[Federal Register Volume 84, Number 163 (Thursday, August 22, 2019)]
[Proposed Rules]
[Pages 44080-44122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17555]



[[Page 44079]]

Vol. 84

Thursday,

No. 163

August 22, 2019

Part III





Environmental Protection Agency





-----------------------------------------------------------------------





40 CFR Part 121





Updating Regulations on Water Quality Certification; Proposed Rule

  Federal Register / Vol. 84 , No. 163 / Thursday, August 22, 2019 / 
Proposed Rules  

[[Page 44080]]


-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 121

[EPA-HQ-OW-2019-0405; FRL-9997-82-OW]
RIN 2040-AF86


Updating Regulations on Water Quality Certification

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Environmental Protection Agency (EPA) is publishing for 
public comment a proposed rule providing updates and clarifications to 
the substantive and procedural requirements for water quality 
certification under Clean Water Act (CWA or the Act) section 401. CWA 
section 401 is a direct grant of authority to states (and tribes that 
have been approved for ``treatment as a state'' status) to review for 
compliance with appropriate federal, state, and tribal water quality 
requirements any proposed activity that requires a federal license or 
permit and may result in a discharge to waters of the United States. 
This proposal is intended to increase the predictability and timeliness 
of section 401 certification by clarifying timeframes for 
certification, the scope of certification review and conditions, and 
related certification requirements and procedures.

DATES: Comments must be received on or before October 21, 2019.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OW-
2019-0405, at https://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. The EPA may publish any 
comment received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. The EPA 
will generally not consider comments or comment contents located 
outside of the primary submission (i.e., on the web, cloud, or other 
file sharing system). For additional submission methods, the full EPA 
public comment policy, information about CBI or multimedia submissions, 
and general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Lauren Kasparek, Oceans, Wetlands, and 
Communities Division, Office of Water (4504-T), Environmental 
Protection Agency, 1200 Pennsylvania Avenue NW, Washington, DC 20460; 
telephone number: (202) 564-3351; email address: cwa401@epa.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. General Information
    A. How can I get copies of this document and related 
information?
    B. Under what legal authority is this proposed rule issued?
    C. How should I submit comments?
II. Background
    A. Executive Summary
    B. Executive Order 13868: Promoting Energy Infrastructure and 
Economic Growth
    C. Pre-Proposal Stakeholder Engagement
    D. Guidance Document
    E. Effect on Existing Federal, State, and Tribal Regulations
    F. Legal Background
    1. The Clean Water Act
    2. The EPA's Role in Implementing Section 401
    3. The EPA's Existing Certification Regulations
    4. Judicial Interpretations of Section 401
    a. U.S. Supreme Court Decisions
    i. P.U.D. No. 1 of Jefferson County
    ii. S.D. Warren
    b. Circuit Court Decisions
    5. Administrative Law Principles
    6. Legal Construct for the Proposed Rule
    a. Scope of Certification
    i. Water Quality
    ii. Activity Versus Discharge
    iii. Discharges From Point Sources to Waters of the United 
States
    b. Timeline for Section 401 Certification Analysis
III. Proposed Rule
    A. When Section 401 Certification Is Required
    B. Certification Request/Receipt
    C. Certification Actions
    D. Appropriate Scope for Section 401 Certification Review
    E. Timeframe for Certification Analysis and Decision
    F. Contents and Effect of a Certification
    G. Certification by the Administrator
    1. Public Notice Procedure
    2. Pre-filing Meeting Procedure
    3. Requests for Additional Information
    H. Determination of Effect on Neighboring Jurisdictions
    I. EPA's Role in Review and Advice
    J. Enforcement
    K. Modifications
IV. Economic Analysis
V. Statutory and Executive Order Reviews
    A. Executive Order 13771: Reducing Regulation and Controlling 
Regulatory Costs
    B. Executive Order 12866: Regulatory Planning and Review; 
Executive Order 13563: Improving Regulation and Regulatory Review
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Unfunded Mandates Reform Act
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act
    K. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. General Information

A. How can I get copies of this document and related information?

    1. Docket. An official public docket for this action has been 
established under Docket ID No. EPA-HQ-OW-2019-0405. The official 
public docket consists of the documents specifically referenced in this 
action, and other information related to this action. The official 
public docket is the collection of materials that is available for 
public viewing at the OW Docket, EPA West, Room 3334, 1301 Constitution 
Ave. NW, Washington, DC 20004. This Docket Facility is open from 8:30 
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The 
OW Docket telephone number is 202-566-2426. A reasonable fee will be 
charged for copies.
    2. Electronic Access. You may access this Federal Register document 
electronically under the ``Federal Register'' listings at https://www.regulations.gov. An electronic version of the public docket is 
available through EPA's electronic public docket and comment system, 
EPA Dockets. You may access EPA Dockets at https://www.regulations.gov 
to view public comments as they are submitted and posted, access the 
index listing of the contents of the official public docket, and access 
those documents in the public docket that are available electronically. 
For additional information about EPA's public docket, visit the EPA 
Docket Center homepage at http://www.epa.gov/epahome/dockets.htm. 
Although not all docket materials may be available electronically, you 
may still access any of the publicly available docket materials through 
the Docket Facility.

[[Page 44081]]

B. Under what legal authority is this proposed rule issued?

    The authority for this action is the Federal Water Pollution 
Control Act, 33 U.S.C. 1251 et seq., including section 401 and 501(a).

C. How should I submit comments?

    Throughout this document, the EPA solicits comment on a number of 
issues related to the proposed rulemaking. Comments on this proposed 
rulemaking should be submitted to Docket ID No. EPA-HQ-OW-2019-0405 at 
https://www.regulations.gov per the online instructions for submitting 
comments and the information provided in ADDRESSES, above.
    As discussed in section II.C in this preamble, this proposed rule 
is the outgrowth of extensive outreach efforts, including requests for 
recommendations, and the EPA has taken recommendations received into 
account in developing this proposal. In developing a final rule, the 
EPA will be considering comments submitted on this proposal. Persons 
who wish to provide views or recommendations on this proposal and have 
them considered as part of this rulemaking process must provide 
comments to the EPA as part of this comment process. To facilitate the 
processing of comments, commenters are encouraged to organize their 
comments in a manner that corresponds to the outline of this proposal.

II. Background

A. Executive Summary

    Congress enacted section 401 of the CWA to provide states and 
authorized tribes with an important tool to help protect water quality 
of federally regulated waters within their borders in collaboration 
with federal agencies. Under section 401, a Federal agency may not 
issue a license or permit to conduct any activity that may result in 
any discharge into waters of the United States,\1\ unless the state or 
authorized tribe where the discharge would originate either issues a 
section 401 water quality certification finding compliance with 
existing water quality requirements or waives the certification 
requirement. As described in greater detail below, section 401 
envisions a robust state and tribal role in the federal licensing or 
permitting process where local authority may otherwise be preempted by 
federal law, but places limitations on how that role may be implemented 
to maintain an efficient process, consistent with the overall 
cooperative federalism construct established by the CWA as explained 
below in section II.F.1 in this preamble.
---------------------------------------------------------------------------

    \1\ The CWA, including section 401, uses ``navigable waters'', 
defined as ``waters of the United States, including territorial 
seas.'' 33 U.S.C. 1362(7). This proposal uses ``waters of the United 
States'' throughout. The EPA is currently in the process of revising 
the definition of waters of the United States via rulemaking and 
expects the final definition of the term to control in all CWA 
contexts.
---------------------------------------------------------------------------

    The plain language of section 401 provides that a state or 
authorized tribe must act on a section 401 certification request within 
a reasonable period of time, which shall not exceed one year.\2\ 
Section 401 does not guarantee a state or tribe a full year to act on a 
certification request. The statute only grants as much time as is 
reasonable, and federal licensing or permitting agencies, in their 
discretion, may establish a period of time shorter than one year if the 
federal licensing and permitting agencies determine that a shorter 
period is ``reasonable.'' 33 U.S.C. 1341(a)(1). The CWA provides that 
the timeline for action on a section 401 certification begins ``upon 
receipt'' of a certification request. Id. If a state or tribe does not 
grant, grant with conditions, deny, or expressly waive the section 401 
certification within a reasonable time period as determined by the 
federal licensing and permitting agencies, section 401 authorizes the 
federal licensing and permitting agencies to find that the state or 
tribe waived the section 401 certification requirement and issue the 
federal license or permit. Id. at 1341; 40 CFR 121.16(b). If the 
certification requirement has been waived and the federal license or 
permit is issued, any subsequent action by a state or tribe to grant, 
grant with condition, or deny section 401 certification has no legal 
force or effect.
---------------------------------------------------------------------------

    \2\ ``If the State, interstate agency, or Administrator, as the 
case may be, fails or refuses to act on a request for certification, 
within a reasonable period of time (which shall not exceed one year) 
after receipt of such request, the certification requirements of 
this subsection shall be waived with respect to such Federal 
application.'' 33 U.S.C. 1341(a)(1); see also Hoopa Valley Tribe v. 
FERC, 913 F.3d 1099 (D.C. Cir. 2019).
---------------------------------------------------------------------------

    Section 401 authorizes states and tribes to certify that a 
discharge to waters of the United States that may result from a 
proposed activity will comply with certain enumerated sections of the 
CWA, including the effluent limitations and standards of performance 
for new and existing discharge sources (sections 301, 302 and 306 of 
the CWA), water quality standards and implementation plans (section 
303), and toxic pretreatment effluent standards (section 307). When 
granting a section 401 certification, states and tribes are directed by 
CWA section 401(d) to include conditions, including ``effluent 
limitations \3\ and other limitations, and monitoring requirements'' 
that are necessary to assure that the applicant for a federal license 
or permit will comply with applicable provisions of CWA sections 301, 
302, 306 and 307, and with ``any other appropriate requirement of State 
law.''
---------------------------------------------------------------------------

    \3\ This proposal does not interpret ``effluent limitations'' to 
be synonymous with ``effluent limitation guidelines'', the pollution 
control technology-based limits developed under section 304, 306, 
and 307 of the CWA, but also does interpret the term to include, for 
example, water quality based effluent limits required under sections 
301 and 303.
---------------------------------------------------------------------------

    As the agency charged with administering the CWA,\4\ the EPA is 
responsible for developing a common framework for certifying 
authorities to follow when completing section 401 certifications. See 
33 U.S.C. 1251(d), 1361(a). In 1971, the EPA promulgated at 40 CFR part 
121 a common framework for implementing the certification provisions 
pursuant to section 21(b) of the Federal Water Pollution Control Act of 
1948 (FWCPA), but the EPA never updated that framework to reflect the 
1972 amendments to the FWCPA (commonly known as the Clean Water Act or 
CWA), which created section 401. Over the last several years, 
litigation over the section 401 certifications for several high-profile 
infrastructure projects have highlighted the need for the EPA to update 
its regulations to provide a common framework for consistency with CWA 
section 401 and to give project proponents, certifying authorities, and 
federal licensing and permitting agencies additional clarity and 
regulatory certainty.
---------------------------------------------------------------------------

    \4\ The EPA co-administers section 404 with the Corps.
---------------------------------------------------------------------------

    In April 2019, the President issued Executive Order 13868 titled 
Promoting Energy Infrastructure and Economic Growth, which directed the 
EPA to engage with states, tribes, and federal agencies and update the 
Agency's outdated guidance and regulations, including the existing 
certification framework. Consistent with Executive Order 13868 and the 
modern CWA, this proposal provides an updated common framework that is 
consistent with the modern CWA and which seeks to increase 
predictability and timeliness.

B. Executive Order 13868: Promoting Energy Infrastructure and Economic 
Growth

    On April 10, 2019, the President issued Executive Order 13868 
titled Promoting Energy Infrastructure and Economic Growth. Its purpose 
is to encourage greater investment in energy

[[Page 44082]]

infrastructure in the United States by promoting efficient federal 
permitting processes and reducing regulatory uncertainty. The Executive 
Order identifies the EPA's outdated federal guidance and regulations as 
one source of confusion and uncertainty hindering the development of 
energy infrastructure. As noted above, the EPA's current certification 
regulations (codified at 40 CFR part 121) have not been updated since 
they were promulgated in 1971, pursuant to section 21(b) of the FWPCA. 
Additionally, at the time the Executive Order was issued, the EPA's 
only guidance to the public on section 401 implementation was an 
interim handbook titled Clean Water Act Section 401 Water Quality 
Certification: A Water Quality Protection Tool for States and Tribes, 
which had not been updated since it was released in 2010 and therefore 
no longer reflected the current case law interpreting CWA section 401.
    The Executive Order directed the EPA to review CWA section 401 and 
the EPA's existing certification regulations and interim guidance, 
issue new guidance to states, tribes, and federal agencies within 60 
days of the Order, and propose new section 401 regulations within 120 
days of the Order. The Executive Order also directed the EPA to consult 
with states, tribes, and relevant federal agencies while reviewing its 
existing guidance and regulations to identify areas that would benefit 
from greater clarity.
    As part of its review, the Executive Order directed the EPA to take 
into account the federalism considerations underlying section 401 and 
to focus its attention on the appropriate scope of water quality 
reviews and conditions, the scope of information needed to act on a 
certification request in reasonable period of time, and expectations 
for certification review times. Section 3.a. of Executive Order 13868 
Promoting Energy Infrastructure and Economic Growth. Following the 
release of the EPA's new guidance document, the Executive Order 
directed the EPA to lead an interagency review of all existing federal 
regulations and guidance pertaining to section 401 to ensure 
consistency with the EPA's new guidance and rulemaking efforts. The 
Executive Order directs all federal agencies to update their existing 
section 401 guidance within 90 days after publication of the EPA's new 
guidance documents. Additionally, the Executive Order directs other 
federal agencies to initiate rulemaking, if necessary, within 90 days 
of the completion of the EPA's rulemaking, to ensure their own CWA 
section 401 regulations are consistent with the EPA's new rules and 
with the Executive Order's policy goals. Although the Executive Order 
focuses on section 401's impact on the energy sector, section 401 
applies broadly to any proposed federally licensed or permitted 
activity that may result in any discharge into a water of the United 
States. Therefore, updates to the EPA's existing certification 
regulations and guidance are relevant to all water quality 
certifications.
    Additional information on the EPA's state and tribal engagement is 
discussed in section II.C in this preamble, and additional information 
on the EPA's updated guidance document is discussed in section II.D in 
this preamble.

C. Pre-Proposal Stakeholder Engagement

    Prior to the release of Executive Order 13868 Promoting Energy 
Infrastructure and Economic Growth, the Agency's 2018 Spring Unified 
Agenda of Regulatory and Deregulatory Actions announced that the Agency 
was considering, as a long-term action, the issuance of a notice 
soliciting public comment on whether the section 401 certification 
process would benefit from a rulemaking to promote nationwide 
consistency and regulatory certainty for states, authorized tribes, and 
stakeholders. While the Agency has decided to issue this proposal 
instead of the notice, that entry was the first indication to the 
public of the Agency's interest in revising its section 401 
certification process.
    On August 6, 2018, the Agency sent a letter to the Environmental 
Council of the States, the Association of Clean Water Administrators, 
the Association of State Wetlands Managers, the National Tribal Water 
Council, and the National Tribal Caucus indicating the Agency's 
interest in engaging on potential clarifications to the section 401 
process. The Agency discussed section 401 at several association 
meetings and calls in Fall 2018 and Spring 2019 and received 
correspondence from several stakeholders between Fall 2018 and Spring 
2019. Early stakeholder feedback received prior to the issuance of the 
Executive Order, as well as presentations given between Fall 2018 and 
Spring 2019, may be found in the pre-proposal recommendations docket 
(Docket ID No. EPA-HQ-OW-2018-0855).
    Following the release of the Executive Order, the EPA continued its 
effort to engage with states and tribes on how to increase clarity in 
the section 401 certification process, including creating a new website 
to provide information on section 401 and notifying state environmental 
commissioners and tribal environmental directors of a two-part webinar 
series for states and tribes. See www.epa.gov/cwa-401. The first 
webinar was held on April 17, 2019, and discussed the Executive Order, 
the EPA's next steps, and solicited feedback from states and tribes 
consistent with the Executive Order. Shortly thereafter, the EPA 
initiated formal consultation efforts with states and tribes regarding 
provisions that require clarification within section 401 of the CWA and 
related federal regulations and guidance. Consultation occurred from 
April 24, 2019 through May 24, 2019, and the EPA opened a docket for 
pre-proposal recommendations during this time period (Docket ID No. 
EPA-HQ-OW-2018-0855). On May 7, 2019 and May 15, 2019, the EPA held 
tribal informational webinars, and on May 8, 2019, the EPA held an 
informational webinar for both states and tribes. See section V in this 
preamble for further details on the Agency's federalism and tribal 
consultations. Questions and recommendations from the webinar attendees 
are available in the pre-proposal docket (Docket ID No. EPA-HQ-OW-2018-
0855).
    During the consultation period, the EPA participated in phone calls 
and in-person meetings with inter-governmental and tribal associations 
including the National Governor's Association and National Tribal Water 
Council. The EPA also attended the EPA Region 9 Regional Tribal 
Operations Committee meeting on May 22, 2019, to solicit 
recommendations for the proposed rule. The EPA engaged with federal 
agencies that issue permits or licenses subject to section 401, 
including the United States Department of Agriculture, Federal Energy 
Regulatory Commission, Army Corps of Engineers, Alcohol and Tobacco Tax 
and Trade Bureau, and Nuclear Regulatory Commission through several 
meetings and phone calls to gain additional feedback from federal 
partners.
    At the webinars and meetings, the EPA provided a presentation and 
sought input on areas of section 401 that may require updating or 
benefit from clarification, including timeframe, scope of certification 
review, and coordination among certifying authorities, federal 
licensing or permitting agencies, and project proponents. The EPA 
requested input on issues and process improvements that the EPA might 
consider for a future rule. Participant recommendations from webinars,

[[Page 44083]]

meetings, and the docket represent a diverse range of interests, 
positions and suggestions. Several themes emerged throughout this 
process, including support for ongoing state and tribal engagement, 
support for retention of state and tribal authority, and suggestions 
for process improvements for CWA section 401 water quality 
certifications.
    Tribes provided several specific recommendations regarding the 
proposed rulemaking. First, some tribes requested the EPA better 
clarify its responsibilities under CWA section 401(a)(2). These tribes 
expressed the importance of considering impacts to neighboring 
jurisdictions during the section 401 certification process. Tribes also 
emphasized that section 401 certification decision-making should not be 
prolonged such that section 401 certifications delay implementation of 
updated water quality standards. Tribes also requested that any changes 
to the section 401 certification process should maintain tribal 
authority and sovereignty. Finally, tribes emphasized the importance of 
meaningful consultation and engagement throughout the rulemaking 
process.
    The EPA received several specific recommendations regarding process 
improvements for section 401 certifications. First, states, cross-
cutting state organizations, and industry groups expressed support for 
pre-application meetings and information-sharing among project 
proponents, certifying authorities, and federal licensing and 
permitting agencies. Additionally, state officials, tribal officials, 
and cross-cutting state organizations cited deficient certification 
applications as a primary cause for delays in the certification 
decision-making process. Permit applicants suggested the lack of clear 
state processes and prolonged information requests contributed 
significantly to the delay in the 401 certification process. The Agency 
was also made aware of relatively low staffing availability in many 
state and tribal 401 certification programs. Stakeholders suggested 
that pre-application meetings as well as explicit state processes and 
checklists could increase the quality of certification applications.
    Additionally, state and tribal officials as well as cross-cutting 
state organizations cautioned the Agency against mandating a specific 
reasonable period of time (e.g., 60 days) that would apply to all types 
of projects. These recommendations encouraged the EPA to maintain the 
authority of federal licensing and permitting agencies to determine the 
appropriate reasonable period of time.
    Finally, the EPA received pre-proposal recommendations covering a 
wide variety of viewpoints on the certifying authority's scope of 
certification review. The EPA considered all of this information and 
stakeholder input, including all 72 recommendations submitted to the 
docket during development of this proposed rule, and feedback received 
prior to the initiation of and during the formal consultation period.

D. Guidance Document

    Pursuant to Executive Order 13868, the Agency released updated 
section 401 guidance on June 7, 2019, available at https://www.epa.gov/cwa-401/clean-water-act-section-401-guidance-federal-agencies-states-and-authorized-tribes. Coincident with the release of the new guidance, 
EPA rescinded the 2010 document titled Clean Water Act Section 401 
Water Quality Certification: A Water Quality Protection Tool for States 
and Tribes (``Interim Handbook''). The 2010 Interim Handbook had not 
been updated or revised since its release in 2010, and therefore no 
longer reflected the current case law interpreting CWA section 401, nor 
had it been finalized.
    The updated guidance provides information and recommendations for 
implementing the substantive and procedural requirements of section 
401, consistent with the areas of focus in the Executive Order. More 
specifically, the guidance focuses on aspects of the certification 
process, including the timeline for review and decision-making and the 
appropriate scope of review and conditions. Additionally, the guidance 
provides recommendations for how federal licensing and permitting 
agencies, states, and tribes can better coordinate to improve the 
section 401 certification process. The emphasis on early coordination 
and collaboration to increase process efficiency aligns with other 
agency directives under Executive Order 13807, Establishing Discipline 
and Accountability in the Environmental Review and Permitting Process 
for Infrastructure Projects, or simply, the ``One Federal Decision'' 
policy. For major infrastructure projects, the One Federal Decision 
policy directs federal agencies to use a single, coordinated process 
for compliance with the National Environmental Policy Act (NEPA), 42 
U.S.C. 4321 et seq., and emphasizes advance coordination to streamline 
federal permitting actions.
    The new guidance is not a regulation, nor does it change or 
substitute for any applicable regulations. Therefore, it does not 
impose legally binding requirements on the EPA, states, tribes, other 
federal agencies, or the regulated community. The EPA expects its final 
regulation, once promulgated, will provide the clarity and regulatory 
certainty expected by the Executive Order and additional guidance will 
not be necessary to implement section 401. The Agency therefore 
requests comment on whether it should rescind its June 7, 2019 guidance 
upon completion of this rulemaking or whether separate guidance would 
be helpful on implementation of the provisions that are finalized in 
this proposal.

E. Effect on Existing Federal, State, and Tribal Regulations

    Section 3.d. of Executive Order 13868 provides that, within 90 days 
after the EPA issues its final section 401 regulations, ``if necessary, 
the heads of each 401 implementing Agency shall initiate a rulemaking 
to ensure that their respective agencies' regulations are consistent 
with'' EPA's final section 401 regulations and ``the policies set forth 
in section 2 of [the Executive Order].'' According to the Executive 
Order, these subsequent federal agency rulemaking efforts will follow 
an EPA-led interagency review and examination of existing federal 
guidance and regulations ``for consistency with EPA guidance and 
regulations.'' As the EPA understands the Executive Order, the other 
federal agencies that issue permits or licenses subject to the 
certification requirements of section 401 are expected to ensure that 
regulations governing their own processing, disposition, and 
enforcement of section 401 certifications are consistent with the EPA's 
final regulations and the policies articulated in section 2 of the 
Executive Order. The EPA plans to review its own National Pollutant 
Discharge Elimination System (NPDES) regulations to ensure its program 
certification regulations are also consistent with the Agency's final 
regulations under this proposal. The EPA will be working with its 
fellow section 401 implementing agencies to accomplish this goal.
    The EPA recommends that states and authorized tribes update, as 
necessary, their own CWA section 401 regulations to provide procedural 
and substantive requirements that are consistent with those the EPA 
eventually promulgates. Regulatory consistency across both federal and 
state governments with respect to issues like timing, waiver, and scope 
of section 401 reviews and conditions will substantially contribute 
towards ensuring that section 401 is implemented in an efficient, 
effective,

[[Page 44084]]

transparent, and nationally consistent manner and will reduce the 
likelihood of protracted litigation over these issues.
    The EPA solicits comments from state and tribal governments, and 
the public at large regarding the need for, and potential benefits of, 
a consistent, national and state regulatory approach to section 401 and 
how the EPA may best promote such consistency.

F. Legal Background

    This proposal initiates the EPA's first comprehensive effort to 
promulgate federal rules governing the implementation of CWA section 
401. The Agency's existing certification regulations at 40 CFR part 121 
pre-date the 1972 CWA amendments. This proposal therefore provides the 
EPA's first holistic analysis of the statutory text, legislative 
history, and relevant case law informing the implementation of the CWA 
section 401 program by the Agency and our federal, state, and tribal 
partners. The proposal, while focused on the relevant statutory 
provisions and case law interpreting those provisions, is informed by 
policy considerations where necessary to address certain ambiguities in 
the statutory text. The following sections describe the basic 
operational construct and history of the modern CWA, how section 401 
fits within that construct, and certain core administrative legal 
principles that guide agency decision-making in this context. This 
legal background is intended to inform the public's review of the 
proposed regulation by summarizing the legal framework for the 
proposal.
1. The Clean Water Act
    Congress amended the CWA \5\ in 1972 to address longstanding 
concerns regarding the quality of the nation's waters and the federal 
government's ability to address those concerns under existing law. 
Prior to 1972, the ability to control and redress water pollution in 
the nation's waters largely fell to the U.S. Army Corps of Engineers 
(Corps) under the Rivers and Harbors Act of 1899 (RHA). While much of 
that statute focused on restricting obstructions to navigation on the 
nation's major waterways, section 13 of the RHA made it unlawful to 
discharge refuse ``into any navigable water of the United States,\6\ or 
into any tributary of any navigable water from which the same shall 
float or be washed into such navigable water.'' 33 U.S.C. 407. Congress 
had also enacted the Water Pollution Control Act of 1948, Pub. L. 80-
845, 62 Stat. 1155 (June 30, 1948), to address interstate water 
pollution, and subsequently amended that statute in 1956 (giving the 
statute is current formal name), 1961, and 1965. The early versions of 
the CWA promoted the development of pollution abatement programs, 
required states to develop water quality standards, and authorized the 
federal government to bring enforcement actions to abate water 
pollution.
---------------------------------------------------------------------------

    \5\ The FWPCA is commonly referred to as the CWA following the 
1977 amendments to the FWPCA. Public Law 95-217, 91 Stat. 1566 
(1977). For ease of reference, the Agency will generally refer to 
the FWPCA in this notice as the CWA or the Act.
    \6\ The term ``navigable water of the United States'' is a term 
of art used to refer to waters subject to federal jurisdiction under 
the RHA. See, e.g., 33 CFR 329.1. The term is not synonymous with 
the phrase ``waters of the United States'' under the CWA, see id., 
and the general term ``navigable waters'' has different meanings 
depending on the context of the statute in which it is used. See, 
e.g., PPL Montana, LLC v. Montana, 132 S. Ct. 1215, 1228 (2012).
---------------------------------------------------------------------------

    These earlier statutory frameworks, however, proved challenging for 
regulators, who often worked backwards from an overly-polluted waterway 
to determine which dischargers and which sources of pollution may be 
responsible. See EPA v. State Water Resources Control Bd., 426 U.S. 
200, 204 (1976). In fact, Congress determined that they ultimately 
proved inadequate to address the decline in the quality of the nation's 
waters, see City of Milwaukee v. Illinois, 451 U.S. 304, 310 (1981), so 
Congress performed a ``total restructuring'' and ``complete rewriting'' 
of the existing statutory framework of the Act in 1972. Id. at 317 
(quoting legislative history of 1972 amendments). That restructuring 
resulted in the enactment of a comprehensive scheme designed to 
prevent, reduce, and eliminate pollution in the nation's waters 
generally, and to regulate the discharge of pollutants into waters of 
the United States specifically. See, e.g., S.D. Warren Co. v. Maine Bd. 
of Envtl. Prot., 547 U.S. 370, 385 (2006) (``[T]he Act does not stop at 
controlling the `addition of pollutants,' but deals with `pollution' 
generally[.]'').
    The objective of the new statutory scheme was ``to restore and 
maintain the chemical, physical, and biological integrity of the 
Nation's waters.'' 33 U.S.C. 1251(a). In order to meet that objective, 
Congress declared two national goals: (1) ``that the discharge of 
pollutants into the navigable waters be eliminated by 1985;'' and (2) 
``that wherever attainable, an interim goal of water quality which 
provides for the protection and propagation of fish, shellfish, and 
wildlife and provides for recreation in and on the water be achieved by 
July 1, 1983 . . . .'' Id. at 1251(a)(1)-(2).
    Congress established several key policies that direct the work of 
the Agency to effectuate those goals. For example, Congress declared as 
a national policy ``that the discharge of toxic pollutants in toxic 
amounts be prohibited; . . . that Federal financial assistance be 
provided to construct publicly owned waste treatment works; . . . that 
areawide waste treatment management planning processes be developed and 
implemented to assure adequate control of sources of pollutants in each 
State; . . . [and] that programs for the control of nonpoint sources of 
pollution be developed and implemented in an expeditious manner so as 
to enable the goals of this Act to be met through the control of both 
point and nonpoint sources of pollution.'' Id. at 1251(a)(3)-(7).
    Congress provided a major role for the states in implementing the 
CWA, balancing the traditional power of states to regulate land and 
water resources within their borders with the need for a national water 
quality regulation. For example, the statute highlighted ``the policy 
of the Congress to recognize, preserve, and protect the primary 
responsibilities and rights of States to prevent, reduce, and eliminate 
pollution'' and ``to plan the development and use . . . of land and 
water resources . . . .'' Id. at 1251(b). Congress also declared as a 
national policy that States manage the major construction grant program 
and implement the core permitting programs authorized by the statute, 
among other responsibilities. Id. Congress added that ``[e]xcept as 
expressly provided in this Act, nothing in this Act shall . . . be 
construed as impairing or in any manner affecting any right or 
jurisdiction of the States with respect to the waters (including 
boundary waters) of such States.'' Id. at 1370.\7\ Congress also 
pledged to provide technical support and financial aid to the States 
``in connection with the prevention, reduction, and elimination of 
pollution.'' Id. at 1251(b).
---------------------------------------------------------------------------

    \7\ 33 U.S.C. 1370 also prohibits authorized states from 
adopting any limitations, prohibitions, or standards that are less 
stringent than required by the CWA.
---------------------------------------------------------------------------

    To carry out these policies, Congress broadly defined ``pollution'' 
to mean ``the man-made or man-induced alteration of the chemical, 
physical, biological, and radiological integrity of water,'' id. at 
1362(19), to parallel the broad objective of the Act ``to restore and 
maintain the chemical, physical, and biological integrity of the 
Nation's waters.'' Id. at 1251(a). Congress then crafted a non-
regulatory statutory

[[Page 44085]]

framework to provide technical and financial assistance to the states 
to prevent, reduce, and eliminate pollution in the nation's waters 
generally. See, e.g., id. at 1256(a) (authorizing the EPA to issue 
``grants to States and to interstate agencies to assist them in 
administering programs for the prevention, reduction, and elimination 
of pollution''); see also 84 FR 4154, 4157 (Feb. 14, 2019) (discussing 
non-regulatory program provisions); 83 FR 32227, 32232 (July 12, 2018) 
(same).
    In addition to the Act's non-regulatory measures to control 
pollution of the nation's waters, Congress created a federal regulatory 
program designed to address the discharge of pollutants into a subset 
of those waters identified as ``the waters of the United States.'' See 
33 U.S.C. 1362(7). Section 301 contains the key regulatory mechanism: 
``Except as in compliance with this section and sections 302, 306, 307, 
318, 402, and 404 of this Act, the discharge of any pollutant by any 
person shall be unlawful.'' Id. at 1311(a). A ``discharge of a 
pollutant'' is defined to include ``any addition of any pollutant to 
navigable waters from any point source,'' such as a pipe, ditch or 
other ``discernible, confined and discrete conveyance.'' Id. at 
1362(12), (14). The term ``pollutant'' means ``dredged spoil, solid 
waste, incinerator residue, sewage, garbage, sewage sludge, munitions, 
chemical wastes, biological materials, radioactive materials, heat, 
wrecked or discarded equipment, rock, sand, cellar dirt and industrial, 
municipal, and agricultural waste discharged into water.'' Id. at 
1362(6). Thus, it is unlawful to discharge pollutants into waters of 
the United States from a point source unless the discharge is in 
compliance with certain enumerated sections of the CWA, including 
obtaining authorizations pursuant to the section 402 NPDES permit 
program or the section 404 dredged or fill material permit program. See 
id. at 1342, 1344. Congress therefore hoped to achieve the Act's 
objective ``to restore and maintain the chemical, physical, and 
biological integrity of the Nation's waters'' by addressing pollution 
of all waters via non-regulatory means and federally regulating the 
discharge of pollutants to the subset of waters identified as 
``navigable waters.'' \8\
---------------------------------------------------------------------------

    \8\ Fundamental principles of statutory interpretation support 
the Agency's recognition of a distinction between ``nation's 
waters'' and ``navigable waters.'' As the Supreme Court has 
observed, ``[w]e assume that Congress used two terms because it 
intended each term to have a particular, nonsuperfluous meaning.'' 
Bailey v. United States, 516 U.S. 137, 146 (1995) (recognizing the 
canon of statutory construction against superfluity). Further, ``the 
words of a statute must be read in their context and with a view to 
their place in the overall statutory scheme.'' FDA v. Brown & 
Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (internal 
quotation marks and citation omitted); see also United Savings Ass'n 
v. Timbers of Inwood Forest Associates, 484 U.S. 365, 371 
(``Statutory construction . . . is a holistic endeavor. A provision 
that may seem ambiguous in isolation is often clarified by the 
remainder of the statutory scheme--because the same terminology is 
used elsewhere in a context that makes its meaning clear[.]'') 
(citation omitted). The non-regulatory sections of the CWA reveal 
Congress' intent to restore and maintain the integrity of the 
nation's waters using federal assistance to support State and local 
partnerships to control pollution in the nation's waters in addition 
to a federal regulatory prohibition on the discharge of pollutants 
into the navigable waters. For further discussion, see 83 FR at 
32232 and 84 FR at 4157.
---------------------------------------------------------------------------

