Federal Facilities Held Subject to State NPDES Permit Programs

The large number of federal facilities throughout the nation — military bases, nuclear fuel plants, the TVA, the Bonneville Power Administration — contribute significantly to ambient environmental pollution. Various efforts have been made at the federal level to bring federal facilities into conformity with federal and state pollution standards, but the problem still persists. Congress clearly indicated its dissatisfaction with this state of affairs by including identical language in the Clean Air Act Amendments of 1970 (§ 118),¹ the Federal Water Pollution Control Act Amendments of 1972 (§ 313),² and the Noise Control Act of 1972 (§ 4)³ mandating federal compliance with "Federal, State, interstate, and local requirements respecting control and abatement of pollution to the same extent that any person is subject to such requirements." Unfortunately, however, the precise meaning of this congressional command as it regards the extent of state jurisdiction over federal facilities in order to insure such compliance is not so clear. On February 10, 1975, the Ninth Circuit became the latest court to step into these murky waters when it held in California v. Environmental Protection Agency⁴ that federal agencies and enclaves which discharge water pollutants within California and Washington are required by this language in the FWPCA to seek NPDES permits from the appropriate state regulatory bodies.

[5 ELR 10068]

The question of federal facility compliance with permit requirements contained in state Clean Air Act implementation plans has been the subject to two contradictory circuit court decisions.⁵ The Sixth Circuit, in Kentucky ex rel. Hancock v. Ruckelshaus,⁶ held that such facilities were immune from state permit regulations on the basis of the Supremacy Clause and the doctrine of sovereign immunity. The Fifth Circuit, however, expressly rejected this view in Alabama v. Seeber,⁷ and ruled that federal facilities are subject to state permit schemes because § 118 of the statute contains a clear waiver of sovereign immunity and contemplates that federal and private facilities are to be treated equally within the scheme of control established under the Act.

The question of federal facility compliance with state permit regulations is of particular relevance to the scheme of regulation established under the FWPCA, however. The backbone of the water Act's regulatory scheme is the National Pollutant Discharge Elimination System (NPDES) permit program, established by § 402,⁸ under which all point sources are required to obtain discharge permits containing timetables for compliance with the statute's ambitious abatement golas. While EPA was given initial authority to issue such permits throughout the nation, each individual state is to take over the administration of the permit program within its borders upon EPA's approval of the state's proposed program under § 402(b). Thus far, twenty-two states have assumed NPDES permit issuing responsibility.

If federal facilities are immune from state permit requirements, either EPA would have to continue issuing permits to such facilities throughout the country as the states gradually take over primary responsibility for administration of the NPDES program, or a substantial number of point sources would not be subject to the program. In fact, EPA's practice thus far has been to allow the state to set substantive effluent standards and limitations for a federal discharger through its administrative process, but then to have the agency rather than the state issue the NPDES permit incorporating these standards. Believing that this practice rested on a mistaken interpretation of the statute, the states of California and Washington challenged EPA's disapproval of portions of their proposed permit programs which provided for issuance of state permits to federal facilities and state jurisdiction over federal facility compliance with water quality standards. Both states have numerous federal facilities within their borders which contribute substantial water pollution loads.

In California v. EPA, EPA conceded before the court, as it had in the two air act cases mentioned above, that the language of § 313 of FWPCA commands compliance by federal point sources with the substantive effluent limitations and standards promulgated by states pursuant to the statute. But EPA questioned whether § 313, by requiring federal compliance with "Federal, State, interstate and local requirements respecting control and abatement of pollution to the same extent that any person is subject to such requirements" mandates federal compliance with state procedures for obtaining state-issued NPDES permits.

The Ninth Circuit began its analysis of this question by noting that, while the plenary powers and supremacy clauses of the Constitution give Congress exclusive legislative authority over federal enclaves, it is well established that Congress may waive exclusive jurisdiction over the activities of federal facilities in deference to state regulation, so long as it retains ultimate legislative control over these areas. Having determined that Congress could, as "an alternative means for achieving the purposes of the Act," use state regulatory bodies to certify whether federal agencies and facilities are in compliance with substantive state standards, the court went on to hold that § 313, clearly and unambiguously, constitutes just such a waiver of exclusive legislative jurisdiction.

According to the court, the Act's legislative history, to which both EPA and the states pointed as supportive of their respective positions, is actually inconclusive as to the proper interpretation of § 313. Given this ambiguity, the court, quoting from Alabama v. Seeber, looked to the wording of § 313, the scheme of the Act as a whole, and the congressional purpose behind the statute as the best guides to interpreting that section. In examining the statutory wording, the court pointed out that § 313 includes language not present in § 118 of the Clean Air Act; the sentence in § 313 containing the mandate that federal facilities comply with state "requirements" ends with the phrase "including the payment of reasonable service charges."

