B-204752.OM, FEB 9, 1982

B-204752.OM: Feb 9, 1982

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WAS SUBJECT TO MORATORIUM ON COLLECTION BEGINNING DECEMBER 27. INDUSTRIAL COST RECOVERY (ICR) REQUIREMENT OF FEDERAL WATER POLLUTION CONTROL ACT (CLEAN WATER ACT) WAS TERMINATED BY SECTION 2 OF PUB.L. GRANTEES HAVE SUBSISTING DUTY TO PAY EPA. CEDD: INCIDENT TO YOUR ASSESSMENT OF THE ENVIRONMENTAL PROTECTION AGENCY'S (EPA) EFFORTS TO COLLECT INDUSTRIAL COST RECOVERY (ICR) PAYMENTS (CODE 995022) WE WERE ASKED FOR LEGAL ASSISTANCE BY THE STUDY'S TEAM LEADER. THE UNDERLYING ASSUMPTION FOR THE QUESTIONS IS THAT EPA HAS THE PRESENT AUTHORITY TO REQUIRE GRANTEES TO MAKE THE COLLECTIONS. THE QUESTIONS (COPY ATTACHED) ARE NOT INDIVIDUALLY ADDRESSED. SECTION 204(B)(1)(B) WAS ADDED TO THE FEDERAL WATER POLLUTION CONTROL ACT TO REQUIRE ICR AS A CONDITION OF TREATMENT WORKS GRANTS APPROVED AFTER MARCH 1.

B-204752.OM, FEB 9, 1982

SUBJECT: COLLECTION OF INDUSTRIAL COST RECOVERY PAYMENTS - B-204752-O.M. DIGESTS: 1. INDUSTRIAL COST RECOVERY (ICR) REQUIREMENT OF FEDERAL WATER POLLUTION CONTROL ACT (CLEAN WATER ACT) FOR TREATMENT WORKS CONSTRUCTION GRANTS APPROVED AFTER MARCH 1, 1973, WAS SUBJECT TO MORATORIUM ON COLLECTION BEGINNING DECEMBER 27, 1977. SECTION 2 OF PUB.L. NO. 96-483 TERMINATED ICR AS OF THAT DATE AND REQUIRED EPA TO DELETE ICR REQUIREMENT FROM GRANTS. IN VIEW OF LEGISLATIVE HISTORY AND ELIMINATION OF GRANT REQUIREMENT EFFECTIVE DECEMBER 27, 1977, EPA NO LONGER HAS AUTHORITY TO REQUIRE GRANTEES TO COLLECT FOR PERIODS PRIOR TO THAT DATE. 2. INDUSTRIAL COST RECOVERY (ICR) REQUIREMENT OF FEDERAL WATER POLLUTION CONTROL ACT (CLEAN WATER ACT) WAS TERMINATED BY SECTION 2 OF PUB.L. NO. 96-483, EFFECTIVE DECEMBER 27, 1977, BEGINNING OF MORATORIUM ON ICR COLLECTIONS. SOME GRANTEES MADE COLLECTIONS BEFORE THAT DATE BUT DID NOT FORWARD FEDERAL SHARE TO EPA FOR DEPOSIT IN TREASURY AS MISCELLANEOUS RECEIPTS. IN ABSENCE OF CLEAR STATUTORY MANDATE ALLOWING GRANTEES TO RETAIN FUNDS COLLECTED ON BEHALF OF FEDERAL GOVERNMENT, GRANTEES HAVE SUBSISTING DUTY TO PAY EPA. EPA CONTINUES COORDINATE AUTHORITY TO OBTAIN AND DEPOSIT THESE FUNDS IN TREASURY.

