UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WSG 106
Date Signed: May 29, 1998
MEMORANDUM
SUBJECT: Guidance on Federal Facility Penalty Order Authority
Under the Safe Drinking Water Act, as amended in 1996
FROM: Steven A. Herman
Assistant Administrator
TO: Addressees
On August 6, 1996, the Safe Drinking Water Act (SDWA) Amendments of 1996, Pub. L.
No. 104-182 (the Amendments), became law. Prominent among the Amendments, are several
provisions uniquely applicable to federal entities. The new SDWA clarifies that Federal
agencies could be subject to a penalty order for a violation of an administrative order. This
guidance explains the Amendment's application to federal entities and offers advice to regions
when exercising the enhanced SDWA authorities. In brief, the Amendments:
• significantly enhanced the SDWA's pre-existing waiver of sovereign immunity,
• reiterated EPA's express enforcement authority over federal entities,
• streamlined the pre-existing statutory process for issuing public water system compliance
orders,
• expanded EPA's administrative penalty authority for any violation of the SDWA,
including the public water supply and underground injection control requirements
and requirements imposed by an administrative order,
• provided citizens the opportunity to obtain judicial review of penalty orders, and
• required states to use any penalty or fine collected from a federal entity under section
1447 for environmental purposes.
I. Summary of the Federal Facility Amendments
The Committee Report accompanying the Amendments provides information on what
Congress viewed as the purpose and need for the federal facility amendments. The Committee on
Commerce wrote:
The Federal Government owns or operates more than
4,200 public drinking water systems at military
bases, National parks and other Federal facilities.
The number of Federal systems cited for violations
increased from 830 in FY 1991 to 946 in 1994.
Federal agencies also own or operate facilities
in wellhead protection areas. These facilities—both
civilian and military—routinely generate, manage and
dispose of large quantities of hazardous waste
-------
WSG 106
containing acids, nitrates, solvents, radioactive
materials and heavy metals which can impact the
safety of drinking water supplies. The Committee's
efforts to ensure the compliance of Federal facilities
with various Federal environmental statutes extends
back several Congresses.
Section 202(a) adds a new section 1429 [sic]
to the Act to reaffirm in more explicit language the
original intent of Congress that each department,
agency, and instrumentality of the United States
be subject to all of the provisions of Federal,
State, interstate and local laws with respect to
drinking water and protection of wellhead
areas....
This waiver subjects the Federal government
to the full range of available enforcement tools,
including, but not limited to the mechanisms
specifically listed in the language of new section
1429, to penalize intermittent or continuing
violations as well as to coerce future compliance.
H. Rep. No. 104-632, Part 1, 2nd Sess., reprinted in Cong. Rec. H6711 (1996) (Commerce
Committee Report) (emphasis added). The Committee's Report and the plain text of the
Amendments eliminate any doubt federal entities are subject to the full force and effect of the
SDWA.
The waiver of sovereign immunity to which the Committee Report refers became new
§ 1447(a), 42 U.S.C. §300j-6, replacing the SDWA's earlier waiver. Under the amended waiver,
all federal, state, interstate, and local substantive and procedural requirements, including all
administrative orders, respecting the protection of wellhead areas, respecting public water
systems, and respecting underground injection apply to each "department, agency and
instrumentality of the executive, legislative, and judicial branches" of the federal government
(federal entities) to the same extent as any person is subject to the requirements. Federal entities
subject to the requirements are those: 1) owning or operating any facility in a wellhead
protection area; 2) engaged in any activity at such facility resulting, or which may result, in the
contamination of water supplies in any such area; 3) owning or operating any public water
system; or 4) engaged in any activity resulting, or which may result in underground injection
which endangers drinking water.
Second, in addition to strengthening the waiver of sovereign immunity, Congress also
added in §1447, 42 U.S.C. §300j-6, a clear statement of EPA's administrative penalty authority
over federal entities. Section 1447 gives EPA authority to assess a civil penalty against a federal
entity in an amount not to exceed $25,000 per day per violation of an "applicable requirement
under this subchapter...." Section 1447 (b)(l) and (b)(2), 42 U.S.C. §300j-6(b)(l) and (b)(2). The
"subchapter" to which this subsection refers includes the entire SDWA, including, as referenced
-------
WSG 106
in the waiver, requirements of administrative orders. Thus, any schedule or requirement an
administrative order imposes would be an "applicable requirement," a violation of which could
provide grounds for a penalty order under §1447, 42 U.S.C. §300j-6.1 Section 1447(b), 42
U.S.C. §300j-6(b), requires EPA, before the penalty order becomes final, to provide the federal
entity with notice, an opportunity for a hearing and a conference with the Administrator.
