The Clean Water Act of 1977: Congress Passes 'Mid-Course Correction' Amendments to the FWPCA

After a protracted conference reminiscent of the deadlock that preceded enactment of the Clean Air Act Amendments of 1977, Congress has finally passed a compromise set of revisions¹ to the Federal Water Pollution Control Act Amendments of 1972 (FWPCA).² The conference report was filed on December 6,³ and both houses approved the measure on December 15, 1977 and sent it to the White House for President Carter's signature. The revisions, which industry generally accepted as fair while certain environmental advocates voiced disappointment, represent more than two years of legislative effort. A similar package of proposed amendments to the FWPCA was aborted in 1976 when a conference committee could not reach a compromise between divergent Senate and House bills at the end of the 94th Congress.⁴

The amendments will make a number of important changes in the FWPCA, perhaps the most obvious being a new "popular" name, the Clean Water Act. Equally noteworthy, however, is the retention of certain central aspects of the original statutory scheme, such as the broad scope of the Army Corps of Engineers' jurisdiction over discharges of dredge and fill material pursuant to § 404, which had been under prolonged attack.⁵ This Comment will described the salient features of the amendments and analyze their regulatory significance.

Compliance Deadline Extensions

The conference agreement gives the Environmental Protection Agency (EPA) the authority to grant case-by-case extensions of the July 1, 1977 deadline for adoption of best practicable control technology to industrial dischargers who have made a "good faith" attempt to comply with the deadline. The agency has no such authority under the 1972 Act,⁶ and although most industrial point sources met the deadline others did not and were subject to enforcement action. The discharger must also have the necessary control facilities in place or under construction, and full compliance must be achieved no later than January 1, 1979.

In addition, the agency can extend the 1977 deadline for the installation of secondary sewage treatment facilities by municipalities for up to six years where the failure to comply is due to lack of federal construction grant funds or to delays in the completion of ongoing treatment facility construction. Here again, the 1972 Act had provided EPA with no such extension authority.⁷ The measure continues EPA's construction grant program, providing $4.5 billion in fiscal year 1978 and $5 billion a year for fiscal 1979 through 1982. This money will be distributed according to a revised allocation formula which gives greater assistance to the less populated states. Increased funding levels are also provided for the operation of facilities for the land treatment of sewage.

The conferees made a number of changes in the requirement for achievement of best available control technology (BAT) by 1983.⁸ A one-year extension was granted for industrial discharges of conventional pollutants such as biological oxygen demand and suspended solids. EPA can allow permanent waivers, on a case-by-case basis, of the requirements for achievement of BAT for such pollutants by 1984. One of the relevant factors in such a waiver determination will be whether the cost of further effluent reduction is unreasonable in relation to the predicted benefits it would achieve. The conference agreement provides an additional year for installation of BAT for controlling discharges of the 65 specific and generic toxic pollutants listed in the consent decree in NRDC v. Train,⁹ but it forbids any waivers of the extended deadline as to these pollutants. The EPA Administrator can expand or reduce the list of regulated toxic pollutants at his discretion.

For all pollutants not in the toxic or conventional categories (labeled by the conferees as nonconventional), four-year extensions of the 1983 deadline can be granted.Waivers of the requirements to achieve best available technology by the extended 1987 deadline can be allowed where they will neither interfere with attainment of water quality standards nor present an unacceptable health risk. The economic "unreasonableness" test for waiver of the BAT requirement for conventional pollutants will not be relevant here, however.

These deadline extensions reflect congressional recognition of administrative delays in issuing effluent limitations and pretreatment standards for industrial dischargers and in obligating federal grants for construction of municipal sewage treatment facilities. The waiver provisions apparently are based on a belief held in some quarters of Congress that the original statutory requirement for installation of best available technology by all dischargers may in some cases prove environmentally or economically unjustifiable. The tighter controls imposed on toxic pollutants in conjunction with the one-year compliance [8 ELR 10011] postponement, on the other hand, represent a significant escalation of the federal regulatory effort to prevent discharges of such substances into the nation's waters.

