
[Federal Register Volume 88, Number 186 (Wednesday, September 27, 2023)]
[Rules and Regulations]
[Pages 66558-66666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20219]



[[Page 66557]]

Vol. 88

Wednesday,

No. 186

September 27, 2023

Part II





Environmental Protection Agency





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40 CFR Parts 121, 122, and 124





Clean Water Act Section 401 Water Quality Certification Improvement 
Rule; Final Rule

  Federal Register / Vol. 88 , No. 186 / Wednesday, September 27, 2023 
/ Rules and Regulations  

[[Page 66558]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 121, 122, and 124

[EPA-HQ-OW-2022-0128; FRL-6976.1-03-OW]
RIN 2040-AG12


Clean Water Act Section 401 Water Quality Certification 
Improvement Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Following careful reconsideration of the water quality 
certification rule the U.S. Environmental Protection Agency (EPA or the 
Agency) promulgated in 2020, the Agency is finalizing a rule revising 
and replacing the 2020 regulatory requirements for water quality 
certification under Clean Water Act (CWA) section 401. This final rule 
updates the existing regulations to better align with the statutory 
text and purpose of the CWA; to clarify, reinforce, and provide a 
measure of consistency with elements of section 401 certification 
practice that have evolved over the more than 50 years since EPA first 
promulgated water quality certification regulations; and to support an 
efficient and predictable certification process that is consistent with 
the water quality protection and cooperative federalism principles 
central to CWA section 401. An Executive order signed on January 20, 
2021, entitled ``Protecting Public Health and the Environment and 
Restoring Science to Tackle the Climate Crisis,'' directed the Agency 
to review the water quality certification rule EPA promulgated in 2020, 
and this final rule culminates that review. The Agency is also 
finalizing conforming amendments to the water quality certification 
regulations for EPA-issued National Pollutant Discharge Elimination 
System (NPDES) permits.

DATES: This action is effective on November 27, 2023.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OW-2022-0128. All documents in the docket are 
listed on the https://www.regulations.gov/ website. Although listed in 
the index, some information is not publicly available, e.g., 
confidential business information (CBI) or other information whose 
disclosure is restricted by statute. Certain other material, such as 
copyrighted material, is not placed on the internet and will be 
publicly available in hard copy form. Publicly available docket 
materials are available electronically through https://www.regulations.gov.

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: [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. General Information
    A. What action is the Agency taking?
    B. What is the Agency's authority for taking this action?
    C. What are the incremental costs and benefits of this action?
III. Background
    A. Development of Section 401
    B. Overview of Section 401 Requirements
    C. Prior Rulemaking Efforts Addressing Section 401
    D. Summary of Stakeholder Outreach
IV. Final Rule
    A. When Section 401 Certification Is Required
    B. Pre-Filing Meeting Request
    C. Request for Certification
    D. Reasonable Period of Time
    E. Scope of Certification
    F. Certification Decisions
    G. Federal Agency Review
    H. EPA's Roles Under Section 401
    I. Modifications
    J. Enforcement and Inspections
    K. Neighboring Jurisdictions
    L. Treatment in a Similar Manner as a State Under Section 401
    M. Implementation Considerations
    N. Severability
V. Economic Analysis
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 14094: Modernizing Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations and Executive Order 14096: Revitalizing Our Nation's 
Commitment to Environmental Justice for All
    K. Congressional Review Act

I. Executive Summary

    Clean Water Act (CWA) section 401 provides states \1\ and 
authorized Tribes \2\ with a powerful tool to protect the quality of 
their waters from adverse impacts resulting from the construction and/
or operation of federally licensed or permitted projects. Under CWA 
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'' \3\ unless the state or authorized Tribe where the 
discharge would originate either issues a CWA section 401 water quality 
certification ``that any such discharge will comply with the applicable 
provisions of Sections 301, 302, 303, 306, and 307'' of the CWA, or 
waives certification. 33 U.S.C. 1341(a)(1). When granting a CWA section 
401 certification, CWA section 401(d) directs states and authorized 
Tribes to include conditions, including ``effluent limitations and 
other limitations, and monitoring requirements,'' necessary to assure 
that the applicant for a Federal license or permit will comply with CWA 
sections 301, 302, 306, and 307, and with ``any other appropriate 
requirement of State law.'' Id. at 1341(d).
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    \1\ 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).
    \2\ The term ``authorized Tribes'' refers to Tribes that have 
been approved for ``treatment in a manner similar to a State'' 
status for CWA section 401. See 33 U.S.C. 1377(e).
    \3\ The CWA, including section 401, uses the term ``navigable 
waters,'' which the statute defines as ``the waters of the United 
States, including the territorial seas.'' 33 U.S.C. 1362(7). This 
final rule uses the term ``waters of the United States'' 
interchangeably with ``navigable waters''.
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    Congress originally created the water quality certification 
requirement in section 21(b) of the Water Quality Improvement Act of 
1970, which amended the Federal Water Pollution Control Act (FWPCA).\4\ 
Congress granted states this certification authority in response to 
Federal agencies' failure to achieve Congress's previously stated goal 
of assuring that federally licensed or permitted activities comply with 
water quality standards.\5\ Two years

[[Page 66559]]

later, Congress revised the Federal water quality protection framework 
\6\ when it enacted the Federal Water Pollution Control Act Amendments 
of 1972 (commonly known as the Clean Water Act or CWA).\7\ In those 
Amendments, Congress placed the water quality certification requirement 
in section 401, using ``substantially section 21(b) of existing law,'' 
with relevant conforming amendments ``to assure consistency with the [ 
] 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); see also H.R. Rep. No. 92-911 at 121 (1972) 
(``Section 401 is substantially section 21(b) of the existing law 
amended to assure that it conforms and is consistent with the new 
requirements of the Federal Water Pollution Control Act.''). Consistent 
with the overall cooperative federalism framework of the CWA, section 
401 authorizes states and authorized Tribes to play a significant role 
in the Federal licensing or permitting process.
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    \4\ Water Quality Improvement Act of 1970, Public Law 91-224, 84 
Stat. 91 (April 3, 1970).
    \5\ S. Rep. 91-351, at 26 (1969) (``Existing law declares it to 
be the intent of Congress that all Federal departments, agencies, 
and instrumentalities shall comply with water quality standards. 
This declaration of intent has proved unsatisfactory. One basic 
thrust of S. 7 is to require that all activity over which the 
Federal Government has direct control--. . . federally licensed or 
permitted activity--be carried out in a manner to assure compliance 
with applicable water quality standards.'')
    \6\ City of Milwaukee v. Illinois, 451 U.S. 304, 310, 317 
(1981).
    \7\ Public Law 92-500, 86 Stat. 816, as amended, Public Law 95-
217, 91 Stat. 1566, 33 U.S.C. 1251 et seq.
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    EPA promulgated implementing regulations for water quality 
certification in 1971 (1971 Rule) \8\ prior to enactment of the 1972 
amendments to the CWA. In 1979, the Agency recognized the need to 
update its water quality certification regulations, in part to be 
consistent with the 1972 amendments. See 44 FR 32854, 32856 (June 7, 
1979) (noting the 40 CFR part 121 regulations predated the 1972 
amendments). However, the Agency declined to update the regulations at 
the time because it had not consulted with other Federal agencies 
impacted by the water quality certification process, and instead 
developed regulations applicable to water quality certifications on 
EPA-issued National Pollutant Discharge Elimination System (NPDES) 
permits. Id.; see, e.g., 40 CFR 124.53 through 124.55. As a result, for 
a number of years, the 1971 Rule did not fully reflect the amended 
statutory language. Following the promulgation of the 1971 Rule, 
several seminal court cases have addressed fundamental aspects of the 
water quality certification process, including the scope of 
certification review and the appropriate timeframe for certification 
decisions. States have also developed and implemented their own water 
quality certification programs and practices aimed at protecting waters 
within their borders. During this time, the Agency supported state and 
Tribal water quality certification practices and the critical role 
states and Tribes play in protecting their waters under section 401.\9\ 
But the 1971 Rule did not reflect or account for water quality 
certification practices or judicial interpretations of section 401 that 
evolved over the 50 years since 1971.
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    \8\ 36 FR 8563 (May 8, 1971), redesignated at 36 FR 22369, 22487 
(November 25, 1971), further redesignated at 37 FR 21441 (October 
11, 1972), further redesignated at 44 FR 32854, 32899 (June 7, 
1979).
    \9\ See Wetlands and 401 Certification: Opportunities and 
Guidelines for States and Eligible Indian Tribes (April 1989) 
(hereinafter, 1989 Guidance); Clean Water Act Section 401 Water 
Quality Certification: A Water Quality Protection Tool for States 
and Tribes (May 2010) (hereinafter, 2010 Handbook) (rescinded in 
2019, see infra).
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    EPA revised the 1971 Rule in 2020.\10\ The 2020 Rule did not update 
the regulations applicable to water quality certifications on EPA-
issued NPDES permits but noted that the Agency would ``make any 
necessary conforming regulatory changes in a subsequent rulemaking.'' 
85 FR 42219 (July 13, 2020). The 2020 Rule represented a substantive 
departure from some of the Agency's and certifying authorities' core 
prior interpretations and practices with respect to water quality 
certification. The 2020 Rule also deviated sharply from the cooperative 
federalism framework central to section 401 and the CWA. While the 2020 
Rule reaffirmed some of the Agency's and the courts' prior 
interpretations, e.g., the need for a potential point source discharge 
into waters of the United States to trigger the section 401 water 
quality certification requirement, it rejected nearly 50 years of 
Agency practice and over 25 years of Supreme Court precedent regarding 
the appropriate scope of certification review, i.e., rejecting 
``activity as a whole'' for the narrower ``discharge-only'' approach. 
Additionally, the 2020 Rule introduced new procedural requirements that 
disrupted state and Tribal certification programs that evolved over the 
last half century. In this final rule, the Agency is returning to those 
important core interpretations and practices, such as an ``activity'' 
approach to the scope of certification review and greater deference to 
the role of states and Tribes in the certification process, while 
retaining (and adding) elements that provide transparency and 
predictability for all stakeholders.
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    \10\ Clean Water Act Section 401 Certification Rule, 85 FR 42210 
(July 13, 2020) (hereinafter, 2020 Rule). For further discussion on 
the 2020 Rule, including legal challenges, please see section III of 
this preamble.
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    On January 20, 2021, President Biden signed Executive Order 13990 
directing Federal agencies to review actions taken in the prior four 
years that are, or may be, inconsistent with the policies stated in the 
order (including, but not limited to, bolstering resilience to climate 
change impacts and prioritizing environmental justice).\11\ Protecting 
Public Health and the Environment and Restoring Science to Tackle the 
Climate Crisis, Executive Order 13990, 86 FR 7037 (published January 
25, 2021, signed January 20, 2021). Pursuant to this Executive order, 
EPA reviewed the 2020 Rule. EPA identified substantial concerns with 
several of its provisions that were in tension with section 401's 
cooperative federalism approach to ensuring that states and Tribes are 
empowered to protect their water quality. See Notice of Intention to 
Reconsider and Revise the Clean Water Act Section 401 Certification 
Rule, 86 FR 29541, 29542 (June 2, 2021) (identifying the Agency's 
concerns with the 2020 Rule). As a result, the Agency announced its 
intention to revise the 2020 Rule so that it is (1) well-informed by 
stakeholder input, (2) better aligned with the cooperative federalism 
principles that have been central to the effective implementation of 
the CWA, and (3) responsive to the environmental protection and other 
objectives outlined in Executive Order 13990. Id.
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    \11\ EPA has defined environmental justice as the ``fair 
treatment and meaningful involvement of all people regardless of 
race, color, national origin, or income with respect to the 
development, implementation and enforcement of environmental laws, 
regulations and policies.'' See https://www.epa.gov/environmentaljustice/learn-about-environmental-justice.
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    Five months after EPA's announcement of its intent to reconsider 
and revise the 2020 Rule, on October 21, 2021, in a legal challenge to 
the 2020 Rule, a Federal district court remanded and vacated the 2020 
Rule. In Re Clean Water Act Rulemaking, 568 F. Supp. 3d 1013 (N.D. Cal. 
2021). While EPA had not asked the court to vacate the 2020 Rule,\12\ 
the court found that vacatur was appropriate ``in light of the lack of 
reasoned decision-making and apparent errors in the rule's scope of 
certification, indications that the rule contravenes the structure and 
purpose of the Clean Water Act, and that EPA itself has signaled that 
it could not or would not adopt the same rule upon remand.'' Id. at 
1026-27. The effect of the court's vacatur was to reinstate the 1971 
Rule, effective October 21, 2021. Defendant-intervenors appealed the 
vacatur order to the U.S. Court of Appeals for the Ninth Circuit. On 
April 6, 2022, the U.S. Supreme Court granted the defendant-

[[Page 66560]]

intervenors' application for a stay of the vacatur pending the Ninth 
Circuit appeal. Louisiana v. Am. Rivers, 142 S. Ct. 1347 (2022).\13\ As 
a result of the Supreme Court's stay, the 2020 Rule once again applied 
to section 401 certifications. On February 21, 2023, the U.S. Court of 
Appeals for the Ninth Circuit reversed the district court's remand with 
vacatur order and remanded the case back to the U.S. District Court for 
the Northern District of California for further proceedings.\14\ As a 
result of the Ninth Circuit's decision, the 2020 Rule applies until 
this final rule goes into effect.
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    \12\ See EPA's Motion for Remand Without Vacatur, No. 3:20-cv-
04636-WHA (N.D. Cal. July 1, 2021).
    \13\ The Court's stay order does not alter EPA's legal 
conclusions discussed in this final rule. The request for a stay 
concerned only the appropriateness of the district court's vacatur 
of a rule before a decision on the merits. The stay request did not 
raise any issues related to the substance of CWA section 401 
certification or the merits of the 2020 Rule. See Application for 
Stay Pending Appeal in Louisiana v. Am. Rivers, No. 21A539, pp. 1, 
4, 16 (March 21, 2022) (identifying ``the core issue in this case'' 
to be the appropriateness of the district court's vacatur order) 
(identifying the Administrative Procedure Act (APA)--not the CWA or 
section 401--as the statutory provision involved in the application 
for stay) (starting the application for stay with the question: 
``Can a single district court vacate a rule that an agency adopted 
through notice-and-comment rulemaking without first finding that the 
rule is unlawful?''). Neither the Court's majority--which did not 
issue an opinion explaining its stay order--nor the dissent 
discussed any aspect of section 401 certification or the 2020 Rule.
    \14\ The court found that ``the district court lacked the 
authority to vacate the 2020 Rule without first holding it 
unlawful.'' In Re Clean Water Act Rulemaking, 60 F.4th 583, 596 (9th 
Cir. 2023). The court did not address the merits of the 2020 Rule, 
noting that it could not ``engage in the factfinding that might be 
needed to identify any harms that keeping the 2020 Rule in place 
during a remand might cause. . . .'' Id.
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    The Agency is finalizing revisions to the 2020 Rule to better 
reflect the cooperative federalism framework and text of the 1972 and 
1977 statutory amendments. The final rule also clarifies issues such as 
scope of certification and the reasonable period of time for a 
certifying authority to act. The final rule modifies the regulatory 
text implementing section 401 to support a more efficient, effective, 
and predictable certifying authority-driven certification process 
consistent with the water quality protection and other policy goals of 
CWA section 401 and Executive Order 13990. The Agency is also 
finalizing conforming amendments to the water quality certification 
regulations for EPA-issued NPDES permits.

II. General Information

A. What action is the Agency taking?

    In this action, the Agency is publishing a final rule to replace 
its currently effective water quality certification regulations at 40 
CFR part 121 and to make conforming edits in 40 CFR parts 122 and 124.

B. What is the Agency's authority for taking this action?

    The authority for this action is the Federal Water Pollution 
Control Act, 33 U.S.C. 1251 et seq., including but not limited to 
sections 101(d), 304(h), 401, 402, and 501(a).

C. What are the incremental costs and benefits of this action?

    The Agency prepared the Economic Analysis for the Final ``Clean 
Water Act Section 401 Water Quality Certification Improvement Rule'' 
(``Economic Analysis for the Final Rule''), which evaluates the 
potential costs and benefits and is available in the rulemaking docket. 
The analysis is summarized in section V in this preamble. The Economic 
Analysis for the Final Rule is qualitative due to significant 
limitations and uncertainties associated with estimating the 
incremental costs and benefits of the final rule. See section V of this 
preamble for further discussion.

III. Background

A. Development of Section 401

    In 1965, Congress amended the Federal Water Pollution Control Act 
(FWPCA) to require states, or, where a state failed to act, the newly 
created Federal Water Pollution Control Administration, to promulgate 
water quality standards for interstate waters within each state. Water 
Quality Act of 1965, Public Law 89-234, 79 Stat. 903 (October 2, 1965). 
These standards were meant ``to protect the public health or welfare, 
enhance the quality of water and serve the purposes of [the] Act,'' 
which included ``enhanc[ing] the quality and value of our water 
resources and [] establish[ing] a national policy for the prevention, 
control, and abatement of water pollution.'' Id. Yet, only a few years 
later, while debating potential amendments to the FWPCA, Congress 
observed that, despite that laudable national policy, states faced 
obstacles to achieving these newly developed water quality standards 
because of an unexpected source: Federal agencies. Instead of helping 
states cooperatively achieve these Federal policy objectives, Federal 
agencies were ``sometimes . . . a culprit with considerable 
responsibility for the pollution problem which is present.'' 115 Cong. 
Rec. 9011, 9030 (April 15, 1969). Federal agencies were issuing 
licenses and permits ``without any assurance that [water quality] 
standards [would] be met or even considered.'' S. Rep. No. 91-351, at 3 
(August 7, 1969). As a result, states, industry groups, conservation 
groups, and the public alike ``questioned the justification for 
requiring compliance with water quality standards'' if Federal agencies 
themselves would not comply with those standards. Id. at 7.
    In response to such concerns, Congress introduced language that 
would bolster state authority to protect their waters and ensure 
federally licensed or permitted projects would not ``in fact become a 
source of pollution'' either through ``inadequate planning or 
otherwise.'' 115 Cong. Rec. 9011, 9030 (April 15, 1969). Under this new 
provision, instead of relying on the Federal Government to ensure 
compliance with water quality standards, states would be granted the 
power to certify that there was reasonable assurance that federally 
licensed or permitted activities would meet water quality standards 
before such a Federal license or permit could be issued. Ultimately, 
Congress added this new provision as section 21(b) of the Water Quality 
Improvement Act of 1970, Public Law 91-224, 84 Stat. 91 (April 3, 
1970).
    Under section 21(b)(1), applicants for Federal licenses or permits 
were required to obtain state certification that there was reasonable 
assurance that any federally licensed or permitted activity that may 
result in any discharge into navigable waters would not violate 
applicable water quality standards. Id. Additionally, section 21(b) 
also provided a role for other potentially affected states, discussed 
scenarios under which state certification for both Federal construction 
and operation licenses or permits may be necessary, and provided an 
opportunity for a Federal license or permit to be suspended for 
violating applicable water quality standards. Section 21(b) embodied 
the cooperative federalism principles from the 1965 amendments by 
providing states with the opportunity to influence, yet not 
``frustrate,'' the Federal licensing or permitting process. See 115 
Cong. Rec. 28875, 28971 (October 7, 1969) (noting the idea of state 
certification ``[arose] out of policy of the 1965 Act that the primary 
responsibility for controlling water pollution rests with the 
States''); see also H.R. Rep. No. 91-940, at 54-55 (March 24, 1970) 
(Conf. Rep) (adding a timeline for state certification ``[i]n order to 
insure that sheer inactivity by the State . . . will not frustrate the 
Federal application'').
    In 1972, with the enactment of the Clean Water Act, Congress 
significantly

[[Page 66561]]

revised the statutory water quality protection framework.\15\ Clean 
Water Act, Public Law 92-500, 86 Stat. 816, as amended, Public Law 95-
217, 91 Stat. 1566, 33 U.S.C. 1251 et seq. While doing so, Congress 
reaffirmed ``the primary responsibilities and rights of States to 
prevent, reduce, and eliminate pollution.'' \16\ To this end, the 1972 
amendments included section 401, which Congress considered to be 
``substantially section 21(b) of the existing law amended to assure 
that it conforms and is consistent with the new requirements of the 
Federal Water Pollution Control Act.'' H.R. Rep. No. 92-911, at 121 
(1972). These ``new requirements'' of the 1972 Act reflected a 
``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). As a result, unlike section 21(b), which focused 
only on compliance with water quality standards, section 401 required 
applicants for Federal licenses and permits to obtain state 
certification of compliance with the newly enacted provisions focused 
on achieving effluent limitations. 33 U.S.C. 1341(a)(1). A few years 
later, Congress amended section 401 to correct an omission from the 
1972 statute and clarify that it still intended for states to also 
certify compliance with water quality standards. See H.R. Rep. No. 95-
830, at 96 (1977) (inserting section 303 in the list of applicable 
provisions throughout section 401).\17\
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    \15\ City of Milwaukee v. Illinois, 451 U.S. 304, 310, 317 
(1981).
    \16\ 33 U.S.C. 1251(b).
    \17\ The conference report noted that ``[t]he inserting of 
section 303 into the series of sections listed in section 401 is 
intended to mean that a federally licensed or permitted activity, 
including discharge permits under section 402, must be certified to 
comply with State water quality standards adopted under section 303. 
The inclusion of section 303 is intended to clarify the requirements 
of section 401. It is understood that section 303 is required by the 
provisions of section 301. Thus, the inclusion of section 303 in 
section 401 while at the same time not including section 303 in the 
other sections of the Act where sections 301, 302, 306, and 307 are 
listed is in no way intended to imply that 303 is not included by 
reference to 301 in those other places in the Act, such as sections 
301, 309, 402, and 509 and any other point where they are listed. 
Section 303 is always included by reference where section 301 is 
listed.'' Id.
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    Section 401 of the 1972 Act also introduced a new subsection, 
subsection (d), that explicitly provided states with the ability to 
include ``effluent limitations and other limitations, and monitoring 
requirements'' in their certification to assure that the applicant will 
comply not only with sections 301, 302, 306, and 307, but also with 
``any other appropriate requirement of State law.'' Id. at 1341(d). In 
subsection (d), Congress also provided that any certification ``shall 
become a condition on any Federal license or permit.'' Id.; see also S. 
Rep. No. 92-414, at 69 (1971) (``The certification provided by a State 
in connection with any Federal license or permit must set forth 
effluent limitations and monitoring requirements necessary to comply 
with the provisions of this Act or under State law and such a 
certification becomes an enforceable condition on the Federal license 
or permit.''). Consistent with Congress's intent to empower states to 
protect their waters from the effects of federally licensed or 
permitted projects, this provision ``assure[d] that Federal licensing 
or permitting agencies cannot override State water quality 
requirements.'' S. Rep. No. 92-414, at 69 (1971).

B. Overview of Section 401 Requirements

    Under CWA 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, unless the certifying authority where the 
discharge would originate either issues a CWA section 401 water quality 
certification or waives certification. 33 U.S.C. 1341(a)(1). The 
applicant for the Federal license or permit that requires section 401 
certification is responsible for obtaining certification or a waiver 
from the certifying authority, which could be a state, territory, 
authorized Tribe, or EPA, depending on where the discharge originates. 
To initiate the certification process, Federal license or permit 
applicants must submit a ``request for certification'' to the 
appropriate certifying authority. The certifying authority must act 
upon the request within a ``reasonable period of time (which shall not 
exceed one year).'' Id. Additionally, during the reasonable period of 
time, certifying authorities must comply with public notice procedures 
established for certification requests, and where appropriate, 
procedures for public hearings. Id.
    If a certifying authority determines that the activity will comply 
with the listed provisions in section 401(a)(1), it may grant or waive 
certification. See section IV.E in this preamble for further discussion 
on the scope of certification. When granting a CWA section 401 
certification, certifying authorities must include conditions (e.g., 
``effluent limitations and other limitations, and monitoring 
requirements'') pursuant to CWA section 401(d) 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.'' 33 U.S.C. 1341(d). 
If a certifying authority grants certification with conditions, those 
conditions are incorporated into the Federal license or permit. Id. 
Once an applicant provides a Federal agency with a certification, the 
Federal agency may issue the license or permit. Id. at 1341(a)(1).
    If a certifying authority is unable to provide such certification, 
the certifying authority may deny or waive certification. If 
certification is denied, the Federal agency cannot issue the Federal 
license or permit. If certification is waived, the Federal agency may 
issue the Federal license or permit. Certifying authorities may waive 
certification expressly, or they may waive certification by ``fail[ing] 
or refus[ing] to act on a request for certification within a reasonable 
period of time.'' Id. Either way, the Federal licensing or permitting 
agency may issue the Federal license or permit.
    Although Congress provided section 401 certification authority to 
the jurisdiction in which the discharge originates, Congress also 
recognized that another state or authorized Tribe's water quality may 
be affected by the discharge, and it created an opportunity for such a 
state or authorized Tribe to raise objections to, and request a hearing 
on, the Federal license or permit. See id. at 1341(a)(2). Section 
401(a)(2) requires the Federal agency to ``immediately notify'' EPA 
``upon receipt'' of a ``[license or permit] application and 
certification.'' Id. EPA in turn has 30 days from that notification to 
determine whether the discharge ``may affect'' the water quality of any 
other state or authorized Tribe. Id. If the Agency makes a ``may 
affect'' determination, it must notify the other state or authorized 
Tribe, the Federal agency, and the applicant. The other state or 
authorized Tribe then has 60 days to determine whether the discharge 
will violate its water quality requirements. If the other state or 
authorized Tribe makes such a determination within those 60 days, it 
must notify EPA and the Federal agency, in writing, of its objection(s) 
to the issuance of the Federal license or permit and request a public 
hearing. Id. The Federal licensing or permitting agency is responsible 
for holding the public hearing. At the hearing, EPA is required to 
submit its evaluation and recommendations regarding the objection. 
Based on the recommendations from the objecting state or authorized 
Tribe and EPA's own evaluation and recommendation, as well as any 
evidence presented at the

[[Page 66562]]

hearing, the Federal agency is required to condition the license or 
permit ``in such manner as may be necessary to ensure compliance with 
applicable water quality requirements.'' Id. The Federal license or 
permit may not be issued ``if the imposition of conditions cannot 
ensure such compliance.'' Id.
    Section 401 also addresses when an applicant must provide separate 
certifications for a facility's Federal construction license or permit 
and any necessary Federal operating license or permit. Under section 
401(a)(3), an applicant may rely on the same certification obtained for 
the construction of a facility for any Federal operating license or 
permit for the facility if (1) the Federal agency issuing the operating 
license or permit notifies the certifying authority, and (2) the 
certifying authority does not within 60 days thereafter notify the 
Federal agency that ``there is no longer reasonable assurance that 
there will be compliance with applicable provisions of sections [301, 
302, 303, 306, and 307 of the CWA].'' Id.\18\
---------------------------------------------------------------------------

    \18\ Section 401(a)(3) identifies the bases a certifying 
authority may rely upon for finding that there is no longer 
reasonable assurance. These are changes after certification was 
granted in: construction or operation of the facility, 
characteristics of the water where the discharge occurs, or the 
applicable water quality criteria or effluent limits or other 
requirements. Id. at 1341(a)(3).
---------------------------------------------------------------------------

    Sections 401(a)(4) and (a)(5) describe circumstances where the 
certified Federal license or permit may be suspended by the Federal 
agency. First, a Federal agency may suspend a license or permit where a 
certifying authority determines during a pre-operation inspection of 
the facility or activity that it will violate applicable water quality 
requirements. Id. at 1341(a)(4). This pre-operation inspection and 
possible suspension apply only where a facility or activity does not 
require a separate operating Federal license or permit. Under section 
401, the Federal agency may not suspend the license or permit unless it 
holds a public hearing.\19\ Id. Once a Federal license or permit is 
suspended, it must remain suspended until the certifying authority 
notifies the Federal agency that there is reasonable assurance that the 
facility or activity will not violate applicable water quality 
requirements. Id. Second, a Federal agency may suspend or revoke a 
certified license or permit upon the entering of a judgment under the 
CWA that the facility or activity violated applicable provisions of 
section 301, 302, 303, 306, or 307 of the CWA. Id. at 1341(a)(5).
---------------------------------------------------------------------------

    \19\ Each Federal licensing or permitting agency may have its 
own regulations regarding additional processes for suspending a 
license or permit.
---------------------------------------------------------------------------

    Section 401 not only identifies the roles and obligations of 
Federal license or permit applicants, certifying authorities, and 
Federal agencies, it also provides specific roles for EPA. First, EPA 
may act as a certifying authority where a state or authorized Tribe 
``has no authority to give such certification.'' Id. at 1341(a)(1). 
Second, as discussed above, EPA is responsible for notifying other 
states or authorized Tribes that may be affected by a discharge from a 
federally licensed or permitted activity, and where required, for 
providing an evaluation and recommendations on such other state or 
authorized Tribe's objections. Id. at 1341(a)(2). Lastly, EPA is 
responsible for providing technical assistance upon request from 
Federal agencies, certifying authorities, or Federal license or permit 
applicants. Id. at 1341(b).