DIRECTOR, CEDD:

INCIDENT TO YOUR ASSESSMENT OF THE ENVIRONMENTAL PROTECTION AGENCY'S (EPA) EFFORTS TO COLLECT INDUSTRIAL COST RECOVERY (ICR) PAYMENTS (CODE 995022) WE WERE ASKED FOR LEGAL ASSISTANCE BY THE STUDY'S TEAM LEADER. RECEIVED SEVERAL QUESTIONS RELATING TO THE CURRENT COLLECTION BY GRANTEES OF ICR PAYMENTS FOR PERIODS PRIOR TO THE ESTABLISHMENT OF A STATUTORY MORATORIUM ON ENFORCEMENT. THE UNDERLYING ASSUMPTION FOR THE QUESTIONS IS THAT EPA HAS THE PRESENT AUTHORITY TO REQUIRE GRANTEES TO MAKE THE COLLECTIONS. OUR REVIEW LEADS US TO BELIEVE THAT, FOR THE REASONS STATED BELOW, EPA NO LONGER HAS THIS AUTHORITY. THEREFORE, THE QUESTIONS (COPY ATTACHED) ARE NOT INDIVIDUALLY ADDRESSED. HOWEVER, EPA'S AUTHORITY TO COLLECT THE FEDERAL SHARE OF ICR PAYMENTS ALREADY RECEIVED BUT NOT YET PAID OVER BY GRANTEES CONTINUES.

LEGISLATIVE BACKGROUND

UNDER SECTION 2 OF THE FEDERAL WATER POLLUTION CONTROL ACT AMENDMENTS OF 1972, PUB.L. NO. 92-500, 86 STAT. 816, 836, SECTION 204(B)(1)(B) WAS ADDED TO THE FEDERAL WATER POLLUTION CONTROL ACT TO REQUIRE ICR AS A CONDITION OF TREATMENT WORKS GRANTS APPROVED AFTER MARCH 1, 1973. THE APPLICANT WAS REQUIRED TO PROVIDE FOR INDUSTRIAL USERS TO PAY TO IT THAT PROPORTION OF THE FEDERAL CONSTRUCTION COSTS ALLOCATED TO SUCH USERS. SECTION 204(B)(3) PROVIDED THAT THE GRANTEE WAS TO RETAIN NOT MORE THAN 50 PERCENT OF THE REVENUES RECEIVED FROM ICR AND THAT THE BALANCE WAS TO BE DEPOSITED BY THE EPA ADMINISTRATOR IN THE TREASURY AS MISCELLANEOUS RECEIPTS.

THE CLEAN WATER ACT OF 1977, DECEMBER 27, 1977, PUB.L. NO. 95-217, 91 STAT. 1573, 1609, 1610, IN SECTION 75(A) REQUIRED EPA TO STUDY THE EFFICIENCY OF, AND THE NEED FOR, ICR AND REPORT THE RESULTS TO THE CONGRESS. SECTION 75(B) OF THE ACT MANDATED AN 18-MONTH MORATORIUM ON ENFORCEMENT OF THE ICR PAYMENT REQUIREMENT BY THE FEDERAL GOVERNMENT EITHER DIRECTLY OR BY REQUIRING A GRANT RECIPIENT TO DO SO. THE MORATORIUM WAS EXTENDED TO JUNE 30, 1980, BY PUB.L. NO. 96-148, 93 STAT. 1088, DECEMBER 16, 1979.

THE LAST LEGISLATION AFFECTING ICR WAS PUB.L. NO. 96-483, 94 STAT. 2360, 2361, OCTOBER 21, 1980, WHICH AMENDED THE FEDERAL WATER POLLUTION CONTROL ACT. SECTION 2 OF THE ACT DELETED SECTION 204(B)(1) WHICH HAD ESTABLISHED THE ICR REQUIREMENT FOR GRANTS APPROVED AFTER MARCH 1, 1973 (SUBSECTION (A)). SUBSECTION (B) INCLUDED REMOVAL OF PRIOR REQUIREMENTS RELATING TO THE DISPOSITION OF ICR REVENUES COLLECTED BY GRANTEES.

SUBSECTION (C) PROVIDED AS FOLLOWS:

"THE ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION AGENCY SHALL TAKE SUCH ACTION AS MAY BE NECESSARY TO REMOVE FROM ANY GRANT MADE UNDER SECTION 201(G)(1) OF THE FEDERAL WATER POLLUTION CONTROL ACT AFTER MARCH 1, 1973, AND PRIOR TO THE DATE OF ENACTMENT OF THIS ACT, ANY CONDITION OR REQUIREMENT NO LONGER APPLICABLE AS A RESULT OF THE REPEALS MADE BY SUBSECTIONS (A) AND (B) OF THIS SECTION OR RELEASE ANY GRANT RECIPIENT OF THE OBLIGATIONS ESTABLISHED BY SUCH CONDITIONS OR OTHER REQUIREMENT."

