8.
Failure to install
aor.itoring equipment.
Will result in violation of
other interim or final dates.
Legitimate delays. Acting in
good faith.
Will result in violation of
other interim or final dates.
No legitimate delays. Not
acknowledging permit respon-
sibilities.
Compliance likely within 90
days. Demonstrated commit-
ment to permit responsibili-
ties.
Delay for legitimate reason:
strike, act of God, economy.
90 days or more overdue. No
legitimate delays. Not ac-
knowledging permit retsponsi-
bilities. Failure to respond
to Agency communications.
Same as above and failure to
respond to NNC or violation
of AO. Requirement is a
major step, resulting in a
serious environmental or
public health situation.
No legitimate delays.
BASIC APPROACH
Industrial: Phone follow-up.
Secure date by which event
should occur. If appropriate,
issue NNC.
Municipal: Same as above.
Identify Grant management
actions which may be taken.
Industrial: Issue NNC. Follow-
up to secure commitment to
compliance. Set new dead-
lines. Track closely.
Municipal: Same as industrial;
identify Grant management
actions which may be taken.
Industrial: Proceed with AO.
Issue NNC. Document case.
Municipal: Issue NNC. Dis-
allow costs associated
with noncompliance.
Industrial: Issue NNC.
Monitor closely to verify
status.
Municipal: Sane as industrial.
Industrial: Issue NNC. Secure
commitment to complete
requirement.
Municipal: Same as industrial.
Industrial: Issue NNC. Proceed
' with AO. Document case-
Municipal: Issue -NNC. Withhold
up to 10% of grant; recover
funds; suspend eligibility
for other projects; terminate
or annul grant.
Industrial: Proceed with
referral. Document case.
Municipal: Proceed with AO
or take Grants Management
actions as in 6 above. If
actions ineffective,
proceed with referral.
Industrial: If NNC ineffective,
proceed with AO to begin
monitoring (with contractor
support if neeessarv)
.immediately. Set new dead-
line.
Municipal: Issue NNC. Take
grant Management actions.
If ineffective, proceed
with AO.
-------
VIOLATION
1. Exceeding interim limits
2. Exceeding interim limits
3. Exceeding interim limits
4. Exceeding interim limits
5. Exceeding interim limits
6. Exceeding interim limits
7. Exceeding final limits
8. Exceeding interim or
final limits.
EFFLUENT VIOLATIONS
CIRCUMSTANCES
Isolated discharge under
permittee's control. No
harmful effects.
Isolated discharge under
permittee's control.
Jeopardizes water quality.
Isolated discharge under
permittee's control.
Results in serious environ-
mental damage or public
health concerns.
Isolated discharge under
permittee's control.
Relatively minor infraction
occurring routinely (more
than once in four quarters).
Isolated discharge not
under permittee control.
No harmful effects.
Isolated discharge not
under permittee control.
Serious environmental
damage or public health
concerns.
Isolated instance. Com-
pliance record generally
good. No harmful effects.
Notification to Agency not
made within five days as
required by permit.
BASIC APPROACH
Industrial: Telephone follow-
up. If response unsatis-
factory, issue NNC.
Municipal: Same as Industrial.
Industrial: Issue NMC. If
response inadequate, proceed
with AO.
Municipal: Contact Grants. •
Proceed as with Industrial.
Industrial: Issue KMC. If
immediate steps not taken,
proceed with AO or referral.
Municipal: Contact Grants.
Consider Grant Management
actions and proceed as with
Industrial.
Industrial: If second KKC in-
effective, proceed with AO.
Municipal: Contact Grants.
Proceed as with Industrial.
Industrial: Issue NNC.
Municipal: Same as Industrial.
Industrial: Same as 3 above.
Municipal: Same as .Industrial.
Industrial: Telephone follow-
up. If corrective steps
taken, monitor closely. If
not, issue NNC. Document
instance.
Municipal: Same as Industrial.
Industrial: Issue NKC. If re-
peated proceed with AO.
Municipal: Contact Grants. Pro-
ceed as with Industrial.
9. Exceeding interim or
final limits
10. Exceeding final limits
Excursion within Technical
Review Criteria but consti-
tutes routine violation.
Violation continues after
issuance of NNC. Demonstra-
ted lack of commitment to
permit responsibilities.
Industrial: Telephone follow-up.
If response unsatisfactory,
issue NNC.
Municipal: Same as industrial.
Industrial: Proceed with AO.
If AO violated, initiate
referral,
Municipal: Contact Grants, Con-
sider Grant Management actions
and proceed with AO or
referral.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D C. 20460
APR 13 1984
OF FICE OF
THE ADM IN 1ST W A TO H
MEMORANDUM
• . .— ii •• ..... t
J " ' "
SUBJECT: FY 1984 P'retreatment Enforcement Activities
FROM: Alvin L. Aim
Deputy Administrator
TO: Regional Administrators
As stated in the Operating Year Guidance for FY 1985-86,
EPA's principal emphasis will be to deal effectively with
control of toxic and hazardous substances. One of. the important
programs necessary for accomplishing this objective is the
pretreatment program. I' think the approval of State and 'local
pretreatment programs and ensuring compliance with categorical
standards are critical to the success of controls on discharges
containing toxic pollutants.
The Operating Year Guidance discusses a strategy for
implementing the pretreatment program during FY 1985-86, but
I believe we cannot wait until then to initiate a strong
enforcement effort in this area. To date, compliance by POTWs
with pretreatment requirements has lagged and we anticipate
widespread noncompliance by the electroplaters with the upcoming
April and June 1984 deadlines for compliance with categorical
standards. Therefore, we must start immediately to improve on
POTW program approval rates and begin to ensure compliance with
the categorical standards.
*
The short-term Pretreatment. Compliance Strategy, issued on
October 28, 1983, by the Office of Water Enforcement and Permits
provides that:
1. Administrative orders, judicial orders or other
appropriate mechanisms be used for establishing
enforceable schedules requiring submittal of all
POTW pretreatment programs by no later than' the end
of FY 1984; and
2. EPA will enforce categorical standards in both non-
approved cities in non-approved States and in approved
cities that are not enforcing categorical standards.
-------
-2-
Action Required
It is absolutely essential that the Regions exert every
effort to get approvable local POTW pretreatment programs, and
implement the short-term strategy cited above. In the Strategic
Planning and Management System, you have committed to a target
of 114 Administrative Orders for this purpose. I expect all
Regions to comply with the strategy by issuing as many orders
as necessary to POTWs which have failed to submit approvable
pretreatment progra'ms, to achieve the September 30 goal, and to
do this as quickly as possible.
Each Region should also immediately begin to examine
priority cases for referrals based on the attached targeting
factors. I would expect that each Region has at least one
POTW and one industrial user that are priority candidates for
referrals. Those Regions with more pretreatment activity
should have a targer number of candidates.
The Regions should submit no. later than April 30, to the
Associate Enforcement Counsel for Water, Office of Enforcement
and Compliance Monitoring (OECM), a one page description for
each potential referral candidate which includes the following
information:
- Name of candidate and basic information (location, size,
control authority status and NPDES permit status, if
appropriate);
- Summary of enforcement actions to date;
Assessment of appropriate targeting factors; and
- Identification of any problems or unresolved issues
such as those listed in the targeting factors.
The Office of Water and OECM will consult with the Regions
on each of these candidate referrals before a decision is made
to proceed. The Regions will manage the cases in coordination
with Headquarters. Regions should submit their case referrals
to Headquarters for concurrence by July 1, 1984, for POTWs and
non-integrated electroplating facilities and by August 1, 1984,
for integrated electroplating facilites. OKCM will iirjr.edlately
canvass the Regions, to ascertain the need for model pleadings.
If requested, OECM will develop the model pleadings by June 1
with input from OW and the Regions.
In addition to the above actions, Regions should begin to
issue Administrative Orders to industrial users violating cate-
^l standards this fiscal ysar. Regions should be able to
-------
-3-
issue at least 20 Administrative Orders nationwide to noncomplying
industrial users during the last two quarters of FY 1984.
During FY 1984, EPA enforcement actions should be focused
in areas where EPA is the control authority in order to establish
an immediate, visible enforcement presence and to compel selected
members of the regulated community to achieve compliance. Obvi-
ously, to have a fully credible enforcement program, EPA must
ensure these efforts are expanded in FY 1985 and beyond to cover
all unapproved local and State programs, a la-rger number of cate-
gorical standard nohcompliers, and oversight of approved POTW
and State programs. OW and OECM are currently developing a long-
term strategy to address these and -other issues.
I look forward to seeing the results of your immediate
enforcement efforts.
Attachment
-------
ATTACHMENT 1
FACTORS FOR IDENTIFYING POTW AND INDUSTRIAL USER
PRETREATMENT REFERRALS
The following .factors should be used in identifying potential
referrals.of POTW and industrial users (IDs) violating pretreat-
ment program requirements. These factors are intended to estab-
lish broad categories from which initial cases should be selected.
There may be some cases appropriate for referral that may not
fit these factors. Such cases, of course, should be considered
but final determination should be coordinated as discussed in the
memorandum.
It should be noted that in developing enforcement cases,
violations by POTWs for failure to submit required pretreatment
programs will be relatively easy to document. This 'may not be
the case for documentation of IU categorical standard violations.
In many cases, the standards are complex and determinations of
noncompliance may be difficult and resource intensive. However,
since a limited number of IU referrals are envisioned in the short
term, extensive sampling inspections should not be necessary.
Regions already have adequate information on some noncompliers.
Such information can be obtained from POTWs, BMRs where available,
citizen complaints, contractors assisting in pretreatment program
implementation, and past inspections.
Where possible, pretreatment enforcement actions should be
coordinated with ongoing NPDES permit enforcement actions. Where
a Region is referring a case for NPDES permit violations under
the National Municipal Policy, a pretreatment count should be
added where appropriate. In the case of an IU, a categorical
standard violation^ which causes or contributes to a NPDES permit
violation by a POTW would make, all other things being equal, a
particularly telling case. Since the latter situation will be
rare and may be very difficult to identify, the merging of
enforcement actions is not essential. It is only suggested as
a way to make stronger enforcement cases and/or-to reduce
resource burden.
. t
POTW Referral Factors
1. POTW should be in violation of an AO requiring program sub-
mittal or have demonstrated a recalcitrant attitude in
failing to develop the required pretreatment program. In
the latter case, referrals may be warranted even if an AO
has not been issued. Violations of AOs should be priority
candidates for referrals.
-------
-2-
2. POTW should be rn States where EPA has program responsibility. '
In order to maximize the deterrent effect of enforcement
actions, the POTW should be relatively large and should have
a significant number of industrial users subject to categorical
standards.
Industrial User Referral Factors
i • " •
1. IU violating categorical standards should be in a State that
does not have pretreatment program authority, should be a
facility that is significant .in., terms of size and/or wasteflow,
and that has demonstrated a recalcitrant attitude. Priority
for an IU case should be based on the extent of noncompliance
with the categorical standards. It is preferable that the
IU be in an area where the POTW does not have an approved
pretreatment program, is not likely to obtain approval in
the near future, and/or is taking little or no action on
its own to enforce the categorical standards or comparable
State or local standards. It is not necessary for an AO to
be issued - before a referral.
2. Potential cases raising unresolved issues such as removal
credits or unresolved category determination requests should
be assessed on a case-by-case basis in close consultation
with Headquarters. In addition, it is highly desirable that
there be some documentation of how the categorical standard
applies to a given IU prior to the initiation of enforcement
action.
3. Referrals should not be initiated solely because the IU did
not submit required baseline monitoring reports (unless such
failure is a violation of a previously issued AO) . However,
non-s.ubmittal of these reports may be one of several reasons
for initiating a referral. BMRs that have been submitted
should be ,reviewed in preparing a referral that is initiated
for noncompliance with categorical standards. Additionally,
referrals involving nonsubmittal of BMRs should be considered
so that noncompliance with reporting requirements does not
exclude the IU from enforcement.
4. Candidates for AOs are lUs that did not submit baseline moni-
toring reports or are >sut of coT.pliar.ce with the categorical
standards. Good faith/bad faith and time needed for compliance
should be taken into account when deciding whether or not to •
issue an AO or initiate a referral. .
-------
Section 311
Enforcement
-------
Section 311
Enforcement
-------
'j UNITED STATES ENVIRONMENTAL "PROTECTION AGENCY-.--.
*'. * WASHINGTON. D.C. 20460
•••".' ' ' •" . JAN 8- 1374 - -•• '. !
QFF1CS 0?.^ •
EHFORf^-IENT AMO GENERAL C=U.NS£T_
-.
; _• ',..-. '. Regional Enforceoent Directors • .
• .• -.-•.• Lf- -Surveillance .and Analysis .Directors - • * '•
-••.---.". 'Regional 'Qil and Hazardous Materials- Coordinators
.VI . "^ _ • • - • •
"'••-^ •••"/* •- • "•--• •** '•'" " ."•* '•'•".''•' '.' .".'• .•-.--' •
j >.•''• Assistant Aomiiiistrator for Enforcement and General
' '
. .
SUfeJSCTi- . Oil Spill Safer cement.' . •• • ' •'• """•'- •'•'.'' •"••~-
• ' * •* • _•• " -..
--.-•_. . .. • .' .-. -.-• . . * - . . . - .. . .- • .
•" -". '-.-A- • ••••-: .""•.'f- --'•:-;^''" - • • . - '•"•"«•--. -. .."
* " »•*•** •
Attached is a status"repprt on S?A Oil 'and Hazardous Materials .
spill enforcsnent actions covering the period January 1 to October 1,
1373. It shows a great improvement over last 'year's record, '
althq-agh scze Hagions should apparently b.e r.ore active. Some Regions
vi^h' few ' actions reported nay- be relying on strong Coast Guard- " enforce—
sent programs. '• -All Regions should send ce the Coast Guard records .
that would indicate the nussher of enforcement actions taken and the
results, to date. This may present a more complete pictures of the
status of spill enforcement activities. .
I realize that lack of sanpjower and resources may result in the
inability., to. follow up oil spill referrals, particularly • in light of
the present 'priority being rightly accorded to perait 'Issuance and
follcw-up.. IThat'is needed/ I believe, is a core efficient use of
those Enforcement and Surveillance and Analysis personnel already
working en, oil spill prcbless. It is particularly is-.pbrtant that
Surveillance' and Analysis personnel work closely with Enforcement
staffs -to roaxinvize the mirier of investigations that can be completed
and cases that can' be prepared, in addition to the vital job of oil
s-nill clean-up. Wherever reported spills cannot be investigated by
the .Zavironr.ental Protection Agency cr the -a. 3- Coast Guard, a
Section 3Q3 information .request should ba sent to -the discharger.
Regional A-±r4nistrators were delegated the authority to administer
•Section. 303 in the Fart 125 — MPDES regulations, prcrrulgitad May 22,.
1-973 (33 Federal Register 13531) . You should also encourage State
•a
-------
Scrae Rsgions have already been successfully using Section 303
letters in their oil enforescent programs. For these who have not,
a suggested'format is attached which should be helpful, which was ''
prepared by Henry Stetir.a. Regional ccmr.ants on this fomat should
be forwarded to Rick Johnson, with a copy to Henry Statins. •
The following guidelines should apply when a Section.308
.letter 'is sent to a discharger:
1. Section 303 letters should be used when s. violator
reports a spill which EPA.is unable'to -investigate on scene.
\ 2. • Section 3*08 letters may also be used occasionally to
supplement EPA or State investigations.' . • .••«••..••.••'.'-.'.•
3. Section 303 information requests should"" not be utilized
to investigate.situations which may culminate in criminal prosecution.
'• <- ' Section 308 letters must be posted by "Registered rlail '
— Eatum Receipt Requested." . .-.."• • '•"..._.-'
5. • Zach Region nust carefully maintain a log.indicating
for' each letter the date mailed, the date received and the date a
respp.nse is due. . • '
• 6. When a Section 308 letter is used, the Einforcement
Division should plan to exercise '.Section 309 sanctions if the
• violator fails to respond or if the response contains false state-
ments — the falsity, of which can be established.
7. If the complete information submitted in response to ths
letter indicates that a violation did occur, that evidence should be
referred to the Coast Guard as basis for-a Section 311(b)(6) civil
penalty. . . .
A copy of ths discharger's response should be automatically
sent to the Emergency Response Branch in your Region. "
To improve oil spill enforcement procedures within Regions, and
to share successful Regional techniques among Regional staffs, we are
planning a meeting for a representative of each Oil Enforcement staff
and' their counterpart in the Zsargency Response Branch on February 20
and '21, 1373, in Atlanta, to be conducted in cooperation with the Oil
and Hazardous Materials Division. -Any suggestions for possible topics
-------
to be included in the agenda should be sent to Patricia O'Ccnnell,
Headquarters. This will be a. working lavsl meeting which will focus
on legal and investigative %orcbls=s. Coast Guard and Justice Dacarr-
nant participation is planned. We also plan to discuss tha new
spill prevention regulaticr.3,-and their i==lej=eststis.i.
Enclosures ' * .
Cc: '• CGC Chron . •__ ''-./'•
' ' Reading ' •• • '
* * . . ' . .•'.--.
; Rich Johnson . • • ' • • :. . •.-. '
Henry Stetina . . .. -•';".
Patricia C-iCcnnell ' • •-•--•
Assistant Adainistrator for Air S Water Programs - •.
S*Johason:dwk:12/2S/73 - ...... - •.
-------
;
t:
o
•H
51
nj
I
II
III
IV
V .
• •
•VI
VII
' ,
VIII
IX
X ;;
.
Total . .
•
"•
I/I . ' .
r-l .d ' i '•
H U
P4 M •'•' . ,
I/) U •
o ra '.'
H 4J
•rl T-i '«
O '() U
nl t! ' '
«M .u rj »
0 H tft
OH..
• O, fll , . •
O o) rj
'« id W. .
000 :". .';
217 ' •';
^ •
GO 3
102
• •
210
-
499
•
151
•
477
M •—
10
3314
t
: •
OIL AND
.*>
i
,
w .
H
dfl ;
i n<
V) ll
0) 4)
r-l !•• 0
b o tr
C»4 ft'
U-l C) O
o P; M.
o
• 01 . ^
H id
r-i ti a
•rl i'. O
0, fll
• . w fl \>
• • '• >w u rt
: oho
• . 0 O
; ' "j
0 d o
£ M 4J
. ; .17
.:•'. •?
*
.51
52
,
':?. 16
8
«
:; 49
. .1 '
22 .
9
. i .
: ' ' 9
.240
•
• '. ' •
. •' • . . - •
XWS MfttBRIMiS
t * a
' ^i' '
TJ i
(1
" t : :
i| Si
f.J O ,
: . ' '51 li ,-.-•
VI f«i O
i r-l J> 4J .
-' rt f«! •'• •
Ol O . -
w C-; • .
0 M • L)
O D fii . .
O f* 0 G ',
S W -U »-". .»
• . • 3 ' : ' • . , •
*• •* -
i
1
3 .
• 19
4 •
*•
; 1
16
• i
•
• i
1
1
: . . 1
t
49
..'•'.'
.
SPILL KN"1-Of.a:?li:Wf:
• l_ 1 '- • *-
• •-'..•'
jua it .1973 « . . •
S •:.
H • '
M S, l»
. ci i.» i:
HI f. • • V
ci M r:
i/i o; o t>
H J-' *~~ • . U
r-l 4J JJ -I* !'
•ri r~ r: t) ' o
o( i\i rf, ' • »•!
w H • •«:
nj (/) AI M in
«M U 11 ' C
o M • y . — * • o
O p uj nl -H
. < IM f.1 -J 4.1
o f. o o; / o t:
JS TJ} +1 ^ . . [< r^;
.9 29
1 8
1 55
71
30 SO
3 1?
4 • ' 69
- - ' 23
- - 10
, .
-.-- ': • AO
•
40 . : 337 .
• *
" '. •' *
•
-------
letter fqr Regional Administrators' signature
Gentlemen: • . .
'The Environmental Protection Agency has received a report
'that your company was involved in the discharge of a hanr.ful
quantity of oil, estimated to be gallons into waters of the
United States, to-wit: (nar.e of waterway) near (city),< (state)
on or about (time, date) frc:>i a "(truck, pipeline or facility)
which you own (or operate). •
The 1972 Amendments to the Federal Water Pollution Control
Act (hereinafter, the "Act") prohibits" the discharge of oil or
a hazardous substance into or upon the waters of the United States
in harmful quantities [33 U'.S.C', 1321(b)(3)]. Any owner or
operator of a ves.sel or facility from which oil or a hazardous
substance is discharaed shall be assessed a civil penalty by
the Coast Guard of not more than $5,000 [33 U.S.C. 1321(b)T&)]. .
The definition of harmful quantities of oil appears in Title 40, •
Code of Federal Regulations, Section 110.3.
In order for this Agency to carry out its responsibilities
under the Act, you are required under authority of Section 303
of the Act (33 U.S.C. §1318) to submit a--letter of explanation.
••including the specific information listed in Attachment A..
The letter of explanation must be submitted to: (Enforce- .
ment Director, Region address) within fourteen.(14) days of
receipt of this letter. It must be signed by a duly authorized
official of the-corporation or company. The information sub-
mitted will be considered in evaluating whether the oil spill
.violated Section 311. (Please note that your reply in no way
constitutes immediate notification of a spill to the appropriate
•federal agency, as required by Section 3l'l(b)(5).)' Section-303
of the Act (33 U...S.C. §1319) provides civil and criminal penalties
.for failure to submit information required under Section 303 . .
and criminal penalties for knowingly making a false statement
in any submission under Section 308.
'""'. If you have any questions please contact (name), Attorney
Legal Branch*, Enforcement Division, at (phone number).
Sincerely yours,
-------
Attachment A
ITU TED -STATES
ENVIROtt-OTAL PROTECTION AGENCY
Report of Oil or Hazardous Material Discharge
The following information is submitted concerning a discharge of
oil or hazardous material: • •
1. Time and date of discharge.
2. Location of discharge, including:
a. name of municipality and state;
'• .' b. ' name and-address of industry or commercial, establishment
at which the discharge occurred, if applicable;
- ._ c.." distance from receiving waterway.'
.3. Type of material discharged.
"4. Quantity.discharged. ' -'
5.' Quantity of material which eventually reached the" receiving
waterway, and date and time'it was discovered. • • ' .
.5. Type of vessel or facility (ship, barge, storage tank, tank
truck, etc.) in which the oil was originally contained.
' 7. Describe in detail what actually caused the discharge.
_ 8.. Name and address of owner of facility causing the discharge.
9.'' Name.and address-of operator of facility causing the discharge.
•10, Describe damage to the environment.
IT. Describe steps the above named owner or operator took- to
. , . clean up the'spilled oil and dates; and times steps were taken.
12. -Actions by company to mitigate damage to the environment.
13.. Measures taken by youV'company to prevent future spills.
-------
:.: ]4. List the federal and stata agencies, if any, to which-tlrs
i'i-"' owner or operator named in 8 and 9 above reported this dre-
h:...-. charge. Show the agency, its location, the date and tine
.•••.- of the notification, and the. official contacted.
_T'15. List the names and addresses of persons you believe have
knowledge of the facts surrounding this incident.
' 16. Name and address of person completing this .report.
17. Your relationship, if any, to owner or cpsrstar.
•18. List other information which you "wish to bring_to the attention
... . of EPA. For example, number employed by the firm.
• -..The above answers are true to the best of my knowledge and belvaf.
Signature of person completing
- this report.
Date of"Signature:
-------
•UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O C. 20-100
r;r AND GLisru/.c C-UNSCL
To: Regional Enforcement Directors
From: Director, Enforcement Division
Subject: Civil Penalties Collected for Violations of 40 CFR Part 112 -
Transmittal to USCG Districts for Deposit in Revolving Fund
Account
Civil penalties collected f?r violations of the subsections of
section 211 and regulations issued pursuant to section 311 of the
are being .deposited in the revolving fund established by section 311(k)
of the FWPCA which reads as follows:
"(k) There is hereby authorized to be appropriated to
a revolving fund to be established in the Treasury not to
exceed 335,000,000 to carry out the provisions of subsections
(c), (d), (i), and (1) of this section. Any other funds
received by the United States under this section shall also ,
be deposited .in said fund for such purposes. All r;ums appro-
priated to, or deposited in, said fund shall remain available
until expended.
In compliance with the foregoing, civil penalties collected for
violations of EPA''s Oil Pollution Prevention Regulations, 40 CFR Part 112,
are to be forwarded, by the EPA regional offices, to che main .office of
the U.S. Coast Guard District within which the violation occurred, for
inclusion in the Coast Guard's.revolving fund account established pursuant
to section 311(k) of the FWPCA. The following procedures should be followed:
(1) Checks in payment of the civil penalty should be m-r.de
payable to the "United States of America." Checks nnde payable
to "EPA," "Treasurer of the U.S.," etc. 'are acceptable so long
as the amount of the check is the same as the civil penalty.
Do not endorse any such checks.
*
(2) The checks should be forwarded to the U.S. Coast Guard
District with a cover letter setting out the foiicv/ing:
-------
(a) Legal name and aiidress of owner/operator
charged with the violation.
(b) Dat'.c and nature ->l" violation, incl 'i-i i nu a
citation of the relevant statutory and reyuMt;ory
provisions. (i.e., failure to have SPCC Plan in
vioiaticr. of 40 CFR Part 112.3).
(c) EPA Regional Office Enforcement fill? number.
., (ci) Date; of check, name of bunk, amotuir. of check.
£'• \ (e) A statement that the check is beinq forv/nrdori
''•J '; for deposit in the U.S. Coast Guard's revolving fund, and
'.*''• i
" . '.' (3) At times the EPA Part 112 violation will have as its
;• genesis facts establishing other law violations. • '.-.'here the Part 112
f. violation resulted from facts establishing another Federal law vio-
lation, including but not limited to the F'-JPCA' s section 311
previsions relating to oil spills or failure to notify, identi-
fication data on the other Federal law violation, for the purpose
of avoiding possible conflicts, should be included in the transmiftal
..' to the USCG.
.• (4) Where the violation, for which the' check was submitted,
is also the basis for a referral to a U."S. Attorney, the U.S.
Attorney should be informed of the disposition of the EPA civil
penalty proceeding.
r ^
J. Brian Mollov
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. '; C. 2C
AFri 2. u \2iS
MEMORANDUM
To: All Regional Administrators
From: Acting Deputy Assistant Administrator for Water nnfcrcsmon
Director for Oil and Hazardous Materials Control Division
Subject: Spill Prevention Control and Ccuntsrmeasure (SPCC)
Plan Program
This memorandum covers a nur.ber of SrCC proyram issues
raised at the March 27-28 joint meeting of Environmental
Emergency Branch and Enforcement Division representatives
in San Francisco.
v.'arninc Letto.5 to Violators
Several Regions arc considering thv= transmission of warn ing
letters-as a means of giving notice to violations of" SPCC require-
ments and obtaining compliance without going through the civil
penalty assessment procedures. The warning letter device was
discussed vigorously at the San Francisco meeting with strong
arguments made both for and 'against warning letters. After
careful consideration we have decided that warning letters are
unnecessary and should not be used. The preferred procedure,
upon detection of a violation, is to issue a notice of violation
with a proposed civil penalty. The notice of violation will get
the attention and compliance response from the owner or operator
faster than a warning letter. As appropriate, the penalty can
be compromised down to a much smaller figure or waived ? 1.>.soother.
The notice of violation, when uced in this manner, has th-;
advantages of a •••••a.rning letter but provides mere clout with no
loss of time.
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t.'ature n-d Conduct c C Civil Penalty Hf.-.-.ir: i:-.::'
It is important that everyone connected with the civil
penalty hearings provided for in 40 C.IT.R. Part 114 under-
stand that these hearings are to be infernal. They can
be held in an office or conference room with the crisualnusr;
of a routine meeting. No formal record is necessary, f-'e
undue attention need be given to the materiality or relevance
of statements or evidence offered by participants. The
rules of evidence employed in courtrooms and formal hearings
are not appropriate for Part 114 civil penalty hearings. Ho
cross examination is required." The time and resources of
Regional attorneys involved with these hearings should be
kept to a minimum.
It should be noted that the Presiding Officer at a civil
penalty hearing can raise as well-as lower a proposed civil
penalty.
Selection of Hearing Officers
Section 114.6 of the civil penalty regulations provide-s
that the Presiding Officer may be any attorney in EFA who ha*
no prior connection with the case. To maintain an atmosphere
of fairness and impartiality, Regional Administrators should not
appoint Enforcement Division Directors or other Enforcement
Division supervisory personnel. Similarly, it is desirable to
avoid appointing water enforcement attorneys. Because of tiv»
informality of the hsaring and the relatively simple rescon-ibilit
of the Presiding Officer, Agency Administrative Lav; Judgen should
not be asked to conduct these hearings. The most desirablo
candidates for Presiding Officers are attorneys in the Hccricnai
Counsel's Office. Also acceptable, although with some losy of
tiie appearance of impartiality, are Enforcement Division attorneys
working in non-water programs such as air and pesticides.
Criteria for Civil Fenaltv Levels
The desirability of establishing national criteria fcr uniform
assessment of civil penalties was discussed at the San Krancinco
meeting, but no conclusion was reached. We have decided to rloirm a
Headquarters-r.egional work group to determine whether :juc;i: criteria
would be desircible and, if so, to set up a matri:: or some other
system for uniform civil penalty assessment.
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Stats > and reCL.-i.-iil ~-ici litics
Doubt as to whether federal, state, or local facilities
are subject to S?CC requirements has been raised because the
definition of "person" in section 311 does not explicitly
include federal, state, and local entities. Our interpretation
•of section 311 and the S?CC regulations is that local", state,
and federal entities are subject to SFCC plan preparation
and, implementation requirements. A General Counsel's legal
memorandum -o this effect will be distributed shortly. . ;
Inclusion of Animal and Vegetable Oils in Section 311 L-efir.ition
of ".Oil" .
Attached are four letters discussing the inclusion of
animal and vegetable oils in the section 311 definition of
"oil." EPA and the U.S. Coast Guard have always treated
spills of -non-petroleum based oils as subject to the civil
penalty and cleanup provisions of section 311. However, the
national Broiler Council and similar- organizations have questioned
this interpretation, and, as a result, many users of animal
and vegetable oils are not in compliance with the SPCC regulations
and have not- submitted requests for extensions of time for
compliance. In his January 9, 1975, . letter Alan Kirk. i?3di» clear
SPA's position that non-petroleum oils are included in the
section 311 'definition of "oil" and that ar.irtal and
oil users are subject to the S?CC plan preparatio'n and i:nnler::f.::ita-
tion requirements of Part 112 .
You will note in Mr. Kirk's January 9 letter and Hick j'chr.son ' s
February 3 letter _that , in view of the good faith efforts of the
animal and vegetable oil users to determine whether their facilities
are subject to the SPCC regulations, we will consider requests for
extensions of time for compliance received from users of. non-petroleum
based oils. Such .requests should be approved in cases where
the requestor can demonstrate his reasonable belief that he
was not subject to the 'SPCC program and his firm commitment
to comply fully with SFCC requirements. Civil penalties for
failure to request extensions of time, in accordance with U'C
timetable se- out in Part 112, should not be imposed in these
situations. Part 112 will be amended to clarify that the
Regional Administrators have the authority to "grant such
extensions for appropriate reasons in addition to those listed
in §112. 3 (f). Any grant of additional time should provide for
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• -": •» * .',~. —} ~. * T r • • -I i -.
. J -^ .l^/' .Ji••) I..U <
To: ''otj."i cr.al l!;ifovcei-icr.t; l>irectors
Frcrr.: Acting "icputy Assistant A-."a:iir.ir; tra••-••; r fior
T-:'a tor Enforcum-jn t
Sub-jcct: ."..•-'ctio.ii H31 Jurisdiction cvor Lt.-cnl, 'i.atc.'
cind rucl
. fjla:::-' r ::- nnf r^y jci'.i-;; ^r/ril j", IV, ,
rt-io:nor;:::aun vin-tiili:^ "Spill rrrr-'r^tior: Control -r. •
C..:-.untcrj~cr.-urr: (SPCC) P].,^;! ?x-cc;r.-\:;:, ;: I i-rcr-.i :•:•:: c: to
cist::il>ut5 thc^ General Counsel':; o^inic^n ^n tn -.-^oLii-
bho '"^tf irx L•^^.cr^ of "oor^cn" in coci:ion 211 incluO ;•::;
!:<• :rl c:~-"! 1 , -t'ltc, r.r.'" local c-ntit:'. ::::,. ,:\ ttr.c; :- .-:•.! i .: :*uc:
-;: o-'inior: .. uat=?.::1 r-r-r\l 23, 137:'=, Urc;:! i'.r-y "=c '".vi-.r. 7
•:; -.^i -.:.v.in :".:.; is .i;.M iic .». : Z •..-•-l '\.
O;ii.'ivjr:'.- =-:c; of f :'; i .. -.' r _• fncilitic:;, iiicl:.'c" Ln=j V'L.V . .• <_••.'•.•
or oporot;:J hv' ic'cal, nt^te , r.:id frid^r?.! 'VMiici;^: ----
sv.i:-j:. ri: to cncticn 311 cjid tiio CTc'-C PJ.on r ^qul. :•.:::;. 0:1..; .
f!0 cm ?nr-:: 112. T'iOi;o 'iV.-cjions viiirj!: aro ^ot ;-:.-.j;id
coirc,- r-o .'..".oulci r-iijuro that all local/ r. L „•. :. i , a •;..'.
f-~v'.lvr-~'. 1 ;:ecili ti-:iG s.r-::- in coir.-;l;.?.rlc-'j \'iti> .t;r-r,'_ Plan
;.'r:- pa ration and Ji:i./lc-:r.:u;Hiatio;i ro:iui::-vr:V-:Tit:- .
bcc: .T. ^rian ''olloy, LG-335
:.'^-"?2 .r>-r!r.d•:-••: D.I.^'ons) bcc: Ken 2i;j"ieine
'
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Section 404
Enforcement
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Section 404
Enforcement
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5 SEP 1979
lionorable Clifford L. Alexander, Jr.
Secretary cf the Army
V.'d shine; tor.,, D.C. 20310
My dear r'r . Secretory:
I r.ir. responding to your letter of March 29,' 1979,
requesting my opinion on tv/c questions arising under 5 404 of
the Federal Water Pollution Control Act, as amended, 33 'J.S.C.
£ 1344. You asked whether the Act gives the ultimate
administrative authority to determine the reach of the term
"navigable waters" for purposes of c 404 to you, acting
through the Chief of Engineers, or to the Administrator cf the
Environmental Protection Agency; and similarly you ask whether
the Act gives the ultimate administrative authority to
determine the meaning of 5
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- 2 -
lUimination System (NPDES) program established by § 402; the
Secretary of the Army issues permits for the discharge of
dredged or fill material under 5 404. !_/
• During consideration cf the legislative proposals that
resulted in the Federal Water Pollution Control Act Amendment
of 1972, the question whether the Secretary should piny any
role, through the "Chief of Engineers, in issuing permits was
hotly debated. The bill introduced in the Senate, S. 27.70,
gave the Administrator the authority to issue permits and
treated discharges of dredged or fill material no differently
frcm discharges of any other pollutant. Curing consideration
of the bill both by the Senate Public i-?orks Committee 2/ and
on the Senate floor, _3/ amendments were proposed to give the
authority to issue permits for discharges of dredged or fill
material to the Secretary of the Army. These amendments were
offered in recognition of the Secretary's traditional
responsibility under the Rivers and Harbors Appropriations Ac
of 1839, 33 U.S.C. 5 4C1 et seo., to protect navigation,
including the responsibility to regulate discharges into the
naviaable waters of the United States. Concerned that the
_!/ A point source is defined in the Act cs "any discernible,
confined and discrete conveyance, including but not limited to
r,ny pipe, ditch,. channel, tunnel, conduit, veil, -discrete
fissure, container, rolling stock, concentrated animal feeding
oceration, or vessel or other floating craft . ..." 33
U.S.C. § 1362(14).
Dredged and fill material .are nc.t defined in the .^ct, but
arc defined in regulations prcmulgatec by the Corps of
\ Engineers: Dredged material is "material that is excavated or
dredged frcm. waters of the United! States," while fill material
: is "any material used for the orima_£y_purp_q'3e of replacing an
; ncuatic area with dry land or of chancing the bottom elevation
of a water body." 33 C.F.K. § 323.2(k), (IT.).
2/ Senate Ccmm. on Public ttcrks, S3rd Cong., 1st Sess., A_
Legislative History of the vrater Pollution Control Act
/\rrend:ver.ts of 1972 (1973), at 1509 (hereafter "Legislative
History").
3/ I£. at 1386.
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- 3 -
Secretary would have insufficient expertise tcr evaluate the
environmental ir.pact cf a proposed dredge or fill operation,
Senator .Muskis, the author of S. 2770, opposed those
arrendirents. _4_/ lie proposed instead that the Secretary certify
the need for any perrit for discharge of dredged material to
the Administrator, who would .retain permit issuing authcrity.
The Senate adopted Senator Muskie's proposal. J3/
The.House of Representatives bill, H.R. 11C'96, on the
other hand, cave the Secretary con-.plete responsibility over
issuing permits for the discharge cf dredged or fill material.
Although the House bill required the Secretary to consult -v.'ith
the EPA on the environmental aspects of permit applications,
the Secretary had the authority to -ake the final decision on
permit issuance. S/
The Conference Ccrrittee substitute, passed by the
Congress as § 404 of the Federal Water Pollution Control Act
Amendments of 1972, represented a cci^proi?ir,e between the
Senate and House positions. It established'a separate perr.it
procedure for discharges of dredged or fill r.aterio.1 to be
administered by the. Secretary, acting through the Chief cf
Engineers. The Administrator, however, retained substcrti?.!
responsibility over administration and enforcement cf 5 404.
The EPA responsibilities were perhaps best curr.arized by
Senator Muskie during the Senate's consideration of the
Conference Report:
• First,' the Administrate^ has both
responsibility and authority for failure to
obtain a Section 404 perr.it or co-ply with
the condition thereon. Section 309
authority is available because discharge of
the "pollutant" dredge spoil without a
perr.it or in violation of a cerrr.it would
violate Section 30l(a).
Second, the Environmental Protection
Agency irust determine whether or not a site
to be used for the discosal of ccecced sccil
±/ Id. at 1387-88
5/ J[d. at 13S3.
G/ Id. at 815.
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- 4 -
is acceptable when judged against.the
criteria established for fresh and oc'ean
voters similar to that v/nich is required
under Section 403.
Third, prior to the issuance of any
peciT.it to-dispose ot" spoil, the Acrr.ini-
nistratcc rr.ust determine that the material
to be Disposed of will not adversely affect
municipal water supplies, shellfish beds and
fishery areas (including spcvp.ing ar.d
breeding areas), wildlife or recreations!
areas in the specified site. Should the
Administrator so determine, no permit nay
issue. 7/
Subsequent amendment of § 404 by the Clean Water Act of
1977, 91 Stat. 1566, altered the .relationship between the
Secretary and the Administrator in only limited fashion. -The
amendments gave the Administrator authority comparable to the
authority conferred on him by the § 4C2 NPDES program to
approve one to monitor State progrr.ms for the discharge- of
dredged or fill material. 33~U.S.C. 5 1344 (cj)-(l) . Ksw
subsection (s) gave the Secretary of the Army explicit
authority under the Act to take action to enforce those 5 40?
permits which he had issued. 'New subsection (n) cautioned
that the amendments should not be considered to detract from
the Administrator's enforcement authority under £ 30S of the
Act, 33 U.S.C..-? 1319. .8/
7/ Id. at 177. This statement, which is often quoted in
explanation of the relative responsibilities of the Corps and
EPA under § 404, is included in the_ Congressional Record'as ?
supplement to Senator l-'uskie's oral remarks.
"7 Sc.ctior. 300 empowers the-
penalties with respect to such perrr.:
Importantly, _?_s_the above-quoted history .of__5..404 indicates,
the s e c ti p n _ a .1 so ' W i v e s .the "Administra tor_the_.a,u tho.r ity._to
bj:j.ng enforcement'act ions .to stop discharges-.uitbaut_.a
required _permit, since such discharges violate the basic
prchibiti'on""set out in § 301 of the Act. 33 U.S.C. £ 131S.
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- 5 -
With that background, I turn to your specific questions.
First, you asked whether the .Secretary or the Administrator
has the authority under S 404 to resolve administrative
disputes over interpretation of the jurisdicticnal term
"navigable waters." That question is an important one, since
the authority to construe that term amounts to the authority
to determine the scope of the § 404 permit program.