C. Prior Rulemaking Efforts Addressing Section 401

    In the last 50 plus years, EPA has undertaken two rulemaking 
efforts focused solely on addressing water quality certification, one 
of which preceded the 1972 amendments to the CWA. The Agency has also 
developed several guidance documents on the section 401 process. This 
section of the preamble discusses EPA's major rulemaking and guidance 
efforts over the last 50 plus years, including most recently the 2020 
Rule and EPA's review of it pursuant to Executive Order 13990.
1. 1971 Rule
    In February 1971, EPA proposed regulations implementing section 
401's predecessor provision, section 21(b) of the FWPCA. 36 FR 2516 
(February 5, 1971). Those proposed regulations were divided into four 
subparts, one of which provided ``definitions of general applicability 
for the regulations and . . . provide[d] for the uniform content and 
form of certification.'' Id. The other three subparts focused on EPA's 
roles. Id. In May 1971, after receiving public comments, EPA finalized 
the water quality certification regulations with the proposed four-part 
structure at 18 CFR part 615. 36 FR 8563 (May 8, 1971) (``1971 Rule'').
    The first subpart of the 1971 Rule (subpart A) established 
requirements that applied generally to all stakeholders in the 
certification process, including an identification of information that 
all certifying authorities must include in a certification. According 
to the 1971 Rule, a certifying authority was required to include 
several components in a certification, including the name and address 
of the project applicant; a statement that the certifying authority 
either examined the Federal license or permit application or examined 
other information from the project applicant and, based upon that 
evaluation, concluded that ``there is reasonable assurance that the 
activity will be conducted in a manner which will not violate 
applicable water quality standards;'' any conditions that the 
certifying authority deemed ``necessary or desirable for the discharge 
of the activity;'' and any other information the certifying authority 
deemed appropriate. 40 CFR 121.2(a) (2019). Additionally, the 1971 Rule 
allowed for modifications to certifications upon agreement by the 
certifying authority, the Federal licensing or permitting agency, and 
EPA. Id. at Sec.  121.2(b) (2019).
    The second subpart of the 1971 Rule (subpart B) established a 
process for EPA to provide notification of potential water quality 
effects to other potentially affected jurisdictions. Under the 1971 
Rule, the Regional Administrator was required to review the Federal 
license or permit application, the certification or waiver, and, where 
requested by EPA, any supplemental information provided by the Federal 
licensing or permitting agency.\20\ If the Regional Administrator 
determined that there was ``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 
would notify each affected state within 30 days of receipt of the 
application materials and certification. Id. at Sec. Sec.  121.13, 
121.16 (2019). In cases where the Federal licensing or permitting 
agency held a public hearing on the objection raised by an affected 
jurisdiction, the Federal agency was required to forward notice of such 
objection to the Regional Administrator no later than 30 days prior to 
the hearing. Id. at Sec.  121.15 (2019). At the hearing, the Regional 
Administrator was required to submit an evaluation and 
``recommendations as to whether and under what conditions the license 
or permit should be issued.'' Id.
---------------------------------------------------------------------------

    \20\ If the documents provided are insufficient to make the 
determination, the Regional Administrator can request any 
supplemental information ``as may be required to make the 
determination.'' 40 CFR 121.12 (2019).
---------------------------------------------------------------------------

    Subpart B also provided 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

[[Page 66563]]

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 Sec.  121.16 (2019). The 1971 Rule provided 
that the Federal licensing or permitting agency determined what 
constitutes a ``reasonable period of time,'' and that the period shall 
generally be six months, but in any event no more than one year. Id. at 
Sec.  121.16(b) (2019).
    The third subpart of the 1971 Rule (subpart C) established 
requirements that only applied when EPA acted as the certifying 
authority, including identifying specific information that must be 
included in a certification request. The project applicant was required 
to submit to the EPA Regional Administrator a signed request for 
certification that included a ``complete description of the discharge 
involved in the activity for which certification is sought,'' which 
included five items: the name and address of the project applicant, 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 would begin and end, and a 
description of the methods to be used to monitor the quality and 
characteristics of the discharge. Id. at Sec.  121.22 (2019). Once the 
request was submitted to EPA, the Regional Administrator was required 
to provide public notice of the request and an opportunity to comment. 
The 1971 Rule specifically stated that ``[a]ll 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 determined that such a 
hearing is necessary or appropriate.'' Id. at Sec.  121.23 (2019). If, 
after consideration of relevant information, the Regional Administrator 
determined that there was ``reasonable assurance that the proposed 
activity will not result in a violation of applicable water quality 
standards,'' the Regional Administrator would issue the certification. 
Id. at Sec.  121.24 (2019).
    The fourth and final subpart of the 1971 Rule (subpart D) provided 
that the Regional Administrator ``may, and upon request shall'' provide 
Federal licensing and permitting agencies with information regarding 
water quality standards and advise them as to the status of compliance 
by dischargers with the conditions and requirements of applicable water 
quality standards. Id. at Sec.  121.30 (2019).
    In November 1971, EPA reorganized and transferred several 
regulations, including the water quality certification regulations, 
into title 40 of the Code of Federal Regulations. EPA subsequently 
redesignated the water quality certification regulations twice in the 
1970s. See 36 FR 22369, 22487 (November 25, 1971), redesignated at 37 
FR 21441 (October 11, 1972), further redesignated at 44 FR 32854, 32899 
(June 7, 1979). The last redesignation effort was part of a rulemaking 
that extensively revised the Agency's NPDES regulations. In the revised 
NPDES regulations, EPA addressed water quality certifications on EPA-
issued NPDES permits separately from the 1971 Rule. EPA acknowledged 
that the 1971 Rule was ``in need of revision'' because the ``substance 
of these regulations predates the 1972 amendments to the Clean Water 
Act.'' 44 FR 32880 (June 7, 1979). However, EPA declined to revise the 
1971 Rule because it had not consulted the other Federal agencies 
impacted by the water quality certification process. Id. at 32856. 
Instead, the Agency finalized regulations applicable only to 
certification on EPA-issued NPDES permits. Id. at 32880. EPA developed 
these regulations, which included a default reasonable period of time 
of 60 days, limitations on certification modifications, and 
requirements for certification conditions, in response to practical 
challenges and issues arising from certification on EPA-issued permits. 
Id. Ultimately, despite the changes Congress made to the statutory text 
in 1972 and opportunities the Agency had to revisit the regulatory text 
during redesignation efforts in the 1970s, EPA did not substantively 
change the 1971 Rule until 2020.
2. EPA Guidance on 1971 Rule
    Although EPA did not pursue any additional rulemaking efforts until 
2019, the Agency issued three national guidance documents on the water 
quality certification process set forth in the 1971 Rule. The first and 
second guidance documents recognized the vital role section 401 
certification can play in protecting state and Tribal water quality, 
sought to inform states and Tribes how to use the certification program 
to protect their waters, and explained how to leverage available 
resources to operate or expand their certification programs. These 
documents provided states and Tribes with background on the 
certification process, discussed the relevant case law, and identified 
data sources that could inform the certification review process. 
Additionally, both documents provided tangible examples of state and 
Tribal experiences with section 401 that could inform other states and 
Tribes interested in developing their certification programs.
    The first guidance document, issued in 1989, focused on how states 
and Tribes could use water quality certifications to protect wetlands. 
Wetlands and 401 Certification: Opportunities and Guidelines for States 
and Eligible Indian Tribes (April 1989) (``1989 Guidance''). While the 
1989 Guidance focused on the use of water quality certifications in 
lieu of, or in addition to, state or Tribal wetlands regulatory 
programs, it provided helpful background information on the 
certification process in general. It also highlighted various state 
programs and water quality certification practices to demonstrate how 
other certifying authorities could approach the certification process. 
For example, the 1989 Guidance highlighted a certification denial 
issued by the then-Pennsylvania Department of Environmental Resources 
to illustrate that ``all of the potential effects of a proposed 
activity on water quality--direct and indirect, short and long term, 
upstream and downstream, construction and operation--should be part of 
a State's certification review.'' Id. at 22-23. Additionally, the 1989 
Guidance discussed considerations states and Tribes could examine when 
developing their own section 401 implementing regulations, as well as 
programs and resources states and Tribes could look to for technical 
support when making certification decisions. Id. at 30-37.
    The second guidance document, issued in 2010, reflected the 
development of case law and state and Tribal program experiences over 
the two decades following the 1989 Guidance. Clean Water Act Section 
401 Water Quality Certification: A Water Quality Protection Tool for 
States and Tribes (May 2010) (``2010 Handbook'') (rescinded in 2019). 
Instead of focusing on certifications in the context of wetland 
protection, the 2010 Handbook described more broadly how the 
certification process could help states and Tribes achieve their water 
quality goals. Like the 1989 Guidance, the 2010 Handbook discussed the 
certification process, using state and Tribal programs as examples, and 
explored methods and means for states and Tribes to leverage available 
funding, staffing, and data sources to fully implement a water quality 
certification program. EPA

[[Page 66564]]

rescinded the 2010 Handbook on June 7, 2019, concurrent with the 
publication of the third guidance document.
    EPA issued the third guidance document in 2019 pursuant to 
Executive Order 13868. Clean Water Act Section 401 Guidance for Federal 
Agencies, States and Authorized Tribes (June 2019) (``2019 Guidance'') 
(rescinded). The 2019 Guidance was meant to ``facilitate consistent 
implementation of section 401 and 1971 certification regulations'' 
based on the view that the 2010 Handbook did not ``reflect current case 
law interpreting CWA section 401.'' 85 FR 42213. The 2019 Guidance 
focused on three topics: (1) timeline for certification review and 
action, (2) the scope of section 401, and (3) the information within 
the scope of a certifying authority's review. 2019 Guidance at 1. EPA 
rescinded the 2019 Guidance on July 13, 2020, concurrent with the 
publication of the final 2020 Rule.
3. Development of the 2020 Rule
    In addition to directing EPA to review its 2010 Handbook and issue 
new section 401 guidance, Executive Order 13868, entitled Promoting 
Energy Infrastructure and Economic Growth, also directed EPA to propose 
new regulations governing section 401 consistent with the policy set 
forth in the order to ``promote private investment in the Nation's 
energy infrastructure.'' 84 FR 13495, 13496 (April 15, 2019). It is 
noteworthy that, even in the context of directing EPA to initiate 
changes to a water quality protection rule, the executive order did not 
direct the Agency to consider the water quality consequences of any 
such changes. EPA issued the proposed rule on August 22, 2019.\21\ EPA 
promulgated a final rule on July 13, 2020. Clean Water Act Section 401 
Certification Rule, 85 FR 42210 (July 13, 2020) (``2020 Rule'').
---------------------------------------------------------------------------

    \21\ Updating Regulations on Water Quality Certifications, 84 FR 
44080 (August 22, 2019).
---------------------------------------------------------------------------

    The 2020 Rule reaffirmed that Federal agencies unilaterally set the 
reasonable period of time, clarified that the certification requirement 
was triggered by a point source discharge from a federally licensed or 
permitted activity into ``waters of the United States,'' and reaffirmed 
that certifying authorities may explicitly waive certification. The 
2020 Rule also introduced several new features, including one that 
allowed Federal agencies to review certification decisions for 
compliance with the 2020 Rule's requirements and, if the certification 
decision did not comply with these requirements, allowed Federal 
agencies to deem such non-compliant certifications as waived. The 2020 
Rule also prohibited a certifying authority from requesting a project 
applicant to withdraw and resubmit a certification request and rejected 
the scope of certification review (``activity as a whole'') affirmed by 
the Supreme Court in PUD No. 1 of Jefferson County v. Washington 
Department of Ecology, 511 U.S. 700 (1994), in favor of a more limiting 
interpretation (``discharge-only'' approach) favored by two dissenting 
Justices in that case.
    Following publication, the 2020 Rule was challenged in three 
Federal district courts by states, Tribes, and non-governmental 
organizations.\22\ Industry stakeholders and eight states intervened on 
behalf of EPA to defend the 2020 Rule. On October 21, 2021, following 
briefing and a hearing on EPA's motion for remand without vacatur, the 
U.S. District Court for the Northern District of California both 
remanded and vacated the 2020 Rule. In re Clean Water Act Rulemaking, 
568 F. Supp. 3d 1013 (N.D. Cal. 2021) (reversed and remanded by 60 
F.4th 583 (9th Cir. 2023)). The court found that vacatur was 
appropriate ``in light of the lack of reasoned decision-making and 
apparent errors in the rule's scope of certification, indications that 
the rule contravenes the structure and purpose of the Clean Water Act, 
and that EPA itself has signaled that it could not or would not adopt 
the same rule upon remand.'' Id. at 1026-27. The court order required a 
temporary return to EPA's 1971 Rule until EPA finalized a new rule.\23\ 
After the Ninth Circuit denied intervenors' motion for stay pending 
appeal on February 24, 2022, intervenors filed an application for a 
stay of the vacatur pending appeal in the Supreme Court on March 21, 
2022. On April 6, 2022, the U.S. Supreme Court granted the application 
for a stay of the vacatur pending resolution of the appeal of the 
vacatur in the Ninth Circuit. Louisiana v. Am. Rivers, No. 21A539 (S. 
Ct. April 6, 2022). On February 21, 2023, the Ninth Circuit reversed 
the remand with vacatur and remanded the case back to the U.S. District 
Court for the Northern District of California for further proceedings. 
In Re Clean Water Act Rulemaking, No. 21-16958 (9th Cir. February 21, 
2023).
---------------------------------------------------------------------------

    \22\ In Re Clean Water Act Rulemaking, No. 3:20-cv-04636-WHA 
(N.D. Cal.); Delaware Riverkeeper et al. v. EPA, No. 2:20-cv-03412 
(E.D. Pa.); S.C. Coastal Conservation League v. EPA, No. 2:20-cv-
03062 (D.S.C.).
    \23\ The two other courts also remanded the 2020 Rule to EPA, 
but without vacatur. Order, Delaware Riverkeeper v. EPA, No. 2:20-
cv-03412 (E.D. Pa. August 6, 2021) (determining that vacatur was not 
appropriate because the court ``has not yet, and will not, make a 
finding on the substantive validity of the Certification Rule''); 
Order, S.C. Coastal Conservation League v. EPA, No. 2:20-cv-03062 
(D.S.C. August 2, 2021) (remanding without vacating).
---------------------------------------------------------------------------

4. Executive Order 13990 and Review of the 2020 Rule
    On January 20, 2021, President Biden signed Executive Order 13990, 
Protecting Public Health and the Environment and Restoring Science to 
Tackle the Climate Crisis (Order). 86 FR 7037 (published January 25, 
2021, signed January 20, 2021). The Order provides that ``[i]t is, 
therefore, the policy of my Administration to listen to the science; to 
improve public health and protect our environment; to ensure access to 
clean air and water; to limit exposure to dangerous chemicals and 
pesticides; to hold polluters accountable, including those who 
disproportionately harm communities of color and low-income 
communities; to reduce greenhouse gas emissions; to bolster resilience 
to the impacts of climate change; to restore and expand our national 
treasures and monuments; and to prioritize both environmental justice 
and the creation of the well-paying union jobs necessary to deliver on 
these goals.'' Id. at 7037, Section 1. The Order ``directs all 
executive departments and agencies (agencies) to immediately review 
and, as appropriate and consistent with applicable law, take action to 
address the promulgation of Federal regulations and other actions 
during the last 4 years that conflict with these important national 
objectives, and to immediately commence work to confront the climate 
crisis.'' Id. ``For any such actions identified by the agencies, the 
heads of agencies shall, as appropriate and consistent with applicable 
law, consider suspending, revising, or rescinding the agency actions.'' 
Id., section 2(a). The Order also revoked Executive Order 13868 of 
April 10, 2019 (Promoting Energy Infrastructure and Economic Growth), 
which initiated development of the 2020 Rule, and specifically 
identified the 2020 Rule for review. See Fact Sheet: List of Agency 
Actions for Review, available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/fact-sheet-list-of-agency-actions-for-review/ (last visited on January 27, 2022).
    EPA reviewed the 2020 Rule in accordance with Executive Order 13990 
and, in the spring of 2021, determined that it would propose revisions 
to the 2020 Rule through a new rulemaking effort. See Notice of 
Intention to Reconsider and Revise the Clean Water Act Section 401 
Certification Rule, 86

[[Page 66565]]

FR 29541 (June 2, 2021). EPA considered several factors in making this 
determination, including but not limited to the text of CWA section 
401; congressional intent and the cooperative federalism framework of 
CWA section 401; concerns raised by stakeholders about the 2020 Rule, 
including implementation-related feedback; the principles outlined in 
the Executive Order; and issues raised in litigation challenging the 
2020 Rule. Id. In particular, the Agency identified substantial 
concerns about whether portions of the 2020 Rule impinged on the 
cooperative federalism principles central to CWA section 401. The 
Agency identified this and other concerns as they related to different 
provisions of the 2020 Rule, including certification requests, the 
reasonable period of time, scope of certification, certification 
actions and Federal agency review, enforcement, and modifications. See 
id. at 29543-44.
    Agencies have inherent authority to reconsider past decisions and 
to revise, replace, or repeal a decision to the extent permitted by law 
and supported by a reasoned explanation. FCC v. Fox Television 
Stations, Inc., 556 U.S. 502, 515 (2009) (``Fox''); Motor Vehicle Mfrs. 
Ass'n of the U.S., Inc. v. State Farm Mutual Automobile Ins. Co., 463 
U.S. 29, 42 (1983); see also Encino Motorcars, LLC v. Navarro, 579 U.S. 
211, 221 (2016) (``Agencies are free to change their existing policies 
as long as they provide a reasoned explanation for the change.''). Such 
a decision need not be based upon a change of facts or circumstances. A 
revised rulemaking based ``on a reevaluation of which policy would be 
better in light of the facts'' is ``well within an agency's 
discretion.'' Nat'l Ass'n of Home Builders v. EPA, 682 F.3d 1032, 1038 
& 1043 (D.C. Cir. 2012) (citing Fox, 556 U.S. at 514-15). The Agency 
reviewed the 2020 Rule, determined that the rule should be replaced, 
and proposed a replacement rule. Some commenters on the proposed rule 
opposed reconsideration of the 2020 Rule and asserted that EPA did not 
provide a basis for reconsideration of the 2020 Rule. EPA disagrees. 
EPA proposed the replacement rule only after reviewing the statutory 
text, legislative history, case law, and public comments. EPA found, 
and continues to find, it appropriate to revise the 2020 Rule for 
several reasons. First, the 2020 Rule does not represent the best 
statutory interpretation of fundamental concepts, such as the scope of 
certification. See section IV.E in this preamble for further discussion 
on why the 2020 Rule's interpretation of the scope of certification is 
inconsistent with the statutory text of section 401 and authoritative 
Supreme Court precedent interpreting that text. Further, the 2020 Rule 
did not align with the broader water quality protection goals of the 
Act or congressional intent behind development and passage of section 
401. The 2020 Rule also failed to appropriately address adverse impacts 
to state and Tribal water quality, as evidenced in public comment.\24\ 
See e.g., section IV.E of this preamble for further discussion on the 
potential adverse water quality-related impacts of the 2020 Rule's 
interpretation of the scope of certification.
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    \24\ For example, commenters noted that use of the 2020 Rule's 
procedural requirements on certifications for the Army Corps of 
Engineers' (Corps) Nationwide General Permits resulted in 
certifications with conditions or denials being treated as 
constructive waivers. As discussed in section IV.F in this preamble, 
the Agency recognizes that a constructive waiver is a severe 
consequence; a waiver means that a Federal license or permit that 
could adversely impact the certifying authority's water quality 
(i.e., cause noncompliance with water quality requirements) may 
proceed without any input from the certifying authority.
---------------------------------------------------------------------------

    Accordingly, EPA is now finalizing revisions to the 2020 Rule to be 
fully consistent with the 1972 and 1977 CWA amendments, the Agency's 
legal authority, and the principles outlined in Executive Order 13990. 
This final rule revises the 2020 Rule to better reflect the CWA's 
statutory text, the legislative history regarding section 401, and the 
broad water quality protection goals of the Act. In addition, the final 
rule clarifies certain aspects of section 401 implementation that have 
evolved in response to over 50 years of judicial interpretation and 
certifying authority practice, and it supports an efficient and 
predictable water quality certification process that is consistent with 
the cooperative federalism principles central to the CWA and section 
401.

D. Summary of Stakeholder Outreach

    Following the publication of EPA's notice of intent to revise the 
2020 Rule, the Agency opened a public docket to receive written pre-
proposal recommendations for a 60-day period beginning on June 2, 2021 
and concluding on August 2, 2021. The Agency received nearly 3,000 
recommendations from members of the public, which can be found in the 
pre-proposal docket. See Docket ID No. EPA-HQ-OW-2021-0302. The Federal 
Register publication requested feedback related to key issues 
identified during implementation of the 2020 Rule, including but not 
limited to issues regarding pre-filing meeting requests, certification 
requests, reasonable period of time, scope of certification, 
certification actions and Federal agency review, enforcement, 
modifications, neighboring jurisdictions, data and other information, 
and implementation coordination. See 86 FR 29543-44 (June 2, 2021).
    EPA also held a series of virtual listening sessions for certifying 
authorities (June 14, June 23, and June 24, 2021), project applicants 
(June 15, 2021), and the public (June 15, and June 23, 2021) to gain 
further pre-proposal input. See id. at 29544 (announcing EPA's 
intention to hold multiple webinar-based listening sessions). EPA also 
met with stakeholders upon request during development of the proposed 
rule. More information about the outreach and engagement conducted by 
EPA during the pre-proposal input period can be found in Docket ID No. 
EPA-HQ-OW-2022-0128. Additionally, EPA also met with other Federal 
licensing and permitting agencies to solicit feedback on the Federal 
Register publication. At the virtual listening sessions, the Agency 
gave a presentation that provided background on section 401 and prior 
Agency actions and sought input on the Agency's intent to revise the 
2020 Rule and the specific issues included in the Federal Register 
publication described above.
    The Agency heard from stakeholders representing a diverse range of 
interests and positions and received a wide variety of recommendations 
during this pre-proposal outreach process. Some certifying authorities 
expressed concern about the limited role of states and Tribes under the 
2020 Rule, and they called for increased flexibility in implementing 
section 401 to fully protect their water resources. During the project 
proponent listening session, project proponents shared feedback about 
the need to streamline the certification process and recommended that 
the new rule prevent delays in determining certification decisions. In 
the public listening sessions, speakers from non-governmental 
environmental and water conservation organizations reinforced the idea 
that states and Tribes should be accorded greater deference in the 
certification process. An overarching theme articulated by many 
speakers from various stakeholder groups was the need for EPA's new 
rule to provide increased guidance and clarity.
    The Agency also initiated a Tribal consultation and coordination 
process on June 7, 2021. The Agency engaged with Tribes over a 90-day 
consultation period during development of the

[[Page 66566]]

proposed rule that concluded on September 7, 2021, including two Tribal 
consultation kickoff webinars on June 29, 2021, and July 7, 2021. The 
Agency received consultation letters from eight Tribes and three Tribal 
organizations. The Agency did not receive any requests for consultation 
during that time, although several Tribes expressed an interest in 
receiving additional information and ongoing engagement throughout the 
rulemaking process. Several Tribes commented that the 2020 Rule 
impaired or undermined Tribal sovereignty and their ability to protect 
Tribal waters. Many Tribes provided input regarding section 401 
certification process improvements. Most Tribes were generally positive 
about a provision for a pre-filing meeting request, however, some had 
concerns that the 30-day wait period (before a project proponent could 
request certification) is very rigid and preferred flexibility in 
allowing certifying authorities to waive the 30-day requirement. Some 
Tribes expressed ``the reasonable period of time'' should start when 
the application is deemed complete, not when the initial request for 
certification is received. Most Tribes argued that the 2020 Rule's 
narrowing of the scope of certification was inconsistent with 
congressional intent for Tribes and states to have an effective tool to 
protect the quality of waters under their jurisdiction. A few Tribal 
organizations expressed concern that current implementation of section 
401(a)(2) does not protect off-reservation treaty rights from 
discharges. Additional information about the Tribal consultation 
process can be found in section VI.F in this preamble and the ``Summary 
Report of Tribal Consultation and Engagement for the Clean Water Act 
Section 401 Water Quality Certification Improvement Rule,'' which is 
available in the docket for this final rule.
    The Agency signed a proposed rule updating the CWA section 401 
water quality certification process on June 1, 2022. On June 9, 2022, 
the Agency published the proposed rulemaking in the Federal Register, 
87 FR 35318 (June 9, 2022), which initiated a 60-day public comment 
period that lasted through August 8, 2022. EPA held a virtual public 
hearing on July 18, 2022, and hosted a series of stakeholder listening 
sessions throughout June 2022, including one listening session for 
project proponents on June 14, 2022, three listening sessions for 
States and territories on June 15, 22, and 28, 2022, and three 
listening sessions for Tribes on June 15, 22, and 28, 2022. The Agency 
also hosted a Federal agency listening session on June 14, 2022.
    In finalizing the proposed rule, the Agency reviewed and considered 
approximately 27,000 comments received on the proposed rulemaking from 
a broad spectrum of interested parties. Commenters provided a wide 
range of feedback on the proposal, including the substantive and 
procedural aspects of the certification process, how the proposed rule 
would impact stakeholders, and the legal basis for the proposed rule. 
The Agency discusses comments received and responses in the applicable 
sections of the preamble to this rule. A complete response to comments 
document is available in the docket for this rule (Docket ID No. EPA-
HQ-OW-2022-0128).

IV. Final Rule

    EPA is the primary agency responsible for developing regulations 
and guidance to ensure effective implementation of CWA programs, 
including section 401. See 33 U.S.C. 1251(d), 1361(a). The Agency is 
finalizing revisions to the section 401 regulations to better align its 
regulations with the cooperative federalism and water quality 
protection principles enshrined in the text and legislative history of 
the CWA. Additionally, the final rule provides greater clarity and 
acknowledgment of essential water quality protection concepts from 
Executive Order 13990. In addition to providing a necessary regulatory 
reset on significant issues such as the scope of certification, the 
reasonable period of time, and Federal agency review, the Agency is 
finalizing its revisions to clarify and update the regulatory text to 
foster a more efficient and predictable certification process. As 
demonstrated by the extensive pre-proposal and proposed rule outreach, 
this rulemaking is well-informed by stakeholder input on all aspects of 
the section 401 certification process.
    In addition to the revisions to part 121, EPA is also finalizing 
conforming changes to the part 124 regulations governing CWA section 
401 certifications for EPA-issued NPDES permits. The final part 121 
regulations apply to all Federal licenses or permits subject to CWA 
section 401 certification, including EPA-issued NPDES permits.\25\ The 
purpose of these conforming changes is to ensure that the part 124 
regulations are consistent with the revised provisions of part 121. In 
the proposal for this rule, EPA requested comment on whether the Agency 
had identified all changes to the part 124 regulations that conflict or 
potentially conflict with the proposal and therefore warrant amendment. 
EPA is finalizing targeted revisions to specific provisions of the 
NPDES regulations at 40 CFR 124.53, 124.54, and 124.55 that implement 
section 401. Specifically, EPA is finalizing targeted revisions to 40 
CFR 124.53(b) through (e), 124.54(a) and (b), and 124.55(a) through 
(d). In addition, EPA is finalizing targeted conforming revisions to 
the regulations at 40 CFR 122.4(b), 122.44(d)(3), and 
122.62(a)(3)(iii). EPA explains in further detail the reasons for each 
conforming change (beyond mere technical revisions) in the preamble 
discussion at sections IV.C, IV.D, IV.E, IV.F, IV.G, and IV.I of this 
preamble.
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    \25\ See Sec.  121.1(c), (f) (defining ``Federal agency'' to 
mean ``any agency of the Federal Government to which application is 
made for a Federal license or permit that is subject to Clean Water 
Act section 401,'' and similarly defining ``license or permit'' to 
mean ``any license or permit issued or granted by an agency of the 
Federal Government to conduct any activity which may result in any 
discharge into waters of the United States'').
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    EPA is also finalizing several revisions to the definitions section 
of the final rule at Sec.  121.1. EPA is finalizing minor revisions to 
the definition of ``Administrator,'' located at Sec.  121.1(a), to 
remove the reference to authorized representatives. Instead, the Agency 
is adding a separate definition for ``Regional Administrator.'' See 
Sec.  121.1(i). The Agency is removing the definition for 
``certification,'' which was located at Sec.  121.1(b) in the 2020 
Rule, because it is not necessary to define the term. Additionally, the 
Agency is removing the definitions for ``certified project'' \26\ and 
``proposed project'' \27\ because the final rule does not include those 
terms. EPA is also clarifying the roles of the stakeholders in the 
certification process. First, the Agency is finalizing non-substantive 
modifications to the definition of ``Federal agency'' located at final 
rule Sec.  121.1(c). Second, the Agency is retaining the term ``project 
proponent'' from the 2020 Rule to define the stakeholder seeking 
certification. 40 CFR 121.1(h). While the term ``applicant'' is used in 
section 401, that term does not clearly reflect and include all the 
stakeholders who might seek certification. For example, Federal 
agencies themselves (and not third-party applicants) seek section 401 
certification on the issuance of general permits (e.g., Corps' 
Nationwide Permits, EPA's Construction General Permits). Additionally, 
contractors or other agents often seek certification on

[[Page 66567]]

behalf of a project applicant. The term ``project proponent'' is meant 
to include the applicant for a Federal license or permit, as well as 
any other entity that may seek certification (e.g., agent of an 
applicant or a Federal agency, such as EPA when it is the permitting 
authority for a National Pollutant Discharge Elimination System (NPDES) 
permit). Lastly, the Agency is finalizing non-substantive changes to 
the definition of ``certifying authority'' located at final rule Sec.  
121.1(b). Other revisions to regulatory definitions are discussed 
throughout this preamble.
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    \26\ 40 CFR 121.1(d) (2020).
    \27\ 40 CFR 121.1(k) (2020).
---------------------------------------------------------------------------

    This section of the final rule preamble includes 12 sub-sections 
that each discuss: (1) the final rule provisions, (2) a summary of the 
Agency's final rule rationale and public comments (where applicable), 
and (3) implementation considerations for the final rule provisions 
(where applicable). Section IV.A of this preamble discusses when 
section 401 certification is required. Sections IV.B through IV.F of 
this preamble walk readers through the section 401(a)(1) certification 
process in chronological order (i.e., pre-filing meeting request 
through the certification decision). Section IV.G of this preamble 
discusses the Federal agency review process that follows the section 
401(a)(1) certification process. Section IV.K of this preamble 
discusses the section 401(a)(2) neighboring jurisdictions process that 
occurs after the section 401(a)(1) certification process (if the 
certification was granted or waived), but before the Federal license or 
permit may be issued. Sections IV.I through IV.J of this preamble 
discuss events that may occur after the certification is granted until 
the Federal license or permit expires, including certification 
modifications (section IV.I of this preamble) and enforcement and 
inspection (section IV.J of this preamble). Section IV.H of this 
preamble discusses EPA's roles under section 401, including EPA's role 
as the certifying authority. Section IV.L of this preamble discusses 
the new provisions for Tribes to obtain treatment in a similar manner 
as a state (TAS) for section 401 or section 401(a)(2). Section IV.M of 
this preamble discusses general implementation considerations for this 
final rule. Lastly, section IV.N discusses severability of this final 
rule. This final rule is structured in a manner to clearly and 
transparently convey to stakeholders the CWA section 401 certification 
and post-certification processes.