UNDER SUBSECTION (F), PROVISION FOR THE MORATORIUM WHICH BEGAN ON DECEMBER 27, 1977, UNDER SECTION 75(B) OF THE 1977 ACT, WAS REMOVED. FINALLY, SUBSECTION (G) STATED THAT "THE AMENDMENTS MADE BY THIS SECTION (SECTION 2) SHALL TAKE EFFECT ON DECEMBER 27, 1977."

ANALYSIS

TO DETERMINE THE EFFECT OF THE 1980 AMENDMENTS OF THE FEDERAL WATER POLLUTION CONTROL ACT IT IS NECESSARY TO CONSIDER THE CHRONOLOGY AND NATURE OF EVENTS AND VIEWS EXPRESSED IN BOTH HOUSES OF THE CONGRESS BEFORE THE ENACTMENT OF THE 1980 AMENDMENTS.

AS THE RESULT OF NUMEROUS COMPLAINTS RECEIVED BY THE CONGRESS REGARDING ICR, THE CLEAN WATER ACT OF 1977 DIRECTED EPA TO STUDY THE ICR SYSTEM AND REPORT ITS FINDINGS TO THE CONGRESS. A MORATORIUM WAS IMPOSED BY THE ACT EFFECTIVE DECEMBER 27, 1977, AND WAS TO EXPIRE ON JUNE 30, 1979. THE EPA REPORT WAS RECEIVED BY THE CONGRESS IN JANUARY 1979. SUBSEQUENTLY, SENATOR CHAFEE, WHO HAD BEEN A CONFEREE ON THE 1977 ACT, INTRODUCED SENATE BILL 901 WHICH TOTALLY REPEALED ICR EFFECTIVE MARCH 1, 1973. IT REMOVED THE ICR REQUIREMENT FROM GRANTS MADE AFTER MARCH 1, 1973. THE BILL REQUIRED EPA TO PAY 120 PERCENT OF FUNDS COLLECTED FROM INDUSTRIAL USERS AND PAID INTO THE UNITED STATES TREASURY, TO THE GRANTEES WHO IN TURN WOULD, WITH CERTAIN EXCEPTIONS, REFUND TO INDUSTRIAL USERS 100 PERCENT OF THEIR ICR PAYMENTS. S. 901 WAS AMENDED BY THE SENATE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS TO DELETE THE REPEAL OF ICR AND INSTEAD EXTENDED THE MORATORIUM UNTIL JUNE 30, 1980. THIS WAS TO GIVE EPA TIME TO FURTHER EXAMINE ICR AND ISSUES RELATED TO ITS IMPLEMENTATION AND TO COME FORWARD WITH LEGISLATIVE RECOMMENDATIONS. (S.REP. NO. 96-200, 96TH CONG., 1ST SESS. 5 (1979).) THE BILL, AS AMENDED, WAS ENACTED AS PUB.L. NO. 96-148.

AFTER RECEIPT OF THE SECOND EPA REPORT THE SENATE HELD EXTENSIVE HEARINGS. SUBSEQUENTLY, S. 2725, AS REPORTED BY THE SENATE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, REPEALED ICR AS A CONDITION OF FEDERAL GRANT AWARDS FOR THE CONSTRUCTION OF PUBLICLY OWNED TREATMENT WORKS (S.REP. NO. 96-744, 96TH CONG. 2ND SESS. (1980)). IT WAS SIMILAR TO S. 901 AS PROPOSED BY SENATOR CHAFEE IN 1979, EXCEPT THAT IT REPEALED ICR EFFECTIVE DECEMBER 27, 1977, RATHER THAN ON MARCH 1, 1973, THE INCEPTION DATE. ALSO, INSTEAD OF REPAYMENT BY EPA AND THE GRANTEES TO INDUSTRIAL USERS, SUBSECTION (H) ALLOWED GRANTEES TO RETAIN ALL REVENUES DERIVED FROM ICR AND COLLECTED PRIOR TO ENACTMENT OF THIS BILL. THE FUNDS WERE TO BE USED FOR OPERATION AND MAINTENANCE OF THE WORKS AND FOR OTHER SPECIFIED PURPOSES.

