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AMSA Legal Alert (Leg04-7)

Member Pipeline - Legal - Alert (Leg 04-7)

To: Members & Affiliates, Legal Affairs Committee
From: National Office
Date: June 8, 2004
Subject: ANALYSIS OF SELECTED CSO PERMITTING AND IMPLEMENTATION ISSUES
Reference: Legal Alert 04-7

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This Legal Alert provides information relative to two questions that continue to arise for publicly owned treatment works (POTWs) in connection with the implementation of the U.S. Environmental Protection Agency’s (EPA’s) combined sewer overflow policy (CSO Policy or Policy). First, this memorandum evaluates interpretations of the “shall conform to” language in Clean Water Act (CWA) § 402(q). EPA itself is at work on a memorandum providing the Agency’s interpretation of this language, which is expected to be released in the coming months. AMSA has provided input to the Agency regarding this EPA effort. Second, this memorandum discusses those provisions of the CSO Policy that POTWs can use to support requests to codify long term control plan (LTCP) obligations in National Pollutant Discharge Elimination System (NPDES) permits rather than in enforceable judicial orders. Both issues were discussed in detail during the AMSA/CSO Partnership Workshop on CSO LTCP Implementation, held April 19-20, 2004 in Chicago, Ill. The information contained in this Legal Alert should be helpful to AMSA member agencies facing CSO negotiations with the federal or state governments.

If you have any questions regarding the material discussed in this Legal Alert, please contact AMSA’s General Counsel, Alexandra Dunn, at 202/533-1803 or via e-mail at adunn@amsa-cleanwater.org.

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I. Interpretation of the “Shall Conform To” Language
In 2000, Congress amended the CWA, providing that “[e]ach permit, order or decree issued pursuant to this Act after [December 15, 2000] for a discharge from a municipal combined storm and sanitary sewer shall conform to the Combined Sewer Overflow Policy signed by the Administrator on April 11, 1994.” Wet Weather Water Quality Act of 2000, CWA § 402(q)(1)(Consolidated Appropriations Act for Fiscal Year 2001, P.L. 106-554). Some enforcement officials have taken the position that the amendment converted specific text in the CSO Policy into statute – such as the references to consent decrees being “generally preferred” for some communities. In contrast, municipalities have argued that “conformance” does not eliminate flexibility to consider important site-specific and economic factors. The tension between these approaches is becoming one of the most controversial implementation questions to date.

Under a Chevron analysis, one first looks to a statute to see if its language is clear on its face or ambiguous. Given the brief statutory text of CWA § 402(q), it would be reasonable for EPA and a court to find the statutory language ambiguous and requiring some explanation. EPA thus is empowered to interpret the language, and if EPA’s action were challenged, a court would review whether EPA’s interpretation is reasonable.

It likely would be found unreasonable for EPA to interpret “shall conform to” in a manner that would treat every line in the CSO Policy as verbatim law. This approach would be particularly troubling given the tremendous flexibility embodied in the CSO Policy and the site-specific analysis and solutions contained therein. In fact, to view each and every element of the CSO Policy as “law” would be inconsistent with EPA’s common position before courts that policies or guidance challenged in litigation are not rules because they do not require uniform compliance in every case.

Accordingly, a more workable interpretation of “shall conform to” would be for EPA and permitting authorities to assure that CSO permits, orders, and decrees are consistent with – and do not flatly conflict or undermine -- the general spirit and intent of the CSO Policy. To ascertain “conformity,” the permitting authority would analyze the facts and circumstances of each case as compared to the Policy's overarching themes of "flexibility," "site specificity," and "cost effectiveness."

An example of how this analysis might be conducted is as follows. NPDES permits must assure compliance with water quality standards (WQS). Thus, most NPDES permits contain “boilerplate” language stating that discharges under the permit "shall not cause or contribute to exceedances of water quality standards.” However, the CSO Policy recognizes that CSO discharges will not meet WQS until after the implementation of the LTCP. This reality can be addressed in CSO Phase II permits by including water quality-based performance standards derived from the LTCP (see CSO Policy at IV.B.2.c.iv.) and modifying the boilerplate to prohibit WQS violations “except as provided in the attached compliance schedule” (see discussion, infra, regarding use of compliance schedules in permits). Using this approach, the permit does ensure compliance with WQS, either immediately or on a delayed, enforceable schedule.

II. Options for Implementation of CSO Obligations
The CSO Policy and subsequent EPA guidance documents consistently state that the requirement to develop (Phase I) and implement (Phase II) the long-term control plan (LTCP) must be embodied in an “enforceable mechanism,” which may be either:

See, e.g., references in the CSO Policy to “the NPDES permit or other enforceable mechanism” (59 Fed. Reg. 18,688, 18,690), “permits or other enforceable mechanisms” (59 Fed. Reg. at 18,690), and “an NPDES permit or other enforceable mechanism” (59 Fed. Reg. at 18,691, 18,696).[1] Also, under “Expectations for Permitting Authorities” the CSO Policy states:

“This policy establishes a uniform, nationally consistent approach to developing and issuing NPDES permits to permittees with CSOs.” 59 Fed. Reg. 18,695.