A. When Section 401 Certification Is Required

1. What is the Agency finalizing?
    EPA is finalizing the regulatory text located at final rule Sec.  
121.2 to affirm that a ``[c]ertification or waiver is required for any 
Federal license or permit that authorizes any activity which may result 
in any discharge from a point source into waters of the United 
States.'' 40 CFR 121.2. The regulatory text clarifies the circumstances 
under which a section 401 certification is required and is consistent 
with the Agency's longstanding interpretation of section 401, including 
in the 2020 Rule, that an applicant for a Federal license or permit to 
conduct any activity that may result in any discharge from a point 
source \28\ into waters of the United States must obtain a section 401 
certification or waiver. The Agency made minor revisions to the 
proposed text at Sec.  121.2 to better match the statutory language in 
section 401(a)(1) and clarify when certification is required, including 
adding the word ``Federal'' before license or permit, ``any'' before 
both ``activity'' and ``discharge,'' and changing from ``a water of the 
United States'' to ``waters of the United States.'' To be clear, these 
changes do not represent a change in substance from proposal.
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    \28\ For ease of discussion and comprehension, the Agency uses 
the term ``discharge'' interchangeably with the more precise 
``discharge from a point source'' or ``point source discharge.'' As 
discussed in section IV.A.2.c of this preamble, several years after 
PUD No. 1, the Ninth Circuit clarified that the type of 
``discharge'' that triggers section 401's certification requirement 
is a ``point source'' discharge. ONDA v. Dombeck, 172 F.3d 1092 (9th 
Cir. 1998).
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2. Summary of Final Rule Rationale and Public Comment
a. Federally Licensed or Permitted Activity
    Section 401 certification is required for any Federal license or 
permit to conduct any activity that may result in any discharge into 
``waters of the United States.'' 33 U.S.C. 1341(a)(1). The Agency is 
retaining the 2020 Rule's definition for a ``license or permit'' with 
minor modifications to clarify that section 401 is required for any 
federally licensed or permitted activity which may result in any 
discharge into waters of the United States. EPA is also adding the word 
``Federal'' before ``license or permit'' throughout the final rule to 
further clarify that the license or permit subject to certification 
must be Federal.
    The CWA is clear that the license or permit prompting the need for 
a section 401 certification must be a Federal license or permit, that 
is, one issued by a Federal agency. This conclusion 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). Additionally, the legislative 
history of the CWA amendments of 1977, discussing state assumption of 
section 404, 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).
    Section 401 certification is not required for licenses or permits 
issued by a state or Tribe that administers a federally approved permit 
program. For example, states and Tribes may be authorized to administer 
the section 402 NPDES permitting program \29\ or the section 404 dredge 
and fill permitting program.\30\ Permits issued by states or Tribes 
pursuant to their authorized or approved program are not subject to 
section 401 of the CWA as the programs operate in lieu of the Federal 
program, under state or Tribal authorities. The state or Tribal permit 
is not a ``Federal'' permit for purposes of section 401.
---------------------------------------------------------------------------

    \29\ 33 U.S.C. 1342(b).
    \30\ 33 U.S.C. 1344(g).
---------------------------------------------------------------------------

    The Agency is not providing an exclusive list of Federal licenses 
and permits that may be subject to section 401. The CWA itself does not 
list specific Federal licenses and permits that are subject to section 
401 certification requirements. The most common examples of Federal 
licenses or permits that may be subject to section 401 certification 
are CWA section 402 NPDES permits issued by EPA in jurisdictions where 
the EPA administers the NPDES permitting program; CWA section 404 
permits for the discharge of dredged or fill material permits issued by 
the Army Corps of Engineers as well as Rivers and Harbors Act sections 
9 and 10 permits issued by the Army Corps of Engineers; and hydropower 
and interstate natural gas pipeline licenses issued by the Federal 
Energy Regulatory Commission (FERC).\31\ See

[[Page 66568]]

section IV.A.3 infra for further discussion on the types of Federal 
licenses or permits subject to section 401.
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    \31\ The Corps also requires section 401 certification for its 
civil works projects, even though there is no Federal license or 
permit associated with those projects. The Corps' current 
regulations require the Corps to seek section 401 certification for 
discharges of dredged material or fill into waters of the United 
States. See 33 CFR 336.1(a)(1) (``The CWA requires the Corps to seek 
state water quality certification for discharges of dredged or fill 
material into waters of the U.S.''); 33 CFR 335.2 (``[T]he Corps 
does not issue itself a CWA permit to authorize Corps discharges of 
dredged material or fill material into U.S. waters but does apply 
the 404(b)(1) guidelines and other substantive requirements of the 
CWA and other environmental laws.''). In these instances, EPA 
understands that the Corps will follow the certification process as 
described in the final rule.
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b. Potential for a Discharge To Occur
    Consistent with the 2020 Rule and the proposal, a certification or 
waiver is required for any Federal license or permit that authorizes 
any activity which may result in any discharge from a point source into 
waters of the United States. 40 CFR 121.2. The presence of, or 
potential for, a discharge is a key determinant for when a water 
quality certification is required. 33 U.S.C. 1341(a)(1) (``A 
certification is required for ``a Federal license or permit to conduct 
any activity . . . which may result in any discharge into the navigable 
waters . . .'') (emphasis added); see 40 CFR 121.2. Most commenters 
supported the clarification in proposed Sec.  121.2 that section 401 is 
triggered by a point source discharge as well as when any Federal 
license or permit authorizes any activity that may result in any point 
source discharge. A few commenters, seeming to refer to the proposal 
preamble as opposed to regulatory text, expressed concern that the 
addition of the word ``potential'' would change the universe of 
projects requiring 401 certification; EPA disagrees. EPA's approach is 
consistent with the plain language of the statutory phrase ``may result 
in any discharge.'' The phrase ``may result'' contemplates that both 
the presence of, and/or potential for, any discharge triggers the 
requirement for a section 401 certification. This approach is also 
consistent with the Agency's longstanding implementation of section 
401. See, e.g., 85 FR 42236 (July 13, 2020) (``Under this final rule, 
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.''); 2010 Handbook at 4 (rescinded in 2019, see supra) (``It is 
important to note that [section] 401 is triggered by the potential for 
a discharge; an actual discharge is not required.'').
    EPA requested comment on whether it should develop a specific 
process or procedure for project proponents, certifying authorities, 
and/or Federal agencies to follow to determine whether a federally 
licensed or permitted activity may result in a discharge and therefore 
require section 401 certification. Some commenters asserted that EPA 
should not develop such a process because certifying authorities and/or 
Federal agencies have well-established practices and experience 
determining whether an activity will require a section 401 
certification, including one commenter who asserted that an EPA-defined 
process could disrupt established efficiencies. Conversely, some 
commenters asserted that EPA should develop a process for determining 
when a federally licensed or permitted activity may result in a 
discharge and require section 401 certification for various reasons, 
asserting that such a process would allow for consistent 
implementation.
    Based on comments, the Agency is not developing a specific process 
or procedure for project proponents, certifying authorities, and/or 
Federal agencies to follow to determine whether a federally licensed or 
permitted activity may result in a discharge and therefore require 
section 401 certification. After more than 50 years of implementing 
section 401, EPA's experience is that Federal agencies and certifying 
authorities are well-versed in the practice of determining which 
federally licensed or permitted projects may result in discharges. 
Ultimately, the project proponent is responsible for obtaining all 
necessary permits and authorizations, including a section 401 
certification. If there is a potential for a project to discharge into 
``waters of the United States,'' a Federal agency cannot issue the 
Federal license or permit unless a section 401 certification is granted 
or waived by the certifying authority. EPA recommends that project 
proponents engage in early discussions with certifying authorities and 
Federal agencies to determine whether their federally licensed or 
permitted activity will require section 401 certification.
c. Discharge
    Consistent with the Agency's longstanding position and the 2020 
Rule, EPA is finalizing that a discharge from a point source (or 
``point source discharge''), or potential for one, is required to 
trigger section 401. See 40 CFR 121.2. Additionally, the Agency is 
clarifying that, consistent with S.D. Warren v. Maine Board of 
Environmental Protection, 547 U.S. 370 (2006), discussed below, a point 
source discharge triggering section 401 does not require the addition 
of pollutants. Although the Agency is retaining the same interpretation 
of ``discharge'' as the 2020 Rule, to simplify the regulation, the 
Agency is removing the definition of ``discharge'' \32\ and instead 
incorporating those definitional concepts into the regulatory text at 
final rule Sec.  121.2, which discusses when certification is required. 
This simpler approach will provide greater clarity about the nature of 
discharges that trigger the need for section 401 certification or 
waiver.
---------------------------------------------------------------------------

    \32\ 40 CFR 121.1(f) (2020).
---------------------------------------------------------------------------

    The CWA provides that ``[t]he term `discharge' when used without 
qualification includes a discharge of a pollutant, and a discharge of 
pollutants.'' 33 U.S.C. 1362(16) (emphasis added). The CWA defines 
``discharge of a pollutant'' to mean ``any addition of any pollutant to 
navigable waters from any point source.'' Id. at 1362(12). EPA and the 
Corps \33\ have long interpreted the definition of ``discharge'' in way 
that gives meaning to the word ``includes'' in the definition. EPA and 
the Corps have interpreted the definition of ``discharge'' to be 
distinct from the term ``discharge of pollutant'' and therefore 
encompassing both the discharge without the addition of pollutants and 
the ``discharges of pollutants.'' Many commenters supported the 
Agency's clear articulation of its longstanding interpretation that any 
discharge triggering a section 401 certification does not require an 
addition of pollutants. On the other hand, some commenters argued that 
eliminating the requirement that there be an addition of pollutants 
goes beyond the plain language of CWA section 401. As an initial 
matter, the final rule's interpretation of discharge is not a change 
from longstanding practice, including the 2020 Rule. See 85 FR 42237 
(``The EPA has concluded that unlike other CWA regulatory provisions, 
section 401 is triggered by the potential for any unqualified 
discharge, rather than by a discharge of pollutants.''). EPA strongly 
disagrees that the plain language of section 401 requires that any 
discharge triggering section 401 include an addition of pollutants. As 
discussed above, the statutory definition of ``discharge'' is broad and 
is not limited to a discharge of pollutants. Additionally, as discussed 
below, this interpretation is consistent with the text

[[Page 66569]]

of the statute as interpreted by the U.S. Supreme Court.
---------------------------------------------------------------------------

    \33\ In the context of section 404, the Corps does the day-to-
day work of conducting jurisdictional determinations though EPA has 
final administrative authority over the scope of CWA jurisdiction. 
Administrative Authority to Construe Sec.  404 of the Federal Water 
Pollution Control Act (``Civiletti Memorandum''), 43 Op. Att'y Gen. 
197 (1979).
---------------------------------------------------------------------------

    In S.D. Warren, a hydropower dam operator asserted that its dams 
did not result in discharges that would require section 401 
certification because the dams only released water that ``adds nothing 
to the river that was not there above the dams.'' 547 U.S. 370, 374-75, 
378 (2006). The Court stated that the term discharge is broader than 
``discharge of a pollutant'' and ``discharge of pollutants.'' Id. 
Observing that the term ``discharge'' is not specifically defined in 
the statute, the Court applied the ordinary dictionary meaning, 
``flowing or issuing out.'' Id. In applying this meaning to 
hydroelectric dams, the Court held that releasing water through a dam 
constituted a discharge for purposes of section 401 and, thus, the CWA 
provided states with the ability to address water quality impacts from 
these releases through the certification process. Id. at 385-86. The 
Court explicitly rejected the argument that an ``addition'' was 
necessary for a ``discharge,'' stating ``[w]e disagree that an addition 
is fundamental to any discharge.'' Id. at 379 n.5.
    While the Supreme Court has held that the addition of a pollutant 
is not necessary for a discharge to prompt the need for a CWA section 
401 certification, the Ninth Circuit has held that such certification-
triggering discharges must be from point sources. Or. Natural Desert 
Ass'n (ONDA) v. Dombeck, 172 F.3d 1092, 1095-99 (9th Cir. 1998) 
(``ONDA'').\34\ In ONDA, the Ninth Circuit addressed the issue of 
whether ``the term `discharge' in [section 401] includes releases from 
nonpoint sources as well as releases from point sources.'' Id. at 1094-
95. The court held that the ``term `discharge' in [section 401] is 
limited to discharges from point sources.'' Id. at 1097. The court 
found its holding to be consistent with the Supreme Court's holding in 
PUD No. 1. 511 U.S. 700 (1994).\35\ The court in ONDA found that 
although PUD No. 1 held that certification conditions may address water 
quality impacts from the certified activity beyond its discharges, a 
triggering discharge is still required for section 401 to apply and 
``PUD No. 1 did not broaden the meaning of the term `discharge' under 
Sec.  1341.'' Id. at 1098-99.\36\ EPA has consistently implemented the 
Ninth Circuit's interpretation of section 401 as requiring the 
potential for a point source discharge (with or without the addition of 
pollutants) to trigger section 401. See 85 FR 42238; 2010 Handbook at 
5-6 (rescinded in 2019, see supra) (discussing requirement of section 
401 certification when there is a point source discharge).\37\
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    \34\ In ONDA, the United States took the position that the term 
``discharge'' at 33 U.S.C. 1362(14) did not include nonpoint sources 
because there was nothing in the definition or the legislative 
history of the term that suggested it extended to nonpoint source 
pollution. Brief of the United States in Or. Natural Desert Ass'n v. 
Dombeck, Nos. 97-3506, 97-35112, 97-35115, at 18-21 (9th Cir. 1997). 
Additionally, the United States argued that section 401's 
legislative history did not suggest that ``discharge'' included 
nonpoint sources. Id. at 23-24.
    \35\ See section IV.E of this preamble for further discussion of 
on PUD No 1.
    \36\ Following the Supreme Court's decision in S.D. Warren that 
the addition of a pollutant was not needed to trigger section 401, 
the Ninth Circuit reaffirmed its earlier decision that section 401 
was only triggered by a discharge from a point source. Or. Natural 
Desert Ass'n v. USFS, 550 F.3d 778 (9th Cir. 2008). The Ninth 
Circuit held that ``[n]either the ruling nor the reasoning in S.D. 
Warren is inconsistent with this court's treatment of nonpoint 
sources in [section] 401 of the Act, as explained in [ONDA].'' Id. 
at 785.
    \37\ The United States argued that section 401 requires the 
discharge to be from a point source in briefs filed before the Ninth 
Circuit. See, e.g., Briefs of the United States in ONDA v. Dombeck, 
Nos. 97-3506, 97-35112, 97-35115 (9th Cir. 1997), ONDA v. USFS, No. 
08-35205 (9th Cir. 2008).
---------------------------------------------------------------------------

    EPA is finalizing the text at Sec.  121.2, including the phrase 
``from a point source,'' because it is consistent with the case law 
discussed above and the Agency's longstanding approach, and because it 
provides greater clarity about the nature of discharges that trigger 
the need for section 401 certification or waiver. However, just as the 
Agency is not defining in regulation the term ``discharge'' for 
purposes of section 401, the Agency is not providing a distinct 
definition of the term ``point source.'' Rather, the Agency will 
continue to rely on the definition of ``point source'' in section 
502(14) of the CWA.\38\ For example, courts have concluded that 
bulldozers, mechanized land clearing machinery, and similar types of 
equipment used for discharging dredge or fill material are ``point 
sources'' for purposes of the CWA. See, e.g., Avoyelles Sportsmen's 
League v. Marsh, 715 F.2d 897 (5th Cir. 1983); United States v. 
Larkins, 657 F. Supp. 76 (W.D. Ky. 1987), aff'd, 852 F.2d 189 (6th Cir. 
1988). On the other hand, courts have concluded that a water withdrawal 
is not a point source discharge and therefore does not require a water 
quality certification.\39\
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    \38\ The CWA 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.'' 33 U.S.C. 1362(14).
    \39\ See, e.g., North Carolina v. FERC, 112 F.3d 1175, 1187 
(D.C. Cir. 1997) (holding that withdrawal of water from lake does 
not constitute discharge for CWA section 401 purposes).
---------------------------------------------------------------------------

    Several commenters supported adding the phrase ``from a point 
source'' at proposed Sec.  121.2. These commenters stated that the 
change is consistent with applicable case law and the text and 
structure of the CWA. In addition, these commenters appreciated that 
EPA clarified that section 401 was triggered by any discharge from a 
point source versus a discharge from a nonpoint source. Conversely, 
other commenters opposed adding the phrase ``from a point source'' at 
proposed Sec.  121.2, arguing that EPA's reliance on the definition of 
point source at 33 U.S.C. 1362(14) implicitly requires the addition of 
pollutants to trigger section 401 certification in contravention of SD 
Warren. The commenters also asserted that it appears to conflict with 
EPA's concurrent proposal that the scope of review is restored to the 
``activity as a whole.'' A few commenters suggested that if EPA did not 
strike the phrase ``from a point source,'' the rule should state that 
certification is triggered regardless of whether the discharge from a 
point source results in an addition of pollutants.
    EPA disagrees with commenters asserting that the definition of 
``point source'' located at 33 U.S.C. 1362(14) implicitly requires the 
addition of pollutants. The CWA provides that a point source is a 
conveyance ``from which pollutants are or may be discharged.'' 33 
U.S.C. 1362(14) (emphasis added). Given the language of the statute, it 
is reasonable for EPA to conclude that a discharge of pollutants is not 
required for a conveyance to be considered a point source. The Agency 
also disagrees that the requirement of a point source discharge to 
trigger section 401 conflicts with the scope of review. As discussed in 
section IV.E in this preamble, once there is a prerequisite potential 
for a point source discharge into waters of the United States, then the 
certifying authority may evaluate and place conditions on the 
``activity,'' which includes consideration of water quality-related 
impacts from both point sources and nonpoint sources. EPA appreciates 
commenter suggestions regarding regulatory text that states that a 
point source does not need to result in an addition of pollutants. EPA 
is declining to add such language in the regulatory text and instead 
relying on the statutory definition of ``point source.'' However, EPA 
has emphasized this point throughout this section of the preamble and 
will continue to do so in implementation of the final rule.
    Many commenters who provided input on this topic urged EPA to 
revise the regulation to include discharges from both point and 
nonpoint sources.

[[Page 66570]]

These commenters stated that the term ``discharge'' as used throughout 
the CWA means something broader than discharges from point sources, 
citing SD Warren, given that the goal of the CWA is to ``restore and 
maintain the chemical, physical and biological integrity of the 
Nation's waters.'' See 33 U.S.C. 1251(a). The commenters asserted that 
revising the regulation to include discharges from nonpoint sources 
will ensure that states and Tribes are able to exercise their section 
401 authority to protect water quality from federally licensed or 
permitted activities that would result in a nonpoint source discharge. 
One commenter encouraged the Agency to use the statutory language in 
section 401(a)(1) to describe the type of activity that triggers 401 
and asserted that limiting discharges to point sources has no basis in 
the statutory text, while another commenter asserted that the Federal 
Government and the Supreme Court recognized that all discharges trigger 
section 401.
    The Agency disagrees that the term ``discharge'' as used in CWA 
section 401 means something broader than discharges from point sources 
or that it has no basis in the statutory text. As discussed above, the 
ONDA court held that the ``term `discharge' in [section 401] is limited 
to discharges from point sources.'' Id. at 1097. EPA also disagrees 
that the Federal Government has recognized that all discharges trigger 
section 401. As noted above, this was the Federal Government's position 
before the Ninth Circuit in ONDA, see footnote 37, and EPA has 
consistently implemented this view in rulemaking, guidance, and through 
its actions pursuant to CWA section 401. EPA emphasizes that this final 
rule does not prevent or limit certifying authorities from protecting 
their water quality from federally licensed or permitted activities 
that would result in nonpoint source discharges. See 33 U.S.C. 1370. 
With respect to using section 401 certifications to address nonpoint 
source discharges, certifying authorities may consider water quality-
related impacts from nonpoint source discharges after determining that 
the project satisfies the prerequisite potential for a point source 
discharge into waters of the United States.
d. ``Into the Navigable Waters''
    Consistent with the 2020 Rule and proposal, the final rule provides 
that section 401 certification is required for Federal licenses or 
permits that authorize any activity which may result in any discharge 
from a point source into waters of the United States.\40\ 40 CFR 121.2. 
Section 401 states that certification is required for any activity that 
``may result in any discharge into the navigable waters.'' 33 U.S.C. 
1341(a)(1). The term ``navigable waters'' is defined as ``waters of the 
United States, including the territorial seas.'' 33 U.S.C. 1362(7). 
Requiring section 401 certification for any federally licensed or 
permitted activity that may result in any discharge into waters of the 
United States is consistent with the plain language of section 
401(a)(1) and legislative history of the CWA. See H.R. Rep. No. 91-911, 
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.''). This reading is also consistent 
with the Agency's longstanding position and practice. See, e.g., 2010 
Handbook at 3, 5 (rescinded in 2019, see supra) (``Since [section] 401 
certification only applies where there may be a discharge into waters 
of the [United States], how states or tribes designate their own waters 
does not determine whether [section] 401 certification is required.'').
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    \40\ In County of Maui, Hawaii v. Hawaii Wildlife Fund, et al., 
the Supreme Court addressed the question of whether the CWA requires 
a NPDES permit under section 402 of the Act when pollutants 
originate from a point source and travel through groundwater before 
reaching navigable waters. 140 S. Ct. 1462 (2020). The Court held 
that ``the statute requires a permit when there is a direct 
discharge from a point source into navigable waters or when there is 
the functional equivalent of a direct discharge.'' Id. at 1476 
(emphasis in original). The Court articulated several factors that 
may prove relevant for purposes of determining whether a section 402 
permit is required. Id. at 1476-77. Consistent with the rationale of 
the Court's decision in County of Maui, any point source discharge 
that is the functional equivalent of a direct discharge to navigable 
waters would also trigger section 401 if a Federal agency issues the 
applicable license or permit.
---------------------------------------------------------------------------

    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. However, as discussed in section IV.E 
in this preamble, the Agency concludes that while a certifying 
authority is limited to considering impacts to ``waters of the United 
States'' when certifying compliance with the enumerated provisions of 
the CWA, a certifying authority is not so limited when certifying 
compliance with requirements of state or Tribal law that otherwise 
apply to waters of the state or Tribe beyond waters of the United 
States.
3. Implementation
    Although the Agency is not providing an exclusive list of all 
Federal licenses or permits subject to section 401, EPA recognizes that 
there is an array of licenses and permits that may trigger the need to 
seek certification. These may include, but are not limited to, CWA 
section 404 permits issued by the Corps for the discharge of dredge or 
fill material, Rivers and Harbors Act section 10 permits issued by the 
Corps for construction of wharfs, piers, etc., Rivers and Harbors Act 
section 9 permits issued by the Corps (for the construction of dams and 
dikes) and the Coast Guard (for construction of bridges and causeways), 
FERC licenses for the construction and operation of non-Federal 
hydropower projects, FERC certificates for the construction and 
operation of interstate natural gas pipeline projects, shoreline 
permits issued by the Tennessee Valley Authority for shoreline 
construction activities, EPA-issued CWA section 402 permits for the 
discharge of pollutants, nuclear power plant licenses issued by Nuclear 
Regulatory Commission, permits for wineries and distilleries issued by 
the Alcohol and Tobacco Tax and Trade Bureau, and mine plans of 
operation for mining activities on National Forest Service Lands 
approved by the Forest Service. See also Economic Analysis for the 
Final Rule at section 3.4. As discussed above, the operative question 
is whether the federally licensed or permitted activity may result in 
any discharge into waters of the United States.
    Section 401 is not limited to individual Federal licenses or 
permits, but also extends to general Federal licenses and permits such 
as CWA section 404 general permits (including Nationwide General 
Permits, Regional General Permits, and State Programmatic General 
Permits) and CWA section 402 general permits (including the Pesticide 
General Permit, Multi-Sector General Permit for stormwater discharges 
associated with industrial activity, and the Construction General 
Permit for stormwater discharges associated with construction 
activity). Several commenters requested clarification that the section 
401 certification process only applies to individual Federal licenses 
or permits. Another commenter said that it is not clear how the 
proposed rule would apply to nationwide permits and state programmatic 
permits, and further suggested that these permits be exempted from the 
rule. EPA disagrees with these comments. General Federal licenses or 
permits that may result in a discharge into waters of the United States 
are subject to the same requirements under section 401 as an

[[Page 66571]]

individual Federal license or permit. Section 401 does not provide an 
exemption for any Federal licenses or permits that may result in a 
discharge into waters of the United States. Additionally, both case law 
and prior Agency rulemakings and guidance recognize that general 
Federal licenses or permits are subject to section 401 certification. 
See U.S. v. Marathon Development Corp., 867 F.2d 96, 100 (1st Cir. 
1989) (``Neither the language nor history of section 404(e) of the 
Clean Water Act . . . suggests that states have any less authority in 
respect to general permits than they have in respect to individual 
permits.''); 40 CFR 121.5(c), 121.7(d)(2) and (e)(2) (2020) (describing 
requirements for certification on the issuance of a general license or 
permit); 2010 Handbook at 29-30 (rescinded in 2019, see supra) 
(discussing the application of section 401 to general permits). 
Accordingly, EPA cannot adopt commenter suggestions to exempt general 
permits from the certification process.
    Several commenters requested that EPA affirmatively state that the 
section 401 certification process does not apply to ``verifications'' 
of Federal general permit actions; instead, commenters suggested that 
the certification process should occur at the time the Federal general 
permit is issued. Federal agencies seek certification on general 
permits before the permits are issued. Accordingly, final rule Sec.  
121.5 provides the minimum content requirements for all requests for 
certification, including certification for the issuance of a general 
Federal license or permit. If a certifying authority grants or waives 
certification for either a CWA section 402 or 404 general permit, then 
entities seeking coverage under that general permit do not need to 
separately seek certification before doing so. When a certifying 
authority denies certification on a section 402 general permit, EPA can 
issue the general permit for the jurisdictions that granted or waived 
certification but cannot issue the permit for jurisdictions that denied 
certification.\41\ If a certifying authority grants certification with 
conditions on an EPA-issued general permit, then the certification with 
conditions becomes part of the general permit applicable within the 
certifying authority's jurisdiction.
---------------------------------------------------------------------------

    \41\ If a certifying authority denies certification on an EPA-
issued NPDES general permit, dischargers could always apply for an 
individual NPDES permit. That individual permit would also require a 
401 certification.
---------------------------------------------------------------------------

    When a certifying authority denies certification for a CWA section 
404 Nationwide or Regional General Permit, the Corps allows specific 
projects to be covered by the Nationwide or Regional General Permit if 
the project proponent obtains certification from the certifying 
authority for that project. In that instance, a project proponent would 
submit a request for certification in accordance with final rule Sec.  
121.5 for individual Federal licenses or permits. When a certifying 
authority grants certification with conditions on a Nationwide or 
Regional General Permit, the Corps may either incorporate the 
conditions into a state- or Tribe-specific version of the general 
permit or require the project proponent to obtain certification from 
the certifying authority for that project to qualify for the general 
permit.
    As discussed above, section 401 is triggered by a potential point 
source discharge from a federally licensed or permitted activity into 
waters of the United States. A few commenters recommended that the 
Agency explicitly acknowledge that point sources include discharges 
from CWA section 404 dredge and fill activities (e.g., equipment, 
construction activities) in the regulatory text. Considering the broad 
applicability of section 401 to all Federal licenses or permits, the 
Agency does not find it necessary to focus the regulatory text on point 
sources from one type of federally licensed or permitted activity. 
Rather, the Agency intends to rely on the definition of point source at 
33 U.S.C. 1362(14), which defines point source as ``any discernible, 
confined and discrete conveyance . . . from which pollutants are or may 
be discharged.'' As emphasized above, a point source does not require 
the addition of pollutants, but rather is a conveyance from which 
pollutants are or may be discharged. For example, a point source 
includes the turbine or tailrace of a hydroelectric dam, and bulldozers 
or other construction equipment. In both instances, the equipment 
(e.g., turbine, bulldozer) acts as a discernable, confined, or discrete 
conveyance that pollutants could be discharged from, but the addition 
or existence of such pollutants is not necessary for the equipment to 
be considered a point source.