The term "navigable waters,"'moreover, is n linchpin of
the Act in other respects. It is critical not only tc the
coverage of § 404, but also to the coverage of the other
pollution control mechanisms established under the Act,
including the 5 402 permit program for point source
discharges, B/ the regulation of discharges of oil and
hazardous substances in § 311, 32 U.S.C. S 1321, and the
regulation of discharges of vessel sewage in f> 312, 33 U;S.C.
5 1322. Its definition is not specific to 5 404, but is
included among the Act's general provisions. 10/ It is,
therefore, logical to conclude that Congress intended that
there be only a single judgment as to whether—and to what
extent—:any particular water body comes within the juris-
dicticnal reach of the federal government'c'pollution control
authority. v:e find no support either in the statute or its .
legislative history, for a conclusion that a water body would
have one set of boundaries for purposes of dredged and fill
permits under S 404 and a different set for purposes of the-
other pollution control measures in the Act. On this point I
believe there can be no serious disagreement. Rather,
u.n_cer_Gtand_ir,g .truit_Jln.av.icab.le ..wa.ter s'L-.csn ..have ..only ..one.
interpretation .under the Act, the cuestion ..is .whether Ccr.gres
iriten"c"ed" ul timately 'for the Administrator or the Secretary" to
describe "its car?.ir.eters. •
The question is.explicitly resolved neither in S 404
itself nor in its legislative history. My conclusion that the
_9/ The Act, as stated above, contains a general prohibition
against the "discharge of any pollutant" except in compliance
with particular standards and permit procedures. 5.301(a)., 33
U.S.C. 5 1311(a). The- definition of the phrase "discharge
of
pollutants" includes
"navigable waters."
a discharge from
5 502(12), 33 U.:
a point source into
5
1362(12).
_1_0/ "Mnvigable waters" is defined under the Act
"the waters of the United States, including the
seas." S 502(7), 33 U.S.C. 5 1362(7).
ar> meaning
territorial
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- 6 -
Act leaves this authority in the hands of the Administrator
thus necessarily draws upon the structure of the Act as a
•v;hole. First, it is the Administrator who has the overall
responsibility for administering the Act's provisions, except
ins .otherwise expressly provided. 5 101 (d), 33 U.S.C. 5
1251 (d). It is the Administrator cs well who interprets the
ter— "nr.vigsble v;aters" in carrying out pollution control
responsibilities under sections of the Act apart from £ 4C4.
Additionally, while the Act charges the Secretary with the
duty of issuing and assuring compliance with the torr.s of £
<04 permits, it does not expressly charge hirr. with respon-
sibility for deciding when a discharge of dredged or fill
material into the navigable waters takes place so that the" 5 •
404 permit requirement is brought into play. Enforcement
authority over perraitless discharges of dredged and fill •
material is charged, moreover, to the Administrator, ll/
Finally, any argument in favor of the Secretary's
authority to interpret the reach -of the tor- "navigable
waters" .for purposes of 5 404 is substantially undercut by the
fact that he" shares his duties under the section with the
Administrator . As outlined above, 5 404 authorizes the
Administrator to develop guidelines with respect to selection -
cf disposal sites, 'to approve and oversee St^te programs for
the discharge( of dredged or fill material, and to veto en '(
environmental' grounds any pern it the Secretary proposes to
issue.
I therefore conclude that the structure and intent cf the
Act oupport an interpretation of 5 404 thc-.t gives the
Administrator the final administrative resccn'sitility for
construing the term "navigable waters."
^r second cuestion is whether the Secretary or the
Adm-i'nistrator has the final authority 'to construe 5 404 (£) of
the. Act. 33 U.S.C. § 1344 (f).' That subsection exempts
o/ jJ u..u iJ-i-J-/ J.j'*<*in. ine
enforcement authority with 'respect to permitless dischnryes
into navigable waters under the Pivers anO Farbors
Appropriations Act of 1899, 33 U.S.C. Gf? 407, 413. Navigable
water? for purposes cf that Act have a more restrictive
meaning, however, than navigable waters under the Federal
V?ater Pollution Control Act. £•£• / NatJop.r.l resource? L'efer:r,e
Council v. Callawayy 392 ?. Supp. 605 (C.C.C. JS-7L;).
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- 7 -
certain activities from regulation under 55 404, 301 (a.), and
'102. The Corps of Engineers has argued that the responsi-
bility for interpretation of the subsection insofar es it
relates to the issuance of the Corps' ? 404 permits is vested
in the Secretary. For reasons similar to those discussed in
connection with your first cu.estion, I disagree. It is the
Administrator v/ho has General administrative responsibility
under the Act, 33 U.S.C. § 1251(d), and who•has general
authority to prescribe regulations, 33 U.S.C. § 1361(a). In
reviewing the statute and its legislative history, I find no
indication that Congress intended that the Secretary have
final authority to construe that subsection for purposes of
his S 404 program. Absent such an indication, I believe that
the Act would be strained by a construction allowing the ~*
Secretary to give a different contsnc to 5 404(f) than the
•Administrator, gives that subsection as it relates to pollution
control provisions apart from 5 404. ' I therefore conclude
that final authority under the Act to construe 5 4C4(f) is
also vested in the Administrator.
Yours sincerely,
Benjamin R. Crviletti
Attorney General •
-------
rsibJe Clifford u. .Mezasdar/ Jr.
u£.cratary o£ t£« A ray
itaahiryten, D.C. 20 3 ID
:'y esLT r.
If you «r''7^:>V|ft' I ctocici lika to hjrvt> pxibi Iri-.^-j
iiac^ victi 23 V/'.S.C. 2.21, svy oplr,ic-c to yc--u rs
5 iO«5 of tb« F^cfprAl Hater
? lease Is-t ns fcncw vhc-trvcr ycrd hsve- ET^V ci: jucticns to
axia.n, Civilctti
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
• •• •••-• • ••••-'•' ' WASHINGTON. D.C. 20460 ••• .
..... ... OFFICE OF ENFORCEMENT
MEMORANDUM . ' AUG ; g \S80.
SUBJECT: Solid Waste Discharges under, Consolidated Permit
Regulations: Procedures^ Pending" Corps of Engineers
Agreement with Changed De~f iniTTon of Fill Material
FROM: Director, Enforcement Division (EN-338)
TO: Regional Enforcement Division Directors ,
Background
On May 19, 1980, EPA. issued its Consolidated Permit
Regulations, 40 CFR Parts 122, 123, 124 and 125; 45 F.R. 33287,
which incorporated a change in the definition of fill material
which affects sections 402 and 404 of the Clean Water Act. The
new regulations specify,
Fill material (404) means any "pollutant" which
replaces portions of the "waters of the United States" with
dry land or which changes the bottom elevation of a water
• body for any purpose. 40 CFR §122.3; 45 F.R. 33419.
m
As the preamble to the new regulations notes,
The [earlier definition] defined fill material as
material discharged for the primary purpose of replacing an
aquatic area with dry land or of changing the bottom
elevation of a water body, reserving to the NPDES program
discharges with the same effect which are primarily for the
purpose of disposing of waste.- 45 F.R. 33299.
All discharges of pollutants which meet the new definition of fill
material, including solid waste discharges, require a section 404
permit issued by the Corps of Engineers. The Corps, however, has
not changed its own regulations to coincide with the change
adopted -by -EPA. J_/ Resolution of this inconsistency is currently
the subject of discussions between EPA and the Corp.s. Until this
issue is resolved, 'the • following .procedures should be observed.
1/ The Corps.1 regulations define fill material as any material
used for the primary purpose of replacing an aquatic area with dry
land or of changing the bottom elevation of a water body. 33 CFR
§ 323.2(m).
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Inquiries and Permit Applications
If Regional offices receive inquiries concerning permit
requirements for discharges of solid wastes, they should advise
the inquirer tha-t unpermitted "discharges 'into waters of the United
States are prohibited by section 301(a) of the Clean Water Act, 32
U.S.C. §1311. In addition, Regions should inform inquirers that
they should 'apply to the Corps of Engineers for a section 404
permit pursuant to EPA's Consolidated Permit Regulations.
In the unlikely event that a Regional office ^receives an
NPDES application for solid waste discharge, the Region should
accept the application and notify Joan Ferretti of my staff at ?TS
755-2370. The application should be held pending specific
guidance from this office regarding the status of our ongoing
discussions with the Corps.
If you have further questions, please contact Joan Ferretti
of my staff.
J'. Brian Mollov
ccs Regional Section 404 Coordinators
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Vv 85340-: Federal Register/ Vol. 45, No. 249 / Wednesday. December 24, 1980 / Rules and Regulations
alternative need hot be considered to- ••;,--.
"less adverse^.impact-.
- /v; .'..Several commenters questioned the. :.'
; >. ::legal basis for requiring the permitting
.'; .-".authority to select the least damaging
'. . ' alternative; (The use- of the term "select" ..
-; may have been misleading- Strictly
. speaking, the permitting authority does
not select anything: he- denies the permit
if the guidelines requirements have not
'been complied with.}. As- mentioned
..:': above, the statute leaves-to EPA's • .
; .discretion the exact implementation of ..
:-^v the alternative requirement in section- • .:
;v:'.:.403 of the Act. In large- part tha •.:.:. . .:.':
*:': /approach. taken by theseTegulations is>-.,-
i;;; ;:yery similar to that taken: by: the recent. .
^section 403(c) regulations (45 FR.'65942^ ','
;:i^- .'October?,' 1980); There is. one- .difference;;
•^>:the Guidelines- always prohibits- ' -""•:;-••-..
£-? discharges. where there, is- a practicable;. .-••
^-.less damaging- alternative^while the- .'• ; ..'•;
.-^section 403(cj regulations only apply this
Ji: "-prohibition in- some cases;. This-.: :oV.:-.-_:
^.difference reflects-, the wide-range of. -. -.-:.-
•-•;•:. water systems-subject to 404 and the- •'.-•
^extreme sensitivity of many of them to .
i: •: 'physical destruction; These waters form ,
;'.:':.& priceless mosaic:- Thus..if destruction .
•^.'of an 'area of waters of the United States
::'->may reasonably- be avoided, it should be-
.V: avoided. Of course, wherea category of
•'; 404 discharges is; so- minimaJ in its
'-'" effects- that it has been placed under a
;-. general permit there- is no need to
•••perform a case-by-case alternatives ^
: analysis. This feature corresponds, in a
sense, to the category of discharges
: under sec'tion403 for which no ' •„
^alternatives analysis is required.
•.;-. '..Third, some commenters werfr
-•concerned that the alternative
• '.consideration- was unduly focused on •'•"
•'\ water quality, and that a better ' . •
':'/ alternative from a water quality •
"'standpoint might be less desirable from,
.rsay,,an air quality point of view. This-
..concern overlooks, the- explicit provision
.-..that- the existence, of an alternative.
which is less damaging to the- aquatic ' .
ecosystem does notdisqualifya. •. -..'.-:•
discharge if that alternative has.other
. significant adverse: environmental.
consequences. This last provision gives
the permitting authority an opportunity
to take into' account evidence of damage--
to other ecosystems iadeciding whether
there is a "better" alternative.
Fourth, a number of commenters were
concerned that the Guidelines ensure •
coordination with planning processes
under the Coastal Zone Management
Act § 208 of the CWA, and. other
programs. We agree that where an
' adequate alternatives analysis has
already been developed, itwould be :
wasteful not to incorporate it into the
404 process. New § 230.10(a)(5) makes it
clear that where alternatives have, been
reviewed under another process, the
permitting authority shall consider such
analysis. However, if the prior analysis
is not as complete as the alternatives
analysis required under the Guidelines,.
he must supplement it as needed to
determine whether the proposed
discharge complies with the Guidelines.
Section 230.10(a)(4) recognizes.that the
range of alternatives considered in
. NEPA documents will be sufficient for
section 404 purposes» where the Corps is
. the permitting authority, (However, a
greater level of detail may be needed in
particular cases to be adequate for the
404(b)(l) Guidelines analysis.} This-
distinction between the Corps and State
permitting authorities-is- based on. the
.fact that it is the-Corps'policy, in
carrying out its- own NEPA, • ••;. • •;
responsibilities, to supplement (or
. require a supplement to) a lead agency's.
. environmental assessment or impact.
statement where such document.does
.not contain sufficient information. State
permitting agencies, on the other hand,
are not subject to NEPA in this manner..
We have moved proposed
§ 230.10(a)(l) (iii). concerning "other
particular-volumes and concentrations
of pollutants at other specific rates",
from the list of alternatives in. § 230.10 to
Subpart H, Minimizing Adverse Effects,.
because it more properly belongs there.
Definitions (§ 230.3) •'
A number of the terms defined in
§"230.3 are also defined in the Corps'
regulations at 33 CFR 323.2, applicable
to the Corps' regulatory program. The
Corps has recently proposed some
revisions to those regulations and V
expects to receive comments on the
definitions. To ensure coordination of
these two sets of regulations, we have
decided to reserve the definitions of
"discharge of dredged material"
"discharge of Gil material." "dredged
material," and "fill material," which
otherwise would have appeared at
§ 230.3 (f), (g). (j), and (1).
Although the term "waters of the
United States" also appears in the
Corps' regulations, we have retaihed a
definition here, in view of the
importance of this key jurisdictional
term and the numerous comment.?
received. The definition and i.he
comments are explained below.
Until new definitions are published,
directly or by reference to the Corps'
revised regulations, users of these
Guidelines should refer to the
definitions in 33 CFR 323.2 (except in the
case of state 404 programs, to which the
definitions in 40 CFR § 122.3 apply.)
Waters of the United States; A.
number of commenters objected to the
definition of "waters of the United '-.
States" because it was allegedly outsi,-
the scope of the Clean Water Act or oi
the Constitution or because it was nof
identical to the Corps' definition. We
have retained the proposed definition.
with a few minor changes for clarity ft
several reasons. First, a number of :-
courts have held that this basic -*'.'.•';
definition of waters of the United State
reasonably implements section 502f"! c
the Clean Water Act and that it is . Vy
.constitutional (e.g.. United States v.:•'.'•?'*
Byrd, 609 F^d 1204. 7th dr. 1979; Lcslh
Salt Company v. Froehlkef 578 F.2d 741
9th Cir. 1978). Second, we agree that iti
preferable to have a uniform definition•
forwaters of the United States, and for.
all regulations and programs under the-
CWA. We have decided to use the v ^
wording in the recent Consolidated.';-:;:?;
Permit Regulations; 45 Fed. Reg. 332SOJ;
Mayl9,1980ras the standard.* ^ ;:.;-?^
Some commenters suggested that.'the;
reference in the definition to waters:. V-
frora which fish are taken.to be soldinVf
interstate commerce be-expanded to V ^
include areas where such fish spawn.'-;^
While we have not made this change ,';i
because we wish to maintain -"v ~'°£
consistency with the wording of the ;.:••"•?
Consolidated Permit regulations, we do''
not intend to suggest that a. spawning" {
area may not have significance for •'':.
commerce. The portion of the definition-
al issue lists major examples, not all the
ways which commerce may be involved
Some reviewers questioned the••'••''.:-':.:
statement in proposed § 230.72(c) (now ••
§ 230.11(h)) that activities on fast land -
created by a discharge of dredged or fill'
material are considered to be in waters-r
of the United States for purposes of---.'is-
these Guidelines. The proposed- •;; i-'-.J
language was misleading and we havr-'v
changed it to more accurately reflect our
intent. When a portion of the Waters or-
the United States has been legally '••'£:%
converted-to fast land by a discharge of"
dredged or fill material, it does not ?.~Hv
remain waters of the United States'-'f'J^J.
subject to section 301(a). The discharge;"
may be legal because it was authorized^
by a permit or because'rt was made ;._-:•>
before there was a permit requirement.--*
In the case of an-illegal discharge, the' ."•"
fast land.may remain subject to the-.-^f
jurisdiction of the Act until the " ..•'•:Vr;^
government determines not to seek-.."'if!;;
restoration. However, in authorizic&a ^
• The Consolidated Permit Regulations exclude •-.
certain wasle treatment systems from waters of tit;
United Slates. The exact terms of this exclusion ere;
undergoing technical revision* and are expected 13 -
change shortly..For this reason, these CuidclioM as-;
published do not contain the exclusion aa originally-
worded in the Consolidated Permit Regulations.
When published, the corrected exclusion will appry'"
to the Guidelines as well aa the Con.solidHted Pern»t
Regulations, • . . .j^xiii
-------
••"•"-v-^r'^^-^-'- -"
•;%~::: Federal Register / Vol. 4.5. No. 249 / Wednesday. December 24, 1980 / Rules and Regulations 85341
^^^•^•"••'^•'••••'•••^•'•"'•'•™^—•"'•••"'"••—~^*'""—*'""''-^^—"*""""°-^p^™^'—*^~**^~""^™^~" **~™^"*^™~~"* »^—•»
which will create fast-lands.
e permitting authority should consider.
Addition to the direct effects of the fill
joselC, the effects on the aquatic
environment of any reasonably
foreseeable-activities to be conducted
on that fast land.
-.Section 230.54 (proposed 230.41] deals
with impacts on parks, national and
historical monuments, national sea
shores, v/ilderness areas, research sites.
and similar preserves. Some readers
were concerned that we intended the
Guidelines to apply to activities in such
' .preserves whether ornot ihe activities
Ipok'place in--waters of the United
• Stales-"Weintended, and we thuik^lhe
" 'context makes it clear, that ihe .
Guidelines apply only to the
: specification of discharge-sites in the
waters of the "United States, as denned
;• in f.230.3. We have .included .this section
- -because the fact that a water of the
: United States may be located in one of
ihese preserves is significant in
.evaluating the impacts of a discharge
. jmlo that water. -\
^'' Wetlands:.Many wetlands are waters
-of the United Stales .under the Clean
;Water Act. Wetlands are also the
Jrabject of Federal Executive Order No.
-11990, and various Federal and State
daws and regulations. A number .of these
.-vjither programs and laws nave
.'developed slightly different wetlands
"definitions, in_part to accommodate or
f.emphasize specialized needs. Some of
"these definitions include, not only
rwetlands as these "Guidelines define
jlhen, but also mud flats and vegetated
•'and unvegetated shallows. Under the
^Guidelines .some of these other-areas are
^grouped with wetlands -as "Special
'Aquatic Sites" (SubpartE) and as .such
-~lheir values are .given special
-"recognition. (See .discussion of Water
^Dependency above.) We.agree ivjth the
'"comment that -the National Inventory -of
^.-Wetlands prepared by the.U.S. Fish and
£{VViIdlife Service, while not necessarily
^exactly coinciding with the .scope of
.^waters of the United States under the
aClean Water Act or wetlands under
,'.;.th&oc icgulaiioas, tnay help avoid :
••;.construction in wetlands, and be a-
"tjuseful Jong-term planning tooL
^•^t'Various commenters objected to the
.: definition of wetlands in the Guidelines
jj^as too broad or too vague. This
•^proposed definition has been upheld by
'rithe courts as reasonable and -consistent
-.v~With the Clean JAAaJpr Art onH ie being
'^retained in the final regulation.
"^However. s.ve do agree that vegetative
..•-guides and other background material
-;-nnay be helpful in applying the definition
*£in the field, EPA and the Corps are
•-^pledged to. work en joint research io aid
in jurisdictional determinations. As we
develop such materials, we will make
them available to the public.
Other commenters suggested that we .
expand the list of examples in the
second sentence of the wetland
definition. While their suggested
additions could legally be added, we
have not done so. The list, is one of
examples only, and does.not serve as a
limitation on the basic definition. We
are reluctant to start expanding the list,
since there are many kinds -of wetlands
which could be included, and the list
could become very unwieldy.
In addition, we wish to avoid the
confusion -which could result from listing '
as examples, not only areas which
generally fit the wetland definitions, but
also areas which may or not meet the
definition depending on the particular
circumstances of a given site. In -sum, if
an area meets the definition, it is a
wetland for purposes of the Clean Water
Act, whether or not it falls into one of
the listed examples. Of course, more
often .than not, it will be one of the listed
examples.
A few commenters cited alleged
inconsistencies between the definition
of wetlands in § 230.3 and § 230.42.
While we see no inconsistency, we have
shortened the latter section as part of
our effort to eliminate unnecessary
comments.
Unvegetated Shallows: One of the
special aquatic areas listed in the
proposal was "unvegetated shallows"
(§ 230.44). Since special aquatic areas
are subject to the presumptions in
§ 230.10(a)(3), it is important that they
'be clearly defined so that the permitting
authority may readily know when to
apply the presumptions. We-were
unable to develop, at this time, a" . . '
definition for unvegetated shallows
which "was. both easy to apply and not
too inclusive or exclusive. Therefore, we
have-decided the "wiser course is to
delete xrnvegetated shallows from the
special aquatic area classification. Of
course, as waters of the United States, '.
they are still subject r"ii^o
..UIW ww^!J.H,.Jt.A*lll£ VV *t**5 1,1 l^J~lhJ
program -discharges -with the same effect
which are primarily for the purpose of
disposing of waste. Both proposals
solicited comments on this -distinction,
referred to as the primary purpose test.
On iviay 19,1980, acting under a court-
imposed deadline, EPA issued final
Consolidated Permit Regulations while
the 404(b)(lJ Guidelines rulemaking was
still pending. These Consolidated Permit
Regulations contained a new definition
of fill material which eliminated the
primary purpose test and included as fill
material all pollutants which have the
effect of fill, that is, which replace part
of-the waters of the United States with
dryland or which change the bottom
elevation of a water body for any
purpose. This new definition is similar
to the -one used before 1377. . . -
During the section 404(b)(l) ...
rulemaking, -the Corps has raised certain
questions about the implementation of
such a definition. Because of the .• ,-•;- -;. -•.
importance of making the Final • - --••
Guidelines available without further
delay, and because of our desire to "' -
cooperate-with the Corps in resolving
their concerns about fill material, we "
have decided to temporarily reserve
§ 230.3(1J pending further discussion.
This action does not affect the
effectiveness of the Consolidated Permit
Regulations. Consequently, there is a
discrepency between those regulations
and the Corps' regulations, -which still
contain the old definition.
Therefore, to avoid any uncertainty
from this situation, EPA wishes to make
clear its enforcement policy for . • ..
unpermitted discharges of solid waste.
EPA has authority under section 309 of .
the CWA to issue administrative orders
against violations of .section 301. -•.•:-"
Unpermitted discharges of solid waste >
into waters of the United States violate
section3CrL . - - ' • --•••
Under the present circumstances, EPA
plans to issue solid waste administative •
orders with two basic elements. First. . .
the orders will require the violator to '.'•'.
apply to the Corps of Engineers fora
section404 .permit within a specified
period of time. (The Corps has agreed to
accept these applications and -to hold
them until it resolves its "position on the .
definition of fill material.) • .- ••:'•':••'.'.••••:
. • Second, the order will constrain '-'4- :-
further discharges by the violator, in- ••. •'."•
extreme cases, an order may TPnnirw -
that discharges cease immediately. ':';.:.
However, because -we recognize that' ':••' .-
. there will be a lapse of time before -• -. .-
decisions are made on this kind of •• •••
permit application, these orders may' . .
expressly allow unpermitted discharges
to continue subject to specific conditions
set forth by EPA in the order. These - -
».. . Mil 1 ' 1 . . .
I.UIHJIUUUS wiu ue-ucaigueu 10 avoid
further environmental damage. .••.-"•.-
Of course, these orders vwil not . '•?;'-.; .
influence-the-ultimate issuance or non- •'
issuance of a permit-or determine the
conditions lhat may be specified in -such
. a permit." Nor will such orders limit the
-------
UNITED STATES -ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
t OBCC4
OFFICE Or ENFORCEMENT
MEMORANDUM
SUBJECT: Enforcement of Section 404 of the Clean Water Act
FROM: Acting Director/ Enforcement Division (EN-338)
TO: Regional Enforcement Division Directors
Background
As you may recall, in March 1980, the Enforcement Division
initiated discussion with the Corps of Engineers for the purpose
of updating and revising the existing June 1, 1976 Enforcement
Agreement which had been signed by EPA, the Corps, and the Depart-
ment of Justice. The proposed new agreement was circulated to all
regions for review, and comments were received. Although initial
discussions were held with the Corps and DOJ, no progress was made
on resolving this matter. However, in October 1980, the Corps
approached EPA with the proposition that it lacked authority to
enforce against persons discharging dredged or fill materials into
waters of the United States without section 404 permits. Although
EPA has not drawn any conclusions regarding the Corps' authority
or lack of it, the Enforcement Division has agreed to endorse the
attached document, dated 7 November 1980, as an interim approach
to enforcement of section 404.
EPA's Role in Enforcement of Section 404
Pursuant to sections 301, 309 and 404(n), EPA has authority
and responsibility for enforcement of violations of section 301(a)
which occur by virtue of discharges of dredged or fill materials
into waters of the United States without a permit, or in violation
of the terms and conditions of section 404 permits. Pursuant to
section 404(s), the Corps of Engineers enforces .discharges which
violate the terms' and conditions of permits it has issued.
Therefore, -it is reasonable that as a matter of practice, EPA's
enforcement effort for violations of section 404 has focused
largely on unpermitted discharges. Even in this capacity,
however, a number of Regions have persisted in viewing EPA's
enforcement role as simply one of support for the Corps' efforts,
rather than as a complementary one with independent authority
flowing from section 309.
-------
Certain recent developments have underscored the need for EPA
to take a more positive approach to enforcement of section 404.
The need has arisen most particularly in cases of solid waste dis-
charges requiring section 404 permits pursuant to the Consolidated
Permit Regulations, 40 CFR §§122.3 and 122.51(c)(2)(ii), _!/ and
in cases where EPA asserts jurisdiction over waters of the United
States, but the Corps disagrees. In such cases, the Corps has
been and will continue to be reluctant or unwilling to take en-
forcement action. Therefore, it is incumbent on EPA to exercise
its authority under section 309.
Procedures for Enforcing Dredge or Fill Violations
Section 309 authority may take the form of administrative
orders or judicial actions, civil or criminal. The procedures for
enforcing section 404 requirements are the same as those for any
other violation of section 301(a). Administrative orders may be
issued by the Regional Administrator's delegatee, with courtesy
copies sent to the Office of Water Enforcement, Attention:
Drinking Water and Special Enforcement Branch. Civil actions
should be prepared in standard civil litigation report format,
and forwarded to the Office of Water Enforcement (Attention:
Drinking Water and Special Enforcement Branch) for review and
referral to the Department of Justice. Criminal referrals may be
made directly to the appropriate United States Attorney's office.
Courtesy copies should be sent simultaneously to the Office of
Water Enforcement, Attention: Drinking Water and Special
Enforcement Branch.
In all cases, EPA should notify the appropriate Corps
district of a planned or proposed enforcement action. This
notification is designed to achieve two results. First, it will
insure that the Corps does not take an inconsistent action which
would jeopardize the efficacy of EPA's enforcement action.
Second, it will afford the Corps an opportunity to join with EPA
in the action.
If you have any questions, please contact Joan Ferretti or
Betty Cox of my staff at FTS 755-2870.
J_/ For a fuller discussion of the appropriate enforcement action
for such discharges, see Memorandum from R. Sarah Compton,
Deputy Assistant Administrator for Water Enforcement, to
Enforcement Division Directors, and Section 404 Coordinators,
September 11, 1980.
-------
- 7
Attachment
cc: General E. R. Heiberg, III
Regional §404 Coordinators
George Ciampa, Region I
Richard Weinstein, Region II
Elo-Kai Ojama, Region III
Susan Schub, Region IV
Jerry Frumm, Region V
Tony Anthony, Region VI
Bill Ward, Region VII
Lee Marabel, Region VIII
Ann Nutt, Region IX
John Hammill, Region X
-------
• TO
ATTENTION Or-.
DAEN-CWO-N
DEPARTMENT OF THE ARMY
OFFICE OF THC CHIEF OF trNCI>-4£ERS
WASHINGTON. O.C. 203M
7 KG'/ 1300
SUBJECT: Enforcement Authority for Violations of Section 404 of Clean
Water Act
Division Engineer, Lower Mississippi Valley
1. Reference:
a. Letter, DAEN-CWZ-B, 26 May 1980, to Division Engineers, subject: Legal
Authority Under Section 404 of the Clean Water Act of 1977 to Enter Private
Property.
b. Letter, L.MVOC, 25 September 1980, to DAEN-CWZ-B, citing agreement
to elevate Section 40-1 permitless enforcement authority problem to KPA/COE
Headquarters for resolution.
2. This letter provides clarification to the guidance set forth in the
reference la above. It shall be implemented ori an interim basis pending
revision or change of the June 1976 EPA/Corps/Justicc enforcement memorandum
currently being discussed between OCE and LTA.
3. The Corps should continue to carry out a strong enforcement program includ-
ing UK- issuance of cease and desist orders against unauthorized activities.
l.ii the past there was clear justification for this position based on the
inherent authorities vested in the Chief of FCng i.nccrs. This residual, power
was considered to be associated with l.hc .implied authority as permitting
ajier.t to manage the Section 404 permit pro»rnni. However, the Civilctt.i Attorney
Gcr,;-:-aJ Opinion of September 5, 1979, undercut that rationale. Nonetheless,
in order t.o serve the public interest and pi-event confusion, we should
continue our enforcement program ns in the past unJess precluded by future
judicial decisions. Accordingly, the district engineers shall proceed in
the following manner:
a. If the site of the discharge is a "water of the United States."
as interpreted by the district engineer, the procedures set forth at
33 CFK 326 slia.ll be followed and, as appropriate, a permit shall be required
am.i an application accepted (no change to presnil practice).
b. If the site is in a previously designated "special case" pursuant
to the Corps/EPA jurisdiction, MOU (Federal Register, Volume 45, No. 12'J,
.inly 2, iy«0, p.JTS0*8). EPA will be responsible for the enforcement action.
-------
UAEN-CWO-N
SUBJECT: Enforcement Authority for Violations of Section 404 of Clean
Water Act
If the Corps learns of discharge activities in such special cases it. will
notify EPA immediately. If a pei-mit is subsequently required, an application
will be accepted and processed by the district engineer consistent with
current" regulations.
* -•
t
c. If lands under a and b above"are involved in the same case, EPA will
normally be responsible for eo-forcemcnt actions; however, by mutual agreement,
the district engineer may assume the responsibility.
4. Paragraph 6 of the Corps/EPA Jurisdiction MOU states that any jurisdictional
determination made by EPA as a result of an enforcement action wj11 be used.
by the district engineer as the basis for all subsequent 404 actions
of that case. Therefore, if EPA (or the Department of Justice on its behalf)
brings an enforcement action against the discharger, the district engineer shall,
consistent with 33 CFR 326, accept an application for an after-thc-fact or
subsequent permit application consistent with the assertions made by the EPA
in that action. If it is at all unclear from KPA's enforcement action whether
ail phases of the discharger's activities are taking place in "waters of the.:
United States," the district engineer shall forward the case to EPA for a
formal jurisdictional delineation before processing any permit. Informal verbal
or written communications (actions other than enforcement actions signed by
r.hc regional administrator or his designee) will not in themselves establish
jurisdiction. In such case where EPA brings an enforcement action and in casesj
3b and 3c above, any public notice will clearly state that the jurisdictional
determination has been made by EPA.
5. Pursuant to Section 404(s) of the Clean Water Act, each district engineer
shall conscientiously, implement enforcement actions against permit condition
violations. This applies regardless of the location of the dis.charge.
fi. This letter docs not alter our full authority and responsibility to take
enforcemcnt action against all violations of the River and Harbor Act. of
KSP9 in t r:iu i t i onal ly navigable waters of the United SUitCE.
l-'OH TIIK UIIKF OF KNG.LN'KKKS:
-.< .*i v
E. H. IIEIHKRG III '
Major General, USA
Director of Civil Works
-------
NPDES Permitting
-------
IMPDES Permitting
-------
PERMITS DIVISION POLICY BOOK
Note; The Contents of the Permits Division Policy Book is included
for the reader's reference and may be obtained in the Permits
Division (EN-336, 755-2545).
-------
rn'U i cC i iUl\ AL.C.NCY
WASHINGTON, D.C. 20460
2 3 1332 OFFICE OF
WATER
MEMORANDUM . •
^SUBJECT: Permits Division Policy Book Update
FROM: Martha G. Prothro, Director
Permits Division (EN-336)
'TO: Regional Water Management Division Directors
Regional Permit Branch Chiefs
NPDES State Directors ' .
In 1981 we'distributed a Permits Division Policy Book:
which provided a compilation of current policies and guidance
pater'ial for your reference. We have reviewed and updated the
contents of the Policy Book. Several outdated NPDES items should
be deleted and nine more recent issuances should be included.
Also, we are no longer including RCRA materials in this
compilation.
Attachments 1 and'2 show additions and deletions by their
subject headings. We will maintain a historical file of the'
'deleted policy guidance materials. For your convenience I am
also providing copies of the nine additions and new chronological
and subject indices.
We will continue to provide periodic updates to the Permits
Division Policy Book. Your comments and suggestions for improving
the usefulness of this book are welcome.
Attachments
-------
Additions
Administrative Guidance
A. Forms
Application Forms 1 and 2 c
12/10/80
n-80-18
IV. Legal Interpretation and Information -Memos
NPDES Permit Issuance for Iron and
Steel Industry 5/15/81
Use of "Draft Supplement to Develop-
ment Document for Effluent'Limitations
Guidelines and New Source Performance
Standa'rds for the Phosphorous Derived
Chemicals Segment of the Phosphate
Manufacturing Point Source Category"
(October 1977) in Writing NPDES Permits 1/18/82
BCT Permitting . 11/2/81
NPDES Permit Issuance for Pulp and Paper
Facilities with BCT Limitations to
Other Facilities * 5/15/81
Status of the Major NPDES Industrial
Permits List • 12/10/81
n-81-3
n-82-1
n-81-4
n-81-5
n-81-6
V. Second Round Permits:
Policy for the Second Round Issuance
NPDES Industrial Permits
of
VI. Technical Guidance:
Outer Continental Shelf Coordination
Committee
Application of the NPDES General
Permit Program to Offshore Oil
and Gas Facilities
6/02/82
6/6/80
7/30/81
n-82-2
n-80-19
n-81-7
-------
Deletions
Tiile
Regulation Procedures
A. ECSLs:-
Procedures for Issuance of
ECSLs
Enforcement Actions Against
Funded Municipal Dischargers
Enforcement Actions where an
Industrial Discharger Fails to
Meet 7/1/77 Deadline
Questions re: ECSLs
Additional Questions re: ECSLs
Use of ECSLs Past 7/1/77
Enforcement Policy and Use of-
ECSLs for POTWs
Date
Permit Program
Code
6/03/76
6/03/76
6/03/76
12/10/76
4/01/77
5/11/77
6/22/77
• n-76-2
n-76-3
n-75-4
n-76-13
n-77-3
n-77-9
h-77-11
Clean Water Act Extensions and
Modifications:
Municipal Permit Extensions under
Section 301(i)
4/19/78
n-78-3
III. Federal/State Relationships
D. Resource Conservation and Recovery Act:
Establishment of RCRA "Program
Implementation Guidance System
(PIGs)" 10/03/30
Interim Authorization of Programs
Based on Emergency State
Regulations ' 10/03/80
Requirement that State-Permitted
Hazardous Waste Facilities have
"Interim Status" 10/03/80
Short-Term Financial Assistance for
State Expected to Receive
Authorization before 1/1/81 10/03/80
The Use of State Permitting Systems
During Phase I Interim Authorization
which are not Based on Explicit
• Regulatory Standards 10/17/80
PIG-80-1
PIG-80-2
PIG-80-3
PIG-80-4
PIG-SI-1
-------
p.
Title -
Federal Register Notice of Public
Hearing and Comment Period on •
State Applications for Interim
Authorization
Effect of RCRA Regulations Changes
on Phase I Interim Authorization
Approval
Deli sting of Wastes by Authorized
States
Used Oil Recycling Act of 1980
State Regulation of Federal Agencies
For purposes of Interim
Authorization
Final Determinations on State
Applications for Interim
Authorization: Action Memoran-
dum & Federal Register Notice
Program Implementation Guidance
on Issuance of Provisional
EPA Identification Numbers
Effect of EPA's Memorandum of
Understanding With the Dept.
of Transportation on Activities
in States with Cooperative
Arrangements
Transfer of Modification and Permit
Application•Information to States
Involvement of States without. Phase
II Interim Authorization in RCRA
Permitting
Date
Permit Program
Code
10/30/80
10/30/80
10/31/80
11/14/80
11/14/80
12/1/80
11/26/80
12/10/30
3/24/81
2/12/81
PIG-81-2
PIG.-81-3
PIG-81-4
PIG-81-5
PIG-81-6
PIG-81-7
PIG-81-8
PIG-fcj
PIG-81-10
PIG-81-11
V. Second Round Permits:
Reissuing NPDES Permits to Sources
Affected by -the NRDC Consent Decree
Policies for Reissuing Industrial
NPDES Permits
Writing NPDES BAT Permits in the
Absence" of Promulgated Effluent
Guidelines
Revised NPDES Second Round Permits
Policy
5/16/78
7/12/78
6/25/80
8/29/80
n-78-5
n-78-9*
n-80-7
n-80-10
V T
Ai
RCRA:
RCRA Permit Priorities Guidance
RCRA Emergency Permit Guidance
10/03/80
10/20/80
r-80-1
r-80-2*
-------
Establishment of RCRA "Program
Implementation Guidance System
(PIGs)" . . : 10/03/80
Interim Authorization of Programs
- Based on Emergency State
Regulations • 10/03/80
Requirement that State Permitted
Hazardous Waste Facilities have
"Interim Status" 10/03/80
Short-Term Financial Assistance for
States Expected to Receive
Authorization Before 1/1/81 10/03/80
The Use of State Permitting Systems
During Phase I Interim Authorization
Which are not Based on Explicit.
• Permit Guidance 10/17/80
RCRA Emergency Permit Guidance 10/20/80
Federal Register Notice of Public
Hearing and Comment Period on
State Applications for Interim
Authorization . ' 10/23/80
Effect of RCRA Regulations Changes
on Phase I Interim Authorization
Approval . ' tt)/30/80
Deli sting" of Wastes by Authorized
States 10/31/80
r-80-1
PIG-80-2
PIG-80-3
PIG-80-4
PIG-81-1
r-80-2*
PIG-81-2
PIG-81-3
PIG-81-4
-------
' Permits Division Policy Book
This book contains policies and guidance under the NPDES
Permit Program. The materials are arranged and numbered in
chronological sequence. NPDES policies are prefixed by an "n".
Following the prefix, the first number is the year of issuance
and the second is the chronological sequence for that year.
In addition to the chronol og'ci al '1 i sti ng a subject index is
provided to assist in locating policies.
Documents which are too lengthy to be included are indicated
by an asterisk. Copies of these documents may be obtained by
contacting:
Mr. Timothy Dwyer
Permits Division (E.N-336)
U.S. EPA
401 M Street, S.W.
Washington, D.C. 20460
(202) 426-4793
• .
Please u-se th'e policy number when requesting a document..
-------
Title
Date
Permit .
Program
Code
1S73
1974
Policy on Storage & Releases for Water Quality
Control in Reservoirs Planned by Federal
Agenci es
Permit Form
Intermittent Streams
Alternative in Permit Language
Additional Guidance for Petroleum Marketing
Terminals & Oil Production Facilities
Feedlot Permit Format
Application of Electroplating Guidelines
Disposal of Supply Water Treatment Sludges
1975
1976
Use of Closed Cycle Cooling Systems to Meet the
Requirements of Section 316(b)
N'PDES Permit Authorization to Discharge •
(Deleted)
(Deleted)
(Deleted) '
Coordination Between NPDES Program and'Water
Quality Management
Attachment - Coordination
Municipal Wastewater Treatment Ponds
American Petroleum Institute v. EPA -
information Memo
Binding Effect of 303(e) Basin Plans
Impact of Phase I Basin Plans
Phase II Iron and Steel Guidelines - Mahoning
River Val ley
Asbestos Limits
Use of Low Flow Augmentation to Meet Water
Quality Standards
(Deleted)
Comments on Region VIIl's Approach to Writing
Effluent Limits for Confined Animal Feeding
Operations
1977 •
Clarification of 03C Opinion No. 40 (State
Review Authority)
Fecal Coliform Bacteria Limits
(Deleted)
Water Treatment Plant Limitations
1/16/73
9/18/73
9/28/73
12/27/73
7/18/74
7/29/74
8/28/74
9/13/74
2/26/75
4/28/76
7/07/76
and
4/02/76
8/12/76
8/24/76
8/24/76
9/01/76
10/04/76
10/15/76
11/08/76
12/15/76
2/04/77
2/14/77
4/13/77
n-73-1
n-73-2
n-73-3
n-73-4
n-74-1
n-74-2
n-74-3
n-74-4
n-75-1
n-75-1
n-75-2
n-76-3
n-76-4
n-76-5
n-76-5
n-76-6
n-76-7
n-76-8
n-76-9
n-76-10
n-76-11
n-76-12
n-76-13
n-75-14
n-77-1
n-77-2
n-77-3
n-77-4
-------
Title
Request for Policy Regarding Possible Use
of NPDES Permits to Promote Better Sludge
Management
316(a) & (b) Technical Guidance Documents
Use of In-Stream Mechanical Aerators to Meet
Water Quality Standards
NPDES Permits and Requirements of State- Law
(Deleted)
Implementation of Promulgated Section 307(a)
Toxic Standards
(Deleted)
NPDES Permits in Wetlands Areas
Implementation of Section 403
Policy Regarding Procedures, for Fundamentally
Different Factors BPT Variances
Policy Regarding the Inclusion in Permits of
More Stringent Effluent Parameters
1978
State Regulation of Federal Facilities
Confidentiality of NPDES Permit Applications .