    Within the regulatory programs established by the Act, two 
principal components focus on ``achieving maximum `effluent 
limitations' on `point sources,' as well as achieving acceptable water 
quality standards,'' and the development of the NPDES permitting 
program that imposes specific discharge limitations for regulated 
entities. EPA v. State Water Resources Control Bd., 426 U.S. at 204. 
Together these components provide a framework for the Agency to focus 
on reducing or eliminating discharges while creating accountability for 
each entity that discharges into a waterbody, facilitating greater 
enforcement and overall achievement of the CWA water quality goals. 
Id.; see Oregon Natural Desert Association v. Dombeck, 172 F.3d 1092, 
1096 (9th Cir. 1998) (observing that 1972 amendments ``largely 
supplanted'' earlier version of CWA ``by replacing water quality 
standards with point source effluent limitations'').
    Under this statutory scheme, the states \9\ are authorized to 
assume program authority for issuing section 402 and 404 permits within 
their borders, subject to certain limitations. 33 U.S.C. 1342(b), 
1344(g). States are also responsible for developing water quality 
standards for ``waters of the United States'' within their borders and 
reporting on the condition of those waters to the EPA every two years. 
Id. at 1313, 1315. States must develop total maximum daily loads 
(TMDLs) for waters that are not meeting established water quality 
standards and must submit those TMDLs to the EPA for approval. Id. at 
1313(d). And, central to this proposed rule, states under CWA section 
401 have authority to grant, grant with conditions, deny, or waive 
water quality certifications for every federal license or permit issued 
within their borders that may result in a discharge to waters of the 
United States. Id. at 1341. These same regulatory authorities can be 
assumed by Indian tribes under section 518 of the CWA, which authorizes 
the EPA to treat eligible tribes with reservations in a similar manner 
to states (referred to as ``treatment as states'' or TAS) for a variety 
of purposes, including administering the principal CWA regulatory 
programs. Id. at 1377(e). In addition, states and tribes retain 
authority to protect and manage the use of those waters that are not 
waters of the United States under the CWA. See, e.g., id. at 1251(b), 
1251(g), 1370, 1377(a).
---------------------------------------------------------------------------

    \9\ The CWA defines ``state'' as ``a State, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
American Samoa, the Commonwealth of the Northern Mariana Islands, 
and the Trust Territory of the Pacific Islands.'' 33 U.S.C. 1362(3).
---------------------------------------------------------------------------

    In enacting section 401, Congress recognized that where states and 
tribes do not have direct permitting authority (either under a section 
402 or 404 program authorization or where Congress has preempted a 
regulatory field, e.g., under the Federal Power Act), they may still 
play a valuable role in protecting water quality of federally regulated 
waters within their borders in collaboration with federal agencies. 
Under section 401, a federal agency may not issue a license or permit 
for an activity that may result in a discharge to waters of the United 
States, unless the appropriate certification authority provides a 
section 401 certification or waives its ability to do so. The authority 
to certify a federal license or permit lies with the agency (the 
certifying authority) that has jurisdiction over the discharge location 
to the receiving waters of the United States. Id. at 1341(a)(1). 
Examples of federal licenses or permits potentially subject to section 
401 certification include, but are not limited to, CWA section 402 
NPDES permits in states where the EPA administers the permitting 
program, CWA section 404 permits issued by the Corps, hydropower and 
pipeline licenses issued by Federal Energy Regulatory Commission 
(FERC), and RHA sections 9 and 10 permits issued by the Corps.
    Under section 401, a certifying authority may grant, grant with 
conditions, deny, or waive certification in response to a request from 
a project proponent. The certifying authority determines whether the 
proposed activity will comply with the applicable provisions of 
sections 301, 302, 303, 306, and 307 of the CWA and any other 
appropriate requirement of state law. Id. Certifying authorities may 
also add to a certification ``any effluent limitations and other 
limitations, and monitoring requirements'' necessary to assure 
compliance. Id at 1341(d). These

[[Page 44086]]

additional provisions must become ``a condition'' of the federal 
license or permit should it be issued. Id. A certifying authority may 
deny certification if it is unable to determine that the discharge from 
the proposed activity will comply with the applicable sections of the 
CWA and appropriate requirements of state law. If a certifying 
authority denies certification, the federal license or permit may not 
issue. Id. at 1341(a)(1). A certifying authority may waive 
certification by ``fail[ing] or refus[ing] to act on a request for 
certification, within a reasonable period of time . . . after receipt 
of such request.'' Id.
    Perhaps with the exception of section 401,\10\ the EPA has 
developed comprehensive, modern regulatory programs designed to ensure 
that the CWA is fully implemented as Congress intended. This includes 
pursuing the overall ``objective'' of the CWA to ``restore and maintain 
the chemical, physical, and biological integrity of the Nation's 
waters,'' id. at 1251(a), while implementing the specific ``policy'' 
directives from Congress to, among other things, ``recognize, preserve, 
and protect the primary responsibilities and rights of States to 
prevent, reduce, and eliminate pollution'' and ``to plan the 
development and use . . . of land and water resources.'' Id. at 
1251(b); see also Webster's II, New Riverside University Dictionary 
(1994) (defining ``policy'' as a ``plan or course of action, as of a 
government[,] designed to influence and determine decisions and 
actions;'' an ``objective'' is ``something worked toward or aspired to: 
Goal''). The Agency therefore recognizes a distinction between the 
specific word choices of Congress, including the need to develop 
regulatory programs that aim to accomplish the goals of the Act while 
implementing the specific policy directives of Congress. For further 
discussion of these principles, see 83 FR at 32237 and 84 FR at 4168-
69.
---------------------------------------------------------------------------

    \10\ As noted in section II.F in this preamble, the EPA's 
existing certification regulations were promulgated prior to the 
1972 CWA Amendments and have not been updated to reflect the current 
statutory text.
---------------------------------------------------------------------------

    Congress' authority to regulate navigable waters, including those 
subject to CWA section 401 water quality certification, derives from 
its power to regulate the ``channels of interstate commerce'' under the 
Commerce Clause. Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824); see 
also United States v. Lopez, 514 U.S. 549, 558-59 (1995) (describing 
the ``channels of interstate commerce'' as one of three areas of 
congressional authority under the Commerce Clause). The Supreme Court 
explained in Solid Waste Agency of Northern Cook County v. U.S. Army 
Corps of Engineers (SWANCC) that the term ``navigable'' indicates 
``what Congress had in mind as its authority for enacting the Clean 
Water Act: Its traditional jurisdiction over waters that were or had 
been navigable in fact or which could reasonably be so made.'' 531 U.S. 
159, 172 (2001). The Court further explained that nothing in the 
legislative history of the Act provides any indication that ``Congress 
intended to exert anything more than its commerce power over 
navigation.'' Id. at 168 n.3. The Supreme Court, however, has 
recognized that Congress intended ``to exercise its powers under the 
Commerce Clause to regulate at least some waters that would not be 
deemed `navigable' under the classical understanding of that term.'' 
United States v. Riverside Bayview Homes, 474 U.S. 121, 133 (1985); see 
also SWANCC, 531 U.S. at 167.
    The classical understanding of the term navigable was first 
articulated by the Supreme Court in The Daniel Ball:

    Those rivers must be regarded as public navigable rivers in law 
which are navigable in fact. And they are navigable in fact when 
they are used, or are susceptible of being used, in their ordinary 
condition, as highways of commerce, over which trade and travel are 
or may be conducted in the customary modes of trade and travel on 
water. And they constitute navigable waters of the United States 
within the meaning of the Acts of Congress, in contradistinction 
from the navigable waters of the States, when they form in their 
ordinary condition by themselves, or by uniting with other waters, a 
continued highway over which commerce is or may be carried on with 
other States or foreign countries in the customary modes in which 
such commerce is conducted by water.

77 U.S. (10 Wall.) 557, 563 (1871). Over the years, this traditional 
test has been expanded to include waters that had been used in the past 
for interstate commerce, see Economy Light & Power Co. v. United 
States, 256 U.S. 113, 123 (1921), and waters that are susceptible for 
use with reasonable improvement. See United States v. Appalachian Elec. 
Power Co., 311 U.S. 377, 407-10 (1940).
    By the time the 1972 CWA amendments were enacted, the Supreme Court 
had held that Congress' authority over the channels of interstate 
commerce was not limited to regulation of the channels themselves but 
could extend to activities necessary to protect the channels. See 
Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S. 508, 523 
(1941) (``Congress may exercise its control over the non-navigable 
stretches of a river in order to preserve or promote commerce on the 
navigable portions.''). The Supreme Court also had clarified that 
Congress could regulate waterways that formed a part of a channel of 
interstate commerce, even if they are not themselves navigable or do 
not cross state boundaries. See Utah v. United States, 403 U.S. 9, 11 
(1971). Congress therefore intended to assert federal regulatory 
authority over more than just waters traditionally understood as 
navigable and rooted that authority in ``its commerce power over 
navigation.'' SWANCC, 531 U.S. at 168 n.3.
    The EPA recognizes and respects the primary responsibilities and 
rights of states to regulate their land and water resources, as 
envisioned by the CWA. See 33 U.S.C. 1251(b), 1370. The oft-quoted 
objective of the CWA to ``restore and maintain the chemical, physical, 
and biological integrity of the Nation's waters,'' id. at 1251(a), must 
be implemented in a manner consistent with Congress' policy directives. 
The Supreme Court long ago recognized the distinction between waters 
subject to federal authority, traditionally understood as navigable, 
and those waters ``subject to the control of the States.'' The Daniel 
Ball, 77 U.S. (10 Wall.) 557, 564-65 (1870). Over a century later, the 
Supreme Court in SWANCC reaffirmed the state's ``traditional and 
primary power over land and water use.'' 531 U.S. at 174. Ensuring that 
states retain authority over their land and water resources helps carry 
out the overall objective of the CWA and ensures that the agency is 
giving full effect and consideration to the entire structure and 
function of the Act. See, e.g., Hibbs v. Winn, 542 U.S. 88, 101 (2004) 
(``A statute should be construed so that effect is given to all its 
provisions, so that no part will be inoperative or superfluous, void or 
insignificant.'') (citation omitted); see also Rapanos v. United 
States, 547 U.S. 715, 755-56 (2006) (Scalia, J., plurality opinion) 
(``[C]lean water is not the only purpose of the statute. So is the 
preservation of primary state responsibility for ordinary land-use 
decisions. 33 U.S.C. 1251(b).'') (original emphasis).
    In summary, Congress relied on its authority under the Commerce 
Clause when it enacted the CWA and intended to assert federal authority 
over more than just waters traditionally understood as navigable, but 
it limited the exercise of that authority to ``its commerce power over 
navigation.'' SWANCC, 531 U.S. at 168 n.3. In doing so, Congress 
specifically sought to avoid ``federal encroachment upon a traditional 
state power.'' Id. at 173. The Court in SWANCC found that ``[r]ather 
than expressing a desire to readjust the

[[Page 44087]]

federal-state balance in this manner, Congress chose [in the CWA] to 
`recognize, preserve, and protect the primary responsibilities and 
rights of States . . . to plan the development and use . . . of land 
and water resources . . .'' Id. at 174 (quoting 33 U.S.C. 1251(b)). The 
Court found no clear statement from Congress that it had intended to 
permit federal encroachment on traditional state power and construed 
the CWA to avoid the significant constitutional questions related to 
the scope of federal authority authorized therein. Id. That is because 
the Supreme Court has instructed that ``[w]here an administrative 
interpretation of a statute invokes the outer limits of Congress' 
power, we expect a clear indication that Congress intended that 
result.'' Id. at 172. The Court has further stated that this is 
particularly true ``where the administrative interpretation alters the 
federal-state framework by permitting federal encroachment upon a 
traditional state power.'' Id. at 173; see also Will v. Michigan Dept. 
of State Police, 491 U.S. 58, 65 (1989) (``[I]f Congress intends to 
alter the `usual constitutional balance between the States and the 
Federal Government,' it must make its intention to do so `unmistakably 
clear in the language of the statute.' '') (quoting Atascadero State 
Hospital v. Scanlon, 473 U.S. 234, 242 (1985)); Gregory v. Ashcroft, 
501 U.S. 452, 461 (1991) (``this plain statement rule . . . 
acknowledg[es] that the States retain substantial sovereign powers 
under our constitutional scheme, powers with which Congress does not 
readily interfere''). This means that that the executive branch's 
authority under the CWA, while broad, is not unlimited, and the waters 
to which CWA regulatory programs apply must necessarily respect those 
limits. For further discussion of these principles, see 84 FR at 4165 
and 83 FR at 32234.
    In some cases, CWA section 401 denials have been challenged on 
grounds that the denial improperly interfered with interstate commerce. 
See, e.g., Lighthouse Resources, Inc. v. Inslee, No. 3:18-cv-5005, 
Complaint at ]] 206-210; ]] 224-248 (W.D. Wash. Filed Jan. 8, 2018) 
(alleging State's denial of section 401 certification violated the 
dormant commerce clause and dormant foreign commerce clause). In Lake 
Carriers Association v. EPA, 652 F.3d 1 (D.C. Cir. 2011), a court of 
appeals found that the section 401 statutory scheme of delegation to 
states itself does not create an impermissible burden on interstate 
commerce; however actions taken by states pursuant to section 401 are 
not insulated from dormant commerce clause challenges. 652 F.3d at 10 
(``If [petitioners] believe that the certification conditions imposed 
by any particular state pose an inordinate burden on their operations, 
they may challenge those conditions in that state's courts. If 
[petitioners] believe that a particular state's law imposes an 
unconstitutional burden on interstate commerce, they may challenge that 
law in federal (or state) court.''). Accordingly, EPA seeks comment on 
whether its proposed regulations appropriately balance the scope of 
state authority under section 401 with Congress' goal of facilitating 
commerce on interstate navigable waters, and whether they define the 
scope in a manner that would limit the potential for states to withhold 
or condition certifications such that it would place undue burdens on 
interstate commerce.
2. The EPA's Role in Implementing Section 401
    The EPA, as the federal agency charged with administering the CWA, 
is responsible for developing regulations and guidance to ensure 
effective implementation of all CWA programs, including section 
401.\11\ In addition to administering the statute and promulgating 
implementing regulations, the Agency has several other roles under 
section 401.
---------------------------------------------------------------------------

    \11\ See 33 U.S.C. 1251(d), 1361(a); Mayo Found. for Medical 
Educ. and Res. v. United States, 562 U.S. 44, 45 (2011); Hoopa 
Valley Tribe v. FERC, 913 F.3d 1099, 1104 (D.C. Cir. 2019); Alabama 
Rivers Alliance v. FERC, 325 F.3d 290, 296-97 (D.C. Cir. 2003); 
California Trout v. FERC, 313 F.3d 1131, 1133 (9th Cir. 2002); 
American Rivers, Inc. v. FERC, 129 F. 3d 99, 107 (2d. Cir. 1997).
---------------------------------------------------------------------------

    The EPA acts as the section 401 certification authority under two 
circumstances. First, the EPA will certify on behalf of a state or 
tribe where the jurisdiction in which the discharge will originate does 
not itself have certification authority. 33 U.S.C. 1341(a)(1). In 
practice, this results in the EPA certifying on behalf of the many 
tribes that do not have TAS authority for section 401. Second, the EPA 
will act as the certifying authority where the discharge would 
originate on lands of exclusive federal jurisdiction.\12\
---------------------------------------------------------------------------

    \12\ The federal government may obtain exclusive federal 
jurisdiction over lands in multiple ways, including where the 
federal government purchases lands with state consent consistent 
with article 1, section 8, clause 17 of the U.S. Constitution, where 
a state chooses to cede jurisdiction to the federal government, and 
where the federal government reserved jurisdiction upon granting 
statehood. See Collins v. Yosemite Park Co., 304 U.S. 518, 529-30 
(1938); James v. Dravo Contracting Co., 302 U.S. 134, 141-42 (1937); 
Surplus Trading Company v. Cook, 281 U.S. 647, 650-52 (1930); Fort 
Leavenworth Railroad Company v. Lowe, 114 U.S. 525, 527 (1895). 
Examples of lands of exclusive federal jurisdiction include Denali 
National Park.
---------------------------------------------------------------------------

    The EPA also coordinates the opportunity for neighboring 
jurisdictions to raise concerns and recommendations where their water 
quality may be affected by a discharge subject to section 401 
certification. Id. at 1341(a)(2). Although section 401 certification 
authority lies with the jurisdiction where the discharge originates, a 
neighboring jurisdiction whose water quality is potentially affected by 
the discharge may have an opportunity to raise concerns. Where the EPA 
Administrator determines that a discharge subject to section 401 ``may 
affect'' the water quality of a neighboring jurisdiction, the EPA is 
required to notify that other jurisdiction. Id. If the neighboring 
jurisdiction determines that the discharge ``will affect'' the quality 
of its waters in violation of any water quality requirement of that 
jurisdiction, it may notify the EPA and the federal licensing or 
permitting agency of its objection to the license or permit. Id. It may 
also request a hearing on its objection with the federal licensing or 
permitting agency. At the hearing, the EPA will submit its evaluation 
and recommendations. The federal agency will consider the 
jurisdiction's and the EPA's recommendations, and any additional 
evidence presented at the hearing. The federal agency ``shall condition 
such license or permit in such manner as may be necessary to insure 
compliance with the applicable water quality requirements'' of the 
neighboring jurisdiction. Id. If the conditions cannot ensure 
compliance, the federal agency may not issue the license or permit.
    The EPA also must provide technical assistance for section 401 
certifications upon the request of any federal or state agency, or 
project proponent. Id. at 1341(b). Technical assistance might include 
provision of any relevant information on applicable effluent 
limitations, standards, regulations, requirements, or water quality 
criteria.
    Finally, the EPA is responsible for developing regulations and 
guidance to ensure effective implementation of all CWA programs, 
including section 401. The EPA's current water quality certification 
regulations were promulgated in 1971,\13\ prior to the 1972

[[Page 44088]]

amendments that enacted CWA section 401.
---------------------------------------------------------------------------

    \13\ The EPA's existing water quality certification regulations 
are found at 40 CFR part 121, 36 FR 22487 (November 25, 1971). The 
EPA has also promulgated regulations addressing how 401 
certification applies to the CWA section 402 NPDES program, found at 
40 CFR 124.53, 124.54, 124.55; 48 FR 14264 (April 1, 1983). This 
proposed rule does not address the NPDES regulations, and the Agency 
will make any necessary conforming regulatory changes in a 
subsequent rulemaking.
---------------------------------------------------------------------------

    The EPA's 1971 regulations were designed to implement an earlier 
version of the certification requirement that was included in the pre-
1972 version of the FWPCA. The legislative history reveals Congress 
added the certification requirement to ``recognize[] the responsibility 
of Federal agencies to protect water quality whenever their activities 
affect public waterways.'' S. Rep. No. 91-351, at 3 (1969). ``In the 
past, these [Federal] licenses and permits have been granted without 
any assurance that the [water quality] standards will be met or even 
considered.'' Id. As an example, the legislative history discusses the 
Atomic Energy Commission's failure to consider the impact of thermal 
pollution on receiving waters when evaluating ``site selection, 
construction, and design or operation of nuclear powerplants.'' Id.
    Prior to 1972, the certification provision required states to 
certify that ``such activity will be conducted in a manner which will 
not violate applicable water quality standards.'' Public Law 91-224, 
Sec.  21(b)(1), 84 Stat. 91 (1970) (emphasis added). As described 
above, the 1972 amendments restructured the CWA and created a framework 
for compliance with effluent limitations that would be established in 
discharge permits issued pursuant to the new federal permitting 
program.
    The 1972 amendments retained the pre-existing water quality 
certification requirements but modified the requirements to be 
consistent with the overall restructuring of the CWA so that a water 
quality certification would assure that the ``discharge will comply'' 
with effluent limitations and other enumerated regulatory provisions of 
the Act, and with ``any other appropriate requirement'' of state or 
tribal law. 33 U.S.C. 1341(a), (d) (emphasis added). Because the EPA's 
existing certification regulations were promulgated prior to the 1972 
CWA amendments, they contain language from the pre-1972 FWCPA that 
Congress changed in those amendments. In contrast to the language in 
CWA section 401, the EPA's existing certification regulations direct 
authorities to certify that there is ``reasonable assurance that the 
activity will be conducted in a manner which will not violate 
applicable water quality standards.'' 40 CFR 121.2(a)(2)-(3) (emphasis 
added). These outdated provisions have caused confusion for states, 
tribes, stakeholders, and courts reviewing section 401 certifications, 
and a primary goal for this proposal is to update and clarify the 
Agency's regulations to ensure that they are consistent with the CWA.
3. The EPA's Existing Certification Regulations
    The EPA's existing certification regulations require certifying 
authorities to act on a certification request within a ``reasonable 
period of time.'' 40 CFR 121.16(b). The regulations provide that the 
federal licensing or permitting agency determines what constitutes a 
``reasonable period,'' and that the period shall generally be six 
months but in any event shall not exceed one year. Id.
    The existing certification regulations also provide that certifying 
authorities may waive the certification requirement under two 
circumstances: First, when the certifying authority sends written 
notification expressly waiving its authority to act on a request for 
certification; and second, when the federal licensing or permitting 
agency sends written notification to the EPA Regional Administrator 
that the certifying authority failed to act on a certification request 
within a reasonable period of time after receipt of such a request. Id. 
at 121.16(a)-(b). Once waiver occurs, certification is not required, 
and the federal license or permit may be issued. 33 U.S.C. 1341(a).
    When the EPA is the certifying authority, the existing 
certification regulations at 40 CFR part 121 establish different 
requirements, including specific information to be included in a 
certification request and additional procedures. When the EPA is 
providing certification, the project proponent must submit to the EPA 
Regional Administrator the name and address of the project proponent, a 
description of the facility or activity and of any related discharge 
into waters of the United States, a description of the function and 
operation of wastewater treatment equipment, dates on which the 
activity and associated discharge will begin and end, and a description 
of the methods to be used to monitor the quality and characteristics of 
the discharge. 40 CFR 121.22. Once the request is submitted to the EPA, 
the Regional Administrator must provide public notice of the request 
and an opportunity to comment, specifically stating that ``all 
interested and affected parties will be given reasonable opportunity to 
present evidence and testimony at a public hearing on the question 
whether to grant or deny certification if the Regional Administrator 
determines that such a hearing is necessary or appropriate.'' Id. at 
121.23. If, after consideration of relevant information, the Regional 
Administrator determines that there is ``reasonable assurance that the 
proposed activity will not result in a violation of applicable water 
quality standards,'' the Regional Administrator shall issue the 
certification.\14\ Id. at 121.24.
---------------------------------------------------------------------------

    \14\ Use of the terms ``reasonable assurance'' and ``activity'' 
in this operative provision of the EPA's existing certification 
regulation is an artifact of the pre-1972 statutory language and 
those terms are not used in the operative provision of CWA section 
401. See Public Law 91-224, 21(b)(1), 84 Stat. 91 (1970).
---------------------------------------------------------------------------

    The existing certification regulations identify a number of 
requirements that all certifying authorities must include in a section 
401 certification. Id. at 121.2. For example, a section 401 
certification shall include the name and address of the project 
proponent. Id. at 121.2(a)(2). The certification shall also include a 
statement that the certifying authority examined the application made 
by the project proponent to the federal licensing or permitting agency 
and bases its certification upon an evaluation of the application 
materials which are relevant to water quality considerations or that it 
examined other information sufficient to permit the certifying 
authority to make a statement that there is a ``reasonable assurance 
that the activity will be conducted in a manner which will not violate 
applicable water quality standards.'' Id. at 121.2(a)(2)-(3). The 
certification shall state ``any conditions which the certifying agency 
deems necessary or desirable with respect to the discharge of the 
activity,'' and other information the certifying authority deems 
appropriate.\15\ Id. at 121.2(a)(4)-(5).
---------------------------------------------------------------------------

    \15\ The term ``desirable'' is also not used in CWA section 401.
---------------------------------------------------------------------------

    The existing certification regulations at 40 CFR part 121 also 
establish a process for the EPA to provide neighboring jurisdictions 
with an opportunity to comment on a certification that is similar to 
that provided in the modern CWA section 401(a)(2). Under the existing 
certification regulations, the Regional Administrator is required to 
review the federal license or permit application, the certification, 
and any supplemental information provided to the EPA by the federal 
licensing or permitting agency, and if the Regional Administrator 
determines there is ``reason to believe that a discharge may affect the 
quality of the waters of any State or States other than the State in 
which the discharge originates,'' the Regional Administrator is 
required to notify each affected state within thirty days of receipt of 
the application materials and certification. Id. at 121.13. If the 
documents provided are insufficient to make the

[[Page 44089]]

determination, the Regional Administrator may request any supplemental 
information ``as may be required to make the determination.'' Id. at 
121.12. In cases where the federal licensing or permitting agency holds 
a public hearing on the objection raised by a neighboring jurisdiction, 
notice of such objection shall be forwarded to the Regional 
Administrator by the licensing or permitting agency no later than 30 
days prior to the hearing. Id. at 121.15. At the hearing the Regional 
Administrator shall submit an evaluation and ``recommendations as to 
whether and under what conditions the license or permit should be 
issued.'' Id. at 121.15.
    The existing certification regulations establish that the Regional 
Administrator ``may, and upon request shall'' provide federal licensing 
and permitting agencies, certifying authorities, and project proponents 
with information regarding water quality standards, status of 
compliance by dischargers with the conditions and requirements of 
applicable water quality standards. Id. at 121.30.
    Finally, the existing certification regulations establish an 
oversight role for the EPA when a certifying authority modifies a prior 
certification. The regulation provides for a certifying authority to 
modify its certification ``in such manner as may be agreed upon by the 
certifying agency, the licensing or permitting agency, and the Regional 
Administrator.'' Id. at 121.2(b) (emphasis added).
    As noted throughout this preamble, the EPA's existing certification 
regulations were promulgated prior to the 1972 CWA amendments and they 
do not reflect the current statutory language in section 401. In 
addition, the EPA's existing certification regulations at 40 CFR part 
121 do not address some important procedural and substantive components 
of section 401 certification review and action. This proposal is 
intended to modernize the EPA's regulations, align them with the 
current text and structure of the CWA, and provide additional 
regulatory procedures that the Agency believes will help promote 
consistent implementation of section 401 and streamline federal license 
and permit processes, consistent with the objectives of the Executive 
Order.
4. Judicial Interpretations of Section 401
    During the 47 years since its passage, the federal courts on 
numerous occasions have interpreted key provisions of section 401. The 
United States Supreme Court has twice addressed questions related to 
the scope and triggering mechanism of section 401, and lower courts 
have also addressed certain elements of section 401 certifications. 
This section summarizes the U.S. Supreme Court decisions and major 
lower court decisions.
a. U.S. Supreme Court Decisions
i. P.U.D. No. 1 of Jefferson County
    In 1994, the Supreme Court reviewed a water quality certification 
issued by the State of Washington for a new hydroelectric project on 
the Dosewallips River. See PUD No. 1 of Jefferson County and City of 
Tacoma v. Washington Department of Ecology, 511 U.S. 700 (1994) (PUD 
No. 1). This particular decision, though narrow in its holding, has 
been read by other courts as well as the EPA and some states and tribes 
to significantly broaden the scope of section 401 beyond its plain 
language meaning.
    The principal dispute adjudicated in PUD No. 1 was whether a state 
or tribe may require a minimum stream flow as a condition in a 
certification issued under section 401. In this case, the project 
proponent identified two potential discharges from its proposed 
hydroelectric facility: ``the release of dredged and fill material 
during construction of the project, and the discharge of water at the 
end of the tailrace after the water has been used to generate 
electricity.'' Id at 711. The project proponent argued that the minimum 
stream flow condition was unrelated to these discharges and therefore 
beyond the scope of the state's authority under section 401. Id.
    The Court analyzed sections 401(a) and 401(d); specifically it 
analyzed the use of different terms in those sections of the statute to 
inform the scope of a section 401 certification. Section 401(a) 
requires the certifying authority to certify that the discharge from a 
proposed federally licensed or permitted project will comply with 
enumerated CWA provisions, and section 401(d) allows the certifying 
authority to include conditions to assure that the applicant will 
comply with enumerated CWA provisions and ``other appropriate state law 
requirements.'' The Court concluded that, consistent with the EPA's 
implementing regulations, section 401(d) ``is most reasonably read as 
authorizing additional conditions and limitations on the activity as a 
whole once the threshold condition, the existence of a discharge, is 
satisfied.'' \16\ Id. at 712. The Court cited the EPA's certification 
regulations at 40 CFR 121.2(a)(3) with approval and quoted the EPA's 
guidance titled Wetlands and 401 Certification, and stated that ``EPA's 
conclusion that activities--not merely discharges--must comply with 
state water quality standards is a reasonable interpretation of Sec.  
401 and is entitled to deference.'' Id. (citing EPA, Wetlands and 401 
Certification 23 (April 1989)).
---------------------------------------------------------------------------

    \16\ The Court apparently failed to identify or understand that 
the EPA's regulations were promulgated prior to the 1972 CWA 
amendments and that the exact provision the Court was analyzing 
contained outdated terminology, including the term ``activity'' from 
the pre-1972 versions of the Act.
---------------------------------------------------------------------------

    The Court was careful to note that a state's authority to condition 
a certification ``is not unbounded'' and that states ``can only ensure 
that the project complies with `any applicable effluent limitations and 
other limitations, under [33 U.S.C. 1311, 1312]' or certain other 
provisions of the Act, `and with any other appropriate requirement of 
State Law.' '' Id. The Court concluded that ``state water quality 
standards adopted pursuant to Sec.  303 are among the `other 
limitations' with which a State may ensure compliance through the Sec.  
401 certification process'' and noted that its view ``is consistent 
with EPA's view of the statute,'' again citing the EPA's regulations 
and guidance. Id. at 713.
    Although this decision has been interpreted by some to broadly 
expand state authority under section 401--beyond assessing water 
quality impacts from the discharge and allowing conditions beyond the 
enumerated CWA provisions--the Court did not stray from the bedrock 
principles that a section 401 certification must address water quality 
and that appropriate conditions include those necessary to assure 
compliance with the state's water quality standards. Indeed, referring 
to the section 401 language allowing certification conditions based on 
``any other appropriate requirements of state law,'' the Court 
explicitly declined to speculate ``on what additional state laws, if 
any, might be incorporated by this language. But at a minimum, 
limitations imposed pursuant to state water quality standards adopted 
pursuant to Sec.  303 are appropriate requirements of state law.'' Id. 
(emphasis added).
    On the scope of section 401, the dissenting opinion would have 
declined to adopt the interpretation suggested by the EPA's regulations 
and guidance and instead analyzed the statutory section as a whole, 
attempting to harmonize sections 401(a) and (d). The dissent first 
noted that, if the Court's conclusion that states can impose conditions 
unrelated

[[Page 44090]]

to discharges is correct, ``Congress' careful focus on discharges in 
Sec.  401(a)(1)--the provision that describes the scope and function of 
the certification process--was wasted effort,'' and that the Court's 
conclusion ``effectively eliminates the constraints of Sec.  
401(a)(1).'' Id. at 726. The dissent then ``easily reconciled'' the two 
provisions by concluding that, ``it is reasonable to infer that the 
conditions a State is permitted to impose on certification must relate 
to the very purpose the certification process is designed to serve. 
Thus, while section 401(d) permits a State to place conditions on a 
certification to ensure compliance of `the applicant,' those conditions 
must still be related to discharges.'' Id. at 726-27. The dissent 
further noted that each of the CWA provisions enumerated in section 401 
``describes discharge-related limitations'' and therefore the plain 
language of section 401(d) supports the conclusion that certification 
conditions must address water quality concerns from the discharge, not 
the proposed activity as a whole. Id. at 727. Finally, the dissent 
applied the principle ejusdem generis in its analysis and concluded 
that because ``other appropriate requirements of state law'' is 
included in a list of more specific discharge-related CWA provisions, 
that the ``appropriate'' requirements are ``most reasonably construed 
to extend only to provisions that, like the other provisions in the 
list, impose discharge-related restrictions.'' Id. at 728.
    The dissent also took issue with the Court's reliance, at least in 
part, on the EPA's regulations and its application of Chevron deference 
in this case without first identifying ambiguity in the statute and, 
where the government apparently did not seek deference on an 
interpretation of section 401(d). Id. The dissent noted that there was 
no EPA interpretation directly addressing the language in sections 
401(a) and (d), and that the only existing EPA regulation that 
addresses conditions ``speaks exclusively in terms of limiting 
discharges.'' \17\ Id. (citing 40 CFR 121.2(a)(4)).
---------------------------------------------------------------------------

    \17\ The EPA's amicus brief filed in this case did not grapple 
with the language in 401(a) and (d) at all, but primarily argued 
that the proposed project had two distinct discharges (which were 
undisputed) and that ``both discharges could reasonably be said to 
cause a violation of the State's water quality standards,'' 
including the designated uses and antidegradation components. Brief 
for the United States as Amicus Curiae Supporting Affirmance, at 12 
n. 2 (Dec. 1993) (``It is therefore unnecessary to determine in this 
case whether Congress intended by the use of the term ``applicant,'' 
rather than ``discharge'' in section 401(d) to grant States a 
broader power to condition certifications under Section 401(d) than 
to deny them under Section 401(a) and, if so, whether there are 
limitations on the States' authority to impose such conditions.'' 
The EPA's amicus brief also did not inform the Court that the 
Agency's implementing regulations included language from the prior 
version of the Act.
---------------------------------------------------------------------------

    The PUD No. 1 decision addressed two other scope-related elements 
of section 401: Whether certification conditions may be designed to 
address impacts to designated uses, and whether conditions related to 
minimum stream flows are appropriate under section 401. First, the 
Court conducted a plain language analysis of the CWA and concluded 
that, ``under the literal terms of the statute, a project that does not 
comply with a designated use of the water does not comply with the 
applicable water quality standards.'' Id. at 715. This means a section 
401 certification may appropriately include conditions to require 
compliance with designated uses, which pursuant to the CWA, are a 
component of a water quality standard. Id. Second, the Court 
acknowledged that the Federal Power Act (FPA) empowers FERC ``to issue 
licenses for projects `necessary or convenient . . . for the 
development, transmission, and utilization of power across, along, 
from, or in any of the streams . . . over which Congress has 
jurisdiction,''' and that the FPA ``requires FERC to consider a 
project's effect on fish and wildlife.'' Id. at 722. Although the Court 
had previously rejected a state's minimum stream flow requirement that 
conflicted with a stream flow requirement in a FERC license, the Court 
found no similar conflict in this case because FERC had not yet issued 
the hydropower license. Id. Given the breadth of federal permits that 
CWA section 401 applies to, the Court declined to assert a broad 
limitation on stream flow conditions in certifications but concluded 
they may be appropriate if necessary to enforce a state's water quality 
standard, including designated uses. Id. at 723.
ii. S.D. Warren
    In 2006, the Court revisited section 401 in connection with the 
State of Maine's water quality certification of FERC license renewals 
for five hydroelectric dams on the Presumpscot River. S.D. Warren Co. 
v. Maine Board of Environmental Protection et al., 547 U.S. 370 (2006) 
(S.D. Warren). The issue presented in S.D. Warren was whether operation 
of a dam may result in a ``discharge'' into the waters of the United 
States, triggering the need for a section 401 certification, even if 
the discharge did not add any pollutants. The Court analyzed the use of 
different terms--``discharge'' and ``discharge of pollutants''--within 
the CWA, how those terms are defined and how they are used in CWA 
sections 401 and 402. The Court noted that section 402 expressly uses 
the term ``discharge of pollutants'' and requires permits for such 
discharges; and that section 401, by contrast, provides a tool for 
states to maintain water quality within their jurisdiction and uses the 
term ``discharge'' which is not independently defined in the Act.\18\ 
Finding no specific definition of the term ``discharge'' in the 
statute, the Court turned to its common dictionary meaning: A ``flowing 
or issuing out'' and concluded that the term is ``presumably broader'' 
than ``discharge of a pollutant.'' Id. at 375-76.
---------------------------------------------------------------------------

    \18\ The Court noted that the Act provides, that ``the term 
`discharge' when used without qualification incudes a discharge of a 
pollutant, and a discharge of pollutants.'' 547 U.S. at 375 (quoting 
33 U.S.C. 1362(16)).
---------------------------------------------------------------------------

    The Court held that operating a dam ``does raise the potential for 
a discharge'' and, therefore, section 401 is triggered. Id. at 373. In 
so holding, the Court observed that, ``[t]he alteration of water 
quality as thus defined is a risk inherent in limiting river flow and 
releasing water through turbines,'' and such changes in a river ``fall 
within a State's legitimate legislative business, and the Clean Water 
Act provides for a system that respects the State's concerns.'' Id. at 
385-86. The Court concluded by observing that ``[s]tate certifications 
under [section] 401 are essential in the scheme to preserve state 
authority to address the broad range of pollution.'' Id. at 386. This 
sentence when read in isolation could be interpreted as broadening the 
scope of section 401 to allow certifying authorities to consider 
potential environmental impacts from a proposed federally licensed or 
permitted project beyond water quality. However, the Court followed 
that sentence with a quote from Senator Muskie's floor statement during 
the enactment of section 401:

    No polluter will be able to hide behind a Federal license or 
permit as an excuse for a violation of water quality standard[s]. No 
polluter will be able to make major investments in facilities under 
a Federal license or permit without providing assurance that the 
facility will comply with water quality standards. No State water 
pollution control agency will be confronted with a fait accompli by 
an industry that has built a plant without consideration of water 
quality requirements.

