[Federal Register Volume 65, Number 121 (Thursday, June 22, 2000)]
[Notices]
[Pages 38828-38830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15719]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-6720-5]


Proposed Settlement Agreement, Application of Labor Standards 
Provision in the Clean Water Act State Revolving Fund program

AGENCY: Environmental Protection Agency.

ACTION: Notice of proposed settlement; request for public comment and 
notice of public meeting.

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SUMMARY: The Environmental Protection Agency (EPA or the Agency) is 
seeking comment on a proposed settlement agreement between the Agency 
and the Building and Construction Trades Department, AFL/CIO (Building 
Trades) which would resolve a matter now pending before the Department 
of Labor's Wage and Hour Division Administrator. Under the proposed 
settlement agreement, EPA would prospectively apply the Davis-Bacon 
Act's prevailing wage rate requirements in the Clean Water State 
Revolving Fund (CWSRF) program established in title VI of the Federal 
Water Pollution Control Act, as amended (more commonly known as the 
Clean Water Act (CWA)), 33 U.S.C. 1381--1387, in the same manner as 
they applied before October 1, 1994.
    Title VI of the CWA authorizes EPA to award grants to capitalize 
state revolving funds from which states, in turn, award loans and other 
types of assistance for the construction of publicly owned treatment 
works and other water quality projects. Appropriations for the CWSRF 
program were authorized only through fiscal year 1994, but Congress has 
continued to

[[Page 38829]]

appropriate funds for the program each year since.
    CWA section 602(b)(6) required publicly owned treatment works 
funded with CWSRF assistance ``directly made available by 
[capitalization grants]'' that were ``constructed in whole or in part 
before fiscal year 1995'' (emphasis added) to comply with the 
requirements of a number of other CWA provisions. Among the provisions 
was CWA section 513, which applies Davis-Bacon Act requirements to 
treatment works for which grants are made under the CWA.
    EPA interpreted the language of CWA section 602(b)(6) as limiting 
the application of the Davis-Bacon Act and other requirements to CWSRF-
funded treatment works projects ``constructed in whole or in part 
before fiscal year 1995'', and, in an August 8, 1995, memorandum, 
announced that these requirements would not apply to CWSRF-assisted 
projects that begin construction on or after October 1, 1994 (the 
beginning of Fiscal Year 1995). Two years later, the Building and 
Construction Trades Department (``Building Trades''), AFL-CIO, asked 
the Department of Labor's Wage and Hour Division (``DOL'') to rule that 
the requirements of the Davis-Bacon Act continue to apply to treatment 
works projects funded with CWSRF loans under CWA title VI. The Building 
Trades argued that the Davis-Bacon Act requirement applied to CWSRF-
funded projects as long as Congress appropriated funds for the program. 
EPA responded in opposition to the Building Trades request for ruling.
    EPA has closely considered the relationship of CWA section 513 and 
CWA section 602(b)(6) and the arguments of the Building Trades in its 
request for ruling. While the Agency's position to date rests on a 
reasonable legal interpretation, EPA is now persuaded of the 
appropriateness of the view that CWA section 513 imposes a continuing, 
independent obligation on the Agency to ensure that Davis-Bacon Act 
requirements apply to any grants made under the CWA for treatment 
works, including capitalization grants made under title VI of the CWA. 
The language of CWA section 602(b)(6) does not relieve the Agency of 
this obligation. Furthermore, as a matter of policy, the Agency has 
determined that prevailing wage rate requirements applicable to 
federally-assisted construction projects should continue to apply to 
federally-assisted treatment works construction in the CWSRF program.
    Consequently, EPA and the Building Trades are proposing to enter 
into the settlement agreement published with this notice. Under the 
agreement, EPA would include a condition in all capitalization grant 
agreements entered into between the Agency and the states on or after 
January 1, 2001, requiring the states to ensure that the requirements 
of section 513 of the CWA will be applied to publicly owned treatment 
works receiving CWSRF assistance in the same manner as they were 
applied before October 1, 1994. In exchange for EPA's commitment, 
Building Trades would agree not to pursue any further action on this 
matter before DOL or any other Federal administrative agency, or in 
litigation.
    For a period of forty-five (45) days following the date of 
publication of this notice, the Agency will receive written comments 
relating to the proposed settlement agreement from any persons. A 
public meeting to discuss this proposed settlement agreement will also 
be held on Thursday, July 13, 2000, from 2 to 4 PM, at the Washington 
Plaza Hotel, 10 Thomas Circle, Washington, DC EPA may withdraw from the 
proposed settlement agreement, or withhold its agreement, if these 
comments or consultations taking place with state and local government 
representatives, disclose considerations that indicate that entering 
into the settlement agreement would be inappropriate, improper or 
inconsistent with the requirements of the CWA.
    Written comments should be sent to Geoff Cooper, Finance and 
Operations Law Office, Office of General Counsel (2377A), U.S. 
Environmental Protection Agency, 12th and Pennsylvania Avenue, NW., 
Washington, DC 20460 (or they may be e-mailed to 
[email protected].) Questions about the July 13, 2000, 
public meeting should be addressed to Angela Cracchiolo, Office of 
Wastewater Management, Office of Water (4204), U.S. Environmental 
Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460 
(or they may be e-mailed to [email protected].)