(Deleted)
Certification and Permitt.ing of Dischargers
in Boundary Waters
(Deleted)
Coal'Min'ing Under the Surface Mining Control
and Reclamation Act of 1977.
Opinions on Variances in Second Round-and
Other Issues . -
Ex Parte Contacts in Adjudicatory Hearings
(Deleted)
Ex Parte Contacts in EPA Rulemaking
Suspenaed Solids Limits for POTW Ponds
.Innovative Technology Extensions
Guidance to States re Pretreatment Program
Variance Applications
Applicability of 301 (h) & (i) to Federal
Facilities
Transfer- of Authority over Federal Facilities
to NPDES States
Coordination between Regional Enforcement and
Water Programs re Pretreatment Program
Request for Legal Opinion - Inclusion of
Compliance Schedules in Second Round and
New Permits
1979
Use of Biornon.itoring in the NPDES
Permits Program
State ? ret re at mer.t Programs
Date
4/13/77
5/01/77
5/02/77
5/04/77
6/01/77
7/12/77
7/20/77
8/18/77
10/13/77
5/25/78.
6/13/78
6/16/78
8/04/77
9/01/78
9/06/78
9/08/78
9/12/78
9/12/78
11/28/78
11/29/78
12/26/78
•Permit
Program
Code
n-77-5
n-77-6*
n-77-7
n-77-8
n-77-9
n-77-10
n-77-11
n-77-12
n-77-13
n-77-14
n-77-15
3/10/78
4/06/78
4/19/78
n-78-1
n-78-2
n-78-3
" n-78-4
• n-7S-5
n-78-6
n-7S-7
n-78-8
n-78-9*
n-78-10
n-78-11
n-78-12
n-78-13*
n-78-14
n-78-15
n-78-16
n-78-17
n-78-18.
1/11/79
4/12/79
n-79-1
n-79-2
-------
Title
Date
Program
Code
EPA Procedures for Review & Approval of State
Pretrefitment Program Submissions
Separate Storm Sewers
National Municipal Policy & Strategy
Guidance on Setting BCT Permit Limits for
Breweries under Section 402(a)(l) of CWA
1980
. Regional Review of State-Issued NPDES Permits
. Applicability of Revised NPDES Regulations
to Permits Currently Being Processed
. Incorporation of Pretreatment Program
Development Compliance Schedules into
POTW NPDES Permits
. OGC Memo-Use of BODS Carbonaceous Test Results
. Pretreatment Compliance Schedule
. "Statement By Agency Personnel Purporting To
Sanction Source Actions Which Are Inconsistent
With Statutory Requirements
. (Deleted)
. Major Municipal Permitting in FY 81
. Suspension of Portion of Definition
of "Waters of the US" in Consolidated
Permit Regulations • .;.
, (Deleted) .
. NPDES Permit Issuance for Iron & Steel
Facilities
.' Suspension .of Provisions in Consolidated
Permit Regulations Establishing Criteria
for NPDES New Source Determinations and
Proposed Revision of the Regulations
. Treatability Manual
. BCT Cost Test Guidance
NPDES Evidentiary Hearing Management Program
. Review of State NPDES Permits Written Prior
to State Program Revision
. Procedures for Processing Plans of Approved
NPDES States to Implement NPDES General
Permit Programs
. Application Forms 1 and 2c
. Outer Continental Shelf Coordination
Committee .
1981
(number not used)
. Determining Whether Revisions to State NPDES
Programs Made to Authorize the Issuance
of General Permits are Substantial •
. NPDES Permit Issuance for Iron and Steel
Industry
4/30/79
9/11/79
10/79
10/18/79
1/18/80
1/18/80
1/28/80
4/18/80
5/28/80
7/10/80
7/15/80
9/15/80
.9/25/80
9/25/80
9/30/80
10/3/80
12/24/80
12/31/80
12/10/80
6/06/80
n-79-3
n-79-4
n-79-5*
n-79-6
n-80-1
n-80-2
n-80-3
n-80-4
n-80-5
n-80-6
n-80-7
n-80-8
n-80-9
n-80-10
n-80-11
n-80-12
n-80-13*
n-80-14*
n-80-15
n-80-15
n-80-17
n-80-18
n-80-19
2/12/81
5/15/81
n-81-1
n-Sl-2
n-81-3
-------
Title
BCT Permit*ing
NPDES Permit Issuance for Pulp and Paper
Facilities with BCT Limitations to
Other Facilities
Permit-
Program
Code
n-81-4 {
n-81-5
Status of the Major NPDES Industrial
Permits List
Application of the NPDES General
Permit Program to Offshore Oil
and Gas Facilities
1982
Use of "Draft Supplement to Develop-
ment Document for Effluent Limitations'
Guidelines and New Source Performance
Standards for the Phosphorous Derived
Chemicals Segment of the Phosphate
Manufacturing Point Source Category"
(October 1977) in Writing NPDES Permits
Policy for the Second Round Issuance
of
NPDES Industrial Permits
12/10/81
7/30/81
1/18/82
6/02/82
n-81-6
n-81-7
n-82-1
n-82-2
-------
LIST OF CURRENT POLICIES BY SUBJECT
Title
I. Administrative Guidance
A. Forms:
Permit Form
Alternative in Permit Language
Feedlot Permit Format
Application Forms 1 and 2c
Date
9/18/73
12/27/73
7/29/74
12/10/80
•Permit
Program
Code
n-73-2
n-73-4.
n-74-2
n-80-18
B. Procedures:
Applicability of Revised NPDES Regs.
to Permits Currently Being Processed
1/18/80
n-80-2
I!. Regulatory Procedures
B. Industrial:
C. Municipal:
D. Tie- .in:
•
F. Consolidated:
Suspension of Portion- of Definition
"
Waters of the US" in Consolidated
Permit Regulations
Suspension of Provisions in
Consolidated Permit Regulations
Establishing Criteria for NPDES
New Source Determinations & Proposed
Revision of the Regulations
III. Federal/State Relationships
A. NPDES States:
Clarification of OGC Opini-on
No. 40 (State Review Authority)
•State Regulation of Federal Facilities
7/15/80
9/25/80
2/04/77
3/10/78
n-80-9.
n-80-12
n-77-1
n-78-1
-------
Title . Date
Transfer of Authority over Federal
Facilities to NPDES States 11/28/78
Review of State NPDES Permits Written
Prior to State Program Revision 12/24/30
Procedures for Processing Plans of
Approved NPDES States To Implement .
NPDES General Permit Programs . 12/31./80
Determining Whether Revisions to State
NPDES Programs Made to Authorize the
Issuance of General Permits are'
Substantial 2/12/81
B. Non-NPDES States:
C. Water Quality Management Plans:
Coordination Between NPDES Program 7/07/76
and Wa-ter Quality Management • and
Attachment - Coordination 4/02/76
' Binding Effect of 303(e) Basin Plans . 8/24/76
Impact of Phase I Basin Plans 9/01/76
NPDES Permit and Requirements of
State Law 5/04/77
£. Safe Drinking Water Act:
•
Legal Interpretations and Information Memos:
Intermittent Streams .. 9/28/73
Disposal of Supply Water Treatment Sludges 9/13/74
NPDES Permit Authorization to Discharge 4/28/76
American Petroleum Institute v. EPA -
Information Memo 8/24/76
Phase II Iron & Steel Guidelines -
Mahoning River Valley . 10/4/76
Request for Policy re Possible.Use of
NPDES Permits to Promote Better Sludge
Management 4/13/77
NPDES Permit in Wetlands Areas 7/12/77
Implementation of Section 403 7/20/77
Policy Regarding the Inclusion in Permits
of More Stringent Effluent Parameters 10/13/77
Confidentiality of NPDES Permit
Applications • ' 4/05/78
Coal Mining Under the Surface Mining
Control and Reclamation Act of 1S77 5/25/78
Certification and Permitting of Dischargers
in Boundary Waters 4/19/78
Opinions on Variances in Second Round
and Other Issues 6/13/78
Permit
Program
. Code-
n-78-15
n-80-.16.
n-80-17
n-81-2
n-76-5
n-76-5
n-76-8
.n-.76-9
n-77-8
n-73-3
n-74-3
n-76-1
n-76-7.
n-76-10
n-77-5
n-77-12
n-77-13
n-77-15
n-78-2
II— I W~ W
n-7S-4
n-78-7
-------
for Pulp and Paper
Limitations to
Title
Ex Parte Contacts in Adjudicatory Hearings
£x Parte Contacts in EPA Rulemaking
Innovative Technology Extensions
Applicability of 301(h) and (i) to Federal
Facilities
Request for Legal Opinion - Inclusion of
Compliance Schedules in Second Round
and New Permits
Separate Storm Sewers
Regional Review of State-Issued NPDES
Permits
OGC Memo-Use of Carbonaceous Test Results
Statement By Agency Personnel Purporting
to Sanctional Actions Which are In-
consistent w/ Statutory Requirements
NPDES Permit Issuance for Iron & Steel
Facilities
BCT Cost Test Guidance
NPDES Evidentiary Hearing Management
Programs
NPDES Permit rssuance for Iron and
Steel Industry
BCT Permitting
NPDES Permit Issuance
Facilities with BCT
Other Facilities
Status of the Major NPDES Industrial
Permits List
Use of "Draft Supplement to Development
Document for Effluent Limitations
Guidelines and New Source Performance
Standards for the Phosphorous Derived
Chemicals Segment of the Phosphate
Manufacturing Point Source Category"
(October 1977) in writing NPDES Permits
Second Round Permits:
Policy for the Second Round Issuance
of NPDES Industrial Permits
Technical Guidance:
•
Policy on Storage & Release for Water '
Quality Control in Reservoirs Planned
by Federal Agencies
Additional Guidance for Petroleum Marketing
Terminals & Oil Production Facilities
Application of Electroplating Guidelines
Use of Closed Cycle Cooling Systems to
Meet the Requirements of Section 216(b).
Municipal Wastewater Treatment Ponds
Asbestos Limits
Date
6/16/78
8/04/77
9/06/78
9/12/78
12/26/78
9/11/79
1/18/80
4/18/80
5/28/80
9/15/80
9/30/80
10/03/80
5/15/81
11/02/81
5/15/81
12/10/81
1/18/82
6/02/82
1/16/73
7/18/74
8/28/74
2/26/75
8/12/76
10/15/75
in i u
Program
Code
n-78-8
n-73-10
n-78-12
n-78-15
n-78-18
n-79-4
n-80-1
n-80-4
n-80-5
n-80-11
n-80-14*
n-80-15
n-81-3
n-81-4
n-81-5
n-81-6
n-82-1
n-82-2
n-73-1
n-74-1
n-74-3
n-75-1
n-75-6
n-76-11
-------
Title
Lrse of Low Flow Augmentation to Meet
Water Quality Standards
Comments on Region VIII1s Approach to
Writing Effluent Limits for Confined
Animal Feeding Operations
Fecal Col i form Bacteria Limits
Water Treatment Plant Limitations
Use of In-Stream Mechanical Aerators
' to Meet Water Quality Standards
.Implementation of Promulgated Section
307(a) Toxic Standards
Suspended Solids Effluent Limitations for
Publicly Owned Wastewater Treatment Ponds
Guidance on Setting BCT Permit Limits for
Breweries under Section 402(a)(l) of
the CWA
Treat ability Manual
Outer Continental Shelf Coordination
Committee
Application of the NPDtS General Permit
Program to Offshore Oil and Gas Facilities
Variances:
Policy re Procedures for Fundamentally
Different"Factors BPT Variances
Variance Applications
316(a) & (b) Technical Guidance Documents
-Coordinated Municipal Strategy
National Municipal Policy & Strategy
Coordination between Regional Enforcement
and Water Programs re Pretreatment
Program
Major Municipal Permitting in FY 81
Pretreatment:
to
re r red council*.
Program (see also Feb. 1979 publication-
Guidance for NPDES States on
Implementaion of the General
Pretreatment Regulations -
40 CFR Part 403)
State Pretreatment Programs
EPA Procedures for Review and
Approval of State Pretreatment
Prooram Submissions
Date
11/08/76
12/15/76
2/14/77
4/13/77
5/02/77
6/01/77
9/01/78
10/18/79
9/25/80
6/06/80
7/30/81
8/18/77
9/12/78
5/01/77
10/79
11/29/78
7/10/80
n to/TO
a f w/ / w
4/12/79
4/30/79
Permit
Program
Code
n-76-12
n-76-14
n-77-2
n-77-4
n-77-7
n-77-10
n-78-11
n-79-6
n-80-13*
n-80-19
n-81-7
n-77-14
n-78-14
n-77-6*
n-79-5*
n-78-17
n-80-8
"3*
n-79-2
n-79-3
-------
..... Permit
• " Program
Title : - Date ' . Code
Incorporation of Pretreatment Program • •
Development Compliance Schedules into
"'I'PGTW NPDES Permits .. . . " "'1/28/80 'n-80-3
.Pretreatment Compliance^.Schedule-. n-80-5
.pBiomonitoring:
OGC Memo "Use of Biomom'toring in the
NPDES-Permit-Program"..,,.. ; -1/11/79 . • n-79-1
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
APR 2 5 1976
OFFICE OF ENFORCEMENT
^ * ^
MEMORANDUM ' .
Subject: NPDES Permit Authorization to Discharge
From: Deputy Assistant Administrator for Water Enforcement
To: Regional Enforcement Director, Region V
•This is in response to your March 17 memorandum requesting
Headquarters' policy on the following issue:
"[W] nether an' NPDES permit constitutes an authorization
to discharge only specific parameters limited or monitored in the
permit or a general authorization to discharge all parameters subject
only to the limitations contained in the permit."
Headquarters policy, as well as the clear language contained in
the standard permit form [EPA Form 3320-4 (10-73) ] , provides for a
general authorization to discharge subject only to the conditions
and limitations contained in the permit.
Discussion
Every standard permit issued by EPA provides that the named discharger
is "authorized to discharge from a [named] facility ... to [named]
receiving waters ... in accordance with effluent limitations, monitoring
requirements and other conditions set forth in Parts I, II, III hereof."
In addition to effluent limitations -specified in Part I and any special
requirements set forth in Part III each general authorization to discharge
is subject to the general conditions set forth in Part II. Those
general conditions which tend to restrict the general authorization to dis-
carge are the following:
A.I. Change in Discharge - requires notice of facility expansions,
production increases or process modifications resulting in any different
or increased discharges of pollutants even if such changes do not violate
the permit effluent limitations.
A. 3. Facility Operation - requires the permittee to maintain his
treatment facilities or systems in good working order and operate them
as efficiently as possible.
-------
A. 5. Bypassing all bypassing is prohibited except under certain
circumstances.
It is believed that the above general conditions, along with the
installation and proper operation of treatment systems designed to
achieve compliance with effluent limitations based upon. BPT and water
quality standards requirements should adequately limit the general
authorization to discharge. Should information which suggests otherwise
subsequently become available (e.g., discovery of the presence of toxic
substances such as PCBs in the discharge) , the permit may be modified
for cause in accordance with general condition B.4. ("Permit Modification")
The few permits issued under the NPDES's predecessor permit program,
the Refuse Act Permit Program, authorized only those parameters identified
in the permit. This approach was rejected by EPA during the early
development phases of the NPDES because it is impossible to identify and
rationally limit every chemical or compound present in a discharge of
pollutants. Compliance with such a permit would be impossible and
anybody seeking to harass a permittee need only analyze that permittee's
discharge until determining the presence of a substance not identified
in the permit. The permittee then would be in technical violation of
his permit. ^
Because we believe the approach adopted in the NPDES Permit Form
3320 is valid we recommend against inserting in permits the language
identified by Walter A. Romanek in his January 22, 1976, memorandum
(attached). Although it may be appropriate in special cases to employ
narrative language in addition to the Part II general conditions in
order to further restrict the general authorization to discharge, as a
routine matter such practices should be avoided.
I believe the above statement of policy is consistent with that
provided to your staff by Dick Browne and Barry Shanoff. If you have
any further questions please contact-Dick BrownefHBpb ^mett, Brian
Molloy, or me.
" . Jeffrey G/ Mfller
Enclosure
cc: Roy Harsch, Enforcement Division, Region V
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460 TAB A
Or?1C£ 0- SNFORCSWSK7
ME.MORANDUM
TO: Regional Administrators
Directors of the Approved NPDES Programs
FROM: Assistant Administrator for Enforcement (EN-329)
General Counsel (A-130)
SUBJECT: State Regulation of Federal Facilities Under the
Federal Water Pollution Control Act Amendments of
1977 ''(Clean Water Act) — POLICY GUIDANCE HEMC?J.KDUM
Introduction
The recent amendments to. the FWPCA have significantly
changed the "regulatory relaz.icr.ship cf States to Federal
facilities under the FWPCA. First, section 212 of the FV7PCA
was'substantially amended to provide that Federal facilities
~usr cor.ply with substantive and procedural requirements of
State lav regarding the control of water pollution including
Scate permits. Second, Federal permits to Federal agencies
now require Stat.e certification under section 401.
S~atr Issuance of PerTT,its tc Federal Facilities
Under the 1977 amendments, States are authorized -to
issue water pollution control permits to Federal facilities.
Prior to these amendments, the Supreme Court had held that
States could not require- federally owned cr operated facili-
ties to obtain State discharge permits.I/
_! / SPA v. California Regional water Resources Control
Board 426 U.S. 20C (1976).
-------
Section 313 was amended to require that Federal
facilities:
. . . shall be subject to and comply with
all . . . State, interstate, and local
requirements, administrative authority,
and process and sanctions respecting the
control and abatement of water pollution
in the same manner, and to the same extent
as any nongovernmental entity . . .. The
preceding, sentence shall apply (A) to any
requirement whether substantive or procedural
(including any recordkeeping or reporting
requirement, any requirement respecting
permits and any other requirement, whatso-
ever) , (B) to the exercise of any . . .
State or local administrative authority ....
(Emphasis added.)
State and NPDSS Permits
States are authorized to issue water pollution control
permits to Federal facilities. The section 313 amendments
do not restrict this authority to State or NPDES permits,
•therefore States may issue both. Obviously, only approved
'NPDES States can issue section 402 permits. Where a non-
approved State issues a' State permit to a Federal facility,
the Regions should continue to issue an EPA permit in the
same manner as anv other NPDES permit. To the extent
possible, issua-nce by-a Region of an NPDES permit in these
circumstances should be coordinr.ted with the State to avoid
inconsistencies and procedural delays.
The effect that the 1977 Amendments will have on the
NPDES permit program as it relates to State regulation of
Federal facilities is discussed below. The issuance of
State permits to Federal dredge and fill activities, and
Sta.te administration of the section 404 program is not
covered by this memorandum. These issues will be discussed
later.
State NPDES Programs
Section 402(c)(l) of the Clean'Water Act provides that
upon approving a State program, "the Administrator shall
-------
suspend the issuance of permits under subsection (a) of
this section as to those navigable waters subject to such
program . . .." Except for Federal facilities, it has
always been EPA's position that section 402(c)(l) requires
States to have authority to issue permits to all point
sources. Prior to the enactment of the Clean Water Act of
1977, EPA withheld approval of State NPDES authority over'
Federal facilities because Federal law precluded States from
issuing permits to Federal agencies. The Supreme Court
adopted EPA's position in EPA v. California Regional Water
Resources Control Board, supra n. 1.
However, in its decision, the Court made it clear that
Congress intended "that the States be given maximum responsi-
bility for the permit system . ..." Id. at n. 39. Moreover,
the Court approved withholding SPA approval of State programs
to the extent that they applied to Federal facilities only
because EPA "may not . . . approve a state plan which the
State has no authority to issue because it conflicts with
federal law." Id. at 226. Now that Congress has amended
the Clean Water Act specifically to include Federal facili-
ties within the class of dischargers subject to State
permits, it seems clear that States may no longer exclude
( Federal facilities from regulation, just as they may not
exclude steel- -mills or power plants, or other sources over
which they may assert jurisdiction.
Accordingly, all NPDES programs approved before the
1S77 Amendments should be modified, including the Memoranda
of Agreement, to reflect the States' new authority to issue
Federal facilities permits.^/ fts part of this modification,
2_/ Modification is required because many States are prevented
by State lew from issuing permits to Federal facilities.
Moreover, all States which" administer the NPDES program
hav.e entered into a Memorandum of Agreement which includes
- a provision that prevents the State from issuing permits
to" Federal facilities. For example, the State of Missouri
.Agreement provides that:
This agreement does not cover the issu-
ance of KPDES permits to Federal facilities
within the State of Missouri. It is under-
stood by both parties that it is the intent •
of EPA to expressly retain the permit issu-
ance authority for Federal facilities . . .'.
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the State shall submit a statement from 'its attorney general
that the laws of the State provide adequate authority for
issuance of permits to Federal facilities and to carry out
the reporting, monitoring, inspection and entry authorities
set out below. The Office of Enforcement will develop
regulations to require these programs to be modified within
one year of promulgation unless a State must amend or enact
a law in, order to make the necessary modification. In that
case the modification must be made within two years of the
date of regulation promulgation. Programs may be modified
before these regulations, are issued. Program modifications
should be subject to public notice and opportunity for
comment. Modifications to the Memorandum of Agreement must
be approved by the Administrator.
It is possible that for some programs only the Memorandum
cf Agreement need be modified to authorize State takeover of
Federal facility permits. In such cases the Regions may
relinquish their permit issuing authority to the State
solely by modifying the Memorandum of Agreement. Following
whatever program modification is necessary, the States
become the permit issuing authority for Federal facilities.
Permits_issued or in the process of issuance by EPA to
Federal facilities located in approved KPDES States should
be transferred to the State in the same way -other permits
were transferred following initial State takeover of the
program. In certain cases, however, the Regions may, as
an interim neasure, issue a Federal facility permit in an
approved State before completion of the 'necessary program
modifications if it is apparent that awaiting such modifi-
cations will cause an inordinate delay in permit issuance.
Finally, all State programs approved after e'nactment of
the 1977 Amendments (December 27, 1S77) must provide for
State issuance of permits to Federal facilities. Existing
regulations are being changed to reflect this requirement.
Reporting, Monitoring, Inspection anc Entry Requirements
.The section 313 amendments also explicitly require that
Federal facilities comply with any State "recordkeepin? or
reporting requirement." The Senate Report indicates that
this includes any reporting or monitoring requirements.
Senate Reoort at 67.
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States must have the right to enter and inspect Federal
facilities if their reporting and monitoring authorities are
to be meaningful. Moreover, it is clear from the language
of section 313 that Congress intended States to have such a
right of entry. The President is authorized to grant a
"paramount interest" exemption covering "any weaponry,
equipment, aircraft, vessels, vehicles, or other classes or
categories'of property, and access to such property . . .."
[section 313 (a)] (emphasis added). Clearly, unless the
President exempts a Federal facility, a State must be
allowed "access" to the facility.3_/
Initial State contact with a Federal facility for the
purpose of entry and inspection; should be closely coordinated
with the facility and the Region particularly where access
to the facility is restricted.
State Certification Under Section 401,
The new amendments eliminated section 401 (a) (6) ,
which provided an exception for Federal agencies from
State certification. Accordingly, NPDES permits issued by
EPA to Federal facilities require certification by the State
that the discharge is in compliance with all of the appli-
cable provisions of sections 301, 302, 303, 306 and 307 of
the FWPCA.
Please refer any further questions to Jeffrey G.
Miller, Deouty Assistant Administrator for Water Enforcement
(8/755-044C) . ,
Marvin B. Durninc
_3/ Section 308 (c) authorizes States to exercise entry
authority under programs approved by EPA, but such entry
authority does not extend to -Federal facilities. This
section, which was not revised by the 1S77 Clean Water
Act, cannot be read to weaken or render ineffective the
clear authority provided States by the amendments tc
section 313.
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MODI." ;CAT!ON TO NATlOl&L POLLUTANT DJSCHAR2 ELIMINATION SYSTEM
M£'.'iORAWDU-'. OF AGREEMENT BETWEEN T>£ INDIAN STREW POLLUTION CONTROL
BOARD AKD THE UNITED STATES ENVIRONMENTAL PROTECTION AEJCY REGION Y
Ths Mierorsno LTT. of Agreement approved July 22, 197", by the Aer.ini strator of
~e Lh itei Stitss Env irorwierjTal rroTection Agency betveer, tne Intfiane Stre»i Pol-
•.•t ic- Control =o^^{; (hsre insf-rer , the "State") zno the United States Env irorraentsl
rotection ^oency (hereinafter, "USErA") Reo ion Y is hereby nod i fied as -follows:
Tns State will scr.'mister ths KrDES psr^^it prcgrar, xi-h respect TO receral
sell ities ar-.c has sho^rj thgt it has the auchcrity to er.ter ana inspect
re=i=rs; facilities. Tr.e Stcte is responsible for - ne issuance, nosi f iCEt ion,
•£ : ss-jsr.ce , c&T.p; iar.ce monitorinc and enforcement CT 5! ! NrvES perir.its in
iniicr.c, inciui'ir.c penr.its applicable to Federal T&cilJties.
A!! references in the (-'e.T,crsnixn! cf AgreaT.erit which have the effecT of retsinino
- ' „-s i; i i i t y TO UEE FA Region Y o\-er reoersi facilities ha^s no force or effect
sftcr the effective i cte of this too if i catior;. hbthinc in this Hoc if i cation shell
:; ccr. r~~-jec to ' i-it t^e suthority r~ USE PA to ^?.ke action pi^si'^nt to Sections 305,..
305, 311, 402, 3O4, or other Sections of the Act.
INDIAN-. STRIA.:-1; POLLUTION CONTROL
50A3D
U.S. ENYlROiWEkTAL PROTECTION
REGION Y
-------
_ ^ _ Region V
D*TE: 0 C i 2 7 1978 . TAB c
.. 'Transfer of K'PDES Federal Facilities Program Authority
Under Section 313 of the Clean Water Act to the State
of Hichigan - Action Memorandum.
p-jgg. John McGuire
Reoional. Administrator
• TO:
Marvin B. Durning, Assistant Administrator
for Enforcement (EN-329)
Issue
Shall National Pollutant Discharge Elimination System (NPDES) program
authority for Federal facilities be transferred to the State of Michigan?
Discussion
The 1977.Amendments to the Clean Water Act authorize states to assume
NPDES authority over Federal facilities. On June 21, 1978, Michigan
requested this authority and provided an Attorney General's opinion that
the Michigan Department of Natural Resources has all of the necessary
authority to adm.in.i-ster the NPDES permit program for Federal facilities
(See Tab A). Our Regional Counsel has reviewed the Attorney General
Statement and concurs (See Tab B).
Assumption of KPDES authority, except for agencies and instrumentalities
of the Federal Government, was transferred by the Administrator to Michigan
on. October 17, 1973 (See Tab C). The Memorandum of Agreement (MOA), which
.was signed as part of the approval of Michigan's NPDES-program (See Tab D),
contains no disallowance of Michigan's jurisdiction over Federal facilities,
Therefore, the MOA does not need to be modified to allow Michigan to take
i.I'DES juri sciction over Federal facilities.
Recommendation
ihe request from Michigan to assume HPDES authority over Federal facilities.
pursuant tc Sectior. 212 of the Clean Water Act, has been reviewed and is
consistent with the March 1C, 1978, Policy Guidance Memorandum from the
Assistant Administrator for Enforcement and General Counsel covering
transfer of authority. Therefore. ! recormend that the request from the
State of Michigan tc assume f.'PDES authority over Federal facilities be
approved. A suggested letter to the Governor of Michigan approving
•Michigan's assumption of authority is enclosed (See-Tab E).
-------
0 CT 2 7 1S78
2
Decision of Regional Administrator
That the request from the State of Michigan to assume NPDES authority over
Federal facilities, pursuant to Section 313 of the Clean Water Act, be
approved.
Approve:
Disapprove:
Date:
Disposition
A letter to the Governor of Michigan with a copy to the Executive Secretary,
Michigan Water Resources Coraission has been prepared for signature of the
Administrator (See Tab E).
Concurrence
Deputy Assistant Administrator
for Enforcement Concur:
nonconcur:
Date:
Enclosures: Tabs A - E
Decision of Assistant ACT.inistrator for Enforcemsnl
Approve:
Disapprove:
Date:
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
GmCi Or SKTORCEM.SKT
Honorable Otis R. Bowen, K.D.
Governor of Indiana
Indianapolis, Indiana 46204
Dear Governor Bowen: •
On January 1, 1S75, Indiana received authority to administer
the National .Pollutant Discharge Eli mi net ion System (NPDES) within
its borders. EPA's approval letter indicated that ws would retain
authority to issue permits for Federal facilities within the State.
The reservation of authority over Federal facilities was necessary
because the Federal Water Pollution Cor-trcl Act (FWPCA) precluded State
regulation of these facilities.
The 1577 amendments to the FWPCA specifically authorize the
States to administer the NPDES permit program for Federal facilities.
Accordingly, I have today approved the State of Indiana's request to'
assume this responsibility. 1 have today also approved a modification
to the Memorandum of Agreement between EPA and the State allowing this
transfer (copy enclosed). This approval overrides any contrary language
.in EPA's January 1. 1575, letter approving the State's K'PDES program.
We are clad to transfer the administration of the K'PDES permit
program for Federal facilities to the State of Indian;. Region V will
be wcr/i-'nc nitr, the Indiana Stream PoVufi or. Control soarii to faciliT.at£
this transfer in a timely manner.
Si ncerely yours,
Karvin E. Durning
Assistant Administrator
for Enforcement
Enclosure
cc: Mr. Oral H. Hert
Technical Secretary
Indiana Stream Pollution Control Board
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION tx
21 5 Fremont Stree:
San Francisco. Ca. SO 05
PU3LIC NOTICE OF PROPOSED ACTION
by the
U.S. Environmental Protection Agency •
Kegior. IX
215 Fremor.t Street
San Francisco, Ca. 94105
(415) 556-3450
June 23, IS73
On September IS, 1975, the Administrator cf the Environ-
mental Protection Agency cave approval to a request froirv the
State of Nevada for authorization to adir.inis-er the National
rcllutant Discharge Eliudnation System. (K?DZI£) penrJ.t prograr.
for discharges v;ithin the jurisdiction of the State. This •
authorization was made pursuant to Section 4C2(b) of the Fed-
eral Water Pollution Control Act .-jr.enevents of 1972. The
authorization excluded discharges from facilities which are
agencies or instrumentalities cf the Federal government.
The 1577 .-_-e.-dr:ents -~c the Federal Kater Pollution Control
Act (23 U.S.C. 1251,et req. ) provics, in Sectior. 313. authority
for states to regulate; discharges from agencies or instrumentali-
ties of the Federal c:-vernment. The Administrator of the En-
vironmental Protection Agency proposes to expand the State cf.
Nevada's KPDF.S authorisation to include- Federal facilities.
All comments or objections received within 30 days of the
date of this notice will be considered by Z?.-. before taking
final action. If sufficient public interest is" expressed E public-he'aring
rr,£y be held.
-------
6 APR-
HEHORAHDUH • ' °
70: Regional Administrators
' . State KPDES Directors
FROM: Deputy Assistant Administrator for Water Enforcement (EH-335)
.SUBJECT.: Confidentiality of KPDES Permit Applications
Attached is a copy of a recent decision issued by the Office
of General Counsel *hich requires -that all information 1a HPDES
penrit applications and peraits be cade public. Please advise
your staff of this change so that icplesentation can be uniform.
Jeffrey 6. Killer
Attachment
cc: Regional Enforcesant Division Directors
Regional Persits Branch Chiefs
JShaffer:nflits:PD:EN-336:3109 WSH:5-0750
-------
WASHINGTON. D.C.
22 1278
*"•" °
SUBJECT: Confidentiality of KPDES Persic Applications
ISDii: Joan Z,
General
TO: Thomas C. Jorling ''
Assistant Administrator for
Water and Hazardous Materials 0
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I think it is also inportant that this be reflected in the
regulations, in the application forns, and in any informational
materials used by EPA to explain the NPDES progran.
Proa what I have been able to determine, this decision nay bt 4
change frca past practice in the treatsent of iaforaarion in NPDES
pemit applications. I believe that in the past section 402 G") was
overlooked, and most offices treated information in KPDES perait
applications the saae as section 308 information. Accordingly, it
take time to bring everybody up to speed on this change.
If you have questions about hov your offices should inplesent
Class Determination or other related matters > contact Janes Kelson at
755-0794. . .
Attachment
-------
•c / CLASS DETERMINATION 1-78
/ •
. _ CONFIDENTIALITY Or .INFORMATION IN NATIONAL POLLUTION DISCHARGE
* ELIMINATION SYSTEM PERMITS AND PERMIT APPLICATIONS UNDER SECTION
402 (j) °* THE FEDERAL WATER POLLUTION CONTROL ACT
Under the Federal Water Pollution Control Act (FWPCA) , as amended
(33 U.S.C. 466 et sea.), the Environmental Protection Agency (EPA)
or counterpart State agencies issue'National Pollution Discharge
Elimination System (NPDES) permits to individual sources of vater
pollution. This program is administered primarily in EPA's Regional
offices. Those offices have asked for a Class Determination concern-
ing the confidentiality of information contained in KPDES permits and
permit- applications in/light of section 402(j) of the FWPCA. Under
40 CFR. 2.207, I have authority to issue Class Determinations concerning
- the confidentiality^of classes of Information obtained by EPA.
In the case of information contained in NPDES permit applications
and KPDES permits, I have found:
1. EPA possesses and vill continue to acquire infcreation in
NPDES permits and permit applications. . .
2. The information contained in NPDES permits and penait applica-
tions is of the same character. It is proper to treat «T3- of the
information as in the same class.
3. A Class Determination vould serve a useful purpose in clarify:
' the status of potentially confidential information contained in NPDES
permits and permit applications as restricted by section 402(j) °£ ~*?c
-------
2 . . V
.1 have determined that information contained in NPDES permits'
and NPDZS permit applications is not entitled to confidential treat-
Bent because section 402 (j) of the FwPCA mandates disclosure of this •
information to the public notwithstanding the fact that it night be
trade secrets or commercial or financial, information.
Section 402(j) of FWPCA states "[aj copy of pach permit applica-
tion and each permit issued under this section ghaTj te available to
the public. Such permit application or permit,, or portion thereof >
shall further be available upon requese for the purpose of reproduction." . \
This language is different from that in section 308 of the FWPCA... \
Section 308 is the basic indorsation gathering authority of the FWPCA.
Paragraph (b) of section 308 states "[a]ny records, reports,, or infor-
x
nation obtained tinder this section.. .shall be available to the public,. .
except upon a showing satisfactory to the Administrator by any person
that records, reports, or information, or particular parr thereof (other
than effluent data), to vhich the Administrator has access under this
section, if made public vould divulge methods or processes entitled to
protection as trade secrets of such person, the Administrator shall
consider such record, report, or information, or particular portion
thereof confidential in accordance vith the purposes of section 1905 of
title IS o'f the United States Code " .. ' . .
^
The inconsistency between the language of section 402(j> and that
of section 308 vas brought to the attention of the House Committee on
Public Works in a letter dated December 13, 1971,. from William Ruckelshav
Administrator of EPA. -Congress chose to treat the information covered
-------
3
by section 402 (j) differently from the information obtained, under "
» •
section 308. In all versions of the bill that becaae the 1972
• amendments to FWPCA, the sane basic approach of requiring public
disclosure-of NPDES permits .and permit applications was followed.
The only amendments to section 402(j) vere to eliminate a specific
.enumeration of the offices in which copies would have to be kept.
In Senate Report 92-414, October 28, 1971, at page 72, the' Senate
Committee on Public Works made the following commencsr
An essential element in any control program involving the
nation's waters is public participation. The public
»
. must have a genuine opportunity to speak on the issue
of protection of its waters. The Committee has therefore'
/
established requirements to provide opportunity for public
hearing by the Jederal Government, or if State participa-
tion is approved by the Administrator, the State,, .and other
provisions to make available to the public all relevant
information surrounding a discharge source and the control
requirements placed on it. This includes the deposit of
any permit, and the conditions thereto, in a place of ready
.public access. The scrutiny of the public and the exercise
of authority under this section is extremely important to
^
insuring expeditious implementation of the authority and a
high level of performance by all levels of government and
discharge sources.
-------
Is is clear froa the language of section 402(j) and the
legislative history of that provision that Congress Intended sectiOo
• 402(j) to be a disclosure caudate in contrast to the basic approach.
of section 308 vhich provides protection for trade secret information..
Accordingly, EPA is required to nake public NPDES permits and KPDES
persit applications.
The NPDES permit application is-a standard form, specified by EPA.
It asks the applicant to supply certain specific information. la
some cases, there is insufficient space for the applicant to supply
ail of the requested information. la those eases the applicant attaches
additional sheets vith the further information. For purposes of section.
402 (j). the NFDES permit application required to be nade public is the
application form itself and any attachments that are csed to supply
information requested by the application form. Any information - '
obtained' by EPA that goes beyond 'that asked for in the application,.
vhether submitted by the applicant or obtained by EPA under authority
such as 40 CFR 1Z5.13, is not considered part of the pemit application.
as contemplated by section 4-02(j). This additional information will
be treated in accordance vith the procedures of 40 CFS 2.302.
If-an applicant has .daisied"'as""confidential any information
- contained .in the NPDES 'percit application or the KPDES persit, confi-
••
dential treatment vill be denied in accordance with this Determination
and notice given to. the applicant in accordance vith 40 CFR. 2.205(f).
' •
/ -^ rx
/ 7 r
. oernstein Date
General Counsel (A-130)
-------
=-'6
5SB
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
APR 1 9 197B
OFFICE OF
GENERAL COUNSEL.
MEMORANDUM
n-
TO:
FROM:
SUBJECT:
Assistant Administrator for
Enforcement
Regional Enforcement Directors
NPDES State Directors
Joan Z. Bernstein
General Counsel (
Certification and Permitting of Dischargers Located
on Waters Forming Boundries Between States
QUESTIONS PRESENTED
When a facility is located within one State, but the end
of the discharge pipe is located within the waters of another
State, which State has certification rights pursuant to
Section 401 of the Clean Water Act ("The Act")? If the Section
402 NPDES permitting authority has been transferred by the
Administrator to the States, which State has the 402 permitting
authority?
FACTS
On February 16, 1978, the Atomic Safety and Licensing
Appeal Board of the Nuclear Regulatory Commission issued a
decision which interpreted Section 401 of the Act. The
Board determined that the proper State to issue a certifica-
tion is the State which has jurisdiction over the navigable
waters in which the discharge originates rather than the State
in which the facility is located. The Board noted that:
"we are prepared to give substantial weight
to the interpretation given a statute by the
agency Congress entrusted with its administra-
tion. In this case, we acknowledge that EPA
is that Agency with respect to the Water Act.
But EPA has not specified how Section 401
controls the outcome of the issue
-------
before us. We are, therefore, left to do
so ourselves." (PUBLIC SERVICE COMPANY OF
INDIANA, INC., Docket Nos. STN 50546,
STN 50-547, slip op. at 20-21, footnotes
omitted).
On February 28, we received a letter from the attorneys
for the Public Service Company of Indiana requesting that we
address the legal issue which is before the NRC. In addition,
we had informal communications with representatives from the
NRC staff and the Commonwealth of Kentucky similarly request-
ing that we address the issue. On March 20, we wrote the
Secretary of the NRC and notified him that we would prepare
a legal opinion on the 401 certification question.
The proposed Marble Hill Nuclear Generating Station will
be located in Indiana. Its discharge will enter the Ohio
River, which forms the border between Kentucky and Indiana.