B. Pre-Filing Meeting Request

1. What is the Agency finalizing?
    EPA is finalizing the requirement that ``[t]he project proponent 
shall request a pre-filing meeting with the certifying authority at 
least 30 days prior to submitting a request for certification in 
accordance with the certifying authority's applicable submission 
procedures, unless the certifying authority waives or shortens the 
requirement for the pre-filing meeting request.'' 40 CFR 121.4. This 
requirement will ensure that certifying authorities have an 
opportunity, should they desire it, to receive early notification and 
to discuss the project with the project proponent before the statutory 
timeframe for review begins. If a certifying authority does not 
communicate whether it wants to waive or shorten the pre-filing meeting 
request requirement, then the project proponent must wait 30 days from 
requesting a pre-filing meeting to submit its request for 
certification. The Agency is not defining the ``applicable submission 
procedures'' or other procedural aspects of a pre-filing meeting 
request or subsequent meeting. Accordingly, the Agency is finalizing 
the removal of the 2020 Rule's recommendations for pre-filing meetings. 
See 40 CFR 121.4(c) and (d) (2020). The Agency is also finalizing the 
removal of regulatory text discussing the certifying authority's 
obligations in response to a pre-filing meeting request because the 
final rule does not compel any action by the certifying authority. See 
40 CFR 121.4(b) (2020).
2. Summary of Final Rule Rationale and Public Comment
    The 2020 Rule introduced the pre-filing meeting request requirement 
to encourage early coordination between parties to identify needs and 
concerns before the start of the reasonable period of time. EPA 
interpreted the term ``request for certification'' in CWA section 
401(a)(1) as being broad enough to include an implied requirement that 
a project proponent shall also provide the certifying authority with 
advance notice that a certification request is imminent. The time (no 
longer than one year) that certifying authorities are provided under 
the CWA to act on a certification request (or else waive the 
certification requirements of section 401(a)) provided additional 
justification in this context to interpret the term ``request for 
certification'' to allow EPA to require a pre-filing meeting request.
    The 2020 Rule proposal originally limited the pre-filing meeting 
request requirement to project proponents seeking certification in 
jurisdictions where EPA acts as the certifying authority. However, in 
response to stakeholder feedback on the proposed 2020 Rule, the Agency 
extended the pre-filing meeting request requirement to all project 
proponents. As a result, the final 2020 Rule required all project 
proponents to request a pre-filing meeting at least 30 days prior to 
submitting a water quality certification

[[Page 66572]]

request. 85 FR 42241 (July 13, 2020). The 2020 Rule did not provide any 
mechanism for certifying authorities to waive or otherwise alter the 
30-day period between a project proponent requesting a pre-filing 
meeting and subsequently submitting a certification request. Instead, 
there was a mandatory 30-day period that had to pass before the project 
proponent could submit a certification request.
    During pre-proposal outreach on this rulemaking, some stakeholders 
found the pre-filing meeting request requirement to be essential to an 
efficient certification process, while others expressed concern about 
the mandatory 30-day ``waiting period'' between the pre-filing meeting 
request and the certification request, particularly in emergency permit 
situations. Stakeholders suggested that EPA should add flexibility to 
the process and give certifying authorities the ability to waive the 
pre-filing meeting request (e.g., for smaller and less complex projects 
and emergencies). In response to pre-proposal input, the Agency 
proposed to retain a pre-filing meeting request provision with 
modifications to provide certifying authorities the flexibility to 
waive or shorten this requirement.
    Many commenters recognized that pre-filing meetings have the 
potential to facilitate and help streamline the certification process 
through early coordination. Conversely, other commenters expressed 
concern that the pre-filing meeting request requirement creates delays 
and administrative burden. Some commenters said that, in lieu of an 
actual requirement, EPA should only encourage pre-filing meeting 
requests. Several commenters supported the flexibility included in the 
proposed rule giving certifying authorities the ability to waive or 
shorten the requirement.
    After considering public comment, EPA is finalizing the pre-filing 
meeting request requirement as proposed, with minor, non-substantive 
revisions. EPA finds that the final rule's approach to the pre-filing 
meeting request requirement both facilitates early coordination in the 
certification process while recognizing that states and Tribes are in 
the best position to determine whether a particular project (or class 
of projects) would benefit from such early coordination. Accordingly, 
this final rule enables a certifying authority to shorten or waive the 
pre-filing meeting request requirement on a case-by-case or categorical 
basis. For example, certifying authorities may categorically waive or 
shorten the pre-filing meeting request requirement for less complex, 
routine projects, as these projects most likely would not benefit from 
early engagement between the project proponent and certifying authority 
as large, complex projects would. This flexibility reflects both 
cooperative federalism principles and the reality that not every 
project will meaningfully benefit from a pre-filing meeting. EPA 
encourages certifying authorities to make their requests for 
certification requirements and the applicable submission procedures 
transparent to project proponents, especially in instances where the 
pre-filing meeting request requirement was waived, so that submission 
of the request for certification goes smoothly in cases where there is 
no early coordination through the pre-filing meeting process.
    EPA requested comment on whether it should define the pre-filing 
meeting request process and ``applicable submission procedures'' for 
other certifying authorities in regulatory text. A few commenters 
stated that there should be procedures for the pre-filing meeting 
requests to increase clarity and consistency, including a list of 
minimum information to include in the meeting request. Other commenters 
opposed the idea of EPA setting procedures for pre-filing meetings to 
maintain flexibility. EPA finds that certifying authorities are best 
equipped to determine their procedures and needs for pre-filing 
meetings and requests. Like the approach taken under the 2020 Rule, EPA 
is not defining the process or manner to submit pre-filing meeting 
requests. Rather, EPA intends the term ``applicable submission 
procedures'' to mean the submission procedures deemed appropriate by 
the certifying authority. See infra for discussion on EPA's applicable 
submission procedures when EPA acts as the certifying authority. The 
Agency is also not defining a pre-filing meeting process (e.g., 
identifying meeting subject matter or meeting participants) nor 
retaining the 2020 Rule's recommendations for pre-filing meetings. In 
the 2020 Rule, the Agency ``encouraged'' but did not require the 
project proponent and the certifying authority to take certain steps 
with respect to the pre-filing meeting process. See 40 CFR 121.4(c) and 
(d) (2020). The Agency is removing these recommendations from the 
regulatory text because (1) they were not expressed as, or intended to 
be, regulatory requirements, and (2) certifying authorities and project 
proponents are best suited to determine the optimal pre-filing meeting 
process on a project-by-project, project type, or general basis.
    EPA also requested comment on whether it should specify that all 
certifying authorities should respond with written acknowledgement and 
determination of the need for a pre-filing meeting and timeline within 
five days of receipt of the pre-filing meeting request. Many commenters 
suggested that certifying authorities should be required to provide a 
written response within five days informing the project proponent if a 
pre-filing meeting is needed. The Agency is not adding a requirement 
that a certifying authority must respond in writing within five days of 
receipt of the pre-filing meeting request. Instead, similar to the 2020 
Rule, this final rule does not require certifying authorities to grant 
or respond to a pre-filing meeting request. See 40 CFR 121.4(b) (2020). 
However, the Agency is finalizing removal of the 2020 Rule provision 
stating that the certifying authority is not obligated to grant or 
respond to a pre-filing meeting request because the regulatory text at 
Sec.  121.4 does not compel any action by the certifying authority. 
Accordingly, the Agency does not find it necessary to expressly 
reiterate what the certifying authority is not obligated to do. If a 
certifying authority fails to communicate whether it wants to waive or 
shorten the pre-filing meeting request requirement, then the project 
proponent must wait 30 days from requesting a pre-filing meeting to 
submit its request for certification. Generally, EPA expects that it 
will provide written acknowledgement that the pre-filing meeting 
request has been received within five days of receipt. In its written 
response, the Agency will also state whether it has determined that the 
pre-filing meeting will be waived or when (if less than 30 days) the 
project proponent may submit the certification request.
    EPA requested comment on whether project proponents should have the 
opportunity to participate in determining the need for a pre-filing 
meeting request. Some commenters argued that the project proponent 
should be involved in determining the need for a pre-filing meeting. 
After considering public comments, EPA is not requiring the 
participation of the project proponent when determining the need for a 
pre-filing meeting request. However, the Agency encourages certifying 
authorities to engage with project proponents early in the process as 
they can inform decisions based on their knowledge of the project.
3. Implementation
    Pre-filing meeting requests ensure that certifying authorities can 
receive early notification of requests for certification and discuss 
the project and potential

[[Page 66573]]

information needs with the project proponent before the statutory 
``reasonable period of time'' for certification review begins (e.g., 
they allow the certifying authority to collect important details about 
a proposed project and its potential effects on water quality). The 
intent of the pre-filing meeting request provision is to support early 
engagement and coordination between certifying authorities and project 
proponents as needed. However, EPA recognizes that there are various 
project types and complexities. Accordingly, this final rule provides 
certifying authorities with the flexibility to waive or shorten the 
requirement on a case-by-case or categorical basis. For example, 
certifying authorities could either require or waive the pre-filing 
meeting request requirement for all projects, specific types of 
projects (e.g., projects under 300 linear feet), or types of Federal 
licenses or permits (e.g., general permits). EPA recommends that 
certifying authorities clearly communicate to project proponents their 
expectations for pre-filing meetings requests and waivers (e.g., 
whether they may grant waivers, either categorically or on an 
individual basis, and any procedures and/or deadlines for submission of 
requests and the grant of waivers) so that project proponents may 
clearly and efficiently engage in the certification process. EPA also 
recommends that certifying authorities make this information readily 
available to project proponents in an easily accessible manner to allow 
for a transparent and efficient process (e.g., posting a list of 
project types that require a pre-filing meeting request on the 
certifying authority's website).
    Additionally, the final rule allows certifying authorities to 
determine appropriate submission procedures for pre-filing meeting 
requests. When EPA acts as the certifying authority, EPA would 
generally find the following submission procedures to be appropriate. 
First, EPA recommends that project proponents submit a pre-filing 
meeting request to the Agency in writing.\42\ Second, the Agency 
recommends that project proponents include the following information, 
as available, in any written request for a pre-filing meeting with EPA:
---------------------------------------------------------------------------

    \42\ Under final rule Sec.  121.5(b)(7), a project proponent 
must submit documentation that a pre-filing meeting was requested, 
unless the pre-filing meeting request requirement was waived. See 
section IV.C in this preamble for further discussion on the contents 
of a request for certification when EPA is acting as the certifying 
authority.

    1. A statement that it is ``a request for CWA section 401 
certification pre-filing meeting,''
    2. The name of the project proponent and appropriate point of 
contact,
    3. The name of the Tribe or jurisdiction for which EPA is 
serving as the certifying authority,
    4. The planned project location (including identification of 
waters of the United States into which any potential discharges 
would occur),
    5. A list of any other necessary licenses/permits (e.g., state 
permits, other Federal permits, etc.),
    6. The project type and a brief description of anticipated 
project construction and operation activities, and
    7. The anticipated start work date.

These are good practices for any pre-filing meeting requests to any 
certifying authority.
    The final rule allows certifying authorities flexibility to 
determine the procedures and content of pre-filing meetings. EPA, 
however, encourages project proponents and certifying authorities to 
use the pre-filing meeting to discuss the proposed project, as well as 
determine what information or data is needed (if any) as part of the 
request for certification to enable the certifying authority to take 
final action on the request for certification within the reasonable 
period of time. During the pre-filing meeting, project proponents could 
share a description and map of the proposed project location and 
timeline, as well as discuss potential water quality-related impacts 
from the activity. Certifying authorities could use the meeting as an 
opportunity to provide information on how to submit requests for 
certification (e.g., discuss procedural requirements for submission of 
a request for certification). Certifying authorities should also 
consider including the Federal agency in the pre-filing meeting process 
for early coordination where the Federal agency is not otherwise 
legally precluded. Additionally, the final provision provides 
flexibility for the certifying authority to determine whether the pre-
filing meeting request requirements are fulfilled by any pre-
application meetings or application submissions to the Federal 
licensing or permitting agency. Generally, EPA recommends that 
certifying authorities provide clear expectations for pre-filing 
meetings to ensure they are used efficiently and effectively.

C. Request for Certification

1. What is the Agency finalizing?
    At Sec.  121.5(a), EPA is requiring that all requests for 
certification be in writing, signed, and dated and include defined 
minimum contents. Unlike the proposed rule, which required a copy of 
the draft Federal license or permit for all requests for certification, 
the Agency is bifurcating the minimum content requirements for an 
individual Federal license or permit and the issuance of a general 
Federal license or permit. Under the final rule, if the request for 
certification is for an individual Federal license or permit, the 
request for certification must include a copy of the Federal license or 
permit application and any readily available water quality-related 
materials that informed the development of the application. If the 
request for certification is for the issuance of a general Federal 
license or permit, then the request for certification must include a 
copy of the draft Federal license or permit and any readily available 
water quality-related materials that informed the development of the 
draft Federal license or permit. For all requests for certification, 
the final rule requires a certifying authority to send written 
confirmation to the project proponent and Federal agency of the date 
that a request for certification is received by the certifying 
authority in accordance with its applicable submission procedures.
    Additionally, the final rule provides that where a project 
proponent is seeking certification from EPA when the Agency is the 
certifying authority, or from a state or authorized Tribe that does not 
specify additional contents of a request for certification (e.g., 
through regulation, forms, etc.), the project proponent must also 
submit seven additional components, as applicable, including: (1) A 
description of the proposed activity, including the purpose of the 
proposed activity and the type(s) of discharge(s) that may result from 
the proposed activity; (2) The specific location of any discharge(s) 
that may result from the proposed activity; (3) A map or diagram of the 
proposed activity site, including the proposed activity boundaries in 
relation to local streets, roads, and highways; (4) A description of 
current activity site conditions, including but not limited to relevant 
site data, photographs that represent current site conditions, or other 
relevant documentation; (5) The date(s) on which the proposed activity 
is planned to begin and end and, if known, the approximate date(s) when 
any discharge(s) may commence; (6) A list of all other Federal, 
interstate, Tribal, state, territorial, or local agency authorizations 
required for the proposed activity and the current status of each 
authorization; and (7) Documentation that a pre-filing meeting request 
was submitted to the certifying authority in accordance with applicable 
submission procedures, unless the pre-filing

[[Page 66574]]

meeting request requirement was waived. 40 CFR 121.5(b).
    The Agency is also finalizing the ability for state or Tribal 
certifying authorities to define the additional contents of a request 
for certification in regulation or another appropriate manner, such as 
an official form used for requests for certification, in lieu of 
relying on EPA's default list of additional contents. Therefore, under 
this final rule, where a project proponent is requesting certification 
from a certifying authority other than EPA and that certifying 
authority has identified additional required contents of a request for 
certification beyond the minimum contents outlined in 40 CFR 121.5(a), 
then the request for certification must include those additional 
required contents.
    The Agency restructured Sec.  121.5 to clarify which components are 
required for all requests for certification versus which components 
depend on the certifying authority. Section 121.5(a) defines the 
minimal contents for all requests for certification, no matter the 
certifying authority (i.e., states, Tribes, or EPA). Section 121.5(b) 
defines the additional contents in a request for certification when EPA 
is the certifying authority. Section 121.5(c) clarifies that if the 
certifying authority is a state or authorized Tribe that has identified 
additional contents for a request for certification, then the project 
proponent must include those additional contents in a request for 
certification. Lastly, Sec.  121.5(d) clarifies that if the certifying 
authority is a state or authorized Tribe that has not identified 
additional contents for a request for certification, then the project 
proponent must include those additional contents defined at Sec.  
121.5(b) in a request for certification. This structural change is 
intended to provide greater clarity for stakeholders in implementation 
of this final rule.
2. Summary of Final Rule Rationale and Public Comment
    Section 401(a)(1) provides that the certifying authority's 
reasonable period of time to act starts after a certifying authority is 
in ``receipt'' of a ``request for certification'' from a project 
proponent. 33 U.S.C. 1341(a) (``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.'') (emphasis added). The statute does not define 
either ``request for certification'' or ``receipt.''
    In the 2020 Rule, the Agency defined ``certification request'' for 
all certifying authorities and asserted that ambiguities in the 
statutory language had led to inefficiencies in the certification 
process. 40 CFR 121.5 (2020); see 85 FR 42243 (July 13, 2020). In 
particular, the 2020 Rule preamble provided that states and authorized 
Tribes could not rely on state or tribally defined ``complete 
applications'' to start the certification process, but rather must rely 
on a certification request as defined in EPA's regulation to initiate 
the process. The Agency relied on New York State Department of 
Environmental Conservation v. FERC, in which the Court of Appeals for 
the Second Circuit rejected New York's argument that the section 401 
process ``begins only once [the state agency] deems an application 
`complete' '' and, instead, agreed with FERC that the section 401 
review process begins when the state receives a request for 
certification. 884 F.3d 450, 455 (2d Cir. 2018) (``NYSDEC''). The court 
found that ``[t]he plain language of Section 401 outlines a bright-line 
rule regarding the beginning of review'' and reasoned that ``[i]f the 
statute required `complete' applications, states could blur this 
bright-line rule into a subjective standard, dictating that 
applications are `complete' only when state agencies decide they have 
all the information they need.'' Id. at 455-56.
    Some commenters asserted that the 2020 Rule's approach provided 
clarity about the requirements for project proponents to request 
certification and when the reasonable period of time begins. These 
commenters stated that the 2020 Rule created a predictable and 
transparent certification process by defining a clear list of contents 
of certification requests. Conversely, some commenters highlighted 
challenges with implementing the 2020 Rule's approach for certification 
requests. Commenters stated that 2020 Rule requirements were 
disconnected from longstanding cooperative processes established among 
stakeholders and created confusion due to differences from certifying 
authorities' requirements.
    EPA agrees that defining some minimum components of a request for 
certification increases clarity and efficiency in the certification 
process. Recognizing that some certifying authorities already have or 
will define additional requirements for requests for certification they 
receive, EPA is only defining minimum contents for all requests for 
certification. EPA finds this approach best respects longstanding state 
and Tribal processes familiar to stakeholders and enables states and 
Tribes to determine their specific information needs. EPA is also 
finalizing additional contents for requests for certification to EPA or 
states and Tribes that fail to define such additional contents to 
provide stakeholders with greater certainty and predictability in the 
certification process. The final rule establishes an approach that 
provides efficiency for requests for certification, while staying 
consistent with cooperative federalism principles and case law.
    EPA is also finalizing conforming changes to the part 124 
regulations governing the contents of a request for certification of 
EPA-issued NPDES permits. EPA proposed to delete Sec.  124.53(b) 
because the provision allowed a request for certification to precede 
development of a draft NPDES permit, which was inconsistent with the 
proposed rule. EPA also proposed to delete Sec.  124.53(c) because the 
list of contents at Sec.  124.53(c) differed from the proposed list of 
contents. See 87 FR 35336-57 (June 9, 2022). In light of changes in the 
final rule, EPA is not deleting in full Sec.  124.53(b) or (c), and 
instead is making targeted revisions to be consistent with the final 
rule. First, EPA is revising 40 CFR 124.53(b), which provided that when 
EPA received a permit application without certification, EPA shall 
forward the application to the certifying authority with a request that 
certification be granted or denied. EPA is revising Sec.  124.53(b) to 
clarify that EPA may forward permit applications for individual NPDES 
permits to a certifying authority and request certification consistent 
with final rule Sec. Sec.  121.4 and 121.5 (e.g., EPA will request a 
pre-filing meeting and include contents for a request for certification 
consistent with this final rule). It is worth noting that although 
Sec.  124.53(b) allows EPA to request certification on a permit 
application for individual permits (consistent with this final rule), 
this approach is not common practice. Under the final rule and Sec.  
124.53(c), EPA may continue to request certification after the draft 
individual or general NPDES permit is prepared (and include a copy of 
draft permit in the request for certification). Nevertheless, EPA is 
retaining Sec.  124.53(b) with the revisions discussed above to provide 
stakeholders and EPA with flexibility to request certification prior to 
developing a draft individual NPDES permit.
    Second, EPA is also revising 40 CFR 124.53(c), which identified the 
required contents of a request for certification of an EPA-issued NPDES 
permit if a certification had not been received by the time the draft 
permit is prepared.

[[Page 66575]]

EPA is revising Sec.  124.53(c) to specify that if certification has 
not been requested by the time a draft NPDES permit is prepared, EPA 
will send a request for certification consistent with final rule Sec.  
121.5, and will include a copy of the draft permit with that request. 
EPA is finalizing deletions of the required contents of a request for 
certification in Sec.  124.53(c)(2) and (3) because the list of 
contents at Sec.  124.53(c)(2) and (3) differ from the list of contents 
in Sec.  121.5. Also, as explained in section IV.D in this preamble, 
the statement required at Sec.  124.53(c)(3) regarding the reasonable 
period of time was not consistent with the approach to the reasonable 
period of time at Sec.  121.6.
    The following sections discuss the minimum contents for all 
requests for certification, state and Tribal authority to define 
additional contents, the additional contents defined by EPA and their 
application in instances where states and Tribes decline to define such 
additional contents, and when a certifying authority is in ``receipt'' 
of a request for certification.
a. Minimum Contents of a Request for Certification
i. Application or Draft Federal License or Permit
    In a change from the proposed rule, EPA is finalizing that all 
requests for certification on an individual Federal license or permit 
shall include ``[a] copy of the Federal license or permit application 
submitted to the Federal agency,'' while all requests for certification 
on the issuance of a general Federal license or permit shall include 
``[a] copy of the draft Federal license or permit.'' 40 CFR 121.5(a). 
EPA proposed in Sec.  121.5(a) that all requests for certification 
``shall include a copy of the draft license or permit'' to ensure that 
states and Tribes have the critical information to make a timely and 
informed certification decision. 87 FR 35332. Many commenters opposed 
this approach for various reasons, including but not limited to 
possible impacts to certifying authority practice and relationships, 
concerns over potential delays, and concerns over how the proposed 
approach would work in instances where a Federal agency does not 
develop a draft license or permit, particularly for individual Federal 
licenses or permits.
    In response to comments, EPA decided to partially change the 
requirement in the final rule to require that all requests for 
certification on an individual Federal license or permit include the 
Federal license or permit application at a minimum, instead of the 
draft Federal license or permit. See 40 CFR 121.5(a)(1). EPA recognizes 
that with respect to general Federal licenses and permits, there often 
is no formal ``application,'' and for that reason the final rule allows 
the Federal agencies issuing those general Federal licenses and permits 
to submit the draft general Federal license or permit to the certifying 
authority instead of a Federal license or permit ``application.'' See 
40 CFR 121.5(a)(2). EPA's bifurcated approach for requests for 
certification for individual Federal licenses or permits and for the 
issuance of general Federal licenses or permits promotes clarity and 
should minimize delays in the licensing and permitting process, since 
EPA anticipates most stakeholders are familiar with starting the 
section 401 certification process with a Federal license or permit 
application (for individual licenses or permits) or with a copy of the 
draft Federal license or permit (for the issuance of a general license 
or permit). Additionally, this bifurcation is modeled on the separate 
lists for the contents of requests for certification included in the 
2020 Rule.
ii. Water Quality-Related Materials
    In the final rule, EPA is requiring project proponents to include 
``any readily available water quality-related materials that informed 
the development of the application'' for requests for certification for 
individual Federal licenses or permits. See 40 CFR 121.5(a)(1)(ii). In 
the case that the request for certification is for the issuance of a 
general Federal license or permit, it must include ``any readily 
available water quality-related materials that informed the development 
of the draft Federal license or permit.'' See 40 CFR 121.5(a)(2)(ii). 
The term ``readily available water quality-related materials that 
informed the development of'' either the application or the draft 
license or permit refers to existing water quality-related materials 
that are in the project proponent's possession or easily obtainable 
\43\ and informed the project proponent's development of the 
application or draft license or permit. These materials for either 
request may include, but are not limited to, water quality baseline 
conditions from the project site, sediment and erosion control plans, 
restoration plans, alternatives analyses, mitigation plans, modeling, 
and/or other materials that have already been developed for the Federal 
license or permit application or draft license or permit and would help 
inform the certifying authority of the water quality-related impacts 
from the activity.\44\
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    \43\ For example, this could include maps, studies, or a 
reference to a website or literature that contain information that 
informed the development of the application or draft license or 
permit.
    \44\ These examples are not intended to be exhaustive, nor does 
EPA expect that all of the example materials listed will be readily 
available and/or materials that informed the develop of the 
application or draft Federal license or permit in all cases. Rather, 
EPA is providing these examples because these are materials that EPA 
has previously asked for and found informative when conducting its 
reviews of requests for certification.
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    The Agency had proposed that, at a minimum, all requests for 
certification include ``any existing and readily available data or 
information related to potential water quality impacts from the 
proposed project.'' EPA intended that providing certifying authorities 
with any existing and readily available data or information related to 
potential water quality impacts from the proposed project, such as 
studies or an EIS or Environmental Assessment (EA) or other water 
quality monitoring data, would reduce the need for duplicative studies 
and analyses. Several commenters supported the requirement that the 
request for certification include ``any existing and readily available 
data or information related to potential water quality impacts from the 
proposed project,'' and a few commenters noted that this information is 
important for decision-making and allows certifying authorities to 
better evaluate potential impacts of a project. Conversely, many 
commenters did not support the inclusion of ``any existing and readily 
available data or information related to potential water quality 
impacts from the proposed project,'' arguing that it was unclear and 
would be difficult to implement. Some of these commenters added that 
the requirement would create confusion and delays in the certification 
process.
    In response to commenter concerns, EPA is adjusting the regulatory 
text in the final rule to read ``any readily available water quality-
related materials that informed the development of'' the application or 
draft general Federal license or permit. See 40 CFR 121.5(a)(1)(ii), 
(a)(2)(ii). EPA recognizes the importance of providing certifying 
authorities with critical information to inform their analysis while at 
the same time considering important implementation details. First, this 
revision provides a predictable endpoint for project proponents because 
it is limited to existing data or information that was used in the 
development of the Federal license or permit application or the draft 
general Federal license or permit. Second, consistent with the

[[Page 66576]]

scope of review under this final rule, this revision limits any such 
materials to ``water quality-related materials.'' This will ensure that 
project proponents provide certifying authorities with pertinent water 
quality-related information to fully inform their certification 
analysis. EPA also finds that limiting such materials to ``water 
quality-related'' should clarify that project proponents may redact or 
exclude personally identifiable information (e.g., personal addresses, 
personal finance information) and/or other sensitive information.
    A few commenters asserted that while they supported the minimum 
requirements of the proposed rule, they believed that the Agency should 
not limit certifying authorities to ``any existing and readily 
available'' and suggested deleting the phrase or clarifying that it 
should not be construed to restrict a certifying authority from 
requesting new, additional, or not-yet available data related to the 
proposed activity. EPA appreciates these concerns, however, as 
discussed above, the Agency finds it reasonable and appropriate for the 
rule to balance certifying authority information needs with legitimate 
implementation concerns by limiting the default requirements to 
existing, readily available information. However, if there are other 
materials that did not necessarily ``inform the development'' of the 
application or draft Federal license or permit (e.g., section 402 
permit factsheets, permit description presentations, etc.), the 
certifying authority is free to define such materials in its additional 
contents for a request for certification, see discussion infra, or 
request such additional information after receiving a request for 
certification. A project proponent may also include any additional 
information in the request for certification. Furthermore, certifying 
authorities are encouraged to use the pre-filing meeting request 
process to further communicate appropriate water quality-related 
materials that would be helpful in reviewing a request for 
certification on an individual Federal license or permit.
b. Additional Contents in a Request for Certification
    Consistent with the proposed rule, EPA is finalizing that where a 
``certifying authority has identified contents of a request for 
certification'' that are relevant to the water quality-related impacts 
from the activity, in addition to the minimum requirements discussed 
above, ``the project proponent shall include in the request for 
certification those additional contents identified prior to when the 
request for certification is made.'' 40 CFR 121.5(c). The Agency is 
also finalizing a set of additional contents that a project proponent 
must include in a request for certification when EPA acts as the 
certifying authority. 40 CFR 121.5(b). For further clarity, the 
additional contents listed at Sec.  121.5(b) are required in each 
request for certification to a state or authorized Tribe that has not 
established its own list of requirements. If a state or authorized 
Tribe has established its own list for a request for certification, 
then EPA's list of additional contents would not apply. The Agency has 
restructured Sec.  121.5 to clearly distinguish between requirements 
that apply to all requests for certification, see Sec.  121.5(a), 
versus requirements that only apply to requests for certification to 
EPA or states or Tribes that fail to define additional contents, see 
Sec.  121.5(b) and (d), or requirements that apply to requests for 
certification to states or Tribes that define additional contents, see 
Sec.  121.5(c).
    EPA acknowledges that this final rule's approach contrasts with the 
approach taken in the 2020 Rule, which defined the contents of a 
certification request for all certifying authorities. However, this 
final rule is a better--and more flexible--approach to defining the 
term ``request'' and consistent with NYSDEC. That decision holds that 
the reasonable period of time begins after receipt of a request for 
certification and not when a state deems it ``complete;'' it does not 
preclude EPA or other certifying authorities from defining--in 
advance--those contents a certification request must contain. As 
discussed below, this approach is consistent with stakeholder input and 
the cooperative federalism principles central to section 401 and the 
CWA.
i. State and Tribal Certifying Authorities
    Under Sec.  121.5(c), ``[w]here a project proponent is seeking 
certification from a certifying authority other than the Regional 
Administrator, and that certifying authority has identified contents of 
a request for certification in addition to those identified in 
paragraph (a) of [Sec.  121.5], the project proponent shall include in 
the request for certification those additional contents identified 
prior to when the request for certification is made.'' This approach is 
consistent with the proposal and the intent of the Act, is reasonable, 
is responsive to concerns and considerations raised through the public 
comment process, and ultimately is the most efficient path forward.
    Many commenters supported certifying authorities having the ability 
to define the contents of a request for certification, saying that it 
ensures states and Tribes have the information they need to protect 
their water quality. Commenters provided a variety of reasons why they 
supported this approach, including asserting that it will ensure a 
comprehensive review under section 401 in the reasonable period of time 
and enable states and Tribes to ensure they have needed information to 
determine whether a project will comply with their water quality 
requirements. Several commenters argued that this approach is an 
improvement over the 2020 Rule's ``one-size fits all'' approach to 
request for certification. EPA agrees that certifying authorities are 
best suited for determining their needs in making their certification 
decisions.
    As an initial matter, the Agency finds it is reasonable for states 
and Tribes to have the authority to determine what information is 
necessary to initiate the certification process under section 401 in 
compliance with their own water quality requirements. In order to 
effectuate Congress's goals and directives for section 401 in the 
limited amount of time provided by the Act, it is reasonable that 
certifying authorities should be able to define what information, in 
addition to a copy of the Federal license or permit application and any 
water quality-related materials that informed the development of the 
application, is necessary to make an informed decision regarding 
protecting their water quality from adverse effects from a federally 
licensed or permitted activity. Defining an exclusive list of 
components for requests for certification for all certifying 
authorities could inhibit a comprehensive review under section 401 in 
the reasonable period of time. The diverse nature of Federal licenses 
and permits and the variety of potential water quality impacts from 
those different types of activities do not lend themselves to a one-
size-fits-all approach.
    Indeed, to define an exclusive list of contents would frustrate the 
intent of the Act's emphasis on cooperative federalism and lead to 
procedural inefficiencies. Specifically, a framework requiring the 
reasonable period of time to begin before the certifying authority has 
essential information that it has transparently publicized as necessary 
to make its own certification decision would be inconsistent with the 
language, goals, and intent of the statute. Congress clearly did not 
intend section 401 reviews to turn on incomplete applications, and the