Id. (emphasis added). The Court then stated, ``These are the very 
reasons that Congress provided the States with

[[Page 44091]]

power to enforce `any other appropriate requirement of State law,' by 
imposing conditions on federal licenses for activities that may result 
in a discharge.'' Id. (emphasis added). Read in context, the Court's 
statement about a state's authority to address a ``broad range of 
pollution'' under section 401 does not suggest that an ``appropriate 
requirement of State law'' means anything other than water quality 
requirements or that a state's or tribe's action on a certification 
request can be focused on anything other than compliance with 
appropriate water quality requirements.
b. Circuit Court Decisions
    Over the years, federal appellate courts have also addressed 
important aspects of section 401, including the timing for certifying 
authorities to act on a request and the scope of authority of federal 
agencies other than the EPA to make determinations on section 401 
certifications. This section highlights a few of the most significant 
issues concerning section 401 and the most often cited decisions but 
does not cover the universe of lower federal court or state court case 
law. The Agency intends for this proposed rule, if finalized, to 
provide consistency and certainty where there may currently be 
conflicting or unclear but locally binding legal precedent.
    Recent case law has provided insight concerning the timing and 
waiver provisions of section 401. In 2018, the Second Circuit addressed 
the question of when the statutory review clock begins. N.Y. State 
Dep't of Envtl. Conservation v. FERC, 884 F.3d 450, 455-56 (2d Cir. 
2018). Considering Millennium Pipeline Company's certification request, 
the court disagreed with the State of New York and held that the 
statutory time limit is not triggered when a state determines that a 
request for certification is ``complete,'' but that the ``plain 
language of Section 401 outlines a bright-line rule regarding the 
beginning of review,'' and that the clock begins upon ``receipt of such 
request'' by the certifying authority. Id. Otherwise, the court noted 
that states could ``blur this bright-line into a subjective standard, 
dictating that applications are complete only when state agencies 
decide that they have all the information they need. The state agencies 
could thus theoretically request supplemental information 
indefinitely.'' Id. at 456.
    The D.C. Circuit has also recently analyzed the statutory timeline 
for review of a certification and held that, consistent with the plain 
language of CWA section 401(a)(1), ``while a full year is the absolute 
maximum, [the statute] does not preclude a finding of waiver prior to 
the passage of a full year.'' Hoopa Valley Tribe v. FERC, 913 F.3d 
1099, 1104 (D.C. Cir. 2019). The court also noted that the EPA--``the 
agency charged with administering the CWA''--has regulations that allow 
it to find that a state has waived certification of an NPDES permit 
application after only six months. Id.
    In Hoopa Valley Tribe, the D.C. Circuit also held that ``the 
withdrawal-and-resubmission of water quality certification requests 
does not trigger new statutory periods of review.'' Id. at 1101. The 
court found that the project proponent and the certifying authorities 
(California and Oregon) had improperly entered into an agreement 
whereby the ``very same'' request for state certification of its 
relicensing application was automatically withdrawn-and resubmitted 
every year by operation of ``the same one-page letter,'' submitted to 
the states before the statute's one-year waiver deadline. Id. at 1104. 
The court observed that ``[d]etermining the effectiveness of such a 
withdrawal-and-resubmission scheme is an undemanding inquiry'' because 
the statute's text ``is clear'' that failure or refusal to act on a 
request for certification within a reasonable period of time, not to 
exceed one year, waives the state's ability to certify.\19\ Id. at 
1103. The court found that, pursuant to the unlawful withdrawal-and 
resubmission ``scheme,'' the states had not yet rendered a 
certification decision ``more than a decade'' after the initial request 
was submitted to the states. Id. at 1104. The court declined to 
``resolve the legitimacy'' of an alternative arrangement whereby an 
applicant may actually submit a new request in place of the old one. 
Id. Nor did it determine ``how different a request must be to 
constitute a `new request' such that it restarts the one-year clock.'' 
Id. On the facts before it, the court found that ``California's and 
Oregon's deliberate and contractual idleness'' defied the statute's 
one-year limitation and ``usurp[ed] FERC's control over whether and 
when a federal license will issue.'' Id.
---------------------------------------------------------------------------

    \19\ Two decisions from the Second Circuit Court of Appeals 
recently acknowledged that project proponents have withdrawn and 
resubmitted certification requests to extend the reasonable time 
period for a state to review. See N.Y. State Dep't of Envtl. 
Conservation v. FERC, 884 F.3d at 456; Constitution Pipeline v. N.Y. 
State Dep't of Envtl. Conservation, 868 F.3d 87, 94 (2d Cir. 2018). 
However, in neither case did the court consider the merits or opine 
on the legality of such an arrangement.
---------------------------------------------------------------------------

    Another important area of case law deals with the scope of 
authority and deference provided to federal agencies other than the EPA 
in addressing issues arising under section 401. Many other federal 
agencies, including FERC and the Corps, routinely issue licenses and 
permits that require section 401 certifications and are responsible for 
enforcing state certification conditions that are incorporated into 
federal licenses and permits. However, because the EPA has been charged 
by Congress with administering the CWA, some courts have concluded that 
those other federal agencies are not entitled to deference on their 
interpretations of section 401. See Alabama Rivers Alliance v. FERC, 
325 F.3d 290, 296-97 (D.C. Cir. 2002); California Trout, Inc. v. FERC, 
313 F.3d 1131, 1133-34 (9th Cir. 2002); American Rivers, Inc. v. FERC, 
129 F.3d 99, 107 (2d. Cir. 1997). Other courts have concluded that FERC 
has an affirmative obligation to determine whether a certifying 
authority has complied with requirements related to a section 401 
certification. See City of Tacoma v. FERC, 460 F.3d 53, 67-68 (D.C. 
Cir. 2006) (FERC had an obligation to ``obtain some minimal 
confirmation of such compliance.''); see also Keating v. FERC, 927 F.2d 
616, 622-623, 625 (D.C. Cir. 1991) (while federal agency may not 
question propriety of state certification before license has issued, 
``FERC must at least decide whether the state's assertion of revocation 
satisfies section 401(a)(3)'s predicate requirements.'').
    In an important determination of procedural authorities, the Second 
Circuit affirmed that FERC--as the licensing agency--``may determine 
whether the proper state has issued the certification or whether a 
state has issued a certification within the prescribed period.'' Am. 
Rivers, Inc., 129 F.3d at 110-111. This holding is consistent with and 
supported by the implied statutory authority of a federal agency to 
establish the ``reasonable period of time (which shall not exceed one 
year)'' in the first place. 33 U.S.C. 1341(a)(1).
    Case law also highlights the potential enforcement challenges that 
federal agencies face with section 401 certification conditions 
included in federal licenses and permits. Federal agencies have been 
admonished not to ``second guess'' a state's water quality 
certification or its conditions, see, e.g., City of Tacoma, 460 F.3d at 
67; Am. Rivers Inc., 129 F.3d at 107; U.S. Dept. of Interior v. FERC, 
952 F.2d 538, 548 (D.C. Cir. 1992) (``FERC may not alter or reject 
conditions imposed by the states through section 401 certificates.''), 
even where the federal agency has attempted to impose conditions that 
are more

[[Page 44092]]

stringent than the state's condition. See Sierra Club v. U.S. Army 
Corps of Engineers, 909 F.3d 635, 648 (4th Cir. 2018) (``the plain 
language of the Clean Water Act does not authorize the Corps to replace 
a state condition with a meaningfully different alternative condition, 
even if the Corps reasonably determines that the alternative condition 
is more protective of water quality''); see also Lake Carriers' 
Association v. EPA, 652 F.3d 1, 6, 12 (D.C. Cir. 2011) (concluding that 
petitioners' request for additional notice and comment procedure on 
state certification conditions would have been futile because ``the 
petitioners have failed to establish that EPA can alter or reject state 
certification conditions. . . .'' But the court also observed, 
``[n]otably, the petitioners never argued that the certifications 
failed to `compl[y] with the terms of section 401,' . . . by 
overstepping traditional bounds of state authority to regulate 
interstate commerce'' (citing City of Tacoma, 460 F.3d at 67) and the 
court ``therefore need not consider whether EPA has authority to reject 
state conditions under such circumstances.'')). But in Snoqualmie 
Indian Tribe v. FERC, the Ninth Circuit upheld FERC's inclusion of 
minimum flow requirements greater than those specified in the State of 
Washington's certification as long as they ``do not conflict with or 
weaken the protections provided by the [State] certification.'' 545 
F.3d 1207, 1219 (9th Cir. 2008). In that case, FERC had added license 
conditions increasing the minimum flows specified in the state's 
certification in order to ``produce a great amount of mist'' which it 
determined would ``augment the Tribe's religious experience,'' one of 
the water's designated uses. Id.; see also cases discussed at section 
III.F in this preamble affirming a role for federal agencies to confirm 
whether certifications comply with the requirements of section 401.
    This proposal is intended to provide clarity to certifying 
authorities, federal agencies, and project proponents, as it addresses 
comprehensively and for the first time some competing case law and 
attempts to clarify the scope of conditions that may be included in a 
certification and the federal agencies' role in the certification 
process.
5. Administrative Law Principles
    To understand the full context and legal basis for this proposal, 
it is useful to understand some key governing principles of 
administrative law. In general, administrative agencies can only 
exercise authority provided by Congress, and courts must enforce 
unambiguous terms that clearly express congressional intent. However, 
when Congress delegates authority to administrative agencies, it 
sometimes enacts ambiguous statutory provisions. To carry out their 
congressionally authorized missions, agencies, including the EPA, must 
often interpret ambiguous statutory terms. However, they must do so 
consistent with congressional intent. In Chevron, U.S.A., Inc. v. 
Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (Chevron), 
the Supreme Court concluded that courts have a limited role when 
reviewing agency interpretations of ambiguous statutory terms. In such 
cases, reviewing courts defer to an agency's interpretation of 
ambiguous terms if the agency's interpretation is reasonable. Under 
Chevron, federal agencies--not federal courts--are charged in the first 
instance with resolving statutory ambiguities to implement delegated 
authority from Congress.
    The Supreme Court has described the Chevron analysis as a ``two-
step'' process. Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2124 
(2016). At step one, the reviewing court determines whether Congress 
has ``directly spoken to the precise question at issue.'' Chevron, 467 
U.S. at 842. If so, ``that is the end of the matter; for the court, as 
well as the agency, must give effect to the unambiguously expressed 
intent of Congress.'' Id. at 842-43. If the statute is silent or 
ambiguous, the reviewing court proceeds to the second step, where the 
court must defer to the agency's ``reasonable'' interpretation. Id. at 
844.
    Chevron deference relies on the straightforward principle that, 
``when Congress grants an agency the authority to administer a statute 
by issuing regulations with the force of law, it presumes the agency 
will use that authority to resolve ambiguities in the statutory 
scheme.'' Encino Motorcars, 136 S. Ct. at 2125 (citing Chevron, 467 
U.S. at 843-44). Indeed, courts have applied Chevron deference to an 
agency's statutory interpretation ``when it appears that Congress 
delegated authority to the agency generally to make rules carrying the 
force of law, and that the agency interpretation claiming deference was 
promulgated in the exercise of that authority.'' Mayo Found. for 
Medical Educ. and Res. v. United States, 562 U.S. 44, 45 (2011) 
(quoting United States v. Mead Corp., 533 U.S. 218, 226-27 (2001)).
    In Chevron, the Supreme Court reviewed the EPA's interpretation of 
statutory language from the Clean Air Act Amendments of 1977. Congress 
amended the Clean Air Act to impose requirements on states that had not 
achieved the national air quality standards promulgated by the EPA. 
States that had not attained the established air standards had to 
implement a permit program that would regulate ``new or modified major 
stationary sources'' of air pollution. Clean Air Act Amendments of 
1977, Public Law 95-95, 91 Stat. 685 (1977). The EPA promulgated 
regulations defining a ``stationary source'' as the entire plant where 
pollutant-producing structures may be located. The EPA, therefore, 
treated numerous pollution-producing structures collectively as a 
single ``stationary source,'' even if those structures were part of the 
same larger facility or complex. See 40 CFR 51.18(j)(1)(i)-(ii) (1983). 
Under the EPA's regulation, a facility could modify or construct new 
pollution-emitting structures as long as the stationary source--the 
facility as a whole--did not increase its pollution emissions.
    The Natural Resources Defense Council (NRDC) opposed the EPA's 
definition of ``stationary source'' and filed a challenge to the 
Agency's regulations. The D.C. Circuit agreed with the NRDC and set 
aside the EPA's regulations. The D.C. Circuit acknowledged that the 
Clean Air Act ``does not explicitly define what Congress envisioned as 
a `stationary source,' to which the permit program . . . should apply'' 
and also concluded that Congress had not clearly addressed the issue in 
the legislative history. NRDC v. Gorsuch, 685 F.2d 718, 723 (D.C. Cir. 
1982). Without clear text or intent from Congress, the D.C. Circuit 
looked to the purposes of the program to guide the court's 
interpretation. Id. at 726. According to the court, Congress sought to 
improve air quality when it amended the Clean Air Act, and the EPA's 
definition of ``stationary source'' merely promoted the maintenance of 
current air quality standards.
    In a unanimous decision, the Supreme Court reversed, finding that 
the D.C. Circuit committed a ``basic legal error'' by adopting ``a 
static judicial definition of the term `stationary source' when it had 
decided that Congress itself had not commanded that decision.'' 
Chevron, 467 U.S. at 842. The Court explained that it is not the 
judiciary's place to establish a controlling interpretation of a 
statute delegating authority to an agency, but, rather, it is the 
agency's job to ``fill any gap left, implicitly or explicitly, by 
Congress.'' Id. at 843. When Congress expressly delegates to an 
administrative agency the authority to interpret a

[[Page 44093]]

statute through regulation, courts cannot substitute their own 
interpretation of the statute when the agency has provided a reasonable 
construction of the statute. See id. at 843-44.
    During the rulemaking process, the EPA had explained that Congress 
had not fully addressed the definition of ``source'' in the amendments 
to the Clean Air Act or in the legislative history. Id. at 858. The 
Supreme Court agreed, concluding that ``the language of [the statute] 
simply does not compel any given interpretation of the term `source.' 
'' Id. at 860. And the legislative history associated with the 
amendments was ``silent on the precise issue.'' Id. at 862.
    In its proposed and final rulemaking, the EPA noted that adopting 
an individualized equipment definition of ``source'' could 
disincentivize the modernization of plants, if industry had to go 
through the permitting process to create changes. Id. at 858. The EPA 
believed that adopting a plant-wide definition of ``source'' could 
result in reduced pollution emissions. Id. Considering the Clean Air 
Act's competing objectives of permitting economic growth and reducing 
pollution emissions, the Supreme Court stated that ``the plantwide 
definition is fully consistent with one of those concerns--the 
allowance of reasonable economic growth--and, whether or not we believe 
it most effectively implements the other, we must recognize that the 
EPA has advanced a reasonable explanation for its conclusion that the 
regulations serve the environmental objectives as well.'' Id. at 863. 
The Court upheld the EPA's definition of the term ``stationary 
source,'' explaining that ``the Administrator's interpretation 
represents a reasonable accommodation of manifestly competing interests 
and is entitled to deference: The regulatory scheme is technical and 
complex, the agency considered the matter in a detailed and reasoned 
fashion, and the decision involves reconciling conflicting policies.'' 
Id. at 865.\20\
---------------------------------------------------------------------------

    \20\ For other instructive applications of Chevron's 
interpretative principles, see Entergy Corp. v. Riverkeeper, Inc. 
556 U.S. 208, 222-223 (2009) (statutory silence interpreted as 
``nothing more than a refusal to tie the agency's hands''); Zuni 
Pub. School Dist. v. Dep't of Edu. 550 U.S. 81, 89-94 (2007) (court 
considered whether agency's interpretation was reasonable in light 
of the ``plain language of the statute'' as well as the statute's 
``background and basic purposes''); Healthkeepers, Inc. v. Richmond 
Ambulance Auth., 642 F.3d 466, 471 (4th Cir. 2011) (``statutory 
construction . . . is a holistic endeavor'').
---------------------------------------------------------------------------

    Even if a court has ruled on the interpretation of a statute, the 
``court's prior judicial construction of a statute trumps an agency 
construction otherwise entitled to Chevron deference only if the prior 
court decision holds that its construction follows from the unambiguous 
terms of the statute and thus leaves no room for agency discretion.'' 
Nat'l Cable & Telecomm. Ass'n v. Brand X Internet Serv., 545 U.S. 967, 
982 (2005) (emphasis added). Put another way, Brand X held that ``a 
court's choice of one reasonable reading of an ambiguous statute does 
not preclude an implementing agency from later adopting a different 
reasonable interpretation.'' United States v. Eurodif S.A., 555 U.S. 
305, 315 (2009). This principle stems from Chevron itself, which 
``established a `presumption that Congress, when it left ambiguity in a 
statute meant for implementation by an agency, understood that the 
ambiguity would be resolved, first and foremost, by the agency, and 
desired the agency (rather than the courts) to possess whatever degree 
of discretion the ambiguity allows.' '' Brand X, 545 U.S. at 982 
(quoting Smiley v. Citibank, 517 U.S. 735, 740-41 (1996)). Indeed, even 
the ``initial agency interpretation is not instantly carved in stone.'' 
Chevron, 467 U.S. at 863.
    In Brand X, the Federal Communications Commission (FCC or 
Commission) interpreted the scope of the Communications Act of 1934, 
which subjects providers of ``telecommunications service'' to mandatory 
common-carrier regulations. Brand X, 545 U.S. at 977-78. Brand X 
internet Services challenged the FCC's interpretation, and the Ninth 
Circuit concluded that the Commission could not permissibly construe 
the Communications Act the way that it did based on the Court's earlier 
precedent. Id. at 979-80. The Supreme Court granted certiorari and 
reversed. The Supreme Court upheld the FCC's interpretation of the 
Communications Act by applying Chevron's two-step analysis. The Court 
found that the relevant statutory provisions failed to unambiguously 
foreclose the Commission's interpretation, while other provisions were 
silent. The FCC had ``discretion to fill the consequent statutory 
gap,'' and its construction was reasonable. Id. at 997.
    The entire ``point of Chevron is to leave the discretion provided 
by the ambiguities of a statute with the implementing agencies.'' Id. 
at 981 (quoting Smiley, 517 U.S. at 742). The Supreme Court emphasized 
that courts cannot override an agency's interpretation of an ambiguous 
statute based on judicial precedent. Id. at 982. Instead, as a ``better 
rule,'' a reviewing court only can rely on precedent that interprets a 
statute at ``Chevron step one.'' Id. ``Only a judicial precedent 
holding that the statute unambiguously forecloses the agency's 
interpretation, and therefore contains no gap for the agency to fill, 
displaces a conflicting agency construction.'' Id. at 982-83. A 
contrary rule produces anomalous results because the controlling 
interpretation would then turn on whether a court or the agency 
interprets the statutory provision first. See id. at 983. Congress 
delegated authority to agencies to interpret statutes and that 
authority ``does not depend on the order in which the judicial and 
administrative constructions occur.'' Id. Agencies have the authority 
to revise ``unwise judicial constructions of ambiguous statutes.'' Id.
6. Legal Construct for the Proposed Rule
    As the preceding summary of the statutory, regulatory and judicial 
history demonstrates, the most challenging aspects of section 401 
concern the scope of review and action on a certification request, and 
the amount of time available for a certifying authority to act. The 
Agency is proposing a regulation that would clarify these aspects and 
provide additional regulatory certainty for states, tribes, federal 
agencies, and project proponents. This subsection summarizes some of 
the core legal principles that inform this proposal, and the following 
section (section III) describes how the Agency is applying those legal 
principles to support the proposed regulation.
a. Scope of Certification
    The EPA has for the first time conducted a holistic analysis of the 
text, structure, and history of CWA section 401. As a result of that 
analysis, the EPA proposes to interpret the scope of section 401 as 
protecting the quality of waters of the United States from point source 
discharges associated with federally licensed or permitted activities 
by requiring compliance with the CWA and EPA-approved state and tribal 
CWA regulatory program provisions.
    Since at least 1973, the EPA has issued memoranda and guidance 
documents and filed briefs in various court cases addressing section 
401. Only a handful of these documents address the scope of section 
401, and they were not the product of a holistic examination of the 
statute or its legislative history and, as a result, included little 
explanation for the Agency's interpretations. For example, in 1989, the 
EPA issued a guidance document asserting that a section 401 
certification could broadly address ``all of the potential effects of a 
proposed

[[Page 44094]]

activity on water quality--direct and indirect, short and long term, 
upstream and downstream, construction and operation. . . .'' EPA, 
Wetlands and 401 Certification 23 (April 1989). The EPA's only 
explanation for this assertion is a reference to section 401(a)(3), 
which provides that a certification for a construction permit may also 
be used for an operating permit that requires certification. The 
guidance does not provide any analysis to support its assertion that a 
certification could address all potential impacts from the ``proposed 
activity'' as opposed to the discharge. Several years later, the United 
States filed an amicus brief on behalf of the EPA in the PUD No. 1 
case. The EPA's brief asserted that petitioners were ``mistaken'' in 
their contention that the minimum flow condition is outside the scope 
of section 401 because it does not address a discharge, but the brief 
provided no analysis to support this position. The EPA's brief also did 
not offer an affirmative interpretation to harmonize the different 
language in sections 401(a) and 401(d). More than a decade later, the 
EPA's amicus brief in the S.D. Warren case simply adopted the Supreme 
Court's analysis in PUD No. 1 that once section 401 is triggered by a 
discharge, a certification can broadly cover impacts from the entire 
activity. Finally, in 2010 the EPA issued its now-rescinded Interim 
Handbook which included a number of recommendations on scope, timing, 
and other issues, none of which were supported with robust analysis or 
interpretation of the Act.
    This proposed rulemaking marks the first time that the EPA has 
undertaken a holistic review of the text of section 401 in the larger 
context of the structure and legislative history of the 1972 Act and 
earlier federal water protection statutes and the first time the Agency 
has subjected its analysis to public notice and comment. The proposed 
regulation is informed by this holistic review and presents a framework 
that EPA considers to be most consistent with congressional intent. The 
Agency solicits comments on whether the proposed approach appropriately 
captures the scope of authority for granting, conditioning, denying, 
and waiving a section 401 certification.
i. Water Quality
    The EPA proposes to conclude that the scope of a section 401 review 
or action must be limited to considerations of water quality. The 
Congressional purpose of the CWA is to protect and maintain water 
quality, and there is no suggestion in either the plain language or 
structure of the statute that Congress envisioned section 401 to 
authorize action beyond that which is necessary to address water 
quality directly. Indeed, as described in greater detail above, the 
1972 amendments to the CWA resulted in the enactment of a comprehensive 
scheme designed to prevent, reduce, and eliminate pollution in the 
nation's waters generally, and to regulate the discharge of pollutants 
into waters of the United States specifically.
    The EPA is aware that certifying authorities may have previously 
interpreted the scope of section 401 in a way that resulted in the 
incorporation of non-water quality related considerations into their 
certification review process. For example, certifying authorities have 
included conditions not related directly to water quality in section 
401 certifications, including requiring construction of biking and 
hiking trails, requiring one-time and recurring payments to state 
agencies for improvements or enhancements that are unrelated to the 
proposed federally licensed or permitted project, and creating public 
access for fishing along waters of the United States. Certifying 
authorities have also attempted to address all potential impacts from 
the operation or subsequent use of products generated by a proposed 
federally licensed or permitted project that may be identified in an 
environmental impact statement or environmental assessment, prepared 
pursuant to the NEPA or a state law equivalent. This includes, for 
example, consideration of impacts associated with air emissions and 
transportation effects.
    The Agency proposes to conclude that expanding the scope of section 
401 to include consideration of effects and the imposition of 
conditions unrelated to water quality would, at a minimum, invoke the 
outer limits of power Congress delegated under the CWA. There is 
nothing in the text of the statute or its legislative history that 
signals that Congress intended to impose federal regulations on 
anything more than water quality-related impacts to waters of the 
United States. Indeed, Congress knows how to craft statutes to require 
consideration of multi-media effects, see 42 U.S.C. 4321 et seq. 
(NEPA), and has enacted specific statutes addressing impacts to air 
(Clean Air Act), land (Resource Conservation and Recovery Act), 
wildlife (Endangered Species Act), and cultural resources (National 
Historic Preservation Act), by way of example.\21\ Subsequent 
congressional action directly addressing a particular subject is 
relevant to determining whether a previously adopted statute reaches 
that subject matter. See FDA v. Brown & Williamson Tobacco Corp., 529 
U.S. 120, 155 (2000) (determining that ``actions by Congress over the 
past 35 years'' that addressed tobacco directly, when ``taken 
together,'' ``preclude[d] an interpretation'' that a previously adopted 
statute, the Food, Drug, and Cosmetic Act, ``grant[ed] the FDA 
jurisdiction to regulate tobacco products.'').
---------------------------------------------------------------------------

    \21\ See, e.g., 42 U.S.C. 7401 et seq. (Clean Air Act); 42 
U.S.C. 6901 et seq. (Resource Conservation and Recovery Act); 16 
U.S.C. 1531 et seq. (Endangered Species Act); and 16 U.S.C. 470 et 
seq. (National Historic Preservation Act).
---------------------------------------------------------------------------

    If Congress intended section 401 of the CWA to authorize 
consideration or the imposition of certification conditions based on 
air quality concerns, public access to waters, energy policy, or other 
multi-media or non-water quality impacts, it would have provided a 
clear statement to that effect. Neither the CWA nor section 401 contain 
any such clear statement. In fact, Congress specifically contemplated a 
broader policy direction in the 1972 amendments that would have 
authorized the EPA to address impacts to land, air and water through 
implementation of the CWA, but it was rejected.\22\ Agencies must avoid 
interpretations of the statutes they implement to avoid pressing the 
envelope of constitutional validity absent a clear statement from 
Congress to do so. See SWANCC, 531 U.S. at 172-73; Rapanos, 547 U.S. at 
738 (Scalia, J., plurality). That includes interpretations of the 
statute that would provide states, tribes and the EPA the ability to 
regulate interstate commerce beyond the four corners of the CWA. See 
discussion supra at section II.F.1 in this preamble. The Agency 
proposes to conclude that inclusion of the phrase ``other appropriate 
requirements of state law'' in section 401(d) lacks that clear 
direction from Congress.\23\
---------------------------------------------------------------------------

    \22\ As Congress drafted the 1972 CWA amendments, the House bill 
(H.R. 11896) included section 101(g) within its ``Declaration of 
Goals and Policy'' providing, ``(g) In the implementation of this 
Act, agencies responsible therefor shall consider all potential 
impacts relating to the water, land, and air to insure that other 
significant environmental degradation and damage to the health and 
welfare of man does not result.'' H.R. 11896, 92nd Cong. (1971). 
Section 101(g) of the House bill was ``eliminated'' at conference, 
and the Act was ultimately passed with no federal policy, goal or 
directive to address non-water quality impacts through the CWA. S. 
Rep. 92-1236, at 100 (1972) (Conf. Rep.).
    \23\ The Agency also proposes to conclude that the use of the 
term ``applicant'' in 401(d) creates ambiguity in the statute. See 
section II.F.6.a.ii in this preamble for discussion on the use of 
the term ``applicant'' in section 401(d).
---------------------------------------------------------------------------

    Pursuant to the plain language of section 401, when a state or 
authorized tribe (and in some cases, the EPA) issues

[[Page 44095]]

a certification, it has determined that the discharge to waters of the 
United States from a proposed federally licensed or permitted activity 
will comply with applicable effluent limitations for new and existing 
sources (CWA sections 301, 302 and 306), water quality standards and 
implementation plans (section 303), toxic pretreatment effluent 
standards (section 307), and other ``appropriate requirements'' of 
state or tribal law. 33 U.S.C. 1341(a)(1), (d). The enumerated CWA 
provisions identify requirements to ensure that discharges of 
pollutants do not degrade water quality,\24\ and specifically 
referenced throughout section 401 is the requirement to ensure 
compliance with ``applicable effluent limitations'' and ``water quality 
requirements,'' underscoring the focused intent of this provision on 
the protection of water quality from discharges.\25\ See 33 U.S.C. 
1341(a), (b), (d). The legislative history for the Act provides further 
support for the EPA's interpretation, as it frequently notes the focus 
of the section is on assuring compliance with water quality 
requirements and water quality standards and the elimination of any 
discharges of pollutants. See e.g., S. Rep. No. 92-414, at 69 (1971).
---------------------------------------------------------------------------