Section 404: Dredge and Fill Regulation

One of the most controversial issues with which the conferees had to wrestle in attempting to reconcile the House and Senate bills was whether the Army Corps of Engineers' regulatory jurisdiction over dredge and fill activities in the nation's waters and adjacent wetlands should be cut back, and if so, to what extent. The House bill had limited the Corps' jurisdiction to navigable waters as traditionally defined and adjoining wetlands,¹⁰ while the Senate bill retained the broad geographical scope of the Corps' regulatory authority over all "waters of the United States" and included specific exemptions for certain activities such as normal farming, ranching, and forestry operations. The Senate had also, unlike the House, provided for the delegation of permit-issuing authority to the states. This divergence reflected a public controversy over § 404 which has raged since the 1975 decision in NRDC v. Callaway,¹¹ and the subsequent issuance of Corps regulations¹² expanding the scope of the federal dredge and fill permit program to all "waters of the United States."

The conferees essentially adopted the Senate version with several important modifications. The geographic reach of the Corps' jurisdiction was not curtailed, but a number of specific activities encompassed within normal agricultural, silvicultural, and ranching operations were exempted from the permit requirement. Permit-issuing authority for dredge and fill activities in waters other than those meeting the traditional test of navigability and their adjacent wetlands will be transferable to states that submit proposed permit programs which are determined by the EPA Administrator, in consultation with the Corps, to meet essentially the same statutory standards required for approval of state national pollutant discharge elimination system (NPDES) permit programs under § 402 of the Act. EPA will retain supervisory authority over such state dredge and fill permit programs and can veto particular permits or withdraw approval of the transfer of permitting authority to the state program as a whole upon a finding that it is not being administered in accordance with the statutory requirements. The Corps is also authorized to issue five-year general permits on a state, regional, or national basis for categories of activities involving dredge and fill material discharges which will have only minimal cumulative adverse effects on the environment.

One provision of major importance exempts all federal projects which have been specifically authorized by Congress from both the federal and state permit programs. A further requirement is that Congress have considered an environmental impact statement analyzing the effects of dredge and fill activities associated with the project prior to authorization or appropriation of construction funds. Environmental advocates find this provision objectionable on the grounds that dredge and fill operations connected with massive federal dams and navigation or stream channelization projects often have the most destructive impact on wetlands areas.

The conferees felt that the exemption is justified by the separation of powers principle. They argued that an executive agency should not be able to nullify specific congressional authorization of a project given with knowledge of its wetland impacts. They presented an additional rationale in their assertion that the project's impact statement must contain an analysis of the environmental effects of the dredge and fill discharge which conforms with EPA's § 404(b)(1) guidelines,¹³ implicitly suggesting that this represents close to the "functional equivalent"¹⁴ of a § 404 permit. Whether the initial fears that this provision opens a gaping hole in the national program to preserve valuable wetland areas from the harmful effects of dredge and fill activities will be quieted rather than confirmed depends upon the diligence of both the responsible agencies and Congress in objectively assessing and attempting to mitigate the wetlands impacts of exempted federal projects.

Best Management Practices to Control Site Runoff

The amendments authorize EPA to publish regulations, classified according to industrial category, which require the use of certain techniques to control plant site runoff, spillage, disposal, and drainage from raw material storage which the Administrator determines may discharge into navigable waters significant amounts of any toxic or hazardous pollutant subject to regulation under § 307(a)(1)¹⁵ or § 311. This provision, which industry strenuously opposed, is aimed at preventing, through the imposition of best management practices, toxic pollutant discharges associated with ancillary industrial activities, and it represents a significant innovation in the statutory scheme.