    Dated: June 14, 2000.
Gary S. Guzy,
General Counsel.

Proposed Settlement Agreement

    Whereas, title VI of the Federal Water Pollution Control Act, as 
amended (more commonly known as the Clean Water Act (CWA)), 33 U.S.C. 
1381--1387, authorizes the Environmental Protection Agency (EPA) to 
make grants to states to capitalize Clean Water State Revolving Funds 
(CWSRF), from which the states, in turn, make loans and other types of 
assistance for the construction of publicly owned treatment works and 
other water quality projects and activities;
    Whereas, section 602(b)(6) of the CWA, 33 U.S.C. 1382(b)(6), 
requires states to ensure that publicly owned treatment works 
``constructed in whole or in part before fiscal year 1995 with CWSRF 
funds directly made available by'' capitalization grants comply with 
sixteen provisions of the CWA, including section 513 of the CWA, 33 
U.S.C. 1372, which applies Davis-Bacon Act requirements to treatment 
works for which grants are made under the CWA;
    Whereas, EPA has not required states to ensure that publicly owned 
treatment works that began construction on or after October 1, 1994, 
with CWSRF assistance will comply with the requirements identified in 
section 602(b)(6) of the CWA, including the requirements of the Davis-
Bacon Act;
    Whereas, the Building and Construction Trades Department, AFL-CIO, 
(Building Trades), challenged this position and requested a ruling by 
John R. Fraser, Acting Administrator of the Department of Labor's (DOL) 
Wage and Hour Division, that the requirements of the Davis-Bacon Act 
continued to apply to the construction of publicly owned treatment 
works receiving CWSRF assistance as long as Congress appropriates funds 
for grants under title VI of the CWA.
    Whereas, Congress has continued to appropriate funds for grants to 
states for their CWSRF programs under the CWA;
    Whereas, EPA replied in opposition to the Building Trades request 
for ruling;
    Whereas, EPA published this settlement agreement in the Federal 
Register along with a request for the public to comment on whether EPA 
should again apply section 513 of the CWA to treatment works projects 
assisted with CWSRF funds directly made available by capitalization 
grants, and consulted with state and local government officials on the 
terms of this agreement;
    Whereas, EPA has carefully considered the comments received on the 
Federal Register Notice and the comments provided by state and local 
governments during the consultation process;
    And Whereas, EPA and the Building Trades have determined that it is 
in the public interest to resolve this matter expeditiously;
    It is therefore agreed that,
    1. EPA will issue a memorandum to its Regional Water Division 
Directors directing them to include a condition in all capitalization 
grant agreements entered into between EPA and the states under title VI 
of the CWA, on or after January 1, 2001, requiring the states to

[[Page 38830]]

ensure that the requirements of section 513 of the CWA will be applied 
to publicly owned treatment works receiving CWSRF assistance under 
those agreements in the same manner as section 513 requirements were 
applied before October 1, 1994.
    2. The grant condition will require states to ensure that the 
requirements of section 513 of the CWA, and no other requirements 
identified in section 602(b)(6) of the CWA, will apply only to 
publicly-owned treatment works that are funded with funds ``directly 
made available by'' grants under title VI of the CWA, as that phrase is 
defined at 40 CFR 35.3105(g).
    3. The grant condition will be included in all capitalization grant 
agreements entered into between EPA and the states under title VI of 
the CWA on or after January 1, 2001;
    4. The Building Trades and EPA will submit this agreement to the 
Administrator of the Wage and Hour Division, DOL, with a joint request 
to dismiss the administrative proceeding on the Building Trades 
Department's request for ruling.
    5. The Building Trades will not pursue any further action on the 
matter hereby resolved in this settlement agreement, either before DOL 
or any other Federal administrative agency, or in litigation.
    6. In the event that EPA does not accomplish one or more of the 
items specified in Paragraphs 1, 2 and 3 above, the Building Trades 
sole remedy will be to reinstitute its request for ruling before the 
DOL.
    7. Nothing in the terms of this agreement shall be construed to 
limit or modify the discretion accorded EPA by the CWA or by general 
principles of administrative law.
    8. The undersigned representatives of each party certify that they 
are fully authorized by the parties they represent to bind the 
respective parties to the terms of this settlement agreement. This 
settlement agreement will be deemed to be executed when it has been 
signed by the representatives of the parties below.
    Agreed:

Gary S. Guzy,
General Counsel, United States Environmental Protection Agency, 1200 
Pennsylvania Avenue, Washington, D.C. 20460.
Edward C. Sullivan,
President, Building and Construction Trades Department, AFL-CIO, 
American Federation of Labor/Congress of Industrial Organizations, 1155 
Fifteenth Street, N.W., 4th Floor, Washington, D.C. 20005-2707.
[FR Doc. 00-15719 Filed 6-21-00; 8:45 am]
BILLING CODE 6560-50-U