Apparently, the precise border is located at the low water
mark on the Indiana side of the river.I/
The legal question raised is of significance to
this Agency because there are 29 rivers in the United States
that are boundaries between two States. While the boundary
line between the States is usually the midline or thread of
the channel of the stream, this is no't always the case. For
some rivers the boundary line is the high-water mark or low-
water mark on one side of the river.
*
The boundary line creates questions not only in regard
to certification under Section 401 of the Act but also in
regard to the question of which State has the permitting
authority under Section 402 of the Act. In this opinion
we shall address both issues.
ANSWER
The State in whose waters the discharge originates is the
certifying authority pursuant to Section 401 of the Act.
Section 4Gl(a)(l) provides that whenever the construction or
operation of a facility "may result in any discharge into the
navigable waters", the certifying State shall be the one
I/ There is a factual question as to whether the discharge
originates in Kentucky or Indiana waters. As noted in our
March 20 letter, we shall not address this factual cuestion.
-------
'•in which the discharge originates or will originate." While
it might be argued that a discharge of pollutants actually
"originates" where the manufacturing or industrial facility
is located, rather than at the end of the discharge pipe,
the entire structure of the Clean Water Act, its legislative
history, and intent clearly establish that the State whose
waters are affected by the .discharge is the proper certifying
State.
Similarly, the State in whose waters the discharge or-
iginates is the Section 402 permitting authority. Section
402(b) provides that a permitting State shall "administer
its own permit program for discharges into navigable waters
within its jurisdiction."
The State in which the facility is located has rights
pursuant to Section 401(a){2) and Section 402(b)(5) only
to'the extent that the quality of its waters is affected
by the discharge.
DISCUSSION
The Clean Water Act is a comprehensive statute designed
to reduce and ultimately to eliminate the discharge of pollu-
tants into the nation's waters. Tne Act provides for a deli-
cate partnership between the Federal government and the
States in achieving this result. A major responsibility
of the Federal government under tne Act is the development
and promulgation of uniform national technology-based stand-
ards for categories and classes of industrial dischargers.
At the same time, the States are granted the authority (with
Federal support and in some cases oversight) to institute
a range of more stringent, more comprehensive requirements
to assure protection of the navigable waters within each
State.
Pursuant to Section 510 of the Act, the States are
empowered to develop more stringent water pollution control
requirements than those developed by EPA. Section 510(2)
also explicitly retains the authority of each State to 'control
the waters within its jurisdiction.
In addition to these general powers, the Act provides
that States shall have a series"of rights and responsibilities
based upon the State's jurisdiction and control over waters
-------
of the United States. Section 208(a)(2) of the Act requires
a State or its designated areawide agency to develop compre-
hensive pollution control plans for areas of the State which
have "substantial water quality control problems." Clearly
the State whose waters are affected must take the lead role
in devising a plan to protect its waters.
Under Section 303 of the Act each State is required to
develop water quality standards for all waters within its
jurisdiction. Such standards consist of a designated use/uses
of the stream (e.g. "protection and propagation of fish and
wildlife") and criteria necessary to support the use, (e.g.
"not less than 5 mg/1 of dissolved oxygen"). Prior to the
passage of the 1972 Amendments, such water quality standards
were the major water pollution control mechanism under the
Federal law. See State Water Control Board v. EPA, 426 U.S.
200, (1976). While the role of water quality standards was
somewhat diminished by the 1972 Amendments, the standards
form a major basis for numerous State and Federal programs.
The difference between the designated standards and the actual
ambient water quality may provide the basis for Section
208 planning. Under Section 303(d) of the Act, States must
identify those streams where the federal technology-based
standards are insufficient to meet the designated water
quality standards. The States are required to develop maximum
daily loads for such streams and to develop more -stringent
effluent limitations which will achieve the standards as
part of the continuing planning process under Section 303(e),2_/
These State plans, laws, regulations, and other require-
ments are translated into limitations applicable to individual
point source dischargers through the NPDES permit program
pursuant to Section 402 of the Act. And under Section 208(e)
of the Act, no permit can be issued which is in conflict
with an approved 208 plan. Under Section 301(b ) (1) (C), a
discharger must achieve by July 1, 1977, any more stringent
limitation necessary to meet the requirements of State law,
2/ In addition, Section 305(b) requires each State to
submit biannually a report describing the water quality
of. all navigable waters within the State and the steps
which will be taken to improve water quality.
-------
including water quality standards. The 402 permitting authority
is required to assure that permits are consistent with
Sections 208(e) and 301(b)(1)(C), and thus consistent with
the requirements of State law including State water quality
standards and limitations developed pursuant to such standards.
Section 401 of the Act provides another mechanism to insure
that NPDES permits (as well as other Federal licenses and
permits) meet the requirements of state law, particularly
State water quality standards. Section 401 has its origins
in Section 21(b) of the Water Quality Improvement Act of
1970, April 3, 1970, P.L. 91-224, 84 Stat. 91. This provision
required that any applicant for a federal license or permit
which 'might result in a discharge into navigable waters must
provide the permitting authority with a certificate from the
State in which the discharge originates or will originate
that:
"There is reasonable assurance, as determined
by the State or interstate agency that such
activity will be conducted in a manner which
will not violate applicable water quality
standards."
Section 21(b)(l) also provided that if.the standards had
been promulgated by the Secretary of the Interior, the certifica-
tion should be from the Secretary. Section 21(b(9) further pro-
vided that if there were no applicable water quality standards,
no certification should-be required. Section 21(b) therefore re-
cognized that the appropriate certifying authority is that which
has developed and implemented water quality standards for the water
body into which the discharge originates, since only the authority
that develops and implements the standards could provide the "rea-
sonable assurance" that the standards won't be violated.
The substance of Section 21(b) became Section 401 of the
1972 Federal Water Pollution Control Act Amendments. The
State was no longer required to directly certify that its
water quality standards would be met by the permit, but
was instead required to certify that the discharge would
•comply with "the applicable provisions of Sections 301,
-------
302, 306 and 307 of this Act."3_/ It is clear from the
legislative history of the 1972 Amendments that the major
purpose of Section 401 was to allow a State to assure that
its water quality standards would be met.
As noted in the Senate Report:
HI
'The purpose of the certification mech-
anism provided in this law is to assure
that Federal licensing or permitting agencies
cannot override State water quality require-
ments. "
A Legislative History of the Water Pollution Control Act
Amendments of 1972, Senate Committee on Public Works, Com-
mittee Print, 93rd Cong. 1st. Sess., 1973 ("Leg. Hist.")
at 1487.
In his statement on the Conference Bill, Senator Huskie
further explicated this concern:
"If a State establishes more stringent
limitations and/or time schedules pursuant
to Section 303, they should be set forth in
a certification u.nder Section '401." Leg,
Hist, at 171.
3_/ Section 401 was amended by the Clean Water Act of 1977
to include Section 303 in the list of enumerated sections.
As stated in the Conference Report:
The inserting of Section 303 into the
series of sections listed in Section 401 is
intended to mean that a federally licensed or
permitted activity, including discharge permits
under Section 402, must be certified to comply
with State water quality standards adopted under
Section 303. The inclusion of Section 303 is
intended to.clarify the requirements of Section
401. It is understood that Section 303 is re-
quired by the provisions of Section 301 . . .
Sscticn 303 is alvsys included hy reference
where Section 301 is listed. (House of Repre-
sentatives, Report No. 95-830, 95th Cong. 1st
Sess. December, 1977 at 96)
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"Secondly, the Conferees agreed that a
State may attach to any Federally issued
license or permit such conditions as may be
necessary to assure compliance with water
quality standards in that State." Leg. Hist.
. at 176.
The legislative history of Section 401 thus shows that Congress
intended that the certifying State be the State with jurisdic-
tion over the navigable waters at the point of discharge.
The language of Section 401 itself further supports the
same conclusion. First, Section 401(a)(l) grants certifi-
cation to the State "in which the discharge originates or
will originate." Under Section 502(12) the discharge of
the pollutant is defined as "any addition of any pollutant
to navigable waters from any point source." Thus, there
is no discharge until the pollutants enter navigable waters.
For the purposes of Section 401, at least, the discharge
thus originates -at the point at which it enters the navigable
waters.4_/
Secondly, when an interstate water pollution control
agency "has jurisdiction over the navigable waters at the
point where the discharge originates or will originate" .
it, rather than any State has the certifying authority.
This is further indication that the certifying authority
derives from jurisdiction over the navigable waters, not over
the land where the facility is located.
Section 401(a)(3) provides further support for this con-
clusion. Pursuant to Section 401(a)(3), a certification with
respect to the construction of any facility also is binding
upon any subsequent operating licenses for such a facility,
except that the certification may be withdrawn because of
changes in four circumstances:
4/ In his discussion of Section 401, Senator Muskie says
that the certification should come'"from the State in which
the discharge occurs." (Leg. Hist. at 1388, emphasis added)
While there may be some question as to where a discharge
originates, there can be no question that the discharge
occurs in navigable waters.
It may be that the Congress used the word originates
to distinguish between the State in whose waters the discharge
initially enters from a downstream State whose waters are
also affected by the discharge. See footnote 5, infra.
-------
(A) The construction or operation of the
facility, (B) the characteristics of the
receiving waters into which such discharge
is made, (C) the water quality standards
applicable to such waters, or (D) applicable
effluent limitations or other requirements."
A concern for the receiving waters and the criteria
applicable to such waters is primarily a concern of the
State which has jurisdiction over the receiving waters.
A State in which the facility is located may have a variety
of concerns about the facility but does not have any direct
concern or jurisdiction over the waters affected by the
discharge .,5/
Our interpretation of Section 401 is further buttressed
by a reading of Section 402 of the Act. Under this section,
permits are issued to point source dischargers. Although
permits, are initially issued by EPA, the Act provides that
the permitting authority may be transferred to a State which
has an adequate program. Section 402(a)(5) provides for
a temporary transfer, while Section 402(b) provides for
a more permanent transfer. Both sections provide that
the State has the power to issue permits for all discharges
into its navigable waters:
"The Administrator shall authorize a
State, which he determines has the capa-
bility of administering a permit program
which will carry out the objective of this
Act, to issue permits for discharges into
navigable waters within the jurisdiction
of such State." Section 402(a)(5) (emphasis
added) .
_5/ Section 401 does provide protection for any other State
whose water quality may be affected by the discharge. Section
401(a)(2). Such State may object to the issuance of a permit
and request a public hearing. The permitting agency is then
required to hold a public hearing and to "condition such
license or permit in such manner as may be necessary to in-
sure compliance with applicable water quality requirements."
States whose waters may be affected by the issuance of
an NPDES permit by another State also have rights to assure
protection of their vaster quality. See Section? 402(b}(5)
and 402(d)(2)(A).
-------
H •
'At any time after the promulgation of
the guidelines required by subsection (h)(2)
of Section 304 of this Act, the Governor of
each State desiring to administer its own
permit program for discharges into navigable
waters within its jurisdiction may submit to
the Administrator a full and complete descrip-
tion of the program it proposes to establish
and administer under State law or under an
interstate compact." Section 402(b) (emphasis
added ).
Thus, the explicit statutory language of Section 402 autho-
rizes a State to issue permits for all discharges into
navigable waters within its jurisdiction.6/
In its letter requesting our opinion on this issue, the
Public Service Company of Indiana suggested that the oppo-
site answer would be preferable administratively since it would
avoid the necessity of making a factual/legal determination
in each case as to who owned the waters at the point of dis-
charge. We recognize that in some circumstances such a deter-
mination may demand the resources of the permitting agency,
but we believe that these considerations are insufficient to
override the clear language of the Act, its legislative history,
and its goals.
It has also been suggested that in issuing permits to
facilities located in another State, the permit granting
State may encounter difficulties in providing for inspection
and monitoring of the facility, and in the enforcement of
the permit. We do not regard these difficulties as insuper-
able, since we assume that all permits would include provisions
allowing the issuing State to monitor and inspect the facility.
In enforcing these provisions, or other provisions of a
_6/ The House Report clearly states that a permitting State
does not have jurisdiction to issue permits for discharges
into navigable waters outside of State's jurisdiction:
Subsection (a)(5) further provides that the Administrator
may authorize a State, which he determines has the capability
of administering a permit program, to issue permits for the
•discharges into the navigable waters within the jurisdiction
of such State (but not in the contiguous zone or the ocean).
Leg. Hist, at 813. (emphasis added).
-------
10
permit, the issuing State could bring an action in its State
courts and should be able to establish that the defendant
had sufficient contacts necessary to support the State's
long-arm jurisdiction.
The questions answered in this opinion have not pre-
viously been formally addressed by this Agency. It is our
understanding that this opinion is consistent with the
actual "real world" permitting and certifying activities
in most regions. A number of regions, however, have evident-
ly allowed States to certify and to issue permits to facilities
located in such States which discharge into the navigable
waters of another State.
A permit issued by a State which does not have the
authority under the Clean Water Act to issue such a permit is
jurisdictionally defective, and would not therefore provide a
discharger with the protection provided by Section 402(k) of
the Act. I urge the Assistant Administrator for Enforce-
ment to take whatever steps are necessary to expedite the
re-issuing of such permits.
On the other hand, a Federal permit issued despite the
lack of certification from the proper State remains valid.
The Federal agency which issued such permit had the jurisdiction
to take such action. To the extent that the permit is incomplete
or illegal because of lack of proper certification, any injured
party could seek judicial review of such permit under the appro-
priate provisions of Federal law. Any State which failed to as-
sert its certification rights within the prescribed statutory and
regulatory time period may be deemed to have waived such rights
pursuant to Section 401(a)(l) of the Act.
-------
§ UNITED STATES ENVIRONMENTAL PROTECTION'AGENCY
. . WASHINGTON, D.C. '20450 . -
JAN'11 1979 .,.
GENERAL COUNSEL. • V" '—.
MEMORANDUM
TO " .
..'.!,: Deputy Ass is tan t\ Admin isj^-a tor
, -• ;; for Water Enforcement
-335)
•:"•>•-''•--:-.v,:: '•••''v ;^85S£
-\ I--"'' •" ' '-' '-••'''..-'••i;'«C^.-T^i-
I.. ' •. • . - - . ~ "TZi^.-,-** v:.--i«.V ••
FROM
: ; Associate General. 'Counse
C:- Water and Solid Waste Division (A-
SUBJECT:"T-bse of Biomonitoring"' in ;thte \NPDES.:
„ • ••-•••».. /-V^.* ••'•" • '- -. i-'?=!»v5?£»»^5?»..jS«Si-
DES: Permit; Program .;.- :'..S^2^*vi:-:i'-i->"
4 . . - . .-•*-•"• •"••-•=>*;'•-« •.;i*":rTr-.i':*r1^
•'v'.'-'3^-. '>'•••'•' •.-•-. /.v-:•'>•'• " •^•x'?v^j:<\;--;!'r^V'./- .'
. .:'Your memorandum of August 31V".19?8,'! requests 'the "Of f ice vrf^v.—V^ p
of General Counsel to address two questions as to the legal .^^.rf;'^/C-iM
authority of EPA to impose toxicity test requirements in ^ ^'i4:^':^--'!
second round permits. Our conclusions are discussed bel<
Question" 1-c j^,.''L.
.^-::r^Dbes
.effluent^
'carcinogens
^ability studies and toxicity reduction plans?;. ,
.; /^^EPA's':;;
'•is-."a"_
amended, is Tat least as broad .as -:the -authori ty conferred by'
Section ;308."of-the Act. Section ' 402 ( b) (2 ), see, Decision of - .y'--^.^::-^
the General- Counsel No. 39, Issue. I(b). Section. 308 calls ;.'\:';VjvTU;"V.i
for''point. sources to conduct, certain.-, types of. information .' '-''• .-~^:^:^-:^
gathering ^'activities as necessary for specif ied :porposes. •' \'-j'--'-:-.-^:(^"J.^:;-.^
* ..This memorandum supersedes. an OGC memorandum 'of November 3, •';,;•''':'..,i'.-.~.l
1978, on this'subject '.....j-.-i- • • r--..-••• :- • . . • -....-:;',:v:r'jl ''i-Kl
-------
'Thus;) if.' ncc'busury , thb Adui in ictr.. ':'or -must require the
or oocratoc. o£ a point source to ," Install , use , and ma intein
such" monitor ing equipment or . methods ( includ incj where ap- .• .
propriate, .biological monitoring methods)," Section 308 .•'.;.
\a)'(A) ( ii i-) / and "provide such other information as he may. >
.reasonably require." .Section 300 (a ) (A) (v ) . This author ity"'-
eu'^V^/^f
_
exercised "whenever required to carry out the .-objec-.:'.
this Act," .including ( 1 ) "developing or assisting in ^
any effluent limitation .•'••. . , . ( 2)
person is. in violation 6C any such
or ( 3 ) .carrying out sections . . v;-102.
308 (a)... The General Couns-el has stated
308(a) it is' only necessary , to suppqct
a permit data-gather ing ..requirement ,v;to find that the infor
mation.is reasonably requ
the Act an'd_Jis. not unreasonable
Counsel No . ;27 ,. Issue V
must be
tive of
the .development of
mining , whether, .any
limitation . . -•. ,
and. 504."-- Section
that; under Section
monitoring is consistent with the ..section ' s criteria. in
the requirement .can provide, infocroation related to^ the
tocation and .maintenance, of . the biological, integrity of
the nation ' s "waters; can be" useful
that
effluent -limitations 'f or'.-the..sane
permit r, -or may... possibly b
5P4. emergency provisions
•unreasonable -to require the discharger'
•"information .--showing whetherr and how .the
;/controlled .-V.The added information.;may
''to .restore and maintain the waters7;?.involved,
' Section ,101 (a) V :..to .develop ef fluent;, 1 imitation s
ry_
,;.:..'in -,-orde r^-to ,ach ieve • the* • : ^'l-k£^f ;'•?:
rge".; of Atoxic, pollutant's'- in ••?;'; :-!*j?h'^?'':^
'~ ' '
That ;sect i6"n--:cstabl ish'e's •
Act1 s ;- object i've, that.-,." the'j.5 ischarge
toxic 'amounts.-..be proh ibited.." ::..Tox ic'ity..reduction plans
would .be; squarely in "accord witii that; policy. •, .The I L c3u
mon
•-::•• .i •• ^^•^•^^r^ • '• • -'^
-------
'i'li is" cjuo^t ion in j;iinilar to l:he question addressee! by '-" '•;'••-.
Decision of the General Councel Ho. 39, Issue I(b). There, ;.
the permittee was required to conduct treatment and control :-;-:
studies, including economic analyses of various alternatives,
to determine the technical and economic feasibility of at-
taining EATEA as then estimated by £PA. No guidelines had . .-'.'•
been-promulgated Cor the category of point sources .in. quest ion". .]
• The General. Counsel ' s decision upheld the permit terms under. .-••-."::.'t
•Sections 402 and 300, stating,.'" it-just cannot be seriously. '•'-..'•'•':•
contended that information directly relevant to establish- .... X
ment of e_ffluent limitations reflecting BATEA for the very '"'.•;.•',,.
'permittee' from whom the information is obtained ..is not in-..-. "::>';;::J;
'formation 'required to carry out the. object ive of the Act './.;•..-;... ^
and neither .to be used for developing effluent
or relevant^to carrying out Section .402." .. •;.
• . . .,:-..--••• . . • -v--.. .<••.•:.:.-. - ...... ..•.-- , .•• . •.. -...----
Here ;"';it. is not' clear", that '-.the . treatabil ity studies ;.\ >,''"'.;v.£l'^:-
and- toxicity. reduction plans.to be supplied would be .-employed !;l.*'"
permittee or to implement water quality ^ .t-:,-
See discussion of question II, below. ::......... ... • :.-.-, • r-^ ^:;£••£•• v-s
'•' ''• ••..,',.• '- • ••-..•••.• .'-.:.v . : ":':-!--." '•'••• ;'';!''"'-'^/-; '"'': "^:-^^S:C^.
. - It--isv'therefore conclude'd. that biomonitoring,'•'•treat-
ability studies, and
;as terms.of a NPDCS pei
'.of course be reasonable.- _The reasonableness of. any
,.ment .would. have, to be deterrained . in each case.
conciuaea. c-nat o lomonitat ing , uieau— • ••-.•^o-v/v'i- > L~"-.'.
toxicity reduction plans may be included i^v^v"^^;-
ermit. . the..specif ic requirements must ..^Ji^'^v"^^-
le.- The reasonableness of. any recuire-"-V'y..'1*-".'----".'-*--'
'non-guidelines based toxicity .'limits in NPDES permits, and
'. • if
.. ' ••'.'•'. •" "•.'••'--'••'••.•,'• ' ! ••': v •-'' . •'*''• : ." '' •'• ' .'•' . • ".-'•:•'•'•".'.•.'•.•' •'•'•:''; "'• '-'.Vi--i '•' t .'.-'••'..• •
' - .''.•* '- ..; • •,-.'. ;.' ." '• . ...-.•' • • :. ....•- "'..--.- .'•'. *•••'• '••'.'-•.„"-"'-.; •''"••••.'"-.?
-------
.".".' ''.""••" •'•'"'"'••••''/!'• ' ' '" ' ./:-.r";"-hV : .^'""••/";' 'l^:'"""':' '•-'•'•^'•7"?/'::;J:?:^^^f@^?|S-
•Hi ."> en:".:-, ion . • _-• -. • •;:; . ". ' : • -;: '•.'" s ; ..- "'• . ' :'^':~l;'~^^^^^-::^^
Sect ion 402(a) (1) ." "• "'"._ ;'. "J /;..,./>'; '••-".•'' •'••'•••"' •'! ^ ''-^iR'fe^r.
Section 402 ( a )(1 )-.author izes ' the Administrator to 'in- • :'^£VT"-:"
elude, in . pcvmits, prior to the" implementing actions relat ingi ;:/''T.'':' -"'../:v'--'
to Sections 301, 302, 306., 307, 300, and 403, such cond i t ions':;:;^^;;^:?^
as he determines are necessary to carry out the provisions ;..>••;j^'^'r^"-^-;
of the Act..: Where applicable effluent limitation guidcl ines V^Vt^:^:^:
and .standards have not. been, promulgated , .Sect ion 402(a) • • • v;c:':~^^"**-^*^^
"outhoci7.cs the. Adm in istrator to include _in permit::-effluent^.
limitations based on best engineer ing . judgment. Decision..
of the General .Counsel No.; 1,..Issue I. .The States' .-author
is comparable.. .40 CFR.,§124.42(6).
"'''. _.'•:•: ••; Promulgation of. effluent/:]
for.-'ci category oC sources does
tor from using Section -402(a)(
parameters • not'"" included. in._those guidelines". . .Dec is ion; of.
General Counsel Mo.; 54 ,i"Issue .I...'\.Thc--_omittedl:_par;
are considered to be outside 'the'-scope of.thevregu!
In addition, -in the case of "a pollutant listed as
pollutant under.Section 307(a), the 402(a)(1) action could
be justified as being action prior to implementing actions
under Section 307(a). -Id. y see also Decision of the General j^^
Counsel No. 2, Issue 3. ..-• •/ •->.-._;. . .- = .-•,. ..-.-..... -C.r.:-.----^f^v^'-^^-
A. determination under:' Sec t ion ^40 2 (a-) (1) -is 'an
o£:na un
vclass or,
•is a .membe:
"ERC-lOO;
sumably
limitations ;and should
Section 304 (b) ('2 ) or^ 3
..:- •!- ,.-. -'•-•.•:.-'-">->:.-wli.-i.
.'•••' ?'i'-;:; It has", been :'prdposed.:;.tHat - tox'icity^l'
•-Cr'6m"'biomon itor ing could- be-.sta'tied.in/either of two ways',
(T) ..Limitations could.^be;'; estabJJ..sh,ed_J5n__sp_e_c{/_i"c__vvaste DC ^ „_ ,,.
•.'meters reflecting the : levels..of j>pl-lu*tion ach ievable - after- •t^i^7%£^p'ji
- completion .
-"I invitation;.c<
.''af te'r',_a .tox"1
'•£/ *:'',!;"TheV£
on spe
.practice.
-•V." v.:-;. ......N^'iv^i}:.-.'^.' ••-
-------
-.i:: loin) ;i:; I.In: nuiiii/r r :*. .'.it:*- jur. t: i l.i ••*! by L-.-c:liii i c.i I ; w.'iL'»/r-
ijiuilLUy oc 3u7(a) Uu:Loi:il ~ ' ".•;''.•...'.'-'"•';"
on the d isicharyoi: ':; own trcDtabiliLy studies und pollutant .. / ,.•••••-
reduction plan, tM'A'mny, nftor- review of the ntudifji* ii.mi. . ". ; . v":';.
plnn, be rible to find that the renults; conr,titut-.c on in-' ' '"-..!/•"
dividuolly determined 15AT Tor the nource. The permit r;houlcl . V . '.""^
then bo able to withstand challenge and thuu eL'L'octively '•'. ;'..r
limit, the parameters covered. ..;. . ._ ... -. .. .. .-.:. '>.>.;---. ;:'-V;^'
•-•'.•••' OC course,' the specific constituent approach, has. the '".'. '''••~\?'s.^:^.~3**l_
practical drawback of requiring identification and 1 imitation -v.;"^'.;,';' '^£
.-of.each constituent to be regulated. It fails to take ad-. .'•-•','•;:;•. •-.'..•; ^Ji.
vantage o'f the capability of''biolog ical. monitor ing and'general- "
limitations .to 'control unidentified .pol!
'•could be accomplished by the use or:_an
.-if authorized by lav/. J. , .-.-.•... •'*>.;£.'{•...-.
.'. .'•/. Tv/o possible approaches
have;been identified. A stra:
established .;:....; Alter natively,
'"lethal unit's", per gallon .of ^discharge/"-using : the. "lethal.
unit" concept.be ing developed -in .draft biomonitoring protocol
guidance-. _,:. .^.. .. ... . ;:..,.-;;_: 'i-.v/;r .. "•-.•.-....' ...-•>„•.;•: L ..>•• ~: •••'-••-r
.-'"•' An initial question "in determining'whether.'such con-;•' -
ditions could be upheld under Seation 402(a)(1),is whether "...
a lethal unit'or LC50 limitation is ah effluent'limitation ..;.
. within.the meaning of Section' 502 (11). .T-hat. section .defines ",
.'the .term . "effluent 1 imitation" , as ;" ... .-'•'". 'any- restriction •.. ..•
•'••'on .quantities , rates, and .concentrations of chemical ,^ physical,
.•'biological,--and other-"constituents, which 'fare discharged
.-There .is no^indication in Section-.502(11) .that the restr
• tions "-'contemplated must be numerical, or that the: cbnstitueni
'must be individually identified.. ;:..A:,permit restrict ion-phrased
- in .terms of .the biological results.-.of the> d ischarge .of . any . .,.r..v;l;::^T-^i.1
'. constituents,, is" comparable . to ,a BOD...limitat ion, .which also.". • /' •.;.:^:.*";"r^:/';^fl
-indicates the', effect, of the overall.Vvdischarge rather .than'.:..
•• -effluent' s;.LC50 . or " lethal.; units ." "^-However , any,permit con-
•; d it'ion mus t..-bc'vnu L" v. iciently -.clcarv-tiin t.-thc ,d iscliargor; cnn ..; •;
•yuiider.r. tnnt'i whn't:;. I'.luv permit irequ irec'V-onrt- who t. .woul »•!" c:ohnt i tut'c
ci v iola t ion . - Tlio jjiroblcni .o L' -vaquonesc or.. uncer ta inty...may .be
• 'oC more concern in .Getting .general -tox ic'..l im itat ions . than
- . '-" I-"'-./-*-. ,* " 'm. ' . "-•**•'.• "l-^t- *—*
-------
would be true 'in the case, for example, of BOD. BOD is a
widely accepted measure of the-oxygen required by living
organisms (bacteria) to decompose organic material under
aerobic conditions. A standard method for its analysis
exists. See .40 C.F.R. §136.3... The methodology recognizes
that BOD varies depending on a
specifies constant temperature
a controlled environment.. •. r-!r-
of
number
and other
factors,
cond
published .toxicity test pro
However , the Agency has
by
.At this time, EPA has not
cedures under 40 C.F.R. §136". .
published three methods manuals which are widely used
industry and regulatory agencies in testing for acute
toxicity.. .!/:"•• Acute toxicity methods also are included
Standard Methods, 2/ which is . recognized as an author
tive reference for chemical and .biological methodology. ._3/
_!/ (a) IERL - RTF Procedures Manual,' Level I
Assessment; Biological Tests/or Pilot Studies.
-..-
(b) EPA-660/3-75-009, Methods'for Acute" Toxiei'tv" Tests'
with Fish, Macroinvertebrates, and Amah
';; "'~;v;(c) EPA-6Q 6/4-7 8-92,'
Toxicity of-Effluent to Aquatic Organisms
'-•2/ • .JAPKA-1975 •.""'' Standard 'Methods;'>
_3/.. ••' Many" NPDES^s ta tes and * reg ions /.' re f erehc'ing
standard 'methods, are including acute..and.in some cases
^toxicity;test, requirements in permits^for^industries si
....of...discharging .toxic substances. ^These..requirementsvare
'generally used ;'only for ..monitoring/ but-California and
'•Washington also use-'acute toxiciCy*
effluent .limitations . .California '.uses ..the :Tox icity
"Rate (TER").as>an effluent limitation. --..The-.TER is
...
-of _the effl'uent toxicity ( acute) .concentration ..and the
.-flow expressed as Mgd. The State .-of _ Washington . limits acute
'toxicity in .permits as a function;of ..'percent survival, of .
. test. organisms ..in a percent concentration of effluenty i • e. '••
80 p'ercent. survival in 65 .percent, treated effluent.,_.,
-------
-7-VV-'^v
While test procedures for.acute toxicity may have "reached •'•'.". . ^
a level of confidence adequate to support specific effluent "';.'w
limitations, it appears that testing methods to determine •/"••" jr-
chronic toxicity are not so well established. Where proce- " " '. ^
dures have not been refined to the point that results are .. ' .. . -T"
fairly predictable and consistent, effluent requirements %"„..'•••.-'V:';"''•'••:'!'
based on the results of the procedures might be challenged .";-.;.•:;;.-,--.^ TCi'-i?
as .uncertain'Or vague. •. -'. ..--... ... tt...;v;:^;:^^^^>C5an-:
' • •"" -••'"•.;.* .• • *—••-,.•... A. k ^« .**r.,*-^3? •••vr V ~--." 5"
. - " " " ' '" * . • •••*."' *''•''•". ' ' " '.*••".*'••' "*! •'••.^•t-•—••»."T-»^ .Z3t V."« C •"•:
\'. Where .the testing method is generally .recognized, . lethal'-V"- •/':/>•'•".:->;£
.unit or LC50 effluent limitations based on a source's treat- :T;'•£"'-ijf;
ability studies and pollutant reduction plan may be upheld ^.-^^v-,-
as a 402(a)(l) best. engineering judgment as to BAT. The . •:":--'-r:^$&-?i
source's studies, if properly designed and conducted, .couid":.:•'~~?*^~
be considered as supplying the necessary engineering .'and ,. .~'^*?:/'-C.''.'
other information for the Administrator to. consider in '..,.;'•'.: ^'J/v;£f^ _.
keeping with Section 304(b)(2). ........ -=.- :V_. .„• ,£ ..•^^•••'^:'^-^.^'
-'c::.-,^it must-.'be ^emphasized ' that. any'-402(a) (1) '.best engineering '''.^-'J
judgment limitation must in fact be,based on an evaluation....... •^..:;
'of the technology available'to achieve that limitation. .......'.^ -O..';;.-
If a discharger's study is to be employed to provide the -.-'.'••. iv'f-'v.
engineering data, the permit writer cannot depart from the ",''."..:.".'>J ".
results of the study to impose requirements more stringent ;:^..."-;;t7-;j:-;.
than those indicated by the study unless other" defensible •:-' rC:-7:>r\:;
.technical studies support the. alternative^ requirements. •'..;' •••/:;.*•;•]• >•>•"•
This is true irrespective of .the permit .writer' s views of ''.-_'•..,>^. .V-^i'VV':
.the discharger's studies. .Whether.-a given discharger's •_•
studies correctly identify:the best.available technology r
.for, reducing its toxic effluents may be a practical issue,?'•':. .;'•?•"..:--'-.,;;V-1
"but inadequacies of the study, whether.done in' good faith"'-" '-:"'"t;.r'j:X';'i
or otherwise, will not justify ;wri ting a 402(a)(l) permit'' "'•"::. ^^v^T"-^:?^ i
•that goes beyond, the available engineering 'data. . " =•.-.-...... , ^'''-ff.ri^P^-rVi^Vri
•Tr;;':.' '--'^.Section-S307 ( a) -,-focusses on individual 'pollutants .'"^ ?• ^^vi-^-^H^Ci^":
-Itjwould be inappropriate to base a ..402 ( a) (1) ^lethal, unit./. ^r^^f^^^J
or"'LC50 condition on a 307(a) rationale.' .If .the conditions'...Tfvr'V^Tv'.
can be.justified as individual-source-BAT-r
fication would be necessary
Via t'er":';Quali'ty S t'andards' •'
""*•-*"'•'."• • *• w ».. •'.*•' '•? '
• •: .;:; State water quality 'Standards ' have".'for-.years "included
general .narrative criteria to limit, certain.'water quality..
,t;r? s^.3^*.----.s.i
:;*iS5Sri«i»-^-?'-=S'*
--.v:-^?^.^-—-
-------
.-8-' ''.
characteristics;resulting from other than natural causesi ".''••
These criteria include variously phrased criteria prohibiting .-
the discharge of toxic substances in toxic amounts. $J ' . -..
Previous decisions of 'the General Counsel have estab- ':.:'-.;
lished that narrative criteria in State water,.quality standards
may be used . in imposing conditions in NPDES permits. Thus,. .
Decision of..the General Counsel No. 13, Issue 1, upholds
imposition of numerical limits on the total .residual chlorine
discharged., based on State toxic water quality, standards .
consisting of. .a general narrative and a median .tolerance
limit numerical.-standard. .The decision;indicates that, the
appropriate .numerical chlorine ;limitation would be a question
'of fact.. '•••-.. .... • -••' .*. ..... ..£ s.. ; • ,.;:.l •'•' . •; '•:....,
'effluent' limitations
"criteria do not have
'•• Further i"'. the permit's
from the State's narrative
pressed .in quantitative .terms.. See
Counsel No. 65,.upholding a limitation
no discharge.of visible foam or floating
derived
to be ex-
Decision, of. the .Generai\:.^/4;L-'^ii:;>;»^iir;
ion that "there shall .be'^j^^^*;^"-
at-inn solids in O't-h«ar " $•-';••'•£'•*>"•:•-*•'-•"'.'' *
. ;.?.•'• r- •
than trace amounts," based on the State's narrative standard
to that effect. ' ...-,-.,'1-..,-.- - • >.. • .. .',*T. ^ ..... ,. ...
\ It follows .from these'decisions that "the Act "would not".
bar the Administrator from issuing permits.that include
LC50 or "lethal unit".effluent limitations based on a narra-
tive -criterion included in . a duty adopted State water: quality"'.
standard. Indeed, where a'water quality. s'tandard for... toxicity ".^•:-,:'i'
exists.. and"-a_ source ' s biomonitoring indicates that its
charge : i
establ:
State
._4/ :Many State .standards~"were "modeled
Criteria ' (1968) ("Green Book" ),.r.ecommenda'_ _
Book recommended , •-. p. 3 , '^-that "s"tandar"d's"~sh*b'u'rd provide
all ..waters
-elides^
or.which
human, f ish ,• and-"other animal .life .and plants.". .Similarly,
Quality Criteria for Water (1976 ) ,-.. p. .„ 6 /v recommends that
ailOU.LlJ
1. I. ^l_- J. t VJIU
— -• u .. i— wi. »- _ j .• _
UI.J.AWUWC1W^C «-W >*t ±ii
.' --/..:./*^ ••-."•'
charges that, "injure or are ..toxic or. produce adverse,phy-
siological responses in humans, animals,..or plants.".-... ..--,.
.__.,. .;1-..-v.;.v: -.-:-.--- ..
''' ";" :;'
-------
'.'. ^ :>'-9-V'.;-'•:
Counsel No.' 13, Issue I; Decision of the General Counsel ' . __
•No, 54, Issue IV, and Decision of the General Counsel No. 58, •;.';• :'.;.-': .-••:,;•
Issue I. _S/ In that case, the Administrator's choices would .be'.' V ." ' £-"
to compel analysis and identification of the individual con- \ _••/''":•'\, ~~r--.:
stituents'accounting for the toxicity or to impose a general • •,;.-.:'\ -.'•'.."..\~
toxic limitation. Particularly since technical feasibility .-.:-- .•,-•:}.•-~-:'J-k
of complicance is not an issue.in the case of water quality.-
standards compliance, the latter response is reasonable.
.. ."*-•« -...T- •*•». *>~^.1 ••.—.
. • However ,• j^;;^'-.*"--*--.^'-';••'••;.:/
eceiving • _:^v:^^~v^''.!"^'
ffluent j/l-v^N^vijV---^.-?^,?^
It might be argued that imposition of .a.general control-
on the effluent in order to implement a water quality
.-criterion which is non-numerical, with compliance measured
:through relatively new and uncertain techniques, contains
too many uncertainties to .form a part of a regulatory pro-
.gram —the. same vagueness/uncertainty concerns raised in
connection with the Section 402(a)(1) discussion.
the translation of effluent.characteristics to .receiving
water..quality.and determination of appropriate effluent
limitations to assure compliance with water quality standards j;.^:.'.^-^ ;C; ^
is generally imprecise. Where the toxicity criterion is .k. ...^JV;.""-.- '-.'1 i"
a State water quality standard, Section 301(b)(l)(C) requires'.:;::'-/:.. " "^
that it be met. Although, the standard is phrased in narra- •:-.'.'".^*'-.V " p.
tive terms, its intent is clear, and there is an obvious .. ^"":; f.V;::---:-v.
close relationship between the water quality criterion and ,•"/'.'• 5;...:J.";.. .•
.-the effluent limitation. The permit process'may provide .."".•'."•'; J;-V\^'•-_,••''
.a forum for translating the imprecise standard into more \.~ \V.:~Vx-^V> -
precise 'effluent limitations. .It .is concluded .that effluent •"^ v;:-.-"';;-'j.V
limitations .reasonably designed to' .result in achievement of _.-'•'='•:-;x/;7',:'^v"v
the duly—adopted narrative wst-Pr- cm^l i t-v st-andsrd shrmld h^ .. t'^^'---:^ •' •••'v'-"'t
•defensible. .
rative water quality standard should be^v-y-v:;y-_.'^'i£"-L
** - . *• •" ^"J —.- • _ ' '*-b,. "• *,'
•quality standard is ''completely narrative, ''•"•'•: J-'.-; ''••'• '•'•'•]'••
(Compare,
'"'•Where the "water quality
the measure of:compliance becomes judgmental.
e. g. , ...the Illinois standard considered
General Counsel No. 13,.Issue.I,. which
•1/10. of :-the.. 48-hour TLM ."-for %-native fish or--essential. f ish
' food organisms, with the" more general prohibitions ^modelled .'
-after
jyillCll l_aj-. \ v.uuif O.L c , •1r..^Yi:"V..r-..;- :v*iV":T"Hi
sd in Decision of the .. ?^--:^VjPrN^.|
:h "defined toxicity as :^?-i"^--^^V?:S'E;
ish or--essential fish '••'= ?&^*-£^:^*~£.
__ A State's 401 certification,'..failure • to 'certify, "or : -'..f •."-:-'rb'Cx'
certification'of . a less stringent limitation would not • •'K\-''"^:.
.alter the Administrator's independent responsibility.. Decision _;;''J.'. J--'/;
"of the General Counsel No. .13, .Issue I, .and Decision of the ;: .IT ."••'£c'-'-^
General Counsel No. 58, Issue .1. ....-;.-'•', ••-'. . •:". .-. ..:-.-. •*,.-.•'. • ..=...-.'^^A-v^iii.i
" ... _. . .
-'i .'• ' ••'.:' .-*.. ••-.'••} • - • "•' »/'-..>-i.-'r»i'5i. i
',-.-• "•...-.-. • • • - •• •—.-" • .•• •*••'.'?. : ' .
-------
-10-
It is cautioned that where EPA is operating the permit program""/
and the State standards are. silent as to the measure of toxi-
city, the Administrator may be forced to determine acceptable '
concentrations, thus issuing "interpretations" of State lav :
and regulations in an important area of emerging policies. 6/.. ' '-
Conclusion " . •'••'.'.•=•;..•• .•;. - ... • .' -.' .• '= ;•. •••'. •• ..-'••.-• '.:." :O' '"'•=" •(r~'- -'•'' '- -.£.