THE SENATE REPORT CONTAINED A DETAILED REVIEW OF ICR. IT CONCLUDED THAT

"NONE OF EPA'S RECOMMENDATIONS *** WILL ELIMINATE THE ENORMOUS ADMINISTRATIVE AND MANAGERIAL BURDEN ICR IMPOSES ON BOTH GRANTEES AND THE AGENCY ITSELF. BY ITS VERY NATURE, THE COMPLEX REGULATORY AND FINANCIAL SCHEME, WITH ITS MAJOR DEMANDS ON SCARCE PERSONNEL RESOURCES, CANNOT SUCCEED. ***" PAGE 10.

THE REPORT MADE CLEAR THE COMMITTEE'S VIEW OF ICR -

"THE COMMITTEE UNANIMOUSLY RECOMMENDS REPEAL OF THE INDUSTRIAL COST RECOVERY REQUIREMENT IN RESPONSE TO THE OVERWHELMING EVIDENCE PRESENTED IN THREE DAYS OF TESTIMONY THAT ICR HAS NOT ACCOMPLISHED THE PURPOSES FOR WHICH IT WAS ORIGINALLY INTENDED." PAGE 8.

THE HOUSE OF REPRESENTATIVES ALSO HELD EXTENSIVE HEARINGS ON ICR. H.R.REP. NO. 96-983, 96TH CONG., 2D SESS. 5 (1980) ON H.R. NO. 6667, WHICH INCLUDED A PROVISION TO ELIMINATE ICR, THE COMMITTEE ON PUBLIC WORKS AND TRANSPORTATION CONCLUDED THAT -

"*** INDUSTRIAL COST RECOVERY DOES NOT SERVE THE ORIGINAL INTENT OF CONGRESS IN ENACTING IT AND IS DISCRIMINATORY, UNWORKABLE, AND NOT COST-EFFECTIVE IN A LARGE NUMBER OF INSTANCES. THE COMMITTEE FURTHER CONCLUDES THAT THE CHANGES IN THE PROGRAM RECOMMENDED BY THE ENVIRONMENTAL PROTECTION AGENCY WOULD NOT SERVE TO CORRECT THE DIFFICULTIES PRESENT AND THAT THE MOST REASONABLE SOLUTION TO THE PROBLEMS ASSOCIATED WITH INDUSTRIAL COST RECOVERY LIES IN ITS ELIMINATION. ***"

THE REPEAL PROVISION OF THE HOUSE BILL (SECTION 2) WAS SIMILAR TO SECTION 4 OF THE SENATE BILL. HOWEVER, IT DID NOT CONTAIN THE SENATE REQUIREMENT (SECTION 4(C)) THAT THE ADMINISTRATOR REMOVE THE ICR PROVISION FROM A GRANT OR ISSUE A RELEASE TO THE SAME EFFECT. ALSO, THE HOUSE MADE NO PROVISION LIKE SECTION 4(H) OF THE SENATE BILL WHICH ALLOWED THE GRANTEES TO RETAIN ALL COLLECTED REVENUES DERIVED FROM ICR PAYMENTS, IF THEY WERE USED FOR CERTAIN SPECIFIED PURPOSES.

IN ORDER TO AVOID A CONFERENCE WITH THE SENATE, THE HOUSE OF REPRESENTATIVES PASSED S. 2725, AS AMENDED, IN LIEU OF H.R. 6667. WHILE SECTION 4(C) WAS RETAINED, SECTION 4(H) OF S. 2725, WAS DELETED.