    \24\ For example, section 306 defines the standard of 
performance for new sources of discharges as ``a standard for the 
control of the discharge of pollutants which reflects the greatest 
degree of effluent reduction which the Administrator determines to 
be achievable through application of best available demonstrated 
control technology, processes, operating methods, or other 
alternatives, including, where practicable, a standard permitting no 
discharge of pollutants.'' 33 U.S.C. 1316(a)(1). Section 303 notes 
that new or revised state water quality standards ``[s]hall be such 
as to protect the public health or welfare, enhance the quality of 
water and serve the purposes of this chapter.'' Id. at 
1313(c)(2)(A).
    \25\ The term ``effluent limit'' is defined as, ``any 
restriction established by a State or the Administrator on 
quantities, rates, and concentrations of chemical, physical, 
biological, and other constituents which are discharged from point 
sources into navigable waters, the waters of the contiguous zone, or 
the ocean, including schedules of compliance[,]'' 33 U.S.C. 
1362(11); and the CWA requires that ``water quality standards'' 
developed by states and tribes ``consist of the designated uses of 
the navigable waters involved and the water quality criteria for 
such waters based upon such uses.'' Id. at 1313(c)(2)(A).
---------------------------------------------------------------------------

    The CWA does not define what is an ``appropriate requirement'' of 
state law that should be considered as part of a section 401 review, 
and the Agency acknowledges the need to respect the clear policy 
direction from Congress to recognize and preserve state authority over 
land and water resources within their borders. See 33 U.S.C. 1251(b). 
Indeed, the Agency must avoid interpretations of the CWA that infringe 
on traditional state land use planning authority. See SWANCC, 531 U.S. 
at 172-73; Will, 491 U.S. at 65. One potential interpretation of this 
clause in section 401(d) could be to authorize the imposition of 
conditions or veto authority over a federal license or permit based on 
non-water quality related impacts if those requirements are based on 
existing state law. But such an interpretation could authorize the EPA 
as a certifying authority to push the constitutional envelope of its 
delegated authority into regulatory arenas more appropriately reserved 
to the states, ``powers with which Congress does not readily 
interfere.'' Gregory, 501 U.S. at 461 (describing the ``plain statement 
rule'').
    More importantly, the Agency does not believe that Congress 
intended the phrase ``any other appropriate requirements of State law'' 
to be read so broadly. Instead, the principle ejusdem generis helps to 
inform the appropriate interpretation of the text. Under this 
principle, where general words follow an enumeration of two or more 
things, they apply only to things of the same general kind or class 
specifically mentioned. See Washington State Dept. of Social and Health 
Services v. Keffeler, 537 U.S. 371, 383-85 (2003). Here, the general 
term ``appropriate requirement'' follows an enumeration of four 
specific sections of the CWA that are all focused on the protection of 
water quality from point source discharges to waters of the United 
States. Given the text, structure, purpose, and legislative history of 
the CWA and section 401, the EPA proposes to interpret ``appropriate 
requirements'' for section 401 certification review to include those 
provisions of state or tribal law that are EPA-approved CWA regulatory 
programs that control discharges, including provisions that are more 
stringent than federal law. See S. Rep. No. 92-414, at 69 (1971) (``In 
addition, this provision makes clear that any water quality 
requirements established under State law, more stringent than those 
requirements established under the Act, shall through certification 
become conditions on any Federal license or permit.''). In this 
respect, the EPA agrees with the logic of Justice Thomas's dissent in 
PUD No. 1, wherein he concludes that ``the general reference to 
`appropriate' requirements of state law is most reasonably construed to 
extend only to provisions that, like other provisions in the list, 
impose discharge-related restrictions.'' PUD No. 1, 511 U.S. at 728 
(Thomas, J., dissenting). The CWA provisions that regulate point source 
discharges to waters of the United States, and those discharge-related 
restrictions referenced in Justice Thomas's dissent, are the 
``regulatory provisions of the CWA.'' When states or tribes enact CWA 
regulatory provisions as part of a state or tribal program, including 
those designed to implement the section 402 and 404 permit programs and 
those that are more stringent than federal requirements, those 
provisions require EPA approval before they become effective for CWA 
purposes. Because the EPA interprets ``appropriate requirements'' to 
mean the regulatory provisions of the CWA, it follows that those would 
necessarily be EPA-approved provisions. The EPA requests comment on 
whether this interpretation is a reasonable and appropriate reading of 
the statute and related legal authorities.
ii. Activity Versus Discharge
    Based on the text, structure, and legislative history of the CWA, 
the EPA proposes to conclude that a certifying authority's review and 
action under section 401 must be limited to water quality impacts from 
the potential discharge associated with a proposed federally licensed 
or permitted project. Section 401(a) explicitly provides that the 
certifying authority, described as ``the State in which the discharge 
originates or will originate,'' must certify that ``any such discharge 
will comply with the applicable provisions of sections 301, 302, 303, 
306 and 307 of this Act'' (emphasis added). The plain language of 
section 401(a) therefore directs authorities to certify that the 
discharge resulting from the proposed federally licensed or permitted 
project will comply with the CWA. Section 401(d) uses different 
language and allows the certifying authority to include conditions ``to 
assure that any applicant \26\ for a Federal license or permit will 
comply'' (emphasis added) with applicable provisions of the CWA and 
other appropriate requirements of state or tribal law. The use of this 
different term in section 401(d) creates ambiguity and has been 
interpreted as broadening the scope of section 401(a) beyond 
consideration of water quality impacts from the ``discharge'' which 
triggers the certification requirement, to allow certification 
conditions that address water quality impacts from any aspect of the 
construction or operation of the activity as a whole. See PUD No. 1, 
511 U.S. at 712.
---------------------------------------------------------------------------

    \26\ As a matter of practice, the Corps seeks state 
certification for ``its own discharges of dredged or fill 
material'', ``[a]lthough the Corps does not process and issue 
permits for its own activities.'' 33 CFR 336.1(a)(1).

---------------------------------------------------------------------------

[[Page 44096]]

    The ordinary meaning of the word ``applicant'' is ``[o]ne who 
applies, as for a job or admission.'' See Webster's II, New Riverside 
University Dictionary (1994). In section 401(d), this term is used to 
describe the person or entity that applied for the federal license or 
permit that requires a certification. The use of this term in section 
401(d) is consistent with the text of the CWA, which uses the term 
``applicant'' throughout to describe an individual or entity that has 
applied for a grant, a permit, or some other authorization.\27\ 
Importantly, the term is also used in section 401(a) to identify the 
person responsible for obtaining the certification: ``Any applicant for 
a Federal license or permit to conduct any activity including, but not 
limited to, the construction or operation of facilities, which may 
result in any discharge into the navigable waters, shall provide the 
licensing or permitting agency a certification from the State . . . .'' 
Broadly interpreting the use of ``applicant'' in section 401(d) to 
authorize certification conditions that are unrelated to the discharge 
would expand section 401 beyond the scope of federal regulatory 
authority integrated throughout the core regulatory provisions of the 
modern CWA--the ability to regulate discharges to waters of the United 
States. The Agency is not aware of any other instance that the term 
``applicant'' (or permittee or owner or operator) as used in the CWA 
has been interpreted to significantly expand the jurisdictional scope 
or meaning of the statute and believes a better interpretation would be 
to align its meaning with its plain language roots.
---------------------------------------------------------------------------

    \27\ See e.g., 33 U.S.C. 1311 (``An application for an 
alternative requirement under this subsection shall not stay the 
applicant's obligation to comply with the effluent limitation 
guideline or categorical pretreatment standard which is the subject 
of the application.''); id. at 1344 (``Not later than the fifteenth 
day after the date an applicant submits all the information required 
to complete an application for a permit under this subsection, the 
Secretary shall publish the notice required by this subsection.'')
---------------------------------------------------------------------------

    The Agency therefore proposes to interpret the use of the term 
``applicant'' in section 401(d), consistent with its use in section 
401(a) and other areas of the CWA, as identifying the person or entity 
responsible for obtaining and complying with the certification and any 
associated conditions. Throughout the CWA, the term ``applicant'' is 
used to identify the person or entity responsible for compliance with 
the federal regulatory provisions of the CWA, all of which remain 
focused on controlling discharges of pollutants to waters of the United 
States.\28\ The legislative history of section 401, discussed below, 
provides additional support for this interpretation.
---------------------------------------------------------------------------

    \28\ For example, section 404 provides that after an applicant 
requests a permit, the Corps ``may issue [a] permit[ ], after notice 
and opportunity for public hearings for the discharge of dredged or 
fill material into the navigable waters at specified disposal 
sites.'' 33 U.S.C. 1344(a).
---------------------------------------------------------------------------

    Section 401 was updated as part of the 1972 CWA amendments to 
reflect the restructuring of the Act, as described in section II.F.1 in 
this preamble. Two important phrases were modified between the 1970 and 
the 1972 versions of section 401 that help inform what Congress 
intended with the 1972 amendments. First, the 1970 version provided 
that an authority must certify ``that such activity . . . will not 
violate water quality standards.'' Public Law 91-224 Sec.  21(b)(1) 
(emphasis added). The 1972 version was modified to require an authority 
to certify ``that any such discharge shall comply with the applicable 
provisions of [the CWA].'' 33 U.S.C. 1341(a) (emphasis added). On its 
face, this modification makes the 1972 version of section 401 
consistent with the overall framework of the amended statutory regime, 
which focuses on eliminating discharges and attaining water quality 
standards.
    Second, the 1972 version included section 401(d) for the first 
time, which authorizes conditions to be imposed on a certification ``to 
assure that any applicant for a Federal license or permit will comply 
with any applicable effluent limitations and other limitations, under 
section 301 or 302 of this Act, standard of performance under section 
306 of this Act, or prohibition, effluent standard, or pretreatment 
standard under section 307 of this Act, and with any other appropriate 
requirement of State law set forth in such certification . . . .''Id. 
at 1341(d). This new section also requires such conditions to be 
included in the federal license or permit.
    Together, these provisions: Focus section 401 on discharges that 
may affect water quality; enumerate newly-created federal regulatory 
programs with which section 401 mandates compliance; and require that 
water-quality related certification conditions be included in federal 
licenses and permits and thereby become federally enforceable. The 
legislative history describing these changes supports a conclusion that 
they were made intentionally and with the purpose of making the new 
section 401 consistent with the new framework of the Act. Indeed, the 
1971 Senate Report provides that section 401 was ``amended to assure 
consistency with the bill's changed emphasis from water quality 
standards to effluent limitations based on the elimination of any 
discharge of pollutants.'' S. Rep. No. 92-414, at 69 (1971).
    The EPA previously analyzed the modifications made to section 401 
between the 1970 and 1972 Acts. See Memorandum from Catherine A. Winer, 
Attorney, EPA Office of General Counsel, to David K. Sabock, North 
Carolina Department of Natural Resources (November 12, 1985).\29\ In 
its analysis, the EPA characterized the legislative history quoted 
above as ``not very explicit,'' and characterized the new section 401 
language as ``not altogether clear.'' Id. Based on this analysis, the 
EPA found at that time that ``the overall purpose of section 401 is 
clearly `to assure that Federal licensing or permitting agencies cannot 
override water quality requirements' '' and that ``section 401 may 
reasonably be read as retaining its original scope, that is, allowing 
state certifications to address any water quality standard violation 
resulting from an activity for which a certification is required, 
whether or not the violation is directly caused by a `discharge' in the 
narrow sense.'' Id. (citing S. Rep. No. 92-414, at 69 (1971)).
---------------------------------------------------------------------------

    \29\ Available at https://www.epa.gov/sites/production/files/2015-01/documents/standards-marinas-memo.pdf.
---------------------------------------------------------------------------

    The EPA has now performed a holistic analysis of the text and 
structure of the CWA, the language of section 401, and the amendments 
made between 1970 and 1972. Based on this review, the EPA now proposes 
to adopt the reasonable interpretation that the 1972 version of section 
401 made specific changes to ensure that discharges were controlled and 
in compliance with the modern CWA regulatory programs, and appropriate 
requirements of state law implementing the same. For the reasons noted 
above in section II.F.1 in this preamble, identifying and regulating 
discharges, as opposed to managing ambient water quality, promotes 
accountability and enforcement of the Act in a way that the 1970 and 
earlier versions did not. The EPA also observes that, had Congress 
intended the 1972 amendments to retain the original scope concerning 
the ``activity,'' it could have easily crafted section 401(d) to 
authorize certification conditions to assure that ``the activity'' 
would comply with the specified CWA provisions, but it did not. Instead 
Congress used the term ``applicant'' which, based upon its plain 
ordinary meaning, identifies the person seeking the certification and 
the related federal

[[Page 44097]]

license or permit. When Congress enacted the 1972 CWA amendments, it 
used the term ``discharge'' to frame the scope of the certification 
requirement under the Act. As a result, the Agency now considers a more 
natural interpretation of the 1972 amendments to be that Congress 
rejected the idea that the scope of a certifying authority's review or 
its conditions should be defined by the term ``activity.'' Congress 
specifically did not carry forward the term ``activity'' in the 
operative phrase in section 401(a) and did not incorporate it into the 
new provision authorizing certification conditions in section 401(d). 
Under basic canons of statutory construction, the EPA begins with the 
presumption that Congress chose its words intentionally. See, e.g., 
Stone v. INS, 514 U.S. 386, 397 (1995) (``When Congress acts to amend a 
statute, we presume it intends its amendment to have real and 
substantial effect.''). This is also consistent with the dissent in PUD 
No. 1, wherein Justice Thomas concluded that ``[i]t is reasonable to 
infer that the conditions a State is permitted to impose on 
certification must relate to the very purpose the certification process 
is designed to serve. Thus, while Sec.  401(d) permits a State to place 
conditions on a certification to ensure compliance of the 
`applicant'[,] those conditions must still be related to discharges.'' 
PUD No. 1, 511 U.S. at 726-27 (Thomas, J., dissenting). The EPA 
proposes to conclude that this interpretation is a reasonable and 
appropriate reading of the statute and related legal authorities and 
seeks public comment on this proposed interpretation.
    As described in detail in section II.F.4.a.i in this preamble, the 
Supreme Court in PUD No. 1 considered the scope of a state's authority 
to condition a section 401 certification and concluded that, once the 
401(a) ``discharge to navigable water'' triggers the requirement for 
certification, section 401(d) authorizes a certifying authority to 
impose conditions on ``the applicant,'' meaning the activity as a whole 
and not just the discharge. In its discussion of the CWA, the Supreme 
Court relied on its own interpretation of the scope of section 401 and 
did not analyze section 401 at ``Chevron step one'' or rely on ``the 
unambiguous terms'' of the CWA to support its reading of section 401. 
Brand X, 545 U.S. at 982. Instead, the Court ``reasonably read'' 
section 401(d) ``as authorizing additional conditions and limitations 
on the activity as a whole once the threshold condition, the existence 
of a discharge, is satisfied.'' PUD No. 1, 511 U.S. at 712 (emphasis 
added).
    To support what it considered to be a reasonable reading of section 
401(d), the Court looked at the EPA's certification regulations at 40 
CFR 121.2(a)(3) and related guidance at that time, but did not have 
before it the EPA's interpretation of how section 401(a) and 401(d) 
could be harmonized. Id. In fact, the Court either was not aware of or 
did not mention that the EPA regulations in place at that time predated 
the 1972 CWA amendments and therefore contained outdated terminology 
implementing what was functionally a different statute. As described 
above, the EPA's existing certification regulations are consistent with 
the text of the pre-1972 CWA, and they require a state to certify that 
the ``activity'' will comply with the Act. The 1972 CWA amendments 
changed this language to require a state to certify that the 
``discharge'' will comply with the Act.
    Based in part on what the EPA now recognizes was infirm footing, 
the Court found that ``EPA's conclusion that activities--not merely 
discharges--must comply with state water quality standards is a 
reasonable interpretation of Sec.  401 and is entitled to deference.'' 
Id. (emphasis added). As amicus curiae, the federal government did not 
seek Chevron ``deference for the EPA's regulation in [the PUD No. 1 
case]'' or for EPA's interpretation of section 401. Id. at 729 (Thomas, 
J., dissenting). In fact, the EPA's amicus brief did not analyze or 
interpret the different language in sections 401(a) and 401(d) and 
instead asserted that it was unnecessary to harmonize the provisions to 
resolve the dispute. See Brief for the United States as Amicus Curiae 
Supporting Affirmance, at 12 n. 2. The EPA's amicus brief asked the 
Court to analyze the two undisputed discharges from the proposed 
federally licensed project and determine whether they would cause 
violations of the state's water quality standards.
    Given the circumstances of the PUD No. 1 litigation, and the fact 
that the Supreme Court did not analyze section 401 under Chevron Step 1 
or rely on unambiguous terms in the CWA to support its own reasonable 
reading of the statute, PUD No. 1 does not foreclose the Agency's 
proposed interpretation of section 401 in this document. See Brand X, 
545 U.S. at 982-83. The Supreme Court's ``choice of one reasonable 
reading'' of section 401 does not prevent the EPA ``from later adopting 
a different reasonable interpretation.'' \30\ Eurodif S.A., 555 U.S. at 
315. An agency may engage in ``a formal adjudication or notice-and-
comment rulemaking'' to articulate its interpretation of an ambiguous 
statute. Christensen v. Harris County, 529 U.S. 576, 587 (2000). When 
it does, courts apply ``Chevron-style'' deference to the agency's 
interpretation. Id. That is exactly what the EPA is doing in this 
proposal. EPA has for the first time, holistically interpreted the text 
of section 401(a) and (d) to support this proposed update to the EPA's 
existing certification regulations while ensuring consistency with the 
plain language of the 1972 CWA. The Agency solicits comment on its 
proposed interpretation of the CWA and the prevailing case law as 
discussed above in section II.F.1 and II.F.4 in this preamble.
---------------------------------------------------------------------------

    \30\ The EPA is not proposing to modify or alter the Agency's 
longstanding interpretation of the Act that was confirmed by the 
Court in PUD No. 1 that ``a water quality standard must `consist of 
the designated uses of the navigable waters involved and the water 
quality criteria for such waters based upon such uses' '' and that 
``a project that does not comply with the designated use of the 
water does not comply with the applicable water quality standards.'' 
511 U.S. at 714-15 (emphasis in original).
---------------------------------------------------------------------------

    The Agency also solicits comment on an alternate interpretation of 
the text of section 401(d) suggested by language in the PUD No. 1 
majority opinion. At page 712, the Court observes that, ``[a]lthough 
401(d) authorizes the State to place restrictions on the activity as a 
whole, that authority is not unbounded.'' (emphasis added). The Court 
does not define the precise limits of State authority under section 
401(d). However, the Court goes on to say that ``[t]he State can only 
ensure that the project complies with `any applicable effluent 
limitations and other limitations, under [33 U.S.C. 1311, 1312]' or 
certain other provisions of the Act, `and with any other appropriate 
requirement of State law.' 33 U.S.C. 1341(d).'' In the previous 
discussion, we explained why the most reasonable interpretation of the 
``bounds'' set by the statutory text is that it limits the imposition 
of effluent limitations, limitations, and other certification 
conditions to ``the discharge,'' and not ``the activity as a whole.'' 
However, EPA is also seeking comment on an alternate interpretation of 
the text that would allow imposition of effluent limitations and other 
similar conditions that address the water quality-related effects of 
``the activity as a whole,'' and not just ``the discharge,'' provided 
such effluent limitations and other conditions are based on ``water 
quality requirements'' as defined in this proposal.

[[Page 44098]]

iii. Discharges From Point Sources to Waters of the United States
    Based on the text, structure and purpose of the Act, the history of 
the 1972 CWA amendments, and supporting case law, the EPA proposes to 
conclude that a certifying authority's review and action under section 
401 is limited to water quality impacts to waters of the United States 
resulting from a potential point source discharge associated with a 
proposed federally licensed or permitted project. The text of section 
401(a) clearly specifies that certification is required to ``conduct 
any activity . . . which may result in any discharge into the navigable 
waters'' (emphasis added). Prior interpretations extending section 401 
applicability beyond such waters conflict with and would render 
meaningless the plain language of the statute. And although the statute 
does not define with specificity the meaning of the unqualified term 
discharge, interpreting section 401 to cover all discharges without 
qualification would undercut the bedrock structure of the CWA 
regulatory programs which are focused on addressing point source 
discharges to waters of the United States. CWA section 502(14) defines 
point source as ``any discernible, confined and discrete conveyance, 
including but not limited to any pipe, ditch, channel, tunnel, conduit, 
well, discrete fissure, container, rolling stock, concentrated animal 
feeding operation, or vessel or other floating craft, from which 
pollutants are or may be discharged.'' \31\
---------------------------------------------------------------------------

    \31\ In the section 404 context, point source includes 
bulldozers, mechanized land clearing equipment, dredging equipment, 
and the like. See, e.g., Avoyelles Sportsman's League, Inc. v. 
March, 715 F.2d 897, 922 (5th Cir. 1983).
---------------------------------------------------------------------------

    As described in section II.F.1 in this preamble, the CWA is 
structured such that the federal government provides assistance, 
technical support, and grant money to assist states in managing all of 
the nation's waters. By contrast, the federal regulatory provisions, 
including CWA sections 402 and 404, apply only to point source 
discharges to waters of the United States. 33 U.S.C. 1362(7). Section 
401 is the first section of Title IV of the CWA, titled Permits and 
Licenses, and it requires water quality-related certification 
conditions to be legally binding and federally enforceable conditions 
of federal licenses and permits. Id. at 1341(d). Similar to the section 
402 and 404 permit programs, section 401 is a core regulatory provision 
of the CWA. Accordingly, the scope of its application is most 
appropriately interpreted, consistent with the other federal regulatory 
programs, as addressing point source discharges to waters of the United 
States.
    The EPA is not aware of any court decisions that have directly 
addressed the scope of waters covered by section 401; however, in 
Oregon Natural Desert Association v. Dombeck, the Ninth Circuit relied 
on the text and structure of section 401 to interpret the meaning of 
``discharge.'' In that case, a citizen's organization challenged a 
decision by the U.S. Forest Service to issue a permit to graze cattle 
on federal lands without first obtaining a section 401 certification 
from the state of Oregon. 172 F.3d 1092. The government argued that a 
certification was not needed because the ``unqualified'' term 
``discharge''--as used in CWA section 401--is ``limited to point 
sources but includes both polluting and nonpolluting releases.'' Id. at 
1096. Finding that the 1972 amendments to the CWA ``overhauled the 
regulation of water quality,'' the court said that ``[d]irect federal 
regulation [under the CWA] now focuses on reducing the level of 
effluent that flows from point sources.'' Id. The court stated that the 
word ``discharge'' as used consistently in the CWA refers to the 
release of effluent from a point source. Id. at 1098. The court found 
that cattle--even if they wade in a stream--are not point sources. Id. 
at 1098-99. Accordingly, the court held that certification under 
section 401 was not required. Id. at 1099.
    The EPA previously suggested that the scope of section 401 may 
extend to non-point discharges to non-waters of the United States once 
the requirement for the section 401 certification is triggered. 
Specifically, in the EPA's now-withdrawn 2010 Interim Handbook the 
Agency included the following paragraphs,

    The scope of waters of the U.S. protected under the CWA includes 
traditionally navigable waters and also extends to include 
territorial seas, tributaries to navigable waters, adjacent 
wetlands, and other waters. Since Sec.  401 certification only 
applies where there may be a discharge into waters of the U.S., how 
states or tribes designate their own waters does not determine 
whether Sec.  401 certification is required. Note, however, that 
once Sec.  401 has been triggered due to a potential discharge into 
a water of the U.S., additional waters may become a consideration in 
the certification decision if it is an aquatic resource addressed by 
``other appropriate provisions of state [or tribal] law.''
     * * *
    Section 401 applies to any federal permit or license for an 
activity that may discharge into a water of the U.S. The Ninth 
Circuit Court of Appeals ruled that the discharge must be from a 
point source, and agencies in other jurisdictions have generally 
adopted the requirement. Once these thresholds are met, the scope of 
analysis and potential conditions can be quite broad. As the U.S. 
Supreme Court has held, once Sec.  401 is triggered, the certifying 
state or tribe may consider and impose conditions on the project 
activity in general, and not merely on the discharge, if necessary 
to assure compliance with the CWA and with any other appropriate 
requirement of state or tribal law.

EPA, Clean Water Act Section 401 Water Quality Certification: A Water 
Quality Protection Tool for States and Tribes, 5, 26 (2010) (citations 
omitted). To support the first referenced paragraph on the scope of 
waters, the Interim Handbook cited to section 401(d), presumably 
referring to the use of the term ``applicant'' rather than 
``discharge'' used in section 401(a).\32\ To support the second 
paragraph on the scope of discharges, the Interim Handbook cited to the 
PUD No. 1 and S.D. Warren Co. Supreme Court decisions. It appears that 
both paragraphs from the Agency's 2010 Interim Handbook relied on the 
PUD No. 1 Court's interpretation of the ambiguity created by the 
different language in sections 401(a) and 401(d).\33\
---------------------------------------------------------------------------

    \32\ Interim Handbook, at 5 n. 23. Tellingly, footnote 23 of the 
Interim Handbook also states, ``Note that the Corps may consider a 
401 certification as administratively denied where the certification 
contains conditions that require the Corps to take an action outside 
its statutory authority or are otherwise unacceptable. See, e.g., 
RGL 92-04, `Section 401 Water Quality Certification and Coastal Zone 
Management Act Conditions for Nationwide Permits.'' In other words, 
in this footnote the EPA was advising states that, while section 
401(d) could perhaps be interpreted to expand the scope of federal 
regulatory and enforcement authority beyond navigable waters (but 
without citation to any case law to support that proposition), the 
Army Corps of Engineers may reject a certification in its entirety 
that is outside the statutory authority provided by the CWA.
    \33\ The S.D. Warren decision did not analyze or adopt the PUD 
No. 1 Court's analysis of section 401(a) and 401(d).
---------------------------------------------------------------------------

    For many of the same reasons that the Agency proposes to avoid 
interpreting the word ``applicant'' in section 401(d) as broadening the 
scope of certification beyond the discharge itself, the Agency also 
proposes to decline to interpret section 401(d) as broadening the scope 
of waters and the types of discharges to which the CWA federal 
regulatory programs apply. Were the Agency to interpret the use in 
section 401(d) of the term ``applicant'' instead of the term 
``discharge'' as authorizing the federal government to implement and 
enforce CWA conditions on non-waters of the United States, that single 
word (``applicant'') would effectively broaden the scope of the federal 
regulatory programs enacted by the 1972 CWA

[[Page 44099]]

amendments beyond the limits that Congress intended. Such an 
interpretation could permit the application of the CWA's regulatory 
programs, including section 401 certification conditions that are 
enforced by federal agencies, to land and water resources more 
appropriately subject to traditional state land use planning authority. 
See, e.g., SWANCC, 531 U.S. at 172-73.
    As described in section II.F.4.a.i in this preamble and pursuant to 
its authority to reasonably interpret ambiguous statutes to fill gaps 
left by Congress, the EPA is proposing to interpret section 401 
differently than the Supreme Court did in PUD No. 1. The Court's prior 
interpretation of sections 401(a) and 401(d) was not based on the plain 
unambiguous text of the statute, but rather was based on the Court's 
own reasonable interpretation (see section II.F.4.a.i in this 
preamble). The EPA's proposed interpretation is also based on a 
reasonable interpretation of the text, structure and legislative 
history of section 401 and the Agency's current proposal is not 
foreclosed by the Court's prior interpretation. See Brand X, 545 U.S. 
at 982.
    For the reasons above, the EPA proposes to conclude that section 
401 is a regulatory provision that creates federally enforceable 
requirements and its application must therefore be limited to point 
source discharges to waters of the United States. This proposed 
interpretation is consistent with the text and structure of the CWA as 
well as the principal purpose of this rulemaking, i.e., to ensure that 
the EPA's regulations (including those defining a section 401 
certification's scope) are consistent with the current CWA. The Agency 
solicits comment on this revised interpretation of the CWA and 
associated case law discussed in this section.
b. Timeline for Section 401 Certification Analysis
    Based on the language of the CWA and relevant case law, the EPA 
proposes to conclude that a certifying authority must act on a section 
401 certification within a reasonable period of time, which shall not 
exceed one year and that there is no tolling provision to stop the 
clock at any time. The Agency requests comment on this plain language 
interpretation of the statute.
    The text of section 401 expressly states that a certifying 
authority must act on a section 401 certification request within a 
reasonable period of time, which shall not exceed one year. 33 U.S.C. 
1341(a)(1). Importantly, the CWA does not guarantee that a certifying 
authority may take a full year to act on a section 401 certification 
request. The certifying authority may be subject to a shorter period of 
time, provided it is reasonable. See Hoopa Valley Tribe v. FERC, 913 
F.3d 1099, 1104 (D.C. Cir. 2019) (``Thus, while a full year is the 
absolute maximum, it does not preclude a finding of waiver prior to the 
passage of a full year. Indeed, the [EPA]--the agency charged with 
administering the CWA--generally finds a state's waiver after only six 
months. See 40 CFR 121.16.''). The CWA's legislative history indicates 
that inclusion of a maximum period of time was to ``insure that sheer 
inactivity by the [certifying agency] will not frustrate the Federal 
application.'' H.R. Rep. No. 92-911, at 122 (1972).
    The timeline for action on a section 401 certification begins upon 
receipt of a certification request. Id. The CWA does not specify any 
legal requirements for what constitutes a request or otherwise define 
the term. The EPA has long recommended that a project proponent 
requiring federal licenses or permits subject to section 401 
certification hold early discussions with both the certifying authority 
and the federal agency, to better understand the certification process 
and potential data needs.
    The CWA does not contain provisions for pausing or delaying the 
timeline for any reason, including to request or receive additional 
information from a project proponent. If the certifying authority has 
not acted on a request for certification within the reasonable time 
period, the certification requirement will be waived by the federal 
licensing and permitting agencies. For further discussion, see section 
III.F in this preamble. The proposed revisions to the EPA's regulations 
in this proposal are intended to provide greater clarity and certainty 
and address some of the delays and confusion associated with the timing 
elements of the section 401 certification process.

III. Proposed Rule

    This proposed rule is intended to make the Agency's regulations 
consistent with the current text of CWA section 401, increase 
efficiencies, and clarify aspects of CWA section 401 that have been 
unclear or subject to differing legal interpretations in the past. The 
Agency proposes these revisions to replace the entirety of the existing 
certification regulations at 40 CFR part 121. The following sections 
explain the Agency's rationale for the proposed rule and provides 
detailed explanation and analysis for the substantive changes that the 
Agency is proposing.
    The EPA's existing certification regulations were issued almost 50 
years ago in 1971, when the Agency was newly formed and the CWA had not 
yet been amended to include the material revisions to section 401.\34\ 
In modernizing 40 CFR part 121, this proposal recognizes and responds 
to the changes to the CWA that occurred after the current regulations 
were finalized, especially the 1972 and 1977 amendments to the CWA.
---------------------------------------------------------------------------

    \34\ See 36 FR 22487, Nov. 25, 1971, redesignated at 37 FR 
21441, Oct. 11, 1972, further redesignated at 44 FR 32899, June 7, 
1979; Reorganization Plan No. 3 of 1970 (creating the EPA), 84 Stat. 
2086, effective Dec. 2, 1970.
---------------------------------------------------------------------------

    Updating the existing certification regulations to clarify 
expectations, timelines, and deliverables also increases efficiencies. 
Some aspects of the existing regulations have been implemented 
differently by different authorities, likely because the scope and 
timing of review are not clearly addressed by the EPA's existing 
certification regulations. While the EPA recognizes that states and 
tribes have broad authority to implement state and tribal law to 
protect their water quality, see 33 U.S.C. 1251(b), section 401 is a 
federal regulatory program that contains explicit limitations on when 
and how states and tribes may exercise this particular authority. 
Modernizing and clarifying the EPA's regulations will help states, 
tribes, federal agencies, and project proponents know what is required 
and what to expect during a section 401 certification process, thereby 
reducing regulatory uncertainty. The Agency requests comment on all 
aspects of this effort to modernize and clarify its section 401 
regulations, including any specific suggestions on how any of the 
proposed definitions or other requirements might be modified to 
implement Congress' intent in enacting section 401.
    The EPA's existing certification regulations at 40 CFR part 121 do 
not fully address the public notice requirements called for under CWA 
1341(a)(1). The EPA solicits comment on whether the Agency should 
include additional procedures in its final regulations to ensure that 
the public is appropriately informed of proposed federally licensed or 
permitted projects, potential discharges, and related water quality 
effects. At a minimum, such procedures could include public notice and 
hearing opportunities, but they could also include mechanisms to ensure 
that the certifying authority is in a position to appropriately inform 
the public, as required by section 401(a)(1). Such mechanisms could 
focus on how and when the certifying authority is notified of potential 
certification requests and what information may be

[[Page 44100]]

necessary for the certifying authority to act on a request. If the EPA 
were to include such additional procedures in its final regulations, 
they could be the same as or similar to the procedures currently 
proposed to apply when EPA is the certifying authority (see proposed 
sections 121.12 and 121.13). The Agency also solicits comment on 
whether it would be appropriate or necessary to require certifying 
authorities to submit their section 401 procedures and regulations to 
the EPA for informational purposes.