The Ninth Circuit rejected EPA's contention that this additional phrase refers to service charges for state and local sewage treatment hookups, and ruled instead that it refers to charges incidentto state permit programs. According to the court, no one has ever seriously argued that subordinate governmental bodies must supply public utility services to federal facilities free of normal user charges, and Congress would therefore not find it necessary to direct federal agencies by statute to pay their full share of municipal sewer system costs. State permit program charges, on the other hand, might be considered sufficiently in the nature of a tax so as to require specific federal consent before they would be payable by federal agencies.

Two other sections, § 510 and § 505(f), of the FWPCA which have no counterparts in the Clean Air Act also reinforce this interpretation of § 313. Section 510⁹ [5 ELR 10069] provides that "nothing in this chapter shall (1) preclude or deny the right of any State … to adopt or enforce (A) any standard or limitation respecting discharges of pollutants, or (B) any requirement respecting control or abatement of pollution." (emphasis added) This implicit distinction between a "standard or limitation respecting discharges of pollutants" and a "requirement respecting control or abatement of pollution" undercuts EPA's argument that the term "requirements" in § 313 should be read to mean substantive effluent standards and limitations.

Section 505(f)¹⁰ in addition authorizes citizen suits against persons in violation of an effluent standard or limitation issued under §§ 301 or 302, standards issued under various other sections of the Act, or a "permit or condition thereof issued under section 402 … (including a requirement applicable by reason of § 313 …)." This wording shows clearly that "requirements" in § 313 cannot be read to mean simply substantive effluent limitations. It also demonstrates, according to the court, that Congress intended, by linking § 313 "requirements" with the § 402 permit scheme, to require full federal facility compliance with the procedural requirements of state prmit programs as well as with their substantive discharge standards.

As a further justification for its ruling, the court pointed to the mandate in § 313 that federal agencies comply with state pollution control requirements "to the same extent that any person is subject to such requirements." Noting that §§ 402(a)(1) and 402(a)(2), which outline the type of state permit program envisioned by Congress, provide for the imposition of conditions on permits, the court went on to assert that these conditions can most reasonably be developed through state administrative proceedings incidental to permit issuance. If federal discharges were not subject to the state permit process, they would not realistically be subject to the same kind of conditions that could be attached to permits issued to non-federal point sources, a result contrary to the express purpose of § 313.

The Ninth Circuit, was also particularly critical of EPA's de facto creation of a two-tier permit system by retaining permit issuance authority over federal facilities within states whose administration of the permit program for all non-federal point sources has been approved by the agency under § 402.

Nowhere in the language of Section 402, establishing NPDES, is there any suggestion that the Administrator may establish a dual permit system, administered in part by a state and in part by himself. The legislative history of Section 313 also is devoid of any indication that Congress intended to allow the Administrator to retain partial permit issuing authority.¹¹

Such a system would in addition, according to the court, be unnecessarily duplicative and inefficient, and thereby run afoul of the policy choice expressed in § 101(f)¹² that the statute be implemented so as to minimize interagency decision procedures.

While the rationale for the court's decision in the case is stated almost exclusively in terms of statutory interpretation and construction, the court's analysis in these areas actually provides less convincing support for its ruling than do the underlying and largely unstated policy considerations involved. Of these, the problem of enforcement under the NPDES permit program provides perhaps the strongest justification for subjecting federal agencies to state permit procedures. By almost all accounts, the federal government has failed to develop a meaningful self-enforcement mechanism for controlling water pollution emitted from its facilities and enclaves.¹³ At present EPA relies primarily on two devices for bringing federal facilities into compliance with federal and state pollution standards. The first is a special budgetary process embodied in OMB Circular A-106¹⁴ by which federal agencies are to provide EPA with a semi-annual list of pollution control expenditures needed at their facilities to achieve compliance with applicable standards. EPA then assigns each project a funding priority of low, medium or high, and forwards the request to OMB. Through its Office of Federal Activities (OFA), EPA also attempts to check back and deterine whether each agency's requests in fact include all expenditures necessary to bring its facilities into compliance.

A very important point to note, however, is that this special A-106 budget process applies only to capital expenditures for pollution control equipment. Funds for the operation and maintenance of such equipment once it is installed are thus subject to the vicissitudes of the general budget process. A large outlay for pollution control equipment at a facility this year therefore may not prevent violation of applicable standards by that facility next year.

The second compliance device, to which EPA would resort if it found an agency was not submitting A-106 requests for all necessary pollution control projects, for instance, is informal mediation between OFA and the derelict agency. It is apparent, however, that both these devices are essentially voluntary and depend heavily on the good faith of federal agencies and facilities. Some EPA regional offices claim the authority to issue administrative compliance orders to federal facilities in the event neither A-106 nor mediation serves to achieve [5 ELR 10070] compliance, but others are not sure federal agencies can be issued such orders as offending "persons" under § 309¹⁵ since they are not included in the definition of that term in § 502(5). Few, if any, administrative orders have been issued to federal facilities. But even these orders may well be toothless, since it is unclear whether EPA can bring a civil action under § 309 against an agency or facility which ignores such an order, and EPA in any case has a tacit policy of not taking sister agencies to court.