IN SUPPORTING THE ADOPTION OF THE SENATE BILL AS AMENDED, CONGRESSMAN CLAUSEN, THE RANKING MINORITY MEMBER OF THE COMMITTEE ON PUBLIC WORKS AND TRANSPORTATION STATED ON THE FLOOR OF THE HOUSE OF REPRESENTATIVES THAT -

"*** IN ABOLISHING THE ICR WE EXPECT THAT EPA WILL REQUIRE THAT THOSE MUNICIPALITIES THAT COLLECTED REVENUES UNDER THE ICR MANDATE TO RETURN THOSE FUNDS TO THOSE WHICH CONTRIBUTED THEM. ***" 126 CONG.REC. H10417 (DAILY ED. OCTOBER 1, 1980).

THE SENATE CONCURRED IN THE HOUSE AMENDMENT OF S. 2725. IN ADVOCATING CONCURRENCE, SENATOR CHAFEE STATED:

"WITH THE PASSAGE OF THIS BILL, THE CONGRESS IS TELLING THE EPA THAT THEIR TIME WOULD BE BETTER SPENT IN COMING UP WITH CONSTRUCTIVE IDEAS ON THE WASTEWATER TREATMENT GRANT PROGRAM, RATHER THAN SENDING OUT THREATENING LETTERS OF UPCOMING SANCTIONS IF ICR SYSTEMS ARE NOT IN PLACE." 126 CONG.REC. S14228 (DAILY ED. OCTOBER 1, 1980).

FROM THE FOREGOING IT IS CLEAR THAT THERE WAS VERY STRONG CONGRESSIONAL SUPPORT FOR TERMINATION OF ICR. IT WAS REGARDED AS UNWORKABLE, AND NOT COST-EFFECTIVE, IMPOSING A SERVERE MANAGERIAL BURDEN NOT ONLY ON THE GRANTEES, BUT ON EPA ITSELF. EPA'S PROPOSAL FOR REFORM OF THE ICR PROGRAM WAS REJECTED IN FAVOR OF REPEAL.

THE NATURE OF THE REPEAL IS IN ISSUE. UNDER S. 901 AS PROPOSED BY SENATOR CHAFEE, REPEAL WAS EFFECTIVE MARCH 1, 1973, THE VERY BEGINNING OF THE PROGRAM. ACCORDINGLY, ALL OF THE AMOUNTS WHICH HAD BEEN COLLECTED, WITH CERTAIN EXCEPTIONS, WERE TO BE REPAID TO THE INDUSTRIAL USERS BOTH BY THE FEDERAL GOVERNMENT AND THE GRANTEES. THE ADMINISTRATOR OF EPA WAS TO REMOVE THE ICR REQUIREMENTS FROM GRANTS MADE AFTER MARCH 1, 1973, AS NO LONGER APPLICABLE UNDER THE REPEAL.

UNDER S. 2725, THE EFFECTIVE DATE OF THE AMENDMENTS REPEALING ICR WAS DECEMBER 27, 1977, THE DATE THE MORATORIUM BEGAN. CONSISTENT WITH THE LATER TERMINATION DATE FOR ICR, THERE WAS NO PROVISION FOR RETURN OF COLLECTED AMOUNTS TO INDUSTRIAL USERS. INSTEAD, THE GRANTEES WERE EXPRESSLY AUTHORIZED IN SUBSECTION (H) TO RETAIN ICR RECEIPTS WHICH HAD BEEN COLLECTED, FOR THE USES SPECIFIED. THERE WAS NO REFERENCE TO AMOUNTS PAID OVER TO THE UNITED STATES. AS IN S. 901, THE ADMINISTRATOR HAD THE DUTY TO REMOVE ICR REQUIREMENTS FROM GRANTS MADE AFTER MARCH 1, 1973, IN ACCORD WITH THE REPEAL.