Oil Spill Liability

To assure adequate environmental protection in the face of increasing oil tanker traffic and probable oil extraction from the Atlantic outer continental shelf (OCS), [8 ELR 10012] the conferees included a provision extending the federal government's jurisdiction over oil spills from the current 12-mile limit out to 200 miles, and bringing oil spills from OCS drilling and deep water ports within the Act's coverage. The measure also substantially increases the liability limits for oil spill cleanup costs by raising the charge per gross ton for vessel spills from $100 to $125 for inland oil barges and $150 for other oil carriers and eliminating the current $14 million ceiling on vessel spill liability. The President is authorized to set a liability ceiling ranging from $8 million to $50 million for spills from each class of onshore or offshore facility covered by the Act.The federal government will also be able to recover as removal costs under § 311¹⁶ expenses incurred in restoring or replacing natural resources damaged or destroyed by the spill. The provision makes clear, however, that only vessel owners or operators otherwise subject to United States jurisdiction (through vessel registry or transit within a United States port) can be held liable for removal costs or fines under the Act.

The conferees say this provision as an interim measure which will assure adequate funding for oil spill cleanup until final congressional action can be taken on separate oil spill "superfund" legislation. The House has already passed a bill¹⁷ to establish such a fund, and the Senate Environment and Public Works Committee is currently considering the matter.

Federal Facility Compliance

The conferees adopted a provision analogous to one contained in the recent Clean Air Act Amendments¹⁸ which subjects federal dischargers to enforcement suits in state courts for violations of state procedural requirements, such as permit or reporting programs, as well as substantive requirements, such as water quality standards or effluent limitations. This measure effectively overrules the Supreme Court's 1976 decision in EPA v. California¹⁹ which held § 313²⁰ too ambiguous to support a finding of a waiver of sovereign immunity on this point. The federal government retains the right to remove any such state enforcement suit to the appropriate federal district court, and the President still has the power to exempt particular facilities from state requirements in the "paramount interest" of the nation. Exemptions for military installations will now be allowed to run for three years rather than the one-year term to which exemptions for all facilities were previously limited.

Irrigation Return Flows

Section 502 of the Act²¹ has been amended to remove agricultural irrigation return flows from the definition of the term "point source." Section 402²² is revised to prohibit the EPA Administrator from requiring NPDES permits for such discharges, but the conferees explicitly disclaimed any intention of restricting state authority to regulate irrigation return flows once a state's permit program has been approved. Section 208²³ is also amended to require that areawide waste treatment management plans prepared under that section consider such return flows.

Deletions: Noncompliance Fees, Phosphate Limits, Sewer Line Construction, User Charges

Several significant provisions in the Senate bill and at least one in the House bill were not adopted by the conferees. The Senate bill had included a requirement for automatic imposition of a quarterly fee equivalent to the economic saving from noncompliance on any point source exceeding the effluent limitations or missing the compliance date specified in its discharge permit. This noncompliance penalty was to supplement rather than replace existing civil and criminal enforcement devices under the Act and is analogous to the delayed compliance penalty included in the Clean Air Act Amendments of 1977.²⁴ The House bill lacked such a penalty, and the issue was finally dropped in conference after the House conferees steadfastly refused to accept the Senate provision.

The Senate bill also established uniform limitations on the phosphorous content of detergents sold within the eight Great Lakes states and directed EPA to conduct a six-month study on the economic feasibility and environmental desirability of extending these limitations to the rest of the nation. Here again, the House bill contained no comparable provision, and the House conferees were successful in their efforts to prevent inclusion of this measure in the conference agreement.

In addition, the Senate had attempted to limit the suburban "sprawl" induced by the extension of municipal services beyond currently developed municipal areas by forbidding the use of sewage treatment construction grants for new sewer line systems that are not limited to the needs of existing populations. The conference replaced this strong prohibition on unnecessary sewer line construction with a provision making the consideration of population density discretionary in EPA eligibility determinations for sewer collector systems and limiting the relevance of population factors to the evaluation of alternatives.