[[Page 66577]]

reasonable period of time and one-year backstop were added by Congress 
to ensure that ``sheer inactivity by the State . . . will not frustrate 
the Federal application.'' H.R. Rep. No. 92-911, at 122 (1972). 
Moreover, this approach should be familiar to project proponents who 
followed specific requirements established by states and Tribes during 
the last approximately 50 years. The Agency's final approach will allow 
for a transparent and timely process that respects the role of state 
and Tribal certifying authorities under the cooperative federalism 
framework of section 401.
    Some commenters opposed the proposed rule and argued that the 
Agency cannot delegate the ability to define additional requirements 
for a certification request to certifying authorities under NYSDEC. The 
Agency does not agree. In NYSDEC, the Second Circuit never addressed 
the separate question of whether EPA or certifying authorities have the 
underlying authority to establish--in advance of receiving a request 
for certification--a list of required contents for such a request. 
Accordingly, the court's holding that the reasonable period of time 
begins after ``receipt'' does not preclude the Agency from establishing 
such a list of minimum ``request for certification'' requirements, or 
from allowing certifying authorities to add requirements to EPA's list 
or develop their own lists of request requirements. Because the statute 
does not define the term ``request for certification,'' EPA and other 
certifying authorities may do so in a reasonable manner that 
establishes--in advance of receiving the request--a discernable and 
predictable set of requirements for a request for certification that 
starts the reasonable period of time. No court has considered this 
issue and come to the opposite conclusion. The Agency decides, 
consistent with principles of cooperative federalism enshrined in the 
Act, to continue this lawful, familiar, and time-tested practice.
    Most commenters that opposed this approach argued that, as an 
implementation matter, EPA is inviting certifying authorities to engage 
in the types of practices that were rejected by the Second Circuit in 
NYSDEC. Specifically, commenters asserted that the proposed approach 
would allow certifying authorities to issue regulations that expand the 
required contents of a request for certification without any oversight 
or limits and for reasons other than potential water quality impacts. 
Other commenters asserted that the proposed approach did not enforce 
any transparency requirements against certifying authorities, and, 
therefore, certifying authorities would vaguely or broadly define the 
minimum contents or require information that was currently unavailable 
to stall the start of the reasonable period of time. Still other 
commenters argued that the ability of states and authorized Tribes to 
define the contents for a request for certification would result in a 
patchwork of different requirements, placing burdens on project 
proponents, especially for projects that span multiple states. The 
Agency acknowledges these concerns and has incorporated reasonable 
changes into the final rule that establish sufficient guardrails to 
prevent those practices, while also allowing certifying authorities to 
act on a request for certification in a timely and informed manner.
    First, as identified in Sec.  121.3, the scope of the certifying 
authority's review is explicitly limited in the final rule to ``the 
water quality-related impacts.'' To clarify that such limitations 
extend to the contents of a request for certification, EPA added text 
at Sec.  121.5(c) that such additional contents are ``relevant to the 
water quality-related impacts from the activity.'' Hence, contents of 
requests for certification that are substantively beyond the scope of 
water quality-related impacts cannot be reasonably necessary to make an 
informed decision regarding the potential water quality-related impacts 
from the activity, and thus would not be in conformity with the 
regulation. The regulatory text provides flexibility within the scope 
for certifying authorities interested in developing their own 
additional contents of requests for certification.
    Next, Sec.  121.5(c) itself limits the ability of a certifying 
authority to request materials to those ``identified prior to when the 
request for certification is made.'' Although the Agency is allowing 
states and authorized Tribes to define their own additional 
requirements for a request for certification, the rule provides a 
backstop for those states or authorized Tribes that either do not 
identify those additional requirements before the request for 
certification is made or change their requirements after the request 
for certification is made. In other words, certifying authorities 
cannot subsequently modify or add to the required contents of a request 
for certification after the request was submitted. This does not mean a 
certifying authority could not ask for additional information after a 
request for certification is made; rather, a certifying authority 
cannot alter the required contents of a request for certification after 
it is received.
    The Agency expects that those states and authorized Tribes that 
choose to identify additional contents in a request for certification 
will do so clearly enough to provide project proponents with full 
transparency as to what is required. Relatedly, to remain consistent 
with legal precedent, states and authorized Tribes should avoid non-
exhaustive or vague lists that a certifying authority could rely on to 
continually deem requests incomplete. When developing their lists of 
additional contents in a request for certification, EPA recommends that 
certifying states and authorized Tribes look to Sec.  121.5(b) for the 
list of contents EPA has outlined for requests for certification when 
it acts as a certifying authority as a guide to help the certifying 
state or authorized Tribe develop its own list.
    The Agency originally proposed that the contents of a request for 
certification be established by a state or authorized Tribe in 
regulation. Several commenters disagreed that certifying authorities 
should be limited to defining the contents of a request for 
certification in regulation. A few commenters asserted that the 
contents do not need to be in a regulation to be transparent or 
publicly available, while a few commenters urged EPA to consider that 
some state processes are well-known to the regulated community or have 
been used for 50 years. A few of these commenters argued that states 
use different approaches to defining the contents of a certification 
request, including statute, policy documents, application forms, and 
guidance. These commenters asserted that placing the contents of a 
request in regulation would be an unnecessary burden, time consuming 
(e.g., may require legislative approval before going into effect), and 
interfere with a state's ability to describe the information in 
certification request. Conversely, some commenters asserted that by 
allowing the certifying authority to set the minimum requirements, and 
requiring those minimum requirements to be in regulation, the project 
proponent, the certifying authority, and the public would be fully 
informed of when the reasonable time begins and ends. One commenter 
asserted that Due Process and basic fairness require certifying 
authorities to publish such contents clearly and authoritatively and 
asserted that EPA should clarify that certification request 
requirements and receipt timing cannot be tied to procedures or 
requirements that are not adopted and published as regulations.

[[Page 66578]]

    After considering public comments, the Agency is not requiring a 
state or authorized Tribe to define additional contents of a request 
for certification in regulation. The Agency agrees that the required 
contents of a request do not need to be in a regulation to be 
transparent, publicly available, and provide project proponents with 
adequate notice. The critical inquiry for state and Tribal certifying 
authorities to consider is whether the method of identifying the 
required contents in a request for certification is clear, objective, 
and authoritative such that notions of fairness and notice are served. 
The Agency notes that some of the state and Tribal processes are 
already well known to the regulated community, have been used for 50 
years, and are not in regulation. As a practical matter, states and 
authorized Tribes use different approaches to define the required 
contents of a request for certification, including statute, 
regulations, policy documents, application forms, and guidance. The 
burden of putting the contents of a request in regulation can be time 
consuming (e.g., may require legislative approval before going into 
effect), and may interfere with certifying authorities' ability to 
describe the information they expect in a request for certification.
    The final rule approach also addresses project proponent concerns 
about certifying authorities that, in the past, may have unexpectedly 
required additional information from the project proponent to satisfy 
the request for certification requirement before starting the clock on 
the ``reasonable period of time.'' Under the approach EPA is 
finalizing, the reasonable period of time starts on the date that a 
``request for certification'' was received in accordance with the 
certifying authority's applicable submission procedures. As discussed 
above, the request for certification is defined to mean a request that 
contains the contents required by EPA's final regulations and any 
additional state or Tribal requirements identified prior to when the 
request for certification was made. This approach creates a bright-line 
for project proponents seeking to avoid unexpected shifts and identify 
the necessary contents for a request for certification with certainty.
    In 1971, the Agency opted to not define what information, if any, 
was sufficient to start the review process for all certifying 
authorities and instead opted to define the information only for EPA 
when it acts as the certifying authority. 40 CFR 121.22 (2019). As a 
result, over the last approximately 50 years, many states and 
authorized Tribes established their own requirements for what 
constitutes a request for certification, also called a ``certification 
request,'' typically defining it as a so-called ``complete 
application.'' See, e.g., Cal. Code Regs. Tit. 23, sec. 3835; La. 
Admin. Code tit. 33, sec. IX-1507; Ohio Admin. Code 3745-32-03. Prior 
Agency guidance acknowledged this practice. See 1989 Guidance, at 31 
(April 1989) (``Thus, after taking the federal agencies' regulations 
into account, the State's 401 certification regulations should link the 
timing for review to what is considered receipt of a complete 
application.''); see also 2010 Handbook at 15-16 (rescinded in 2019, 
see supra) (``States and tribes often establish their own specific 
requirements for a complete application for water quality 
certification. . . . The advantage of a clear description of components 
of a complete [section] 401 certification application is that 
applicants know what they must be prepared to provide, and applicant 
and agencies alike understand when the review timeframe has begun.''). 
Some certifying authorities rely on a ``complete application'' to start 
the certification review process. In the Agency's view, a state 
requirement for submittal of a complete application, when the contents 
of such complete application are clearly identified ahead of time, is 
not inherently subjective and can be defined by the information 
identified by regulation or on a form. Establishing such a list of 
required elements in advance is consistent with the rationale of NYSDEC 
that criticized the state for relying on its ``subjective'' 
determination following submission regarding whether the request was 
``complete.''
    The use of a ``completeness'' standard for applications or similar 
documents is not a novel concept in CWA implementing regulations.\45\ 
Both EPA and the Corps have developed regulations setting out 
requirements for ``completeness'' or ``complete applications'' to 
initiate the permitting process. See 40 CFR 122.21(e) (describing 
``completeness'' for NPDES applications); 33 CFR 325.1(d)(10) 
(describing when an application is deemed ``complete'' for section 404 
permits). Neither CWA section 402 nor section 404 uses the word 
``complete'' to modify the term ``application'' in the statute, yet the 
agencies have reasonably interpreted the term ``application'' in those 
contexts to allow for a ``completeness'' concept that provides a clear 
and consistent framework for stakeholders involved in the section 402 
and 404 permitting processes. The Agency is unaware of significant 
issues with the use of ``complete applications'' in either the section 
402 or section 404 permitting processes or a concern that it has led to 
a ``subjective standard.''
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    \45\ The use of ``complete'' applications is also applied in 
other Federal environmental realms (e.g., the Safe Drinking Water 
Act, the Clean Air Act). See, e.g., 40 CFR 144.31, 40 CFR 51.103, 
appendix V to part 51.
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    While acknowledging the ruling in NYSDEC, the Agency also notes 
that the Fourth Circuit ruled in support of the reasonable period of 
time beginning when the certifying authority deems the application 
complete. AES Sparrows Point LNG v. Wilson, 589 F.3d 721 (4th Cir. 
2009). The final rule approach is consistent with this decision in that 
regard, and not inconsistent with NYSDEC, as explained above.
    States' and authorized Tribes' ability to define additional 
contents of a request for certification should ultimately reduce the 
need for certifying authorities to request additional information from 
project proponents after the request for certification has been 
submitted. The limitations referenced above do not preclude certifying 
authorities from asking for more information after they receive a 
request for certification and the reasonable period of time begins, if 
the certifying authority determines additional information would help 
inform its decision-making on the request for certification. However, 
these requests for additional information by a certifying authority 
should be targeted to information relevant to the potential water 
quality-related impacts from the activity. EPA also encourages 
certifying authorities and project proponents to discuss the necessary 
information that must be part of the request for certification during 
the pre-filing meeting process.
ii. Requirements When EPA Is the Certifying Authority
    The Agency is finalizing a list of additional contents required for 
requests for certification submitted to EPA when EPA acts as a 
certifying authority.\46\ This list also applies to requests for 
certification submitted to states and authorized Tribes that have not 
identified additional contents of a request for certification. As 
discussed below, these components contain some similarities to the 1971 
Rule and 2020

[[Page 66579]]

Rule, with revisions to provide further clarification and efficiency 
for project proponents, EPA when it acts as a certifying authority, and 
when a state or authorized Tribe has not established its own definition 
of ``request for certification.''
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    \46\ EPA acts as the certifying authority on behalf of states or 
Tribes that do not have ``authority to give such certification.'' 33 
U.S.C. 1341(a)(1). EPA acts as the certifying authority in two 
scenarios: (1) on behalf of Tribes without ``treatment in a similar 
manner as a state'' (TAS) and (2) on lands of exclusive Federal 
jurisdiction.
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    EPA proposed a list of contents that shall be included in requests 
for certification to the Regional Administrator shall include the 
following, if not already included in the draft license or permit:
    1. The name and address of the project proponent;
    2. The project proponent's contact information;
    3. Identification of the applicable Federal license or permit, 
including Federal license or permit type, project name, project 
identification number, and a point of contact for the Federal agency;
    4. Where available, a list of all other Federal, interstate, 
tribal, state, territorial, or local agency authorizations required for 
the proposed activity and current status of each authorization; and
    5. Documentation that a pre-filing meeting request was submitted to 
the certifying authority in accordance with applicable submission 
requirements, unless a pre-filing meeting request has been waived. 40 
CFR 121.5(c)
    Proposed Sec.  121.5(b) also provided that ``[w]here a project 
proponent is seeking certification from a certifying authority other 
than the Regional Administrator, and that certifying authority has not 
identified in regulation additional contents of a request for 
certification, the project proponent shall submit a request for 
certification as defined in [Sec.  121.5(c)].''
    In this final rule at Sec.  121.5(b), EPA is finalizing a slightly 
different list of additional contents in a request for certification 
than what was proposed that combines components proposed and offered as 
alternatives in the preamble to the proposed rule, due to the feedback 
received in the public comments and the removal of a draft Federal 
license or permit from the minimum contents for all requests for 
certification. The final list of additional contents for a request for 
certification when EPA is the certifying authority (or when states or 
Tribes fail to define such additional contents) includes seven 
components derived from the proposed approach and the alternative 
approach:
    1. A description of the proposed activity, including the purpose of 
the proposed activity and the type(s) of discharge(s) that may result 
from the proposed activity;
    2. The specific location of any discharge(s) that may result from 
the proposed activity;
    3. A map or diagram of the proposed activity site, including the 
proposed activity boundaries in relation to local streets, roads, and 
highways;
    4. A description of current activity site conditions, including but 
not limited to relevant site data, photographs that represent current 
site conditions, or other relevant documentation;
    5. The date(s) on which the proposed activity is planned to begin 
and end and, if known, the approximate date(s) when any discharge(s) 
may commence;
    6. A list of all other Federal, interstate, Tribal, state, 
territorial, or local agency authorizations required for the proposed 
activity and the current status of each authorization; and
    7. Documentation that a pre-filing meeting request was submitted to 
the certifying authority in accordance with applicable submission 
procedures, unless the pre-filing meeting request requirement was 
waived.
    A few commenters agreed that EPA's additional contents for a 
request for certification should be the default contents for a request 
to a certifying authority that does not define additional contents. 
However, some commenters expressed concern that EPA's default list of 
additional certification request components was inadequate and did not 
capture all the items a state or authorized Tribe may need for its 
analysis. One commenter asserted that EPA's default additional 
components create a presumption that EPA's list is sufficient for a 
request for certification, and recommended that EPA make clear that 
states and authorized Tribes have the authority to specify the contents 
of a request for certification where they are the certifying authority.
    To provide transparency and predictability, the final rule requires 
project proponents seeking certification from a state or authorized 
Tribe that has not identified additional contents of a request for 
certification to submit the additional contents identified at Sec.  
121.5(b). See Sec.  121.5(d). However, this final rule does not create 
the presumption that the contents identified at Sec.  121.5(b) will be 
sufficient for all scenarios and all certifying authorities. Rather, 
the Agency is providing a list of minimum contents as a baseline and 
allowing state and Tribal certifying authorities to define additional 
contents for each request for certification. As discussed above, the 
additional contents in Sec.  121.5(b) would not apply where a 
certifying authority has established its own list of requirements for a 
request for certification. However, EPA recommends that certifying 
authorities wishing to establish their own lists of additional contents 
of requests for certification consider the requirements outlined by the 
Agency in Sec.  121.5(b), as these contents reflect the additional 
information deemed necessary by EPA for the Agency to initiate its 
analysis of a certification request on a Federal license or permit 
application.
    EPA requested comment on an alternative list of additional contents 
to accompany a request for certification on a Federal license or permit 
application. Under this alternative approach, the project proponent 
would be required to submit ``proposed activity information'' with six 
components, including the following:
    1. A description of the proposed activity, including the purpose of 
the proposed activity and the type(s) of discharge(s) that may result 
from the proposed activity;
    2. The specific location of any discharge(s) that may result from 
the proposed activity;
    3. A map and/or diagram of the proposed activity site, including 
the proposed activity boundaries in relation to local streets, roads, 
highways;
    4. A description of current activity site conditions, including but 
not limited to relevant site data, photographs that represent current 
site conditions, or other relevant documentation;
    5. The date(s) on which the proposed activity is planned to begin 
and end and, if known, the approximate date(s) on which any 
discharge(s) will take place; and
    6. Any additional information to inform whether any discharge from 
the proposed activity will comply with applicable water quality 
requirements. 87 FR 35336.
    A few commenters did not find the additional requirements for the 
alternative approach to be necessary, because the information would 
already be included in the application or under current state 
requirements. On the other hand, some commenters provided suggestions 
for the default additional contents. A few commenters recommended 
supplementing the default additional request components with the six 
additional components listed in the proposal preamble as an 
alternative, and as suggested by one of these commenters, revising as 
appropriate to address any duplication.
    EPA does not agree with commenters asserting that additional 
components are unreasonable. While some commenters said doing so was 
unnecessary, the relevant inquiry is whether EPA's

[[Page 66580]]

inclusion of additional components is ``reasonable,'' not whether it is 
``necessary.'' EPA anticipates that the list of additional required 
contents at Sec.  121.5(b) is appropriate for EPA as a certifying 
authority and as a default list for those other certifying authorities 
that have not identified additional required contents for requests for 
certification. EPA also does not intend for this list to be 
duplicative. Accordingly, EPA has added text at final rule Sec.  
121.5(b) to clarify that a project proponent only needs to provide the 
additional components where such components are not already included in 
the minimal contents of a request for certification defined at Sec.  
121.5(a). For example, if a map or diagram of the proposed activity 
site is part of the Federal license or permit application, the project 
proponent would not be required to submit a second copy of the map or 
diagram.
    EPA agrees with commenters who suggested that the Agency combine 
the proposed and alternative lists of additional contents. As discussed 
below, the Agency has revised the list of additional contents to reduce 
duplication among the minimal contents of a request for certification. 
Additionally, the Agency recognizes that some of the components listed 
at Sec.  121.5(b) may not be applicable if the project proponent is a 
Federal agency seeking certification on the issuance of a general 
Federal license or permit. Accordingly, the Agency has added regulatory 
text at Sec.  121.5(b) to clarify that only the applicable additional 
components need to be included in a request for certification to EPA.
    First, based on commenter recommendations, EPA is not finalizing 
the components of the proposed list that are expected to be captured by 
the requirements in Sec.  121.5(a), such as the name and address of the 
project proponent, the project proponent's contact information, and 
identification of the applicable Federal license or permit, including 
the Federal license or permit type, project name, project 
identification number, and a point of contact for the Federal agency. 
Although this type of background information was included in the 1971 
Rule and the 2020 Rule, this information is unnecessary and redundant 
to both the Federal license or permit application and draft Federal 
license or permit.
    Second, similar to the 2020 Rule, the Agency is finalizing the 
requirement that the project proponent provide a list of other 
authorizations that are required for the proposed activity and the 
current status of such authorizations. This requirement will allow the 
Agency to assess how water quality impacts may be addressed through 
other Federal, state, Tribal, or local authorizations and potentially 
reduce redundancies or inconsistencies between the certified Federal 
license or permit and other authorizations. When the project proponent 
is a Federal agency seeking certification, the Agency does not expect 
the Federal agency to be able to produce such a list. Typically, when a 
Federal agency seeks certification, it is seeking certification on 
general Federal licenses or permits that would be used by project 
applicants in the future. Therefore, at the time of the request for 
certification, the Federal agency is likely unable to provide any 
information on which authorizations, if any, are required for such a 
future project.
    Third, like the 2020 Rule, the Agency is finalizing a requirement 
that the project proponent submit documentation that it requested a 
pre-filing meeting, unless the pre-filing meeting request has been 
waived. The documentation should be in writing, such as a copy of the 
email requesting the pre-filing meeting. As discussed in section IV.B 
in this preamble, a certifying authority may waive the requirement for 
a pre-filing meeting request. In that event, the project proponent 
would not need to produce documentation of a pre-filing meeting 
request.
    Fourth, the Agency is adding five components that were offered as 
alternatives to the final rule text to provide EPA with information 
about the proposed activity, including a description of the proposed 
activity, the location of any discharge from the proposed activity, a 
map or diagram of the proposed activity site, a description of current 
activity site conditions, and the date(s) on which the proposed 
activity will begin and end. These components are similar to those in 
the 2020 Rule, see Sec.  121.5(b)(4) (2020), and the 1971 Rule, see 
Sec.  122.22(b), (d) (2019). These components are necessary to initiate 
EPA's analysis of a request for certification on a Federal license or 
permit application.
    The Agency is not including the sixth alternative component offered 
at proposal, which would have required a project proponent to submit 
any additional information to inform whether any discharge from the 
proposed activity will comply with applicable water quality 
requirements. EPA finds that such a component would be too vague and 
would not provide project proponents with a clear, predictable set of a 
requirements for a request for certification. However, if EPA later 
determines additional information would be helpful to inform its 
decision-making on a request for certification, this final rule does 
not preclude EPA from asking for additional information after a 
certification request is submitted. But EPA cannot require additional 
components, aside from contents listed at Sec.  121.5(a) and (b), in a 
request for certification.
    The Agency is also finalizing the removal of the contents of the 
2020 Rule at Sec.  121.5(b)(5), (8), and (9); the 1971 Rule also 
contained similar contents to Sec.  121.5(b)(5) of the 2020 Rule. See 
40 CFR 121.22(c), (e) (2019). Section 121.5(b)(5) of the 2020 Rule, 
which required the project proponent to ``[i]nclude a description of 
any methods and means proposed to monitor the discharge and the 
equipment or measures planned to treat, control, or manage the 
discharge,'' is unnecessary since the final rule requires a project 
proponent to provide the Federal license or permit application or draft 
Federal license or permit, as appropriate, and any readily available 
water quality-related materials that informed the development of the 
application or draft Federal license or permit in its request. The 
Agency also finds it unnecessary to retain the requirements at Sec.  
121.5(b)(8) and (9) of the 2020 Rule. In 2020, EPA required the project 
proponent to include an attestation statement that the project 
proponent ``certifies that all information contained herein is true, 
accurate, and complete to the best of my knowledge and belief'' at 
Sec.  121.5(b)(8) ``to create additional accountability on the part of 
the project proponent to ensure that information submitted in a 
certification request accurately reflects the proposed project.'' 85 FR 
42245. EPA is unaware of any issues or concerns that project proponents 
will not provide accurate information in the request for certification 
without such attestation. Furthermore, the final contents for a request 
for certification include either the license or permit application or a 
copy of the draft Federal license or permit, which presumably 
incorporates accurate information about the proposed project. 
Additionally, Sec.  121.5(b)(9) of the 2020 Rule, which required the 
project proponent to include a statement that it ``hereby requests that 
the certifying authority review and take action on this CWA 401 
certification request within the applicable reasonable period of 
time,'' is unnecessary because a project proponent is required to 
submit a request for certification as defined in this final rule. 
Submitting a request for certification as defined in this final rule 
should be a clear

[[Page 66581]]

indication to the certifying authority that the project proponent is 
seeking certification.
    A few commenters provided detailed, lengthy lists of additional 
contents, beside the seven that EPA is finalizing, that could be 
required by certifying authorities, including but not limited to 
various plans, photographs, field surveys, construction methods, and 
maps. Another commenter asserted that a request should include the 
requirements for a complete application that are at least as stringent 
as Federal agencies making similar determinations, such as the Corps' 
requirements for complete CWA section 404 permit applications.
    EPA appreciates commenter suggestions and while EPA is not 
including additional contents in Sec.  121.5(b), aside from those 
discussed above, the Agency emphasizes that certifying authorities are 
free to define additional contents for their requests for 
certification. As discussed in the prior subsection, EPA has adjusted 
the language in the final rule to increase flexibility for certifying 
authorities to define the additional contents of a request for 
certification in regulation or another appropriate manner, such as an 
official form used for requests for certification. Such additional 
contents should be communicated clearly and transparently for project 
proponents to be aware of before submitting a request for 
certification.
c. Defining ``Receipt'' of a Request for Certification
    The Agency is clarifying at Sec.  121.6(a) that ``the reasonable 
period of time begins on the date that the certifying authority 
receives a request for certification, as defined in Sec.  121.5, in 
accordance with the certifying authority's applicable submission 
procedures.'' In proposed Sec.  121.6(a), EPA stated that ``the 
reasonable period of time shall begin upon receipt of a request for 
certification.'' The Agency proposed to define ``receipt'' at Sec.  
121.1(k) to mean ``the date that a request for certification, as 
defined by the certifying authority, is documented as received by a 
certifying authority in accordance with the certifying authority's 
applicable submission procedures.'' The final rule merely simplifies 
the proposed rule's approach to when the reasonable period of time 
begins by placing the definition of receipt in Sec.  121.6(a).
    The statute provides that the reasonable period of time begins 
``after receipt of such request.'' 33 U.S.C. 1341(a)(1). The statute 
does not define the term ``receipt of such request,'' nor does it 
define how a request for certification must be received by a certifying 
authority. The 1971 Rule did not address or define the term 
``receipt,'' however, the Agency opted to define the term in the 2020 
Rule. 40 CFR 121.1(m) (2020). The 2020 Rule defined the term 
``receipt'' as ``the date that a certification request is documented as 
received by a certifying authority in accordance with applicable 
submission procedures.'' Id. In implementation of the 2020 Rule, there 
was some confusion regarding whether it was the Federal agency's or 
certifying authority's responsibility to determine that a certification 
request, as defined by the 2020 Rule, was received.
    Consistent with the statutory text, the reasonable period of time 
begins on the date that the certifying authority receives a request for 
certification, as defined at Sec.  121.5, and is submitted in 
accordance with the certifying authority's applicable submission 
procedures. 40 CFR 121.6(a). As discussed in more detail below, the 
certifying authority must send written notification to the project 
proponent and Federal agency of the date the request for certification 
was received.
    Some commenters asserted that, due to the wide variety of project 
types, the regulations should not dictate when the reasonable period of 
time begins. These commenters added that states and authorized Tribes 
should determine when the reasonable period of time starts, and when 
they have sufficient information to conduct a proper review, provided 
it does not exceed the statutory one-year limit. As described above, 
EPA provides in the final rule at Sec.  121.6(a) that ``the reasonable 
period of time begins on the date that the certifying authority 
receives a request for certification, as defined in Sec.  121.5, in 
accordance with the certifying authority's applicable submission 
procedures.'' This approach provides certifying authorities with a role 
in determining when the clock starts (i.e., by defining additional 
contents of a request for certification and applicable submission 
procedures), while also providing transparency and consistency around 
the process for requesting certification and starting the reasonable 
period of time for project proponents.
    Some commenters stated that the proposed definition of ``receipt'' 
would limit predictability and could allow certifying authorities to 
delay the certification process by saying they have not received the 
request for certification in full and in accordance with its submission 
procedures. A few commenters asserted that the Second Circuit held that 
allowing states to determine when requests are ``complete'' could 
create a ``subjective standard'' in violation of the bright line 
requirements of section 401. NYSDEC, 884 F.3d at 455-56. While not 
retaining a definition of ``receipt'' in the final rule, EPA maintains 
that consistent with section 401(a)(1), the reasonable period of time 
clock starts when the certifying authority has received a request for 
certification, as defined in Sec.  121.5 of the final rule, in 
accordance with the certifying authority's applicable submission 
procedures. See 40 CFR 121.6(a). EPA disagrees with commenter 
assertions that having the certifying authority determine when it has 
received a request for certification will lead to certifying 
authorities subjectively determining when a request for certification 
has or has not been submitted. Rather, this final rule expressly 
rejects such practices by limiting requests for certification from 
state and Tribal certifying authorities with additional required 
components to those that are identified prior to when the request for 
certification is made. See 40 CFR 121.5(c). This does not mean a 
certifying authority could not ask for additional information after a 
request for certification is made; rather, a certifying authority 
cannot alter the required contents of the request for certification 
after it is received. Similarly, the Agency disagrees that the concept 
of ``completeness'' is inherently subjective. As discussed above, 
having the certifying authority establish a list of additional required 
contents for a request for certification before receiving a request for 
certification, and therefore determine when the request has been 
received, is not at odds with the decision from the Second Circuit. See 
discussion supra.
    The project proponent must submit the request for certification in 
accordance with the certifying authority's applicable submission 
procedures. Applicable submission procedures describe the manner in 
which a certifying authority will accept a certification request, e.g., 
through certified mail or electronically. The Agency understands that 
certifying authorities may have different procedures for receiving 
certification requests (e.g., receiving certification in different 
formats or requiring the payment of fees), and as such is not limiting 
or defining a set of standard applicable submission procedures. The 
certifying authority may provide these applicable submission procedures 
in regulations or another appropriate manner, such as an official form 
used for requests for certification. In whichever way the certifying 
authorities