THE HOUSE OF REPRESENTATIVES AMENDED S. 2725 TO DELETE THE PROVISION WHICH ALLOWED AND CONDITIONED GRANTEES' RETENTION OF ICR RECEIPTS TO WHICH THEY WERE OTHERWISE ENTITLED. THUS, S. 2725, AS ENACTED, MAKES NO REFERENCE TO DISPOSITION OF THE RECEIPTS. APPARENTLY THE SENATE HAD WANTED THE GRANTEES TO RETAIN THE PROCEEDS FOR THE STATED PURPOSES, BUT THERE WAS SENTIMENT IN THE HOUSE OF REPRESENTATIVES FOR RETURN OF THE PROCEEDS TO INDUSTRIAL USERS. IN ANY EVENT, WHATEVER THE DIFFERENCES OF OPINION REGARDING WHAT SHOULD BE DONE WITH THE AMOUNTS COLLECTED, THERE WAS NO INDICATION THAT ANY FURTHER COLLECTIONS SHOULD BE MADE. ADDITIONAL COLLECTIONS FOR PERIODS SUBSEQUENT TO MARCH 1, 1973, AND PRIOR TO DECEMBER 27, 1977 (THE PERIOD PRIOR TO THE ESTABLISHMENT OF THE MORATORIUM), WOULD IN SOME CASES REQUIRE THE ESTABLISHMENT AND APPROVAL OF A GRANTEE'S ICR SYSTEM SOLELY FOR THE PURPOSE OF COLLECTING PAYMENTS FOR A SHORT PERIOD OF TIME. THESE ACTIONS WOULD BE THE VERY KIND OF ACTIVITIES WHICH LED THE CONGRESS TO CONCLUDE THAT ICR SHOULD BE ABOLISHED.

FURTHER, WE VIEW SECTION 2(C) OF THE REPEALING STATUTE, PUB.L. NO. 96-483, WHICH REQUIRES THE EPA ADMINISTRATOR TO DELETE THE ICR REQUIREMENT FROM GRANTS ISSUED AFTER MARCH 1, 1973, AS TERMINATING HER AUTHORITY TO ENFORCE ICR AFTER DECEMBER 27, 1977, EXCEPT AS INDICATED BELOW. THEREFORE, BECAUSE OF REMOVAL OF THE ICR GRANT PROVISION THE ADMINISTRATOR MAY NOT NOW REQUIRE GRANTEES TO MAKE ICR COLLECTIONS FOR ANY PERIOD, AS THAT AUTHORITY HAS BEEN EXTINGUISHED. SINCE THE QUESTIONS PRESENTED WERE BASED ON AN ASSUMPTION THAT THE ADMINISTRATOR RETAINS AUTHORITY TO REQUIRE FURTHER COLLECTIONS, IN ACCORD WITH YOUR STAFF'S REQUEST, THEY ARE NOT OTHERWISE ADDRESSED.

ADDITIONAL QUESTION

ADDITIONALLY, OUR VIEWS WERE REQUESTED ABOUT AMOUNTS COLLECTED BY GRANTEES FROM INDUSTRIAL USERS BUT NOT REMITTED TO EPA. DOES EPA STILL HAVE THE AUTHORITY TO REQUIRE GRANTEES TO PAY OVER THE FEDERAL SHARE OF ICR COLLECTIONS? OUR ANSWER IS YES.

UNDER SECTION 204(B)(3) WHICH WAS ADDED TO THE FEDERAL WATER POLLUTION CONTROL ACT IN 1972 -

"THE GRANTEE SHALL RETAIN AN AMOUNT OF THE REVENUES DERIVED FROM THE PAYMENT OF COSTS BY INDUSTRIAL USERS OF WASTE TREATMENT SERVICES, TO THE EXTENT COSTS ARE ATTRIBUTABLE TO THE FEDERAL SHARE OF ELIGIBLE PROJECT COSTS *** EXCEPT THAT SUCH RETAINED AMOUNT SHALL NOT EXCEED 50 PER CENTUM OF SUCH REVENUES FROM SUCH PROJECT. ALL REVENUES FROM SUCH PROJECT NOT RETAINED BY THE GRANTEE SHALL BE DEPOSITED BY THE ADMINISTRATOR IN THE TREASURY AS MISCELLANEOUS RECEIPTS. ***"