A. When Section 401 Certification is Required

    The EPA proposes that the requirement for a section 401 
certification is triggered based on the potential for any federally 
licensed or permitted activity to result in a discharge from a point 
source into waters of the United States.\35\ This proposal is 
consistent with the Agency's longstanding interpretation and is not 
intended to alter the scope of applicability established in the CWA. 
Consistent with section 401(a)(1), the EPA is proposing that:
---------------------------------------------------------------------------

    \35\ State or tribal implementation of a license or permit 
program in lieu of the federal program, such as a CWA section 402 
permit issued by an authorized state, does not federalize the 
resulting permits or licenses and therefore does not trigger section 
401 certification. This is supported by the legislative history of 
CWA section 401 which noted that ``since permits granted by States 
under section 402 are not Federal permits--but State permits--the 
certification procedures are not applicable.'' H.R. Rep. No. 92-911, 
at 127 (1972). The legislative history of the CWA amendments of 
1977, discussing state assumption of section 404, also noted that 
``[t]he conferees wish to emphasize that such a State program is one 
which is established under State law and which functions in lieu of 
the Federal program. It is not a delegation of Federal authority.'' 
H.R. Rep. No. 95-830, at 104 (1977).

    Any applicant for a license or permit to conduct any activity 
which may result in a discharge shall provide the Federal agency a 
certification from the certifying authority in accordance with this 
---------------------------------------------------------------------------
part.

    Based on the text of the statute, the EPA proposes that section 401 
is triggered by the potential for a discharge to occur, rather than an 
actual discharge. This is different from other parts of the Act \36\ 
and is intended to provide certifying authorities with a broad 
opportunity to review proposed federally licensed or permitted projects 
that may result in a discharge to waters of the United States within 
their borders. This proposal does not identify a process for certifying 
authorities or project proponents to determine whether a federally 
licensed or permitted project has a potential or actual discharge. 
However, the EPA observes that if a certifying authority or project 
proponent determines after the certification process is triggered that 
there is no actual discharge from the proposed federally licensed or 
permitted project and no potential for a discharge, there is no longer 
a need to request certification. The EPA requests certifying 
authorities and project proponents to submit comment on prior 
experiences with undertaking the certification process and later 
determining that the proposed federally licensed or permitted project 
would not result in an actual discharge. The EPA also requests comment 
on whether there are specific procedures that could be helpful in 
determining whether a proposed federally licensed or permitted project 
will result in an actual discharge. Finally, the EPA requests comment 
on how project proponents may establish for regulatory purposes that 
there is no potential discharge and therefore no requirement to pursue 
a section 401 certification. This request is intended to solicit 
mechanisms for project proponents to generate a record for themselves 
that no 401 certification was required; this is not intended to propose 
a process for project proponents to seek or require concurrence from 
the certifying authority.
---------------------------------------------------------------------------

    \36\ See e.g., National Pork Producers Council v. EPA, 635 F.3d 
738, 751 (5th Cir. 2011); Waterkeeper Alliance, Inc. v. EPA, 399 
F.3d 486, 505 (2d Cir. 2005) (Interpreting section 402 in the 
context of CAFOs, courts said the CWA gives EPA jurisdiction to 
require permits for only actual discharges).
---------------------------------------------------------------------------

    The EPA also proposes that section 401 is triggered by a potential 
discharge into a water of the United States. 33 U.S.C. 1341(a)(1), 
1362(7). Potential discharges into state or tribal waters that are not 
waters of the United States do not trigger the requirement to obtain 
section 401 certification. Id. at 1342(a)(1). This interpretation flows 
from the plain text of the statute, is supported by the legislative 
history, and is consistent with other CWA regulatory program 
requirements that are triggered by discharges into waters of the United 
States, not state or tribal waters. Id.; see also H.R. Rep. No. 92-911, 
at 124 (1972) (``It should be clearly noted that the certifications 
required by section 401 are for activities which may result in any 
discharge into navigable waters.'') (emphasis added); see also section 
II.F.6.a.iii for discussion on discharges to waters of the United 
States.
    Unlike other CWA regulatory programs, however, the EPA proposes 
that section 401 be triggered by any unqualified discharge, rather than 
by a discharge of pollutants. This interpretation is consistent with 
the text of the statute and with U.S. Supreme Court precedent. In S.D. 
Warren, the Court considered whether discharges from a dam were 
sufficient to trigger section 401, even if those discharges did not add 
pollutants to waters of the United States. Because section 401 uses the 
term discharge but the Act does not specifically define the term,\37\ 
the Court applied its ordinary dictionary meaning, ``flowing or issuing 
out.'' S.D. Warren Co. v. Maine Bd. of Envtl. Prot. et al., 547 U.S. 
370, 376 (2006). The Court concluded that Congress intended this term 
to be broader than the term discharge of pollutants that is used in 
other provisions of the Act, like section 402. See e.g., 33 U.S.C. 
1342, 1344; S.D. Warren Co., 547 U.S. at 380-81. For further discussion 
on S.D. Warren see section II.F.4.a.ii and for further discussion on 
discharges see section II.F.6.a.ii-iii in this preamble. The Court held 
that discharges from the dam trigger section 401 because ``reading 
Sec.  401 to give `discharge' its common and ordinary meaning preserves 
the state authority apparently intended.'' S.D. Warren Co., 547 U.S. at 
387. The EPA's interpretation in support of this proposal is therefore 
consistent with the Court's conclusion.
---------------------------------------------------------------------------

    \37\ The Act provides, ``The term `discharge' when used without 
qualification includes a discharge of a pollutant, and a discharge 
of pollutants.'' 33 U.S.C. 1362(16)
---------------------------------------------------------------------------

    Finally, the EPA proposes that to trigger section 401, a discharge 
must be from a point source. This is consistent with case law from the 
Ninth Circuit, which concluded that the word ``discharge'' as used 
consistently throughout the CWA refers to the release of effluent from 
a point source, and that use is also appropriate for section 401. 
Oregon Natural Desert Association v. Dombeck, 172 F.3d 1092, 1099. 
Because this proposed interpretation is consistent with the structure 
of the Act and with the other CWA regulatory programs (see section II.F 
above), the EPA adopted the Ninth Circuit's interpretation and has 
consistently implemented that interpretation of section 401.\38\
---------------------------------------------------------------------------

    \38\ See, e.g., Briefs of the United States in ONDA v. Dombeck, 
Nos. 97-3506, 97-35112, 97-35115 (9th Cir. 1997) and ONDA v. USFS, 
No. 08-35205 (9th Cir. 2008).
---------------------------------------------------------------------------

    The CWA does not list specific federal licenses and permits that 
are subject to section 401 certification requirements, instead 
providing that section 401 applies when any activity that requires a 
federal license or permit may result in a discharge into waters of the 
United States. The most common examples of licenses or permits that may 
be subject to section 401 certification are CWA section 402 NPDES 
permits in states where the EPA administers the permitting program, CWA 
section 404

[[Page 44101]]

permits for the discharge of dredged or fill material, RHA sections 9 
and 10 permits issued by the Corps, and hydropower and interstate 
natural gas pipeline licenses issued by FERC. The Agency is not 
proposing to further define this list but requests comment identifying 
other federal licenses or permits that may trigger the section 401 
certification requirement.

B. Certification Request/Receipt

    Under this proposal, to initiate an action under section 401, a 
project proponent must submit a certification request to a certifying 
authority. The statute limits the time for a certifying authority to 
act on a request as follows:

    If the State, interstate agency, or Administrator, as the case 
may be, fails or refuses to act on a request for certification, 
within a reasonable period of time (which shall not exceed one year) 
after receipt of such request, the certification requirements of 
this subsection shall be waived with respect to such Federal 
application.

33 U.S.C. 1341(a)(1) (emphasis added). Although the plain language of 
the Act requires the reasonable period of time to begin upon receipt of 
a certification request, the statute does not define those terms. 
Because they are not defined and their precise meaning is ambiguous, 
these terms are susceptible to different interpretations, which have 
resulted in inefficiencies in the certification process, individual 
certification decisions that have extended beyond the statutory 
reasonable period of time, and regulatory uncertainty and litigation. 
See section II.F in this preamble. Given the number of certification 
requests submitted each year \39\ and the statutory requirement that 
those requests be acted on within a reasonable period of time not to 
exceed one year, it is important that the certifying authorities, 
project proponents, and federal agencies have a clear understanding of 
what the terms ``request'' and ``receipt'' mean.
---------------------------------------------------------------------------

    \39\ See Economic Analysis for the Proposed Clean Water Act 
Section 401 Rulemaking at XX.
---------------------------------------------------------------------------

    The CWA does not address (and therefore is ambiguous regarding) 
whether a certification request must be in writing, must be signed and 
dated, or if it must contain specific kinds of information. The EPA's 
prior section 401 guidance (the now-withdrawn 2010 Interim Handbook) 
indicated that the timeline for action begins upon receipt of a 
``complete application,'' as determined by the certifying authority, 
even though section 401 does not use the term ``complete application'' 
or prescribe what an ``application'' would require. The reference by 
the EPA to a ``complete application'' without explaining what an 
``application'' must include has led to subjective determinations about 
the sufficiency of certification request submittals. This in turn has 
caused uncertainty about when the statutory reasonable period of time 
begins to run. Certification request requirements vary from state to 
state (e.g., location maps and topographical maps versus latitude/
longitude or GPS locations). For example, some states have open-ended 
and broad submittal requirements (e.g., ``all information concerning 
water resource impacts'') which create the potential for certifying 
authorities to conclude (sometimes repeatedly) that a submittal is 
incomplete. Additionally, if a certifying authority requires additional 
information to be submitted before it will review and act on a 
certification request, it may be unclear whether the certifying 
authority considers the request to be ``complete'' and whether the 
statutory clock has started to run. Further, differences in the 
contents of a request or required supporting materials can create 
special challenges for project proponents and federal agencies working 
on large interstate projects that require certification from multiple 
states.
    The CWA also does not define the term ``receipt,'' which has led to 
different states, tribes, and project proponents, as well as different 
courts, using different definitions. ``Receipt of the request'' has 
been used alternately to mean receipt by the certifying authority of 
the request in whatever form it was submitted by the project proponent, 
or receipt of a ``complete application'' as determined by the 
certifying authority (see section II.F in this preamble). The statute 
also does not specify how requests are to be ``received'' by the 
certifying authority--whether by mail, by electronic submission, or 
some other means.
    As the Agency charged with administering the CWA, the EPA is 
authorized to interpret through rulemaking undefined terms, including 
those associated with CWA section 401 certifications. See Chevron, 
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 
844 (1984). To address the particular challenges identified above, the 
EPA is proposing to define ``certification request'' and ``receipt,'' 
which Congress left undefined and ambiguous. By establishing uniform 
definitions for ``certification request'' and ``receipt,'' EPA hopes to 
eliminate confusion about when the statutory reasonable period of time 
begins and ends. See id. at 843.
    Consistent with the text of the CWA, the EPA is proposing that the 
statutory timeline for certification review starts upon receipt by the 
certifying authority of a ``certification request,'' rather than the 
receipt of a ``complete application'' or ``complete request'' as 
determined by the certifying authority. To increase consistency, the 
EPA's proposed definition of ``certification request'' includes an 
enumerated list of documents and information that must be included in a 
certification request:

    Certification request means a written, signed, and dated 
communication from a project proponent to the appropriate certifying 
authority that:
    1. Identifies the project proponent(s) and a point of contact;
    2. identifies the proposed project;
    3. identifies the applicable federal license or permit;
    4. identifies the location and type of any discharge that may 
result from the proposed project and the location of receiving 
waters;
    5. includes a description of any methods and means proposed to 
monitor the discharge and the equipment or measures planned to treat 
or control the discharge;
    6. includes a list of all other federal, interstate, tribal, 
state, territorial, or local agency authorizations required for the 
proposed project, including all approvals or denials already 
received; and
    7. contains the following statement: `The project proponent 
hereby requests that the certifying authority review and take action 
on this CWA section 401 certification request within the applicable 
reasonable timeframe.'

    The EPA anticipates that a certification request that contains each 
of these components will provide the certifying authority with 
sufficient notice and information to allow it to begin to evaluate and 
act on the request in a timely manner. The EPA solicits comment on 
whether this list of documents and information is appropriately 
inclusive, whether it is specific enough to inform project proponents 
of the submittal requirements, and whether it is clear enough to avoid 
subjective determinations by a certifying authority of whether 
submittal requirements have been satisfied. The EPA acknowledges that 
not all proposed projects may be subject to monitoring or treatment for 
a discharge (e.g., section 404 dredge or fill permits rarely allow for 
a treatment option). The EPA solicits comment on whether the fourth and 
fifth items proposed to be required in a certification request are 
sufficiently broad to capture all potential federal licenses or 
permits. The EPA also acknowledges that some certifying authorities may 
charge a fee to process certification requests. The Agency solicits 
comment on whether it should

[[Page 44102]]

include ``any applicable fees'' in the definition of certification 
request. Pre-proposal recommendations to the EPA also requested that 
the Agency require project proponents to include existing documentation 
or reports showing prior contamination at the proposed federally 
licensed or permitted project site. The EPA solicits comment on whether 
this would be an appropriate requirement for all certification 
requests, or whether this information is best requested on a case-by-
case basis by the certifying authority. Additionally, the EPA solicits 
comment on whether such documentation or reports would be appropriate 
if the permit or license is being reissued or amended, or only for 
initial license or permit processes.
    The EPA intends that the term ``certification request'' means only 
written requests for certification. In addition, EPA intends that any 
written request for certification include the specific information 
identified in the definition. Providing this new definition is intended 
to ensure that the certifying authority and the project proponent 
understand what is required to start the statutory reasonable time 
period. The proposed requirement that a request include the following 
statement--``The project proponent hereby requests that the certifying 
authority review and take action on this CWA section 401 certification 
request within the applicable reasonable timeframe.''--is intended to 
remove any potential ambiguity on the part of the certifying authority 
about whether the written request before it is, in fact, a ``request 
for certification'' that triggers the statutory timeline. The EPA also 
solicits comment on whether the Agency should generate a standard form 
that all project proponents can use to submit certification requests. A 
standard form could help project proponents provide all necessary 
information and help certifying authorities quickly identify all 
components of the certification request. If the EPA promulgated a 
standard form, it could include all seven items included in the 
proposed definition of certification request.
    This proposal requires a project proponent to identify the location 
of a discharge in the certification request. To meet this requirement, 
the EPA recommends that the project proponent provide locational 
information about the extent of the project footprint and discharge 
locations, as shown on design drawings and plans. Project proponents 
should consider, but are not limited to, using the following formats:

(1) ArcGIS File Geodatabase with accompanying Feature Classes
(2) ArcGIS Shapefile
(3) DXF or DWG (CAD files) projected to WGS 84 Decimal Degrees
(4) KMZ/KML (Google Earth)

Alternatively, the project proponent might consider identifying 
discharge locations on readable maps. The EPA solicits comment on 
whether the location of all potential discharges from proposed 
federally licensed or permitted projects can be identified with such 
specificity or if other methods may be more appropriate for different 
types of activities.

    Many states and tribes have established their own requirements for 
section 401 certification request submittals, which may be different 
from or more extensive than the proposed ``certification request'' 
requirements listed above. The EPA recommends that, following 
establishment of final EPA regulations defining ``certification 
request'' and ``receipt,'' certifying authorities update their existing 
section 401 certification regulations to ensure consistency with the 
EPA's regulations. Additionally, the EPA encourages certifying 
authorities to work with neighboring jurisdictions to develop 
regulations that are consistent from state to state. This may be 
particularly useful for interstate projects, like pipelines and 
transmission lines, requiring certification in more than one state.
    In some cases, federal agencies may be project proponents for 
purposes of section 401, for both individual projects and activities 
and for general federal licenses or permits (e.g., Corps general 
permits). The Agency requests comment on whether federal agencies 
should be subject to the same ``certification request'' submittal 
requirements as proposed, or if they require different considerations 
and procedures than section 401 certification requests by other non-
federal agency project proponents. Specifically, the Agency requests 
comments on an alternative approach for federal agencies that issue 
general federal license or permits whereby ``certification request for 
a general permit or license'' would mean a written, signed, and dated 
communication from a Federal agency to the appropriate certifying 
authority that:
    (1) Identifies the Federal agency and a point of contact;
    (2) identifies the proposed categories of activities to be 
authorized by general permit for which general certification is 
requested;
    (3) includes the proposed general permit;
    (4) estimates the number of discharges expected to be authorized by 
the proposed general permit or license each year;
    (5) includes a general description of the methods and means used or 
proposed to monitor the discharge and the equipment or measures 
employed or planned for the treatment or control of the discharge;
    (6) identifies the reasonable period of time for the certification 
request; and
    (7) contains the following statement: `The federal agency hereby 
requests that the certifying authority review and take action on this 
CWA 401 certification request within the applicable reasonable period 
of time.'
    The statutory reasonable period of time for a certifying authority 
to act on a certification request begins upon ``receipt of such 
request.'' The EPA is proposing to define the term ``receipt'' as 
follows:

    Receipt means the date that a certification request is 
documented as received by a certifying authority in accordance with 
applicable submission procedures.

    The EPA understands that some certifying authorities have 
established general procedures for project proponents to follow when 
seeking state or tribal licenses or permits and encourages the use of 
consistent procedures for all submittals, including section 401 
certification requests. The proposed requirement that certification 
requests be documented as received ``in accordance with applicable 
submission procedures'' is intended to recognize that some certifying 
authorities may require hard copy paper submittals and some may require 
or allow electronic submittals. If the certifying authority accepts 
hard copy paper submittals, EPA recommends that the project proponents 
submitting a hard copy request send the request via certified mail (or 
similar means) to confirm receipt of the section 401 certification 
request. If the certifying authority allows for electronic submittals, 
EPA recommends that the project proponent set up an electronic process 
to confirm receipt of the request. The EPA recommends that project 
proponents retain a copy of any written or electronic confirmation of 
submission or receipt for their records. The Agency solicits comment on 
whether these new definitions will provide sufficient clarity and 
regulatory certainty or if additional procedures or requirements may be 
necessary, and if so, what those procedures or requirements might be.

C. Certification Actions

    Consistent with the text of the CWA, the EPA proposes that a 
certifying authority may take four potential

[[Page 44103]]

actions pursuant to its section 401 authority: It may grant 
certification, grant with conditions, deny, or waive its opportunity to 
provide a certification. These actions are reflected in Sec.  121.5 of 
the proposed regulatory text.
    Granting a section 401 certification demonstrates that the 
authority has concluded that the discharge to waters of the United 
States from the proposed activity will be consistent with the listed 
CWA provisions and appropriate state or tribal water quality 
requirements (as defined at Sec.  121.1(p) of this proposal). Granting 
certification allows the federal agency to proceed with processing the 
application for the license or permit.
    If the certifying authority determines that the discharge from a 
proposed activity would be consistent with applicable water quality 
requirements only if certain conditions are met, the authority may 
include such conditions in its certification. Any conditions must be 
necessary to assure compliance with water quality requirements. The EPA 
proposes that water quality related conditions that meet the 
requirements in this proposed rule and that are placed on a section 401 
certification must become conditions of the resulting federal license 
or permit if it is issued. 33 U.S.C. 1341(d).
    A certifying authority may choose to deny certification if it is 
unable to certify that the proposed activity would be consistent with 
applicable water quality requirements. If a certification is denied, 
the federal agency may not issue a license or permit for the proposed 
activity. Id. at 1341(a).
    Finally, a certifying authority may waive the requirement for a 
certification in two different ways. First, the certifying authority 
may waive expressly by issuing a statement that it is waiving the 
requirement. Second, the certifying authority may implicitly waive by 
failing or refusing to act in accordance with section 401. Id. As 
discussed throughout this preamble, a certifying authority has a 
reasonable period of time, not to exceed one year, to complete its 
section 401 certification analysis. If the authority fails or refuses 
to act within that reasonable period, the certification requirement 
will be deemed waived by the federal licensing or permitting agency. 
Id. Where section 401 certification has been waived--expressly or 
implicitly--the federal agency may issue the license or permit. Id. 
This proposal is consistent with the Agency's longstanding 
interpretation of what actions may be taken in response to a 
certification request. The EPA solicits comment on this interpretation 
and continued approach in this proposed rule.

D. Appropriate Scope for Section 401 Certification Review

    Section 401 of the CWA provides states and tribes with additional 
authority to protect water quality within their jurisdictions that 
complements the other regulatory programs and the nonregulatory grant 
and planning programs established by the CWA. CWA section 401(a) does 
so by authorizing states and tribes to certify that a potential 
discharge to waters of the United States that may result from a 
proposed activity will comply with applicable provisions of certain 
enumerated sections of the CWA, including effluent limitations and 
standards of performance for new and existing sources (sections 301, 
302, and 306 of the CWA), water quality standards and implementation 
plans (section 303), and toxic pretreatment effluent standards (section 
307). 33 U.S.C. 1341(a)(1). When granting a section 401 certification, 
states and tribes are authorized by CWA section 401(d) to include 
conditions, including effluent limitations, other limitations and 
monitoring requirements that are necessary to assure that the applicant 
for a federal license or permit will comply with appropriate provisions 
of CWA sections 301, 302, 306, and 307, and with any other appropriate 
requirement of state law. Id. at 1341(d). In addition to the specific 
enumerated sections of the CWA referenced throughout section 401, the 
focus of section 401(a) on the compliance of ``any such discharge,'' 
and the substance of the enumerated CWA sections in section 401(d), 
e.g., to ensure compliance with ``effluent limitations'' under sections 
301 and 302 and any ``effluent standard'' under section 307, underscore 
that Congress intended this provision to focus on the protection of 
water quality.
    Although the text, structure, and legislative history of the CWA 
(including the name of the statute itself--the Clean Water Act) clearly 
demonstrate that section 401 of the CWA is intended to focus on 
addressing water quality impacts from discharges from federally 
licensed or permitted projects, there continues to be some confusion 
and uncertainty over the precise scope of a certifying authority's 
review under section 401 and the scope of appropriate conditions that 
may be included in a certification (see section II.F in this preamble). 
This proposal is intended to provide clarity on these issues.
    Section 401 contains several important undefined terms that, 
individually and collectively, can be interpreted in varying ways to 
place boundaries on the scope of a certifying authority's review and 
authority. Discerning the meaning, both individually and in context, of 
terms like ``discharge,'' ``activity,'' ``applicant,'' ``other 
limitations,'' and ``any other appropriate requirements of State law'' 
with respect to a state or tribe's certification authority without 
clear regulatory guidance, presents a challenge to project proponents, 
certifying authorities, federal agencies, and the courts. The challenge 
is exacerbated by the fact that nowhere in section 401 did Congress 
provide a single, clear, and unambiguous definition of the section's 
scope, a gap the Agency is proposing to remedy in this proposal. See 
Chevron, 467 U.S. at 843-44.
    The phrase ``any other appropriate requirement of State law'' in 
section 401(d) is illustrative of this ambiguity. Congress did not 
intend that the scope of a certifying entity's authority to impose 
conditions to be unbounded. PUD No. 1 of Jefferson County and City of 
Tacoma v. Washington Department of Ecology, 511 U.S. 700, 712 (1994). 
Presumably, that is why Congress added the modifier ``appropriate'' in 
the phrase ``any other appropriate requirements of State law.'' In this 
context, the exact meaning of ``appropriate'' and how it modifies the 
preceding term ``any other'' or the following phrase ``requirements of 
State law'' are important, but undefined by Congress. The Agency, as 
the federal entity charged with administering the CWA, has authority 
under Chevron and its progeny to address these ambiguities through 
notice and comment rulemaking.
    To provide needed clarity regarding the scope of a certifying 
entity's authority to grant and condition a certification, the EPA is 
proposing a clear and concise statement of the scope of certification, 
as well as clear regulatory definitions for the terms 
``certification,'' ``condition,'' ``discharge,'' and ``water quality 
requirement.''
    As explained in section II.F.6.a.iii in this preamble, based on the 
text and structure of the Act, as well as the history of modifications 
between the 1970 version and the 1972 amendments, the EPA has concluded 
that section 401 is best interpreted as protecting water quality from 
federally licensed or permitted activities with point source discharges 
to waters of the United States by requiring compliance with the CWA as 
well as EPA-approved state and tribal

[[Page 44104]]

CWA regulatory programs. This proposal includes for the first time a 
well-defined scope for section 401 certification that reflects the 
EPA's holistic interpretation of the statutory language, which is based 
on the text and structure of the Act. As the Agency charged with 
administering the CWA, the EPA is authorized to interpret by rulemaking 
the appropriate scope for a CWA section 401 certification. 33 U.S.C. 
1361(a). The EPA proposes to establish the ``scope of certification'' 
as follows:

    The scope of a Clean Water Act section 401 certification is 
limited to assuring that a discharge from a Federally licensed or 
permitted activity will comply with water quality requirements.

    The proposed scope of certification is consistent with the plain 
language of section 401 and is intended to provide clarity to 
certifying authorities, federal agencies, and project proponents about 
the extent of environmental review that is expected, the type of 
information that may reasonably be needed to review a certification 
request, and the scope of conditions that are appropriate for inclusion 
in a water quality certification.
    The proposed scope of certification differs from the EPA's existing 
regulations, which require a certification to include a statement that, 
``there is a reasonable assurance that the activity will be conducted 
in a manner which will not violate applicable water quality 
standards.'' See 40 CFR 121.2(a)(3). The ``reasonable assurance'' 
language in the EPA's existing regulations is an artifact from the pre-
1972 version of the statute which provided that the certifying 
authority would certify ``that there is reasonable assurance . . . that 
such activity will be conducted in a manner which will not violate 
applicable water quality standards.'' Public Law 91-224, 21(b)(1), 84 
Stat. 91 (1970). The proposed scope could be considered more stringent 
than the EPA's existing certification regulations because, consistent 
with the 1972 CWA amendments, it requires certifying authorities to 
conclude that a discharge ``will comply'' with water quality 
requirements (as defined at Sec.  121.1(p) of this proposal), rather 
than providing ``reasonable assurance.''
    Section 401 is triggered by a proposed federally licensed or 
permitted project that may result in any discharge into waters of the 
United States. The term ``discharge'' is not defined in section 401, 
and the only definition in the CWA provides that ``the term `discharge' 
when used without qualification includes a discharge of a pollutant, 
and a discharge of pollutants.'' 33 U.S.C. 1362(16). Consistent with 
the analysis above concerning the scope of section 401 and the need to 
provide greater clarity, the Agency is proposing to define the term 
``discharge'' as follows:

    Discharge for purposes of this part means a discharge from a 
point source into navigable waters.

    The Agency solicits comment on whether this definition is 
necessary, whether it provides appropriate clarification, or whether 
the EPA's proposed regulations would be sufficiently clear without 
including this new definition. The Agency also solicits comment on 
whether an alternate definition of ``discharge'' may provide greater 
clarity and regulatory certainty.
    Section 401(d) requires a certification to ``set forth any effluent 
limitations and other limitations, and monitoring requirements 
necessary to assure that any applicant for a Federal license or permit 
will comply with [enumerated provisions of the CWA], and with any other 
appropriate requirement of State law'' and that these requirements 
``shall become a condition on any Federal license or permit subject to 
the provisions of this section'' (emphasis added). As described in 
section II.F.6.a.i in this preamble, the EPA interprets ``appropriate 
requirement of state law'' to mean applicable provisions of those EPA-
approved state and tribal CWA regulatory programs (e.g., state water 
quality standards, NPDES program provisions). To provide greater 
clarity, the EPA proposes to define the term ``water quality 
requirements'' as follows:

    Water quality requirements means applicable provisions of 301, 
302, 303, 306, and 307 of the Clean Water Act and EPA-approved state 
or tribal Clean Water Act regulatory program provisions.

    The term ``water quality requirements'' appears throughout section 
401, but it is not defined in the statute. The EPA's interpretation of 
this term and the proposed definition are intended to align section 401 
program implementation with the text of the statute, which specifically 
identifies those provisions of the Act enumerated in the proposed 
definition. The term ``EPA-approved state or tribal CWA regulatory 
programs'' in the proposed definition is intended to include those 
state or tribal provisions of law that are more stringent than federal 
law, as authorized in 33 U.S.C. 1370. The legislative history supports 
the interpretation in this proposal. See S. Rep. No. 92-414, at 69 
(1971) (``In addition, the provision makes clear that any water quality 
requirements established under State law, more stringent than those 
requirements established under this Act, also shall through 
certification become conditions on any Federal license or permit.''). 
The CWA provisions that regulate point source discharges to waters of 
the United States are the ``regulatory provisions of the CWA.'' When 
states or tribes enact CWA regulatory provisions as part of a state or 
tribal program, including those designed to implement the section 402 
and 404 permit programs and those that are more stringent than federal 
requirements, those provisions require EPA approval before they become 
effective for CWA purposes. Because the EPA interprets ``appropriate 
requirements'' to mean the ``regulatory provisions of the CWA,'' it 
follows that those would necessarily be EPA-approved provisions.
    The EPA solicits comment on whether this proposed definition is 
clear and specific enough to provide regulatory certainty for 
certifying authorities and project proponents. The EPA also solicits 
comment on whether additional specificity should be added to the 
proposed definition, for example that the term does not include non-
water quality related state or local laws. In an alternate approach, 
the EPA may consider defining the term ``appropriate requirement of 
State law'' to provide additional clarity concerning the scope of 
section 401. Under this alternate approach, the EPA solicits comment on 
whether that term should be defined similar to or more broadly or 
narrowly than ``EPA-approved state or tribal Clean Water Act regulatory 
program provisions'' as proposed in this rulemaking.
    The scope of certification established in this proposal also 
informs the scope of conditions that may be included in a 
certification. The statute does not define ``condition,'' but several 
appellate courts have analyzed the plain language of the CWA and 
concluded that the Act ``leaves no room for interpretation'' and that 
``state conditions must be'' included in the federal license or permit. 
Sierra Club v. U.S. Army Corps of Engineers, 909 F.3d 635, 645 (4th 
Cir. 2018) (emphasis in original); see also U.S. Dep't of Interior v. 
FERC, 952 F.2d 538, 548 (D.C. Cir. 1992); Am. Rivers, Inc. v. FERC, 129 
F.3d 99, 107 (2d Cir. 1997) (recognizing the ``unequivocal'' and 
``mandatory'' language of section 1341(d)); Snoqualmie Indian Tribe v. 
FERC, 545 F.3d 1207, 1218 (9th Cir. 2008) (collecting cases); FERC, 952 
F.2d at 548 (``FERC may not alter or reject conditions imposed by the 
states through section 401 certificates.''). The EPA is not proposing 
to modify this plain language interpretation of the

[[Page 44105]]

CWA concerning the inclusion of certification conditions in federal 
licenses and permits. However, the EPA is proposing to define the term 
``condition'' to address ambiguity in the statute and provide clarity 
and regulatory certainty. See Chevron, 467 U.S. at 843-44.
    Although the structure and content of section 401(d) provide 
helpful context for what should be included as conditions in a federal 
license or permit, the CWA does not define that operative term. Because 
this term is not defined in the statute, its meaning has been 
susceptible to different interpretations. For example, the EPA 
understands some certifying authorities have included conditions in a 
certification that have nothing to do with effluent limitations, 
monitoring requirements, water quality, or even the CWA. Such 
requirements were perhaps based on other non-water quality related 
federal statutory or regulatory programs, concerns about environmental 
media other than water, or they might have been related to state laws, 
policies, or guidance that make decisions or recommendations unrelated 
to the regulation of point source discharges to waters of the United 
States. As the Agency charged with administering the CWA, the EPA is 
authorized to interpret by rulemaking what the term ``condition'' means 
in the context of a CWA section 401 certification. Under the Chevron 
doctrine, courts presume ``that when an agency-administered statute is 
ambiguous with respect to what it prescribes, Congress has empowered 
the agency to resolve the ambiguity.'' Utility Air Regulatory Group v. 
EPA, 573 U.S. 302, 315 (2014). Congressional silence is read ``as a 
delegation of authority to EPA to select from among reasonable 
options.'' EPA v. EME Homer City Generation, 572 U.S. 489, 515 (2014).
    The EPA recognizes that the majority of certification actions 
reflect an appropriately limited interpretation of the purpose and 
scope of section 401. However, the Agency is also aware that some 
certifications have included conditions that may be unrelated to water 
quality, including requirements for biking and hiking trails to be 
constructed, one-time and recurring payments to state agencies for 
improvements or enhancements that are unrelated to the proposed 
federally licensed or permitted project, and public access for fishing 
and other activities along waters of the United States. The EPA is also 
aware of certification conditions that purport to require project 
proponents to address pollutants that are not discharged from the 
construction or operation of a federally licensed or permitted project. 
Using the certification process to yield facility improvements or 
payments from project proponents that are unrelated to water quality 
impacts from the proposed federally licensed or permitted project is 
inconsistent with the authority provided by Congress. During pre-
proposal stakeholder engagement, the EPA also heard from federal 
agencies that, because several court decisions have concluded that they 
do not have authority to ``review and reject the substance of a state 
certification or the conditions contained therein,'' Am. Rivers, Inc., 
129 F.3d at 106, non-water quality conditions are often included in 
federal licenses and permits. Once included in the federal license or 
permit, federal agencies have found it challenging to implement and 
enforce these non-water quality related conditions. The Agency solicits 
comment on other examples of certification conditions that may have 
been unrelated to water quality.
    This proposal includes three elements designed to address the 
issues described above. First, the proposal defines the term 
``condition'' as follows:

    Condition means a specific requirement included in a 
certification that is within the scope of certification.

