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Compliance Basics: Immunity, Fees and Fines Region 4 EPA/DoD/States Environmental Conference Lt Col Barbara Altera Regional Envtl Counsel 29 June 2005
Roadmap • Sovereign Immunity • Environmental Fees • Environmental Fines • Other Possible Fee/Fine Issues
Sovereign Immunity • Ancient Concept: The King (Sovereign) Can Do No Wrong • The Federal Government as Sovereign is • Not subject to Federal, state, or local laws, and • Is not subject to lawsuit • Federal Supremacy • Based on US Constitution • Federal Government is Free From Regulation by Individual States
Rules of Interpretation • Only Congress has the Power to Waive Sovereign Immunity • Waivers are strictly construed in favor of U.S. • States Cannot Regulate Federal Entities Absent a Clear, Unequivocal Waiver • Department of Energy v. Ohio, 503 U.S. 607 (1992) • The Following Are Not Waivers • Executive orders • Failure to object to state regulation • Compliance agreements • Action of base commander • Most major environmental laws contain a federal facilities provision
Analysis: EPA vs. State Authority • EPA • Interagency Authority • “Clear Statement” Rule of Statutory Construction • Legislative History is Relevant • See DoJ OLC Opinion (14 Jun 00) -- addressing DoD’s payment of UST fines to EPA • http://www.usdoj.gov/olc/ustop2.htm • States • Waiver of Sovereign Immunity • Legislative History is not Relevant • Ex: DOE v. Ohio “sanction” not clear, unequivocal waiver for punitive fines under CWA and RCRA (FFCA, Oct 92)
Waivers – Summary Points • Waivers are getting broader (e.g., CAA, RCRA) • Congressional Interest in Amending Waivers • Court decision Congress amends to broaden • Scope of Waiver Drives Legally Enforceable Requirements
Overview: FEES • What are environmental fees? • When can DoD pay? • Sovereign immunity • Taxes
Environmental Fees • Fees are charges for services provided by state or local governments in administering their environmental programs • Examples • Permit fees • Underground storage tank registration fees • Solid waste collection fees
When Can DoD Pay? • Waiver of Sovereign Immunity; • Fees Must be Reasonable; and • Fee is not a Tax If No Legal Basis Payment = Anti-Deficiency Act Violation (ADA: 31 USC § 1341, “Limitations on expending and obligating amounts”)
Waiver Example: RCRA • RCRA Subchapter III (42 U.S.C. § 6961) “Each department, agency … of the Federal Government (1) having jurisdiction over any SW management facility or disposal site, or (2) engaged in any activity resulting, or which may result, in the disposal or management of SW or HW shall be subject to, and comply with, all Federal, State, interstate, and local requirements, both substantive and procedural (including any requirement for permits or reporting …), respecting control and abatement of SW or HW disposal and management in the same manner, and to the same extent, as any person is subject to such requirements, including the payment of reasonable service charges.”
RCRA Example, cont. “The reasonable service charges referred to in this subsection include, but are not limited to, fees or charges assessed in connection with the processing and issuance of permits, renewal of permits, amendments to permits, review of plans, studies, and other documents, and inspection and monitoring of facilities, as well as any other nondiscriminatory charges that are assessed in connection with a Federal, State, interstate, or local solid waste or hazardous waste regulatory program.”