- - . .' .; .' • • • -. . ' ' ••'.••. • . • • • '• - . •.••••;••::-.. •;-:"''.-«~ ".*• ---- . *7
-...-.-• •..••....- ••.' ....... ; . . ..-•.;••:;: - •• T ..; . .. ; -.•• •' .- .ij
•There are over 12, 000" suspected- toxic chemical compounds '."• '." .. : ..!:•
in commercial use. It is, if not impossible, at least enor- 4 s.. ;; .' . ""^
mously expensive to ' identify- and establish appropriate pro- •'~[..r^-'- ,:..:'. ^"^
hibitions or . limitations on every substance . which , if dis-.^,"^.^-.-'/..-'.-^^
charged to the navigable waters, may in some concentration, ' '.•^-.^••^\. ;\~'^
singly or in combination with other substances, injure or .be ^Cf-^^V^r
:toxic to humans or. aquatic biota. ..Creative and at times . ;; ^-^7^ :.-..:•.::>:
"'technology-forcing "solutions are needed. . It is believed '-'• ' .;: vfr^y "rp -:'' ,,""". >=
that the efforts discussed in_this memorandum can be supported /J. :,-..../-. ",;~
under the. Clean Water Act. i;.'. :.^.- . .... ^...r .. • , : _-._»• .._ ^ _ ..-'..:••-. .•••^.?,T-; ••.•^ivJ^lfti^'^K"^
• '":.*. At • the " same time , V the "imperfections o f the se ' approaches ' " :'-\7 '.•.',•:.;• '.- ;:
are clear. .-Continuing work on identification and more pre- ::. '. • ". l
cise definition of the acute and long-term lethal and sub- .."' ; "^- -V _•": r
lethal . effects of toxic constituents will be an important •."; >.''"/.•'. .'',":'- '.-'.-.[
complement to. the biomonitoring. and general toxicity limita- ' -V -';.'.'.'. '.;'
. tion approach.
•j5/.~ Of course, the State may' participate' in the permit deter-"'""."
minations,. and if the State objects to an EPA .interpretation ':.;;";;.'•":;.-r.
of its' narrative toxicity standard,-"the State may suggest .; .:.•/,-...- ::..- ..';.
an ..effluent • limitation or ,adopt, a standard .reflet tiny the /•:'••;•>•.•"'"'• '• \i ' •'"'"•.
State's preferences. . ' • ov.-..-- .-•.'" •• . i-, •.£.--::-.•-. • -. : . . ..•.!;.^.^'4;''*:!:: r-^i
• . .... •:...•!; .^ .«•. .' ;. n^ffvv^r•'?:.-:;• •::- ;-• \.-'.^v-^fr-?v^v.:';...^.:-~;--f :<^^v'i^rv^>i^
.-.-.. " T-JS,^^ *'"**J.fT(V-- '"•'• •*' • *"* . "
• ' '-.. '.'»'".*'"* 's'. .''•• ' "
•'• j. , . ..^"-.'.X; ." * *••" ' •"..-• • '•
'*- "• ' *"fV~:/%V^*':***" ">-"" ~ "•'
": ' ::• -f'^Tj "•'"'''"";
;,r" *.
-.^;.. •:
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-
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
. '• WASHINGTON. D.C. 20460'
1 9 1979
OFFICE OF ENFORCEMENT
MEMORANDUM
TO: Regional Enforcement Division Directors
Director, NEIC
NPDES State Directors
FROM: Deputy Assistant Administrator for Water Enforcement (EN- 335)
SUBJECT: Office of General Counsel (OGC) Memorandum
Attached is a copy of a legal opinion prepared by OGC in response
to questions concerning the inclusion of compliance schedules in Second
Round and new permits. The Permits Division is including this document
in its Policy Book as 78-21- IV-. If you have any questions or comments
about this opinion please contact Scott Slesinqer (EN-336), 202-755-0750.
Jef ff-ey ^. Miller
Attachment
cc: Regional Permits Branch Chiefs
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20450
7
OFFICE Of
SENEMAL. COUNSEL
MEMORANDUM
TO
FROM
SUBJECT:
Deputy Assistant Administrator for
Water Enforcement (EN-335) "
Associate General Counsel
Water and Solid Waste Divi
Request for a Legal Opinion f— Inclusion of Com-
pliance Schedules in Second Round Permits and
Newly Issued Permits — Yo^ry Memo of November 2,
1978 .
ion
QUESTION
You have asked a series of questions regarding the require-
ments of best practicable control technology currently available
("BPT") anJ water quality standards ("WQS") in permits issued
after July 1, 1977. Your first questions concern reissuance of
a permit to a source which had already been subject to BPT re-
quirements in an expiring permit. If BPT or WQS have become more
stringent since issuance of the first permit and additional con-
struction would be necessary for the source to meet the changed
requirements, you ask whether the permit must require the source
to meet the new BPT or WQS requirements and, if so, whether the
permit may include a schedule for achieving the new requirements.
In addition you ask, in the case of a new permit, whether the
p.ermit may ignore BPT and WQS requirements and place the source
on a direct schedule- to BAT/BCT. In both cases, you ask whether
a schedule of compliance, if allowable, may provide a time period
during which no construction is required, to allow the permit
writer and the discharger to determine what construction will be
required by BAT/BCT where those requirements cannot be clearly
determined when the permit is issued.
-------
ANSWER
If a source, other than a publicly-owned treatment
works, has never received an NPDES permit setting forth
any applicable BPT and WQS based effluent limitations, a
permit issued to such source must require immediate com-
pliance with the applicable requirements of BPT or WQS as
those requirements are in effect at the time the permit is
issued. If a non-POTW source has achieved its first-round
effluent control requirements, a new or reissued permit to
that source should assure that the source will continue to
achieve those effluent reductions. In addition, revised
BPT and WQS must be applied to the source. Since the Act
provides no fixed schedule for compliance with these re-
quirements, EPA should adopt a reasonable scheme for at-
taining compliance expeditiously, consistent with orderly
application of the Act's 1984 requirements.
DISCUSSION
Section 301(b)(l)(A) of the Clean Water Act requires
all sources of pollutants, other than publicly-owned treat-
ment works, to achieve BPT by July 1, 1977, and Section
301(b)(l)(C) re.quires all sources to comply with WQS by
that date. Section 301(b)(2) establishes a second set of
more stringent technological requirements to be achieved
by non-POTW's by 1984 (or three years after the date the
requirements are established, up to 1987). Thus, the Act
establishes a two-phase structure for achieving specified
effluent limitations.
The questions raised by your memorandum arise because
(1) some sources did not achieve compliance with the Phase I
requirements by July 1, 1977, and (2) in some instances
the definitions of BPT, or the requirements of WQS, have
been revised, and current levels of treatment, previously
in compliance with BPT or WQS, as defined in an NPDES per-
mit, are not adequate to meet the revised BPT or WQS. The
thesecond.
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Congress made it clear, in Section 301(b)(l), that ini-
tial compliance with BPT and WQS was to be achieved by July 1,
1977. In the 1977 amendments to the Act Congress recognized
that some sources had not met those requirements, sometimes
for justifiable reasons. Nonetheless, it refused to waive or
extend the deadline for such sources. See H.R. 3199, 95th Cong
Isc Sess., Section 13, eliminated in conference; see also,
Cong. Rec. S 13538, Aug. 4, 1977, explaining that the 1977
amendments do not extend the deadlines of Section 301 but -
allow the Administrator certain Section 309 enforcement op-
tions .
Since Congress expressly 'determined not to waive Phase I
compliance requirements or allow permits to extend the com-
pliance deadlines of Section 301(b)(l), EPA cannot claim im-
plied authority to do so. Instead, if. a permit must be issued
or reissued to a source which has never achieved compliance
with applicable BPT or WQS requirements, the permit must re-
quire immediate compliance with those requirements as they are
currently in effect when -the permit is issued, and if relief
is to be provided, Sect ion 309(a)(5) orders must be employed.
II
A source which had complied with BPT before the deter-
mination of BPT changed is in a different position from the
source which never complied. This source has already achieved
the Act's Phase I requirement as administratively interpreted
and applied to it and is in a position to proceed with the
second phase. Therefore, it would be inappropriate to impose
an immediate requirement that revised BPT be achieved.
The requirement that BPT be achieved remains in the Act
even after the 1977 deadline has passed. However, the Act
does not set a specific deadline for attaining revised BPT
requirements, and some reasonable scheme should be adopted
to ensure that such requirements be achieved as expeditiously
as practicable, consistent with orderly imposition of Phase II-
(BAT and BCT) requirements. Thus, for example, if compliance
with revised BPT is a logical step towards attainment of BAT
or BCT limitations, such compliance could be included as a
reasonable interim element of the source's permit responsibili-
ties. Certainly any applicable BPT requirements would have to
-------
be met not later than the date on which compliance with.BCT
and BAT is required. However, where a compliance date prior
to that time would require construction or modification in
addition to previously defined BPT, and where that construc-
tion would not constitute a logical step toward BAT, im-
posing the interim BPT requirement might well undermine the
Act's orderly progression from the 1977 to the 1984 require-
ment s .
Ill
The issue of compliance dates for ongoing WQ5 compliance
is less clear. The Act establishes the end date for the first
stage of VQS compliance, but for subsequent levels of possibly
more stringent WQS , the Act defers to" State planning determina-
tions. See Section 303(e)(3)(A), Section 303(e ) (3)(F), Sec-
tion 208(b)(2)(B) , Section 208(e), and Section 303Ce ) (3)(B).
If a' state has revised its WQS and established a schedule of
compliance at least as stringent as any federal requirement,
th.e NPDES permit would have to impose the state-established
limitation. However, if the State plans do not contain specific
•compliance schedules, the EPA permit writer must establish the
source's Phase II WQS compliance schedule.
The Act su'pplies no express guidance as to what the EPA-
determined, post-1977 WQS compliance schedule should be. In
general, Congress intended compliance with the Act's require-
ments to occur at the earliest practicable time.* One option,
therefore, might be for EPA simply to establish the policy
that post-1977 compliance must be achieved by the earliest
practicable time.
Alternatively, the Section 301(b)(2) pattern is to re-
quire second round municipal compliance in 1983 and second
round industrial compliance in 1984. It is reasonable to
* The Section 301 requirements are all to be met "no Istsr
than" the statutory deadli-nes. See, e.g. , Leg . Hist. -163. .In
the 1977 amendments, Congress confirmed its interest in securing
the earliest possible compliance. See Sections 309(a)(5) and
309(a)(6), added by the amendments.
-------
establish WQS compliance schedules in harmony with the Act's
general regulatory structure. Thus, EPA may infer that the
Section 301(b)(2) dates should be applied to WQS, in the ab-
sence of any more stringent state schedules.
Which of these approaches (or what combination of them)
is to be selected is a policy judgment. Since the Act does
not express compliance schedule requirements for post-1977
WQS compliance, EPA may wish to supply guidance by regula-
tion. This would provide a reasonable, permanent method for
establishing WQS compliance schedules where none are avail-
able from the states.
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UNITED STATES. ENVIRONMENTAL PROTECTION AGENCY
. 'WASHINGTON, D.C. 20460
OFFICE Or ENFORCEMENT
MEMORANDUM n ' § 0 * 3
TO: Regional Enforcement Division Directors
Regional Permits Branch Chiefs
FROM: Acting Deputy Assistant Administrator
for Water Enforcement (EN-335)
SUBJECT: Incorporation of Pretreatment Program Development
Compliance Schedules Into POTW NPDES Permits
The General Pretreatment Regulation (40 CFR Part 403)
requires that certain publicly owned treatment works. (POTWs)
develop programs to ensure compliance with pretreatment discharge
standards by nondomestic sources discharging into the POTW. A
necessary first step in developing these programs is the insertion
of a compliance schedule for program development in the POTWs
NPDES permit. The purpose of this memorandum is to re-emphasize
.the importance of incorporating pretreatment compliance schedules
into all appropriate permits at the earliest possible time.
••
BACKGROUND
It is the intention of the Clean Water Act and the National
Pretreatment Strategy that the primary responsibility for enfor-
cing pretreatment stc.ndards be delegated to local POTWs'. This is
to be accomplished by EPA and NPDES States overseeing the develop-
ment of POTW pretreatment programs meeting the .requirements of
the General Pretreatment Regulation. Section 403.8(d) of that
regulation requires that, • •'
If the POTW* does not have an approved Pretreatment Program
at the tine the POTWs1 existing Permit is reissued or
modified, the reissued or modified Permit will contain the
shortest reasonable compliance schedule, not to exceed three
• years or July 1, 1983, whichever is sooner, for the.develop-
ment of the legal authority, procedures and funding required
by paragraph (f) of this section. Where the POTW is located
in an NPDSS State currently without authority to require a
POTw Pretreatment Program, the Permit shall incorporate a
. modification or termination clause as provided for in
•section 403.10(d) and the compliance schedule shall be
incorporated when the Permit is modified or reissued pursuant
to such clause.
As defined by section 403.8(a)
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The insertion of these compliance schedules is .a critical element
in launching the.development of many POTW pretreatment programs.
Compliance schedules also serve as a means for EPA and NPDES
States to track program development.
• Those POTWs required to develop a pretreatment program
have been identified by States and Regional offices. Preliminary
information on these POTWs was forwarded to Headquarters at the
start of 1979. Since, that time, the Regions and-States should .
have developed a firmer list of exactly which POTWs will need ..
pretreatment programs. For those POTWs so identified, the
task of incorporating compliance schedules should be well underway.
CURRENT STATUS AND NECESSARY ACTIONS
Despite the importance of compliance schedules to program
development and the need-for their swift incorporation if
regulatory deadlines are to be met, there have been indications
that schedules have not been inserted in all appropriate permits.
While some Regions and States have moved forward strongly in this
area, others have not. If the pretreatment program is to be
successful and the- momentum for local program development that
has been generated is to be maintained, it is essential that this
activity is given appropriate priority.
- In order to meet both the July 1, 1983 program approval
deadline and allow POTWs adequate time for program development,
compliance schedules should be established as soon as possible.
By inserting schedules in permits as they expire or are modified,
the disruption and waste of resources created by reopening
permits solely to incorporate pretreatment compliance schedules
will be avoided. Although it is desirable to avoid opening
permits just to insert pretreatment schedules,•this step may
become necessary as the 1983 deadline approaches. As first round
permits expire in FY 80, the insertion of compliance schedules
will be a priority activity in this fiscal year. Less than
complete attention to this activity will create a backlog with
potentially disastrous program consequences.
I understand that the timely insertion of compliance
schedules has been made more difficult by the delay in approval
of State pretreatment programs. However, in many cases, this •
delay need not affect the development of POTW compliance schedules.
The General Pretreatment Regulation and the National Pretreatment
Strategy make it clear that those States which currently have the
authority to reissue, modify or reopen POTW permits to incorporate
prerreatment requirements should exercise that authority and put
compliance schedules into expiring permits or those being modified
for some other reason. This should be the case with the majority \
of NPBES States. Those few States which at this time lack the '
necessarv authoritv to incorporate corneliance schedules
-------
should continue to put modification clauses in permits. These
modification clauses should require that such permits be promptly
reissued or modified after State pretreatment program approval to
incorporate an approved POTW program or a compliance schedule for
the development of a pretreatment program. To alleviate future
delays, all States should move quickly to receive State program
approval.
The incorporation of compliance schedules into permits
should not be a major resource burden on either Regional offices
or States. Individual schedules should not vary a great deal '
from the model provided in guidance material. A model compliance
schedule accompanied by a detailed explanation of how to develop
such a schedule was included in the November 29, 1978 memorandum
from the Deputy Assistant Administrator for Water Enforcement and
the Deputy Assistant Administrator for Water Programs Operations
which is attached for your assistance. This information was
expanded upon in the Pretreatment Guidance Document for NPDES
States that was distributed in February, 1979. Additional' copies
of this Document are available from Headquarters Permits Division.
If these models are followed, it should require a minimal amount
of resources to carry out this critical function. The investment
of resources in this effort now will yield a long term resource
saving for EPA and States. Pretreatment programs developed as. a
result of these compliance "schedules will shift most.program
responsibilities to POTWs.
CONCLUSION
To allow us to evaluate the progress of this program,
and to help us plan where we can best utilize our contract
collars, we ask" that you provide us with the. following information
on compliance schedule activities:
o Your current count of the number of POTWs or POTW
Authorities which are required to develop pretreat-
ment programs.
o Of those POTWs or POTW Authorities required to develop
programs, how many have pretreatment compliance schedules?
Kow many have modification clauses? .
o How many POTWs or POTW Authorities/ required to~d"evelop
pretreatment programs, do not yet have either a compliance
schedule or a modification clause?
o How do you plan to deal with those POTWs or POTW
Authorities with neither a compliance schedule nor a
r.odificaticn clause, in a -.anner that will allow them
sufficient time to develop a program prior to the July
1, 1S53 deadline?
-------
Fcr purposes of answering the first three questions, ve have
attached a form that can be filled in for each State in your
Region. Because of the need to finalize our contract planning
process, we need this information as soon'-as possible and would
like to have it within four weeks of your receipt of this memorandum,
Please send the completed forms to Michael Kerner, Permits
Division, (EN-.336)," US EPA, 401 M Street SW, Washington, D.C.
20460. If you-have any questions on this or .any other aspect of
the Kational Pretreaunent Program you can call Michael Kerner at
(202) 755-0750 (FTS).
By diligently pursuing this compliance schedule activity,
we should be able to prevent any further program slippage and
encourage the rapid and successful development of this important
pollution control program.
Leonard A. Miller
i
Attachments
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A
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
JUN 2 1982 OFF.CEOF
OW" ; . WATER
j —
MEMORANDUM
SUBJECT: Policy for the Second Round Issuance of NPDES
Industrial Permits
TO: Regional Administrators
FROM: Frederic A. Eidsness, Jr.
Assistant Administratdtxf'o'i^Water (WH-556)
The final "second round" policy for re-issuing NPDES indus-
trial permits is attached. The policy reflects Regional comments
in response to previous drafts sent to you and discussions with
the Water Management Division Directors. This policy applies
only to EPA-issued permits, although States may choose to adopt
the principles outlined. I am sending the policy to both the
NPDES and non-NPDES States under separate cover to solicit their
comments and advice on the applicability of the policy to their
programs. In addition to the priorities set here for reissuance
of NPDES industrial permits, the issuance of new source or new
discharge permits remains the highest priority to assure no
undue delay in the construction or modification of such sources.
This policy reflects the Administrator's conviction that,
to the. extent possible, permit requirements should be based
either on promulgated national wastewater treatment standards
or requirements necessary to achieve the designated water uses
specified in water quality standards. It also reflects the
principles that permit effluent limitations should be developed
using good scientific information and that, to the extent
practicable, permits of a lasting value should be developed.
Such permits assure protection of the environment while estab-
lishing wastewater treatment requirements that will not be
subject to frequent change.
•
The policy establishes five priorities for permit issuance
and describes the basis for assigning permit priorities and'
developing limitations. ' Based on this policy, Regions are to
develop and submit by June 30, 1982, a list of priority permits •
which the Region expects to issue before the end of FY 1983.
The initial list is to be submitted to Headquarters and should
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- 2 -
contain key information such as the facility name, owner/operator,
location, receiving water (STORET Reach Number), the issuance
priority category (see attachment to the policy), pollutants of
concern, and the anticipated schedule of issuance. Headquarters
will use this information to report to the Congress and others on
EPA's plans for and s,tatus of the permit program — .what our
priorities are and where our resources are going". Regional
performance against established plans will be assessed as part of
the Office of Water's guidance/evaluation process.
Regions should also work cooperatively with the NPDES States
to develop similar priority permit information on permits to be
issued by the States. This is important to assuring a truly
national effort and can be done as a part of routine cooperative
program planning.processes, such as the development of 106 plans.
In this way we can determine how EPA can most usefully assist the
States in their permitting efforts. Establishing State priority
permit-lists will also serve to assist in determining the most
appropriate Sta;te-issued permits to be reviewed by the Region.
EPA headquarters will be providing guidance and assistance
to help carry out this policy. Questions concerning the policy
should be directed to Bruce Barrett, Director, Office of Water
Enforcement and Permits (FTS/Area Code 202-755-0440).
Attachment
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
WATER
Policy for the Second Round Issuance of National
Pollutant Discharge Elimination System (NPDES)
Permits for Industrial Sources
STATEMENT OF POLICY
EPA-.issued industrial NPDES permits will" be issued according to
the following priorities. (A detailed explanation of the
policy is contained in the attachment to the "Implementation".
section of this policy.) First priority shall be given to
facilities discharging to waters where use impairment problems
have been identified and where there is adequate information to
develop either a water quality-based permit or, in the exceptional
case detailed in the attachment, a BAT/BCT permit relying on best
professional judgment. The second priority is to permit facilities
for which, applicable BAT effluent limitations guidelines have
been promulgated. The third'priority covers facilities suspected
of contributing- to the impairment of a designated water use but
where insufficient information exists to confirm the extent of
the use impairment. .The fourth priority addresses facilities for
which effluent limitations guidelines are not scheduled for
promulgation and the existing permit limitations do not reflect
sufficient treatment. The lowest priority is extension or
reissuance of permits to facilities for which effluent limita-
tions guidelines are not scheduled and the existing permit ^
requires sufficient treatment. In all permitting actions, EPA
will work cooperatively with States and permittees and adhere to
procedures established by applicable statutes and regulations.
This policy also establishes a mechanism for developing priority
permit lists with the first list due by June 30, 1982 (see "Other
Considerations" in the Attachment).
EXPIRATION DATE
This policy will remain in effect until September 30, 1983.
June 2, 1982
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BACKGROUND
EPA and authorized States issue NPDES permits for periods not
to exceed five years. Permit limits are based either on the
application of available technology or on the protection of
water quality, whichever is more stringent. The Clean Water
Act (CWA) establishes £wp levels of technology standards and
deadlines for industrial' compliance: best practicable control
technology currently available (BPT) by July 1, 1977 and best
available technology economically achievable/best conventional
technology (BAT/BCT) by July 1, 1984.
The majority of the "first round" permits, reflecting BPT or more
stringent water quality-based limitations, were issued between
1974 and 1976. Most of these were based on technology using
"best professional" judgment" (BPJ) because effluent guidelines
were unavailable (relying on section 402(a)(l) of the CWA). In
1978, as these permits began to expire, EPA instituted a policy
of reissuing short-term (2 to 3 year) permits in order to await
promulgation of BAT/BCT effluent guidelines. Most of these
'short-term permits have now expired. Thus there are now more
than 35,000 expired permits. For the most part, these expired
permits continue in effect under the federal Administrative
Procedure Act or similar State statutes.
In the past, EPA and many States focused almost exclusively on
the technology-based effluent limitations approach. • While EPA
will continue this technology-based" approach using BAT/BCT
effluent limitations guidelines, EPA will also look beyond
technology-based requirements and issue permits based on scien-
tifically determined requirements for assuring environmental
protection. The development of requirements based on protection
of water quality has often been hampered by lack of data. This
policy makes clear that the burden of data collection is shared
by EPA, the State, and the discharger. Further, the implementa-
tion of this policy should assure the most effective use of
resources by carefully scheduling permit activities, waiting
for national treatment standards where practicable, making
better use of existing data, and initiating cooperative efforts
with States and permittees.
Thic approach is supported by initiatives •chat will strengthen
both technology-based and water quality-based effluent limitations,
It will produce permits of lasting value that are not subject to
frequent change. EPA is moving ahead to promulgate national ,
effluent limitations guidelines on a schedule which will provide
guidelines for 24 primary industry categories before the end of
FY 1983. Promulgated effluent limitations guidelines, in
conjunction with their development documents, expert assistance,
and permit writer training, will assure the application of good
science and produce well founded permit limitations, 'individual
permit limitations developed in this way will significantly
reduce conflicts and avoid protracted appeals.
June 2, 1982
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A sound technical and legal basis for permit limits is also
provided by State water quality standards. All States have
standards for each designated water use which include both
numeric criteria for specific pollutants and general conditions.
Expanding the scope of these standards and improving their
scientific basis is a continuing process which is-now being given
additional attention by EPA, the States, and throughout the
scientific community. EPA is encouraging States to review and
revise their standards to reflect site-specific factors. The
technological basis for implementing these standards using Total
Maximum Daily Load/Wasteload Allocations is being significantly
advanced. These factors and site-specific biological and chemical
analysis will provide the needed scientific basis for water
quality-based effluent limitations in permits.
APPLICATION
This policy applies only to EPA-issued industrial NPDBS' permits
although States may choose to adopt the principles outlined.
IMPLEMENTATION
This policy is implemented by establishing permit issuance
priorities and developing priority permit lists and schedules.
This approach is designed, to assure the best use of available
resources and produce results where they are most needed. The
details of this approach are explained in the attachment.
Date Frederar-
Assistant\Administrator
for Water
.SH^
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Second Round Industria,
(EPA-Issued P
nit ting Policy
Only)
Attachment
Permitting Priorities
Discussion/Implementation
First Priority
Issue permits to
facilities where water
use impairment problems
have been identified
Second Priority
Issue permits based on
promulgated BAT guidelines
where BAT guidelines
are scheduled
o States, with EPA assistance, identify water bodies where It is known that the water use
is impaired or other major water quality problems exist. This may be based on factors
such as drinking water supply contamination, exceedences of applicable water quality
standards, and bioaccumulation of toxic pollutants. In coordination with the State, the
available scientific information should be reviewed to identify significant contributors
and determine whether there la adequate scientific Information to develop water quality-
based limits for those dischargers. '
o For those dischargers identified as contributing to a use impairment or other major water
quality problem, and for which there are sufficient information and data, permit limits
should be developed based on section 303(d) total maximum daily load/wasteload alloc-
tions (TMDL/WLA's) and relevant portions of section 208 plans. Where sufficient data
exist, EPA may develop water quality-based limits in the absence of 303(d) TMDL/ULA's,
using scientifically acceptable methods, including the use of bioassays. However, such
effluent limits are subject to public, administrative, and judicial review as part of
the permit process and any other permittees contributing to the water quality problem
will have an opportunity to participate after notice of proposed effluent limits. All
water quality-based permits with expiration dates beyond July 1, 1984, also must meet
the statutory definition of DAT and BCT. .
o In those exceptional cases where major water quality problems are identified but there
is insufficient information to develop limitations based on water quality, and effluent
guidelines will not be available in the near term, the permit should be based on good
scientific information with the limits reflecting BAT/BCT. In making determinations of
BAT/BCT, the permit writer will rely on best professional judgment. Such permits will
be issued with five year terms. More stringent limits required by nat'ional technology-
based guidelines issued during the term of the permit will be included in subsequent
permits. In addition, the organic chemicals and plastics/synthetics Industry categories
will likely present a number of cases which, because of the identified use impairment or
other major water quality problems, justify the use of this approach. EPA headquarters
will provide assistance to permit writers through teams of industry experts for these
Industrial categories.
o Where BAT effluent guidelines have been promulgated, permits will be Issued reflecting
guidelines and any other necessary BAT/BCT or water-quality based limits. If BAT guide-
lines are scheduled but have not been promulgated and no major water quality problems are
involved, the first round BPT permit should be extended under the Administrative Procedure
Act (APA) while waiting for BAT guidelines.
June 2, 1982
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Permitting Priorities
Second Round Industrial Permitting Policy
(EPA-Issued Permits Only)
Discussion/Implementation
Attachment
Page 2
Third Priority
Issue permitu to
facilitleo where
water use impairment
problems are suspected
Fourth Priority
Issue permits where
upgrading is needed and
DAT guidelines are not
scheduled
Fifth Priority
Issue permits for all
others as the last
priority v
o For those dischargers suspected of contributing to major water use impairment or other
major water quality problems, but where insufficient confirming data exist, a specific
short-term program of data collection should be initiated. The data collection program
should include requirements for blomonitoring, chemical analysis, or field surveys
necessary to obtain information to determine the magnitude and. extent of the water use
impairment. In setting up the data collection program, particular attention should be
paid to potential contamination of public drinking water supplies. EPA Headquarters
will provide further guidance on both the procedural mechanisms for implementing this
data collection program as well as substantive guidance on the type of blomonitoring
or chemical analysis requirements that could be used to collect data.
o If sufficient information is obtained that shows the discharger is contributing to water
use impairment problems, a new five year permit or modification of existing permit limits
should be developed as appropriate.
i
o Where no further BAT guidelines development is planned and the first round permit does
not reflect sufficient treatment to comply with BAT/BCT, subsequently promulgated BPT
guidelines or water quality standards, upgrade the permits limits and/or other necessary
conditions and issue a five-year permit. Limits on .conventional pollutants reflecting
BCT may be developed using the BCT methodology when it becomes available, and limits on
priority pollutants reflecting BAT should be developed using BPJ. Normally, significant
discharges of priority pollutants are not expected where BAT guidelines are not
scheduled for development.
o Where no further guidelines development Is .planned but the first round permit requires
sufficient treatment (i.e., would meet what are likely to be considered BAT/BCT limits and
no water quality problems are suspected), the existing permit may be extended under APA
provisions or reissued only as the last priority.
June.,
^982
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Second Round Permitt^^ Policy
(EPA-Issued Permits Only)
Other Considerations
Attachment
Page 3
1. Priority Permits
2. General Permits
3. Compliance Deadline
EPA Regional Offices will Identify facilities which are probable contributors to water
use Impairment or other major water quality problems. The 305(b) reports and 303(d)
priority segments will be considered In Identifying these priority facilities•
Using this and other Information, the Regional Offices will develop a listing of permits
.which are expected to be Issued before October 1, 1983 consistent with the priorities
established by this policy* The listing will Include permit issuance schedules which
will provide a reasonable estimate of expected issuance. The initial list of priority
permits and schedules are to be transmitted to Headquarters by June 30, 1982. This list
should be updated periodically to reflect current plans and priorities. Encouraging
States to establish similar priority lists is also essential to the national program.
In addition to the points described above, we are encouraging the use of general permits
to cover many facilities with the same or substantially similar types of operations and
the same types of wastestream discharges. This should help significantly in reducing
the backlog of expired NPDES permits. The Office of Water will analyze the opportunities
for general permits for industry categories, including some primary industry categories,
where the facilities' operations and discharges are very similar. Multi-State coverage
will also be considered. We will keep you informed of progress in this area. In the
meantime, permitting authorities should consider issuing general'permits in their own
jurisdictions where appropriate.
All permits extending past July 1, 1984 must contain final limitations that are deemed
equivalent to BAT/BCT regardless of whether the limits are based on wa'ter quality,
effluent guidelines, or BPJ.
June 2, 1982
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
OFFICE OF
WATER
JAN 16 1984
MEMORANDUM
SUBJECT: Continuance of NPDES General Permit^ Under the APA
i
FROM: '' Bruce- R. Barrett, Director
Office of Water Enforcement and Permits (EN-335)
TO: Regional Water Management Division Directors
Regional Counsels
We have received a number o?- inquiries as to whether
continuation of expired general permits is allowed under the
Administrative Procedure Act (APA) and the NPDES regulations.'.
\ recent Office of General Counsel (OGC) opinion (attached)
kdicates that such continuance is legally permissible. However,
ere are important reasons for .EPA not to rely on APA continu-
ance except in extreme cases where permit reissuance is delayed
for unexpected or unavoidable reasons. This memorandum addresses
the general permit reissuance process in light of OGC's recent
review of the continuance.issue.
SUMMARY
NPDES general permits may be continued under the APA " •
.where the Agency has failed to reissue the permit prior to
expiration. Although continuance is legally permissible,.
permits should be continued only as a last resort and continuance
should be avoided by timely reissuance of general permits
wherever possible.
- Because of the geographic scope of general permits and. the
number of facilities covered, continuance could raise questions
as to whether EPA has • adequately considered long-term cumulati-ve
environmental impacts, exacerbate the permit issuance backlog,
and create new issues or workload problems associated with new
facility permits since new facilities cannot be covered by a
Continued permit. Continuance is generally avoidable given
cuate planning. Where continuance is unavoidable, it should
for the shortest possible time. Upon determining,that a
general permit will not be reissued prior to expiration, the
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Regional Water Management Division Director should inform the
Permits Division Director and provide a specific schedule for
completing reissuance.
IMPLEMENTATION
The following requirements govern the continuance of
general permits:
o. Only those facilities authorized to discharge under' •
the expiring general permit are covered by the
continued permit. <
• • »
o '-Where the notification requirements of a general
permit provide permit coverage prior to the actual
commencement of operations at a site (e.g., mobile
seafood processors and oil and gas drilling vessels)
facilities providing such "notice prior to expiration
are covered by the continued permit.
o At least six months prior to the expiration date.of a
general permit, the Regional Water Management Division
Director should submit a draft general permit and a'•
schedule for permit issuance or reissuance to the
• Permits Division Director. If .a draft general permit
' is not ready at that time, an explanation of the reasons
for delay and a schedule for permit development and
reissuance, should be submitted instead. The Permits
Division Director will expedite permit issuance and
reissuance processes at headquarters as much as possible
and will inform upper management in the Office of
Water of any significant delays.
DISCUSSION . . . . . '
As'with individual NPDES permits, it may become necessary
to administratively continue a general NPDES permit when,, re-
issuance of the permit or issuance of a new permit is impossible
before permit- expiration, • The Ai"A allows for continuance of a
Federal license or permit when a permittee has made a timely
and complete application for a new permit. Until OGC's recent
review of the issue, OWEP had advised the Regional Offices
that general permits could not' be continued under the APA
because the NPDES regulations do not require applications for
general oermits. DWF:? requested that OGC review onu provide a
written opinion on this issue since a number of parties had
questioned our legal position. On November 17, 1983, OGC informed
OWE? that general permits can legally be continued under the
APA. .
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There are a number of strong policy and program reasons to
sure timely reissuance rather than relying on APA continuance.
general permits cover several dozens or even hundreds of
dual facilities. The large number of facilities covered
and the broad geographic coverage tend to focus industry and
public attention on Agency inaction when the permit is allowed
to expire, especially in the early stages of "implementation of
the general permit program.
Many general permits are controversial at the time of
initial permit issuance. Similar controversies can be antici-.
pated during reissuance. EPA cannqt allow the public to • '
perceive that we are avoiding these issues through administrative
continuance of expired permits. For example, cumulative en-
vironmental impact assessments hinge on the nuirtber and volume
of discharges. Information gathered during the term of. the
original permit may justify new permit limitations, terms and
conditions at the time of reissuance. For marine dischargers,
determinations pursuant to §403(cj of the Clean Water Act are
usually dependent on the estimates of the number of facilities
that will discharge during the term of the permit. Delay in
updating these determinations raises questions about potential
environmental impacts and the efficacy of permit conditions.
Similar issues arise where there have been new standards or
fluent limitation guidelines promulgated during.the course
the permit or changes in the CWA or applicable requirements
r other applicable statutes (e.g;, Coastal Zone Management
Act,"Endangered Species Act).
Finally, a major goal of the general permit program is to
reduce the Agency's NPDES. permit issuance backlog. Allowing
general permits to expire aggravates the backlog problems. In
addition, new dischargers would not be covered until EPA re-
issued the general permit. Since these facilities would be
liable for .di-scharge without a permit, they would likely request
an individual permit and be required t8 submit a full application
and do appropriate testing. This creates a permit issuance
workload demand that would be avoided by timely reissuance of
the general permit, as well as putting burdens on permit appli-
cants that would be .removed by reissuance of the general, permit. .
: Given the drawbacks and problems, administrative continuance
of general permits should be the exception rather than the rule.
Adequate planning and timely permit preparation will allow us
to avoid the necessity to use administrative continuance except
as a stop gap, short term measure. Th-e Office of Water Enforce-
ment and Permits will work with the Regions to avoid continuance
/•^•erever possible.
^^ Coiburn T. Cheraey, OGC
Attachment
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NPDES Hearings
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NPDES Hearings
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. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
° WASHINGTON. D.C. 20460
JUN i 6 1976
THE ADMINISTRATOR
n-?? -.?
MEMORANDUM
TO : Assistant Administrator for Enforcement (EN-329)
Deputy Assistant Administrator for
Water Enforcement (EN-335)
Regional Administrators
Regional Counsels
Regional Enforcement Directors
SUBJECT: Ex Parte Contacts in NPDES Adjudicatory Hearing
Decisions
This -memorandum sets forth limitations on contacts among
those EPA employees who are involved in preparing and issuing
initial and final NPDES decisions of the Regional Administrator
or the Administrator, and other Agency staff and persons out-
side EPA. Effective immediately, these requirements apply to
all EPA employees involved in NPDES proceedings.
Several courts have now held that the hearing required
by Section 402(a) of the Clean Water Act must be "on the re-
cord," triggering the formal adjudication requirements of the
Administrative Procedure Act. Seacoast Anti-Pollution League
v. Costle, No. 77-1284 (1st Cir. Feb-. 15, 1978); United States
Steel Corp. v. Train, 556 F.2d 822 (7th Cir. 1977); Marathon
Oil Co. v. EPA, 564 F.2d 1253 (9th Cir. 1977). Among these
requirements is that embodied in the Government in the Sunshine
Act, Pub. L. 94-409, 90 Stat. 1241 (Sept. 13, 1976), prohibiting
EPA decision-makers in formal APA hearings from engaging in ex
parte discussions of the merits with "interested persons out-
side the agency." 5 U.S-.C. §557 (d.).. The APA also requires that
no one involved in "investigative or pro'secuting functions" may
"participate or advise in the decision, recommended decision,
or agency review . . .." 5 U.S.C. §554(d).
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It is not clear that Agency enforcement staff involved
in NPDES adjudicatory hearings are performing "investigative
or prosecuting functions." However, EPA should adopt a
policy that not only complies with the law, but avoids even
the appearance of unfairness. Accordingly, I am setting out
the following requirements.
When these Requirements Apply
Consistent with the Sunshine Act, all the requirements
in this memorandum are applicable from the date public notice
of an evidentiary hearing is published under 40 C.F.R. §125.
36(c)(4), until the date of final Agency action on the permit
application.
Requirements Applicable to Regional Administrators and their
Assistants
Regional Administrators and staff members selected to
assist them in writing an NPDES decision will refrain from ex
parte discussions of the merits of the proceeding with any in-
terested person outside the Agency. They should also refr_ain
from any such discussions with the Assistant Administrator for
Enforcement or his staff, and the Regional Enforcement Director
and his staff.
The term "interested person outside the agency" appears
in the Sunshine Act, and refers generally to anyone who has a
stake in the outcome of the proceedings greater than a member
of the general public. The term includes, for instance, all
parties to the hearing and their competitors, public officials
(including elected representatives such as mayors, Senators,
and Congressmen), environmental and other interest groups, and
companies, organizations or associations with some special in-
terest in the issues (for example, the Chamber of Commerce or
industry trade associations).
The Water Quality Division of the Office of General Counsel
has been assigned to be available to assist me, the Deputy Ad-
ministrator, or any judicial officer in preparing final de-r
cisions in MFDES proceedings. Accordingly, the Regional Admin-
istrator and his staff, and Regional enforcement staff, may not
discuss the merits of the case with.an attorney in that Division.
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However, to avoid total isolation of the Regional Administra-
tor and his staff from assistance,' one or two attorneys in the
Water Quality Division will be designated by the Associate
General Counsel for Water to serve as Special Counsel to ad-
vise them in preparing decisions. Such attorneys may not ad-
vise me or my staff in NPDES decisions. Currently, Barry
Walter (FTS 755-0760) and Nancy Othmer (FTS 755-0433) are
serving in that capacity.
Administrator and his Staff
The Administrator (and the Deputy Administrator, when she
is Acting Administrator for the purpose of making a final de-
cision on an NPDES appeal), and any judicial officer assigned
to assist us' in preparing an NPDES decision, will, like-Regional
Administrators, refrain from ex parte discussions of the merits
of the proceeding with all "interested persons outside the Agency,"
and Enforcement staff. We will, where necessary, call upon other
Agency personnel, including the General Counsel and her staff,
excluding any attorneys designated as Special Counsel to assist
Regional Administrators.
Procedures in case of Departure from these Requirements
Occasionally these requirements may be abrogated through
inadvertence. Or, if a Congressman or Senator requests a
briefing on a pending matter (see 5 D.S.C. §557(d)(2))f dis-
cussions otherwise proscribed by this memorandum may be unavoid-
able. In any case where such a discussion occurs, the substance
of the discussion must be promptly reduced to writing, 'and a
copy served upon all. parties to the proceeding. ' .
I have asked the Assistant Administrator for Enforcement
and the General Counsel to review applicable NPDES regulations
to see to what extent incorporation^ of these procedures would be
appropriate.