    As described above, the lack of a statutory definition for the term 
``condition,'' despite its central use in section 401(d), creates 
ambiguity and uncertainty over the types of conditions that may be 
included in a certification. See Chevron, 467 U.S. at 843-44. For 
example, does section 401(d) authorize certifying authorities to 
include any kind of limitation or requirement in a certification? Or it 
is more limited, and if so, how limited?
    As used in section 401(d), the term is most logically read to refer 
to those ``effluent limitations and other limitations, and monitoring 
requirements necessary to assure'' compliance with certain enumerated 
provisions of the CWA and with ``any other appropriate requirements of 
State law.'' The statute mandates that these kinds of limitations and 
monitoring requirements ``shall become a condition'' on a federal 
license or permit subject to section 401. Thus, based on the plain 
language of the statute for these limitations or requirements to become 
a license or permit ``condition'' through operation of section 401(d), 
they must be of a certain character. That is, they must be necessary to 
assure compliance with water quality requirements (as defined at Sec.  
121.1(p) of this proposal). That is why EPA's proposed definition of 
``condition'' would require that it be a limitation or requirement 
within the statute's ``scope of certification.'' If it purports to 
require something beyond the appropriate scope of section 401, the 
limitation or requirement offered by the certifying authority would not 
be a ``condition'' as that term is used in section 401(d).
    Providing a clear definition of ``condition'' addresses the 
ambiguity in section 401 and provides regulatory certainty to 
certifying authorities, project proponents, and federal agencies. 
Although this would be a new provision in the EPA's regulations, the 
Agency presumes that the majority of certification conditions included 
by states and tribes are consistent with the authority granted by 
Congress. The EPA expects this proposed definition, however, to provide 
much needed clarity to federal agencies and regulatory certainty to 
project proponents that have been subjected to delays and project 
denials as a result of the lack of regulatory certainty in this area.
    Second, to assure that such ``conditions'' are appropriately 
tailored to the scope and authorized by law, this proposal would 
require the following information be provided for each condition 
included in a certification:

    1. A statement explaining why the condition is necessary to 
assure that the discharge from the proposed project will comply with 
water quality requirements;
    2. A citation to federal, state, or tribal law that authorizes 
the condition; and
    3. A statement of whether and to what extent a less stringent 
condition could satisfy applicable water quality requirements.

    The EPA intends this provision to require citation to specific 
state or tribal law or CWA provision that authorizes the condition, and 
that citations to CWA section 401 or other general authorization or 
policy provisions in federal, state or tribal law would be insufficient 
to satisfy the proposed requirement. These proposed requirements are 
intended to ensure that any limitation or requirement added to a 
certification is within the ``scope of certification'' and is, thus, a 
true section 401(d) ``condition.''
    These proposed requirements might create new obligations for some 
certifying authorities, but the EPA anticipates that the value of 
including this information in every certification, in terms of 
transparency and regulatory certainty, will far outweigh the minimal 
additional administrative burden of including this information in a 
certification. Stakeholders in pre-proposal engagement expressed 
concern that federal agencies do not enforce the certification 
conditions incorporated in

[[Page 44106]]

their federal licenses or permits. Providing a citation to the legal 
authority underpinning a federally enforceable permit condition is one 
way to address these concerns. In fact, federal agencies during pre-
proposal engagement acknowledged that this information will help them 
understand how best to implement and enforce certification conditions. 
In addition, including this information in each certification will 
provide transparency for the overall certification process and allow 
the project proponent to understand the legal authority that the 
certifying authority is relying on to require the condition. This 
information will help the project proponent assess whether the 
condition is within the statute's lawful scope and what recourse it 
might have to challenge or appeal it. Overall, the EPA believes that 
the benefits of providing this information will significantly outweigh 
any additional administrative burden that certifying authorities may 
incur because of these new requirements. The Agency solicits comment on 
the proposed information needed to support each condition, particularly 
on the utility of such information for the certification process. In an 
alternate approach, the Agency may define the third requirement as ``a 
statement of whether and to what extent a more or less stringent 
condition could satisfy applicable water quality requirements,'' or 
remove the third requirement altogether. The Agency also requests 
comment on these alternate approaches.
    Third, this proposal would specifically provide federal agencies 
the ability to determine whether certification conditions meet the new 
regulatory definition for condition, and whether the state or tribe has 
provided the information required for each condition. If a condition 
satisfies these requirements, under this proposal it would have to be 
included in the federal license or permit; if a condition does not 
satisfy these requirements, it may not be included in the federal 
license or permit. See section III.J in this preamble for more 
discussion on the federal licensing or permitting agency's enforcement 
responsibility and discretion. The EPA expects that the proposed 
requirements are clear and specific enough that a federal agency would 
not need to have water quality expertise to determine if a 
certification condition meets the proposed requirements.\40\ The Agency 
solicits comment on whether the proposed requirements for conditions 
need to be further refined to allow federal agencies other than the EPA 
to appropriately determine compliance. Although this review function 
may be new to some federal agencies, it is consistent with the EPA's 
own longstanding practice under its NPDES regulations implementing 
section 401 that allow the EPA to make such determinations under 
certain circumstances. See 40 CFR 124.53(e).
---------------------------------------------------------------------------

    \40\ Additionally, section 401 provides that federal agencies 
may request EPA advice on ``any relevant information on applicable 
effluent limitations, or other limitations, standards, regulations, 
or requirements, or water quality criteria'' and compliance methods. 
33 U.S.C. 1341(b).
---------------------------------------------------------------------------

    This proposal would require other federal agencies to review and 
determine whether certification conditions are within the ``scope'' 
articulated in the proposed implementing regulations. This is 
consistent with the principle that federal agencies have the authority 
to reject certifications or conditions that are inconsistent with the 
requirements and limitations of section 401 itself. In City of Tacoma, 
Washington v. FERC, the Court of Appeals for the D.C. Circuit noted 
that ``[i]f the question regarding the state's section 401 
certification is not the application of state water quality standards, 
but compliance with the terms of section 401, then [the federal agency] 
must address it. This conclusion is evident from the plain language of 
section 401: `No license or permit shall be granted until the 
certification required by this section has been obtained or has been 
waived.' '' 460 F.3d 53, 67-68 (D.C. Cir. 2006) (citing 33 U.S.C. 
1341(a)(1)). The court went on to explain that even though the federal 
licensing or permitting agency did not need to ``inquire into every 
nuance of the state law proceeding . . . it [did] require [the federal 
agency] to at least confirm that the state has facially satisfied the 
express requirements of section 401.'' Id. at 68. This proposal 
provides that, if a federal agency determines that a certifying 
authority included a condition in a certification that is beyond the 
scope of certification, as defined in the proposed regulation, or that 
the state has not provided the specific information necessary to 
support each condition, that condition may not be included in the 
federal license or permit and it does not become federally enforceable.
    As noted above, the EPA is not proposing to modify prior case law 
interpreting the plain language of the CWA to require certification 
conditions to be included in federal licenses and permits. See, e.g., 
City of Tacoma, 460 F.3d at 67; Am. Rivers Inc., 129 F.3d at 107; FERC, 
952 F.2d at 548; Sierra Club, 909 F.3d at 645. The EPA is proposing to 
maintain that requirement for conditions that are consistent with 
section 401 and necessary to assure compliance with the Act and with 
other appropriate requirements of state law. The statute does not 
define the term ``condition'' and the EPA proposes to fill the gap left 
by Congress and define the term to address ambiguity in the statute and 
provide clarity and regulatory certainty. See Chevron, 467 U.S. at 843-
44.
    This proposal would also provide federal agencies an opportunity to 
allow a certifying authority to remedy a condition that the federal 
agency determines exceeds or conflicts with the scope of section 401 
authority under certain circumstances. If a federal agency determines 
that a condition does not satisfy the proposed requirements for a 
condition and the reasonable period of time has not yet expired, this 
proposal would allow the federal agency to notify the certifying 
authority and provide an opportunity to remedy the defective condition, 
either by modifying the condition to conform to the scope of 
certification, or by providing the information required in the proposed 
regulation. A federal agency would not be required to provide this 
opportunity to the certifying authority, but if it does, this proposal 
nonetheless would require the certifying authority to provide the 
corrected condition or required information within the original 
reasonable period of time, which shall not exceed one year from 
receipt. Under this proposal, any federal agency determination on 
whether to allow a certifying authority to remedy a deficient condition 
would have to occur within the original reasonable period of time. 
Under this proposal, if the certifying authority fails to remedy the 
deficiencies within the reasonable period of time, the condition would 
not be included in the federal license or permit. Deficient conditions 
do not invalidate the entire certification, nor do they invalidate the 
remaining conditions in the certification. The EPA solicits comment on 
whether the regulatory text should clarify that deficient conditions do 
not invalidate the entire certification or the remaining conditions. 
The EPA also solicits comment on whether the proposed opportunity to 
remedy deficient conditions would be helpful and an appropriate use of 
federal agency resources, whether it should be mandatory for federal 
agencies to provide this opportunity, and whether it is within the 
scope of EPA authority to establish through regulation. The EPA also 
solicits comment on an alternative

[[Page 44107]]

approach where certifying authorities would not have the opportunity to 
remedy deficient conditions, even if the reasonable period of time has 
not expired.
    The proposed regulations clarify the EPA's interpretation that the 
appropriate scope of review under section 401(a) is limited to the 
potential water quality impacts caused by the point source discharge 
from a proposed federally licensed or permitted project to the waters 
of the United States. This is consistent with the statutory language in 
sections 401(a) and 401(d) and is supported by the legislative history. 
See S. Rep. No. 92-414, at 69 (1971) (providing that authorities must 
certify that ``any such discharge will comply with [CWA] Sections 301 
and 302'' and that section 401 was ``amended to assure consistency with 
the bill's changed emphasis from water quality standards to effluent 
limitations based on the elimination of any discharge of pollutants''), 
41 (describing CWA section 301 as prohibiting the discharge of any 
pollutant except as permitted under CWA sections 301, 302, 306, 307 or 
402, and identifying point sources of pollution as the regulatory 
target), 46 (describing CWA section 302 to authorize water quality 
based effluent limits ``for the affected point sources at a level which 
can reasonably be expected to contribute to the attainment or 
maintenance of such a standard of water quality''). The scope of 
certification also extends to the scope of conditions that are 
appropriate for inclusion in a certification--specifically, that these 
conditions must be necessary to assure that the discharge from a 
proposed federally licensed or permitted project will comply with water 
quality requirements, as defined at Sec.  121.1(p) of this proposal.
    The EPA solicits comments on whether the proposed approach 
appropriately captures the scope of authority for granting, 
conditioning, denying, and waiving a section 401 certification. The EPA 
solicits comment on the extent to which project proponents have 
received non-water quality related conditions in certifications. The 
EPA also solicits comment on whether this proposal regarding the scope 
of certification and conditions is an appropriate and useful way to 
ensure that federal licenses will not contain non-water quality related 
certification decisions and conditions, or if there are other more 
useful and appropriate tools or mechanisms the EPA should consider to 
address these concerns. In particular, the EPA solicits comment on what 
it means for a certification or its conditions to be ``related to water 
quality'' and how direct that relationship to water quality must be to 
properly define a certification or condition as within the appropriate 
scope of section 401.
    In addition, the EPA solicits comment on its interpretation of the 
phrase ``any other appropriate requirements of State law'' as limited 
to requirements in EPA-approved state and tribal CWA regulatory 
programs. In particular, EPA solicits comment on whether EPA should 
interpret that phrase more broadly to include any requirement of State 
law, any water quality-related requirement of State law (regardless of 
whether it is part of an EPA-approved program), or any different 
universe of state or tribal requirements (reflecting, or not, CWA 
sections or programs) that might be broader or narrower in scope than 
this proposal. The EPA also solicits comment on its interpretation of 
sections 401(a) and 401(d) as limiting the scope of state and tribal 
section 401 review and conditions to impacts from potential 
``discharges,'' or whether the state or tribe may also consider a 
different and broader universe of impacts, such as impacts from the 
licensed project or activity as a whole, or some other universe of 
potential impacts to water quality. The EPA also solicits comment on 
whether this proposal will facilitate enforcement of certification 
conditions by federal agencies, or whether there are other approaches 
the Agency should consider beyond requiring a citation to state, 
tribal, or federal law or explaining the reason for a condition.
    Pre-proposal recommendations identified concerns with certain types 
of conditions that have created regulatory uncertainty for project 
proponents, including conditions that extend the effective date of a 
certification out beyond the reasonable period of time and conditions 
that authorize certifications to be re-opened. To better understand 
these concerns, the Agency solicits comment on whether, given the 
explicit limitations on conditions in this proposal, it may still be 
necessary or appropriate to expressly preclude these or other types of 
conditions that may create regulatory uncertainty.
    The EPA is also soliciting comment on an alternate approach that it 
is considering taking whereby the Agency would interpret CWA sections 
401(a) and 401(d) as providing two different scopes for action on a 
certification request. Specifically, section 401(a) could be read to 
authorize review of a section 401 certification only on the basis of 
determining whether the discharge would comply with the enumerated 
sections of the CWA; and section 401(d) could be read to authorize 
consideration of ``any other appropriate requirement of State law'' 
only for purposes of establishing conditions once the certifying 
authority has determined to grant certification. Under this alternate 
approach, a certification request could be denied only if the 
certifying authority cannot certify that the discharge will comply with 
applicable provisions of CWA sections 301, 302, 303, 306 and 307. This 
proposal would also define the term ``any other appropriate requirement 
of State law'' to mean EPA-approved state or tribal CWA regulatory 
program provisions (e.g., state water quality standards, NPDES program 
provisions). The EPA solicits comment on this alternate interpretation. 
The EPA also solicits comment on whether establishing two different 
scopes for action under section 401 would clarify the certification 
process or if it could cause further confusion or potential delays in 
processing certification requests.

E. Timeframe for Certification Analysis and Decision

    The EPA proposes to reaffirm that CWA section 401 requires 
certifying authorities to act on a request for certification within a 
reasonable period of time, which shall not exceed one year. By 
establishing an absolute outer bound of one year following receipt of a 
certification request, Congress signaled that certifying authorities 
have the expertise and ability to evaluate potential water quality 
impacts from even the most complex proposals within a reasonable period 
of time after receipt of a request, and in all cases within one year. 
The CWA also provides that if a certifying authority fails or refuses 
to act within that reasonable period of time, the certification 
requirement is waived; however, the CWA does not define the term 
``fails or refuses to act.'' This proposal provides additional clarity 
on what is a ``reasonable period,'' how the period of time is 
established, and for the first time defines the term ``fails or refuses 
to act'' to provide additional clarity and regulatory certainty.
    Section 401 does not include a tolling provision. Therefore, the 
period of time to act on a certification request does not pause or stop 
for any reason once the certification request has been received. One 
recent court decision held that withdrawing and resubmitting the same 
section 401 request for the purpose of circumventing the one-year 
statutory deadline does not restart the reasonable period of time. 
Hoopa Valley Tribe v. FERC, 913 F.3d 1099 (D.C. Cir. 2019) (Hoopa 
Valley). The EPA agrees with

[[Page 44108]]

the Hoopa Valley court that ``Section 401's text is clear'' that one 
year is the absolute maximum time permitted for a certification, and 
that the statute ``does not preclude a finding of waiver prior to the 
passage of a full year.'' Id. at 1103-04. The court noted that, ``[b]y 
shelving water quality certifications, the states usurp FERC's control 
over whether and when a federal license will issue. Thus, if allowed, 
the withdrawal-and-resubmittal scheme could be used to indefinitely 
delay federal licensing proceedings and undermine FERC's jurisdiction 
to regulate such matters.'' Id. at 1104. The court further observed 
that the legislative history supports its interpretation of the 
statute's plain language because, ``Congress intended Section 401 to 
curb a state's `dalliance or unreasonable delay.' '' Id. at 1104-05 
(emphasis in original).
    The Hoopa Valley case raised another important issue: Perpetual 
delay of relicensing efforts (in that case for more than a decade) 
delays the implementation and enforcement of water quality requirements 
that have been updated and made more stringent in the years or decades 
since the last relicensing process.\41\ See id. at 1101. This concern 
was also raised in stakeholder recommendations received during the pre-
proposal outreach period. One stakeholder specifically cited the delays 
in the Hoopa Valley case as a ``concrete example of how the Sec.  401 
certification process was being manipulated by a state certification 
agency to delay implementation of effective water quality controls and 
enhancement measures'' and that ``allowing the Sec.  401 certification 
process to be used to achieve further delays in the re-licensing 
process is in turn an abuse of the certification process.'' Letter from 
National Tribal Water Council to David P. Ross, Assistant Administrator 
of the Office of Water, EPA (Mar. 1, 2019).
---------------------------------------------------------------------------

    \41\ This is a concern shared by the EPA. The Agency has 
recently taken steps to promote its own compliance with CWA 
deadlines, including acting on state and tribal water quality 
standard submittals, because prior delays have created a significant 
backlog of state submittals awaiting EPA action. Memorandum from 
David P. Ross to Regional Administrators (June 3, 2019). These 
delays and backlogs prevent states and tribes from timely 
implementing and enforcing updated programs and standards that could 
otherwise be improving water quality.
---------------------------------------------------------------------------

    Given the Hoopa Valley court's plain language analysis of the 
statute and the potential water quality impacts from allowing 
certification decisions to be delayed, and the Agency's agreement with 
that analysis, EPA is proposing to amend the Agency's regulations in a 
manner consistent with the Hoopa Valley holding as follows:

    The certifying authority is not authorized to request the 
project proponent to withdraw a certification request or to take any 
other action for the purpose of modifying or restarting the 
established reasonable period of time.

    The Agency proposes this clear statement to reflect the plain 
language of section 401, which as described above, is supported by 
legislative history. The Agency expects this clarification will reduce 
delays and help ensure that section 401 certification requests are 
processed within the reasonable period of time established by the 
federal agency, and at most, within one year from receipt of the 
request. The Agency understands that in cases where the certifying 
authority and project proponent are working collaboratively and in good 
faith, it may be desirable to allow the certification process to extend 
beyond the reasonable period of time and beyond the one-year statutory 
deadline. The Agency solicits comment on whether there is any legal 
basis to allow a federal agency to extend the reasonable period of time 
beyond one year from receipt.
    During the pre-proposal recommendation period, stakeholders also 
expressed concern about the effect of potentially limited certification 
review timeframes on state and tribal resources. The Agency has similar 
concerns regarding its own resources. This proposal therefore would 
establish a pre-filing meeting process when the EPA is the certifying 
authority to ensure that the Agency receives early notification of 
anticipated projects and can discuss its information needs with the 
project proponent (see section III.G in this preamble). This pre-filing 
meeting process is intended to occur before the statutory timeframe 
begins. The Agency solicits comment on whether the pre-filing meeting 
process would be helpful for other certifying authorities, whether it 
is an appropriate mechanism to promote and encourage early coordination 
between project proponents and certifying authorities, and if there are 
other options that may also be appropriate from a regulatory 
perspective. The EPA also solicits comment on whether the Agency has 
the authority to propose similar requirements on state and tribal 
certifying authorities through this rulemaking. The Agency also heard 
concerns from certifying authorities on staffing challenges, agency 
priorities, and the need for additional federal funding to support 
timely action on certification requests. To better understand these 
concerns, the Agency solicits comment from certifying authorities on 
the extent to which section 401 programs are funded by states and 
tribes and the number of full or part time employees that are assigned 
to evaluate and take action on certification requests.
    The EPA recognizes that federal agencies are uniquely positioned to 
promote pre-application coordination among federal agencies, certifying 
authorities, and project proponents to harmonize project planning 
activities and promote timely action on certification requests. For 
instance, early coordination between the certifying authority and the 
federal agency could decrease duplication of materials that need to be 
prepared and submitted by the project proponent. The EPA encourages 
federal agencies to notify certifying authorities as early as possible 
about potential projects that may require a section 401 certification. 
Additionally, the EPA encourages federal agencies to respond timely to 
requests from certifying authorities for information concerning the 
proposed federal license or permit, and to provide technical and 
procedural assistance to certifying authorities and project proponents 
upon request and to the extent consistent with agency regulations and 
procedures. The Agency solicits comment on the responsibilities of 
federal agencies, ways to facilitate technical and procedural 
information sharing among federal agencies, project proponents, and 
certifying authorities, and ways to provide technical and procedural 
assistance to project proponents and certifying authorities.
    The EPA also proposes to reaffirm that the federal agencies 
determine the reasonable period of time for a certifying authority to 
act on a certification request. Some existing federal agency 
regulations specify a reasonable period of time that applies across all 
permit types. For instance, FERC's regulations at 18 CFR 5.23(b)(2) 
provide that ``[a] certifying agency is deemed to have waived the 
certification requirements of section 401(a)(1) of the Clean Water Act 
if the certifying agency has not denied or granted certification by one 
year after the date the certifying agency received a written request 
for certification.'' Similarly, the Corps regulations at 33 CFR 
325.2(b)(1)(ii) state that ``[a] waiver may be explicit, or will be 
deemed to occur if the certifying agency fails or refuses to act on a 
request for certification within sixty days after receipt of such a 
request unless the district engineer determines a shorter or longer 
period is reasonable for the state to act.'' Executive Order 13868 
directed

[[Page 44109]]

these agencies to update their existing regulations to promote 
consistency across the federal government upon completion of the EPA's 
current rulemaking to modernize its certification regulations.
    In setting the reasonable period of time for a certification--
either on a project-by-project basis or categorically through a 
rulemaking--the EPA proposes to require federal agencies to consider:

    1. The complexity of the proposed project;
    2. The potential for any discharge; and
    3. The potential need for additional study or evaluation of 
water quality effects from the discharge.

    The EPA solicits comment on whether these factors are appropriate 
and whether there are other factors that a federal agency should 
consider when establishing the reasonable period of time (e.g., permit 
type within a federal agency, certifying authority resources and 
capacity to review). The EPA also solicits comment on whether the 
Agency should establish reasonable periods of time for different 
federal permit types on a categorical basis in its final rule. For 
example, the EPA could establish that section 401 certifications for 
CWA section 404 permits that disturb a certain acreage threshold must 
be completed in a prescribed period of time. As another example, the 
EPA could establish that for interstate pipelines that will cross a 
certain number of states or transport a certain volume of material, 
certification must be completed within a specific period of time. The 
EPA understands that the federal agencies that implement their own 
permitting programs are experts in those areas, however, the Agency 
also understands that establishing a clear national framework for 
section 401 certifications may help create efficiencies in the process 
and therefore provide greater regulatory certainty.
    The Agency is also soliciting comment on an alternate approach that 
it is considering taking whereby the EPA would retain the language in 
its existing certification regulations that specifies a reasonable 
period of time ``shall generally be considered to be 6 months, but in 
any event shall not exceed 1 year.'' 40 CFR 121.16(b). In the event the 
EPA pursues this alternate approach, the Agency requests comment on 
whether six months is an appropriate general rule, if a longer or 
shorter period of time would be more appropriate as a general rule, and 
whether having such a general rule is appropriate. Such alternate 
approach would retain the federal agencies ability to determine the 
reasonable period of time but would allow for a default reasonable 
period of time in the event that a federal agency fails to establish a 
reasonable period of time or prefers to rely on the default.
    This proposal also intends to clarify the process by which federal 
agencies and certifying authorities communicate regarding the 
reasonable period of time. A clear understanding of the reasonable 
period of time will prevent certifying authorities from inadvertently 
waiving their opportunity to certify a request and will provide 
regulatory certainty to the project proponent. Under this proposal, 
upon submittal of the request for certification, the project proponent 
would contact the federal agency to provide notice of the certification 
request. Within 15 days of receiving a notice of the certification 
request from the project proponent, the federal agency would provide, 
in writing, the following information to the certifying authority: The 
applicable reasonable period of time to act on the request, the date of 
receipt, and the date upon which waiver will occur if the certifying 
authority fails to act. The EPA understands that this process may 
create additional administrative burdens on federal agencies, given the 
number of section 401 certification requests that are submitted each 
year. However, the Agency expects that the benefit of clarity and 
transparency that this additional process will provide for all parties 
involved in a section 401 certification process will outweigh any 
potential additional burden. The EPA also expects the federal agencies 
will quickly routinize this process, using forms, electronic 
notifications or other tools to minimize the potential administrative 
burden associated with providing written notice of the reasonable 
period of time. The EPA solicits comment on whether the proposed 
process is the most efficient way to provide clarity and transparency, 
or if there are other procedural or administrative mechanisms that may 
be more effective. In an alternate approach the EPA could require 
federal agencies to post the reasonable period of time notification on 
a public website, instead of requiring it be sent to the certifying 
authority. The EPA solicits comment on whether this alternate approach 
would provide greater efficiency and transparency in the certification 
process, or if there are concerns with this approach.
    The EPA also solicits comment on whether, if a federal agency 
promulgates reasonable periods of time categorically based on project 
type, the notification process in this proposal would still be 
necessary. For example, FERC has promulgated regulations for hydropower 
projects that require the license or permit applicant to file with FERC 
either a copy of the certification, a copy of the request for 
certification, including proof of the date that the certifying 
authority received the request, or evidence of waiver. 18 CFR 
4.34(b)(5)(i). In its permitting processes, FERC allows certifying 
authorities to take the full year provided in section 401, and its 
regulations clearly state, ``A certifying agency is deemed to have 
waived the certification requirements . . . if the certifying agency 
has not denied or granted certification by one year after the date the 
certifying agency received a written request for certification.'' 18 
CFR 4.34(b)(5)(iii). The EPA solicits comment on whether FERC's 
hydropower regulations, or other existing federal regulations, provide 
clear enough procedure and transparency that the additional notice to 
the certifying authority proposed in this rule would be redundant, 
unnecessary, or a waste of resources.
    The EPA also proposes to clarify that section 401 does not prohibit 
a federal agency from modifying an established reasonable period of 
time, provided the modified time period is reasonable and does not 
exceed one year from receipt. The EPA does not expect periods of time 
to be modified frequently, but this proposal is intended to provide 
federal agencies with additional flexibility for unique circumstances 
that may reasonably require a longer period of time than was originally 
established. In such cases, the modified time period would be 
communicated in writing to the certifying authority and the project 
proponent to ensure all parties are aware of the change. In all cases, 
the reasonable period of time would not exceed one year from the 
original receipt of the certification request.
    To ensure that the section 401 certification process does not 
unreasonably delay the federal licensing and permitting processes, the 
plain language of section 401(a)(1) provides that the requirement to 
obtain a certification is waived when a certifying authority ``fails or 
refuses to act'' on a request for certification, within a reasonable 
period of time (which shall not exceed one year).'' 33 U.S.C. 
1341(a)(1). The Act does not define the term ``fails or refuses to 
act.'' This term is ambiguous and the lack of a statutory definition 
has resulted in different interpretations of when the period of time 
for review expires and inefficiencies in the certification process. It 
has also resulted in significant regulatory uncertainty and litigation. 
See section II.F in this preamble. As the Agency charged with

[[Page 44110]]

administering the CWA, the EPA is authorized to interpret by rulemaking 
what these terms mean in the context of a request for a CWA section 401 
certification. See Chevron, 467 U.S. at 843-44.
    The phrase ``fails or refuses to act'' lends itself to at least two 
interpretations. One interpretation of the ``fails or refuses to act'' 
language in section 401 is that a certifying authority took no action, 
or refused to take any action, on a section 401 certification request 
within the reasonable period of time. Such lack of action would be 
understood as triggering a waiver. Alternatively, when read in the 
larger context of the section, ``fails or refuses to act'' could also 
mean that--while the certifying authority took some action in response 
to the request--the action it took was outside the statute's 
permissible scope and thus the certifying authority failed or refused 
to act in a way Congress intended, and that such failure amounts to a 
failure or refusal to act, triggering a waiver. To resolve this 
ambiguity, under this proposed definition, if a certifying authority 
either takes no action at all within the reasonable period of time, or 
acts outside the scope of certification, as defined in this proposal, 
the federal agency may determine that waiver has occurred and issue the 
federal license or permit. Accordingly, this proposal includes the 
following definition:

    Fail or refuse to act means the certifying authority actually or 
constructively fails or refuses to grant or deny certification, or 
waive the certification requirement, within the scope of 
certification and within the reasonable period of time.

    A certifying authority actually fails or refuses to grant or deny 
certification when it states its intention unambiguously in writing or 
takes no action within the reasonable period of time. A certifying 
agency constructively fails or refuses to grant or deny certification 
when it acts outside the scope of certification as defined in the 
proposed rule.
    The EPA expects that for the majority of circumstances where states 
and tribes issue section 401 certifications, this new definition will 
have little practical implication because they will have acted on 
certification requests within the scope of CWA section 401. However, 
the EPA is aware of circumstances where some states have denied 
certifications on grounds that are unrelated to water quality 
requirements and that are beyond the scope of CWA section 401.\42\ The 
EPA's existing certification regulations at 40 CFR part 121 are silent 
on this point and thus when a certifying authority acts beyond the 
scope of authority granted by Congress in section 401, the project 
proponent has two options: (1) Walk away from the proposed federally 
licensed or permitted project because certification has been denied, or 
(2) challenge the certification denial in court. Under this proposal, 
the Agency intends to clarify that a denial based on factors outside 
the scope of authority under section 401 amounts to a ``fail[ure] or 
refus[al] to act.'' The burden is thus placed on the certifying 
authority to act within the proper scope of authority granted by 
Congress, or otherwise risk having the certification denial being set 
aside by the federal agency. If that were to happen, under this 
proposal, a certifying authority that disagrees that its action was 
outside the scope of section 401 could consider its options for legal 
or administrative review against the federal agency for issuing the 
license or permit without considering its certification denial. The EPA 
intends that this proposed definition of ``fails or refuses to act'' 
will encourage certifying authorities to act within the scope of 
certification and promote timely and CWA-consistent action on 
certification requests. As discussed in section III.D in this preamble, 
an entire certification is not considered waived if a certifying 
authority grants certification with deficient conditions. In those 
circumstances, the deficient conditions are addressed by the federal 
agency but the remainder of the certification remains in place.
---------------------------------------------------------------------------

    \42\ See Letter from Thomas Berkman, Deputy Commissioner and 
General Counsel, New York State Department of Environmental 
Conservation, to Georgia Carter, Vice President and General Counsel, 
Millennium Pipeline Company, and John Zimmer, Pipeline/LNG Market 
Director, TRC Environmental Corp. (Aug. 30, 2017) (denying 401 
certification because ``FERC failed to consider or quantify the 
effects of downstream [greenhouse gas emissions] in its 
environmental review of the Project'').
---------------------------------------------------------------------------

    Alternatively, the Agency seeks comment on an approach that would 
not define ``fails or refuses to act'' as a separate term. In the event 
the Agency pursues that alternate approach, the Agency solicits comment 
on other tools or mechanisms to encourage certifying authorities to act 
timely and within the scope of certification, consistent with the text 
of the CWA as defined in this proposal.
    This proposal also includes a process by which, if a certifying 
authority denies certification on grounds outside the scope of 
certification, and the reasonable period of time has not yet expired, 
the federal agency may provide an opportunity for the certifying 
authority to remedy the deficient denial, so long as the remedy occurs 
within the original reasonable period of time. This process is intended 
to promote actions by certifying authorities that are within the scope 
of certification and provide an ability to remedy deficient denials so 
long as it is does not extend the reasonable period of time, and 
therefore does not delay the federal licensing or permitting process. 
The Agency solicits comment on whether the opportunity to remedy 
deficient certifications or conditions would be helpful and 
appropriate, or if it could create additional delays in the federal 
licensing or permitting process. The EPA also solicits comment on an 
alternative approach where certifying authorities would not have the 
opportunity to remedy deficient denials, even if the reasonable period 
of time has not expired. The Agency also solicits comment on whether 
there are other mechanisms that may also promote timely and appropriate 
action on certification requests.

