Headquarters U.S. Air Force
Integrity - Service - Excellence
Compliance Basics:
Immunity, Fees and Fines
Region 4 EPA/DoD/States
Environmental Conference
Lt Col Barbara Altera
Regional Envtl Counsel
29 June 2005
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Environmental Issues Are Like …
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Environmental Issues Are Like …
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Environmental Issues Are Like …
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Environmental Issues Are Like …
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Environmental Issues Are Like …
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Environmental Issues Are Like …
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Environmental Issues Are Like …
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Environmental Issues Are Like …
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Environmental Issues Are Like …
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Roadmap
As of:

Sovereign Immunity
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Environmental Fees
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Environmental Fines

Other Possible Fee/Fine
Issues
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Sovereign Immunity


Ancient Concept: The
King (Sovereign) Can Do
No Wrong
The Federal Government
as Sovereign is



Federal Supremacy


As of:
Not subject to Federal, state,
or local laws, and
Is not subject to lawsuit
Based on US Constitution
Federal Government is Free
From Regulation by
Individual States
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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

As of:
Most major environmental laws contain a federal
facilities provision
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Analysis:
EPA vs. State Authority

EPA
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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


States
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

As of:
http://www.usdoj.gov/olc/ustop2.htm
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)
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Waivers – Summary Points

Waivers are getting broader
(e.g., CAA, RCRA)

Congressional Interest in
Amending Waivers

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As of:
Court decision  Congress
amends to broaden
Scope of Waiver Drives
Legally Enforceable
Requirements
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Overview: FEES
 What
 When


As of:
are environmental fees?
can DoD pay?
Sovereign immunity
Taxes
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Environmental Fees
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
As of:
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
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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”)
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Waiver Example: RCRA

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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.”
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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.”
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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)
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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 …”

As of:
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)
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Waiver Example: Cleanup Fees
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
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 offsite 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
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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)

As of:
A legal basis outside of EPCRA statute may exist
(ex: fiscal or contract principle)
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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)
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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)
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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
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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 Jorling v. US Dept of Energy, 218 F.3d 96 (2d Cir.
2000)
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Fines (Penalties)
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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)
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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
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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
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As of:
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
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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).
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Other Possible Fee/Fine Issues

Interest
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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
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End
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Questions?

Contact me:

E-mail
(barbara.altera@brooks.af.mil)

As of:
or
404-562-4212
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