Douglas M. Costle
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
90U OFFICE OF ENFORCEMENT
MEMORANDUM
SUBJECT: NPDES Evidentiary Hearing Management Program
TO: Regional Enforcement Division Directors
FROM: R. Sarah Compton
Deputy Assistant Administrator
for Water Enforcement (EN-335)
On March 7, 1979f responsibility for managing the NPDES
evidentiary (formerly adjudicatory) hearing program was trans-
ferred from the Enforcement Division to the Permits Division.
With the evidentiary hearing program the Permits Division gained
responsibility for:
o developing 'a strategy for resolving evidentiary hearings
o providing guidance on granting and denying evidentiary
hearings
o providing specific case support —
o maintaining an evidentiary hearing tracking system
o processing proposed stipulations settling evidentiary
hearings
Until now, no written procedures for carrying out these
activities have been directed to the Regions. Discussion
of these procedures is outlined in the following paragraphs. .
However, before discussing hearing program policy, I
wish to emphasize the importan.ee of processing pending cases
as expeditiously as possible. It is essential that you •
^J Legal case support was reestablished on September 10, 1980,
as an Enforcement Division responsibility.
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aggressively resolve the existing backlog of cases so that
permittees will complete, at the earliest possible date, all
measures necessary to achieve BPT. The backlog must be eliminated
in anticipation of another series of hearing requests which we
expect as second round permits are issued. Pending hearings, and
the issues which they have raised, will not necessarily become
moot upon the filing of a hearing request for review of second
round BCT or BAT permits. We should push for attaining BPT and
then be prepared to handle the second round of hearing requests
as they are filed.
Strategy for Resolving Evidentiary Hearings
Several attempts have been made to develop a strategy for
resolving pending evidentiary hearings. However, with permits
expiring and emphasis being placed on enforcement case resolution,
developing this strategy for resolution of evidentiary hearings
was never completed. However, we are still considering the
following actions for resolving the large number of upcoming
hearing requests:
1. Narrow the scope of, or aeny as many unfounded requests
as can be justified. Guidance for granting and denying
evidentiary hearings is now being prepared by Robin
Conrad in the Permits Division. The initial draft
guidance document is expected shortly.
2. Categorize the issues raised, code these issues and
: incorporate these codes into the Evidentiary Hearing
Tracking System. Automation of these issues (through
use of codes) could allow us to keep a running tally of
issues and allow categorizing such issues and ultimately
aid in providing uniform response to requests and
uniform resolution to issues adjudicated.
3. After categorizing and summarizing the issues, a
centralized evidentiary hearing team, made up of
technical and legal staff (and economists), could
be established to address these common issues.
Specific Case Support
Even though management. o£ Luc e
was transferred to the Permits Division, specific legal case
support has been reestablished as a responsibility of the Legal
Branch, Water Enforcement Division.
Evidentiary Hearing System Report (formerly "Adjudicatory" Hearing
System Report)
Recently we have discussed improvements to the computerized
Evidentiary Hearing System Report (EHSR), which has not been
updated since June 1978; and we are considering three approaches
to providing a current hearing status:
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o Use the present system and format and periodically
update the report.
o Eliminate data elements of little benefit and
replace them with more useful ones before updating
the report.
o Develop a completely new tracking system that is
more efficient and flexible.
Several aspects of the Headquarters NPDES evidentiary
hearing program, as well as regional hearing programs, will
have to be considered before a decision is made on which route to
follow. In the meantime, we still would like to track evidentiary
hearings. In the summer of 1978, Bridget Crawford of the Industrial
Permits Branch requested (by phone) the number of pending hearings
in each region, their SIC codes, and related issues. From this
information, she developed a status report on all pending NPDES
evidentiary hearings. Once again we want to request this type of
information to enable the "Crawford" report to be updated. For
your convenience, attached is a questionnaire that, when completed
by your office, covers all areas necessary for updating the
report.
Stipulations Review Procedures
Even though the final Consolidated Regulations are silent on
Deputy Assistant Administrator (DAA) approval of stipulations
settling NPDES evidentiary hearings, the review and approval of
stipulations for major dischargers only will continue at Headquar-
ters. This review procedure is a continuation of existing policy
except that stipulations for minor dischargers no longer require
Headquarters' approval. Stipulations will continue to be signed
by the Chief, Industrial Permits Branch (until we reorganize).
Since settling evidentiary hearings for majors is of primary
•concern, it is important that the review and approval of stipula-
tions to such hearings be well managed. Also, we anticipate- an
increasing flow of stipulations for Headquarters approval because
of the many new hearing requests that are expected in the coming
months. We do not anticipate any delays in Headquarters.
Stipulations submitted for Headquarters approval will
still be examined'for their legal and technical accuracy and
ability to meet certain compliance standards. This re'view
process has proven to be an effective method of screening
stipulations for possible errors due to oversights, lack of
coordination, and misjudgment. Generally, once Headquarters has
received a stipulation package, the proposed stipulation can be
reviewed and returned to the Region within fifteen working
days. However, in certain cases additional time is needed.
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- 4 -
So that stipulations can be reviewed and returned to the
Regions with minimal delay, these procedures should be followed:
1. Forward the proposed stipulation package to:
Bridget C. Crawford (EN-336)
Evidentiary Hearing Clerk
Permits Division, Industrial Permits Branch
Environmental Protection Agency
401 M Street, S.W.
Washington, D. C. 20460
2. The stipulation package should contain:
a. A cover memorandum to the Chief, Industrial
Permits Branch that explains the proposed
changes to the permit, reasons for those
changes, and includes the name and phone
number of the regional contact who is familiar
with the stipulation.
b. A copy of the permit (and the revised permit
if part of the stipulation).
c. The original copy of the proposed stipulation
signed by appropriate regional officials.
r
d. A copy of the evidentiary hearing request.
e. Any background data that would have bearing on
the review and approval of the stipulation.
If all reviewers concur with the proposed stipulation, it is
returned to the Chief, Industrial Permits Branch, for final
review and signature and then returned to the Region for further
processing. In cases where .an issue is raised with regard to
provisions of a stipulation, the Headquarter1s staff member
raising the issue will telephone the appropriate regional contact
and attempt a verbal resolution. If agreement cannot be reached,
the Industrial Permits Branch Chief will review the issues in
question and determine whether the stipulation should be returned
to the Region for revision. If this determination is made, the
Regional Enforcement Division Director will be requested to
resubmit the stipulation to Headquarters with suggested changes.
However, if the stipulation is resubmitted to Headquarters
without suggested changes, and still does not meet with the
approval of the Industrial Permits Branch Chief,'a review by the
Deputy Assistant Administrator for Water Enforcement will be
requested. If the DAA for Water Enforcement concurs with the
decision of the Industrial Permits Branch Chief, the .stipulation
will be returned to the Region unsigned and accompanied by a
formal nonapproval memorandum.
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- 5 -
I hope that this memorandum will provide sufficient guidance
for getting stipulations processed in an organized and timely
manner. As the program moves ahead, you will receive further
guidance or information on managing the evidentiary hearing
process, revising the Evidentiary Hearing Tracking System,
how specific case support will be provided, the grounds for
granting and denying evidentiary hearing requests, the development
of policy for resolving hearings, and training with regard to
evidentiary and non-adversary panal hearing procedures.
Please provide us with your comments. Call me (FTS 755-0440)
or Bill Jordan, Chief Industrial Permits Branch (FTS 426-7010) if
there are any questions.
Attachment
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Drinking Water
Enforcement
-------
Drinking Water
Enforcement
-------
WSG-29
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
OFFICE OF ENFORCEMENT
MEMORANDUM Q£Q £ g ^75 .
Subject: Regional Guidance
Emergency Action on Water Supply Hazards
From: Deputy Assistant Administrator for Water
Enforcement (EN-335)
Deputy Assistant Administrator for Water
Supply (WH-550)
To: See Below
A draft guidance memorandum on the above subject
was sent to you on May 17, 1976, for your review and
comments. All the comments that you submitted have
been reviewed and evaluated in the preparation of the
attached final version of the Guidance Memorandum.
You may now use this guidance in exercising the
authority granted by section 1431 of the Public
Health Service Act, as amended by the Safe Drinking
Water Act.
At this time, we wish to emphasize that these
Emergency Powers should be used "to deal promptly and
effectively with emergency situations which jeopardize
the health of persons" and only as a last resort when
all other remedies available to EPA have been exhausted.
This memowAdum should be filed as Water Supply
Guidance No. 2^unifier the heading "Emergency Powers."
I/, fy^r*
G./Miller Victor dj. Kimm :
Addressees:
Regional Administrators
Regional Counsel
Regional Enforcement Directors .
Regional Water Program Directors
Regional Surveillance & Analysis Directors
Regional Water Supply Chiefs
*
Attachment
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V&G-23
The -whole point of water vending machines is to sell water so that
condition (c) is not met. Most'machines treat the water in some way
so condition (a) is not met.
H any one ol (a) (b) or (c) is not met the public water system is covered
by the regulations.
Conclusion
Water vending machines which either treat water in some way or sell
water are covered by the NIPDWR as a non-community, public water
supply.
1-5
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WSG-29
REGIONAL GUIDANCE
EMERGENCY ACTION ON WATER SUPPLY HAZARDS
Section 1431 of the Public Health Service Act,
as amended by the Safe Drinking Water Act, provides
that the Administrator may take emergency action to
protect public health when he receives information
that a contaminant which is present in or is likely
to enter a public water system may present an imminent
and substantial endangerment to health. The text of
section 1431 and the accompanying explanation in the
House Report (H.R. No. 93-1185) are attached as Tab A.
Evaluation of a given situation to which section
1431 might apply must include the following considerations
A. Who may take emergency action. A
decision to act under section 1431 must be made by
the Administrator. To date there has been no delegation
of this authority.
'B. Discretionary nature of section 1431.
Action under section 1431 is discretionary. The
statute provides that the Administrator "may" take
action. Upon .evaluation of the available information,
the Administrator may determine that the evidence of
an imminent hazard is inadequate or that the problem
should be dealt with by State or local government or
under EPA authority provided elsewhere in the Act.
Emergency authority under this section is not to be
used in cases where the risk is speculative in nature,
or trifling in degree.
C. Purpose of 1431 action. Any section
1431 action should be directed toward:
1. Preventing an impending hazardous
condition from materializing/
2. Reducing or eliminating a hazardous
situation once it has arisen, and
3. Providing an alternate safe water
supply source.
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WSG-2?
D. Effect of State and local action.
Action can be taken under section 1431 only if the
Administrator has information indicating that appropriate
State and local authorities have not 'acted to protect
the public health. Moreover, to the extent considered
practical in light of the urgency of the situation,
the Administrator must consult with State and local
authorities to confirm the information indicating
that there is an imminent hazard and to determine
what action the State and local governments are
taking or will take. This requirement implements
legislative intent expressed in House Report 93-1185
to "direct the Administrator to refrain from precipitous
preemption of effective State or local emergency
abatement efforts." Section 1431 is not meant to be
a vehicle for dealing with problems which can be
handled effectively by State and local governments in
a timely fashion.
E. Other SDWA requirements do not limit
1431 action. Action under section 1431 can be taken
without regard to requirements of the primary drinking
water regulations or State underground injection
control programs. Thus, action can be taken to deal
with a contaminant not covered by the primary 'drinking
water regulations or to act against an underground
injection control program. Orders may be issued and
enforced and -suits may be brought notwithstanding the
existence of any exemption, variance, permit, license,
regulation, order or other requirement. During the
initial stages of implementation of the emergency
powers authorized under section 1431, appropriate .
actions will have to be.taken on a case-by-case
basis. However, as experience is accumulated and
certain problems are found to recur in a geographical
area or on a nationwide basis, it would be best to
deal with such similar cases on a Regional or national
basis by modifying the national requirements (such as
revision of MCLs) instead of t_lie tepeated use of
emergency powers under section 1431.
-------
WSG-29
F. Standard of imminent endangerment to
health. The Administrator has been given broad dis-
cretion to determine whether a hazard is "imminent."
Because of the paramount importance given to the
objective of protecton of the public health, implementation
.of this authority must occur early enough to prevent
the potential hazard from materializing or becoming
worse. "Imminence" thus means that the Administrator
is required to have proof of a substantial danger to
health, but he is not required to have uncontroverted
proof, that injury will in fact occur. The risk of
harm must be "imminent," not the harm itself. Thus,
for example, the Administrator may invoke this section
to prevent an imminent introduction of contaminants
into drinking water even though the adverse health
effects will be experienced by the users of the
system only after a long period of latency. The
Administrator may consider the time it may take to
prepare orders, to commence and complete litigation,
and to implement and enforce administrative or judicial
orders to protect the public health. Thus, the
hazard may also be "imminent" even if the contaminants
will not enter the water supply for several days, if
time is needed to implement corrective action under
section 1431.
G. Standard of substantial endangerment
to health. The Administrator also has been given
broad discretion to determine whether a-hazard is
"substantial." Certainly, the presence or potential
presence of any life threatening substances is a
"substantial" hazard, but a "substantial" hazard may
also include the presence or potential presence of
any substances capable of causing adverse health
effects, such as carcinogens, as well as a substantial
statistical probability that disease will result from
the presence of contaminants in drinking waters.
Additionally, a "substantial" endangerment may also
exist when the danger is one of a lesser degree of
risk but a substantial number of people are involved.
H. Degree of proof required. As noted above,
the Administrator does not have to have uncontroverted
"proof" that persons will in fact be injured before taking
action under section 1431. Undue efforts to document
the available information or proof should be avoided,
particularly where the delay in obtaining such information
or proof could impair attempts to prevent or roduce
the hazardous situation.
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WSG-29
I. Scope of remedial action. Once the
Administrator determines that action under section
1431 is needed, a broad range of options is available.
The statute provides that he may take such actions as
may be necessary to protect the health of persons who
are or may be users of the public water system involved/
and that he may issue an order or bring a suit for
appropriate relief, including a restraining order or
a temporary or permanent injunction. An order or a
suit can be directed against an owner or operator of
a public water system/ a Federal Government agency, a
State or local government unit, State or local officials,
owners or operators of underground injection wells,
area or point source polluters, or any other person
whose action or inaction requires prompt regulation
to protect the public health.
J. No citizen suits under section 1431.
Section 1431 does not authorize suits by anyone other
than EPA. Citizens' civil actions are authorized by
section 1449 of the Public Health Service Act to
force compliance with drinking water requirements,
but section 1449 does not grant general authority for
suits in emergency situations.
K. Orientation towards sources of contaminants.
Any action under section 1431 should be oriented
toward the abatement of the source of contamination.
Such action may include amendment of the terms of an
NPDES permit. Public water systems/ where they are
not the source of contamination, should not be forced
to bear the burden of ameliorating an emergency
situation unless the danger is such that exposure
must be minimized immediately and it is not feasible
to abate the source of pollution within the available
time period.
L. Procedures for implementation of section 14.31
Implementation of section 1431 shall generally proceed
in the sequence outlined below:
1. The Regional Office documents the
problem. The degree of documentation necessary will
depend on the difficulty and urgency of the problem.
Section 1431 authorizes the Administrator to obtain
from any person relevant information necessary to
evaluate the source and the danger of a potentially
hazardous contaminant. If possible, the Region
should cooperate with State and local officials in
this effort. . Pending the acquisition and evaluation
of such information, the Regional Office should
promptly notify one person in Headquarters using the
following order of priority:
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WSG-29
Division.
a. DAA for Water Supply.
b. Associate DAA.
c. Director, State Programs
d. Chief, Drinking Water Regulations
Implementations Branch.
The Office of Water Supply will promptly notify the
DAA for Water Enforcement.
2. The Regional Office transmits the
information to the DAAs for Water Supply and Water
Enforcement for coordination of the risk assessment
and identification of possible remedial measures.
3. The Regional Office shall consult
with the State and local officials to confirm the
correctnes's of the information developed in Step 1.
4. The Regional Office determines
whether State and local officials are or are not
taking appropriate action to protect the health of
persons.
5. If it is determined that State
and local officials are not (or cannot) taking appropriate
action, the Regional Office and the Offices of Water
Supply and Enforcement shall prepare an action package
in accordance with EPA Order 1320.2 for the Administrator.
The degree of detail and amount of backup for the
Action Memorandum will vary with the degree of urgency
involved. When the hazard is due to area or point
source pollution, proposed actions should include
identification of the pollution sources and plans for
their abatement.
6. The Administrator determines the
action(s) to be "taken and transmits his decision to
the Regional Administrator by telephone or mail, as
appropriate.
7. The Regional Office implements
the action(s) of the Administrator. These guidelines
should be followed until sufficient case-by-case
experience is accumulated to allow their revision„
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WSG-29
IAEA
"Part D - Emergency Powers
. 42 USC 3001.
"See. 1431. (a) Notwithstanding any other provision of this title,
the Administrator, upon receipt of information that a contaminant
which is present in or is likely to enter a public water system may
present an Imminent and substantial endangerment to the health of
persons, and that appropriate State and local authorities have not
acted to protect the health of such persons, may take such actions
»
as he may deem necessary in order to protect the health of such
persons. To the extent he determines it to be practicable in light
of such imminent endangerment, he shall consult with the State
and local authorities in order to confirm the correctness of the
information on which action proposed to be taken under this sub-
section is based and to ascertain the action which such authorities
are or will be taking. The action which the Administrator may
take may include (but shall not be limited to) (1) issuing such
orders as may be necessary to protect the health of persons who
are or may be users of such system (including travelers), and
(2) commencing a civil action for appropriate relief, including a
restraining order or permanent or temporary injunction.
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WSG-29
2
M(b) Any person who willfully violates or fails or refuses to
comply with any order issued by the Administrator under sub-
section (a) (1) may, in an action brought in the appropriate United
States district court to enforce such order be fined not more
than $5,000 for each day in which such violation occurs or failure
to comply continues.'1
House Report No. 93-1185, pages 35 and 36 :
"Part D - General Provisions
Section 1431. Emergency Powers
Section 1431 reflects the Committee's determination to confer com-
pletely adequate authority to deal promptly and effectively with
emergency situations which jeopardize the health of persons.
The authority conferred by this section is intended to override any
limitations upon the Administrator's authority found elsewhere in
the_bill, Thus, the section authorizes the Administrator to issue such
orders as may be necessary (including reporting, monitoring, entry and
inspection orders) to protect the health of persons, as well as to com-
mence civil actions for injunctive relief for the same purpose.
The authority to take emergency action is intended to be applicable
not only to potential hazards presented by contaminants which are
subject to primary drinking water regulations, but_also_to those pre-
sented by unregulated contaminants.
-------
WSG-29
The authority conferred hereby is intended to be broad enough to
permit the Administrator to issue orders to owners or operators of
public water systems, to State or local governmental units, to State
or local officials, owners or operators of underground injection wells,
to area or point source polluters, and to any other person whose action
or inaction requires prompt regulation to protect the public health.
Such orders may be issued and enforced notwithstanding the existence
of any exemption, variance, permit, license, regulation, order or oth.^
requirement. Such orders may be issued to obtain relevant information
about impending or actual emergencies, to require the issuance of notic
so as to alert the public to a hazard, to prevent a hazardous condition
from materializing, to treat or reduce hazardous situations once they —
have'arisen, or to provide alternative safe water supply sources in tht
event any drinking water source which is relied upon becomes hazard-
ous or unuseable.
Willful violation of the Administrator's order is made punishable
by a fine of up to $5,000 per day of violation.
In using the words "that appropriate State or local authorities have
not acted to protect the health of persons," the Committee intends to
direct the Administrator to refrain from precipitous preemption of
effective State or local emergency abatement efforts. However, if Stat
or local efforts are not forthcoming in timely fashion or are not effec-
tive to prevent or treat the hazardous condition, this provision should
-------
KSG-29
not bar prompt enforcement by the Administrator.
In using the words "imminent and substantial endangerment to it
health of persons," the Committee intends that this broad administr^^
tive authority not be used when the system of regulatory authorities
provided elsewhere in the bill could be used adequately to protect the
public health. Nor is the emergency authority to be used in cases wher
the risk of harm is remote in time, completely speculative in nature, o
de xninimis in degree. However, as in the case of U.S.v. United States
Steel, Civ. Act. No. 71-1041 (N. D. Ala. 1971), under the Clean Air A
the Committee intends that this language be construed by the courts
and the Administrator so as to give paramount importance to the ob-
jective of protection of the public health. Administrative and judicial
s
implementation of this authority must occur early enough to prever,
the potential hazard from materializing. -This means that "imminence
must be considered in light of the time it may take to prepare admin-
istrative orders or moving papers, to commence and complete litiga-
tion, and to permit issuance, notification, implementation, and enforce
ment of administrative or court orders to protect the public health.
Furthermore, while the risk of harm must be "imminent" for the
Administrator to act, the harm itself need not be. Thus, fcr sxainple,
the Administrator may invoke this section when there is an imminent
likelihood of the introduction into drinking water of contaminants
that may cause health damage after a period of latency.
1-15
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WSG-29
Among those situations in which the endangerment may be regarde
as "substantial" are the following: (1) a substantial likelihood that
contaminants capable of causing adverse health effects will be ingested
by consumers if preventive action is not taken; (2) a substantial sta-
tistical probability that disease will result from the presence of con-
taminants in drinking water; or (3) the threat of substantial or seri-
ous harm (such as exposure to carcinogenic agents or other hazardous
contaminants)."
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\
° UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. DC 20460
NOV 17 1983
MEMORANDUM
SUBJECT: Safe Drinking Water Act Public Water System
Settlements - Interim Guidance
OFFICE OF
ENFORCEMENT COUNSEL
FROM: Courtney M. Price _
Assistant Administrator, o££ice of
Enforcement and Compliance Monitoring
TO: All Regional Administrators
All Regional Counsels
Introduction
Since 1979 EPA has referred 30 Safe Drinking Water Act (SDWA)
cases against public water suppliers to the Department of Justice.
Sixteen of these cases have been filed by Justice during 1983
alone. With this increase in litigation, three different settle-
ment patterns have developed among the three Regions referring SDWA
cases (see attached charts). This document establishes criteria "
that will promote a coherent national enforcement policy governing
SDWA settlements in cases against public water suppliers. Proposed
Regional settlements not consistent with these criteria will not
be concurred in by this office and will not be recommended to the
Department of Justice.
Due to negotiations currently underway in a number of SDWA
cases, this guidance is being issued for immediate use in interim
form at this time. This guidance shall remain in effect until
further notice. Comments are invited on the policies set forth
herein.
The Office of Drinking Water has been consulted on this- policy
Injunctive or Administrative Relief
Except for extraordinary cases in which it is physically -
impossible for a public water supplier to comply with a maximum
contaminant level (MCL) or other appropriate health standard, all
settlements must remove all health hazards or risks associated.
with the public water supplier's SDWA violations. Violations of
MCLs shall be abated as soon as possible, whether through the
-------
provision of alternate water supplies, installation of treatment
equipment, or other means. If settlement in such circumstances is
not immediately available, Regional Administrators should issue an
administrative order under §1431 of the SDWA where warranted, or
seek a preliminary injunction ordering appropriate relief.
Monitoring, Reporting, and Notification Duties
Because public exposure to health risks is. also increased by
a public water supplier's failure to comply with the SDWA regula-
tions governing monitoring, reporting, and public notification
duties, all settlements must require full compliance with SDWA
regulations governing monitoring, reporting, and public notification
duties. In cases in which the defendant has failed to monitor for
any contaminant during the most recent monitoring period, all
settlements should require appropriate monitoring to be conducted
within 30 days of the entry of the settlement with the court.
Civil Penalties
Civil penalties have two components: the recovery of
economic benefits accruing from noncompliance, and the imposition
of a penalty to deter further violations. All settlements should
recover the economic benefits that have accrued to the defendant
through his noncompliance. Proposed settlements which do not
recover economic benefits should explain why they do not. A
deterrence component must also be included in each settlement,
although its amount may vary according to the factors discussed
below.
Calculations of benefits should include applicable amounts
saved through the avoidance of sampling, mailing, public notice,
laboratory, and capital equipment costs.^ Labor costs to conduct
sampling and other tests may be included at Regional discretion.
As a rule, inferred costs for volunteer labor for small public
water suppliers need not be included in the government's final
settlement offer, although costs for paid employees of larger
systems should be included in settlement. This distinction is
based on financial differences among defendants and their effect
on achieving settlements.
The deterrence component presents a more complex calculation.
The primary factors to consider in determining the Agency's final
1 Economic savings of capital costs may be calculated by the
imputation of finance costs. (The 1980 Civil Penalty Policy pro-
vides an example of a detailed method to estimate *»ronomic savings
enjoyed by deferral of capital expenditures.) In all SDWA cases
brought to date, economic savings to the violator for failures to
monitor, report, or notify have been slight. Very few cases have
required construction or equipment installation costs.
-------
settlement offer are those enumerated in the Safe Drinking Water
Act itself - "the seriousness of the violation, the population at
risk, and other appropriate factors." SDWA §1414(b), 42 U.S.C.
§300g-3. All settlements reached should specifically attempt to
deter the violator from further noncompliance. Deterrent penalty
amounts should reflect the severity of the defendant's violations.
Most serious are MCL violations associated with outbreaks of water-
borne illness among the defendant's consumers, followed in order
by MCL violations of bacteriological, nitrate, or turbidity .limits,
other MCL violations, failures to notify the public or EPA of
violations, monitoring violations, and reporting violations. The
Region should also consider the willfulness or recalcitrance of
the defendant, its financial resources, the length of time over
which the violations have occurred, and the general deterrent
effect of the settlement on similarly situated violators in the
same area.
Unless there are extraordinary circumstances, no settlement
may include a deterrent component of less than $1,000. All settle-
ments shall include a deterrent component.
If a settlement that includes an appropriate civil pe/ialty
cannot be achieved, the case should be litigated through trial.2
Conclusion
Adherence to this settlement policy will affect certain
pending cases. Cases which a Region determines are significant
enough to refer merit application of the minimal settlement
requirements set forth above to promote effective enforcement
responses. The potential for adverse affects on human health by
violation of the SDWA compels rigorous enforcement of the Act to
achieve remedies for existing violations and to deter future
violations.
Attachment
cc: Rebecca Hanmer
F. Henry Habicht
2 see Memorandum dated September 7, 1982, titled "Case Referrals
for Civil Litigation" from Acting Enforcement Counsel to Regional
Counsels: "[R]eferrals to Headquarters and DOJ for the purpose of
applying pressure on a party to settle should not be made unless
the Regional office is willing to carry the case through a suit."
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SAFE DRINKING WATER ACT CASES
CIVIL ENFORCEMENT DIVISION
REGION III
Name of Defendant/
Facility Location
Cherry Tree Bor Muni,
Cherry Tree, Pa.
Monument Water Assn. ,
Centre County, Pa.
Orviston Water Assn. ,
Orviston, Pa.
Oval-Oriole Water,
Lycoming County, Pa.
Perkiomen Valley Pre-
servation Society,
Green Lane, Pa.
Salemville Water Assn. ,
Bedford County, Pa.
Tenney, Wm. B., et al.
Hamden Twp. , Pa.
West Carroll, Twp. of
West Carroll Tw. , Pa.
Whiskey Run Water,
Farrandsville , Pa.
.
Date
Filed
4/7/83
2/3/83
2/21/83
4/25/83
9/30/83
9/29/80
6/23/80
4/7/83
8/16/83
Status
active
active
active
CD
CD
lodged
CD
Trial
concluded
active
active
Penalty/
Special Relief.
-
-
-
$500
$8,000 &
broad injunc-
tive relief
$100 &
required to
discontinue
use of surface
water source
$25,000
-
-
i
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SAFE DRINKING WATER ACT CASES
CIVIL ENFORCEMENT DIVISION
REGION VIII
Name of Defendant/
Facility Location
Avelino Gutierrez ,d/b/a
A & K Trailer Court,
Rock Springs, Wy.
Alcova Acres Invest,
Alcova, Wy.
Alpine Water and Sewer
District, Alpine, Wy.
Alta Commun Pipeline,
Alta, Wy.
Grover Domestic Water
Works, Grover, Wy.
Happy Valley Pipe!. ,
Afton, Wy.
McGuire Trailer Ct. ,
Rock Springs, Wy.
North Alton Pipeline/
Afton, Wy.
Osmond Pipeline Co. ,
Afton, Wy.
Rainbow Pipeline Co. ,
Afton, Wy.
Rio Vista Homesites,
Green River, Wy.
Date
Filed
3/22/83
8/13/82
9/6/83
3/22/83
8/15/83
8/13/82
3/22/83
8/13/82
3/22/83
10/14/80
10/14/80
Status
CD lodged
CD
active
CD
lodged
active
CD
active
Default
J 'ment
active
CD
Default
J 'ment.
Penalty/
Special Relief
$1,000
$1,000 & re-
quired to pro-
vide bottled
water until
PWS complies
-
$1,000
•™»
$0 - required
to install
$2,000
chlorinator
-
Penalty
question still
open
- '
$0 - Judge
rejected
penalty in CD
$0 - system
turned- over to
new supplier
-------
SAFE DRINKING WATER ACT CASES
CIVIL ENFORCEMENT DIVISION
REGION X
Name of Defendant/ .
Facility Location
Alder Creek Water Co.,
Portland, Or.
Glen Villa Trl. Park,
Glendale, Or.
London Water Coop,
Cottage Grove, Or.
Midland Water Assn. ,
Clatskanie, Or.
Mitchell Water Assn.,
Bend, Or.
Mt. View Motel & Trail,
Chemult, Or.
Neskowin Enterprises,
Neskowin, Or.
Partney Mobile Home
Park
Pilot Rock, Or.
Tivoli Mobile II. Park,
Junction City, Or.
Westgate Mobile Home
Park,
Ontario, Or.
Date
Filed
9/19/79
11/12/82
1/25/83
1/7/83
11/12/82
11/12/82
4/4/79
To DOJ :
10/21/83
11/12/82
5/9/83
Status
active
CD
active
active
active
Default
J 'ment
($50/day)
Summ.
J ' me n t
active
CD
Default
J 'ment
($50/day)
Penalty/
Special Relief
Court placed
company in
receivership
for 2 1/2 yrs
$2,500
-
-
-
$6,800
$26,400
-
$2,000
$35,400
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PUBLIC WATER SYSTEMS
COMPLIANCE POLICY
Office of Water
U.S. Environmental Protection Agency
November 18, 1983
-------
Preface
The Safe Drinking Water Act of 1974 established a
national goal of safe drinking water for all Americans. To
carry out this mandate, the Environmental Protection Agency
(EPA) promulgated National Interim Primary Drinking Water
Regulations (NIPDWR) which establish permissible concentration
levels for contaminants commonly found in drinking water and
require water systems to monitor for and report on the presence
of these contaminants.
A great deal has been accomplished since 1977, the date
the NIPDWR went into effect. Available data indicate a steady
improvement in compliance with the regulations over the years.
More, however, remains to be done. In 1982, water provided by
1.3% of the monitored systems persistently exceeded the allow-
able level of microorganisms. Also in 1982, there were 40
documented outbreaks of waterborne disease causing 3,456
cases of illness. The problem is greatest among small systems
which tend to have a higher violation rate than large systems. .
The purpose of this Policy is to foster compliance with
the NIPDWR. It provides guidance to the States and Regions
responsible for implementing Public Water System Supervision
programs by suggesting priorities for selecting compliance
problems to address and outlining the available actions for
bringing water systems into compliance.
Some of the material incorporated here, for.example,
strategies for improving compliance by noncommunity and small
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systems, has been published previously. The issuance of
this overall Public Water System Compliance Policy is intended
to signal the Agency's goal of achieving full compliance
with the NIPDWR by 1988.
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Table of Contents
Page
Public Water Systems Compliance Policy
I Statement of Policy 1
II Background 5
III Implementation 8
IV . Effective Date 10
Attachment A: National Compliance Trends
Number of Community Water Systems in Violation
and Total Number of Violations—FY 19.82 1
Percentage of Community Water Systems
in Violation with the Microbiological
and Turbidity Standards—FY 80-82 2
Attachment B: Guide to the Development of
State Strategies
Introduction 1
Developing a Strategy "1
Enforcement Action 9
Remedies and Penalties 15
Attachment C: Guide to Bringing Formal Enforcement
Action Under the Safe Drinking Water
Act (Legal Interpretation of Section
1431)
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PUBLIC WATER SYSTEMS
COMPLIANCE POLICY
I. STATEMENT OF POLICY
The Environmental Protection Agency (EPA) and states
which have assumed primary enforcement responsibilities
(primacy states) will protect public health by ensuring
that all public water systems (PWS) are in compliance with
the National Interim Primary Drinking Water Regulations
(NIPDWR). While the Safe Drinking Water Act requires that
all systems be in compliance by January 1, 1984 (1986 for
regionalized systems), the Agency realizes some systems will
not be in compliance by this date. Therefore,. EPA's interim
goal is to eliminate all persistent violations^ by 1986,
to reduce to a. minimum all violations of the microbiological
and turbidity maximum contaminant levels and monitoring and
reporting requirements by PWS's and to put all noncomplying
»
systems on a formal compliance schedule. To achieve this
goal, compliance must improve substantially between now and
1986. By 1988, all PWS's should be in full compliance with
the NIPDWR.
Each state2 is asked to undertake appropriate measures
including the development and implementation of a PWS compliance
strategy to ensure annual compliance improvements that will
meet the 1986 interim goal and the 1988 goal of full compliance.
1 In a fiscal year,4 or more months in violation or more than
one quarter in violation.
2 Agent which assumes primary enforcement responsibility
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While EPA acknowledges that a few PWS's will always drop out of
compliance temporarily because of such factors as operator
turnover, variability of analytical results, equipment failures,
and human error, the Agency believes that a goal of full
compliance is valid given a small turnover of temporarily
noncompliant systems.
While implementing this Policy the following principles
will guide the Agency's efforts:
1. Improved compliance with the NIPDWR will increase public
health protection.
The measurement of compliance with the NIPDWR, is the
best indicator the Agency has concerning how well the public
is protected from the traditional contaminants in drinking
water. Since the standards established by the NIPDWR are
based on protection of public health to the maximum extent
»
feasible, compliance improvements will result in improved
protection of public health. This Policy will focus EPA
and state resources on those violations which represent
the greatest threats to health.
2. States have a primary responsibility for compliance.
When states assume responsibility to enforce the NIPDWR,
they also assume a primary role in achieving national
compliance improvements. Though EPA has established
national compliance goals, the Agency recognizes that
there are differences among the states in implementing
the PWS program- establishing priorities, and creating
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enforcement strategies. However EPA believes that although
states may legitimately differ in their management styles
or in their perceptions concerning the degree of threat
to public health that a given violation represents,
state enforcement priorities should first address those
violations which present the greatest public health
threats. EPA also expects each state to negotiate yearly
compliance targets with EPA and to develop a strategy to
achieve agreed upon compliance improvements. EPA will
provide states programmatic and funding assistance to
ensure state enforcement efforts result in the agreed
upon compliance improvements.
3. EPA and states will cooperate to set reasonable
compliance targets.
EPA will assist state efforts to bring systems into compliance,
Each year, EPA will set national compliance targets bas'ed
upon the compliance rates in the Federal Reporting Data
System (FRDS). EPA regions will negotiate individual state
compliance targets with each State. EPA recognizes that
because states and EPA Regions begin with varying compliance
levels, compliance targets may differ. However, EPA expects
annual compliance improvements in each state will serve
to meet the .annual compliance targets.
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4. States will develop strategies to bring noncomplying
systems into compliance.
EPA will encourage each State to develop a strategy to
identify high priority violating systems and to
systematically bring each into compliance voluntarily
through corrective action, a negotiated compliance schedule
or through a formal enforcement action. States should
consider the following factors in establishing compliance
priorities: the type of violation, e.g., a maximum con-
taminant level or monitoring/reporting failure; the degree
of hazard, e.g., deviation from the standard or whether
the-violation represents an acute or chronic health risk;
the size of the population affected; the degree of system
recalcitrance; and the deterrent effect which enforcement
actions will have on other potential violators. Each
strategy should ensure that all persistent violators are
in complia'nce or on a compliance schedule by 1986.
5. EPA and states will enforce against all noncomplying
systems.
EPA and the states will take appropriate enforcement action
against all noncomplying systems giving first priority to
systems whose violations threaten public health, recalcitrant
systems, and persistent violators. EPA will cooperate
with states when enforcing against noncomplying systems
to ensure that the objectives of this policy are successfully
?»ch isvcd.
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• -5-
6. Each year EPA will review progress toward targets
and goals.
Each year Headquarters will review with each region the
progress toward the achievement of the compliance goal
and the development of state compliance strategies. EPA
will review each state strategy and compliance record to
determine the need for further guidance, assistance, and
mid-course corrections to report progress to the Administrator
and to Congress, to revise State targets for the next
year, and to take corrective action where State primacy
requirements are not met.
II. BACKGROUND
The Safe Drinking Water Act (P.L. 93-523) enacted on
t-
December 16, 1974 gives- EPA the responsibility to establish
standards ensuring the safety of drinking water while encouraging
the states to accept primary enforcement responsibility for
implementing these programs. If a state does not elect to
assume primacy, EPA must implement a program in that state.
Presently 51 states and territories have assumed primary
enforcement responsibility for the drinking water program.
The water supply programs in Pennsylvania, Indiana, Wyoming,
South Dakota, Oregon, District of Columbia, and on Indian
lands are implemented by EPA regional offices.
The states (and the EPA regions for non-primacy states)
have the primary responsibility for ensuring compliance by
public water systems. EPA regions provide overview and
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technical assistance to primacy states. EPA Headquarters has
national oversight responsibility for all programs under the
SDWA.
In 1975 EPA promulgated regulations (effective June 24,
1977) for five classes of contaminants including microbiological,
turbidity, organic, inorganic, and radionuclides. These regulat-
ions established maximum contaminant levels, monitoring and
reporting requirements, and administratve procedures each public
water system must follow. In 1979 additional standards were
promulgated for total trihalomethanes (TTHMs) and applied to
systems which disinfect and serve 10,000 or more people
Each year States report compliance information to EPA.
EPA analyzes that data, reports national compliance trends,
and provides the Administration and Congress reports on
progress under the SDWA.
As EPA began analyzing the compliance rates of various
segments of the public water systems, it found that rates of
compliance varied depending upon system size, and type of
system (community vs. non-community). To address these
specific problems, EPA in 1979 issued a non-community strategy
which suggested that regions and states establish followup
and enforcement priorities using such factors as the population
at risk, the type of contaminant level exceeded, the source
of the water supply, the degree of treatment, and the type
of nch-co-uTiunity facility served (hospital, food establishment,
rest area, etc.).
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Continuing analysis of community compliance data revealed
that noncompliance was disproportinately concentrated in the
small and very small water systems (systems serving less
than 3,300 persons). In response to this data, the Office
of Drinking Water proposed a small systems strategy in June
1980 which suggested an approach through which states could
rank enforcement actions. In fiscal years 1982 and 1983,
the Office of Water through national program guidance, en-
couraged states to use the state compliance strategy technique
to rank followup and enforcement actions when addressing
instances of noncompliance.
Current compliance rates based upon an analysis of FRDS
data indicates that though compliance with the microbiological
and turbidity MCL and M/R requirements has improved each
year, 30.1% and 16.3% of the PWS's were not in compliance with
the microbiological and turbidity standards respectively. This
includes 9.8% and 11.6% of the PWS's respectively classified as
persistent microbiological and turbidity violators.
The Public Water System Program is a mature program
with many of the initial tasks such as developing an inventory,
informing PWS of NIPDWR requirements, and delegation of
primary enforcement authority now completed. As such, EPA
recognizes that many of the systems which remain out of
compliance are either recalcitrant or clearly lack the ability
to comply. To ensure that these systems are targeted for
compliance requires a systematic approach combining programmatic,
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-8-
financial, and enforcement actions. This Policy is designed to
further this systematic approach and ensure that the cooperation
which exists between states and EPA results in compliance
improvements.
III. IMPLEMENTATION
In order to ensure the success of this Policy, EPA suggests
that the States at a minimum address the following implementation
activities:
1. Monitor Compliance Data
Monitoring of compliance data is essential to determine
the progress of each state in improving compliance. Each
state should compile its compliance data and analyze it to
determine which classes of PWS's need improvement. EPA
will compile national compliance data for use in determining
future national compliance goals. Those goals will be established
based upon discussions between EPA and the states as part of
the annual program planning cycle. Once national goals are set,
EPA will negotiate annual compliance targets with each state.
2. On an annual basis/ commit to compliance targets.
National compliance objectives will be established annually.
Yearly objectives will be contained in the Office of Water's
Accountability System. Regions will negotiate with each of
the primacy states appropriate state specific objectives.