SECTION 2(B) OF PUB.L. NO. 96-483 STRUCK OUT ALL OF PARAGRAPH (3) EFFECTIVE DECEMBER 27, 1977. THE EFFECT OF THIS ACTION ON AMOUNTS ALREADY COLLECTED BUT NOT REMITTED TO EPA, IS NOT ENTIRELY CLEAR. UNDER THE MOST RESTRICTIVE AND LITERAL READING, IT WOULD APPEAR THAT REPEAL OF SECTION 204(B)(3) TOGETHER WITH THE LANGUAGE OF SUBSECTION (C), FREES GRANTEES OF ALL PREVIOUSLY EXISTING OBLIGATIONS IN CONNECTION WITH ICR FUNDS. WE THINK THAT THE BETTER VIEW IS THAT UPON GRANTEES' COLLECTION OF FUNDS TO WHICH THEY HAD NO LEGAL TITLE, THEY HAD A SPECIAL DUTY WHICH AROSE AT THAT TIME TO SURRENDER THEM TO THE RIGHTFUL OWNER, THE FEDERAL GOVERNMENT, AND THAT THIS DUTY SURVIVED THE TERMINATION OF SECTION 204(B)(3) AND THE RELEASE LANGUAGE OF SUBSECTION (C). AS INDICATED ABOVE, THE CONGRESS INTENDED TO PREVENT EPA FROM REQUIRING GRANTEES TO OBTAIN ADDITIONAL ICR PAYMENTS FROM INDUSTRIAL USERS. HOWEVER, WHILE THERE HAD BEEN VARIOUS PROPOSALS FOR RETURN OF THE AMOUNTS ALREADY COLLECTED TO THE USERS, OR TO ALLOW THE GRANTEES TO KEEP THE PROCEEDS TO WHICH THEY HAD PREVIOUSLY BEEN ENTITLED TO BE USED FOR SPECIFIC PURPOSES, WE DO NOT FIND ANY ADVOCACY FOR ALLOWING THE GRANTEES TO RETAIN THOSE REVENUES THAT HAD BEEN COLLECTED FROM INDUSTRIAL USERS BUT NOT YET DEPOSITED IN THE TREASURY AS MISCELLANEOUS RECEIPTS. THIS ISSUE WAS NOT RAISED, APPARENTLY, BECAUSE IT WAS ASSUMED THAT THE GRANTEES DURING THE PERIOD PRIOR TO THE MORADTORIUM HAD COMPLIED WITH THE REQUIREMENT THAT THE FEDERAL GOVERNMENT'S SHARE BE FORWARDED TO EPA FOR DEPOSIT IN THE APPROPRIATE TREASURY ACCOUNT. IT DOES NOT APPEAR THAT THE CONGRESS WAS INFORMED THAT GRANTEES HAD FAILED TO PAY OVER AMOUNTS DUE THE UNITED STATES.

WHEN A GRANTEE RECEIVED AN ICR PAYMENT IT BECAME CUSTODIAN OF PART OF THE PAYMENT FOR TRANSMITTAL IN DUE COURSE TO THE FEDERAL GOVERNMENT. AS AGENT FOR COLLECTION OF THE FEDERAL SHARE OF THE ICR PAYMENT, THE GRANTEE'S FUNCTION WAS TO TURN OVER THE FUNDS TO THE APPROPRIATE FEDERAL OFFICIAL. IN ESSENCE, WHEN GRANTEES RECEIVED INDUSTRIAL USER PAYMENTS, THOSE PORTIONS NOT DESIGNATED FOR RETENTION BY THE GRANTEES WERE FEDERAL FUNDS AND THE OBLIGATION TO PAY THEM OVER AROSE AT THAT TIME. THIS OBLIGATION WAS NOT, IN OUR VIEW, EXTINQUISHED BY THE LATER REPEAL LANGUAGE WHICH DIRECTED THE ADMINISTRATOR TO RELEASE GRANTEES OF OBLIGATIONS IMPOSED BY THE ICR PROVISIONS. ACCORDINGLY, IN THE ABSENCE OF A CLEAR STATUTORY MANDATE ALLOWING A GRANTEE TO RETAIN THE FUNDS FOR ITS OWN BENEFIT, IT HAS A SUBSISTING PAYMENT OBLIGATION WHICH SURVIVES THE TERMINATION OF ICR. DO OTHERWISE WOULD ALLOW GRANTEES TO RECEIVE A WINDFALL NOT SPECIFIED IN THE ICR REPEAL PROVISIONS. IN THIS CIRCUMSTANCE, THE ADMINISTRATOR OF EPA IS NOT RELIEVED OF HER COORDINATE AUTHORITY TO ATTEMPT TO RECOVER THE FEDERAL SHARE OF ICR PAYMENTS ALREADY COLLECTED BY GRANTEES, FOR DEPOSIT IN THE TREASURY AS MISCELLANEOUS RECEIPTS.