Another road open to EPA when the conditions or effluent limitations contained in a permit are being violated by a federal facility is to revoke the permit. This remedy is of little practical use, however, since it is not realistic to think that the agency would take action effectively closing down a federal installation. The existing federal enforcement scheme therefore relies heavily on voluntary compliance and self-enforcement, an approach which is not justified by the performance record of federal facilities in the field of pollution control.

This problem of inadequate federal enforcement is largely surmounted by the subjection of federal agencies to the state permit process. Such subjection includes the right of states to sue federal facilities in state courts for violation of effluent standards and limitations, for non-compliance with conditions attached to a permit, or for failure to submit required discharge or monitoring reports. The only real enforcement mechanism available against recalcitrant federal facilities in the absence of such state jurisdiction is the citizen suit device provided in § 505. However, relying on states, private parties or public interest litigating groups to be ever-present watchdogs capable to ferreting out sufficient data to prove a violation in every case without the benefit of monitoring procedures and timely discharge reports at the state level is tenuous at best. While it is understandable that federal agencies should not wish to be burdened with the duty to comply with 50 distinct sets of legal and procedural requireents, this alternative is preferable to the present state of affairs in which recalcitrant federal facilities can get away with polluting, and by their bad example serve to discourage vigorous abatement efforts by non-federal point sources.

On March 17, 1975, the Supreme Court granted certiorari¹⁶ in the case of Kentucky ex rel. Hancock v. Ruckelshaus, thereby agreeing to consider the recent split of authority between the Fifth and Sixth Circuits over the question of federal facility compliance with permit requirements contained in state Clean Air Act implementation plans. As was noted in an earlier ELR Comment,¹⁷ the plaintiff-appellant state's position in that case was strongly buttressed by the Fifth Circuit's subsequent ruling in Alabama v. Seeber. A third case involving the same question, California v. Stastny,¹⁸ is currently on appeal before the Ninth Circuit. The court in California v. EPA took pains to indicate that, because of the additional structural elements and language in the FWPCA not present in the Clean Air Act, its ruling did not predispose either an affirmance or reversal of the lower court ruling in Stastny, which held federal facilities immune from state permit requirements. The Ninth Circuit did acknowledge, however, that there arestrong structural and terminological similarities between the two statutes, and its numerous favorable citations of Alabama v. Seeber in conjunction with several disapproving references to Kentucky ex rel. Hancock at least suggest the likelihood of a reversal in Stastny.

The additional provisions and language in the FWPCA reduce to some extent the effect the Supreme Court's ultimate decision in Kentucky ex rel. Hancock, a Clean Air Act case, will have on the question of federal compliance with state NPDES permit programs under the FWPCA. In reaching that decision, the court should be aware, however, that the same basic policy considerations regarding federal versus state roles in pollution control underlie both laws, and a reversal in Kentucky would help to insure the longevity of the Ninth Circuit's holding in California v. EPA. The latter ruling makes possible the development of an effective enforcement system in the field of water pollution control, and is certainly worth preserving.

1. 42 U.S.C. § 1857f; ELR 41214.

2. 33 U.S.C. § 1323; ELR 41120.

3. 42 U.S.C. § 4904; ELR 41501.

4. California v. Environmental Protection Agency, 5 ELR 20213 (9th Cir. Feb. 10, 1975).

5. See Comment, Federal Facilities Held Subject to State Implementation Plans as Circuits Split, 4 ELR 10197 (Dec. 1974).

6. 4 ELR 20484 (6th Cir. 1974).

7. 4 ELR 20793 (5th Cir. 1974).

8. 33 U.S.C. § 1342; ELR 41121.

9. 33 U.S.C. § 1370; ELR 41126.

10. 33 U.S.C. § 1365(f); ELR 41125.

11. 5 ELR 20216.

12. 33 U.S.C. § 1251(f); ELR 41101.

13. See eg., S. Rep. No. 92-414, 1972 U.S. Code Cong. & Admin. News at 3733:

Evidence received in hearings disclosed many incidents of flagrant violations of air and water pollution requirements by federal facilities and activities. Lack of Federal leadership has been detrimental to the water pollution control effort.

14. 40 Fed. Reg. 1325 (Jan. 7, 1975); 5 ELR 47009.

15. 33 U.S.C. § 1319, ELR 41115.

16. 43 U.S.L.W. 3499.

17. supra, n. 5.

18. 2 ELR 20561 (C.D. Cal. 1972), appeal pending, 9th Cir. No. 72-2905.