(Headquarters will negotiate with Regions that operate
the PWS program within the non-prisnacy states). Depending
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on state compliance levels, some states will be above the
national objectives and others will be below. Though
variability in individual state targets and goals is
expected, all agreements which are negotiated, should
incorporate compliance improvements, to the extent feasible,
over the previous year.
3. Develop state strategies.
One of the goals of this Policy is to encourage each State
to develop a compliance strategy which ranks compliance
violations and develop appropriate enforcement responses
to noncomplying systems. The initial step for a primacy
agency to take in developing a compliance plan is to list
and rank, on a priority basis, noncomplying systems. Develop-
ing a priority list requires consideration of several factors
including: the type of violation; the degree of hazard; size
of the affected population; degree of recalcitrance; and
the the deterrent effect. (Attachment B gives guidance
concerning the establishment of priorities and developing a
decision making model.)
4. Take appropriate compliance enforcement actions.
After establishing a priority ranking, primacy agents should
» .
•consider a number of possible enforcement responses including
taking emergency action; requiring public notification;
providing informal notification (phone call, warning letter,
site visit); granting a variance or exemption and place on
a compliance schedule; issuing a notice of violation or
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administrative order; or initiating civil suit or criminal
action. EPA will cooperate with the states to ensure coordinated
financial and enforcement assistance. For example, systems
may be referred to FmHA or other agencies for loans or
grants when financing is needed for system improvements.
EPA will also cooperate with the states to ensure that EPA
programmatic resources are used to improve PWS compliance.
5. Conduct Data Verification
Because the development of compliance objectives depends
upon the accurate measurement of compliance, EPA and the
states will institute a quality control program to ensure
that the compliance data reflects the actual water quality.
On a regular basis, the states and EPA will ensure the
integrity of compliance data through data audits. To support
this effort, EPA will provide training and guidance concerning
data verification and audit techniques.
»
IV. EFFECTIVE DATE
This policy is effective immediately. It will be reviewed
annually. The review will evaluate compliance objectives and
will incorporate any policy changes into the Office of Water's
Accountability Systern.
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Attachment A
NATIONAL COMPLIANCE TRENDS
NUMBER OF COMMUNITY WATER SYSTEMS IN
VIOLATION AND TOTAL NUMBER OF VIOLATIONS
(FY82)
Requirement
Microbiological
MCL
Monitoring
Number of Total
Systems with Violations Number of
Persistent^ Intermittent Violations
764
4,463
5,050
9,878
11,500
67,000
Turbidity
MCL
Monitoring
Fluorides1
MCL
All Others
MCL
153
1,137
1,350
950
8,817
249
390
15,567
1,000
7,500
1,350
950
89,300
^Monitoring is nearly 100 percent for inorganic, organic and
radionuclide contaminants.
2persistant violations reflect systems in violation more than
three months or more than one quarter. Any inorganic,
organic or radionuclide contamination is. considered persistent,
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PERCENTAGE OF COMMUNITY WATER SYSTEMS IN VIOLATION
WITH THE MICROBIOLOGICAL AND TURBIDITY STANDARDS
FY's 1980-1982
Requirement
National Total
FY 80 FY 81 FY 82
*
Microbiological
MCL 11.0 8.5 9.9
Persistent Violators1 Intermittent Violator2
FY 80 FY 81 FY 82 FY 80 FY 81 FY 82
1.0
.9 1.3
10.0 7.6 8.6
M/R 30.1 24.6 24.4
TOTAL 36.7 29.8 30.1
12.4 8.3 7.6 17.7 16.3 16.8
14.3 10.0 9.8
22.4 19.8 20.3
hJ
I
Turbidity
MCL
6.6 4.9 3.6
2.8 1.8 1.4
3.8 3.1 2.2
M/R 11.8. 10.2 13.7
6.8 5.3 10.2
5.0 4.9 3.5
TOTAL 16.8 13.9 16.3
9.5 7.0 11.6
7.3 6.9 4.7
^Persistent; In a fiscal year—more than 3 months or 1 quarter in violation
^Intermittent; In a fiscal year—less than or equal to 3 months or 1 quarter
in violation
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Attachment B
Guide to the Development of State Strategies
INTRODUCTION
State compliance strategies should ensure that all systems
which provide water comply with the National Interim Primary
Drinking Water Regulations .(NIPDWR) as mandated by the Safe
Drinking Water Act (SDWA). The approach outlined here should
result in an orderly process that improves compliance. This
document establishes both a procedure to develop enforcement
priorities and a strategy to achieve compliance by all public
water systems within each EPA Region and primacy State.
Strategy implementation will require close cooperation between
Federal, State and local governments, reflecting a common
commitment to improving drinking water quality.
Priorities
Listing and ranking noncompliant systems is central to systematic
decision-making. This process should be continuous. As systems
come into compliance and removed from the priority listing of
violators, new ones may be added due to changes in source water,
deterioration of equipment, or the quality of operation. This
ranking process will aid the ability of the primacy agency in
deciding when to act and what action to take.
DEVELOPING A STRATEGY
Each state will undoubtedly have a" different approach to the
development of a Drinking Water Compliance Strategy. There
will be a number of common elements, principal among them
the development of.criteria which can be used to rank non-
complying systems on a priority basis. Such a listing and
ranking of noncomplying systems is central to systematic
decision-making and should be continuously updated with
systems which some into compliance being dropped and systems
going out of compliance being added. This'ranking will provide
the primacy agency a priority list of systems with those which
are the most important to address listed first and those with
ma'rginal problems last.
Criteria for Action
Developing a priority list of violators is a complex
determination requiring consideration of .several factors,
including:
Type of violation - The primacy agent should clarify.
the type of violation, for example, microbiological
MCL vs. inorganic chemical MCL or monitoring
frequency vs. reporting.
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0 Degree of hazard - Both the extent of the contamination
and the potential harm resulting from the non-
compliance should be considered, (e.g., immediate
illness vs. long term health effects; and the amount
by which an MCL is exceeded). Violations posing
minimal public health hazard could receive a lower
priority.
0 Size of population affected - Greatest emphasis
should be placed on ensuring that medium and large
systems achieve compliance as they serve a larger
segment of the population and any health threat,
.-therefore affects a greater number of people.
0 Degree of recalcitrance of the water supplier -
This is difficult to determine and will require
some subjective judgment on the part of the primacy
agency. Factors to consider include:
00 falsification of data, e.g., willful incomplete
reporting or fabrication of data;
00 attitude of the water supplier, e.g., generalized
opposition to compliance with or indifference
to the law;
00 type, frequency and magnitude of violations
(persistent violations should receive higher
priority ) ; •
00 efforts, if any, by the water supplier to come
into compliance;
00 response of the water supplier to informal
compliance actions by the primacy agency;
and/or
0 The deterrent effect that action to gain compliance
from a system, including enforcement action, may
- have on other potential violators.
The most critical factor in the above list is the degree of
hazard. The primacy agency should develop a ranking of
violations taking into arronr.t tha extent of contamination
potential harm resulting -from the noncompliance.
Table A is an example of how these criteria can be factored
into a single list against which each violator may be rated.
Though Table A shows State regulation violations at the bottom
of the table they can be inserted elsewhere in the priority
listing. Many of these violations, such 25 r.onc-Gmpiiance
v-?ith a State disinfection requirement have legitimate public
health implications and could be assigned a higher priority.
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PRIORITY LISTING OF VIOLATIONS
)
EMERGENCY ACTIONS**
SERIOUS VIOLATIONS
ACUTE RISKS
Microbiological MCL/Microbiological Public
Notification Failure
Nitrate MCL/Nitrate Public Notification Failure
Turbidity MCL/Turbidity Public Notification Failure
Microbiological Monitoring/Reporting
Nitrate Monitoring/Reporting
Turbidity Monitoring/Reporting
. Radiological MCL*
Inorganic Chemical MCL*
Organic Chemical MCL*
Radiological Public Notification Failure*
Inorganic Chemical Public Notification Failure*
CHRONIC RISKS
Organic Chemical Public Notification Failure*
Radiological Monitoring/Reporting
Inorganic .Chemical Monitoring/Reporting
Organic Chemical Monitoring/Reporting
Radiological MCL I
Inorganic Chemical MCL 1+
Organic Chemical MCL f
Radiological Public Notification Failure #
inorganic Chemical Public Notification Failure t
Organic Chemical Public Notification Failure I
Public Notification for Failure to Monitor/Report
Variance or Exemption Public Notification Failure
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Table A cont
-4-
LESS SERIOUS VIOLATIONS
Failure to Negotiate a Compliance Schedule
Failure to Complete an Engineering/Economic
Evaluation as Part of an Exemption Schedule
Fluoride MCL *
Failure to Meet Deadline Set as Part of an
Exemption Schedule +
Fluoride Exemption Schedule
Incorrect Analytical Methods
Laboratory Certification Violations
STATE REGULATION VIOLATIONS
Disinfection Requirement
No Certified Operator
Facility/Operation Violations
Inadequate Chlorinator Redundancy
Others
MCL LEVELS GREATER THAN THE EXEMPTION GUIDELINES
EXCLUDES FLUORIDES
LEVELS GREATER THAN MCL BUT LESS THAN EXEMPTION
GUIDELINES
It should be noted that there is EPA and State
jurisdiction over emergencies where a significant
health risk is posed even though no MCL violation
has occurred.
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It is important to note that in the list, the priority given
an MCL violation must take into account the amount by which
the MCL is exceeded. Minimal violations which present no
immediate adverse public health hazard would receive a lower
priority than greater, more hazardous violations. [See
Guidance for the Issuance of Variances and Exemptions, Section
III, (1979).] Section III of this Guidance sets forth levels
of various contaminants which will not result in an unreasonable
risk to the public's health. A consistent enforcement scheme
would not allow MCL violations in excess of these levels.
Further, a repeated violation may receive higher priority than
a violation which just occurs once or twice. For example, on-
going failure or refusal to monitor/report would usually be
assigned higher priority than a single such violation. However,
this does not mean that a single violation should be a low priority.
A single microbiological MCL violation, for example, could have
very serious consequences and might therefore have a high priority.
Emergency Actions
A second important part of each compliance strategy should be an
action plan for addressing emergencies. These situations are
•generated when there is an imminent and substantial risk to the
public health. These actions may involve industries or individuals
that are contaminating the water source to the point that the
supplier cannot provide water that meets the standards, and there-
fore, the remedies set up in the Act for suppliers may be totally
inappropriate. Each compliance strategy should set out clearly
what will be done when emergency actions are required or anticipated
Federal responses to emergencies which threaten drinking water are
governed by Section 1431 of the SDWA. This Section provides that
the Administrator may take whatever action is necessary to protect
the public health when information is received that a contaminant
which is present in or likely to enter a public water system may
present an imminent and substantial endangerment to the health
of the public. State or local inaction is a prerequisite to EPA
emergency action. "Inaction" .is interpeted to mean either that
State or local authorities have taken no action or that the Federal
action seeks additional relief. For an in-depth analysis of what
constitutes an emergency action and when such an.action should be
brought by EPA, see attachment C.
Note: Under the emergency action section of the SDWA, Federal
action may be taken in a primacy State either where State or
local authorities have taken no action or where the Federal
action seeks additional relief. Among the situations which
may require Federal intervention are where an emergency
involves more than one State, at the request of the State, or
where the emergency involves more than one State, at the request
of the State, or where the emergency is beyond the resources
of the State, e.g., Three Mile Island.
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t
Types of Federal action which may be taken under Section 1431
include, but are not limited to, issuance of administrative
orders, civil suits, and actions for injunctive relief. Willful
violations of, or failures to comply with, administrative orders
are subject to a fine of up to 55,000 per day.
In order to determine whether Federal emergency action is
appropriate:
1. First, determine whether an emergency exists. This
requires examination of the type and degree of harm
posed to the public's health. In essence, there
must be an "imminent and substantial endangerment"
to the health of the public. See attachment C for
an in-depth analysis of this requirement.
2. Next, examine any State or local action which.has
been taken to mitigate the situation. Where an
emergency exists and no State/local action has been
taken, use of §1431 would be appropriate. Where
State/local action has been taken, §1431 may also
be used after their action has been carefully
analyzed by EPA. There is to be no "precipitous
preemption of effective state or local emergency
abatement efforts". House Committee or Interstate
and Foreign Commerce, H.R. Rep. No 93-1185, 93d
Cong., 2d Sess. 35 (1974). Section 1431 is inter-
preted to mean not that State/local action is
inadequate, but that additional avenues of public
health protection need to be pursued. Under this
interpretation, Federal and State/local action are
supplemental. Thus, duplication of effort is
eliminated, maximum allocation of resources is
achieved, and the health of the public is protected
to the maximum extent possible.
3. Finally, determinations should be made as to the
method of regaining compliance from the pollution
source or the offending system. EPA may take any
appropriate action to remedy the emergency.
Emergency actions should always be handled as expeditiously
as possible to mitigate/eliminate the public health risk. In
the event of a Federal emergency action EPA, as appropriate,
should work with the State to coordinate an appropriate response.
Acute serious violations should be handled either to bring the
system, ir.to compliance and/or minimize the public health risk so
that the violation can be handled as a chronic serious violation
(where time is available to explore the possible remedies). This
latter category is extremely important in that many of these
violations may not be subject to rapid correction. Accordingly,
these violations will probably generate a work-load associated
with exemptions, variances, technical assistance, technical
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information hearings, and legal action and may be the pool from
which the recalcitrant systems can be identified.
It is also crucial that the serious chronic violations be given
ample ti-.ely attention. A check-off system may be developed
so that this category of systems can be systematically moved
up the scale of compliance/enforcement actions. A specific
time frame that fits the local situation and available resources
should be developed and adhered to.
Routine Compliance Actions
The last category of violations that are essentially administrative
in nature,• should be addressed only after the other violations
have been addressed, except where resources allow for
simultaneous actions on all violations. Additionally, legal
and/or judicial action should be reserved for this category
of system as a last alternative except where there is the
possibility that the administrative violation may mask a
more serious violation.
Charting a Systematic Strategy
The flow chart (Table B) that follows outlines a systematic and
consistent process for using the priority ranking of violations
to evaluate noncompliance and to bring a system into compliance.
It serves as a decision tree to aid the primacy agency manager
to determine where in the ranking "each violator should fall.
For example, if a community public water system monitors and
reports a nitrate MCL violation, the primacy agency will
determine, based on the priority ranking of violations, that
such a violation is serious and presents a potential acute
health risk, the primacy agency should then act to mitigate
the health risk. .Such mitigation could take the form of
requiring public notification by the supplier and recommending
that the system supply bottled water meeting the drinking
water standards to all families with infants. The next step
is to evaluate what action is necessary to bring the system
into compliance. Where the system is cooperative and can
adequately demonstrate that immediate compliance is not
possible, the primacy agency should develop a long term
solution. The system should enter into a compliance schedule
with milestones for compliance.
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•PWS VIOLATION RESPONSE
TABLE 3
3 norths
KBLJC WOTR S*STO6
Violations Requiring
Centact uid
Evaluate
Ca^lionoe
CPticns
Pint Hi
of
Coneliance Schedules
cannot
-technical asaiatance
alternative*
-infooMticn
-training
altemati
-inrpmtiv* traauent
1 Turbidity and/or bacteriological _
> 3 aontha or 1 quarter in violation
2 loqal Action My be taken •arlier in the oaaplii
and enforoBoent procesa. Per enable, a aycten vith
a prior record of nonconpliance whioh complies for a
period and then aoain beeaet noncatpliant, ohould be
to leoal action.
Sow chronic haalth risk* aay nquire a tort fomal
Note: Wtere Utere ia final judoenent in a Icfl action,
oenerclly the aymtan vill retain aio^ect to the court'i
jurisdiction
24 eenuis
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ENFORCEMENT ACTION
Once a priority listing of violators and violations has been
created, the primacy agency should use the flow chart to aid
in deciding upon appropriate action. Responses may be selected
from a wide range of compliance and enforcement choices.
Enforcement under the SDWA is not restricted to legal action.
In the exercise of enforcement discretion, choices 'range from
a phone call to criminal prosecution. Several courses of
action can be pursued simultaneously. In some situations,
particularly with recalcitrant systems, it may be appropriate
to pursue legal action immediately. In others, a progression
of responses from informal notification through legal action
may be necessary. In still other circumstances, effective
allocation of resources and lack of seriousness of a violation
may permit enforcement action to be deferred.
Choosing among the various enforcement responses does not
require starting with the least formal action, for example,
informal notification, then proceeding through the other
options. Depending upon the facts and individual State or
Regional authorities, the initial enforcement response can be
chosen at any appropriate level. However, in general, it is
appropriate that water suppliers be given an opportunity to
comply before taking more stringent action.
Options for Compliance and Enforcement
0 Require Public Notification
As early as possible in dealing with a noncompliant public
water system, a primacy agency should require public notification
The SDWA requires public notification for all violations of
an MCL, failure to comply with an applicable testing procedure,
and when a variance or exemption is granted. Wh'ere EPA has
primary enforcement responsibility, public notice is also
required for failure to comply with applicable testing procedures
and monitoring requirements.
In analyzing the public notification provision of the SDWA,
the Congressional intent is very clear. Congress intended
that the primary vehicle for compliance would be the pressure
brought to bear by an .informed citizenry.
The primacy agency should document when a water supplier is
advised of the need for public notification. This is necessary
for future case support. Where a supplier is verbally notified
of a violation, documentation of the request for public
notification can be by a file memorandum. The primacy agency
may devise a standard method to record the giving of oral
advice. Such a system would be helpful to the office giving
the advice and would ensure a consistent record of when a
supplier is informed of the need for public notification.
Where written notice of the need for public notification is
sent to a supplier, a copy should be kept for the file.
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When public notification is required of a system, the supplier
should submit to the primacy agency proof that public notifica-
tion was done. Finally, where a system fails or refuses to
provide public notification, the primacy agency may give notice
to the public on behalf of the system.1 Agency experience is
that Regions and States have developed novel and inventive
ways of accomplishing this responsibility. Nothing in this
document should be interpreted to limit or prohibit such inno-
vation, consistent with the requirements of the SDWA.
0 Informal Notification
Informal notification can take a number of forms. Methods for
notification include: a phone call, an on-site visit/survey, a
note attached to sample bottles; and/or a warning letters/form
letters..
One of the simplist methods of informal notification is a
phone call reminding the purveyor that a violation has occurred
and that action is required on his part. Another method is to
schedule an on-site visit or a sanitary survey from a repre-
sentative of the primacy agency to inform the operator of the
problem and to ascertain whether the situation requires more
formal action. The advantage of -this method is that it is
often quick and very effective, thereby eliminating the resource
commitment required for a more formal response. Another method,
attaching a note to sample bottles which are sent to system
operators with sampling requirements and instructions, has
also proven to be useful. Several States have institutionalized
this process by a system of postcards that are computer generated
and automatically sent to purveyors when monitoring and/or
•reporting is required. Other innovative techniques and methods
are encouraged.
Warning letters can take a variety of forms and may be used
for all types of violations.2 Initially, in these letters,
the opportunity to meet with the primacy agency and discuss
compliance may be available to the supplier. If the supplier
fails or refuses to take advantage of this opportunity within
a reasonable period of time, for example thirty days, other
steps should be considered. However, even after litigation
commences, settlement negotiations may continue.
The reader is referred to the EPA publication, "Handbook on
Public Notification - June 1977' (U.S. GPO: 1977-241-037/38)
for specific nnj.dance or. details of public notification.
For a more detailed discussion, see EPA document, "Regulatory
Aspects of the Safe Drinking Water'Act - Workgroup Report" -
dated November 1977. This document can be obtained from
EPA Regional and Headquarters offices.
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These letters should also advise suppliers of the potential
penalties which could be imposed under the Act. Compliance
may be more easily obtained if attention is drawn to the
potential costs of continued noncorapliance. Finally, these
letters should require a response from the water supplier
detailing any corrective action he has taken to achieve
compliance. Several types of letters may be sent:
0 advising the water supplier of the violation and
the need for compliance;
0 advising the water supplier to apply for a variance
or exemption, if eligible;
0 ." ordering the water supplier to show cause why he
should not be subject to prosecution and penalties
for violation of the SDWA (these orders may be
issued by primacy States having the legal authority
to issue such orders); or,
0 threatening legal action if efforts to comply are
not immediately made.
The particular type of informal notification the primacy
agent uses should consider cost and effectiveness. For
example, a phone call can be very expensive when dealing
with a small water system which only has one operator who
usually is not at the facility. On-site visits could take
the better'part of a day and may. be resource intensive.
Perhaps the quickest and easiest method of informal notification
is the warning/form-letter.
0 Variance and Exemption Activities
Primacy agents.should evaluate systems which cannot comply due
to compelling factors or to the nature of the raw water source
and advised of their eligibility for a variance or exemption.
Variances and exemptions were included in the Act to lessen
the immediate impact of the regulations by giving certain
public water systems an opportunity to extend the date for
compliance with MCL and treatment technique requirements.
A public water system can request one or more variances when
the characteristics of the reasonably available raw water are
such that the system cannot meet the maximum contaminant levels
of the regulations despite the application of the best
technology treatment techniques or other means found by th-e
Administrator of EPA to be generally available (taking cost
into consideration). Granting of a variance must not result
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in an unreasonable risk to health. Within one year of granting
a variance, the primacy agency must prescribe a compliance
schedule which will bring the systems into compliance as
expeditiously as practicable.
The primacy agent may grant an exemption if a public water
system cannot meet an MCL or specified treatment technique
requirement of the regulations due to compelling factors.
These factors include, but are not limited to: the high
cost of purchasing and constructing necessary equipment or
facilities or a service community of a small number of
consumers with low per capita income. Where the cost of
treatment or other factors is excessive, an exemption from
the MCL's may be granted until January 1, 1984, or January 1,
1986 (if a systems has entered into an agreement to become
a part of a regional public water system). However, any
public water system requesting an exemption must have been
in operation on the effective date of the particular MCL or
treatment technique requirement. A system which was not in
operation by the date may be eligible for an exemption only
if no reasonable alternative source of drinking water is
available to the new system.
A request for a variance or exemption can be made upon deter-
mining that one or more MCL's are exceeded. The request for
an exemption must be fully supported and documented in order
to demonstrate the compelling reasons for .granting the exemption.
Application for either a variance or an exemption must demonstrate
that there will be no unreasonable risk to health if the .
variance or exemption is issued.
Detailed information regarding the above provisions of the Act
is contained in th-e National Interim Primary Drinking Water
Regulations, the National Interim Primary Drinking Water
Regulations, Implementation Regulations and the document
entitled, "Guidance for the Issuance of Variances and Exemptions"
- U.S. GPO: 1979.
0 Hearings
In most cases, hearings are part of another enforcement/compliance
action, i.e., they are required as part of the administrative
prerequisites to the granting of a variance or exemption.
However, hearings should not be limited to these special
cases. Ofter., when a violation occurs and the supplier is
reluctant to give public notice and/or the public notice is
inadequate/ a public hearing intended to gather technical
information can be useful in informing the affected customers
of the potential risks and appropriate costs. The hearing
brings together the primacy agency, the water supplier
and any interested users and allows technical discussion? or.
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possible corrective actions which would achieve compliance.
Likewise, this extra step can be important in the preparation
of litigation if legal action ultimately becomes necessary.
It is critical that such hearings be held so that the
primacy agency develops appropriate case support.
0 Notice of Violation by EPA
EPA normally issues a formal notice of violation to a state
after the appropriate state official is informally advised
of the program deficiencies and has not taken timely action
to'correct the noted deficiencies. EPA may issue a notice
of violation to a primacy State in two alternative instances.
First, EPA may issue a notice of violation where a primacy
State has committed an abuse of discretion in a substantial
number of cases by granting variances or exemptions or by
failing to prescribe a variance or exemption compliance
schedule. This notice identifies the problem system, gives
reasons for the abuse of discretion finding and, as appropriate,
proposes revocation of the variance or exemption or revision
of the compliance schedule. Additionally, the State should be
kept informed of the pending public administrative hearing on
the notice of violation. Within 180 days of notice to the
State, the Administrator must either rescind the notice or
issue modifications to the variances or exemptions. These
modifications are to become effective 90 days after notice
thereof to the State, unless the State takes adequate
corrective action within that time.
Secondly, primacy States and noncompliant public water systems
are subject to notices of violation for failure to comply with
any NIPDWR or with any compliance schedule issued as a condition
of a variance or exemption. EPA is to offer the State and
system advice and technical assistance, as appropriate. If,
within 30 days of notice of violation to the State of the non-
compliance, the system fails to comply or to initiate adequate
corrective action, public notice of the noncorapliance should
be made by EPA. Within 15 days of this public notice, the
State must submit a report of the action taken to bring the
system into compliance and any reasons for the State's failure
to gain the system's compliance. Based on this report, the
Administrator is to determine whether the.State action is
adequate or whether the State has abused its discretion. It
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is-an abuse of discretion where the State fails by the sixtieth
day from notice by EPA to implement procedures to bring the
system into compliance and to assure an alternative safe
drinking water source.
0 Administrative Orders
A primacy State, with appropriate State authority, may issue
administrative orders mandating that an offending system
cease violation. Alternatively, the states may, if State law
allows issue binding compliance orders and assess civil
penalties.
0 Civil Suit
The Administrator may bring a civil action against a supplier
who is in violation of the NIPDWR or of a variance or exemption.
Civil suit may be brought against a system in four alternate
instances. First, in a non-primacy State, a civil suit by EPA
would be appropriate where a system had violated the NIPDWR,
a variance or exemption. Second,' in either a primacy or a non-
primacy State, suit may be instituted upon the request of
either the chief executive officer of the State or the
appropriate State agency. Third, in a primacy State, a
civil action would be appropriate where a system is still in
violation sixty days after notice to the State by EPA and
the State has failed to submit to EPA a timely report of the
steps being taken to bring the system into compliance. Finally,
civil action may .be brought against a system in a primacy State
where the State has committed an abuse of discretion in carrying
out its primary enforcement responsibility. There will be a per
s>e_ abuse of discretion where there has been "any failure by a
State to implement by the sixtieth day [from notification by
EPA] adequate procedures to bring a system into compliance by
the earliest feasible time ..." House Committee on Interstate
and Foreign Commerce, H.R. Rep. No. 93-1185, 93d Cong. 2d Sess.
22 (1974). (H.R. Rep.). "Such a failure would constitute an
abuse of discretion whether it results from negligence, inatten-
tion, lack of adequate technical and enforcement personnel, or
from any other cause." H.R. Rep. at 23. A State's failure to
carry out properly any follow-up or enforcement procedures
necessary to achieve timely compliance would also be an abuse of
discretion.
Civil actions seeking penalties pursuant to §1414(b) SDWA may
be brought by EPA where there has been willful violation of a
variance or exemption, or a Nipnuw Ky 5
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The degree of seriousness of the violation of the NIPDWR
should be taken into account in making the decision whether
or not to bring a civil suit.
0 Criminal Action
A criminal action may be brought where a system has willfully
failed to satisfy the public notification requirements.
Criminal actions may also be brought against a system for
failure or refusal to comply with the recordkeeping, monitoring,
or reporting requirements of the SDWA.
0 Defer Enforcement Action
Effective allocation of enforcement resources and lack of
seriousness of a violation may dictate that the primacy
agency exercise its enforcement discretion in deciding to
defer action.
REMEDIES AND PENALTIES
This .section of the guidance presents the judicially imposed
remedies which may be sought and the types of remedies which may
be required in negotiating settlements. It is important that
enforcement actions seek both expeditious compliance and adequate
penalties. The penalties and remedies sought under this
guidance neither substitute for injuctive. relief or. other non-
duplicative remedies.
The current financial ability of the water supplier to achieve
immediate compliance or, within a reasonable time, to progress
toward compliance as expeditiously as practicable should be
determined. This is a practical concern to be taken into
account along with the other health risk factors—provided
the existing noncompliance does not pose a significant threat
to consumers. Factors to consider in analyzing a system's
financial situation include:
0 type and cost of treatment presently used,
e.g., addition of a chemical to the water vs.
devising of a construction or funding schedule;
0 cost of relief sought;
0 the community's ability to pay increased
utility bills;
0 possibility of regionalization or centralized
management and associated costs; and/or
0 possibility of use of other water sources.
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While State law may authorize penalties other than those
discussed in this document, this policy provides guidelines for
the selection and application of both SDWA penalties and any
additional primacy States penalties. The penalty policy is
intended to provide a strong economic incentive for rapid
compliance. In essence, the purpose of penalties is to deter
violations and encourage compliance. Violators must recognize
that penalties are not violation fees. Payment of penalties
by a system does not give any right or privilege to continue
to operate in violation of the law or to slow down compliance.
The statutory bases for penalties under the SDWA include:
0 §1414(b) which imposes a $5,000 per day civil
penalty for willful violation of a national primary
drinking water regulation, a variance or exemption;
0 §1414(c) which imposes up to a $5,000 criminal fine
for willful violation of the public notification
provisions; and
0 §1445(c) which prohibits any violations of the
inspection-reporting requirements and imposes up to
a $5,000 per day criminal fine.
The minimum penalty may be determined on the basis of the factors
set forth below. The penalty so determined may be lower than
the statutory maximum. Where the penalty sum is higher, this
figure may be used in settlement negotiations or in litigation,
but the statutory maximum is all that may be requested by the
State/EPA or imposed by the court.
Penalty factors:
0 the sum appropriate to redress the harm or risk of
harm to public health;
0 • the sum appropriate to remove the economic benefit
gained or to be gained from delayed compliance;
0 the sum appropriate as a penalty for the violator's
recalcitrance, defiance of or indifference to
requirements of the law; and
0 the sum appropriate to recover unusual or extraordinary
enforcement costs thrust upon the public..
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In calculating these factors it should be kept in mind that
civil penalties under §1414(b) of the SDWA and criminal fines
under §1445(c) of the SDWA are assessed on a daily basis. We
recognize that State penalty amounts may differ from these
penalties. Therefore, the sum arrived at as an appropriate
penalty under these two Sections must be keyed to this per
day assessment. Section 1414(c) of the SDWA does not require
consideration of daily penalty amounts.
0 Harm or Risk of Harm:
The extent to which a violation harms or poses a risk of harm
to the public health the primacy agent should be carefully
considered by the primacy agency in setting the appropriate
penalty/ e.g., a serious microbiological MCL violation vs. a
minimal turbidity violation. Of course, all violations
create some risk of harm and it may be difficult in some
cases to precisely quantify this risk or harm. The penalty
amount attributable to such harm or risk will have to be
determined on the facts and circumstances of each case.
0 Economic Benefit from Delayed Compliance:
Delaying the implementation of treatment techniques or
installation of treatment equipment can result in economic
savings or gains for a water supplier. These savings or
gains usually arise from:
0 The opportunity to otherwise invest capital not
spent on treatment (the monetary amount of this
element may be calculated on the same basis as is
done und.er the Clean Water Act - P.L. 92-500) and/or
0 the avoidance of operation and maintenance expenses
(figures for calculating benefit from delayed use
of treatment techniques or installation of equipment
are readily available in the literature).
This factor should be used as a guide to determine the appropriate
penalty. In some instances, often with very small systems, there
will have been no economic benefit to noncompliance. Thus,
although this factor should always be analyzed to determine its
applicability, it is not a required element of a penalty.
0 Recalcitrance, Defiance of, or Indifference to the Law
Good faith efforts to obey the law are expected of all subject
to the Act and regulations. Except as provided below under
"Mitigation", assertions of good faith should not be considered
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as a basis for reducing a penalty. Courts traditionally
consider the degree of the violators recalcitrance, defiance,
purposeful delay or indifference to legal obligations in
setting penalties. It is important that, where appropriate,
these factors be considered in calculating penalties.
0 Extraordinary Costs
Unusual or extraordinary enforcement costs may be taken into
account in calculating a penalty, where appropriate. Where,
for example, a water supplier fails to notify the public and,
as a result, the primacy agency must undertake such notification
to protect the public's health, then the costs for this
notification should be considered. Extraordinary costs may be
sought pursuant to'both the penalty provisions of the SDWA
and the general equity powers of a court.
0 Mitigation
This factor involves consideration of whether the system is
demonstrating good faith by entering into and following a
compliance schedule designed to obtain compliance as
expeditiously as practicable.
The appropriate sum for- each of the four penalty factors
should be determined and added together. Thereafter, the
appropriate sums reflecting the mitigation factor should be
subtracted. The balance reflects the penalty amount which
should be sought, assuming the total is less than or equal to
the statutory maximum.
One additional consideration is the collection of penalties
where a system may be unable to pay. In such a case, the
reasons for inability to pay must be carefully scrutinized.
Depending on the facts and circumstances of each case, the
following alternatives may be considered:
0 seek the. full penalty; (a lien on the supplier's
property may also be sought so that a recorded
judgment will be had and recovery assured); and/or
0 recommend that a time payment arrangement be made
(a lien may also be sought here); or
0 recommend that the penalty be postponed or forgiven
in part or in toto.
This is particularly important with respect to small systems
where the calculated penalty may be disproportionate to the
resources of the sstem.
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Attachment C
Guide to Bringing Formal Enforcement Action
Under the Safe Drinking Water Act
(Legal Interpretation of Section 1431)
Emergency actions under Section 1431 of the SDWA (Section
1431) are an important enforcement tool. One of the primary
goals of the SDWA is prevention of contamination of drinking
water supplies. Another objective is elimination of con-
tamination to the extent possible once it has occurred.
Where there is an emergency or potential emergency, this
Section provides guidance on the quickest, most effective
method of achieving these goals. This guidance is primarily
a legal interpretation of Section 1431, its legislative
history and recent case law designed as a resource document
for legal personnel. It describes the circumstances under
which it is appropriate to commence an emergency action and
how to assemble the necessary elements of proof.
When there is an identifiable source of contamination
near a water supply, e.g. a hazardous waste site or an
industrial plant, EPA has the responsibility and the means
of preventing the contamination. Because of the importance
of protecting the public health, and given the high costs of
removing contaminants, the most economic method of handling
these problems, both in terms of monetary cost to society
.and the limited Agency resources, is to stop the contamination
at its source before it enters the water supply.
In the past, lack of information and apparent institutional
obstacles (e.g. the assumed need' to allege lack of protection of
the public health by the State) have resulted in the under utili-
zation of this provision. The preparation by the Agency and the
States of hazardous waste site inventories and compilation of
other useful facts has greatly reduced the information problems.
As will be described below, the SDWA has never required that EPA
allege that the State is failing to do its duty before EPA can
use the emergency provision. In fact, a greater use of this
power should lead to greater cooperation between the States and
EPA. Neither the States nor EPA alone necessarily have sufficient
resources to handle emergency situations. Section 1431 provides
a mechanism whereby resources can be applied jointly to the most
serious and immediate public health problems.
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In order to initiate a S1431 action (either a civil
action or an administrative order), six major elements must
be present:
1. The appropriate State and local authorities must
not have already successfully obtained the same
remedy EPA is seeking, and that remedy is necessary
to prevent an endangerment to the public health;
2. there must be a contaminant;
3. that contaminant Bust be present in or likely to
enter a public water system; "
4. that contaminant must be a substance that may
present an 'imminent and' substantial endangerment
to the health of persons";
5. there must be something that can be done to remedy
or ameliorate the situation, (i.e. appropriate
relief); and,
6. there must be an appropriate defendant.
1. State and Local Authorities Have not Acted
This element is one of the most misunderstood requirements
of the SDWA. First, there has been an overly literal inter-
pretation of the meaning of the words used in the statute ("that
the appropriate State and local authorities have not acted to
protect the health of such persons. ..." S1431(a) SDWA, 42
U.S.C. 5300(a). Second, the requirements must be understood
within the intricate State/Federal relationship established by
the Act. A study of the statute, its legislative history, and
the statutory enforcement framework leads to a reasonable
interpretation that the Federal emergency action simply must
not be completely duplicative of a local or State action.
'The plain meaning of the language is that there must be no
actions already taken by the State or local authorities, or if
an action has been taken, the Federal action must be seeking
additional relief which will protect the public from the
contamination in question. Shaff, The Emergency Powers In The
Environmental Protection Statutes; A Suggestion For A Unified
Emergency Provision, 3 Harv. Env. L. Rev. 298, 304 (1979).
(Emergency Powers). Under this interpretation EPA need not
allege or prove that the State is failing to do its duty,
i.e., protecting the public health (although clearly if that
is the case EPA may act). Quite the contrary, the legislative
- 2 -
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history unequivocally indicates that the provision was intended
only to prevent EPA from "precipitous[ly] preempt[ing] . . .
effective State or local emergency abatement efforts." House
Committee on Interstate and Foreign Commerce, H.R. Rep. No.
93-1185, 93d Cong., 2d Sess. 35 (1974). (1974 House Report).
Where a State is not seeking the remedy sought by the United
States, no such preemption of ah abatement effort is possible.
However, when the State or local authority does not take
action "in a timely fashion or [even if actions are taken but
they] are not effective to prevent or treat the hazardous con-
dition, this provision should not bar enforcement by the Adminis-
trator." id. at 35 (emphasis added). The Congressional Reports
and floor debates support the view that Congress included this
language in S1431 (and added certain procedural prerequisites
before allowing Federal enforcement in a primacy State) simply
to avoid duplication between Federal and State enforcement and
to preserve the primary responsibility for protecting the public
at the State and local level, id. at 22-23,35, Senate Committee
on Commerce, S. Rep. No 93-231, 93d Cong., 1st Sess. 9, 10 (1973)
(1973 Senate Report); 120 Cong. Rec. H 10789, H 10793-94; (daily
ed. Nov. 19, 1974); 120 Cong. Rec. S20241-42 (daily ed. Nov. 26,
1974).
Not only does the Act not require an adversarial relationship
between the State and EPA for EPA to bring an emergency action,,
but 51431 mandates cooperation and consultation to the extent
feasible. Emergency Powers, supra, at 305. Section 1431(a)
explicitly states that:
[t]o-the extent [the1-Administrator]
determines it to be practicable in light
of such imminent endangerment, he-shall
consult with-the•State and local authori-
ties in order to confirm the correctness
of the information on which action
proposed to be taken under this sub-
section is based and to ascertain the
action which such authorities are or
will be taking." (emphasis added).
Additionally, the SDWA establishes a "joint Federal/State
system . . . protecting underground sources of drinking water."
1974 Bouse Report, supra, at 1, 8; 120 Cong. Rec. H10794 (daily
ed. Nov. 19, 1974). The House Committee expressed the "hop[e]
that State and Federal cooperation will be the rule." 1974 House
Report, supra, at 21. In reviewing the Act in 1979, the Senate
Committee described it as requiring the "development of an effec-
tive enforcement program in cooperation with State governments."
Senate Committee on Environment and Public Works, S. Rep. No.
96-161, 96th Cong., 1st Sess. 3 (1979) (1979 Senate Report).
- 3 -
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The Act's joint Federal/State enforcement scheme is also
expressed in 51414(a) which permits EPA to enforce drinking water
regulations, variances, and exemptions even in primacy States.
Also, $1414(b) specifically authorizes EPA to bring an enforcement
action when requested to do so by the Governor of a State or the
State Agency which regulates drinking water. The legislative
history of that section states that a lack of adequate technical
and enforcement resources is sufficient to justify Federal action.
1974 House Report, supra at 22-23. The legislative history of
51431 contains no similar statement, but clearly where there is
an emergency situation and the State's resources are overburdened,
it would be foolish to withhold from EPA the power to remedy the
problem.
This is particularly true when the emergency action is
directed against the source of the contamination rather than
against a water supplier, since the other enforcement provision
(S1414(b)} does not cover sources of pollution and does not
provide authority for States to bring an emergency action. The
.House Committee inferentially supported this interpretation by
stating that it was "conferling] completely adequate authority to
deal promptly and effectively with emergency situations which
jeopardize the health of persons." id. at 35.
In sum, the emergency action Section provides another
mechanism for cooperative Federal/State enforcement. It allows
the Federal government to assume some of the burden of bringing
an enforcement action.
2. Contaminant
The terra contaminant is broadly defined in Section 1401(6),
42 U.S.C. 5300f(b) as:
any physical, chemical, biologial or
. radiological substance or matter in water.
The breadth of this definition is even greater because
the protection of the public health is a "fundamental personal
interest in life, health and liberty . . . [which has] a special
claim to judicial protection in comparison with the economic
interests . . . ." EOF v. Ruckelshaus, 439 F.2d 585, 598 (D.C.