Third, the Amendments streamlined the administrative procedures for issuing a
compliance order under §1414(g), 42 U.S.C. §300g-3(g). Under the amended section, which is
applicable to compliance orders issued to federal and private parties alike, EPA no longer is
required to provide the respondent with notice and an opportunity for a hearing before a
compliance order is final. However, Congress retained the SDWA's pre-Amendment
requirement that EPA give a state prior notice of an enforcement action.2 EPA also may issue
compliance orders against federal entities when requested by the Chief Executive Officer of the
state in which is located the public water system.
Fourth, the Amendments ensure that penalty orders EPA issues to a federal entity are
accountable to the public and the courts. Section 1447(b)(4)(A), 42 U.S.C. §300j-6(b)(4)(A),
provides any interested person may obtain judicial review in U.S. District Court of the penalty
orders issued under section 1447, 42 U.S.C. §300j-6. As part of the review, the District Court
may impose additional civil penalties against the federal entity if the court finds that EPA's
penalty assessment constituted an abuse of discretion. The court must uphold the EPA penalty
order unless it finds that there is not substantial evidence in the record to support the finding of a
violation or that the assessment constitutes an abuse of discretion.
Finally, new section 1447(c), 42 U.S.C. §300j-6(c), requires states to use the penalties
and fines collected pursuant to §1447(b), 42 U.S.C. §300j-6(b), "only for projects designed to
improve or protect the environment or to defray the costs of environmental protection or
enforcement."3
II. Administrative Procedures for §1414(g), 42 U.S.C. §300g-3(g), Compliance Orders
Section 1414(g), 42 U.S.C. §300g-3(g), governs EPA's authority to issue SDWA public
water system compliance orders against private persons and federal entities, alike. Before the
Amendments, § 1414(g) required EPA to provide notice and an opportunity for a public hearing
before a compliance order could take effect. The amended section 1414(g) no longer requires
this process.
"Applicable requirements under this subchapter" also include requirements or permits
issued pursuant to an approved state program under section 1413, 42 U.S.C §300g-2.
In a primacy state,§1414(a), 42 U.S.C.§300g-3(a), requires EPA to give the state 30 days to take action before EPA
may issue a compliance order under §1414(g), 42 U.S.C. §300g-3(g). hi a nonprimacy state, §1414(a), 42 U.S.C.
§300g-3(a), requires EPA to notify an appropriate local elected official with jurisdiction over the public water
system of the planned EPA enforcement action before taking the action.
Congress exempted from these use restrictions state laws in effect on the date of enactment of the Amendments that
would prohibit such a limitation on penalties collected and further exempted states from this limitation if the state's
constitution requires the funds to be used in a different manner. Section 1447(c), 42 U.S.C.§300j-6(c).
-------
WSG 106
In general, compliance orders issued under §1414(g) to federal entities generally should
follow the same procedures governing issuance of a §1414(g) compliance order to a private
party. However, EPA believes that providing a federal agency respondent an opportunity to
confer with an appropriate regional official who has authority to issue the section 1414(g) order
is warranted even in the absence of a statutory provision requiring one. When giving the federal
entity the opportunity to confer, the regions may establish a time period in which the conference
must be requested or the opportunity is waived. Because § 1414(g) order is issued to achieve
expeditious compliance with SDWA requirements and not to assess a penalty, the time period to
request a compliance order conference generally should be less than the 30 days afforded to seek
a conference for penalty orders. Ultimately, based on the seriousness of the violations and the
nature of the compliance activities, the regional office will determine the time period during
which the conference would be available. Once the order is final, the requirements of the order
become applicable requirements, subject to the penalty provisions of §1447(b).
III. Administrative Procedures for §1431 Imminent and Substantial Endangerment
Orders
Section 1431, 42 U.S.C. §300i, authorizes the Administrator to take any action she deems
necessary upon her "receipt of information that a contaminant which is present in or is likely to
enter a public water system or an underground source of drinking water may present an
imminent and substantial endangerment to the health of persons..." Actions the Administrator
may take under this section include, but are not limited to, issuing orders to protect human
health, including orders to provide drinking water. Regions may issue an imminent and
substantial endangerment order either as part of a comprehensive order relying also on other
SDWA enforcement authorities, or as a separate order. For example, the region could issue a
§1431 order in conjunction with a compliance order pursuant to §1414(g), 42 U.S.C. §300g-
3(g).4 As with § 1414(g) compliance orders, § 1431 does not require EPA to offer the opportunity
to confer with the Administrator, or require EPA to provide notice and an opportunity for
hearing, before an imminent and substantial endangerment order becomes final. As discussed
above for §1414(g) compliance orders, however, when practicable based on the circumstances of
the order, the regions may offer the federal entity an opportunity to confer with an appropriate
regional official who has authority to issue the § 1431 order before the order becomes final. The
region may determine based on the facts of the individual case whether it would be practicable to
provide an opportunity to confer and if so, the period of time in which the conference would be
available. Due to the nature of § 1431 orders, any opportunity to confer may be limited.