[[Page 66582]]

provide their procedures, EPA encourages certifying authorities to 
communicate them transparently and publicly. EPA recommends that the 
certifying authority and project proponent communicate with each other 
(e.g., during any pre-filing meeting engagement) to discuss submission 
procedures and contents of the request for certification.
    As mentioned above, once a certifying authority receives a request 
for certification, the certifying authority must send written 
confirmation to the project proponent and the Federal agency of the 
date that the request for certification was received. The Agency 
proposed similar language at Sec.  121.5(d). However, the Agency has 
moved this provision to Sec.  121.6(a) to better clarify that the 
reasonable period of time does not start with the written confirmation 
from the certifying authority. Rather, consistent with section 
401(a)(1), it begins on the date that the project proponent submitted 
the request for certification. EPA recognizes that the final rule no 
longer includes a strict period for negotiation on the length of the 
reasonable period of time between the certifying authority and the 
Federal agency at the start of the reasonable period of time, which 
means that the certifying authority may not promptly notify the project 
proponent and the Federal agency that the request for certification was 
received. Accordingly, the Agency is removing the regulatory text 
located at Sec.  121.6(b) in the 2020 Rule, which required the Federal 
agency to communicate the date of receipt of the request for 
certification, the reasonable period of time, and the date waiver will 
occur. Under this final rule, the certifying authority is responsible 
for confirming the date of receipt of a request for certification with 
the project proponent and Federal agency. However, the final rule 
approach will not lead to the same level of confusion as the 2020 Rule 
requirement for the project proponent to submit the request for 
certification concurrently to the certifying authority and the Federal 
agency. Under the 2020 Rule, although the certifying authority was 
responsible for determining whether a request was received, a project 
proponent could submit a deficient certification request to the Federal 
agency and spur the Federal agency to communicate an inaccurate date of 
receipt for the request. The final rule approach avoids this potential 
miscommunication by relying on the certifying authority, rather than 
the project proponent, to communicate the date of receipt of a request 
for certification with the project proponent and Federal agency.
3. Implementation
    The Agency recommends that project proponents, certifying 
authorities, and Federal agencies work together to determine the most 
efficient and effective means of communication before the certification 
process begins to ensure a common understanding of the contents of a 
request for certification. The final rule's pre-filing meeting process 
provides an opportunity for such early engagement to identify and 
discuss the appropriate request for certification requirements. Because 
the final rule allows certifying authorities to require additional 
contents in a request for certification as long as they are identified 
prior to when the request for certification is made, certifying 
authorities should make their additional contents for request for 
certification and applicable submission procedures readily available 
and transparent to the regulated public. EPA intends to support 
certifying authority efforts to make the requests for certification 
requirements transparent. For example, EPA could provide links to other 
certifying authorities' websites on EPA's website or maintain an up-to-
date list of points of contact to connect project proponents with the 
appropriate certifying authority.
    Another way a certifying authority may further support the 
efficient review of requests for certification would be for the 
certifying authority to make available draft certification conditions 
that project proponents can consider while developing their project 
design plans and request for certification materials. Project 
proponents can save time and money by preparing for and mitigating the 
impacts from an activity that will not comply with applicable water 
quality requirements. EPA acknowledges that not all certifying 
authorities will be able to provide conditions that anticipate 
potential water quality impacts from various types of activities that 
will not comply with their applicable water quality requirements; 
however, some certifying authorities have made example certification 
conditions for certain project types or waterbodies available prior to 
receipt of requests for certification for those project types or 
geographic areas.
    The Agency wishes to clarify several implementation questions or 
issues related to the request for certification that have previously 
arisen or were revealed through public comment on this rulemaking. 
First, with regards to project proponents seeking project-specific 
certification to obtain authorization under a Corps general permit, 
project proponents must submit the minimum contents defined at Sec.  
121.5(a)(1). For example, if a state or authorized Tribe denied 
certification on the issuance of a Corps' general permit, then to 
obtain authorization under that general permit, the project proponent 
would need to obtain a project-specific certification or waiver from 
the state or authorized Tribe. In those cases, the ``application'' part 
of the request for certification may take the form of a pre-
construction notification (PCN), along with any readily available water 
quality-related materials that informed the development of the 
application (e.g., the general permit). Second, regarding individual 
projects that do not involve an ``application'' or a ``license or 
permit'' but still require certification, like Corps' civil works 
projects, the Agency expects the project proponent to provide documents 
in lieu of the application that are similar in nature, such as a 
``project study'' when requesting certification. In both instances, the 
Agency expects the final rule's approach should be familiar to 
stakeholders who have previously sought certification on such Federal 
licenses or permits for 50 years under the 1971 Rule.
    A few commenters also raised various implementation-related 
questions with the proposed inclusion of the draft Federal license or 
permit in all requests for certification. Several commenters expressed 
concern and confusion over the term ``draft permit or license'' in the 
proposed rule and requested that EPA define the term to clarify the 
appropriate level of detail (e.g., license or permit is ready for 
issuance, final draft license or permit). Commenters also questioned 
what would occur if the project changed after receiving a draft Federal 
license or permit, as well as whether the project proponent was best 
suited to provide the certifying authority with a copy of the draft 
Federal license or permit.
    As discussed above, in this final rule, a draft Federal license or 
permit is only required for requests for certification on the issuance 
of general Federal licenses or permits. Currently, the Agency is only 
aware of general permits for two Federal agencies: the Corps (section 
404 program) and EPA (section 402 program). The Agency does not find it 
necessary to define ``draft license or permit'' for purposes of this 
rulemaking, in part because stakeholders should be familiar with the 
process of requesting certification on these Federal licenses or 
permits and Federal agencies will be acting as the ``project 
proponent'' in

[[Page 66583]]

these instances. This final rule does not require a Federal agency 
seeking certification on the issuance of a general Federal license or 
permit to seek certification immediately upon publication of the draft 
Federal license or permit. Rather, the Federal agency must request 
certification after publication of the draft Federal license or permit. 
For example, the Corps is required to request certification on the 
nationwide permits (NWPs) when they are renewed every five years. 
First, the Corps proposes the draft NWPs and takes comment on the 
proposals, and later finalizes the NWPs after considering public 
comment. Under this final rule, the Corps may request certification on 
the NWPs after it receives and considers public comment on the 
proposals but before finalizing the NWPs. In that scenario, the Corps 
would provide the non-finalized NWP to the certifying authority as the 
draft permit in its request for certification to satisfy the 
requirements. EPA encourages Federal agencies and certifying 
authorities to work together to determine the point in time at which a 
request would be most appropriate to allow for an informed and 
efficient certifying authority review. Such coordination could also 
avoid questions or concerns arising over significant changes to the 
draft Federal license or permit post-request. However, there may always 
be a degree of uncertainty or possibility for project changes when it 
comes to certifying any project because a Federal agency must obtain a 
certification prior to issuing a Federal license or permit.\47\ EPA 
encourages certifying authorities to engage early and often with 
project proponents and Federal agencies and develop certification 
conditions that allow for ``adaptive management'' in the event a 
project changes. See section IV.F in this preamble for further 
discussion on adaptive management conditions.
---------------------------------------------------------------------------

    \47\ A final Federal license or permit may not be issued until 
after a certification or waiver is obtained by the project 
proponent. 33 U.S.C 1341(a)(1) (``No license or permit shall be 
granted until certification required by this section has been 
obtained or has been waived as provided in the preceding 
sentence.'') Therefore, requiring a copy of the final Federal 
license or permit to initiate the certification process would be 
inconsistent with the plain language of section 401.
---------------------------------------------------------------------------

    Neither the CWA nor this final rule require project proponents to 
submit the request for certification for an individual license or 
permit at the time a Federal license or permit application is 
submitted. Accordingly, project proponents would not be precluded from 
providing a copy of the draft Federal license or permit, in addition to 
the Federal license or permit application, when requesting 
certification for individual Federal licenses or permits. For example, 
EPA can continue its longstanding practice of submitting a copy of the 
draft individual CWA section 402 NPDES permit to the certifying 
authority for its review. However, project proponents would not be 
required to wait to request certification for an individual Federal 
license or permit until a copy of the draft Federal license or permit 
is obtained, unless the certifying authority has defined in its 
additional contents for a request for certification that the request 
must include a copy of the draft Federal license or permit.
    A few commenters recommended allowing certifying authorities to 
issue certification decisions in the absence of a request for 
certification. For purposes of section 401, EPA does not agree that a 
CWA section 401 certification can be issued in the absence of a project 
proponent requesting certification for a Federal license or permit that 
may result in any discharge into waters of the United States. See 
section IV.A in this preamble for further discussion on when 
certification is required.\48\ Similarly, if the certifying authority 
never received a request for certification or if the request for 
certification or Federal license or permit application was withdrawn, 
then the certifying authority is no longer responsible for acting on 
the request for certification because the pre-requisite ``request'' is 
absent. See section IV.D.2.c in this preamble regarding the Agency's 
position on the legality of the practice of withdrawing and 
resubmitting requests for certification.
---------------------------------------------------------------------------

    \48\ EPA is aware that in some instances, certifying authorities 
use section 401 certifications as state permits under state law; 
however, this final rule does not address such practices.
---------------------------------------------------------------------------

    As mentioned above, once a certifying authority receives a request 
for certification, the certifying authority must send written 
confirmation to the project proponent and the Federal agency of the 
date that the request for certification was received. 40 CFR 121.6(a). 
If a project proponent submits a request for certification that does 
not meet the requirements of Sec.  121.5 of this final rule, the Agency 
recommends that the certifying authority promptly notify the project 
proponent that it did not submit a request for certification in 
accordance with Sec.  121.5 of this final rule. However, as discussed 
previously, certifying authorities and project proponents can avoid 
such outcomes by leveraging early engagement opportunities (i.e., pre-
filing meetings) to ensure a common understanding of the required 
contents of a request for certification.

D. Reasonable Period of Time

1. What is the Agency finalizing?
    Under section 401, when a certifying authority receives a request 
for certification, the certifying authority must act on that request 
within a ``reasonable period of time (which shall not exceed one 
year).'' 33 U.S.C. 1341(a)(1). At Sec.  121.6(a), EPA clarifies that 
the reasonable period of time begins on the date that a request for 
certification, as discussed in the previous section, is received by the 
certifying authority in accordance with its applicable submission 
procedures. Section 121.6(b) provides Federal agencies and certifying 
authorities with the ability to jointly set the reasonable period of 
time, provided it does not exceed one year from the date that the 
request for certification was received. The final rule clarifies that 
the joint determination of the reasonable period of time may happen on 
a case-by-case basis or categorically. See 40 CFR 121.6(b).
    Under this final rule, if the Federal agency and certifying 
authority do not agree upon a reasonable period of time, the default 
reasonable period of time will be six months from the date that the 
request for certification was received. See 40 CFR 121.6(c). This 
default approach obviates the need for a dispute resolution process in 
the event the certifying authority and Federal agency are not able to 
agree on the reasonable period of time. The Agency proposed a 60-day 
default reasonable period of time. However, for several reasons 
discussed below, the Agency is not finalizing the proposed 60-day 
default reasonable period of time.
    The pre-filing meeting could be a venue for the Federal agency and 
certifying authority to discuss the length of the reasonable period of 
time, particularly because the project proponent participates in that 
meeting and will, therefore, be informed of any reasonable period of 
time-related discussions and decisions. EPA also recognizes that the 
Federal agency and the certifying authority may benefit from discussing 
the length of the reasonable period of time before the pre-filing 
meeting to then use the pre-filing meeting to inform the project 
proponent of the agreed-upon length. Although the Agency is not listing 
factors that Federal agencies and certifying authorities must consider 
when establishing the reasonable period of time that the certifying 
authority has to act on the

[[Page 66584]]

request for certification, Federal agencies and certifying authorities 
might consider factors such as project type, complexity, location, and 
scale; the certifying authority's administrative procedures; other 
relevant timing considerations (e.g., Federal license or permit 
deadlines; associated National Environmental Policy Act deadlines; and/
or anticipated timeframe for neighboring jurisdictions process); and/or 
the potential for the licensed or permitted activity to affect water 
quality. Federal agencies and certifying authorities might also elect 
to establish joint reasonable period of time procedures and/or 
agreements through a memorandum of agreement (MOA) or similar. Such 
MOAs could apply to all federally licensed or permitted activities or 
only to specific types of activities (e.g., activities covered by 
general permits). The requests for certification that fall under these 
MOAs would not require individual written agreements confirming the 
reasonable period of time between the Federal agency and certifying 
authority for each Federal license or permit. Alternatively, Federal 
agencies and certifying authorities might prefer to agree and establish 
the reasonable period of time in writing on a case-by-case basis.
    EPA is finalizing as proposed that after the reasonable period of 
time is set, the Federal agency and certifying authority may agree to 
extend the reasonable period of time, provided that it does not exceed 
one year from the date that the request for certification was received. 
See 40 CFR 121.6(e). Section 121.6(d) also provides automatic 
extensions for certain situations, as EPA recognizes there are 
circumstances under which the Federal agency must extend the reasonable 
period of time without the certifying authority needing to negotiate an 
agreement. Such circumstances are where a certification decision cannot 
be rendered within the negotiated or default reasonable period of time 
due to force majeure events (including, but not limited to, government 
closure or natural disasters) and when state or Tribal public notice 
procedures necessitate a longer reasonable period of time.
    If a longer period of time to review the request for certification 
is necessary due to either of these circumstances, upon written 
notification to the Federal agency by the certifying authority prior to 
the end of the reasonable period of time, the reasonable period of time 
shall be extended by the amount of time necessitated by public notice 
procedures or the force majeure event, as long as it does not cause the 
reasonable period of time to exceed one year from the date that the 
request for certification was received. In its notification, the 
certifying authority must provide the Federal agency with a written 
justification for the automatic extension. The justification must 
describe the circumstances supporting the extension (i.e., 
accommodating the certifying authority's public notice procedures, 
government closures, or natural disasters) and does not require Federal 
agency approval before taking effect. The extended reasonable period of 
time would take effect upon notification by the certifying authority to 
the Federal agency.
    Aside from these automatic extensions, the Agency expects that 
certifying authorities and Federal agencies will collaboratively agree 
to discretionary extensions to the reasonable period of time where 
appropriate. For example, the certifying authority and Federal agency 
could develop, in a MOA or similar instrument, a process to identify 
scenarios where changes to the reasonable period of time would be 
appropriate. Such scenarios may include situations where relevant new 
information becomes available during the reasonable period of time. EPA 
notes that the final rule promotes early collaboration and pre-filing 
meetings to allow the Federal agency, certifying authority, and the 
project proponent to discuss project complexity, seasonal limitations, 
and other factors that may influence the amount of time needed to 
complete the certifying authority's analysis. These opportunities may 
reduce the need to extend the jointly established or default reasonable 
period of time.
    Consistent with the proposal, EPA is not taking a position on the 
legality of withdrawing and resubmitting a request for certification. 
While there may be situations where withdrawing and resubmitting a 
request for certification is appropriate, drawing a bright regulatory 
line on this issue is challenging, and the law in this area is dynamic. 
See, e.g., Hoopa Valley Tribe v. FERC, 913 F.3d 1099, 1105 (D.C. Cir. 
2019) (holding that repeated, coordinated withdrawal and resubmittal of 
a certification request resulted in a waiver); N.C. Dep't of Envtl. 
Quality (NCDEQ) v. FERC, 3 F.4th 655, 676 (4th Cir. 2021) (finding that 
the record did not support FERC's determination that the state and 
project proponent withdrew and resubmitted the certification request in 
a coordinated fashion resulting in waiver). For these reasons, the 
final rule does not take a position on this issue, instead allowing the 
different state and Tribal certifying authorities, Federal agencies, 
and/or possibly project proponents to make case-specific decisions 
addressing the practice.
    The Agency is also finalizing deletions in the part 124 provisions 
regarding the reasonable period of time for certification on EPA-issued 
NPDES permits, formerly located at 40 CFR 124.53(c)(3), in favor of the 
reasonable period of time provisions in the final rule at Sec.  121.6. 
The approach to the reasonable period of time taken in Sec.  124.53(c) 
was not fully consistent with the approach at Sec.  121.6. For 
instance, the standard reasonable period of time was 60 days instead of 
the default six months in Sec.  121.6(c). Further, unlike Sec.  
121.6(b), Sec.  124.53(c)(3) did not include a provision allowing 
certifying authority collaboration in setting the reasonable period of 
time. And unlike Sec.  121.6(d), Sec.  124.53(c)(3) did not allow for 
automatic extensions to accommodate a certifying authority's public 
notice procedures or force majeure events (instead allowing extensions 
beyond the default 60 days only if EPA finds ``unusual circumstances'' 
require a longer time). Consequently, EPA has deleted Sec.  
124.53(c)(3). In addition, EPA has made conforming changes in Sec.  
124.53(c) for consistency with the request for certification 
requirements in Sec.  121.5.
2. Summary of Final Rule Rationale and Public Comment
    Section 401(a)(1) provides that a certifying authority waives its 
ability to certify a Federal license or permit if it does not act on a 
certification request within the reasonable period of time. 33 U.S.C. 
1341(a)(1) (``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.''). Other than specifying its outer bound (one year), the 
CWA does not define what length of time is ``reasonable.'' The 1971 
Rule explained that a certifying authority would waive its opportunity 
to certify if it did not act within ``a reasonable period of time'' and 
provided that: (1) the Federal licensing or permitting agency 
determines the length of the reasonable period of time, and (2) the 
reasonable period of time ``shall generally be considered to be six 
months, but in any event shall not exceed one year.'' See 40 CFR 
121.16(b) (2019).
    The 2020 Rule provided that the Federal agency alone sets the 
reasonable

[[Page 66585]]

period of time and defined a process for how it should be determined. 
See 40 CFR 121.6 (2020). This process specified when a Federal agency 
must communicate the reasonable period of time to the certifying 
authority and identified factors that the Federal agency must consider 
when setting the reasonable period of time. See id.; 85 FR 42259-60 
(July 13, 2020). The 2020 Rule did not maintain the 1971 Rule's six-
month default and reiterated that the reasonable period of time could 
not exceed one year from receipt of the certification request. 40 CFR 
121.6 (2020). The 2020 Rule also defined the term ``reasonable period 
of time'' as the length of time during which the certifying authority 
may act on a request for certification. 40 CFR 121.1(l) (2020).
    Some Federal agencies promulgated regulations describing a 
reasonable period of time for section 401 certification in relation to 
those agencies' licenses or permits prior to the 2020 Rule. For 
example, FERC has explicitly defined the reasonable period of time to 
be one year. See 18 CFR 4.34(b)(5)(iii), 5.23(b)(2), 157.22(b).\49\ The 
Corps has routinely implemented a 60-day reasonable period of time for 
section 401 decisions commencing when the certifying authority receives 
a section 401 certification request. See 33 CFR 325.2(b)(1)(ii). EPA 
established a 60-day reasonable period of time for NPDES permits. See 
40 CFR 124.53(c)(3).
---------------------------------------------------------------------------

    \49\ FERC proposed and finalized regulations to codify FERC's 
practice of a one-year reasonable period of time on natural gas or 
liquefied natural gas infrastructure projects after the 2020 Rule. 
See 86 FR 16298 (March 29, 2021).
---------------------------------------------------------------------------

    In pre-proposal input on the rulemaking, project proponents 
generally supported the reasonable period of time provisions in the 
2020 Rule, whereas most states, Tribes, and non-governmental 
organizations expressed concern with various aspects of it. Some 
certifying authorities also pointed out that short reasonable periods 
of time (e.g., 60 days) do not allow the state or authorized Tribe 
sufficient time to fulfill certain state or Tribal law requirements, 
such as public notice procedures, or allow them to obtain all the 
information they need about a project to make an informed certification 
decision. As a result, these certifying authorities asserted that for 
complex projects, their only realistic options are to waive or deny 
certification. EPA expressed similar concerns in its notice of intent 
to revise the 2020 Rule. See 86 FR 29543 (June 2, 2021) (``Among other 
issues, EPA is concerned that the rule does not allow state and tribal 
authorities a sufficient role in setting the timeline for reviewing 
certification requests . . . .'').
    The Agency proposed at Sec.  121.6(b) that the Federal agency and 
certifying authority may jointly set the reasonable period of time on a 
case-by-case or project type basis. Additionally, the proposal included 
a default reasonable period of time of 60 days if the Federal agency 
and certifying authority are not able to come to an agreement within 30 
days of receipt of the request of certification at Sec.  121.6(c). 
Proposed Sec.  121.6(c) and (d) also introduced extensions of the 
reasonable period of time. It was proposed that the negotiated or 
default reasonable period of time would automatically be extended to 
accommodate public notice and comment processes or due to force majeure 
events. The Federal agency and certifying authority could also agree to 
extend the reasonable period of time for any reason, provided it did 
not exceed the statutory one-year maximum. Lastly, in the proposal, the 
Agency did not take a stance on the legality of the withdrawal and 
resubmittal approach to restart the clock. 87 FR 35341-42 (June 9, 
2022).
    Similar to the proposal, this final rulemaking not only affirms and 
clarifies that--consistent with the statutory text--the reasonable 
period of time may not exceed one year from the date the request for 
certification is received, but it also finalizes the proposed approach 
that the Federal agency and certifying authority may collaboratively 
set the reasonable period of time on a project-by-project basis or 
categorical project type basis (e.g., through development of procedures 
and/or agreements), provided that it does not exceed one year. 40 CFR 
121.6(b). Under this final rule, in a change from proposal, if the 
Federal agency and certifying authority do not agree upon the 
reasonable period of time in writing, the default reasonable period of 
time would be six months from the date the request for certification is 
received. 40 CFR 121.6(c). The final rule also allows for extensions 
under certain circumstances. 40 CFR 121.6(d) and (e). Additionally, the 
Agency is removing as unnecessary the definition for ``reasonable 
period of time.'' See 40 CFR 121.1(l) (2020). Like that definition, the 
final rule language in Sec.  121.6(b) itself provides that the 
reasonable period of time is the time during which the certifying 
authority must act on the request for certification. As a result, the 
Agency finds it duplicative and unnecessary to include a separate 
definition for the term ``reasonable period of time.''
a. Reasonable Period of Time Determination
i. Joint Setting of the Reasonable Period of Time
    The collaborative approach in this final rule (i.e., the Federal 
agency and certifying authority may jointly set the reasonable period 
of time with a default of six months if an agreement is not reached) 
differs from the approach in both the 1971 Rule and the 2020 Rule where 
the reasonable period of time was determined solely by the Federal 
agency. See 40 CFR 121.16(b) (2019); 40 CFR 121.6(a) (2020). The 
approach taken in the 1971 and 2020 Rules is not compelled by the 
statutory text because CWA section 401(a)(1) is silent regarding who 
may or must determine the reasonable period of time. Nor does the 
statute imply that the Federal agency is the only entity that may 
establish the reasonable period of time. As such, and as described 
below, EPA finds that the best reading of the statute is to allow both 
entities--the certifying authority and the Federal agency--to play a 
role in establishing the reasonable period of time, and only include 
the EPA-derived default of six months if they cannot come to an 
agreement.
    As stated above, Federal agencies and certifying authorities may 
collaboratively set the reasonable period of time in lieu of relying on 
the default of six months. Under this approach, Federal agencies and 
certifying authorities can offer each other their expertise relevant to 
determining what timeframe is reasonable. Federal agencies are in the 
best position to opine on timing in relation to their Federal licensing 
or permitting process. Likewise, certifying authorities are in the best 
position to determine how much time they need to evaluate potential 
water quality impacts from federally licensed or permitted activities. 
Certifying authorities are also best positioned to opine on the impacts 
of state or Tribal procedures governing the timing of decisions with 
respect to environmental review and public participation 
requirements.\50\ Given that

[[Page 66586]]

EPA is deferring to the combined expertise of the Federal agencies and 
certifying authorities for establishing the reasonable period of time, 
this final rule does not retain the list of factors that a Federal 
agency shall consider, under the 2020 Rule at Sec.  121.6(c), when 
establishing the reasonable period of time. However, the Agency notes 
that Federal agencies and certifying authorities might consider factors 
such as project type, complexity, location, and scale; the certifying 
authority's administrative procedures; other relevant timing 
considerations (e.g., Federal license or permit deadlines; associated 
National Environmental Policy Act deadlines; and/or anticipated 
timeframe for neighboring jurisdictions process); and/or the potential 
for the licensed or permitted activity to affect water quality. 
Importantly, this final rule approach addresses state and Tribal 
stakeholders' concerns that, under the 2020 Rule, certifying 
authorities did not have enough influence in determining the length of 
the reasonable period of time for a particular project.
---------------------------------------------------------------------------

    \50\ Section 401(a)(1) requires a State or interstate agency to 
establish procedures for public notice in the case of all 
applications for certification by it and, to the extent it deems 
appropriate, procedures for public hearings in connection with 
specific applications. However, section 401(a)(1) does not set any 
requirements or time limits on those public notice procedures or how 
those procedures should be considered when setting the reasonable 
period of time. Some certifying authorities have public notice 
procedures that exceed the default reasonable period of time in 
place for some Federal agencies (e.g., longer than the Corps' or 
EPA's current default 60-day reasonable period of time for federally 
issued CWA section 404 and 402 permits).
---------------------------------------------------------------------------

    Many commenters expressed support for the collaborative approach of 
the Federal agency and certifying authority setting the reasonable 
period of time together. These commenters said that the joint 
determination is consistent with cooperative federalism principles and 
allows certifying authorities to provide input as the stakeholder that 
conducts the review of the request for certification. Some commenters 
also supported the setting of reasonable periods of time through MOAs 
between the Federal agency and certifying authority to reduce the need 
to determine the reasonable period of time on a case-by-case basis. 
Commenters also suggested that the final rule should provide that 
Federal and state agencies can agree to categorical time periods for 
state review of certain types of permits, licenses, or projects, 
pursuant to written agreements, which many did before the 2020 Rule. A 
few commenters raised concerns about the time and resources that would 
be needed to set a reasonable period of time for every review of a 
request for certification and suggested that the final rule should 
clarify that categorical agreements, in addition to case-by-case 
agreements, are permissible.
    While the Agency agrees that the joint agreement approach promotes 
cooperative federalism, EPA recognizes that coordinating the reasonable 
period of time for reviewing requests for certification requires time 
and resources for Federal agencies and certifying authorities. 
Therefore, EPA encourages the creation of MOAs between Federal agencies 
and certifying authorities as appropriate to help reduce the need for 
determining the reasonable period of time on a case-by-case basis for 
every request. In response to commenters' concerns about setting the 
reasonable period of time each time a request for certification is 
submitted, the final rule clarifies that Federal agencies and 
certifying authorities may set categorical reasonable periods of time 
through written agreements--for example, based on certain types of 
Federal licenses or permits.
    Other commenters did not support setting the reasonable period of 
time through a joint agreement between the Federal agency and 
certifying authority. Some commenters said that EPA should remain 
silent on who sets the reasonable period of time and that certifying 
authorities should apply their own procedures. Some of these commenters 
argued that the Federal agency should not be placed on the same footing 
as the certifying authority in determining the reasonable period of 
time because the certifying authority is the expert regarding their own 
procedures, resources, and applicable state and Tribal laws. 
Conversely, other commenters stated that the Federal agency should set 
the reasonable period of time. One commenter stated that having a 
Federal agency set the default serves to minimize the arbitrary delays 
and bureaucratic gamesmanship, and thus EPA should continue to have 
Federal agencies establish it, as they have done for decades. Several 
commenters also expressed concern that the collaborative approach would 
cause instability or inefficiencies for various reasons, including the 
fact that there could be different reasonable periods of time if it is 
set on a case-by-case basis or may differ by certifying authority.
    This joint agreement approach is the optimal interpretation of the 
statute as it balances equities between the Federal agency and 
certifying authority and utilizes the expertise of both stakeholders. 
EPA disagrees that having the Federal agency alone set the default 
serves to minimize arbitrary delays and bureaucratic gamesmanship 
because that approach leaves the certifying authority out of the 
decision-making process. And as stated above, EPA anticipates that 
certifying authorities and Federal agencies will enter into categorical 
agreements, which will minimize, if not eliminate, any potential 
arbitrariness and bureaucratic gamesmanship. Additionally, written 
agreements between Federal agencies and certifying authorities with 
categorical reasonable periods of time would create efficiency while 
still taking advantage of the knowledge of both parties for determining 
the time necessary for reviewing each request for certification.
    One commenter asked that the joint agreement between the Federal 
agency and the certifying authority be made in consultation with the 
project proponent to allow for greater regulatory predictability for 
project proponents and reduce any confusion among the parties. EPA 
disagrees that any joint agreement between the Federal agency and the 
certifying authority must be made in consultation with the project 
proponent. Considering the high annual average number of requests for 
certification,\51\ and therefore project proponents, it is unlikely it 
would reduce confusion or allow for regulatory predictability. Rather, 
instead of relying on categorical reasonable periods of time (e.g., by 
project type, by Federal license or permit type), certifying 
authorities and Federal agencies would have to consult with project 
proponents on every request for certification. Consistent with the 
cooperative federalism principles imbued in section 401, Federal 
agencies and certifying authorities, not project proponents, have 
primary roles in the certification process. That is, it is the Federal 
agency whose license or permit is subject to section 401, and the 
certifying authority is responsible for determining compliance with 
applicable water quality requirements in accordance with section 401.
---------------------------------------------------------------------------

    \51\ EPA estimates that the average annual number of 
certification requests is 1,947 requests per certifying authority. 
See Supporting Statement for the Information Collection Request 
(ICR).
---------------------------------------------------------------------------