F. Contents and Effect of a Certification

    The CWA does not define the term ``certification'' or offer a 
definitive list of its contents or elements. Accordingly, the EPA under 
section 501(a) may reasonably interpret the statute to add content to 
that term. See 33 U.S.C. 1251(d); 33 U.S.C. 1361(a); Chevron, 467 U.S. 
at 843-44. While the EPA's existing regulations at 40 CFR 121.2(a) 
identify certification requirements that might have made sense in 1971, 
in this proposal the EPA seeks to update those requirements and also 
address more fully the effects of certification decisions. Among other 
things, the EPA is proposing that any action on a certification request 
be in writing and clearly state whether the certifying authority has 
chosen to grant, grant with conditions, or deny certification. The EPA 
is also proposing that any express waiver of the certification 
requirement by the certifying authority also be in writing.
    In circumstances where certification is granted, with or without 
conditions, the EPA is proposing that the written certification include 
a statement that the discharge from the proposed federally licensed or 
permitted project will comply with applicable water quality 
requirements, as defined at Sec.  121.1(p) of this proposal. Where the 
certifying authority has granted without conditions, the federal agency 
could continue processing the license or permit in accordance with its 
implementing regulations. Where the certifying authority is granting 
certification with conditions, the federal

[[Page 44111]]

agency could continue processing the license or permit and would 
include those conditions as terms in the federal license or permit. 
Under the proposal, the certification would include specific supporting 
information for each condition that will be included in the 
certification, including at a minimum: A statement explaining why the 
condition is necessary to assure that the discharge resulting from the 
proposed federally licensed or permitted project will comply with 
applicable water quality requirements; a citation to federal, state, or 
tribal law that authorizes the condition; and a statement of whether 
and to what extent a less stringent condition could satisfy applicable 
water quality requirements. See section III.D in this preamble for 
information about the scope of appropriate conditions and for 
information about how conditions could be written to ensure 
enforceability by federal agencies.
    CWA section 401(a)(1) provides that ``[n]o license or permit shall 
be granted if certification has been denied by the State, interstate 
agency, or the Administrator, as the case may be.'' 33 U.S.C. 
1341(a)(1). In circumstances where certification is denied, the EPA is 
proposing that the written notification include the reasons for denial, 
including the specific water quality requirements with which the 
proposed federally licensed or permitted project will not comply, a 
statement explaining why the proposed project will not comply with the 
identified water quality requirements, and the specific data, 
information, or project modifications, if any, that would be needed for 
the certifying authority to determine that the discharge will comply 
with water quality requirements. In circumstances where a certifying 
authority is unable to certify that a discharge will comply with the 
Act, EPA is proposing that the certifying authority may deny 
certification or waive the requirement for certification. The EPA notes 
that there may be multiple reasons why a certifying authority may be 
unable to certify, including a lack of resources for reviewing the 
certification request, other more pressing priority work that the 
agency must attend to, or because the information provided to the 
agency demonstrates that the discharge will not comply with the Act. 
Under the former circumstances, waiver may be appropriate and under the 
latter circumstance, denial would be appropriate. The statute does not 
prevent a project proponent from reapplying for a section 401 
certification if the original request is denied, and this proposal 
reaffirms the ability of a project proponent to submit a new 
certification request. In the event that a denial is issued, the EPA 
recommends that the project proponent discuss with the certifying 
authority whether project plans could be altered to meet applicable 
water quality requirements upon submittal of a new request for 
certification.
    Where a federal agency determines that a certifying authority's 
denial satisfied the requirements of section 401, the EPA proposes that 
the federal agency provide written notification to the certifying 
authority and the project proponent that the denial was consistent with 
section 401 and that the license or permit will not be granted. A 
project proponent may explore its options to challenge a denial in 
court, or alternatively, it may submit a new request for certification 
that addresses the water quality issues identified in the denial in 
addition to the other requirements for a request for certification, as 
discussed in section III.B in this preamble.
    Where a federal agency determines that a certifying authority's 
denial failed to meet the requirements of section 401, the EPA proposes 
that the federal agency provide written notification to the certifying 
authority and the project proponent and indicate which provision(s) of 
section 401 the certifying authority failed to meet. If the federal 
agency receives the certifying authority's certification decision prior 
to the end of the reasonable period of time, the federal agency may 
provide the certifying authority an opportunity to remedy the 
deficiencies within the remaining period of time. In such 
circumstances, if the certifying authority does not provide an updated 
certification decision by the end of the reasonable period of time, 
under the proposal the federal agency would treat the certification in 
a similar manner as waiver. The EPA solicits comment on whether this 
opportunity to remedy a deficient denial would be helpful and an 
appropriate use of federal agency resources, whether it should be 
mandatory for federal agencies to provide this opportunity, and whether 
it is within the scope of Agency authority to establish through 
regulation.
    EPA's proposed regulations at sections 121.6 (Effect of denial of 
certification), 121.7 (Waiver), and 121.8 (Incorporation of conditions 
in the license or permit) contemplate that the licensing or permitting 
agency would review and make appropriate determinations about the 
adequacy of certain aspects of a 401 certification. Establishing such a 
role for federal licensing or permitting agencies is a reasonable 
interpretation of the CWA. In City of Tacoma, Washington v. FERC, the 
Court of Appeals for the D.C. Circuit noted that ``[i]f the question 
regarding the state's section 401 certification is not the application 
of state water quality standards but compliance with the terms of 
section 401, then [the federal agency] must address it. This conclusion 
is evident from the plain language of section 401: `No license or 
permit shall be granted until the certification required by this 
section has been obtained or has been waived.' '' 460 F.3d at 67-68 
(citing 33 U.S.C. 1341(a)(1)) (emphasis in original). The court went on 
to explain that even though the federal agency did not need to 
``inquire into every nuance of the state law proceeding . . . it [did] 
require [the federal agency] to at least to confirm that the state has 
facially satisfied the express requirements of section 401.'' Id. at 
68; see also Hoopa Valley Tribe v. FERC, 913 F.3d 1099, 1105 (D.C. Cir. 
2019) (``had FERC properly interpreted Section 401 and found waiver 
when it first manifested more than a decade ago, decommissioning of the 
Project might very well be underway''); Airport Communities Coalition 
v. Graves, 280 F. Supp.2d 1207, 1217 (W.D. Wash. 2003) (holding that 
the Army Corps had discretion not to incorporate untimely certification 
conditions).\43\
---------------------------------------------------------------------------

    \43\ Cases like Sierra Club, 909 F.3d at 645; Snoqualmie Indian 
Tribe, 545 F.3d at 1218; and FERC, 952 F.2d at 548 are not to the 
contrary. These cases do not stand for the proposition that 
licensing agencies have no role to play in reviewing and 
implementing state or tribal certifications. Although the courts' 
language is at times strong (e.g., ``FERC may not alter or reject 
conditions''), a closer reading shows that these holdings are more 
nuanced. In Sierra Club, the court faulted FERC for replacing a 
state certification condition with a different, alternative 
condition FERC thought was more protective. In Snoqualmie, the court 
allowed FERC to require additional license conditions that did not 
conflict with or weaken the protections provided by the state's 
certificate. In FERC, the court upheld FERC's hydroelectric facility 
license, observing that ``we have no reason to doubt that any valid 
conditions imposed by West Virginia in its section 401 certificates 
must and will be respected by the Commission.'' (Emphasis added). 
Even American Rivers, 129 F.3d at 110-111, recognized that FERC 
``may determine whether the proper state has issued the 
certification or whether a state has issued a certification within 
the prescribed period.'' To the extent any of these cases arguably 
stand for the proposition that licensing agencies lack the authority 
or discretion to make appropriate determinations regarding the 
adequacy of certain aspects of a state's or authorized tribe's 
certification, EPA disagrees.
---------------------------------------------------------------------------

    In circumstances where certification is waived, under this 
proposal, the federal agency may continue processing the license or 
permit in accordance with its implementing regulations. As discussed in 
section III.E and section III.F in this preamble, under this

[[Page 44112]]

proposal a certifying authority may waive its opportunity to certify, 
either expressly by issuing a statement that it is waiving its 
opportunity to certify or by failing or refusing to act within the 
reasonable period of time and in accordance with section 401.
    The EPA's existing certification regulations recognize the role of 
the federal agency to determine whether a waiver has occurred. 40 CFR 
121.16(b); see also Millennium Pipeline Company, L.L.C. v. Seggos, 860 
F.3d at 700-701 (acknowledging that a project proponent can ask the 
federal agency to determine whether a waiver has occurred). As 
discussed in section III.E in this preamble, the federal agency also 
determines the reasonable period of time for a certifying authority to 
act on a request for certification. The EPA proposes to reaffirm that 
it is the federal agency that also determines whether a waiver has 
occurred.
    The EPA is also proposing to clarify the procedures for a federal 
agency to notify a certifying authority that a waiver has occurred. If 
the certifying authority fails or refuses to act before the date 
specified by the federal agency, as explained in section III.E in this 
preamble, the federal agency would be required to communicate to the 
certifying authority and project proponent in writing that waiver has 
occurred. The communication would also include the original 
notification from the federal agency to the certifying authority of the 
reasonable period of time.
    As discussed in section III.E in this preamble, the practice of 
withdrawing and resubmitting the same request for certification does 
not pause or reset the clock for purposes of determining whether a 
waiver has occurred. In Hoopa Valley Tribe, the Court of Appeals for 
the D.C. Circuit held that waiver occurred where the applicant and 
certifying authority coordinated to repeatedly resubmit the same 
certification request for over a decade. 913 F.3d 1099.
    This proposal reaffirms the ability of a state to expressly or 
affirmatively waive the requirement to obtain a section 401 
certification. Although the statute does not explicitly provide for 
express or affirmative waiver, such waivers are consistent with the 
certification authority's ability to waive through failure or refusal 
to act. An express or affirmative decision to waive certification does 
not provide the certifying authority's determination of whether or not 
the section 401 certification request will comply with the Act. 
Instead, an express or affirmative waiver indicates that the certifying 
authority has chosen not to act on a certification request. See EDF v. 
Alexander, 501 F. Supp. 742, 771 (N.D. Miss. 1980) (``We do not 
interpret [the Act] to mean that affirmative waivers are not allowed. 
Such a construction would be illogical and inconsistent with the 
purpose of this legislation.''). Additionally, express or affirmative 
waiver enables the federal agency to proceed with processing an 
application where the certifying authority has stated it does not 
intend to act, thereby avoiding the need to wait for the reasonable 
period of time to lapse.
    The Agency solicits comments on whether the proposed approach 
appropriately captures the scope of authority for granting, 
conditioning, waiving, and denying a section 401 certification, and 
whether the proposed approach also effectively addresses those 
circumstances where certification is sought for general permits issued 
by the federal agencies (e.g., 33 U.S.C. 1344(e)).

G. Certification by the Administrator

    Section 401(a)(1) of the CWA provides that ``[i]n any case where a 
State or interstate agency has no authority to give such a 
certification, such certification shall be from the Administrator.'' 33 
U.S.C. 1341(a)(1). Currently, all states have authority to implement 
section 401 certification programs. However, there are two scenarios 
where the EPA acts as the certifying authority: (1) On behalf of 
federally recognized Indian tribes that have not received TAS for 
section 401, and (2) on lands of exclusive federal jurisdiction, such 
as Denali National Park. As discussed in section II.F.1 in this 
preamble, tribes may obtain TAS authorization for purposes of issuing 
CWA section 401 certifications. If a tribe does not obtain TAS for 
section 401 certifications, the EPA is responsible to act as the 
certifying authority for projects proposed on tribal land. The Agency 
solicits comment on whether additional information on the TAS process 
for section 401 certifications would be helpful and how the Agency 
could best communicate that information to the public.
    The federal government may obtain exclusive federal jurisdiction in 
multiple ways, including where the federal government purchases land 
with state consent consistent with article 1, section 8, clause 17 of 
the U.S. Constitution; where a state chooses to cede jurisdiction to 
the federal government; and where the federal government reserved 
jurisdiction upon granting statehood. See Collins v. Yosemite Park Co., 
304 U.S. 518, 529-30 (1938); James v. Dravo Contracting Co., 302 U.S. 
134, 141-42 (1937); Surplus Trading Company v. Cook, 281 U.S. 647, 650-
52 (1930); Fort Leavenworth Railroad Company v. Lowe, 114 U.S. 525, 527 
(1895). For example, the federal government retained exclusive 
jurisdiction over Denali National Park in Alaska's Statehood Act. 
Alaska Statehood Act, Public Law 85-508, 72 Stat. 339 (1958). 
Considering the potential for jurisdictional overlap between certifying 
authorities at certain project sites (e.g., boundary between tribal 
land and a state), the Agency encourages project proponents to engage 
in pre-application communications with certifying authorities and 
federal agencies to ensure project proponents submit a request for 
certification to the appropriate certifying authority.
    The EPA's existing certification regulations discuss circumstances 
where the Administrator certifies instead of a state, tribe, or 
interstate authority. The Agency proposes to modernize and clarify 
these regulations, and withdraw the text in 40 CFR 121.21 in its 
entirety and replace it with the following text:

    Certification by the Administrator that the discharge from a 
proposed project will comply with water quality requirements will be 
required where no state, tribe, or interstate agency has authority 
to give such a certification.

    In circumstances where the EPA is the certifying authority and the 
water body impacted by the proposed discharge does not have any 
applicable water quality standards, the EPA's existing regulation 
provides the EPA with an advisory role. 40 CFR 121.24. The statute does 
not explicitly provide for this advisory role, and therefore this 
proposal does not include a similar provision. However, the Agency 
believes that this advisory role may not be inconsistent with the 
Agency's technical advisory role provided at 33 U.S.C. 1341(b). In an 
alternate approach, the Agency may reaffirm the Agency's advisory role 
when it certifies for water bodies without water quality requirements. 
The Agency solicits comment on its interpretation of the EPA's advisory 
role under Section 401 and the utility of maintaining such a role for 
the EPA.
    This proposal includes three procedural requirements that would 
apply when the Administrator is the certifying authority: Clarified 
public notice procedures, a pre-filing meeting process, and specific 
timelines and requirements for the EPA to request additional 
information to support a

[[Page 44113]]

certification request. Each of these is discussed below and would be 
contained in proposed sections 121.11 through 121.13.
1. Public Notice Procedure
    Section 401 requires a certifying authority to provide procedures 
for public notice, and a public hearing where necessary, on a 
certification request. The courts have held that this includes a 
requirement for public notice itself. City of Tacoma, 460 F.3d at 68. 
As discussed above in section III.B in this preamble, the timeframe for 
making a certification decision begins upon receipt of request, and not 
when the public notice is issued. The existing regulations at 40 CFR 
part 121.23 describe the EPA's procedures for public notice after 
receiving a request for certification.
    The EPA proposes to update these regulations to provide greater 
clarity to project proponents, federal agencies, and other interested 
parties on the EPA's procedures for public notice when it is acting as 
the certifying authority. Under the proposal, the Agency would provide 
appropriate public notice within 20 days of receipt of a certification 
request to parties known to be interested, such as tribal, state, 
county, and municipal authorities, heads of state agencies responsible 
for water quality, adjacent property owners, and conservation 
organizations. If the EPA in its discretion determines that a public 
hearing is appropriate or necessary, the Agency would, to the extent 
practicable, give all interested and affected parties the opportunity 
to present evidence or testimony at a public hearing.
    When acting as a certifying authority, the EPA is subject to the 
same timeframes and section 401 certification requirements as other 
certifying authorities. The Agency requests comment on whether 
providing public notice within 20 days of receipt is appropriate or 
whether more or less time would be appropriate.
2. Pre-Filing Meeting Procedure
    This proposal also includes for the first time a requirement that 
the project proponent request a pre-filing meeting with the EPA when 
the Agency is the certifying authority. The Agency solicits comment 
regarding whether the term ``request'' as used in the statute is broad 
enough to include an implied requirement that, as part of the 
submission of a request for certification, a project proponent also 
provide the certifying authority with advance notice that a request is 
imminent. The fact that the statute requires the certifying authority 
to act on a request within a relatively short time (no longer than one 
year and possibly much less) or else waive, provides some justification 
in this context to interpret the term ``request for certification'' to 
also include a pre-filing meeting process.
    In order to facilitate early engagement and coordination, and using 
its discretion to interpret the term ``request'' as applied to its own 
certification procedures, the EPA is proposing a regulatory requirement 
for a 30-day pre-filing meeting process. Under this proposal, a project 
proponent would be required to request in writing a pre-filing meeting 
with EPA as the certifying authority at least 30 days before submitting 
a certification request. As proposed, the EPA would be required to 
promptly accommodate the meeting request or respond in writing that 
such a meeting is not necessary. This proposed pre-filing meeting 
process would give the EPA the option to meet with project proponents 
before a certification request is received to learn more about a 
proposed federally licensed or permitted project. Alternatively, the 
EPA would have the option to decline the meeting request. The EPA 
expects to take advantage of this proposed pre-filing meeting process 
for larger or more complex projects and may choose to decline the 
request for more routine and less complex projects.
    The EPA is proposing to require this pre-filing meeting process to 
trigger early communication with the EPA about important aspects of 
section 401 certification requests before the project proponent submits 
its certification request. The period prior to submitting a 
certification request provides an opportunity for the project proponent 
to verify whether a section 401 certification is required and for the 
EPA to identify potential information, in addition to the request 
requirements proposed in this rule, that may be necessary to evaluate 
the certification request. This will be particularly important if the 
EPA anticipates requesting additional information from the project 
proponent.
    Pre-filing meetings could be particularly helpful for complex 
projects. In all cases, the EPA recommends that preliminary discussions 
between the project proponent and the EPA begin well before submittal 
of a certification request. Early engagement and coordination, 
including participation in a pre-filing meeting or other pre-filing 
procedures, may also help increase the quality of application materials 
and reduce the need for the EPA to request additional information 
during the CWA section 401 review period. For further discussion, see 
section III.E in this preamble.
    Many states and tribes have indicated how valuable pre-filing 
communication between the project proponent and the certifying 
authority can be. The Association of Clean Water Administrators also 
reports that many states either require or encourage pre-filing 
meetings with project proponents and observes that many states work 
with project proponents through early engagement to ensure project 
proponents are aware of the state's information needs. During pre-
proposal outreach for this rulemaking, stakeholders identified and 
recommended specific opportunities for early coordination among the 
project proponent, certifying authority, and relevant federal agencies. 
For instance, some stakeholders encouraged pre-filing meetings, and 
others encouraged early information sharing between federal agencies 
and certifying authorities.
    The EPA's existing section 401 certification regulations do not 
address pre-filing consultation with the EPA or any other certifying 
authority. However, other federal agencies provide for pre-filing 
discussions in their regulations. For example, FERC regulations provide 
that ``[b]efore it files any application for an original, new, or 
subsequent license under this part, a potential applicant must consult 
with the relevant Federal, state, and interstate resource agencies. . . 
.'' 18 CFR 5.1(d)(1). Additionally, the Corps regulations state ``[t]he 
district engineer will establish local procedures and policies 
including appropriate publicity programs which will allow potential 
applicants to contact the district engineer or the regulatory staff 
element to request pre-application consultation.'' 33 CFR 325.1(b).
    The Agency encourages states and tribes to engage in early 
communications with project proponents and federal agencies, including 
participation in pre-filing meetings that federal agencies may require 
for their licensing or permitting processes, as these meetings may 
provide significant advance notice and additional information about 
proposed federally licensed or permitted projects and upcoming or 
future certification requests. However, this proposal would only 
require a pre-filing meeting process when the EPA is the certifying 
authority. The EPA received recommendations from many states and tribes 
during the pre-proposal process that additional pre-filing procedures 
would be valuable for them as well, and the EPA would like to be 
responsive to

[[Page 44114]]

these comments. The EPA seeks comment on the proposed pre-filing 
meeting process. The EPA is particularly interested in comments related 
to existing state, tribal or federal agency pre-filing notice or 
meeting requirements and whether such requirements have favorably 
affected the review and disposition of certification requests, 
particularly with respect to timely receipt of information relevant for 
reaching informed section 401 certification decisions. The EPA also 
solicits comment on whether states, tribes and project proponents would 
like this pre-filing meeting process to be required for all 
certification requests, including those where the EPA is not the 
certifying authority, and what legal authority the EPA would have to 
impose such requirements on states and tribes through this rulemaking. 
The EPA also solicits comment on whether such pre-filing meeting 
process, if adopted nationwide, should be mandatory or discretionary. 
If such pre-filing meeting process were mandatory, the EPA also 
solicits comment on the regulatory effect of a project proponent or 
certifying authority failing to participate in this process.
3. Requests for Additional Information
    The definition of a certification request in this proposal 
identifies the information that project proponents would be required to 
provide to certifying authorities when they submit a request for 
certification. However, in some cases, the EPA and other certifying 
authorities may conclude that additional information is necessary to 
determine that the proposed activity will comply with water quality 
requirements (as defined at Sec.  121.1(p) of this proposal). Section 
401 does not expressly address the issue of whether and under what 
conditions a certifying authority may request additional information to 
review and act on a certification request. Given the importance of this 
issue, it is reasonable and consistent with the CWA's statutory 
framework that EPA when acting as a certifying authority be afforded 
the opportunity to seek additional information necessary to do its job. 
However, consistent with the statute's firm timeline, it is also 
reasonable to assume that Congress intended there to be some 
appropriate limits placed on the timing and nature of such requests. 
This proposal fills the statutory gap and provides a structure for the 
EPA as the certifying authority to request additional information and 
for project proponents to timely respond. The structure in this 
proposal includes procedural processes and timeframes for action and is 
intended to provide transparency and regulatory certainty for the EPA 
and project proponents.
    Certifying authorities like the EPA need relevant information as 
early as possible to review and act on section 401 certification 
requests within the reasonable period of time. As discussed earlier, 
the proposed pre-filing meeting process is intended to ensure that the 
EPA has an opportunity to engage with the project proponent early, 
learn about the proposed federally licensed or permitted project, and 
consider what information might be needed from the project proponent to 
act on a certification request. The EPA is also proposing that the 
Agency would have 30 days after the receipt of a certification request 
to seek additional information from the project proponent. Additional 
information may include more detail about the contents of the potential 
discharge from the proposed federally licensed or permitted project or 
specific information about treatment or waste management plans or, 
where the certification will also cover a federal operation permit, 
additional details about discharges associated with the operation of 
the facility.
    The EPA is also proposing that the Agency would only request 
additional information that can be collected or generated within the 
established reasonable period of time. Under this proposal, in any 
request for additional information, the EPA would include a deadline 
for the project proponent to respond. The deadline must be required to 
allow sufficient time for the Agency to review the additional 
information and act on the certification request within the established 
reasonable period of time. The EPA is proposing that project proponents 
would be required to submit requested information by the EPA's 
deadline. If the project proponent fails to submit the requested 
information, the EPA may conclude that it does not have sufficient 
information to certify that the discharge will comply with applicable 
water quality requirements. The EPA may also use its expertise to 
evaluate the potential risk associated with the remaining information 
or data gap and consider issuing timely certification with conditions 
to address those potential risks. The EPA expects these proposed 
procedures to provide clarity and regulatory certainty to the EPA and 
project proponents.
    This proposal is intended to address concerns that the EPA heard 
from stakeholders during the pre-proposal period concerning the desire 
for pre-filing procedure and additional information requests. The EPA 
recognizes the advantages of working cooperatively with project 
proponents to secure the information needed to conduct an informed 
review of a certification request. This proposal provides additional 
procedures to assure the EPA will have an opportunity to request 
additional information to make informed and timely decisions on 
certification requests.
    This proposal is also intended to address other issues that have 
caused delays in certifications and project development and that have 
resulted in protracted litigation. For example, the Agency is aware 
that some certifying authorities have requested ``additional 
information'' in the form of multi-year environmental investigations 
and studies, including completion of a NEPA review, before the 
authority would begin review of the certification 
request.44 45 Consistent with the plain language of section 
401, under this proposal such requests from the EPA would not be 
authorized because they would extend the statutory reasonable period of 
time, which is not to exceed one year. This proposal provides clarity 
that, while additional information requests may be a necessary part of 
the certification process, such requests may not result in extending 
the period of time beyond which the CWA requires the EPA to act.
---------------------------------------------------------------------------

    \44\ See e.g., Exelon Generation Co. v. Grumbles, 2019 WL 
1429530 (D.D.C. 2019) (describing how the State of Maryland's 
request for a multi-year sediment study resulted in Exelon 
withdrawing and resubmitting its certification request multiple 
times to prevent waiver while the company completed the study).
    \45\ Some stakeholders have suggested that it may be challenging 
for a state to act on a certification request without the benefit of 
review under NEPA or a similar state authority. See e.g., Cal. Pub. 
Res. Code Section 21000 et seq.; Wash. Rev. Code Section 43.21C.150. 
Consistent with the EPA's June 7, 2019 guidance, the EPA recommends 
that certifying authorities not delay action on a certification 
request until a NEPA review is complete. The environmental review 
required by NEPA has a broader scope than that required by section 
401. For example, the NEPA review evaluates potential impacts to all 
environmental media, as well as potential impacts from alternative 
proposals that may not be the subject of a federal license or permit 
application. By comparison, a section 401 certification review is 
far more narrow and is focused on assessing potential water quality 
impacts from the proposed federally licensed or permitted project. 
Additionally, the NEPA process has historically taken more than one 
year to complete and waiting for a NEPA process to conclude may 
result in waiver of the certification requirement for failure to act 
within a reasonable period of time. To the extent that state or 
tribal implementing regulations require a NEPA review to be 
completed as part of a section 401 certification review, the EPA 
encourages certifying authorities to update those regulations to 
incorporate deadlines consistent with the reasonable period of time 
established under the CWA, or decouple the NEPA review from the 
section 401 process to ensure timely action on section 401 
certification requests.

---------------------------------------------------------------------------

[[Page 44115]]

    The EPA is aware that some states have regulations addressing 
timeframes within which states must request additional information 
after the receipt of a request for certification. For instance, the 
California Code of Regulations states that, ``Upon receipt of an 
application, it shall be reviewed by the certifying agency to determine 
if it is complete. If the application is incomplete, the applicant 
shall be notified in writing no later than 30 days after receipt of the 
application, of any additional information or action needed.'' Cal. 
Code Regs. tit. 23, 3835(a). The EPA also notes that some state 
regulations may require the completion of certain processes, studies or 
other regulatory milestones before it will consider a certification 
request. Although the CWA does provide flexibility for certifying 
authorities to follow their own administrative processes, particularly 
for public notice and comment, see 33 U.S.C. 1341(a), these processes 
cannot be implemented in such a manner to violate the plain language of 
the CWA. The Act requires the timeline for review to begin upon receipt 
of a certification request and requires certifications to be processed 
within a reasonable period of time, not to exceed one year.
    A number of stakeholders submitted recommendations to the pre-
proposal docket that the EPA propose procedural requirements for 
certifying authorities' requests for additional information. Some 
stakeholders recommended certifying authorities be required to request 
additional information within 90 days of receipt, and that project 
proponents must be required to respond within 60 days. The EPA 
appreciates these recommendations but notes that those timelines would 
not be workable if the federal agency establishes the reasonable period 
of time as, for example, 60 days from receipt.\46\ The EPA understands 
that providing only 30 days from receipt for the EPA to request 
additional information may seem short but the proposed pre-filing 
meeting process is a way for the Agency to understand more about the 
proposed federally licensed or permitted project before the 
certification request is submitted. The EPA solicits comment on whether 
30 days would be too long in cases with a 60-day reasonable period of 
time for a certifying authority to act on a request. The EPA also 
solicits comment on other appropriate timelines for requesting 
additional information that would be consistent with the reasonable 
period of time established by the federal agency.
---------------------------------------------------------------------------

    \46\ The Army Corps' existing federal regulations require 
certifications to be completed within 60 days unless circumstances 
require more or less time. 33 CFR 325.2(b)(1)(ii).
---------------------------------------------------------------------------

    The EPA solicits comment on whether nationally consistent 
procedures for requesting and receiving additional information to 
support a certification request would provide additional clarity and 
regulatory certainty for certifying authorities and project proponents. 
The EPA solicits comment on whether the procedures in this proposal 
should be encouraged or required for all certifying authorities, not 
just the EPA, and under what authority the Agency could require states 
and tribes to comply with these procedures.

H. Determination of Effect on Neighboring Jurisdictions

    Section 401(a)(2) provides a mechanism for the EPA to coordinate 
input from states and authorized tribes where the EPA has determined 
the discharge from a proposed federally licensed or permitted project 
subject to section 401 may affect the quality of their waters. The 
EPA's existing pre-1972 certification regulations establish procedural 
requirements for this process but require updating to align with the 
modern CWA section 401 and establish additional clarity. Additionally, 
pre-proposal stakeholder input identified section 401(a)(2) as an area 
of the regulations in need of procedural clarification.
    This proposal affirms the EPA's interpretation that section 
401(a)(2) establishes a discretionary authority for the Agency to 
determine if a water quality certification and related federal license 
or permit may impact the water quality in a neighboring jurisdiction. 
Where the Agency in its discretion has determined that the certified 
license or permit ``may affect'' the quality of water in any other 
state or authorized tribal jurisdiction, the Act requires the EPA to 
coordinate input from the affected jurisdictions and make 
recommendations to the federal agency.
    This proposal modifies the EPA's existing certification regulations 
to mirror the CWA in describing EPA's procedural duties regarding 
neighboring jurisdictions. The statute provides that, following notice 
of a section 401 certification, the Administrator shall within 30 days 
notify a potentially affected downstream state or authorized tribe 
``[w]henever such a discharge may affect, as determined by the 
Administrator, the quality of the waters of any other State.'' 33 
U.S.C. 1341(a)(2) (emphasis added). Because the EPA's duty to notify is 
only triggered when the EPA has made a determination that a discharge 
``may affect'' a downstream state or tribe, the section 401(a)(2) 
notification requirement is contingent. It is not a duty that applies 
to EPA with respect to all certifications and licenses, rather it 
applies where--at its discretion--EPA has determined that the discharge 
in question ``may affect'' a neighboring jurisdiction's waters. This 
proposal provides updated language to increase clarity regarding EPA's 
discretionary determination.
    The EPA also proposes to clarify the section 401(a)(2) notification 
process in this proposal, as such procedures are not described in 
sufficient detail in the existing regulations. If the EPA in its 
discretion determines that a neighboring jurisdiction may be affected 
by a discharge from a federally licensed or permitted project, the EPA 
must notify the affected jurisdiction, certifying authority, and 
federal agency within 30 days of receiving the notice of the 
certification request from the federal agency. If the EPA in its 
discretion does not determine that the discharge may affect neighboring 
waters, the EPA would not provide section 401(a)(2) notice.
    The EPA is proposing that its notification to neighboring 
jurisdictions be in writing, dated, and state that the affected 
jurisdiction has 60 days to notify the EPA and the federal agency, in 
writing, whether or not the discharge will violate any of its water 
quality requirements (as defined at Sec.  121.1(p) of this proposal) 
and whether the jurisdiction will object to the issuance of the federal 
license or permit and request a public hearing from the federal agency. 
The EPA is also proposing that, if an affected jurisdiction requests a 
hearing, the federal agency forward the hearing notice to the EPA at 
least 30 days before the hearing takes place. The EPA would then 
provide its recommendations on the federal license or permit at the 
hearing. After considering the EPA and affected jurisdiction's input, 
the federal agency would under this proposal be required to condition 
the license or permit as necessary to assure that the discharge from 
the certified project will comply with applicable water quality 
requirements. Under this proposal, if additional conditions cannot 
assure that the discharge from the certified project will comply with 
water quality requirements, the federal agency would not issue the 
license or permit. The proposed regulation further clarifies that the 
federal agency may not issue the license or permit pending the 
conclusion of the determination of effects on a neighboring 
jurisdiction. The EPA solicits comments on this approach and whether 
additional

[[Page 44116]]

process or clarification is needed to explain the EPA's role in 
determining the effects on neighboring jurisdictions.

I. EPA's Role in Review and Advice

    This proposal reaffirms the EPA's important role in providing 
advice and assistance. Section 40 CFR 121.30 of the existing 
regulations specifically highlight the EPA's role in assisting federal 
agencies as they assess project compliance with conditions of a license 
or permit. Although this proposal aims to provide greater clarity on 
section 401 implementation, the Agency recognizes its role in providing 
advice and assistance as needed. For example, the EPA proposes to 
change the term ``water quality standards''--as currently appearing in 
40 CFR 121.30--to ``water quality requirements'' in 121.15(a) to align 
its regulations with the scope of review and the scope of conditions 
specified in section III.D in this preamble. This change is not 
intended to preclude federal agencies from seeking support in 
interpreting applicable water quality standards or requirements and 
evaluating the appropriate scope of review and conditions for 
particular projects and certification.
    The EPA also proposes to clarify that federal agencies, certifying 
authorities, and project proponents may seek the EPA's technical 
expertise at any point during the section 401 water quality 
certification process. Additionally, the EPA proposes that a certifying 
authority, federal agency, or project proponent may request assistance 
from the Administrator to evaluate whether a certification condition is 
intended to address potential water quality impacts caused by the 
discharge from a proposed federally licensed or permitted project into 
waters of the United States. See section III.D in this preamble for 
further discussion on the appropriate scope of certification 
conditions. The Agency solicits comment on whether this proposal is 
tailored for the EPA to provide appropriate technical assistance to 
certifying authorities, federal agencies and project proponents, or if 
the EPA should offer or provide assistance in other specific or 
additional circumstances.