As is the case for §1414 compliance orders, the terms of §1431 emergency orders
become "applicable requirements under the subchapter" for purposes of the administrative
penalty order authority granted the Administrator in §1447(b)(l). Accordingly, in the event the
federal entity fails to comply with an order issued under section 1431, EPA may issue a penalty
For more information, see EPA's "Final Guidance on Emergency Authority Under Section 1431 of the Safe
Drinking Water Act," signed on September 27, 1991 by James R. Elder, Director, Office of Ground Water and
Drinking Water and Frederick Stiehl, Enforcement Counsel, Office of Enforcement.
-------
WSG 106
order under section 1447(b).5
IV. Administrative Procedures, including Opportunity to Confer with the
Administrator, for §1447(b), 42 U.S.C. §300j-6(b), Penalty Orders6
Under §1447(b)(l), 42 U.S.C. §300j-6(b)(l), EPA may assess a penalty for violation of an
"applicable requirement under this subchapter." Although EPA does not rely on a waiver of
sovereign immunity to enforce the provisions of the SDWA against a federal entity, the new
waiver clarifies the scope of section 1447(b)'s penalty provision. Section 1447(a) provides that
the "federal state, interstate, and local substantive and procedural requirements referred to in this
subsection include, but are not limited to, all administrative orders...." Thus, for example,
requirements imposed by administrative orders issued pursuant to sections 1414 (public water
system requirements), 1423 (protection of underground sources of water) and 1431 (emergency
powers) could form the basis for issuing a section 1447 penalty order. Additionally of course, a
violation of any statutorily mandated requirement could subject the federal entity to a section
1447 penalty order. For example, section 1445 requires, among several requirements,
monitoring and record keeping. A violation of this section would subject the federal entity to
penalties under section 1447(b).
In assessing penalties against a federal entity under section 1447, 42 U.S.C. §300j-6,
EPA may evaluate the penalty based on the seriousness of the violations, the population at risk
and other appropriate factors. EPA would calculate the penalty amount in a manner consistent
with Agency policy and in the same manner it would calculate a penalty for a private person
capturing the economic benefit for avoidance of costs.7 In some cases it may be
appropriate to offer the federal entity the opportunity to negotiate a settlement of the penalty
action before the region formally files the complaint. Offering pre-filing settlement negotiations
of SDWA penalty actions is analogous to the pre-filing settlement negotiation opportunities the
Department of Justice provides before filing complaints in civil court.
Subsection 1447(b), 42 U.S.C. §300j-6(b), requires that before a penalty order becomes
final the Administrator provide the federal entity with notice and an opportunity for a formal
hearing on the record in accordance with the Administrative Procedures Act. 40 C.F.R. Part 22
sets forth EPA's general rules of administrative practice governing the assessment of
administrative penalties. If EPA issues an order and no settlement eventually is reached, the
head of the federal entity may request an opportunity to confer with the Administrator following
As a matter of practice, EPA will seek penalties against a Federal agency which violates or fails or refuses to
comply with a §1431 order not to exceed $15,000 for each day in which such violation occurs or failure to comply
continues.
6 Note: settlement may be reached at any point in the administrative process. See section V for settlement guidance.
Congress clarified in the Amendments' legislative history that any fine or penalty assessed is to be paid from an
entity's appropriations and not from the U.S. Judgement Fund. "This will assure the proper measure of
accountability for Federal entities and assist in deterring future violations of drinking water laws and regulation." H.
Rep. No. 104-632, Part 1, 2ndSess., reprinted in Cong. Rec. H6711 (1996) (Commerce Committee Report).
-------
WSG 106
exhaustion of the Part 22 process.8
To initiate the Part 22 process, EPA files a complaint with the Regional Hearing Clerk.
40 C.F.R. §22.13. The respondent federal entity then may file an answer, in which it must
clearly admit, deny, or explain each factual allegation of the complaint, and it may request a
hearing. 40 C.F.R. §22.15. If the case proceeds to a hearing, a Presiding Officer is assigned to
hear and decide the case. Following the Presiding Officer's decision, Part 22 provides
opportunities for reopening the hearing or appealing the decision to the Environmental Appeals
Board. 40 C.F.R. §§22.28, 22.30.
