[Federal Register Volume 66, Number 17 (Thursday, January 25, 2001)]
[Notices]
[Pages 7761-7763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-2179]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
[FRL-6937-7]
Settlement Agreement, Application of Labor Standards Provision in
the Clean Water Act State Revolving Fund Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of settlement.
-----------------------------------------------------------------------
SUMMARY: The Environmental Protection Agency (EPA) is publishing a
final settlement agreement between EPA and the Building and
Construction Trades Department, AFL/CIO (Building Trades) which will
resolve a matter pending before the Department of Labor's (DOL) Wage
and Hour Division Administrator. Under the settlement agreement, EPA
will 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.
In exchange for EPA's commitment, Building Trades has agreed not to
pursue any further action on this matter before DOL or any other
Federal administrative agency, or in litigation.
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. 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. In 1997,
the Building Trades asked the DOL Wage and Hour Division to rule that
the requirements of the Davis-Bacon Act continue to apply to treatment
works projects funded with CWSRF loans that began construction on or
after October 1, 1994. 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.
After closely considering the relationship of CWA section 513 and
CWA section 602(b)(6) and the arguments of the Building Trades in its
request for ruling, EPA became 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 decided to settle
the matter with the Building Trades and provided the public an
opportunity to comment on a proposed settlement agreement, which was
published in the Federal Register
[[Page 7762]]
on June 22, 2000. 65 FR 38828. In addition, EPA held a public meeting
on July 13, 2000, to provide the public an additional opportunity to
comment.
Public Comments on the Proposed Settlement Agreement
EPA received 25 comments on the proposed settlement agreement. Most
commentators stated that the Agency's original position was correct and
disputed the legal basis for reimposing the Davis-Bacon Act in the
CWSRF program. Although they varied in detail, the arguments of the
commentators generally contained these points: CWA section 602(b)(6)
clearly sunsetted the Davis-Bacon Act in the CWSRF program; continuing
appropriations for the program after FY 1995 did not extend that sunset
date; CWA section 513 does not place a continuing obligation on the
Agency to impose the Davis-Bacon Act requirements in the program
because, by its plain language, CWA section 513 applies only to direct
grants for treatment works construction.
The states, in particular, complained that reimposing the Davis-
Bacon Act requirement would create hardships for the CWSRF programs,
including increased labor costs for assistance recipients and
administrative burdens on both the recipients and the states. State
commentators also requested a delay in the implementation of the
agreement's terms to allow time to notify potential borrowers and to
more closely coincide with state planning schedules. Several states
with state prevailing wage rate laws said that the Davis-Bacon Act
requirements are more burdensome and costly on businesses and state
agencies than their similar state requirements without bringing
additional benefit for workers. They suggested that in situations in
which states had substantially similar prevailing wage rate
requirements, that states be given discretion to substitute state
procedures for federal procedures.
Response to Comments
As the June 22, 2000, Federal Register notice stated, the Agency's
original position on the Davis-Bacon Act and the CWSRF program
``rest(ed) on a reasonable legal interpretation.'' 65 FR at 38828.
However, the legal basis for reimposing the Davis-Bacon Act
requirements is sound and, as a matter of policy, it is proper for
prevailing wage rates to apply to construction projects that are, for
all intents and purposes, federally-assisted.
Reimposing the Davis-Bacon Act requirements may increase
construction costs for many CWSRF recipients, but the levels of those
cost increases vary widely and are often insignificant. Although EPA is
interested in streamlining administrative requirements and reducing
implementation costs, state prevailing wage rate laws cannot substitute
for the requirements of CWA section 513.
EPA has made one change to the settlement agreement in response to
state comments. In order to allow states more time to notify borrowers
of the requirements, and to more closely match the yearly CWSRF
planning schedules in most states (July 1 to June 30), the Agency has
changed the date for implementing the Davis-Bacon Act requirement from
January 1, 2001, until July 1, 2001. All capitalization grants awarded
on or after July 1, 2001 will contain a condition requiring the states
to ensure that the Davis-Bacon Act requirements will be applied to
publicly owned treatment works receiving CWSRF assistance under those
agreements in the same manner as the requirements were applied to
projects initiated before October 1, 1994. Building Trades has agreed
to this revision, which is reflected in the settlement agreement
reprinted below.
DATES: This settlement agreement is effective as of January 17, 2001.
FOR FURTHER INFORMATION CONTACT: Geoffrey Cooper, EPA Office of General
Counsel, Mail Code 2377A, 1200 Pennsylvania Avenue, Washington, D.C.
20004; telephone: 202-564-5451; email: [email protected].
Dated: January 19, 2001.
Gary S. Guzy,
General Counsel.
In the matter of: Application of Labor Standard Provisions In the
Clean Water Act's State Revolving Fund Program
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, On June 14, 2000, 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 July 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 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
[[Page 7763]]
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
Sec. 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 July 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:
Dated: January 11, 2001.
Gary S. Guzy,
General Counsel, United States Environmental Protection Agency, 1200
Pennsylvania Avenue, Washington, DC 20460.
Dated: January 17, 2001.
Edward C. Sullivan,
President, Building and Construction Trades Department, AFL-CIO,
American Federation of Labor/Congress of Industrial Organizations,
815 16th Street, N.W., 6th Floor, Washington, D.C. 20006-4101.
[FR Doc. 01-2179 Filed 1-24-01; 8:45 am]
BILLING CODE 6560-50-P