J. Enforcement

    The CWA expressly notes that all certification conditions ``shall 
become a condition on any Federal license or permit'' subject to 
section 401. 33 U.S.C. 1341(d); see also Am. Rivers, 129 F.3d at 111 
(``The CWA . . . expressly requir[es] [federal agencies] to incorporate 
into its licenses state-imposed-water-quality-conditions.''). However, 
the EPA's existing certification regulations do not discuss the federal 
agency's responsibility to enforce such conditions after they are 
incorporated into the permit. Under this proposal and consistent with 
the Act, a federal agency would be responsible for enforcing conditions 
included in a certification that are incorporated into a federal 
license or permit. The EPA requests comment on these provisions, and 
whether additional enforcement procedures may be appropriate to further 
define the federal agency's enforcement obligations. In limited 
circumstances, the EPA's existing certification regulations require the 
Agency to provide notice of a violation and allow six months for a 
project proponent to return to compliance before pursuing further 
enforcement. See 40 CFR 121.25. The Agency solicits comment on whether 
specific procedures such as these would be reasonable to include in 
section 401 regulations, or whether the general enforcement provisions 
of the CWA provide sufficient notice and procedure.
    The Agency notes that section 401 does not provide an independent 
regulatory enforcement role for certifying authorities for conditions 
included in federal licenses or permits. The role of the certifying 
authority is to review the proposed project and either grant 
certification, grant with conditions, deny, or waive certification. 
Once the certifying authority acts on a certification request, section 
401 does not provide an additional or ongoing role for certifying 
authorities to enforce certification conditions under federal law; 
rather, that role is reserved to the federal agency issuing the federal 
license or permit. The Agency solicits comment on this interpretation 
and whether clarification on this point may be appropriate to include 
in the regulatory text.
    Enforcement plays an essential role in maintaining robust 
compliance with section 401 certification conditions and a critical 
part of any strong enforcement program is the appropriate use of 
enforcement discretion. Heckler v. Chaney, 470 U.S. 821, 831 (1985) 
(``This Court has recognized on several occasions over many years that 
an agency's decision not to prosecute or enforce, whether through civil 
or criminal process, is a decision generally committed to an agency's 
absolute discretion.''). Enforcement programs exercise discretion and 
make careful and informed choices about where to conduct 
investigations, identifying the most serious violations and reserving 
limited enforcement resources for the cases that can make the most 
difference. Sierra Club v. Whitman, 268 F.3d 898 (9th Cir. 2001). It is 
important for enforcement programs to retain their enforcement 
discretion because federal agencies are in the best position to (1) 
determine whether the action is likely to succeed, (2) assess whether 
the enforcement action requested fits the agency's policies, and (3) 
determine whether they have enough resources to undertake the action. 
See Heckler, 470 U.S. at 831. Further, federal agencies' decisions not 
to enforce generally are not subject to judicial review, because they 
involve balancing several factors. Id. These factors include ``whether 
a violation has occurred, . . . whether agency resources are best spent 
on this violation or another, whether the agency is likely to succeed 
if it acts, whether the particular action requested best fits the 
federal agency's overall policies, and, indeed, whether the agency has 
enough resources to undertake the action at all.'' Id.
    Section 401(a)(4) and the EPA's existing regulations at 40 CFR part 
121.26 through 121.28 describe circumstances where the certifying 
authority may inspect a facility that has received certification prior 
to operation \47\ and notify the federal agency to determine if the 
facility will comply with applicable water quality requirements. 33 
U.S.C. 1341(a)(4). The Agency proposes to update these regulations to 
reflect the scope of certification review under the modern CWA in the 
proposed regulations at Sec.  121.9 (see section III.D in this 
preamble). Additionally, consistent with section 401, the EPA proposes 
to expand this inspection function to all certifying authorities and 
clarify the process by which certifying authorities should notify the 
federal agency and project proponent of any concerns.
---------------------------------------------------------------------------

    \47\ The Agency notes that operation may include implementation 
of a certified project.
---------------------------------------------------------------------------

    Consistent with section 401, this proposal provides certifying 
authorities the opportunity to inspect the project facility or activity 
prior to operations, in order to determine if the discharge from the 
certified project will comply with the certification. After an 
inspection, the certifying authority would be required to notify the 
project proponent and federal agency in writing if the discharge from 
the certified project will violate the certification. The certifying 
authority would also be required to specify recommendations of measures 
that may be necessary to bring the certified project into compliance 
with the certification. The Agency solicits comment on whether there 
are

[[Page 44117]]

additional procedures or clarifications that would provide greater 
regulatory certainty for certifying authorities, federal agencies, and 
project proponents.

K. Modifications

    Section 401 does not provide an express oversight role for the EPA 
with respect to the issuance or modification of individual water 
quality certifications by certifying authorities, other than the 
requirement that the EPA provide technical assistance under section 
401(b) and the limited role the EPA is expected to play for ensuring 
the protection of other states' waters under section 401(a)(2). 
However, the EPA's existing certification regulations provide the 
Agency a unique oversight role in the context of a modification to an 
existing water quality certification. 40 CFR 121.2(b). The EPA is 
proposing to remove this provision from the regulatory text as it is 
inconsistent with the Agency's role for new certifications. In the 
alternative, the Agency requests comment on whether it should maintain 
the existing oversight provision for certification modifications to 
provide a regulatory backstop for ensuring consistency with the CWA, 
given the relative infrequency of occurrence and the unique nature the 
circumstances giving rise to a modification request.
    The Agency also solicits comment on the appropriate scope of the 
EPA's general oversight role under section 401, whether the EPA should 
play any role in oversight of state or tribal certifications or 
modifications, and, if so, what that role should be. The Agency also 
requests comment on the legal authority for a more involved oversight 
role in individual water quality certifications or modifications. In 
addition, in light of the statute's one-year time limit for acting on a 
section 401 certification, the EPA solicits comment on whether and to 
what extent states or tribes should be able to modify a previously 
issued certification, either before or after the time limit expires, 
before or after the license or permit is issued, or to correct an 
aspect of a certification or its conditions remanded or found unlawful 
by a federal or state court or administrative body.

IV. Economic Analysis

    Pursuant to Executive Orders 12866 and 13563, the Agency conducted 
an economic analysis to better understand the potential effects of this 
proposal on certifying authorities and project proponents. While the 
economic analysis is informative in the rulemaking context, the EPA is 
not relying on the analysis as a basis for this proposed rule. See, 
e.g., Nat'l. Assn. of Homebuilders v. EPA, 682 F.3d 1032, 1039-40 (D.C. 
Cir. 2012). The analysis is contained and described more fully in the 
document Economic Analysis for the Proposed Clean Water Act Section 401 
Rulemaking. A copy of this document is available in the docket for this 
action.
    Section 401 certification decisions have varying effects on 
certifying authorities and project proponents. The Economic Analysis 
provides a qualitative analysis of the current and proposed section 401 
certification process to make the best use of limited information to 
assess the potential impacts of this proposed rule on project 
proponents and certifying authorities. Using the current practice as 
the baseline, the document assesses the potential impacts to certifying 
authorities and project proponents from the proposed revisions to the 
section 401 certification process. In particular, the Economic Analysis 
focuses on the proposed revisions to the time period for review, the 
scope of review, and the proposed process requirements applicable when 
the EPA is the certifying authority. The Economic Analysis explores 
these changes in more detail through four case studies.
    This proposal will help certifying authorities, federal agencies, 
and project proponents understand what is required and expected during 
the section 401 certification process, thereby reducing regulatory 
uncertainty. The Economic Analysis concludes that improved clarity on 
the scope and reasonable period of time for certification review may 
make the certification process more efficient for project proponents 
and certifying authorities.
    The Agency solicits comments on all aspects of the analysis, 
including assumptions made and information used, and requests any data 
that may assist the Agency in evaluating and characterizing the 
potential impacts of the proposed revisions to the section 401 
certification process. The Agency also solicits comment on the utility 
of using case studies to inform the Agency's analysis, the utility of 
the specific case studies selected, and if there are other examples 
that could also serve as informative case studies.

V. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 13771: Reducing Regulation and Controlling 
Regulatory Costs

    Pursuant to Executive Order 13771 (82 FR 9339, February 3, 2017), 
this proposed rule is expected to be a deregulatory action. Although 
the proposed revisions in certain circumstances may limit the authority 
of some states and tribes relative to current practice, the Agency 
believes the net effect of the proposal on the certification process 
will likely be deregulatory. See Economic Analysis for the Proposed 
Clean Water Act Section 401 Rulemaking for further discussion about the 
potential effects of this rule.

B. Executive Order 12866: Regulatory Planning and Review; Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is a significant regulatory action that was submitted 
to the Office of Management and Budget (OMB) for review. Any changes 
made in response to OMB recommendations have been documented in the 
docket for this action. In addition, the Agency prepared an analysis of 
potential costs and benefits associated with this action. This analysis 
is contained in the document Economic Analysis for the Proposed Clean 
Water Act Section 401 Rulemaking, which is available in the docket and 
briefly summarized in section IV in this preamble. Because of the 
limitations in data availability and uncertainty in the way in which 
certifying authorities and project proponents may respond following a 
change in the section 401 certification process, the potential effects 
of the proposed rule are discussed qualitatively. While economic 
analyses are informative in the rulemaking context, the agencies are 
not relying on the economic analysis performed pursuant to Executive 
Orders 12866 and 13563 and related procedural requirements as a basis 
for this proposed action.

C. Paperwork Reduction Act

    The information collection activities in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the PRA. The Information Collection Request (ICR) document 
that the EPA prepared has been assigned EPA ICR number 2603.02 (OMB 
Control No. XXXX).
    The information collected under section 401 is used by the 
certifying authorities for reviewing proposed projects for potential 
water quality impacts from discharges from an

[[Page 44118]]

activity that requires a federal license or permit, and by the EPA to 
evaluate potential effects on downstream or neighboring states and 
tribes. Except for when the EPA evaluates potential downstream impacts 
and acts as a certifying authority, information collected under section 
401 is not directly collected by or managed by the EPA. The primary 
collection of information is performed by other federal agencies and 
states and tribes acting as certifying authorities. Information 
collected directly by the EPA under section 401 in support of the 
section 402 program is already captured under existing EPA ICR No. 
0229.22 (OMB Control No. 2040).
    The revisions in the proposed rule clarify the information project 
proponents must provide to request a section 401 certification, 
introduce a preliminary meeting requirement for project proponents 
where the EPA acts as the certifying authority. The proposed revisions 
also remove information requirements in the certification modification 
and 401(a)(2) contexts and provide additional transparency by 
identifying information necessary to support certification actions. The 
EPA expects these proposed revisions to provide greater clarity on 
section 401 requirements, reduce the overall preparation time spent by 
a project proponent on certification requests, and reduce the review 
time for certifying authorities. The EPA solicits comment on whether 
there are ways it can increase clarity, reduce the burden, or improve 
the quality or utility of the collection of information in general.
    In the interest of transparency and public understanding, the EPA 
has provided here relevant portions of the burden assessment associated 
with the EPA's existing certification regulations. The EPA does not 
expect any measurable change in information collection burden 
associated with the proposed changes.
    Respondents/affected entities: Project proponents, state and tribal 
reviewers (certifying authorities).
    Respondent's obligation to respond: Required to obtain 401 
certification.
    Estimated number of respondents: 41,000 per year.
    Frequency of response: Per federal application.
    Total estimated burden: 328,000 hours (per year). Burden is defined 
at 5 CFR 1320.3(b).
    Total estimated cost: $18,000,000 (per year).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for the 
EPA's regulations in 40 CFR are listed in 40 CFR part 9.
    Submit your comments on the Agency's need for this information, the 
accuracy of the provided burden estimates and any suggested methods for 
minimizing respondent burden to the EPA using the docket identified at 
the beginning of this rule. You may also send your ICR-related comments 
to OMB's Office of Information and Regulatory Affairs via email to 
OIRA_submission@omb.eop.gov, Attention: Desk Officer for the EPA. Since 
OMB is required to make a decision concerning the ICR between 30 and 60 
days after receipt, OMB must receive comments no later than September 
23, 2019. The EPA will respond to any ICR-related comments in the final 
rule.''

D. Regulatory Flexibility Act

    The Agency certifies that this action will not have a significant 
economic impact on a substantial number of small entities under the 
Regulatory Flexibility Act (RFA). In making this determination, the 
impact of concern is any significant adverse economic impact on small 
entities. An agency may certify that a rule will not have a significant 
economic impact on a substantial number of small entities if the rule 
relieves regulatory burden, has no net burden or otherwise has a 
positive economic effect on the small entities subject to the rule. 
Section 401 requires federal license or permit project applicants to 
request certification from the certifying authority. This action will 
provide project applicants with greater clarity and certainty on the 
contents of and procedures for a request for certification.
    The Regulatory Flexibility Act (RFA) of 1980, as amended by the 
Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, 
requires Federal agencies to consider the impact of their regulatory 
proposals on small entities, to analyze alternatives that minimize 
those impacts, and to make their analyses available for public 
comments. The RFA addresses three types of small entities: Small 
businesses, small nonprofits, and small government jurisdictions.
    These entities have the following definitions under the RFA: (1) A 
small business that is a small industrial entity as defined in the U.S. 
Small Business Administration's size standards (see 13 CFR 121.201); 
(2) a small organization that is any not-for-profit enterprise that is 
independently owned and operated and is not dominant in its fields; or 
(3) a small governmental jurisdiction that is a government of a city, 
county, town, school district, or special district with a population of 
less than 50,000.
    The RFA describes the regulatory flexibility analyses and 
procedures that must be completed by federal agencies unless they 
certify that this rule, if promulgated, would not have a significant 
economic impact on a substantial number of small entities. This 
certification must be supported by a statement of factual basis, such 
as addressing the number of small entities affected by the proposed 
action, expected cost impacts on these entities, and evaluation of the 
economic impacts.
    These revisions to section 401 do not establish any new 
requirements directly applicable to regulated entities. This rule may 
impact states and authorized tribes that implement section 401 in the 
form of administrative burden and cost. States and tribes are not small 
entities under the RFA. As such, this rule will not result in impacts 
to small entities.

E. Unfunded Mandates Reform Act

    This proposed rule does not contain an unfunded mandate of $100 
million or more as described in the Unfunded Mandates Reform Act of 
1995 (UMRA), 2 U.S.C. 1531-1538. The action imposes no enforceable duty 
on any state, local or tribal governments or the private sector. The 
proposed rule does not contain regulatory requirements that 
significantly or uniquely affect small governments.

F. Executive Order 13132: Federalism

    The Agency consulted with state and local government officials, or 
their representative national organizations, during the development of 
this action as required under the terms of Executive Order 13132 (64 FR 
43255, August 10, 1999). On April 24, 2019, the Agency initiated a 30-
day Federalism consultation period prior to proposing this rule to 
allow for meaningful input from state and local governments. The 
kickoff Federalism consultation meeting occurred on April 23, 2019; 
attendees included intergovernmental associations and other 
associations representing state and local governments. Organizations in 
attendance included: National Governors' Association, U.S. Conference 
of Mayors, National Conference of State Legislatures, the Environmental 
Council of States, National League of Cities, Council of State 
Governments, National Association of Counties, National Association of 
Towns and Townships, Association of Clean Water Administrators, Western 
States Water Council, Conference of Western Attorneys' General, 
Association of State Wetland Managers, and Western

[[Page 44119]]

Governors Association. Additionally, one in-person meeting was held 
with the National Governors' Association on May 7, 2019. The Agency 
also held an informational webinar for states and tribes on May 8, 
2019. At the webinars and meetings, the EPA provided a presentation and 
sought input on areas of section 401 that may require clarification, 
including timeframe, scope of certification review, and coordination 
among project proponents, certifying authorities, and federal licensing 
or permitting agencies. See section II.C in this preamble for more 
information on outreach with states prior to federalism consultation. 
Letters and webinar attendee feedback received by the agency before and 
during Federalism consultation may be found on the pre-proposal 
recommendations docket (Docket ID No. EPA-HQ-OW-2018-0855). These 
webinars, meetings, and letters provided a wide and diverse range of 
interests, positions, and recommendations to the Agency. See section 
II.C in this preamble for a summary of recommendations.
    This action may change how states administer the section 401 
program. Under the technical requirements of Executive Order 13132, the 
Agency has determined that this proposed rule may not have federalism 
implications, but believe that the requirements of the Executive Order 
have been satisfied in any event.

G. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    The Agency consulted with tribal officials during the development 
of this action to permit meaningful and timely tribal input, consistent 
with the EPA Policy on Consultation and Coordination with Indian 
Tribes. The EPA initiated a tribal consultation and coordination 
process before proposing this rule by sending a ``Notification of 
Consultation and Coordination'' letter dated April 22, 2019, to all 573 
Federally recognized tribes. The letter invited tribal leaders and 
designated consultation representatives to participate in the tribal 
consultation and coordination process. The Agency held two identical 
webinars on this action for tribal representatives on May 7 and May 15, 
2019. The Agency also presented on this action at the Region 9 Regional 
Tribal Operations Committee Spring meeting on May 22, 2019. 
Additionally, tribes were invited to two webinars for states, Tribes, 
and local governments on April 17, 2019 and May 8, 2019. Tribes and 
tribal organizations sent 14 pre-proposal recommendation letters to the 
agency as part of the consultation process. All tribal and tribal 
organization letters and webinar feedback may be found on the pre-
proposal recommendations docket (Docket ID No. EPA-HQ-OW-2018-0855). 
The Agency met with three Tribes at the staff-level. See the section 
II.C on ``Pre-proposal engagement'' for a summary of recommendations.
    This action may change how tribes with TAS for section 401 
administer the section 401 program, but will not have an administrative 
impact on tribes for whom EPA certifies on their behalf. The proposal 
will not impose substantial direct compliance costs on federally 
recognized tribal governments nor preempt tribal law.

H. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    This action is not subject to Executive Order 13045 (62 FR 19885, 
April 23, 1997) because the environmental health or safety risks 
addressed by this action do not present a disproportionate risk to 
children.

I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy.

J. National Technology Transfer and Advancement Act

    This proposed rule does not involve technical standards.

K. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    The human health or environmental risks addressed by this action 
will not have potential disproportionately high and adverse human 
health or environmental effects on minority populations, low income 
populations, and/or indigenous populations, as specified in Executive 
Order 12898 (59 FR 7629, February 11, 1994).

List of Subjects in 40 CFR Part 121

    Environmental protection, Administrative practice and procedure, 
Intergovernmental relations, Water pollution control.

    Dated: August 8, 2019.
Andrew R. Wheeler,
Administrator.


0
For the reasons set forth in the preamble, the EPA proposes to revise 
40 CFR part 121 as follows:

PART 121--STATE CERTIFICATION OF ACTIVITIES REQUIRING A FEDERAL 
LICENSE OR PERMIT

Sec.
Subpart A--General
121.1 Definitions
Subpart B--Certification Procedures
121.2 When certification is required
121.3 Scope of certification
121.4 Establishing the reasonable period of time
121.5 Action on a certification request
121.6 Effect of denial of certification
121.7 Waiver
121.8 Incorporation of conditions into the license or permit
121.9 Enforcement and compliance of certification conditions
Subpart C--Determination of Effect on Other States
121.10 Determination of effects on neighboring jurisdictions
Subpart D--Certification by the Administrator
121.11 When the Administrator certifies
121.12 Pre-request procedures
121.13 Request for additional information
121.14 Notice and hearing
Subpart E--Consultations
121.15 Review and advice

    Authority: 33 U.S.C. 1251 et. seq.

Subpart A--General


Sec.  121.1  Definitions.

    (a) Administrator means the Administrator of the Environmental 
Protection Agency or the appropriate Regional Administrator to whom the 
Administrator has delegated Clean Water Act section 401 authority.
    (b) Certification means a water quality certification issued in 
accordance with Clean Water Act section 401 and this part.
    (c) Certification request means a written, signed, and dated 
communication from a project proponent to the appropriate certifying 
authority that:
    (1) Identifies the project proponent(s) and a point of contact;
    (2) Identifies the proposed project;
    (3) Identifies the applicable federal license or permit;
    (4) Identifies the location and type of any discharge that may 
result from the proposed project and the location of receiving waters;

[[Page 44120]]

    (5) Includes a description of any methods and means proposed to 
monitor the discharge and the equipment or measures planned to treat or 
control the discharge;
    (6) Includes a list of all other federal, interstate, tribal, 
state, territorial, or local agency authorizations required for the 
proposed project, including all approvals or denials already received; 
and
    (7) Contains the following statement: `The project proponent hereby 
requests that the certifying authority review and take action on this 
CWA 401 certification request within the applicable reasonable period 
of time.'
    (d) Certified project means a proposed project that has received a 
Clean Water Act section 401 certification or for which the 
certification requirement has been waived.
    (e) Certifying authority means the agency designated by law to 
certify compliance with applicable water quality requirements in 
accordance with Clean Water Act section 401.
    (f) Condition means a specific requirement included in a 
certification that is within the scope of certification.
    (g) Discharge for purposes of this part means a discharge from a 
point source into navigable waters.
    (h) Fail or refuse to act means the certifying authority actually 
or constructively fails or refuses to grant or deny certification, or 
waive the certification requirement, within the scope of certification 
and within the reasonable period of time.
    (i) Federal agency means any agency of the Federal Government to 
which application is made for a license or permit that is subject to 
Clean Water Act section 401.
    (j) License or permit means any license or permit granted by an 
agency of the Federal Government to conduct any activity which may 
result in a discharge.
    (k) Neighboring jurisdictions means any other state or authorized 
tribe whose water quality the Administrator determines may be affected 
by a discharge for which a certification is granted pursuant to Clean 
Water Act section 401 and this part.
    (l) Project proponent means the applicant for a license or permit.
    (m) Proposed project means the activity or facility for which the 
project proponent has applied for a license or permit.
    (n) Reasonable period of time means the time period during which a 
certifying authority may act on a certification request, established in 
accordance with Sec.  121.4.
    (o) Receipt means the date that a certification request is 
documented as received by a certifying authority in accordance with 
applicable submission procedures.
    (p) Water quality requirements means applicable provisions of 
Sec. Sec.  301, 302, 303, 306, and 307 of the Clean Water Act and EPA-
approved state or tribal Clean Water Act regulatory program provisions.

Subpart B--Certification Procedures


Sec.  121.2  When certification is required.

    Any applicant for a license or permit to conduct any activity which 
may result in a discharge shall provide the Federal agency a 
certification from the certifying authority in accordance with this 
part.


Sec.  121.3  Scope of certification.

    The scope of a Clean Water Act section 401 certification is limited 
to assuring that a discharge from a Federally licensed or permitted 
activity will comply with water quality requirements.


Sec.  121.4  Establishing the reasonable period of time.

    (a) The Federal agency shall establish the reasonable period of 
time categorically or on a case by case basis, which shall not exceed 
one year from receipt.
    (b) Upon submittal of a certification request, the project 
proponent shall contact the Federal agency in writing to provide notice 
of the certification request.
    (c) Within 15 days of receiving notice of the certification request 
from the project proponent, the Federal agency shall provide, in 
writing, the following information to the certifying authority:
    (1) The applicable reasonable period of time to act on the 
certification request;
    (2) The date of receipt of the certification request; and
    (3) The date upon which waiver will occur if the certifying 
authority fails or refuses to act on the certification request.
    (d) In establishing the reasonable period of time, Federal agencies 
shall consider:
    (1) The complexity of the proposed project;
    (2) The potential for any discharge; and
    (3) The potential need for additional study or evaluation of water 
quality effects from the discharge.
    (e) The Federal agency may modify an established reasonable period 
of time, but in no case shall it exceed one year from receipt.
    (1) Any request by a certifying authority or project proponent to 
the Federal agency to extend the reasonable period of time shall be in 
writing.
    (2) If the Federal agency agrees to modify the reasonable period of 
time, it shall notify the certifying authority and project proponent in 
writing.
    (f) The certifying authority is not authorized to request the 
project proponent to withdraw a certification request or to take any 
other action for the purpose of modifying or restarting the established 
reasonable period of time.


Sec.  121.5  Action on a certification request.

    (a) Any action to grant, grant with conditions, or deny a 
certification request must be within the scope of certification and 
completed within the established reasonable period of time. 
Alternatively, a certifying authority may expressly waive the 
certification requirement.
    (b) If the certifying authority determines that the discharge from 
a proposed project will comply with water quality requirements it may 
issue a certification. If the certifying authority cannot certify that 
the discharge from a proposed project will comply with water quality 
requirements, it may deny or waive certification.
    (c) Any grant of certification shall be in writing and shall 
include a statement that the discharge from the proposed project will 
comply with water quality requirements.
    (d) Any grant of certification with conditions shall be in writing 
and shall for each condition include, at a minimum:
    (1) A statement explaining why the condition is necessary to assure 
that the discharge from the proposed project will comply with water 
quality requirements;
    (2) A citation to federal, state, or tribal law that authorizes the 
condition; and
    (3) A statement of whether and to what extent a less stringent 
condition could satisfy applicable water quality requirements.
    (e) Any denial of certification shall be in writing and shall 
include:
    (1) The specific water quality requirements with which the proposed 
project will not comply;
    (2) A statement explaining why the proposed project will not comply 
with the identified water quality requirements; and
    (3) The specific water quality data or information, if any, that 
would be needed to assure that the discharge from the proposed project 
complies with water quality requirements.
    (f) If the certifying authority determines that no water quality

[[Page 44121]]

requirements are applicable to the waters receiving the discharge from 
the proposed project, the certifying authority shall grant or waive 
certification.


Sec.  121.6  Effect of denial of certification.

    (a) A certification denial shall not preclude a project proponent 
from submitting a new certification request, in accordance with the 
substantive and procedural requirements of this part.
    (b) Where a Federal agency determines that a certifying authority's 
denial satisfies the requirements of Clean Water Act section 401 and 
Sec. Sec.  121.3 and 121.5(e), the Federal agency must provide written 
notice of such determination to the certifying authority and project 
proponent, and the license or permit shall not be granted.
    (c) Where a Federal agency determines that a certifying authority's 
denial did not satisfy the requirements of Clean Water Act section 401 
and Sec. Sec.  121.3 and 121.5(e), the Federal agency must provide 
written notice of such determination to the certifying authority and 
indicate which provision(s) of Clean Water Act section 401 and this 
part the certifying authority failed to satisfy.
    (1) If the Federal agency receives the certifying authority's 
certification decision prior to the end of the reasonable period of 
time, the Federal agency may offer the certifying authority the 
opportunity to remedy the identified deficiencies in the remaining 
period of time.
    (2) If the certifying authority does not provide a certification 
decision that satisfies the requirements of Clean Water Act section 401 
and this part by the end of the reasonable period of time, the Federal 
agency shall treat the certification in a similar manner as waiver.


Sec.  121.7  Waiver.

    (a) The certification requirement for a license or permit shall be 
waived upon:
    (1) Written notification from the certifying authority to the 
project proponent and the Federal agency that it expressly waives its 
authority to act on a certification request; or
    (2) The certifying authority's failure or refusal to act on a 
certification request.
    (b) If the certifying authority fails or refuses to act, the 
Federal agency shall provide written notice to the Administrator, 
certifying agency, and project proponent that waiver has occurred. This 
notice must be in writing and include the notice that the Federal 
agency provided to the certifying authority pursuant to Sec.  121.4(c).
    (c) A written notice of waiver from the Federal agency shall 
satisfy the project proponent's requirement to obtain a certification.
    (d) Upon issuance of a written notice of waiver, the Federal agency 
may issue the license or permit.


Sec.  121.8   Incorporation of conditions into the license or permit.

    (a) All conditions that satisfy the definition of Sec.  121.1(f) 
and meet the requirements of Sec.  121.5(d) shall be incorporated into 
the license or permit and shall be federally enforceable.
    (1) If the Federal agency determines that a condition does not 
satisfy the definition of Sec.  121.1(f) and meet the requirements of 
Sec.  121.5(d), such condition shall not be incorporated into the 
license or permit. The Federal agency must provide written notice of 
such determination to the certifying authority and indicate which 
conditions are deficient and why they do not satisfy provisions of this 
part.
    (2) If the Federal agency receives a certification with conditions 
that do not satisfy the definition of Sec.  121.1(f) and the 
requirements of Sec.  121.5(d) prior to the end of the reasonable 
period of time, the Federal agency may notify the certifying authority 
and provide an opportunity in the remaining period of time for the 
certifying authority to remedy the deficient conditions. If the 
certifying authority does not remedy the deficient conditions by the 
end of the reasonable period of time, the Federal agency shall not 
incorporate them in the license or permit.
    (b) The license or permit must clearly identify any conditions that 
are based on the certification.


Sec.  121.9  Enforcement and compliance of certification conditions.

    (a) The certifying authority, prior to the initial operation of a 
certified project, shall be afforded the opportunity to inspect the 
proposed discharge location for the purpose of determining if the 
discharge from the certified project will comply with the 
certification.
    (b) If the certifying authority, after an inspection, determines 
that the discharge from the certified project will violate the 
certification, the certifying authority shall notify the project 
proponent and the Federal agency in writing, and recommend remedial 
measures necessary to bring the certified project into compliance with 
the certification.
    (c) The Federal agency shall be responsible for enforcing 
certification conditions that are incorporated into a federal license 
or permit.

Subpart C--Determination of Effect on Other States


Sec.  121.10  Determination of effects on neighboring jurisdictions.

    (a) Upon receipt of a federal license or permit application and the 
related certification, the Federal agency shall notify the 
Administrator.
    (b) Within 30 days of receipt of the notice provided by the Federal 
agency, the Administrator at his or her discretion may determine that 
the discharge from the certified project may affect water quality in a 
neighboring jurisdiction. In making this determination and in 
accordance with applicable law, the Administrator may request copies of 
the certification and the federal license or permit application.
    (c) If the Administrator determines that the discharge from the 
certified project may affect water quality in a neighboring 
jurisdiction, the Administrator shall notify the affected neighboring 
jurisdiction, the certifying authority, the Federal agency, and the 
project proponent, and the federal license or permit may not be issued 
pending the conclusion of the processes in this paragraph and paragraph 
(d) of this section.
    (1) Notification from the Administrator shall be in writing, dated, 
identify the materials provided by the Federal agency, and inform the 
affected neighboring jurisdiction that it has 60 days to notify the 
Administrator and the Federal agency, in writing, whether it has 
determined that the discharge will violate any of its water quality 
requirements, object to the issuance of the federal license or permit, 
and request a public hearing from the Federal agency.
    (2) Notification of objection from the neighboring jurisdiction 
shall be in writing, shall identify the receiving waters it determined 
will be affected by the discharge and the specific water quality 
requirements it determines will be violated by the certified project, 
and state whether the neighboring jurisdiction requests a hearing.
    (d) If the affected neighboring jurisdiction requests a hearing in 
accordance with this paragraph, the Federal agency shall hold a public 
hearing on the affected neighboring jurisdiction's objection to the 
license or permit.
    (1) The Federal agency shall provide the hearing notice to the 
Administrator at least 30 days before the hearing takes place.
    (2) At the hearing, the Administrator shall submit to the Federal 
agency its

[[Page 44122]]

evaluation and recommendation(s) concerning the objection.
    (3) The Federal agency shall consider recommendations from the 
neighboring jurisdiction and the Administrator, and any additional 
evidence presented to the Federal agency at the hearing and determine 
if additional conditions are necessary to assure that the discharge 
from the certified project will comply with water quality requirements.
    (4) If additional conditions cannot assure that the discharge from 
the certified project will comply with water quality requirements, the 
Federal agency shall not issue the license or permit.

Subpart D--Certification by the Administrator


Sec.  121.11  When the Administrator certifies.

    (a) Certification by the Administrator that the discharge from a 
proposed project will comply with water quality requirements will be 
required where no state, tribe, or interstate agency has authority to 
give such a certification.
    (b) In taking action pursuant to this paragraph, the Administrator 
shall comply with the requirements of the Clean Water Act section 401 
and this part.
    (c) For purposes of this subpart, the certifying authority is the 
Administrator.


Sec.  121.12  Pre-request procedures.

    (a) At least 30 days prior to submitting a certification request, 
the project proponent shall request a pre-filing meeting with the 
certifying authority.
    (b) The certifying authority shall timely grant the pre-filing 
meeting request or provide written notice to the project proponent that 
a pre-filing meeting is not necessary.
    (c) At the pre-filing meeting, the project proponent and the 
certifying authority shall discuss the nature of the proposed project 
and potential water quality effects. The project proponent shall 
provide a list of applicable state and federal licenses and permits and 
describe the anticipated timeline for construction and operation.
    (d) After the pre-filing meeting, the certifying authority shall 
contact the Federal agency and identify points of contact at each 
agency to facilitate information sharing throughout the certification 
process.


Sec.  121.13  Request for additional information.

    (a) The certifying authority shall have 30 days from receipt to 
request additional information from the project proponent.
    (b) The certifying authority shall only request additional 
information that is within the scope of certification and directly 
related to the discharge from the proposed project and its potential 
effect on the receiving waters.
    (c) The certifying authority shall only request information that 
can be collected or generated within the established reasonable period 
of time.
    (d) In any request for additional information, a certifying 
authority shall include a deadline for the project proponent to 
respond.
    (1) Project proponents shall comply with deadlines established by 
the certifying authority.
    (2) The deadline must allow sufficient time for the certifying 
authority to review the additional information and act on the 
certification request within the established reasonable period of time.
    (e) Failure of a project proponent to timely provide the certifying 
authority with additional information does not modify the established 
reasonable period of time.


Sec.  121.14  Notice and hearing.

    (a) Within 20 days of receipt of a certification request, the 
Administrator shall provide appropriate public notice of receipt of 
such request, including to parties known to be interested in the 
proposed project or the receiving waters into which the discharge may 
occur, such as tribal, state, county, and municipal authorities, heads 
of state agencies responsible for water quality, adjacent property 
owners, and conservation organizations.
    (b) If the Administrator in his or her discretion determines that a 
public hearing is appropriate or necessary, the agency shall schedule 
such hearing at an appropriate time and place and, to the extent 
practicable, give all interested and affected parties the opportunity 
to present evidence or testimony in person or by other means at a 
public hearing.

Subpart E--Consultations


Sec.  121.15  Review and advice.

    (a) The Administrator may, and upon request shall, provide federal 
agencies, certifying authorities, and project proponents with 
assistance regarding determinations, definitions and interpretations 
with respect to the meaning and content of water quality requirements, 
as well as assistance with respect to the application of water quality 
requirements in particular cases and in specific circumstances 
concerning a discharge from a proposed project or a certified project.
    (b) A certifying authority, Federal agency, or project proponent 
may request assistance from the Administrator to evaluate whether a 
condition is intended to address water quality effects from the 
discharge.

[FR Doc. 2019-17555 Filed 8-21-19; 8:45 a.m.]
BILLING CODE 6560-50-P