    Additionally, requiring project proponent consultation in every 
case would add unnecessary across-the-board procedure and coordination 
into the certification process. However, EPA notes that certifying 
authorities and Federal agencies are welcome to consult with project 
proponents if they wish. For example, early engagement with the project 
proponent during any pre-filing meeting discussions could serve to 
gather input from project proponents that may help in setting the 
reasonable period of time. Federal agencies and certifying authorities 
may also choose to include input from project proponents when setting 
categorical reasonable periods of time via MOAs.
    Some commenters who also expressed concern about the 30-day 
negotiation period between the Federal agency and certifying authority 
in the proposed

[[Page 66587]]

rule. Some of these commenters stated that certifying authorities would 
need to expend their resources on both negotiating the reasonable 
period of time and trying to review the request for certification due 
to the clock already running during the negotiation period. In response 
to commenters' concerns, EPA is not finalizing a timeframe for the 
negotiation between Federal agencies and certifying authorities--
especially because the final rule makes it clear that the certifying 
authority and Federal agency may coordinate categorical agreements 
prior to the date that a request for certification was received. 
However, the Agency encourages prompt negotiations between the Federal 
agencies and certifying authorities for both individually determined 
reasonable periods of time and categorical reasonable periods of time 
to give clarity to project proponents as early as possible.
ii. Default Reasonable Period of Time
    Section 401(a)(1) provides that the reasonable period of time 
``shall not exceed one year.'' 33 U.S.C. 1341(a)(1). The phrase ``shall 
not exceed one year'' means that the reasonable period of time need not 
be one full year and that a certifying authority should not necessarily 
expect to be able to take a full year to act on a section 401 request 
for certification. If Congress had meant for the reasonable period of 
time to be one year in all cases, it would have simply written ``shall 
be one year'' instead of ``shall not exceed one year.'' Under this 
final rule, the certifying authority could be subject to a shorter than 
one-year reasonable period of time to render its decision, provided 
that the Federal agency and the certifying authority have agreed to a 
shorter time, or as discussed below, when the parties do not reach 
agreement and instead rely on the default reasonable period of time of 
six months. This approach is consistent with case law. See Hoopa Valley 
Tribe v. FERC, 913 F.3d 1099, 1104 (D.C. Cir. 2019) (``[W]hile a full 
year is the absolute maximum, it does not preclude a finding of waiver 
prior to the passage of a full year.'').
    As discussed in more detail below, many commenters opposed the 
default 60-days for a variety of reasons and offered alternative 
reasonable periods of time, such as 90 days, 120 days, 180 days, and 
one year. For the final rule, EPA decided on six months as the default 
reasonable period of time for several reasons. First, as stated above, 
a default six-month reasonable period of time is consistent with the 
Agency's longstanding 1971 regulations, which provided that the 
reasonable period of time is generally considered to be six months. See 
40 CFR 121.16(b) (2019). Thus, EPA's decision to choose six months as 
the default is consistent with almost 50 years of program 
implementation under EPA's 1971 regulations. Second, six months is 
exactly half of one year, which is the statutory maximum for the 
reasonable period of time. If the Federal agency and certifying 
authority cannot reach an agreement, it seems reasonable to designate 
half of the statutory maximum as the default reasonable period of time 
as a middle ground to best balance equities between the Federal agency 
and certifying authority. Third, six months should give the Federal 
agency and certifying authority ample time to negotiate an alternate 
reasonable period of time if they do not want to be subject to the six-
month default. At the same time, the six-month period serves as a 
default should Federal agencies and certifying authorities fail to 
agree on a different time period. Finally, EPA's proposed 60-day 
default reasonable period of time was based largely on EPA's concurrent 
proposal to require that requests for certification include a copy of 
the draft Federal license or permit. Since the certifying authority 
would have more information upfront (the draft Federal license or 
permit instead of only the application), the Agency proposed that the 
default reasonable period of time could be shorter. But since EPA has 
decided not to finalize the proposed draft Federal license or permit 
requirement (for individual Federal licenses and permits) and instead 
only require that a request for certification include the Federal 
license or permit application, certifying authorities will have less 
information and may need more time to review requests for 
certification, hence the six-month default reasonable period of time 
(which only applies if the certifying authority and Federal agency do 
not agree on an alternative).
    Although EPA proposed 60 days as the default reasonable period of 
time, the Agency requested comment on whether and, if so, why the 
default should be longer than 60 days (e.g., 120 days, six months, one 
year). 87 FR 35339-40 (June 9, 2022). EPA noted that the default may 
depend on when certification is requested during the Federal licensing 
or permitting process, e.g., if EPA were to decide that a draft Federal 
license or permit is not a required component of a certification 
request, a longer default reasonable period of time may be appropriate. 
Id. Based on comments received on the proposed rule, it seems that 
many, if not most, commenters would support a six-month default 
reasonable period of time, as described in this section.
    A few commenters supported the proposed 60-day default and pointed 
out that certifying authorities often review many simpler projects in 
30 days or less, and in some jurisdictions, applicable law already 
requires certifying authorities to approve or deny the certification 
request within 60 days of receipt of a complete application. A few 
commenters argued that the 60-day default would ensure consistency and 
predictability for stakeholders. One commenter proposed that the 
default be 60 days unless the Federal agency regulations define a 
different reasonable period of time, provided it is not less than 60 
days, which would allow FERC to continue applying one year, per its 
regulations. Relatedly, other commenters opined that the final rule 
should clarify that if a Federal agency has a regulation or guidance 
document establishing a longer period for a particular type of request, 
that regulation or guidance document applies.
    EPA agrees in part and disagrees in part with these comments. EPA 
agrees that some certifying authorities often review many simpler 
projects in a short period of time, such as 30 or 60 days. EPA 
recognizes that a 60-day reasonable period of time is being implemented 
for section 401 decisions for some licenses and permits, including by 
EPA for draft NPDES permits and by the Corps. EPA disagrees that 60 
days as a default reasonable period of time for all projects is 
practical for the reasons provided in the Agency's rationale above, in 
addition to the many comments summarized below explaining why a 60-day 
default for all projects is not sufficient. EPA agrees that a uniform 
period can provide clarity to project proponents and other 
stakeholders, but any uniform period should only be a default to allow 
the certifying authority and Federal agency to determine, as 
appropriate, the review timeframe on an individual or categorical 
basis. While this may reduce the ability of project proponents to 
anticipate the timeline for the certification process, they will still 
have six months as a default guidepost, plus EPA encourages certifying 
authorities and Federal agencies to enter into categorical agreements 
that will allow project proponents to anticipate timelines for 
certification processes. The default reasonable period of time would 
not apply if the Federal agency and certifying authority agree to a 
different time. EPA does not agree that Federal agency defaults in 
regulation that are less than one year should supersede the

[[Page 66588]]

need for a certifying authority and Federal agency to collaborate in 
setting the reasonable period of time. That said, if a Federal agency 
establishes a one-year reasonable period of time in regulation, it 
would not be at odds with the final rule's language or intent. Rather, 
in such a scenario (e.g., FERC regulations), it is unnecessary for the 
certifying authority and Federal agency to negotiate an alternate 
reasonable period of time because the Federal agency has already agreed 
to the maximum amount of time statutorily allowed, and if the 
certifying authority determines that one year is too long, it may act 
on the request for certification as early as it chooses. In these 
circumstances, individual written agreements for each request for 
certification would not be necessary, since a negotiation between the 
certifying authority and Federal agency would not need to occur.
    Most commenters opposed the 60-day default reasonable period of 
time. Commenters noted that while 60 days may be enough time for 
simpler or more routine projects, which may include some projects 
covered by general or nationwide permits, 60 days would be insufficient 
for especially novel, complicated, controversial, or complex projects. 
Some commenters provided various examples of such project types, 
including FERC pipeline authorizations, relicensing of hydroelectric 
dams, water supply projects, liquefied natural gas (LNG) terminals, 
deep-water ports, and projects that trigger the need for an 
environmental impact statement (EIS) or multiple Federal permits. 
Commenters also added that each request is different and carries unique 
implications to be examined based on the specific characteristics of 
the water bodies and proposed project and Federal license or permit in 
question. Some commenters said that because the proposed rule would 
require agreement between the Federal agency and certifying authority 
on a different amount of time, the proposal would effectively and 
inappropriately give Federal agencies veto power over certifying 
authorities, infringing on principles of collaborative federalism. 
Commenters also said that states and Tribes know their own procedures, 
resources, and applicable requirements and should have input into 
deciding the length of the reasonable period of time. Lastly, 
commenters argued that the 60-day default would be inadequate if the 
final rule does not require submittal of the draft Federal license or 
permit in a request for certification, noting that the proposed default 
appeared to be predicated on the assumption that the ``request'' the 
certifying authority will receive will include a draft Federal license 
or permit.
    The Agency has decided to finalize a default reasonable period of 
time of six months to best balance equities between the Federal agency 
and certifying authority. As discussed above, Federal agencies and 
certifying authorities offer different types of relevant expertise for 
setting the reasonable period of time, and EPA encourages them to 
establish categorical reasonable period of time. The final rule default 
provides both parties with ample time to negotiate the reasonable 
period of time and inform its length based on their respective 
expertise but provides a default middle ground (half of the maximum one 
year) in the event an agreement cannot be reached. EPA acknowledges 
that 60 days may not be a sufficient default for certain project types 
and has accordingly shifted the default reasonable period of time to 
six months. However, the Agency emphasizes that the default only 
applies in the absence of a written agreement between the certifying 
authority and Federal agency, either categorically or on a case-by-case 
basis. The Agency encourages consideration of project complexities when 
setting the reasonable period of time.
    Some commenters alleged that the proposed default reasonable period 
of time is contrary to the plain language and intent or purpose of CWA 
section 401. These commenters said Congress did not authorize EPA to 
contravene the statute by mandating action, or allowing the Federal 
agency to mandate action, in less than one year; and if there should 
there be any default, it should simply be the one year allowed under 
the statute. EPA disagrees with these commenters. As discussed above, 
section 401(a)(1) provides that the reasonable period of time ``shall 
not exceed one year,'' which means that the reasonable period of time 
can be less than one year. As stated above, if Congress meant for the 
reasonable period of time to be one year in all cases, it would have 
simply written ``shall be one year.'' But Congress did not do that. For 
the reasonable period of time to ``not exceed one year,'' it must 
either be less than or equal to one year. Under the clear language of 
the statute, Congress envisioned a scenario in which the reasonable 
period of time could be less than one year. For the reasons explained 
in this section, EPA reasonably decided on six months as the default, 
which is half of the maximum allowable time, substantially longer than 
the proposed and often applied 60 days, and consistent with almost 50 
years of implementation under the 1971 Rule. Again, the default only 
applies where the Federal agency and certifying authority cannot agree 
on another period of time, which EPA expects to be rare. In sum, this 
approach is consistent with the plain text of CWA section 401 and the 
Agency's longstanding implementation of that text under the 1971 Rule, 
which acknowledged that the reasonable period of time may be less than 
one year and is generally considered to be six months. See 40 CFR 
121.16(b) (2019). Nevertheless, the Agency re-emphasizes that six 
months is only the default, and that certifying authorities and Federal 
agencies may agree to a reasonable period of time less than or equal to 
one year on a case-by-case or categorical basis.
b. Extensions to the Reasonable Period of Time
    As mentioned previously, the final rule provides that Federal 
agencies and certifying authorities may agree to extend the reasonable 
period of time, provided it does not exceed the statutory one-year 
limit. Additionally, there may be circumstances where the established 
or default reasonable period of time is not sufficient to allow the 
certifying authority to complete its review. Therefore, the final rule 
provides automatic extensions to accommodate public notice procedures 
or due to force majeure events. In these two circumstances, the 
reasonable period of time is extended by the time needed by public 
notice procedures or the force majeure event, which would be 
communicated in the written justification by the certifying authority 
to the Federal agency. The Agency is finalizing that extensions of the 
reasonable period of time must occur to accommodate certifying 
authority public notice ``procedures,'' rather than public notice 
``requirements'' as was proposed. This change is consistent with the 
statutory language that certifying authorities ``shall establish 
procedures for public notice in the case of all applications for 
certification.'' 33 U.S.C. 1341(a)(1). The change to ``procedures'' 
also clarifies that extensions to the reasonable period of time could 
be due to subsequent public hearing procedures, and this language is 
consistent with the final rule language for certification decisions and 
Federal agency review at Sec. Sec.  121.7 and 121.8. The statute does 
not address extending the reasonable period of time once it has 
started; it does not prohibit extending the reasonable period of time 
as long as the certifying authority ``acts'' within one year from the 
date the request for

[[Page 66589]]

certification is received. The statute also does not specify who may 
extend the reasonable period of time or the terms on which it may be 
extended. The 1971 Rule was also silent on extensions. However, several 
Federal agencies, including EPA and the Corps, have established 
regulations allowing extensions to their default reasonable periods of 
time. See 40 CFR 124.53(c)(3) (2022) (allowing for a reasonable period 
of time greater than 60 days for certification requests on NPDES 
permits where the EPA Regional Administrator finds ``unusual 
circumstances''); 33 CFR 325.2(b)(1)(ii) (allowing for a reasonable 
period of time greater than 60 days for certification requests on Corps 
permits when the ``district engineer determines a shorter or longer 
period is reasonable for the state to act.''). The 2020 Rule allowed 
certifying authorities to request an extension of the reasonable period 
of time. 40 CFR 121.6(d) (2020). However, only the Federal agency had 
the power to extend the reasonable period of time. Id.; see also 85 FR 
42260. Under the 2020 Rule, the Federal agency was not required to 
grant extension requests. See 40 CFR 121.6(d)(2) (2020). As a result, 
Federal agencies denied those requests even in situations where the 
certifying authority said it was not able to act within the established 
timeframe (e.g., where state public notice procedures required more 
time than the regulatory reasonable period of time). For instance, one 
commenter noted that its requests for extensions due to public notice 
procedures were refused by the Corps for the 2020 Nationwide General 
Permits.
    The Agency proposed at Sec.  121.6(d) to allow certifying 
authorities and Federal agencies to jointly extend the reasonable 
period of time in a written agreement, as long as the project proponent 
was consulted, and the extension did not exceed one year from the 
receipt of request for certification. The Agency also recognized that 
there were circumstances under which the Federal agency should extend 
the reasonable period of time without the certifying authority needing 
to negotiate an agreement. Accordingly, the Agency proposed at Sec.  
121.6(c) to identify two scenarios that would require the extension of 
the reasonable period of time: force majeure events and public notice 
procedures. Under the proposed rule, the certifying authority had to 
notify the Federal agency through a written justification prior to the 
end of the reasonable period of time. Upon notification, the reasonable 
period of time would be extended by the period needed to fulfill public 
notice procedures or the force majeure event, provided such extension 
did not exceed one year from receipt of the request for certification.
    The Agency is finalizing its proposed approach to extending the 
reasonable period of time, including allowing certifying authorities 
and Federal agencies to determine collaboratively whether and how the 
reasonable period of time should be extended, as well as allowing for 
automatic extensions in limited scenarios, as long as it does not 
exceed one year. 40 CFR 121.6(d) and (e). The final rule approach 
balances Federal agency and certifying authority equities better than 
the 1971 Rule and the 2020 Rule for the reasons explained in this 
section. This approach is consistent with the approach for joint 
establishment of the reasonable period of time. It also aligns with 
cooperative federalism principles central to the CWA. Although the 
Agency is not finalizing the requirement to consult with the project 
proponent, the final rule does allow for input from the project 
proponent. The certifying authority and Federal agency should 
communicate any extensions to the reasonable period of time to the 
project proponent.
    Most of the commenters who addressed extensions of the reasonable 
period of time supported allowing certifying authorities and Federal 
agencies to agree to extensions. A few commenters said that the Federal 
agency should have the sole discretion to extend the reasonable period 
of time, and another commenter said that the certifying authority 
should be the only one to determine the extension. One commenter 
suggested that extensions should be granted only if EPA finds that 
unusual circumstances require a longer time. Some commenters 
recommended that the project proponent should also be engaged in the 
determination of extending the reasonable period of time. Multiple 
commenters said that extensions agreed on by the Federal agency and 
certifying authority should have justifiable and reasonable limits that 
address the concerns of the project proponent. Conversely, other 
commenters recommended that project proponents not be consulted but 
rather notified about any extensions.
    Consistent with the final rule's collaborative approach for setting 
the reasonable period of time, EPA maintains that the Federal agency 
and certifying authority should be able to jointly agree to extensions, 
provided any extension does not exceed one year from the receipt of the 
request for certification. Both the Federal agency and certifying 
authority can provide insight on the length of time a review needs to 
be extended, based on their knowledge of the Federal licensing or 
permitting process and their knowledge of water quality and applicable 
state or Tribal laws, respectively. The Agency is not finalizing 
proposed text that would have required project proponent consultation. 
Under this final rule, the project proponent does not play a role in 
setting the reasonable period of time, see Sec.  121.6(b), so it is 
unnecessary to provide the project proponent with a role in extensions. 
Additionally, considering the annual average number of certification 
requests,\52\ and therefore possible extension requests, EPA finds it 
unreasonable to require project proponent consultation on all requests 
for extension. However, the final rule does not prevent the certifying 
authority and Federal agency from seeking input from the project 
proponent. EPA also notes that this final rule allows certifying 
authorities, in limited circumstances, to unilaterally extend the 
reasonable period of time. The final rule recognizes that there are 
circumstances the reasonable period of time should be extended without 
the certifying authority needing to negotiate an agreement: where a 
certification decision cannot be rendered within the reasonable period 
of time due to force majeure events (including, but not limited to, 
government closure or natural disasters) and where the state or Tribal 
public notice and comment process takes longer than the negotiated or 
default reasonable period of time.
---------------------------------------------------------------------------

    \52\ See footnote 51.
---------------------------------------------------------------------------

    All commenters who addressed extensions of the reasonable period of 
time expressed support for extensions due to unforeseen circumstances 
such as government closures or force majeure events. Several commenters 
suggested that extensions should be limited only to such events and not 
include public comment and other known procedures that were in place at 
the time the reasonable period of time was established. Other 
commenters expressed support for an expanded list of situations that 
warrant automatic extensions and for maximum flexibility in terms of 
extensions to address such things as public hearings, responding to 
comments, revisions to the certification based on community engagement, 
appeals under state laws, project complexity, and inadequate 
information or unresponsive project proponents. A few commenters 
supported defining specific situations warranting extensions for 
efficiency and predictability, while a few commenters stated that the 
final rule should not

[[Page 66590]]

include a defined list that would limit the circumstances under which 
an extension can occur.
    The Agency maintains that providing a limited list of scenarios 
that warrant automatic extensions promotes efficiency and clarity, 
while providing some flexibility for stakeholders when unforeseen 
circumstances arise. EPA retained the accommodation for public notice 
procedures in the list of circumstances warranting automatic extensions 
to capture unanticipated occurrences such as extended public notice 
periods. This approach also supports section 401's emphasis on public 
notice opportunities and is consistent with the spirit of cooperative 
federalism in balancing the interests of certifying authorities with 
those of Federal agencies. However, to be clear, the Agency finds that 
such extensions only apply to public notice procedures in effect at the 
time the written notification for an extension is received. Due to the 
final rule's collaborative approach to setting the reasonable period of 
time, which allows for consideration of certifying authority public 
notice procedures, the Agency expects that the need for automatic 
extensions to accommodate public notice procedures will be rare.
    Some commenters noted that the rule should provide more clarity 
such as specifically defining public notice procedures and providing 
more details on how extensions would work. In response to these 
comments, the Agency has revised Sec.  121.6 to clearly differentiate 
automatic extensions from agreed-upon extensions. Additionally, the 
Agency has revised what is now Sec.  121.6(d) to clarify that in the 
certifying authority's written notification to the Federal agency, it 
must identify how much additional time is required by either the public 
notice procedures or the force majeure event in addition to the 
justification for such extension.
c. Withdrawal and Resubmissions of Requests for Certification
    As proposed, EPA is removing Sec.  121.6(e) from the 2020 Rule, 
which prohibited the certifying authority from asking the project 
proponent to withdraw the certification request to reset the reasonable 
period of time. Instead, the Agency is finalizing as proposed to take 
no position on the legality of withdrawing and resubmitting a request 
for certification.
    Several commenters expressed opposition regarding EPA's decision 
not to retain the 2020 Rule's regulatory text at Sec.  121.6(e) and the 
approach not to take a position on the permissibility of withdrawing 
and resubmitting a request for certification. Some commenters supported 
the 2020 Rule's position on withdrawals and resubmittals, stating that 
this position has helped ensure that the certification process cannot 
be misused to delay or prevent issuance of the Federal license or 
permit. Commenters expressed concern that EPA's proposed approach to 
refrain from taking a position on the legality of withdrawing and 
resubmitting a request for certification suggested that this process 
may be used as a loophole to circumvent the one-year time limit 
described in section 401, which would increase uncertainty, costs, and 
indefinitely delay Federal licensing or permitting processes, 
especially if there is an increase in litigation. Most of the 
commenters opposed to EPA's proposed approach pointed out that Congress 
was clear in its intent for including the statutory maximum one-year 
period of time in section 401 to ``guard against a situation where the 
water pollution control authority in the State in which the activity is 
to be located . . . simply sits on its hands and does nothing.'' See 
115 Cong. Rec. at 9,259 (starting debate on H.R. 4148, Water Quality 
Improvement Act of 1969), 9,264-65 (amendment offered and discussed), 
and 9,269 (amendment accepted) (Apr. 16, 1969). These commenters urged 
EPA to retain the language of the existing regulation at 40 CFR 
121.6(e) since Congress already created a ``bright line'' in section 
401 of one year.
    EPA disagrees with the above comments and is aware that, 
historically under the 1971 Rule, certifying authorities sometimes 
asked project proponents to withdraw and resubmit their requests for 
certification to restart the clock and provide more time to complete 
their certification review. Neither the text of section 401 nor Hoopa 
Valley Tribe categorically precludes withdrawal and resubmission of a 
request for certification. EPA understands and shares the concern 
expressed by the D.C. Circuit in Hoopa Valley Tribe that prolonged 
withdrawal and resubmission ``schemes'' might--under certain facts--
unreasonably delay and frustrate the Federal licensing and permitting 
process. To be clear, EPA does not find that mere coordination between 
the certifying authority and project proponent, as encouraged 
throughout this preamble, rises to a withdrawal and resubmittal scheme. 
Yet, the potential factual situations that might give rise to, and 
potentially justify, withdrawal and resubmission of a request for 
certification are so varied that the Agency is not confident that it 
can create regulatory ``bright lines'' that adequately and fairly 
address each situation. By EPA not taking a regulatory position on this 
issue, it is up to project proponents, certifying authorities, and/or 
possibly Federal agencies to determine on a case-by-case basis whether 
and when withdrawal and resubmittal of a request for certification is 
appropriate. Such determinations are ultimately subject to judicial 
review based on their individual facts.
    Other commenters expressed support for EPA's proposed approach of 
not taking a position on the legality of withdrawal and resubmittal. 
Some commenters acknowledged that flexibility is important for project 
proponents and certifying authorities, while others described the need 
for more guidance to reduce litigation on the withdrawal and 
resubmittal practice. Conversely, some commenters expressed support for 
withdrawal and resubmission in certain situations, encouraging EPA to 
make clear in the final rule that withdrawal and resubmission of 
requests for certification may occur except where there is evidence 
that the certifying authority and applicant are attempting to collude 
to thwart Congress's intention to avoid undue delay in processing 
applications. A few commenters asserted that withdrawal and 
resubmission of requests for certification may occur to avoid denials 
of certification, and a few suggested that allowing a certifying 
authority to discuss withdrawal and resubmittal with a project 
proponent is in the project proponent's interest because they may be 
able to avoid unnecessary denials of certification.
    EPA recognizes that the practice of withdrawal and resubmittal has 
been subject to litigation. The 2020 Rule prohibited the certifying 
authority from asking the project proponent to withdraw the 
certification request to reset the reasonable period of time. 40 CFR 
121.6(e) (2020). In support of that position, the 2020 Rule relied on a 
broad reading of the D.C. Circuit's decision in Hoopa Valley Tribe and 
asserted that the regulatory text at Sec.  121.6(e) is a ``clear 
statement that reflects the plain language of section 401 and . . . is 
supported by the legislative history.'' 85 FR 42261. In that case, 
which featured highly unusual facts,\53\ the court rejected the 
particular

[[Page 66591]]

``withdraw and resubmit'' strategy the project proponents and states 
had used to avoid waiver of certification for a FERC license. 913 F.3d 
at 1105. The court held that a decade-long ``scheme'' to subvert the 
one-year review period characterized by a formal agreement between the 
certifying authority and the project proponent, whereby the project 
proponent never submitted a new request, was inconsistent with the 
statute's one-year deadline. Id. Significantly, the court said it was 
not addressing the legitimacy of a project proponent withdrawing its 
request and then submitting a new one, or how different a new request 
had to be to restart the one-year clock. Id. at 1104.
---------------------------------------------------------------------------

    \53\ The court held 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 for a decade by operation of 
``the same one-page letter'' repeatedly submitted to the states 
before the statute's one-year waiver deadline. 913 F.3d at 1104.
---------------------------------------------------------------------------

    On the other hand, at least three circuit courts have acknowledged 
the possibility that withdrawal and resubmittal of a request for 
certification may be a viable mechanism for addressing complex 
certification situations. See NCDEQ, 3 F.4th at 676 (withdrawal and 
resubmittal was appropriate where the certifying authority and project 
proponent did not engage in a coordinated scheme to evade the 
reasonable period of time); NYSDEC, 884 F. 3d at 456 (noting in dicta 
that the state could ``request that the applicant withdraw and resubmit 
the application''); Cal. State Water Res. Control Bd. v. FERC, 43 F.4th 
920 (9th Cir. 2022) (vacating FERC orders where FERC had found that the 
certifying authority had waived certification by participating in a 
coordinated scheme to allow the project proponent to withdraw and 
submit its application for certification before the reasonable period 
of time expired).\54\ Additionally, EPA's guidance prior to the 2020 
Rule acknowledged use of the withdrawal and resubmittal approach, as 
well as the ``deny certification without prejudice to refile'' 
approach, but noted that ``[t]his handbook does not endorse either of 
the two approaches. . . .'' 2010 Handbook at 13, n.7 (rescinded in 
2019, see supra). With the dynamic case law related to the topic of 
withdrawal and resubmittal and the complexities of certain 
certification situations,\55\ EPA's approach in this final rule lets 
certifying authorities, Federal agencies (e.g., as the project 
proponent where it is the Federal agency issuing the license or 
permit), and/or possibly project proponents take the lead in deciding 
whether and when it is reasonable to allow withdrawal and resubmittal 
of requests for certification. This final rule approach resets EPA's 
interpretive position to silent and neutral on withdrawal and 
resubmittal, where it was before the 2020 Rule.
---------------------------------------------------------------------------

    \54\ The respondent-intervenors in the Ninth Circuit case 
petitioned the Supreme Court for certiorari but the Supreme Court 
denied the petition on May 15, 2023. Nevada Irrigation District, et 
al. v. Cal. State Water Res. Control Bd., et al., Docket. No. 22-
753.
    \55\ Historically, certifying authorities and project proponents 
have used the ``withdraw and resubmit'' approach for dealing with 
the one-year deadline for complex projects. There are a multitude of 
permutations, but the basic idea is that the project proponent would 
withdraw the certification request and then resubmit a new 
certification request either immediately or at some later date. The 
Agency recognizes that there may be legitimate reasons for 
withdrawing and resubmitting certification requests, including but 
not limited to the following potential reasons: a new project 
proponent, project analyses are delayed, and/or the project becomes 
temporarily infeasible due to financing or market conditions.
---------------------------------------------------------------------------

3. Implementation
    As previously explained, EPA has added regulatory text to clarify 
that the certifying authority and Federal agency may enter into written 
agreements that establish categorical reasonable periods of time for 
certain types of Federal licenses or permits. This regulatory text 
gives the certifying authority and Federal agency the option of 
establishing the reasonable period of time for certain categories of 
Federal licenses or permits at any time without needing to wait until a 
Federal license or permit application (or draft general Federal license 
or permit) is submitted. For example, the certifying authority and 
Federal agency could enter into an agreement that establishes a 
reasonable period of time for all NPDES permits or for certain 
categories of NPDES permits such as some general permits or minor 
individual permits. The addition of the regulatory text regarding 
written agreements was supported by some commenters who stated that the 
final rule should allow the Federal agency and certifying authority to 
agree in writing to categorical time periods for the certifying 
authority to review certain types of permits, licenses, and/or 
projects. These commenters noted that this was done prior to the 2020 
Rule, and in the past, such agreements improved efficiency and 
predictability by allowing Federal agencies, certifying authorities, 
and project proponents (if applicable) to understand the reasonable 
period of time prior to submitting an application. EPA agrees that the 
addition of the regulatory text will allow for more efficiency and 
predictability.
    Commenters also noted that the proposed rule stated that the 
reasonable period of time must be agreed upon within 30 days of the 
receipt of request for certification, which suggested that categorical 
agreements entered into prior to the date that the request for 
certification was received would not satisfy the regulatory 
requirement. EPA has addressed this concern by deleting the phrase 
``within 30 days of receipt of a request for certification.'' By 
deleting this phrase, the regulation makes clear that the Federal 
agency and certifying authority may agree to a reasonable period of 
time through written agreements that can be entered into prior to a 
request for certification.
    Several commenters identified specific types of permits and/or 
processes that require a longer reasonable period of time than the 
proposed 60-day default. Specifically, several commenters stated that 
the 60-day default reasonable period of time would not align with the 
concurrent Federal consistency reviews that are required for some 
projects pursuant to the Coastal Zone Management Act (CZMA). In 
addition, several commenters noted that FERC pipeline authorizations or 
relicensing of hydroelectric dams can require up to one year. While 
most of these comments are addressed through the establishment of a 
longer default reasonable period of time of six months, EPA also notes 
that these are the types of permits, licenses, and/or projects that 
could warrant a categorical agreement between the Federal agency and 
certifying authority to establish the appropriate reasonable period of 
time. Furthermore, as discussed above, if a Federal agency establishes 
a one-year reasonable period of time in regulation (e.g., FERC 
regulations), it is unnecessary for the certifying authority and 
Federal agency to negotiate because the certifying authority is already 
provided the maximum amount of time statutorily allowed.