The House bill contained a provision amending § 204(b)²⁵ of the Act to permit the use of ad valorem (property) taxes as a method of collecting the costs of operating and maintaining municipal waste treatment works constructed with federal grants. The Senate conferees strongly opposed this measure, and as a result, the conference substitute allows an ad valorem assessment of sewage treatment plant operating costs against residential users, but it leaves large industrial dischargers subject to the existing statutory requirement [8 ELR 10013] that each user's fee be set according to the strength and volume of the waste water it contributes to the system. Environmental advocates view user charges as preferable to ad valorem taxes because they encourage water conservation and, in the case of industrial dischargers, more efficient pretreatment of waste water discharged into municipal treatment works. The conferees did provide that industrial user charges need not be based on actual metering of waste water flows, an allowance that reflects the House concern that many municipalities would be unable to afford the installation costs of a large number of meters.

Unlike the Clean Air Act Amendments of 1977,²⁶ the Clean Water Act makes no significant changes in the statutory provisions regarding judicial review or the setting of administrative standards. The conferees rejected a provision in the House bill which would have allowed either house of Congress to veto any administrative regulation or standard promulgated pursuant to the Act within 60 days of its issuance. They also rejected as unnecessary a section of the House bill expressly providing for court of appeals review of two specific EPA actions, including the issuance of effluent limitations guidelines under § 304(b),²⁷ an issue essentially resolved by the Supreme Court's decision in DuPont v. Train.²⁸

Sewage Sludge

The conference agreement addresses the growing problem of sewage sludge disposal in two ways. First, it modifies the § 301 requirement of secondary treatment of municipal waste water discharges, thereby validating the current practice of several west coast cities of discharging untreated sludge through deep ocean outfalls. This provision overrules a recent federal court decision that Los Angeles' discharge of such sludge was illegal.²⁹ Second, the amendments direct EPA to complete a report by October 1, 1978 which identifies legal, institutional, and health-related impediments to the expanded use of municipal waste water and treated sludge for productive purposes and considers whether new federal legislation is necessary to accomplish such increased use.

Conclusion

The two-year task of revising the Federal Water Pollution Control Act has finally been completed, and the Act has emerged from this protracted process relatively unscathed. As the foregoing analysis indicates, the revisions that Congress has made in the statute are closer to "mid-course corrections" than fundamental changes in the statutory scheme.

The most important features of the new amendments are the extensions of the 1977 and the 1983 compliance deadlines, coupled with modifications of the requirements for achievement of best available technology and the modification of the current federal permit program for regulating discharge of dredge and fill material. The deadline extensions delay the original compliance timetable and the provisions for BAT waivers loosen the Act's ambitious technological requirements to some extent. The amendments retain the basic regulatory approach of technologically determined pointsource effluent limitations, however, and include a new emphasis on controlling toxic pollutant discharges.

The effort to cut back drastically the broad scope of federal dredge and fill jurisdiction under § 404 has been defeated. As modified, the § 404 program now provides for a workable transfer of permit issuance authority for certain geographical areas from the federal government to the states, subject to EPA's supervisory power, and effectively exempts certain de minimis dischrges. The real question raised by the amendments to § 404 is the ultimate effect of the statutory exemption from the dredge and fill permit requirements for those federal projects which have been specifically authorized by Congress after disclosure of the project's wetlands impacts in a NEPA impact statement.

1. H.R. 3199, 95th Cong., 1st Sess. (1977).

2. 33 U.S.C. §§ 1251-1376, ELR STAT. & REG. 41101.

3. H. Rep. No. 95-380, 95th Cong., 1st Sess. (1977), reprinted in 123 CONG. REC. H12690 (daily ed. Dec. 6, 1977).

4. See Comment, Congress Fails to Amend the Clean Air Act or § 404 of the FWPCA, 6 ELR 10246 (Nov. 1976).

5. Id. See also, Comment, The Move to Amend § 404 of the FWPCA: House Passes Bill Limiting Federal Authority Over Dredge-and-Fill Activities, 7 ELR 10082 (May 1977).