Cir. 1971) (in reviewing an administrative order concerning a
pesticide); EDF v. EPA, 465 F.2d 528, 538 (D.C. Cir., 1972)
(particularly when carcinogens are involved); Certified Color
Mfgs. v. Matthews, 593 F.2d 284, 297-298 (D.C. Cir., 1976) (in
upholding FDA's termination of a provisional listing of certain
food colorings). See generally, Virginia Petroleum Jobbers Ass'n
v. FPC, 259 F.2d 921, 925 (D.C. Cir. 1958); U.S. v. Nutrition
Service, Inc., 234 F.Supp. 57b, 57y (W.D. Penn., 1964). Since
the emergency provision is intended to cover "potential.hazards
presented by ... unregulated contaminants" the term
"contaminant" must be defined broadly.' 1974 House Report
supra, at 35.
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Congress enacted the SDWA in direct response to the discovery
of organic compounds in drinking water. Bauro, Drinkina Water
Chlorination and the Regulation of Organics, 3 Harv. Env. L.Rev.
399, 400, 403 (1979).Among situations considered by Congress, a
substantial endangerraent was the exposure to a carcingenic agent.
id. at 36. This view is underscored by the many references in the
legislative'history to the discovery of carcinogens and potential
carcinogens in an ever-increasing number of water supplies. 1974
House Rep./ supra, daily 6, 10-11, 35; 120 Cong. Rec. H 10789,
H 10793-94, H10798-99, H 10801-02 (daily ed. Nov. 19, 1974); 120
Cong. Rec. S20240 (daily ed. Nov. 26, 1974). This concern was
reiterated and strengthened 'in subsequent Congressional reviews
of the SDWA program. House Committee on Interstate and Foreign
Commerce, H.R. Rep. No. 96-186 at 4-6, (1979) (1979 House Report);
1979 Senate Rep., supra, at 3.
Congress has thereby provided a clear mandate to the Agency
to use this Act in dealing with a wide range of contaminants
including hazardous wastes.
3. Contaminant In or Likely to Enter a Public Water Supply
The language of the Act is plain on its face, a contaminant
does not have to be present in a drinking water supply but only
be 'likely to enter a public water system . . . ." This language
has been interpreted as .covering threatened discharges. Emergency
Powers, supra, at 302, n.26 and n.27. The legislative history
strongly emphasizes the point by stating that:
1. the emergency administative "orders may be issued to
obtain relevant information about impending . . . emergencies."
(emphasis added);
2. such orders may be issued "to prevent a hazardous
condition from materializing . . . .* (emphasis added);
3. the section should be used "early enough to prevent the
potential hazard from materializing . . . ." (emphasis added);
'4. EPA may use the section when "there is.an imminent
likelihood of the introduction into drinking water of contam-
inants." (emphasis added). (All of the above quotes are from
1974 House Report, supra, at 35-36);
5. "the Act requires that EPA adopt a preventive health
posture in regulating contaminants. With chemicals whose side
effects may not become manifest for a generation after exposure,
this means regulations cannot be withheld until danger is
conclusively proven . . . (particularly for organic chemicals]
. . . .• 1979 Senate Rep., supra, at 3.
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The above interpretation is also dictated by the practical
necessities of the hydrology of groundwater, e.g.:
In as much as 40 percent of the population
derives drinking water from groundwater
sources, pollution is of significant
concern, not only from a public health
standpoint but also from an economic
standpoint .... Once an aquifer becomes
polluted, recovery from that pollution is
usually slow, because of the generally slow
rate of groundwater movement through the
aquifer. Hence, groundwater pollution nay
be considered a serai permanent condition,
perhaps lasting for years after the source
has been located and the pollution stopped.
United States Water Resources Council. The
Nation's Water Resources - 1975 - 2000 at 64
(emphasis added.); cited in 1979 House Rep.,
supra, at 5-6, see also, Tripp and Jaffe,
Preventing Groundwater Pollution; Towards
a Coordinated Strategy to Protect Critical
Discharge ZonelT3 Harv. Env. L.Rev.T~,
3-9 (1979).
The House Committee, citing this report, the growing
hazardous waste problems, and the established principles of
hydrology directed the Agency to protect underground sources of
drinking water, particularly from organic chemical contamination.
1979 House Report, supra, at 5-6; see also 1979 Senate Report,
supra, at 3. Specifically, the Committee called for "full and
vigorous implementation of its authorities under its hazardous
'waste program of ... the Safe Drinking Water Act . . . ." 1979
House Report, supra at 6; see also 1979 Senate Report suora at
•3. ' ' . '
In sum, the uncontradicted purpose of the Act in general
and the emergency provision in particular is to avoid allowing
water supplies to become contaminated.
4. May Present an Imminent and Substantial Endangerment
This element of an emergency action has several discrete
subparts:
A. A contaminant "may", not will, endanger;
fc. the endangerment must be imminent; and,
c. the endangerraent must be substantial-
- 6 -
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The meaning of the phrase, therefore can best be understood by
.analyzing its component parts. Emergency Powers supra at 312.
These terms mus-t also be interpreted with the preventive nature
of the statutory scheme (see discussion above) and the strong
emphasis on the control of organic chemicals, especially
carcinogens, in mind. (see, Contaminants, above). As Justice
Frankfurter directed, •[s]tatutes . . . are instruments of '"
government, and in constructing them, the general purpose is a
more important aid to the meaning than any rule which grammar or
formal logic nay lay down .... This is so because the purpose
of an enactment is embedded in its words even though it is not
always pedantically expressed in words." United States v.
Shirey, 359 U.S. 255, 260-61 (1958)'(emphasis added.). Also,
the courts must understand that *{w]hen Congress undertakes to
act in areas fraught with medical and scientific uncertainties,
legislative options must be especially broad and courts should be
cautious not to rewrite legislation even assuming, arguendo, that
'judges with more direct exposure to the problem might make wiser
choices." Marshall v. United States, 414 U.S. 917, 727 (1974)
(emphasis added).
Even more than recent environmental and public health
statutes, Congress intended this Act to be "construed broadly
by the courts so as to give paramount importance to the objective
of protection of the public health.' 1974 House Report, supra,
at 35 (citing United States v. United States Steel, Civ. Act. No.
.71-1040 (N.D. Ala. 1*71) at 32; at 23 (in discussing §1414 (b));
at 120 Cong. Rec. H10794 (daily ed. Nov. 26, 1974). Congress
specifically rejected the limited interpretation of when in-
junctive relief was available that the Eighth Circuit took in
the Reserve Mining Co. v. U.S., 514 F.2d 518. 120 Cong. Rec. H
10793 (daily ed. section on Appropriate Remedies). see page 10
this memorandum
A. Contaminant May Endanger
The original Senate version of the emergency provision used
the phrase "a constituent . . . will 'result in a serious risk to
health . . . .' 56 (a) of S. 433 as reported in 1974 Senate
Report, supra, at 24. In the final version, Congress chose the
probabilistic word "may" rather than the deterministic term
"will." The plain meaning of the language change is that EPA need
only prove that the contaminant may be an endangerment, not that
it will be an endangerment. In interpreting why the word "may"
instead of "will" was chosen the House Report states:
The words used by the Committee were carefully
chosen. Because of the essential preventive
purpose of the legislation, the vast number of
contaminants which may r\eed to be regulated,
and the limited amount of knowledge presently
- 7 -
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available on the health effects of various
• contaminants in drinking water, the committee
did not intend to require conclusive proof
that any contaminant will cause adverse health
effects as a condition for regulation of a
suspected contaminant. Rather, all that is
required is that the Administrator make a
reasoned and plausible judgment that a con-
taminant may have such an effect. 1974 House
Report supra, at 10. (emphasis added).
Although the House Report was discussing the definition of an
MCL, since Congress used the identical word in a similar context,
under general statutory interpretation rules, it is presumed
that the same meaning was intended. Certainly, such ah
interpretation is consistent with the purpose of the provision.V
The House Report also specifically stated that in determining
whether there may be an adverse health effect, EPA could use
epidemiological, toxicological, physiological, biochemical or
Statistical studies or research (including studies on the effects
on animals). id. at 10. Even extrapolations of such research and
studies or a professional -judgment based on the known behavior of
analogous contaminants or the same contaminant in other media
could be used. id. at 10.
Given this history and the explicit rejection of the holding
in the Reserve Mining case, it is clear that Congress intended
that the traditional (and, in modern scientific analysis, out-
moded) concept of causation be rejected. See Kraus, Environmental
Carcinoaenesis: Reaulation on the Frontiers of Science, 7 Env. L.
B3, 104-11 (1976)(Kraus); Ethyl Corp. v. EPA, 541 F.2d 1, 28
(D.C. Cir. ) e_n bane, cert, denied 426 U.S. 941 (1976); Emergency
Powers, supra, at 315;. 1979 House Rep., supra at 4.
"Endangerraent" is composed of reciprocal elements of risk
and harm, or probability and severity. See Ethyl Corp. v. EPA/
541 F.2d., at 18 (in interpreting the language "will endanger" in
the Clean Air Act); Carolina Environmental Study Group v. United
States, 510 F. 2d 796, 799 (D.C. Cir. 1975); Reserve Mining Co.
v. EPA, 514 F.2d at 519-529 (8th Cir., 1975)Tr~Emergency Powers,
supra, at 313. Public health may properly be considered endan-
gered both by a lesser risk of a greater harm and by a greater
risk of lesser harm. What constitutes an endangerment will
ultimately depend on the facts of each case. Ethyl Corp. v. EPA,
510 F.2d, at IB; Emergency Powers, supra, at 315.
legislative history of the Act uses the term regulation
and regulatory authority broadly. See 1974 House Report, supra,
at 35-36 which states that an emergency action is used to regulate
a source ot contamination^
-.8 -
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In Reserve Mining, the Eighth Circuit interpreted "endanger"
in the Clean Water Act's emergency provision as not requiring a
showing of actual harm. A showing of evidence of potential harm
w,as held to be sufficient.^/ See also, United States v. United
States Steel Corp., Civ. Act. No. 77-1041 (S.D. Ala. Nov. 16,
1971) (discussed in Emergency Powers, supra, at 313 n. 99);
ajid Kraus, supra, at 100-111.) AS the Court stated in Reserve
Mining;
Congress used the term "endangering" in
a precautionary or preventive sense, and,
therefore, evidence of potential harm as
well as actual harm comes within the
purview of that term. We are fortified
in this view by the flexible provisions
for injunctive relief which permit a court
to enter such judgment and orders
enforcing such judgment as the public
interest and the equities of the case may
require. Reserve Mining Co. v. U.S., 514
F.2d at 528 (emphasis added).\
The court in the Ethyl case felt that requiring actual harm
.to meet a standard of "endangerment" to persons would frustrate
the preventive purposes of environmental legislation. 510 F.2d at
28. Clearly, "(w)ith chemicals whose side effects may not beco-e
manifest for a generation after exposure, this means regulations
cannot be withheld until danger is conclusively proven." 1979
Senate Report, supra, at 3. Therefore, the endangerment element
only requires proof of the risk of harm, not actual harm.
Emergency .Powers, supra, at 315.
B. ''Imminent
The risk of harm-must be imminent not the harm itself for the
Agency to act. 1974 House Report, supr'a, at 36. Thus, §1431 may
be used if there is an "imminent" likelihood that contaminants
which may cause health damage even after a period of latency are
dicta without any discussion or analysis the Court also
stated that "the terra endangering. . . connotes a lesser risk of
harm . . . than the phrase imminent and substantial endangerment
to the health of persons as us'ed by Congress in the 1972 amend-
ments to the FWPCA. 33 U.S.C. S1364.- 514 F.2d at 528 (emphasis
added). This judicial opinion was decided after the SDWA was
passed. Therefore, Congress could not have incorporated this
interpretation into the SDWA. In fact, Congress rejected the
Eighth Circuit's earlier opinions in this case. 120 Cong. Rec.
H10793 (daily cd. Nov. 19, 1974). See discussion of Reserve
Mining, infra, under Appropriate Relief.'
- 9 -
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introduced into drinking water, id. at 36. This is a change fro-.
the common law approach and is necessary to enable action before
people actually get sick or are otherwise harmed.
In construing the term 'imminent' the Agency may also
consider the time it may take to prepare orders, commence and
complete litigation, and to implement and enforce administrative
or court orders, id. A hazard, therefore, may be 'imminent' even
if the contaminant will not enter the water supply for many years,
if time is needed to implement corrective action under 51431.
id. at 35-36. See also, EDF v. Ruckelshaus, 439 F.2d 584, 597
(D.C. Cir. 1971} (accepting a similar definition in a statute
regulating pesticides).
The term 'imminent" is related to the probability that harm
will be set into motion (as opposed to already being manifest)
within a certain time frame. The recognition by Congress that a
risk of harm may be considered 'imminent', even though the harm
itself may be latent, is a necessary element for enforcement under
the Safe Drinking Water Act, otherwise the Agency could never
prevent carcinogens from contaminating water supplies.
C. Substantial Endanqerment
•Substantial,' for purposes of the SDWA, includes risks of
harm which are greater than de minimis. 1974 House Report supra,
at 3.5; Emergency Powers, supra, at 315. What Congress meant to
exclude by the term "substantial" are insignificant, negligible
or speculative risks of injury or illness. This interpretation
is supported elsewhere in legislative history of this and other
statutes. Administrative and judicial implementation of emergency
authority must occur sufficiently early to prevent the potential
hazard from materializing, or the Agency's regulatory tasks
becomes meaningless. 1974 House Rep.'at 35, 36.
•Substantial endangerment' specifically includes: a) a sub-
stantial likelihood that hazardous contaminants will be ingested
by consumers if preventive action is not taken; b) a substantial
statistical probability that disease will result from the presence
of contaminants in drinking water; or, c) the threat of substan-
tial or serious harm (such as exposure to carcinogenic agents or
other hazardous contaminants). . 1974 House Report, supra at 36.
5. Appropriate Relief *
There are two mechanisms for obtaining relief under the
emergency provision: an administrative order issued by the Agency
or a judicial order issued by a court in a civil action.^/ These
^/ Under §1431, the Administrator may take such actions as he
may deem necessary . . .• and he is "not limited to . . . • admin-
istrative orders and civil actions. Exactly what actions this
additional authority encompasses will not be discussed here.
- 10 -
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The court's decision in Reserve Mining
has prompted a third question, whether it
is proper to resolve all uncertanties in
favor of public health where substantial
economic costs would be imposed to meet
standards of questionable necessity ...
the court did not say that resolving
uncertainties in favor of health protec-
tion is impermissible. Rather it said:
*. . . the district court's determination
to resolve all doubts in favor of health
safety represents a legislative policy
judgmenti not a judicial one." [498 F. 2d
at 1084]
Whatever Congress1 intent was in passing
the Refuse Act I have no doubt that
•subcommittee and the committee have made
'just such a legislative policy judgment
in the Safe Drinking Water Act. .. . Cost
is not to be considered. . . in enforcing
the [Act's] requirement. ... We must
recognize that there now exists very
little evidence on the health effects
of contaminants in drinking water.
What there is is often inconclusive and
inconsistent. But in my view, we cannot
afford to wait 20 years for health
effects research to be completed ....
If there are uncertainties, they must be
resolved on the side of protection of
health. 120 Cong. Rec. H107y3 (daily ed.
Nov. 19, 1974). (emphasis added). (Mr.
Rogers, Chairman- of the -Subcommittee
reporting the bill and floor leader)
Congress also specifically expressed its desire that a
different result occur in SDWA cases by using different, less
restrictive language than is used in the Clean Water Act's
emergency provision. 120 Cong. Rec. H 10794 (daily ed. Nov. 19,
1974). The Administrator was directed to seek such injunctive
relief as may be necessary to protect the health of persons.
1974 House Rep., supra, at 35. Congress underscored this position
by clearly stating that uncertainies should be resolved in the
favor of the protection of the public health.
To argue that a court should wait until a contaminant is
actually detected in the water supply before issuing a mandatory
order to the source of contamination is not only contrary to the
plain language of the statute and the legislative history, but
implies that the only effective remedy is precluded. In general,
- 12 -
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orders may be issued sequentially or independently. If an admin-
istrative order is issued and willfully violated or there is a
•willful refusal to comply, EPA nay initiate a civil action to
enforce the order or it may seek criminal penalties of up to
55,000 per day. Section 1431(b), 42 U.S.C. S300i(b).
Such orders can require any "actions as [EPA]. . . may
deem necessary in order to protect the health of such persons."
Section I431(a), 42 U.S.C. 300i(a). The legislative history
specifically states that these orders may be issued:
to obtain relevant information about
impending or actual emergencies, to
require the issuance of notice so as to
alert the public to a hazard, to prevent
a hazardous condition from materializing,
to treat or reduce a hazardous situation
.once they have arisen, or to provide
alternative notice safe water supply
sources in the event any drinking water
source which is relied upon becomes
hazardous or unuseable." 1974 House
Report, supra, at 35; Emergency Powers,.
supra at 320 n. 137 (emphasis added).
The remedies available under this section are, therefore,
extremely broad. They fall into two basic categories: those
directed at water suppliers and those directed at the source of
contamination. Those actions directed at the contamination source
are particularly important, since the purpose of the Act is to
prevent health-problems.
Generally, and particularly with regard to actions against
the sources of.contamination, vigorous and preventive remedies -
should always be sought. It should be noted that despite the
precautionary and preventive definition of endangerment adopted by
the Eighth Circuit in the Reserve Mining case the Court in that
case refused to uphold the district court's order to shut down
Reserve Mining's, plant because the economic consequences of such
a shut down (a loss of 31,000 jobs and millions of dollars to the
local economy) outweighed the risk of harm from asbestos fibers in
the water. Reserve Mining Co. v. EPA, 514 F. 2d at 536-537. The
Court used the traditional balancing test, i.e. weighing the
unpredictable health effects versus the social and economic
consequences of closing a plant, id. at 536. Nevertheless,
Congress, in passing the SOWA, specifically discussed the holding
^ _ D >»»->« «-»•«> u**»«>*-» «—.J «*«»*i»*A»4 »• K a «• >*mn*>^e
case, e.g.: .
- 11 -
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courts should not impute to Congress a futility inconsistent with
tne great design of this legislation. United States v. Republic
Steel,. 362 U.S. 482, 492 (1960) (in inferring that the Rivers and
Harbors Act provided a civil remedy); Wyandotte Transportation Co.
v. United States, 389 U.S. 191, 203 (1974) (in interpreting Rivers
and Harbors Act as allowing recovery of removal costs). In many
SDWA emergency actions, particularly hazardous waste site cases,
the major concerns of the Eighth Circuit in Reserve Mining,
i.e. the loss of jobs from a plant closing, will not arise since
either a plant shutdown will not be necessary or a waste site is
involved, not an industrial facility.
For the above mentioned reasons, a preliminary
injunction should be more easily obtainable under the SDWA.
The legislative history behind the Act specifically rejects
the traditional balancing tests that the courts have adopted in
preliminary injunction cases. Congress has determined that the
balance must be struck in favor of minimizing the risk of harm to
the user of the water supply. Courts are directed to give "utmost
of the public health." 1974 House Report, supra, at 23.
6. Potential Defendants
Obviously, 51431 covers the owners and operators of water
supplies. However, S1431 by its language can be used against any
person who is or potentially may contaminate a drinking water
supply. The legislative history explicitly includes within the
reach of this section, State or local governments., State or local
officials, owners or operators of underground injection well,, area
or point source, pollutants, and "any other person whose action or
inaction requires prompt regulation to protect the public health."
1974 House Report, supra, at 35. The floor debate in the House
discussed extensively the Reserve Mining case where a point source
discharge contaminated a water supply with asbestos fibers and
.concluded that the SDWA would apply in such a case. 120 Cong.
Rec. H 10793 (daily .ed. Nov. 19, 1974). When recently reviewing
the SDWA both the Senate and House Committee specifically directed
EPA to use all its authorities under the SDWA to address the
problems of hazardous waste sites. 1979 House Report, supra,
at 6, and 1979 Senate Report, supra, at 3.
In summary, this section of the Act may and should be used
against any existing or potential source of contamination.
7. Elements of Proof
-The mainstay of legal proof in a S1431 preliminary injunction
action is the affidavit. An affidavit is a declaration in
writing, under oath, sworn to or affirmed by the person making
it before some person who has authority to .administer an oath.
- 13 -
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e.g., a notary. Affidavits are to be made by persons who know
the; facts from first hand experience and have the legal ability
to make an oath, i.e., they are over the legal age and are not
mentally disabled. The affidavit presents to the court prima
facie evidence of an emergency condition that requires emergency
action under $1431. The language of each affidavit must be
tightly written. Within ten (10) days of filing its pleadings
and moving for a temporary restraining order (TRO), EPA must.be
prepared to present witnesses in support of each element of each
affidavit filed. The affidavits can be from non-governmental
persons. -
Ordinarily, the person with overall responsibility in the
case will present affidavits describing the facts of a violation
presenting an emergency. Those subordinates with direct responsi-
bility for fact gathering and field analysis must be prepared to
testify as witnesses in support of the affidavits at any hearings
which will ensue. Care must be taken to safeguard that evidence
is admissible at any hearings. Affidavits should contain the
following elements: - ...
1. Identify the person giving the affidavit; name,
position, experience/ credentials, etc.;
2. Enumerate all facts, scientific, technical, and
the source of these facts, e.g., "I observed that no chlorinator
was installed by the plant, or "lt]he ovner (or employee) of the
water supply stated that there never has been" a chlorinator
installed", etc.
3. Enumerate all professional opinions and conclusions
pertinent to the emergency condition and within the expertise of
that person. The affidavit should relate the opinions to the
facts, (e.g., Since the benzene waste I observed was at the site
for several years according' to the workmen at the site and, given
the hydrology of the area, I conclude that benzene has probably
migrated within 400 feet of the well (aquifer or reservoir).
From ray knowledge of the geology and hydrology of this area and,
given the normal migration process, I am of the opinion that the
benzene will reach and contaminate the water supply within one
year if nothing is done). Care should be taken that experts give
opinions only on matters within their expertise.
8. Conclusion
The purpose and legislative history of the SDWA, the prior
case law, and practical considerations support 2 strong preventive
interpretation of Section 1431. This interpretation emphasises
the paramount importance of protection of the public health.
Health' studies that raise a reasonable medical concern about a
chemical or are indicative that a chemical-is a carcinogen may
- 14 -
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be used to determine whether there is an "imminent and substantial
endangerroent." All that is necessary as discussed above is the
risk of harm rather than actual medically proven harm (in the
traditional sense). Of course, a detailed description of the
outer contours of what constitutes an "imminent and substantial
endangerraenf must await the development of an extensive case
law.
- 15 -
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
JA.'i ? I :o-3/!
•»•. '•« w-r
OFFICE OF
MEMORANDUM ^ WATER
SUBJECT: wJ^eF Su^nay/guidance on Expired Exemptions
FROM: Victor JA Kimm, Director
Office jof Drinking Water
TO: Regional Drinking Water Branch Chiefs
Regions I - X
This document should be filed in Chapter VI - Variance
and Exemption Guidance, Compendium of Water Supply Guidance
for the Public Water System Supervision Program. It addresses
the expiration of exemptions under Section 1416 of the Safe
Drinking Water Act, as amended (42 U.S.C. §300f et seq.)
and explains how to work with systems whose exemptions
expired on January 1, 1984. This guidance is offered to
states with primary enforcement responsibility and EPA
Regional Offices that have issued exemptions where states do
not have primacy. For the purpose of this document, Regional
Offices and states with primacy will be collectively referred
to'as the "primacy agent'."
Section 1416 authorizes exemptions for public water
systems that are unable to comply with a maximum contaminant
level (MCL) or treatment technique requirement due to compelling
factors such as economic constraints. Economic constraints
may include the cost of purchasing and constructing necessary
equipment and facilities and/or the low per capita income
and small number of residents in a community served by the
system. An exemption may be granted only if it will not
result in an-unreasonable risk to health.
According to the Act, a compliance schedule must be
prescribed with every exemption to the National Primary
Drinking Water Regulations (NPDWR's). Exemptions to the
Interim NPDWR'S must require compliance with MCL's or treatment
techniques no later than January 1, 1984. If a system has
entered into an enforceable agreement to become part of a
regional public water system, the schedule must require
compliance no later than January 1, 1986. In addition, exemptions
may not be issued after January 1, 1984, unless the system
has entered into an enforceable agreement to join a regional
system.
VI-26
-------
Congress is now considering legislation (H.R. 3200,~the
E ck art B 111 k_;to --grant Tia^r-epcieise zto those-asy s tejtis:
exemptions h.a^e:rexpired- ^bu.t-i-feris^uncle.a.r; w.hgra
will be granted.. Systems, that -are .^nqt ^•i^.r-corap
the MCL' s;.or. ^treatment techniques . and-~wh.oseJ,exem,ptiQn'S:-
expired are .. in-:v-iolation: of the.. Act:. . ~e.ur :latest-~rep©.rt ::(-see ~~
attached) indicates that 393 exemptions:.)*©. thel£nfeec:yfc-N;PI>WR\-;5
remain outstanding as of January 1, 1984.. Primacy agents
should take the following actions as soon as possible:
(1) If necessary to determine the compliance status,
survey the systems that have been granted exemptions
to determine their compliance status (e.g., whether
the systems are becoming part of a regional system) .
Report to the US EPA Regional Office on the compliance
status of systems that had been given exemptions
and update that report with quarterly reports on
changes in compliance status. Regional reports on
the compliance status should be forwarded to USEPA
Office of Drinking Water by February 15, 1984,
with updates submitted quarterly after the initial
.report.
(2) Inform the systems that their exemptions have
expired, that they are in violation of the Act and
that they may ±>.e subject to enforcement action;
(3) In addition, under section 1414 (c) of the Act,
notify the systems that they must notify the persons
they serve of any violation of an MCL;
(4) .Encourage systems to «nter into regional ti.e-in
agreements where feasible;
each system which is not in compliance, and
consider judicial or administrative actions as
appropriate. "•"''.'.
Primacy agents should follow their respective compliance
strategies to bring their systems into compliance. The fact
that the systems may be out of compliance due in part to the
expiration of an exemption allows the exercise of discretion
and case-by-case evaluation of any non-compliance. Compliance
strategies may dictate a variety of responses including
enforcement action 'in some cases = An effective compliance
strategy should place great importance on the magnitude of
the health 'risk arising from each violation and the ability
jDf the system to come into compliance. Enforcement action
"against these, systems should be carefully weighed, against vi-27
-------
-3-
other enforcement priorities. We expect you to work with
each system to bring it into compliance as soon as possible.
We =ee"j(2'6grii'z'e"t:lia€:'"exp~ir-atfdn'-o5;~6'xSmp"tio'ns':h"as'-generated
unce~rta-£t*ty-f or- some pablie twatetf-systems" arid =t heir customers,
By deveEopi'rrg compliance -pslans 'for- "each system^-feach" "tjie
systems and-tfte"i-r"?ussfs-• sBoSld-understand-how com'pli-art-ce -can-;
be^-cFChietr.ed'-inra^realisfic -ntanneri^ -We"will keep!"you-~'.i;nfonrtejd'
(5 f t<3o ng'r e*s s ^o n al - d e ve^l opffle n t s.:
Vl-28
-------
Contamrnant
Turbidity
Arsenic-
Barium
Chromium
Fluoride
Nitrate
Seleni-um"
Gross Alpha
Combined Radium
.TOTAL . .
E X-efap t i o n s
Nuinber^.o..f. Exemptions
'~2~,
. - ., 2
393
VI-29
-------
''«<
UNITED- STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20450
-'1 -0 1984:
OFFICE OF
ENFORCEMENT AND
..COMPLIANCE MONITORING
MEMORANDUM
SUBJECT:
FROM:
Draft Enforcement Guidance Regarding Public Water
Sys.te~ms--" in States Which Have Primary Enforcement.-
:spons jt'Sli 1 i &y
'$;.<*. "7 v_V' cy<--zs.--t»-*'<*ri-v
victor Timra, Director
Officej/of prinking VT/ate/fj
Louise^-tsl Jacobs A^-^k^^'^
..... I / y
Associate Enforcement Qounsel
for "W-ater ' •
TO: ' Regional Water Management
Regional Counsels
Regions I - X
Division Directors.
Background . ,. '
Since September 1979, 30 Federal enforcement act.ions have
been filed against public water systems under the Safe Drinking
Water Act. They have all been filed in States which have not
received primary enforcement responsibility, (Pennsylvania
(9), Wyoming (11) and Ore.gon (10)), where the Agency is not
required to provide any notice to the State prior to filing
the action,. All of these actions have been brought under the
authority of 551414 (b) (1) and. 1414(a)(2) and other sections.
Also, during this period, the Administrator has issued .
two administrative orders under the "imminent and substantial-
endangerment" provision of the SDWA (51431): Perkiomen Valley,
Greenhouse, Pennsvlvania (1983) and Grindstone Indian Rancheria,
Orland, California (1984). These actions were brought in areas
where EPA has primary .enforcement responsibilitv.
However, we are receiving data which reflect significant
levels of non-compliance in a ^ew States which do have primary
enforcement responsibility., which, for the purpose of this
draft guidance., we will caTl "primacy States." In an effort to
reduce existing levels of -non-compliance, and consistent with
guidelines for -improved Federal-State relations, we believe it
is important for the Agency to more closely examine PWS non-
compliance in primacy States and to -more closely consider
-------
di's
th,e
'" to
('2)''"§a4if C,!?:)f|' which ii"B5:
of- a .:reque.s-.t; _by. the State th.at the
' ' • • '~
g 141--4 (b^ (--) ---^-T "Reqes-t fry '^
There ...&re two
, civil ref;ert^.J.s.unde'r..|:.his section: U )^ a request fey a^specified
s-""SLtate of f i5lL:ai:l"r;'~%nd._ T^'^ a' b%^l'Bf by/tfie* .A^e^cy"'';'(%jU^p^t-ied by.
•;• eyidenqer".~t~b'a,t ."t'Kg^i^f^*"-""^ "h"'pt in -co^npTL'ia'hce^.-. :'-:-Wev"s''h%u^ld-''co^:$;.i.der
_.:"•'"" i1;' **. 5l * •* _r^_ ^*- " y • ' jf^ " . ^* JC - .,*i^: •" -^i , •**%. • *•<••' J="- ^> :*v tv^iwv^vi vii-tv. ^.11. ....-^ .ws_
(3) The form of the --request: in ^-r-f*'
14 I I il'.liJiU r
cat a- "
an
rSe-^e-ndentl
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.ivy
'"-- 3 -
Comj>:^an,ge...^.6.licy, "^ January' IS ,,..,l|84-. .:;"jvWhi le.. fcjre' -S'ta^e- request
dpers--not:;. require/ the Age.rn:cy. 't:o re.spo;n.d. Sy. inii^a.ting^a.-'civil
referral,.^ tb;.?.'t: rj'fer";rai^ under %\$
^•>az)'j. 1) ,...*e-vten,,.,if ..a, .,B>t..a.-t.e,.,.h;as ...not ,.|feq'u;esl;!e,d' jsS.ch'^aclion.j. The*-
"finds"' thVt "a PW'S is "in nolTcbmpil'ahb'e ^^^r^pro'videB1'" notice'
to
ice
irfa"n;be"' c.on t?. nu'es :' .| or
'
j the: aaiay-th
"we 'should consider 'th "^o'loWffrg'factfoJf-s irt Connect-ion-
with .such a r
of, n^n.
^S |.41il-en) (4:)-(.A >|,, :ife^-'^p|^a^fg;Jw£J-in"rvgrtcomgliarkc
,-speeif4.c^ief«a4^^^^^^i^^1?T5^iilwht?h .wefe-~viol^ted^ .-.the
duration' of "tne' violatibft»-'au5.S ^Re- p^ten.fia;i-.-:Si-g.nif4can-c:e , of
, . . . ; > .•*'** *:£ 2^1?^." '..^"-r^aa ~c • • '• •-=• -3
the noncompliance; . -.^
; »i-<:2") • "Tb^. type^-.o? advipe''^n.^-:^^-B'ic-a.^ ajgAf J:^!?-0^-' 155
requi-red to' b.e. "•&£>' l^-a^yTKe^ ^Pp-^^?f^"?"® ''-t-°r^>.F '•"• ^f; r-n ® r sy s t dm i i n t o
botnp-1 i-an-ce^.A. .by .t-hj^ ft-aiCb.i-^st-^'f:e'a.s.i/bjJ.6"'tiftie?j-H Rowevert this'-
does- not..
otherwi::
•th.e •.prQv.i-sc-... .,_ _. =-_--„-_^-„ ...^_._ .. . - . ^ ^ ... ^- . .. .
al-te-rn^ti-ve' ^..hp-r^.-^n^'lldjn^terrn- met:Ho-ds->;;bf55as.s>crihg-. compliance
or pr>QV*ij4i"n^ ^^^' ^jrv'< i"Txn -w'a-t''e"r:•'•'"'-• • -.'-?'••••> - *..''•
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.tajne- .
shortly "'-af-te'r , the-'/divita.^l5-:=no.t.-ic..eoiiQ? the; -St-a-te .-so -that J^a C^the
"-• '.' — "f ' ' ' "* *• " •* "f ' - >-* -I;--"" J" •*' ***•'• -*•' -"^ -2" -•' i -;?' v" \"- ' 3r^?Jir m'-vr
'State can ,us'e~ the ;a:sjs i'sjta>i£?e; ;ito &e$^ te&ipyg .tfsfie. .yS..ys^t>e/n .inj^a. .-com
pliance, ah& _(^3f) ' -rt^ (S.'e^§^^ri^4v^S ^>| np&^™PQ^J^&.vi£..:^y?
may include nie-Rt-i on of this assistance': . < s •'',&'"'''.'.'•' g*,* "£,''?'}
?S! /^."V
J3|i->a;t;^e^: .J3..Q..
days; .^fstVr? jthfe'5' ;|ni:t ial S t,at^ |^t i.ee""^t"h^:><3ip.^is^EatJp^
ru-i.reiTie'|n|l|s* .-cited
should make such a finding and "must giv®.,jpytel.vgJ'n,o5i ' i" •_••».: J- =.' .ij . i* * S# * V ? J ..
noted
,, ,.-\secll4if";forf T$.£*$la£i6f sfief e^alvjo^a^ primary
** 6tHe3f^e'gisJi.?|i^|^il|'i ?l?r^ gseirsi^f.
gf>uM^C?w*ter
^ _ ^ . ? t
'as, 'OE shortly after, the. public :nq,t:Tc'^r tfh®, a..
must request that the State repprt ,. to EPA, w-itVarT" Is' day's
-the date .-of the public, notice as to the steps being t.ak'en to
bring the. PWS i info cornpiiaiiqe: this re.qu.es-t ne;,e,d not be in
writing :: initially but S:h"ou.,lc3 be
( 6 ) The evaluation of the. State report : after r e ce i p t
of the State report, ' If '"fee?c^ve4' VithTn" Tor close* to) 15 days
from the: public notice,, the Region should ^va.lu.at-e^ t;he report
to determine whether or> not the, State, hgts* a-hu,Steri its discretion,
§1414 (a). (l)(BV(ii)
The; House Report on the prop^qsjero^ Hou3=., ijjcyj 1 CL-J: A b i on.s of- i*-neey-it: tp cq^^e.nqe-. legal
proceedings or othe-r- "s^imilar- vague- de.clara.tions of intPft would
not be suf f iciest/ to" qons^tlfeute ''the.-, req^ire.^ rep-ly u,nrie-r this
section." Legl>:l'a.t4 Ve", 'HA'S:tqry pf_ the SDWA-, at 554.; (r9»2)..
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- "5 -
(7) The final assessment of compliance: the Acjency may
iirte'% '"coWl re'f eVraC- f*-1;hfe- ^^nc^ c^cTude%^%hat { '( 1 ) the
anc^^%ct?en.ds, be^oni:SfeySv &f te'r^th-ef i'fi'Lt i'aj." S't
rvbti/ce r*and ' (~~2.f '( a" H thft* S^te^a^ls- $b-subrffitV' ih-).-^. ^i'^fe
man'heV-
otfcer- and (2 r "( a')- tfift4 S:t%tre••-^.ajAs-. '£o"-;-subrffit, in->.-^; i.ilpe ly ^.1
an'n'eV, ''^V^r'tepvoVt req-\i?ir,fe!d; in' -Sl^i^^SS^r^J^BO^; o.r I.bT the. . "
ge'ncy co^rA?l\ide"s'';"t'h"a1:- t'Vte S^Vtfe: ~-ab^Lt^di|its^idis&f'e^ibn,= (see:: •.
1414(a) (1) (B) ( ii) ). '^.^S'-'HH i-i.^i |\ VHi^^"*-"i"- -*' - -:-
The determination that a system is in serious enough
rinelrip^ia'nce '1iw43^aafc!.t).A-in:i^iafe.ed civii^&.^sajilfc'V^houi'd be made
" "
. i a ft d e. ~l*oil fey -/ *•' Sou re e s 6^; -^L nf-orina tji o n
by -pu-b^Ii^c -*water ^gy'itemis :>.&&<$ .^tihle^ BfeVioii' s m-i'd1-y|s'^j?sevelotion's'
^f* tl^efSta$e |E©g^^ms^i^l vH'^ fe.-fe i^:?r-^ ^4^'^-s.\ ?• Vv -'i
*r*cn %-S ?\7iff»> 43B»» S' i?.!^ v?^§ g^ri^f .. 's ^s'li^. ' .'<^-. ;.," : '
act ioi? •» r" a^'y© r^
brisnging a system into compliance, please work with the" 'appro-
priate' Reg'ionai- pe^sonhei-^|S'ta$Sar§^tMafe ;f>rofe;'| .i.eigal and
technical *Kprpcediir«!s are f ©llc-wsd i -?|'the Office jofi EnforcfmenJ.
.and"1* Compliance Monitoring fea^^p^rfpaffdl-adciiifeiQ^li^rjf qr:m4-ftc?n
•d'rt* formats' f o'r* motions'? ofdef s , ' e'tJc-^-V which •hss?be,ep d'i'sferfbjuted
'to^^out-^'fhe-iOf^i-fee^o-f Drinking Water ' I!iech|iicalia1fvic:| . isv of
§otirse? iymilable- t^Sybul !as^is: thef r^k|.9w|sd^i.^C>f -;
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Appendix
Sec. 1414. (a)(l)(A) Whenever the Administrator finds
during a period during which a State has primary enforcement
responsibility for public water systems (within the meaning
of section 1413(a)) that any public water system "*-
(i) for which a variance under section 1415 or an
exemption under section 1416 is not in effect, does not
comply with any national primary drinking water regulation
in effect under section 1412, or'
(ii) f'or which a variance under section 1415 or an
exemption under section 1416 is in effect, does not comply
with any schedule or other requirement imposed pursuant
thereto,
he shall so notify the State and and provide such advice and
technical assistance to such State and public water system as
may be appropriate to bring the system into compliance with
such regulation or requirement by the earliest feasible time.
(B) If the Administrator finds such failure to comply
extends beyond the thirtieth day after'the date of the notice
given pursuant to subparagraph (A), he shall give public notice
of such finding and request the State to report within fifteen
days from the date of such public notice as to the steps heirig
takem to bring the system into compliance (including reasons
for anticipated steps to be taken to bring the system into
compliance and for any failure to take steps to bring the system
into compliance). If -
(i) such failure to comply extends beyond the sixtieth
day after the date of the notice given pursuant t-o sub-
paragraph (A): and
(ii) (alpha) the State fails to submit the report
requested by the Administrator within the time period
prescribed by the preceeding sentence; or
(beta) the State submits such report within such period
but the Administrator, after considering the report,
determines that the State abused its discretion in carrying
out primary enforcement responsibility for public water
systems by both - - .
(I) failing to implement by such sixtieth day
adequate procedures to bring the system into compliance
by the earliest feasible time, and
(II) failing to assure by such day the provision
through alternative means of safe drinking water by the
earliest feasible time:
the Administrator may commence a civil action under subsection (b)
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.- ;2
Section 1.414(b) The Administrator: may b-ri-hg a 'civil - action
in the "appropriate United States district court"-to- require-' com-
liance "-.wi'ih a national primary -drinking water:,: regulation or
with any-schedule '.or other-.'..requi;re-me-nt imposed, pursuant--to a
variance or exemption grante.d under section 1415.,or 1416 if -
(1) authorized;..under p:a.-r.agraph (1-) or (2) of subsection
(a )-, ..or" ~"
(2~) if-- requested .by-(A) the." chief exe-cutivei officer of
the 'State'- in which is io'c-ated/tiie public water-\s"ystem
w-hix:h" is .not ,in eomp-lia-nqe. with" such ••regulation^or require-
•ment, pr (B) t,he. agen.cy .of.? sych'-State- which has jurisdiction
over e&mpliahceNby.. public water, ^systems in the-..State with
national 'primary. Drinking., water .regulations or- State drinking
.water-regulations,,'
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