EPA will provide the federal entity with an opportunity to confer with the Administrator
after the federal entity exhausts its Part 22 administrative process. This means that EPA will
provide the federal entity with the opportunity to confer with the Administrator after the matter
has been elevated to and decided by the Environmental Appeals Board. EPA will provide the
federal entity thirty days following the Environmental Appeals Board's order issued under
§22.31 to request a conference, regardless if the entity petitions for reconsideration under
§22.32. Under section 22.32, motions to reconsider the Environmental Appeals Board's order
must be filed within ten days after service of the order. A motion for reconsideration will not
toll the thirty-day period EPA provides the federal entity to seek an opportunity to confer with
the Administrator. If no written request to confer is filed within the thirty-day period, the
administrative order is final under the terms of §1447(b)(3), 42 U.S.C. §300j-6(b)(3), of the
SDWA.
EPA may satisfy the opportunity to confer requirement by providing the federal entity an
opportunity to confer with a regional official with authority to issue the §1447(b) order.
However, consistent with guidance issued under the FFCA9 and as a matter of general policy, the
head of the federal entity may confer with the Administrator, under the circumstances described
below.
The conference with the Administrator can occur directly or through an exchange of
letters. A request for a direct conference should be served on the Administrator with a copy to
the Director of the Federal Facilities Enforcement Office (FFEO) and all parties/counsel of
record. The request for a direct conference should specifically identify the issues which the
federal entity proposes to discuss with the Administrator, and should specifically identify who
will represent the federal entity. In addition, as part of its request for a direct conference, the
head of the federal entity should attach copies of all prior administrative decisions and briefs in
the underlying proceedings. Copies of the briefs and underlying decisions also should be
provided to the Director of FFEO.
The parties/counsel of record may request to be present during the direct conference.
The Administrator's obligation to provide an opportunity to confer is only in connection
with EPA-issued orders, not State orders. Therefore, EPA will not confer with federal entities regarding State-issued
orders.
See Memorandum from Steven A. Herman, Final Enforcement Guidance on Implementation of the Federal Facility
Compliance Act, July 6, 1993.
-------
WSG 106
This request to attend the direct conference, likewise, should be in writing and served on the
Director of FFEO and the parties/counsel of record. The Administrator or her designee shall
notify the head of the federal entity who requested the direct conference and the parties/counsel
of record regarding her plan and arrangements for the direct conference.
Following the conclusion of the direct conference, a person designated by the
Administrator will provide a written summary of the issues discussed and addressed. Copies of
the written summary will be provided to the parties/counsel of record. Ordinarily, within thirty
(30) days of the conference, or within thirty (30) days following the receipt of the letter from the
head of the federal entity in the event of no direct conference, the Administrator shall issue a
written decision with appropriate instruction regarding the finality of the order. This decision
shall be filed with the Regional Hearing Clerk and made part of the administrative case file.
If the conference with the Administrator is conducted through an exchange of letters, the
head of the federal entity should serve a letter on the Administrator with a copy to the Director of
FFEO and all parties/counsel of record. In addition, the letter should specifically identify the
issues which the federal entity proposes that the Administrator consider. The head of the federal
entity should also attach copies of all prior administrative decisions and briefs in the underlying
proceedings. Copies of the briefs and underlying decisions also should be provided to the
Director of FFEO.
If the Environmental Appeals Board referred the matter to the Administrator for decision
under §22.04(a) rather than deciding the matter itself and if the federal entity wants to request a
conference with the Administrator, the federal entity must do so prior to the Administrator's
decision. To assure that federal entities are aware of these procedures, Regions should refer the
federal entity to Part 22 and other relevant Agency guidance.
V. Section 1447(b), 42 U.S.C. §300j-6(b), Penalty Order Settlements
The process for administrative settlements is set out at 40 C.F.R. §22.18. This provision
provides an opportunity for the respondent to confer with the complainant (an EPA employee
authorized to issue the complaint) concerning settlement regardless if the respondent requests a
hearing. Whenever a settlement or compromise has been proposed, the parties must forward a
written consent agreement and proposed order to the Regional Administrator and the
Environmental Appeals Board for EPA Headquarters-issued complaints. Throughout the
administrative process, the regions should follow Part 22's requirements regarding ex parte
communications.
Each settlement between EPA and a federal entity should include, in addition to the
provisions typically included in private party settlements, a waiver of the federal entity's
opportunity for a conference with the Administrator under §1447(b)(3), 42 U.S.C. §300j-6(b)(3).