BASED ON YOUR STAFF'S FINDINGS, A REPORT ENTITLED "WYOMING WASTEWATER TREATMENT FACILITY PROVES UNSUCCESSFUL", CED-81-94, JUNE 15, 1981, B-199207, RECOMMENDED THAT THE APPROPRIATE EPA REGIONAL ADMINISTRATOR COLLECT FROM THE TOWN OF THAYNE, WYOMING, FUNDS DUE THE FEDERAL GOVERNMENT FOR ICR PAYMENTS THAT THE TOWN HAD COLLECTED. EPA RESPONDED BY STATING THAT THE TOWN WOULD BE DIRECTED TO MAKE PAYMENT. OUR VIEW, EXPRESSED ABOVE, IS CONSISTENT WITH THIS RESULT.

QUESTIONS

1. IF A PROJECT STARTED SERVING AN INDUSTRIAL USER ON 1/1/77, BUT THE GRANTEE'S ICR SYSTEM WAS NOT APPROVED BY EPA UNTIL 6/1/77, WOULD THE INDUSTRY BE LIABLE FOR A YEAR'S WORTH OF ICR PAYMENTS (1/1/77 TO 12/27/77) OR 7 MONTHS (6/1/77 TO 12/27/77)?

DID A GRANTEE HAVE ANY DISCRETION IN THIS MATTER?

2. IF A PROJECT STARTED SERVING AN INDUSTRIAL USER ON 6/1/77 BUT THE GRANTEE DID NOT HAVE AN APPROVED ICR SYSTEM ON 12/27/77, IS THE INDUSTRY LIABLE FOR ANY ICR PAYMENTS?

SOME GRANTEES MAY HAVE HAD THEIR ICR SYSTEMS APPROVED DURING THE MORATORIUM AND THUS HAVE A MEANS OF CALCUATING HOW MUCH ICR THEIR INDUSTRIES OWE, IF IN FACT THEY OWE ANYTHING, BUT P.L. 96-483 APPARENTLY RELIEVED GRANTEES OF THE RESPONSIBILITY OF DEVELOPING AN ICR SYSTEM. THUS, SOME GRANTEES MIGHT NEVER HAVE DEVELOPED AN ICR SYSTEM EVEN THOUGH INDUSTRIES USED THE GRANTEES'S PROJECTS BEFORE THE MORATORIUM. IF THESE INDUSTRIES ARE LEGALLY LIABLE FOR ICR PAYMENTS, HOW COULD THE AMOUNT OF THE LIABILITY BE CALCULATED WITHOUT AN APPROVED ICR SYSTEM?

3. IS THERE ANY WAY AN INDUSTRIAL USER COULD BE RELIEVED OF ICR OBLIGATIONS INCURRED BEFORE 12/27/77 BY VIRTUE OF DISCHARGING LESS THAN 25,000 GALLONS A DAY?

4. IF A GRANTEE BILLED ITS INDUSTRIAL USERS FOR ICR EACH YEAR AT THE END OF JUNE, WOULD AN INDUSTRY BE LIABLE FOR ICR BETWEEN 7/1/77 AND 12/27/77, OR WOULD THE ICR MORATORIUM AND SUBSEQUENT REPEAL RELIEVE THE INDUSTRY OF ITS ICR LIABILITY FOR THAT PERIOD, SINCE ITS NEXT PAYMENT WAS NOT DUE UNTIL 6/78, WHICH WAS AFTER THE EFFECTIVE DATE OF ICR REPEAL?