Notably, this sentence is followed by extensive discussion of required elements for CSO Phase I and II permits.

A. Who Chooses the Option?
While enforcement officials have taken the reins in implementing the CSO program, it is quite clear that the CSO Policy intended for the “permitting authority” to take the lead role:

B. When Are Judicial Decrees Preferred?
Under the CSO Policy, judicial orders for Phase II major permitees are a “general” preference[2]:

“For major permittees, the compliance schedule [for a Phase II permit] should be placed in a judicial order.” 59 Fed. Reg. 18,696;

In general, a judicial order is the appropriate mechanism for incorporating the above provisions for Phase II.

The CSO Policy states that administrative orders may be appropriate:

C. Major and Minor Permittees
Notably, the terms “major permittee” and “minor permittee” are not defined in the CSO Policy, the CWA, or in U.S. EPA’s NPDES regulations. On the NPDES permit application forms, however, EPA traditionally has regarded POTWs with a design flow greater than 1.0 million gallons per day (MGD) or a service population above 10,000 as “major.”[3] Since the CSO Policy states only that decrees are preferred for “major” permittees, the NPDES permitting office has a great opportunity to shape future CSO program efforts by defining “major” permittee for CSO program purposes. In EPA’s own practice, the Agency has issued administrative orders to Phase II major permittees rather than judicial consent decrees. See, e.g., Appendix J to CSO Report to Congress. EPA has not held to a steadfast rule requiring consent decrees to codify CSO community obligations.

If “major permittee” is defined more appropriately and more specifically for CSO program purposes based on such factors as system size, complexity of the LTCP program, and length of time required for implementing the policy, many communities presently facing enforcement action could be permitted instead of facing enforcement action. EPA likely can identify how many of the 772 CSO communities presently fall below the 1.0 mgd major threshold, and can explain why the “major” definition selected makes sense in terms of prioritizing CSO communities and issues.

D. Preference for State Enforcement versus Federal Enforcement
The CSO Policy expresses a clear preference for the use of state enforcement mechanisms where the state agency is the delegated permitting authority. The CSO Policy specifically encourages a dominant state role:

Once the permittee has completed development of the long-term CSO control plan and has coordinated with the permitting authority the selection of the controls necessary to meet the requirements of the CWA, the permitting authority should include in an appropriate enforceable mechanism, requirements for implementation of the long-term CSO control plan, including conditions for water quality monitoring and operation and maintenance. 59 Fed. Reg. at 18,695.

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Once the permittee has completed development of the long-term CSO control plan and the selection of the controls necessary to meet CWA requirements has been coordinated with the permitting and WQS authorities, the permitting authority should include, in an appropriate enforceable mechanism, requirements for implementation of the long-term CSO control plan as soon as practicable. 59 Fed. Reg. at 18,696.

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Unless the permittee can comply with all of the requirements of the Phase II permit, the NPDES authority should include, in an enforceable mechanism, compliance dates on the fastest practicable schedule for those activities directly related to meeting the requirements of the CWA. For major permittees, the compliance schedule should be placed in a judicial order. Id.

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If a CSO permittee fails to meet the final compliance date of the schedule, the NPDES authority should initiate appropriate judicial action. 59 Fed. Reg. at 18,697.

Notably, the only EPA document suggesting a preference for federal consent decrees is the recent September 16, 2003 OECA memorandum from W. Smith and B. Gelber, which states that

“[t]he principal objective of all CSO negotiations is to reach agreement on a federal consent decree requiring a Defendant to: 1) develop and implement a long-term control plan . . . and 2) implement the nine minimum controls . . . .”

As this memorandum is directed only to EPA Regional staff and DOJ enforcement personnel, and not to states, it would not be expected to make reference to alternative state enforcement mechanisms that are not available to the personnel to which it is addressed. However, if this memorandum was intended to express a requirement applicable to state permitting authorities, it simply cannot be reconciled with the language of the CSO Policy itself.

E. Compliance Schedules and Permits as “Enforceable Mechanisms” for LTCP Implementation
Most CSO LTCPs extend beyond five years. It has been suggested by enforcement staff to several AMSA member agencies that a permit is an inappropriate enforceable mechanism where the compliance schedule goes beyond the NPDES permit life. This approach is not only inconsistent with the CSO Policy, law, and precedent but also makes it unlikely that an NPDES permit will ever be used as the “enforceable mechanism” for most CSO communities.

If authorized by the relevant state’s water quality standards or implementing regulations, a compliance schedule can be longer than 5 years and can extend beyond the permit term. The Administrator’s decision in Star-Kist Caribe, Inc., NPDES Appeal No. 88-5 (April 17, 1990) held that EPA could establish compliance schedules in NPDES permits if the schedules were authorized in the State’s water quality standards or the State’s regulations implementing the standards. The Administrator stressed that:

In sum, the language, structure and objectives of the Act, as set forth in §§101(a) and (b), 402(A)(3), and 510, all support an interpretation of §301(b)(1)(C) that Congress intended the States, not EPA, to become proper authorities to define appropriate deadlines for complying with their own state law requirements. Just how stringent such limitations are, or whether limited forms of relief such as variances, mixing zones, and compliance schedules should be granted are purely matters of state law, which EPA has no authority to override.”