Moreover, whenever EPA reaches a settlement that includes work to achieve compliance with
the SDWA, stipulated penalties should be included in the settlement reached under section
1447(b) and 1414. In appropriate circumstances, EPA may use the May 8, 1995 "Interim
Revised EPA Supplemental Enforcement Projects Policy" and future revisions to it to resolve
-------
WSG 106
penalty enforcement actions under §1447, 42 U.S.C. §300j-6.10
VI. Administrative Procedures for Administrative Orders under UIC Program
Section 1447 waives federal sovereign immunity and provides EPA express enforcement
authority, including UIC enforcement authority, over federal entities. Accordingly, the federal
government is subject to the requirements of the UIC provisions to the same extent as a private
party.
Under section 1423(c), 42 U.S.C. §300h-2(c), EPA may issue UIC compliance orders
after giving the person to whom it is directed written notice of the proposed order and an
opportunity to request a hearing on the order. The § 1423 hearing is not subject to the
Administrative Procedures Act, but the process must provide a reasonable opportunity to be
heard and present evidence. Violation of a §1423 compliance order could subject the federal
entity to a penalty order under §1447."
Like §1414(g), 42 U.S.C. §300g-3(g), section 1423 does not require EPA to provide the
federal entity with an opportunity to confer on a compliance order. Based on the circumstances
of the case, however, EPA believes that providing an opportunity to confer with an appropriate
regional official who has authority to issue the §1423 order is warranted even in the absence of a
statutory provision requiring one. The time period to request a conference generally should be
less than that afforded to seek a conference for penalty orders. The regional office may
determine based on the seriousness of the violations and the nature of the compliance activities
to be undertaken the time period in which the federal entity may request a conference.
VII. Timing of Issuance of SDWA Administrative Order(s)
The EPA regional offices may determine, based on the facts of the particular enforcement
case, whether it is appropriate to issue a § 1414, 42 U.S.C. §300g-3, compliance order or a
section 1447 penalty order, separately or in combination. Similarly, the region may issue a
§1423 UIC compliance order separately or in combination with a §1447 penalty order.
VIII. Press Releases for SDWA Enforcement Actions at Federal Facilities
It is the policy of EPA to use the publicity of enforcement activities as a key element of
the Agency's program to promote compliance and to deter noncompliance with environmental
laws and regulations. Publicizing EPA enforcement actions against private parties and Federal
agencies on an active and timely basis informs both the public and the regulated community of
EPA's efforts to ensure compliance and take enforcement actions. The issuance of press releases
in appropriate circumstances can be a particularly effective tool for expediting timely
The SEP policy also maybe used to settle penalty actions, including actions brought under Section 1423, 42
U.S.C. section 300-h, (for violation of underground injection control program requirements).
As noted above, in assessing a penalty under section 1447(b), 42 U.S.C. § 300j-6(b), EPA regional offices
will calculate the penalty amount based on the seriousness of the violations, the population at risk and other
appropriate factors.
8
-------
WSG 106
compliance at violating federal facilities. EPA's decision to issue a press release and the
contents of press releases are not negotiable with federal agencies or other regulated entities. We
encourage the regions to use press releases as one of the effective tools for enforcement under
the SDWA.
IX. Conclusion
FFEO is issuing this guidance to clarify its expectations for federal facility enforcement
under the SDWA. This guidance supersedes earlier guidance regarding SDWA enforcement at
federal facilities such as that found in the 1988 Federal Facilities Compliance Strategy. Should
you have any questions or concerns, please call Mary Kay Lynch at (202) 564-2574, Sally
Dalzell at (202) 564-2583, or Jean Rice at (202) 564-2589.
X. Notice
This guidance and any internal procedures adopted for its implementation are intended
solely as guidance for employees of EPA. Such guidance and procedures do not constitute rule
making by the Agency and may not be relied upon to create a right or benefit, substantive or
procedural, enforceable at law or equity, by any person. The Agency may take action at variance
with this guidance and its internal implementing procedures.
Addressees:
Sylvia Lowrance
Michael Stahl
Director, FFEO
Director, Office of Regulatory Enforcement
Assistant Administrator, Water
Associate General Counsel, Water Division
Director, Office of Ground Water and Drinking Water
Regional Administrators, Regions I-X
Regional Counsels, Regions I-X
Water Program Managers, Regions I-X
Enforcement Coordinators, Regions I-X
PWSS Enforcement Coordinators, Regions 1-X
Drinking Water Program Representatives, Regions I-X
Federal Facility Leadership Council, Regions I-X
Federal Facility Coordinators, Regions I-X
ORC Federal Facility Workgoup
------- |