6. Bethlehem Steel Corp. v. Train, 554 F.2d 657, 7 ELR 20019 (3d Cir. Nov. 1, 1976).

7. State Water Control Board v. Train, 559 F.2d 921, 7 ELR 20571 (4th Cir. July 13, 1977).

8. 33 U.S.C. § 1311(b)(2)(A).

9. 6 ELR 20588 (D.D.C. June 9, 1975).

10. See Comment, The Move to Amend § 404 of the FWPCA: House Passes Bill Limiting Federal Authority Over Dredge-and-Fill Activities, 7 ELR 10082 (May 1977). Traditionally defined navigable waters include coastal waters and inland waters which have historically been used, are being used, or could with reasonable improvement be used for interstate or foreign commerce. See, e.g., State Water Control Board v. Hoffmann, 424 F. Supp. 146, 7 ELR 20219 (W.D. Va. Jan. 11, 1977).

11. 392 F. Supp. 685, 5 ELR 20285 (D.D.C. 1975). See Comment, Comprehensive Wetlands Protection: One Step Closer to Full Implementation of § 404 of the FWPCA, 5 ELR 10099 (July 1975).

12. 42 Fed. Reg. 31320 (July 25, 1975); see Comment, Corps Issues Interim Rules for Discharges of Dredged and Fill Materials, 5 ELR 10143 (Sept. 1975). These regulations were recently revised and republished. 33 C.F.R. pts. 321, 323, 42 Fed. Reg. 37122, 37144 (July 19, 1977), ELR STAT. & REG. 46361, 46377. See Comment, Corps of Engineers Promulgates Revised Dredge and Fill Regulations, 7 ELR 10193 (Oct. 1977).

13. 40 C.F.R. § 230.

14. The functional equivalence theory was recently used to justify EPA's failure to prepare an EIS in connection with the selection of a dump site and issuance of an ocean dumping permit under the Marine Protection, Research and Sanctuaries Act. Maryland v. Train, 415 F. Supp. 116, 6 ELR 20496 (D. Md. May 10, 1976).

15. 33 U.S.C. § 1317(a)(1).

16. 33 U.S.C. § 1321.

17. H.R. 6803, 95th Cong., 1st Sess. (1977). See generally, Comment Oil Spills: Expected Reforms in Tanker Standards and Liability, 7 ELR 10099 (June 1977).

18. § 118, 42 U.S.C. § 7418, ELR STAT. & REG. 42225. See Comment, The Clean Air Act Amendments of 1977; Expedient Revisions, Noteworthy New Provisions, 7 ELR 10182, 10185 (Oct. 1977).

19. 426 U.S. 200, 6 ELR 20563 (1976).

20. 33 U.S.C. § 1323. See Comment, End-of-Term Supreme Court Decisions, 6 ELR 10172 (Aug. 1976).

21. 33 U.S.C. § 1362(14).

22. 33 U.S.C. § 1342.

23. 33 U.S.C. § 1288.

24. § 120, 42 U.S.C. § 7420.

25. 33 U.S.C. § 1284(b).

26. See Comment, The Clean Air Act Amendments of 1977: Expedient Revisions, Noteworthy New Provisions, 7 ELR 10182, 10186 (Oct. 1977).

27. 33 U.S.C. § 1314(b).

28. 430 U.S. 112, 7 ELR 20191 (Feb. 23, 1977). See Comment, DuPont v. Train: Supreme Court Upholds EPA's Authority to Issue Uniform Effluent Limitations, 7 ELR 10062 (Apr. 1977).

29. Pacific Legal Foundation v. Quarles, __ F. Supp. __, 7 ELR 20653 (C.D. Cal. July 20, 1977).