Star-Kist at 15-16. The opinion also emphasized that “. . . the States have full authority to make appropriate accommodations for dischargers needing additional time for compliance, and it is up to the States, not EPA, to decide whether their water quality standards should be applied in a flexible manner.” Id. at 17. The Administrator’s decision was subsequently confirmed by the Environmental Appeals Board on May 26, 1992. 4 E.A.D. 33.

 Notably, the U.S. EPA has approved the NPDES permit regulations in states that authorize compliance schedules extending beyond the permit term and lasting longer than 5 years. One example can be found in the state of Ohio. OAC § 3745-33-05(F)(3)(c) explicitly provides for compliance schedules that go beyond the term of the permit, and OAC § 3745-33-05(F)(3)(d) imposes a 5-year limit only on compliance schedules for whole effluent toxicity or other specified pollutants.

Furthermore, the Water Quality Guidance for the Great Lakes System (GLI), 40 CFR Part 132, authorizes compliance schedules that extend beyond the permit term. The GLI restricts the length of compliance schedules to a maximum of 5 years, however, this limitation is not based on any requirement outside of the GLI itself, and it does not apply to discharges from “wet weather” sources. See 40 CFR § 132.4(e)(1). EPA states in the Water Quality Guidance for the Great Lakes System: Supplementary Information Document (EPA-820-B-95-001, March 1995), at 433, that:

EPA recognizes that where a permit is modified near the end of the permit term, the permittee may still need a full five years to comply. The Agency finds no persuasive reason for distinguishing between these permittees and permittees who are in the earlier part of a permit cycle. Therefore, the final Guidance provides that the compliance schedule can go beyond the term of the permit.

III. Background Reference Documents
U.S. EPA Combined Sewer Overflow Control Policy, 59 Fed. Reg. 18,688 (April 19, 1994)

Memorandum from R. Perciasepe, Assistant Administrator, Office of Water, January 1, 1997

Deadline for Nine Minimum Controls in Combined Sewer Overflow Policy (Nov. 19, 1996)

Memorandum from R. Perciasepe, Assistant Administrator, Office of Water re: Implementation of the CSO Control Policy (May 19, 1998

Memorandum from M. Cook, Director, Office of Regulatory Enforcement re: Water Quality-Based and Technology-Based CSO Requirements (Jan. 14, 1999)

Memorandum from S. Herman, Assistant Administrator, Office of Enforcement and Compliance Assurance re: Compliance and Enforcement Strategy Addressing Combined Sewer Overflows and Sanitary Sewer Overflows (Apr. 27, 2000)

Memorandum from W. Smith, Director, OECA and B. Gelber, Chief, Environmental Enforcement Section, DOJ re: Negotiation of Combined Sewer Overflow (CSO) Consent Decrees (Sept. 16, 2003).

 


[1] See also statements in the April 27, 2000 memo from S. Herman to the effect that Regional CSO Response Plans should require the Region and/or NPDES states to ensure that all CSO communities are “under an enforceable mechanism (e.g. NPDES permit, administrative order),” Herman memo at 2-3; and that CSO requirements “may be in a permit, administrative order, or civil judicial order,” Herman memo at 5.

[2] Notably, the CSO Policy states that for Phase I permits: “The NPDES authority should include compliance dates [for the nine minimum controls] in an “appropriate enforceable mechanism” issued in conjunction with the Phase I permit. 59 Fed. Reg. 18,696. No reference is made to a judicial decree for Phase I.

[3] The 1999 NPDES application rule preamble (64 Fed. Reg. at 42,435) states that:

Based on the information from the Minor POTW Study and comments received on the proposal, EPA decided to modify the proposed application requirement to reduce the information required from facilities under 0.1 mgd. The 0.1 mgd cut-off was based on data from the EPA Permit Compliance System (PCS). The data showed that facilities with design flows greater than 1.0 mgd (major facilities) account for 94.6% of the total POTW flow nationwide. Facilities with design flows between 1.0 mgd and 0.1 mgd account for 5% of the total flow. The remaining 0.4% of the nationwide POTW flow is discharged by facilities with design flows less than 0.1 mgd. A facility with a design flow of less than 0.1 mgd typically serves a population of 1,000 people or less. Approximately 40% of all POTWs fall into this less than 0.1 mgd category.

See also id. at 42,459:

The annual reporting and recordkeeping costs and burden for this collection of information are described in the following paragraphs. . . . For Form 2A the total annual costs are $ 4,100,711. There are 731 major applicants, 1230 minor applicants between 0.1 and 1.0 mgd, and 1230 minor applicants <0.1 mgd.