Waiver Example: CWA • CWA (33 USC § 1323(a), “federal facilities pollution control”) “Each department, agency … of the Federal Government (1) having jurisdiction over any property or facility, or (2) engaged in any activity resulting, or which may result, in the discharge or runoff of pollutants … shall be subject to, and comply with, all Federal, 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 including the payment of reasonable service charges.” (Applies to substantive and procedural requirements)
Waiver Example: CAA 42 U.S.C. § 7418; CAA § 118, “Control of pollution from Federal facilities” • CAA § 118(a), “General Compliance” Compliance with Federal, State, interstate, and local requirements applies … “(B) to any requirement to pay a fee or charge imposed by any State or local agency to defray the costs of its air pollution regulatory program …” • But no waiver under CAA § 118(c), “Government Vehicles” and CAA § 118(d), “Vehicles operated on Federal installations” • 118(a) waiver cannot be read into 118(c) or 118(d) (DoJ letter to EPA Acting General Counsel, 29 Jul 98)
Waiver Example: Cleanup Fees • CERCLA Federal Facilities Provision (42 USC § 9620) • No waiver for fees • Environmental Restoration Program (ERP) (10 USC § 2701(d)) • “ … [T]he Secretary may enter into agreements on a reimbursable or other basis with any other Federal agency, with any State or local government agency, or with any Indian tribe, to obtain the services of the agency to assist the Secretary in carrying out any of the Secretary's responsibilities under this section. Services which may be obtained under this subsection include the identification, investigation, and cleanup of any off-site contamination resulting from the release of a hazardous substance or waste at a facility under the Secretary's jurisdiction.” • Basis for fees under Defense-State Memorandum of Agreement (DSMOA) Program
Waiver Example: EPCRA • 42 U.S.C. §§ 11001 – 11050 (1986) NO WAIVER No basis in EPCRA to pay fees • Federal Facilities Comply IAW Executive Order • E.O. 13148, “Greening the Government through Leadership in Environmental Management” (2000) (revoked EO 12856, “Federal Compliance with Right-to-Know Laws and Pollution Prevention Requirements” (1993)) • Enforcement and penalty provisions of EPCRA (Sections 325 and 326) are not applicable to federal facilities (no sovereign immunity waiver) • A legal basis outside of EPCRA statute may exist (ex: fiscal or contract principle)
Fee/Tax Analysis • Even if sovereign immunity has been waived, ensure that the fee is not really a tax • Taxes are revenues collected to provide for the general support of the entire community • States cannot tax the federal government absent Congress’ express consent • Existing waivers in environmental statutes do not waive sovereign immunity for state taxation • Most accepted fee/tax test was set forth by Supreme Court in Massachusetts v. U.S., 435 U.S. 444 (1978)
Massachusetts Test • Case involved state immunity from federal taxation • The test has been applied by analogy to federal immunity • DoD and DoJ have adopted -- DODI 4715.6, Environmental Compliance (24 Apr 96)
Massachusetts Test (cont.) • A fee is not a tax if the charges: • do not discriminate against Federal functions • are based on a fair approximation of use of the system; and • are structured to produce revenues that will not exceed the total cost to the state of the benefits to be supplied
Prong 2: Benefit Received • Many prior legal opinions found Prong 2 not satisfied because an actual benefit was not received • Test has relaxed in some circuits • So long as a benefit is available • See Jorlingv. US Dept of Energy, 218 F.3d 96 (2d Cir. 2000)
Punitive vs. Coercive Fines • Punitive Fines – Punish for Past Violations • Coercive Fines – Imposed to Induce Compliance with Injunctions or other Judicial Orders Designed to Modify Non-Compliant Behavior • Generally, Focus is on Punitive Fines (See Supreme Court’s Discussion in DOE v. Ohio)
Maximum Civil Penalties Maximum Statutory Amounts for EPA-imposed Fines • Were $27,500 per day per violation • Maximum increased by 17.3 percent to $32,500 for most violations after 15 Mar 04 • “Civil Monetary Penalty Inflation Adjustment Rule,” 69 Fed. Reg. 7121 (13 Feb 04) • EPA must review its penalties at least once every four years; adjust as necessary for inflation IAW Debt Collection Improvement Act of 1996 • The first time penalties have been adjusted for inflation since 1997
CAA Fines/Penalties • IAW 1997 DoJ (Office of Legal Counsel) Opinion, EPA has Authority to Assess Penalties • Uncertainty Exists for Payment of State-Imposed Penalties Under the CAA • SAF/IEE Memo, “Air Force Policy of the Payment of Fines and Penalties for Violations of the Clean Air Act (CAA)” (17 Jul 02) • 6th Cir: DoD will pay IAW Court of Appeals opinion • 9th Cir: DoD may negotiate and settle other pending or future penalty assessments • 11th Cir: DoD will not pay • City of Jacksonville v. Dep’t of the Navy, 348 F.3d 1307 (11 Cir. 28 Oct 03) • Held that CAA does not waive immunity from state-imposed punitive fines • All other circuits: Coordinate with DoJ • For all states: follow guidance and coordination regarding settlement agreements
CWA Fines • No waiver for fines • “Each department, agency … of the Federal Government (1) having jurisdiction over any property or facility, or (2) engaged in any activity resulting, or which may result, in the discharge or runoff of pollutants … shall be subject to, and comply with, all Federal, 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 including the payment of reasonable service charges.” 33 USC § 1323(a).
Other Possible Fee/Fine Issues • Interest • Generally, “no-interest rule” • E.g., Library of Congress v. Shaw, 478 U.S. 310 (1986) • Back Fees • Penalties for a Late Fee • Local Dispute Regarding Fee Amount • Negotiating Amount of Penalty • Self-Reporting (EPA Audit Policy; state policy) • Supplemental Environmental Projects
End • Questions? • Contact me: • E-mail(firstname.lastname@example.org) or • 404-562-4212