E. Scope of Certification

1. What is the Agency finalizing?
    The Agency is finalizing its proposed approach to the scope of 
certification at Sec.  121.3 with modifications to the regulatory text 
to better clarify the extent of the activity subject to certification 
and the water quality limitations inherent to section 401. The 
finalized approach returns to the scope that is consistent with not 
only the statutory language and congressional intent but also 
longstanding Agency guidance and decades of Supreme Court case law. In 
addition, EPA's final rule makes clear that a certifying authority's 
review is limited to considering impacts to waters of the United States 
except where a state or authorized Tribe has

[[Page 66592]]

state or Tribal laws that apply to waters of the state or Tribe.
    The 2020 Rule substantially narrowed the scope of a certifying 
authority's review. Before the 2020 Rule, a certifying authority 
considered whether the whole ``activity'' subject to the Federal 
license or permit will comply with applicable water quality 
requirements. Under the 2020 Rule, the certifying authority could only 
consider potential water quality impacts from the project's point 
source ``discharges.'' See 85 FR 42229 (July 13, 2020). This 
interpretation was heavily criticized by many states, Tribes, and non-
governmental organizations as unlawfully narrowing the certifying 
authorities' scope of review under section 401 and was subject to 
multiple legal challenges.
    Having now carefully reconsidered the 2020 Rule's ``discharge-
only'' interpretation of scope of review, EPA has concluded that the 
best reading of the statutory text is that the scope of certification 
is the activity subject to the Federal license or permit, not merely 
its potential point source discharges. This reading is further 
supported by the legislative history of section 401, authoritative 
Supreme Court precedent, and the goals of section 401, which include 
recognition of the central role that states and authorized Tribes play 
in protecting their own waters. It also realigns scope with accepted 
practice for the preceding 50 years. Consistent with this 
interpretation, EPA is finalizing revisions to Sec.  121.3 that 
reaffirm the activity scope of review that Congress intended when it 
first enacted the water quality certification provision in 1970 and 
reaffirmed when it amended the CWA in 1972 and 1977. Additionally, in 
response to comments, EPA is finalizing revisions to Sec.  121.3 that 
clarify important limiting principles and provide greater regulatory 
certainty.
    The final rule at Sec.  121.3 provides that when a certifying 
authority reviews a request for certification, the certifying authority 
``shall evaluate whether the activity will comply with applicable water 
quality requirements.'' It further provides that the certifying 
authority's evaluation by the certifying authority is ``limited to the 
water quality-related impacts from the activity subject to the Federal 
license or permit, including the activity's construction and 
operation.'' Finally, it provides that a certifying authority ``shall 
include any conditions in a grant of certification necessary to assure 
that the activity will comply with applicable water quality 
requirements.'' 40 CFR 121.3
    The final rule adopts the proposed scope of certification but with 
textual edits made in response to public comment. First, the final rule 
no longer divides its regulatory text regarding scope between two 
separate sections of part 121. The Agency proposed a definition of 
``activity as a whole'' at Sec.  121.1 and also addressed scope of 
certification at Sec.  121.3. After considering public comment, the 
Agency finds this structure unnecessary and confusing and instead has 
incorporated its full interpretation of scope in final rule Sec.  
121.3. See section IV.E.2.b of this preamble for further discussion.
    Second, the Agency removed the phrase ``as a whole'' from the 
regulatory text throughout part 121. This does not represent a change 
in substance from proposal. The Agency does not interpret the terms 
``activity'' and ``activity as a whole'' as having different meanings; 
rather, EPA included the phrase ``as a whole'' in the proposed rule 
simply to emphasize that a certifying authority's evaluation extends to 
the activity in its entirety, as opposed to only the point source 
discharges associated with the activity. After considering public 
comment and the statutory text, EPA concludes that the final regulatory 
text at Sec.  121.3 makes this clear without the need to add ``as a 
whole'' and best reflects the statutory text. See section IV.E.2.b of 
this preamble for further discussion.
    Third, the final rule adds regulatory text clarifying that a 
certifying authority's evaluation ``is limited to the water quality-
related impacts'' from the activity subject to the Federal license or 
permit. This is not a change in substance from proposal. This concept 
was captured in the proposed definition of activity as a whole at Sec.  
121.1(a) (``activity as a whole means any aspect of the project 
activity with the potential to affect water quality) and, in the 
preamble at proposal, EPA was clear that section 401 is limited to 
addressing only water quality-related impacts. 87 FR 35343 (June 9, 
2022). EPA finds that this clarification best reflects the statutory 
language and purpose of section 401. See section IV.E.2.c of this 
preamble for further discussion.
    Fourth, the proposal defined ``activity as a whole'' to mean any 
aspect of the activity ``with the potential'' to affect water quality. 
As discussed above, EPA is not finalizing that definition, and further, 
the final regulatory text does not refer to ``potential'' to affect 
water quality. 40 CFR 121.3(a). EPA made this change in response to 
several commenters who questioned the breadth of the term 
``potential,'' suggesting that the term ``potential'' authorized 
certifying authorities to consider purely speculative ``potential'' 
impacts to water quality. EPA did not intend for its proposed language 
to establish the required degree of causality between the activity and 
the impact to water quality. The Agency finds it unnecessary to do so 
in this rulemaking. Consistent with the statutory text and purpose of 
section 401, final rule Sec.  121.3 clearly limits a certifying 
authority's analysis of any given activity to the water quality-related 
impacts that may prevent compliance with water quality requirements. It 
is incumbent on the certifying authority to develop a record to support 
its determination that an activity will or will not comply with 
applicable water quality requirements. See section IV.E.2.b of this 
preamble for further discussion.
    Fifth, Sec.  121.3(b) provides that the scope of conditions in a 
grant of certification is the same as the scope of review when acting 
on a request for certification; certifying authorities are to impose 
conditions ``necessary to assure that the activity will comply with 
applicable water quality requirements.'' This is not a change in 
substance from proposal. Proposed rule Sec.  121.7(d)(2) included the 
same concept by requiring a grant with conditions to include ``[a]ny 
conditions necessary to assure that the activity as a whole will comply 
with water quality requirements,'' and EPA was clear at proposal that 
the scope for the purpose of including conditions in a certification 
and the scope of review for purposes of whether to grant certification 
are the same. 87 FR 35346. EPA continues to find this interpretation 
best aligns with the statutory text and purpose of section 401. See 
section IV.E.2.e of this preamble for further discussion.
    Next, EPA's final regulatory text provides that the certifying 
authority's evaluation of the activity includes ``the activity's 
construction and operation.'' At proposal, EPA explained that it did 
not intend for its proposed scope to cover only those portions of the 
activity directly authorized by Federal license or permit in question. 
87 FR 35346. EPA specifically requested comment on this interpretation. 
Id. After considering comments and the statutory text of section 401, 
EPA is finalizing its proposed interpretation and including regulatory 
text to reflect it. Specifically, final rule Sec.  121.3(a) states that 
the certifying authority's evaluation includes ``the activity's 
construction and operation'' without reference to whether the Federal 
license or permit at issue covers both aspects of the activity.

[[Page 66593]]

The Agency focused on construction and operation because those are the 
two aspects of an activity that Congress referenced throughout section 
401. See section IV.E.2.b of this preamble for further discussion.
    The Agency is also finalizing the definition of ``water quality 
requirements'' at Sec.  121.1(j) as proposed (``Water quality 
requirements means any limitation, standard, or other requirement under 
sections 301, 302, 303, 306, and 307 of the Clean Water Act, any 
Federal and state or Tribal laws or regulations implementing those 
sections, and any other water quality-related requirement of state or 
Tribal law''). The 2020 Rule narrowed the ability of certifying 
authorities to include conditions in their certifications pursuant to 
section 401(d) to protect the quality of their waters. Before the 2020 
Rule, a certifying authority could add conditions to its certification 
as necessary to assure compliance with the specifically enumerated 
sections of the CWA and ``any other appropriate requirement of State 
[or Tribal] law.'' 33 U.S.C. 1341(d). In the 2020 Rule, however, EPA 
promulgated a narrow regulatory interpretation of the section 401(d) 
term ``other appropriate requirements of State law,'' limiting it to 
``state or tribal regulatory requirements for point source discharges 
into waters of the United States.'' 40 CFR 121.1(n), 121.3 (2020); see 
also 85 FR 42250. In this rulemaking, EPA is returning to an 
interpretation of ``any other appropriate requirement of State law'' 
that is more closely aligned with the statutory text and more 
environmentally protective. See further discussion at section IV.E.2.c 
of this preamble.
    The Agency also is finalizing an interpretation regarding which 
waters a certifying authority can consider when determining whether to 
grant certification. After considering public comment, the Agency 
concludes that a certifying authority is limited to considering 
``navigable waters'' as defined in the CWA, except where a state or 
authorized Tribe has state or Tribal laws that apply to waters of the 
state or Tribe. This interpretation is supported by the text of section 
401 and reflected in prior Agency guidance. See section IV.E.2.d of 
this preamble for further discussion.
    As discussed below, the interpretations in this final rule of 
section 401's scope of review and conditions reflect the best reading 
of the statute. Even if some commenters may disagree that these 
interpretations reflect the best reading, there can be no doubt that 
they are imminently reasonable, for the same reasons articulated below 
for why EPA's interpretation represents the best reading. They also 
advance the water quality protection goals of section 401, are 
consistent with the principles of cooperative federalism that underlie 
the CWA and especially section 401, and restore the full measure of 
authority that Congress intended to grant states and authorized Tribes 
to protect their critical water resources.
2. Summary of Final Rule Rationale and Public Comment
    The following subsections describe the Agency's finalization of the 
five key aspects of the scope of a certification: (a) return to 
activity scope of certification; (b) defining the ``activity'' subject 
to certification; (c) water quality requirements; (d) waters considered 
in acting on a request for certification, and (e) scope of conditions.
a. Return to ``Activity'' Scope of Certification Review and Conditions
    Consistent with the proposal, EPA is returning the scope of 
certification review and conditions to the ``activity'' subject to the 
Federal license or permit. EPA is returning to the ``activity'' scope 
because it best reflects congressional intent and appropriately 
restores consistency with the ``activity as a whole'' scope that the 
Supreme Court affirmed in PUD No. 1 over a quarter of a century before 
the 2020 Rule. After reviewing the considerable number of comments 
received on this aspect of the proposed rule, EPA concludes that the 
``activity'' interpretation of scope affirmed by the Supreme Court in 
1994 best reflects the statutory text, history, and purpose of CWA 
section 401. By allowing states and authorized Tribes to protect their 
water quality from the full activity made possible by a Federal license 
or permit, this interpretation also effectuates Congress's goal of 
maximizing protection of the nation's waters by providing an 
independent grant of authority to states and authorized Tribes to 
ensure that federally licensed or permitted activities do not frustrate 
attainment of their water quality protection goals. See, e.g., 116 
Cong. Rec. 8984 (1970) (explaining that the new certification 
provisions were meant to ensure that ``[n]o 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''). Although this is a reversal of the approach taken by 
the Agency in 2020, any disruption to the certification process will be 
manageable in part because this final rule realigns scope with well-
established practice for the nearly 50 years preceding the 2020 Rule, 
and all prior EPA interpretations, some dating from the 1980s.\56\ 
Also, the 2020 Rule, departing from this longstanding regime, was in 
effect for only a few years. Further, the final rule addresses 
stakeholder concerns regarding the pre-2020 Rule landscape and provides 
regulatory certainty by clarifying important concepts such as how 
certifying authorities are limited to considering adverse impacts to 
water quality.
---------------------------------------------------------------------------

    \56\ All EPA interpretations of scope prior to the 2020 Rule 
reflected the ``activity'' or ``project'' scope affirmed in PUD No. 
1 and reinstated in this final rule. See e.g., Memorandum from 
Catherine A. Winer to David K. Sabock, Section 401 Certification of 
Marina (Nov. 12, 1985) (hereinafter, Winer Memorandum) (concluding 
that ``section 401 may reasonably be read as . . . 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''); 1989 Guidance at 22 (``[I]t is imperative for a 
State review to consider all potential water quality impacts of the 
project, both direct and indirect, over the life of the project.''); 
2010 Handbook at 17 (rescinded in 2019, see supra) (``Thus, it is 
important for the [section] 401 certification authority to consider 
all potential water quality impacts of the project, both direct and 
indirect, over the life of the project.'').
---------------------------------------------------------------------------

    While disruption to the certification process will be modest, the 
additional protections to water quality, on the other hand, are 
significant. As commenters observed, the distinction between certifying 
the activity and certifying only its associated discharges is more than 
semantic and can in some cases have significant consequences. A point 
source discharge emanates from a ``discernible, confined and discrete 
conveyance.'' 33 U.S.C. 1362(14). Impacts to water quality from point 
source discharges are a small subset of the water quality impacts that 
may result from a federally licensed or permitted activity. For 
example, as commenters observed, there are many situations where 
reductions in stream flows or increases in thermal loading caused by 
aspects of the federally licensed or permitted activity not directly 
related to point source discharges can have devastating impacts on a 
waterbody or watershed. This can be especially true in the dam context 
(at issue in PUD No. 1), where construction and operation unrelated to 
point source discharges can cause, among other adverse water quality 
effects, a change in the timing and flow of water, blockage of 
nutrients, and altered chemical makeup of water due to reservoirs. But 
even beyond the dam context, the additional water quality protections 
offered by an ``activity''-based scope may be significant for certain 
types of federally licensed or

[[Page 66594]]

permitted activities, such as the construction and operation of a 
pipeline project. See supra section IV.E.2.a.iv of this preamble. 
Moreover, as explained in the following sections, an ``activity''-based 
scope is consistent with the longstanding Supreme Court precedent of 
PUD No. 1 and bolstered by additional textual support and the 
legislative history.
i. The Supreme Court in PUD No. 1 Affirmed the Proper Scope of 
Certification
    The 2020 Rule rejected the scope of certification affirmed by the 
Supreme Court in PUD No. 1, precedent in effect for a quarter of a 
century. In PUD No. 1, the Court held, based on a textual analysis, 
that section 401 ``is most reasonably read'' as authorizing the 
certifying authority to place conditions on what the Court described as 
the ``project in general'' or the ``activity as a whole'' once the 
predicate existence of a discharge is satisfied. Id. at 711-12. Before 
the Court was a section 401 certification issued by the State of 
Washington for a new hydroelectric project on the Dosewallips River. 
The principal dispute in PUD No. 1 was whether a certifying authority 
could require a minimum stream flow as a condition in its section 401 
certification. The project applicant 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 applicant 
argued that because the minimum stream flow condition was unrelated to 
these discharges, it was beyond the scope of the state's authority 
under section 401. Id.
    The Court examined sections 401(a)(1) and 401(d), specifically the 
use of different terms in those paragraphs, to inform its 
interpretation of the scope of a section 401 certification. The Supreme 
Court, recognizing the ambiguity created when in 1972 Congress amended 
the language in section 401(a)(1) and added section 401(d), held that 
section 401(d) ``is most reasonably read'' as authorizing the 
certifying authority to place conditions on the ``activity as a whole'' 
once the predicate existence of a discharge is satisfied. Id. at 711-
12. EPA agrees that section 401 is ambiguous regarding the scope of 
certification and conditions, and EPA agrees with the Court's textual 
analysis of the statute. The Court reasoned:

    If Sec.  401 consisted solely of subsection (a), which refers to 
a state certification that a ``discharge'' will comply with certain 
provisions of the Act, petitioners' assessment of the scope of the 
State's certification authority would have considerable force. 
Section 401, however, also contains subsection (d), which expands 
the State's authority to impose conditions on the certification of a 
project. Section 401(d) provides that any certification shall set 
forth ``any effluent limitations and other limitations . . . 
necessary to assure that any applicant'' will comply with various 
provisions of the Act and appropriate state law requirements. 33 
U.S.C. 1341(d) (emphasis added). The language of this subsection 
contradicts petitioners' claim that the State may only impose water 
quality limitations specifically tied to a ``discharge.'' The text 
refers to the compliance of the applicant, not the discharge. 
Section 401(d) thus allows the State to impose ``other limitations'' 
on the project in general to assure compliance with various 
provisions of the Clean Water Act and with ``any other appropriate 
requirement of State law.'' Although the dissent asserts that this 
interpretation of Sec.  401(d) renders Sec.  401(a)(1) superfluous, 
post, at 726, we see no such anomaly. Section 401(a)(1) identifies 
the category of activities subject to certification--namely, those 
with discharges. And Sec.  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.

Id. at 711-12 (emphasis in original).\57\ EPA agrees with the Court's 
interpretation regarding the proper scope of certification. 
Specifically, EPA agrees with the Court's analysis of section 401(a)(1) 
and section 401(d). Because section 401(d) requires that a section 
401(a)(1) certification include conditions necessary to assure the 
``applicant . . . will comply'' with water quality requirements, 
section 401 is most reasonably read to require the certifying 
authority--when it reviews a request for certification under section 
401(a)(1)--to review the applicant's activity subject to the Federal 
license or permit, and not merely the potential point source 
discharges. This is the best interpretation of the combined text of 
sections 401(a)(1) and 401(d) partly because it accounts for the fact 
that the activity is made possible by the applicant's Federal license 
or permit, and that activity might involve a wide range of actions 
beyond any potential discharge that could significantly affect 
compliance with water quality requirements. In order to assure--as it 
must under section 401(d)--that the ``applicant'' will comply with all 
applicable water quality requirements, the certifying authority must be 
able to evaluate water quality-related impacts from the activity made 
possibly by the applicant's license or permit beyond those related to 
its triggering discharge(s).
---------------------------------------------------------------------------

    \57\ Note that, as EPA felt the Supreme Court need not reach the 
question of the scope of certification in PUD No. 1, the Agency did 
not directly address this issue in its amicus brief. The amicus 
brief filed by the Solicitor General on behalf of the EPA in this 
case did not grapple directly with the language in sections 401(a) 
and (d), and argued that ``[e]ven if a condition imposed under 
Section 401(d) were valid only if it assured that a `discharge' will 
comply with the State's water quality standards, the Section 40l(d) 
condition imposed by the State in this case satisfies that test.'' 
Brief for the United States as Amicus Curiae Supporting Affirmance, 
PUD No. 1, No. 92-1911 at 11, 12 fn. 2. (Dec. 1993).
---------------------------------------------------------------------------

    As suggested by the Court, it is significant that Congress chose to 
use the term ``applicant'' in section 401(d), which it added to section 
401 at the same time that it changed ``activity'' to ``discharge'' in 
section 401(a)(1). Congress could easily have used the term 
``discharge'' in section 401(d) as it did in section 401(a)(1) in place 
of ``applicant'' and chose not to. Congress used similar phrasing in 
other parts of the CWA. For example, CWA section 402 contemplates that 
an NPDES permit may issue only upon a showing that a ``discharge will 
meet'' various enumerated provisions. 33 U.S.C. 1342(a). Congress could 
have used the same term (discharge) in section 401(d) but it did not. 
EPA's interpretation of section 401 accounts for the distinct language 
Congress employed. See Transbrasil S.A. Linhas Aereas v. U.S. Dep't of 
Transp., 791 F.2d 202, 205 (D.C. Cir. 1986) (``[W]here different terms 
are used in a single piece of legislation, the court must presume that 
Congress intended the terms to have different meanings.'') (quoting 
Wilson v. Turnage, 750 F.2d 1086, 1091 (D.C. Cir. 1984)).
    In conclusion, EPA agrees with the Court's interpretation regarding 
the proper scope of certification. Specifically, EPA agrees with the 
Court's analysis of section 401(a)(1) and section 401(d), and, as 
discussed below, has identified additional support for the Agency's 
interpretation in the statutory text of section 401, the legislative 
history of section 401, the water quality protection goals of section 
401, and the principles of cooperative federalism that underlie the 
CWA.\58\
---------------------------------------------------------------------------

    \58\ It is also instructive to note that a unanimous Supreme 
Court left PUD No. 1 untouched in S.D. Warren, which found that 
``[s]tate certifications under [section] 401 are essential in the 
scheme to preserve state authority to address the broad range of 
pollution . . .'' 547 U.S. at 386.
---------------------------------------------------------------------------

ii. Additional Textual Support for ``Activity'' Scope of Certification
    In PUD No. 1, the Court focused its analysis on sections 401(a)(1) 
and (d). However, additional text in section 401(a)(1) and section 
401(a)(3)-(5) adds

[[Page 66595]]

further support for a scope of review encompassing the activity subject 
to the Federal license or permit, not just its discharges. Section 
401(a)(1) provides that ``[i]n the case of any such activity for which 
there is not an applicable [water quality requirement,\59\] the State 
shall so certify . . .'' 33 U.S.C 1341(a)(1) (emphasis added).\60\ This 
final rule interprets this language to mean that if the certifying 
authority determines that no water quality requirements are applicable 
to the activity, the certifying authority shall grant certification. 40 
CFR 121.7(g). Important to interpreting scope, what matters for this 
provision is whether there are water quality requirements applicable to 
the ``activity,'' not the ``discharge.'' Congress added this provision 
in the same 1972 act that changed ``activity'' to ``discharge'' earlier 
in section 401(a)(1). Yet Congress used ``activity'' here. Congress's 
use of ``activity'' in this provision of section 401(a)(1) instead of 
``discharge'' adds further support to the conclusion that Congress 
intended for the scope of certification to encompass the activity 
subject to the Federal license or permit, not just its discharges.
---------------------------------------------------------------------------

    \59\ Specifically, the provision lists ``an applicable effluent 
limitation or other limitation under sections 1311(b) and 1312 
[301(b) and 302] of this title, and . . . an applicable standard 
under sections 1316 and 1317 [306 and 307] of this title.'' As 
discussed infra at section IV.E.2.c of this preamble, section 
301(b), specifically section 301(b)(1)(C), incorporates by reference 
section 303, and section 303 is not limited to regulating point 
source discharges.
    \60\ The provision goes on to say that any such certification 
(of no applicable water quality requirements) ``shall not be deemed 
to satisfy section 1371(c),'' i.e., CWA section 511(c) (pertaining 
to the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et 
seq. (NEPA)).
---------------------------------------------------------------------------

    Section 401(a)(3)-(5) adds more support.\61\ Section 401(a)(3) 
provides that a certification for the ``construction'' of a 
``facility'' fulfills the section 401 obligations with respect to the 
facility's ``operation'' unless the certifying authority determines 
there is no longer reasonable assurance of compliance with water 
quality requirements. See 33 U.S.C. 1341(a)(3). ``Construction'' and 
``operation'' of a ``facility'' are clearly broader concepts than 
``discharge.'' In addition, section 401(a)(4) allows the certifying 
authority the opportunity to ``review the manner in which the 
[previously certified] facility or activity shall be operated or 
conducted'' prior to initial operation for the purpose of assuring this 
will not violate applicable water quality requirements. See id. at 
1341(a)(4). Reviewing how the ``facility or activity'' is ``operated or 
conducted'' goes well beyond simply evaluating any related 
``discharge.'' Continuing with this language, Congress provided that if 
this review results in suspension of the facility or activity's Federal 
license or permit, the license or permit remains suspended until 
notification from the certifying authority that there is reasonable 
assurance that ``such facility or activity''--not discharge--``will not 
violate'' water quality requirements. Id. Lastly, section 401(a)(5) 
provides that any certified Federal license or permit may be suspended 
or revoked by the Federal licensing or permitting agency upon an entry 
of judgment that ``such facility or activity,'' not discharge, has been 
operated in violation of applicable water quality requirements. See id. 
at 1341(a)(5). The scope of review employed in each of these 
subsections is whether there has been compliance by the ``facility or 
activity'' with the five CWA sections identified in section 401(a)(1) 
(i.e., CWA sections 301, 302, 303, 306, and 307), and not merely 
compliance by the ``discharge.'' Congress's choice to use broad words 
such as ``facility'' and ``activity,'' rather than the narrower 
``discharge,'' to describe what is subject to the substantive 
requirements in section 401(a)(3)-(5) should be given meaning and is in 
this final rule. For a discussion on the text of section 401(a)(2), see 
section IV.K of this preamble, infra.
---------------------------------------------------------------------------

    \61\ See 87 FR 35344-45 (discussing section 401(a)(3)-(5) in 
support of an ``activity'' based scope of certification).
---------------------------------------------------------------------------

iii. Legislative History Confirms Congress Intended an Activity-Based 
Scope
    The legislative history of CWA section 401, and of its predecessor 
section 21(b) of the Water Quality Improvement Act of 1970 where the 
certification requirement was first enacted, provides persuasive 
evidence that Congress intended the scope of certification to include 
the activity subject to the Federal license or permit, not only its 
point source discharges. As discussed in section III of this preamble, 
Congress significantly revised the statutory water quality protection 
framework in 1972, focusing more on effluent limitations and numeric 
limits than water quality standards to try to drive down pollution 
levels. While Congress largely retained the water quality certification 
scheme it enacted in 1970, it did make several revisions, including 
some in the subsections relevant to interpreting the scope of 
certification. As discussed below the legislative history of the 1972 
CWA amendments demonstrates that these changes were not intended to 
significantly narrow the scope of section 401, contrary to what some 
commenters argued and what EPA stated in its justification for the 2020 
Rule.
    The pre-1972 version of section 401 indisputably authorized 
certifying authorities to review the entire activity, not only its 
point source discharges. Congress originally enacted the water quality 
certification requirement in section 21(b) of the Water Quality 
Improvement Act of 1970. Public Law 91-224, 84 Stat. 91 (April 3, 
1970). That section provided that any applicant for a Federal license 
or permit to conduct any activity including, but not limited to, the 
construction and operation of facilities, which may result in any 
discharge into the navigable waters of the United States, ``shall 
provide the licensing or permitting agency a certification from the 
State in which the discharge originates or will originate . . . 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 (April 3, 1970) 
(emphasis added). Had this language remained untouched, there would be 
no question regarding congressional intent; the 1970 language clearly 
envisioned a broad ``activity'' scope of certification.
    However, in 1972, Congress changed the above italicized language to 
``such discharge will comply with the applicable provisions of sections 
301, 302, 306, and 307 of this Act.'' Public Law 92-500, 401(a)(1), 86 
Stat. 816 (Oct. 18, 1972). While Congress changed the word ``activity'' 
to ``discharge'' in this one instance when overhauling the CWA in 1972, 
the rest of the legislative history of the 1972 amendments demonstrates 
that Congress did not intend this one edit to section 401(a)(1) to 
dramatically narrow the scope of certification.\62\ First, as discussed 
above, Congress made other revisions in 1972 that demonstrate 
Congress's intent to

[[Page 66596]]

retain a broader activity-based scope. Congress used the phrase ``such 
activity'' (instead of ``such discharge'') in the very next sentence of 
section 401(a)(1) and added section 401(d), which authorizes 
certification conditions that assure that ``any applicant'' (instead of 
``any discharge) will comply with water quality requirements. The broad 
phrasing in section 401(a)(3)-(5) existed in section 21(b) and, 
tellingly, was not revised by Congress in 1972. Further, the 
legislative record shows that, in 1972, Congress understood it was 
making only ``minor,'' insubstantial changes to section 21(b) to 
harmonize with the substantial new provisions of the CWA pertaining to 
regulation of point source discharges.\63\ The Senate Report stated 
that section 401 was ``substantially section 21(b) of the existing 
law.'' S. Rep. No. 92-414, at 69 (1971); see also remarks of Sen. 
Baker: ``Section 21(b), with minor changes, appears as section 401 of 
the pending bill S.2770.'' 117 Cong. Rec. 38857 (1971). Nowhere in the 
legislative history is there a statement to the effect that Congress 
intended to dramatically shrink section 401's scope of review and 
protection to only those water quality effects caused by a potential 
point source discharge. To the contrary, the House Report stated that 
``[i]t should be clearly noted that the certifications required by 
section 401 are for activities which may result in any discharge into 
navigable waters.'' H.R. Rep. 92-911, at 124 (1972) (emphasis added). 
Indeed, in summarizing section 401, Senator Muskie stated that ``[a]ll 
we ask is that activities that threaten to pollute the environment be 
subjected to the examination of the environmental improvement agency of 
the State for an evaluation and recommendation before the Federal 
license or permit be granted.'' 117 Cong. Rec. 38854 (1971) (emphasis 
added). See also H.R. Rep. 92-911, at 121 (1972) (stating that ``[t]he 
term `applicable' as used in section 401 . . . means that the 
requirement which the term `applicable' refers to must be pertinent and 
apply to the activity . . . .'') (emphasis added). In light of the lack 
of any compelling evidence in the legislative history that Congress 
intended to fundamentally constrain the certification power it granted 
just two years before, and the abundant evidence to the contrary, EPA 
adopts the full activity scope of review included in the proposed 
rule.\64\
---------------------------------------------------------------------------

    \62\ While Congress was otherwise engaged in a ``total 
restructuring'' of the CWA in 1972, Milwaukee v. Illinois, 451 U.S. 
304, 317 (1981) (quoting legislative history of the 1972 
amendments), Congress deemed the water quality certification scheme 
so important that Congress carried it over, largely unchanged. Much 
of the legislative history of the 1972 amendments focuses on the 
total restructuring of the act, not explaining the pre-existing 
certification requirement. The legislative history is accordingly 
relatively sparse regarding certification. Much of the discussion 
that does exist concerns the change from certifying compliance with 
``applicable water quality standards'' (in the 1970 version) to 
``the applicable provisions of sections 301, 302, 306, and 307'' of 
the 1972 CWA. Congress amended section 401 in this way to reflect 
its new strategy to more effectively advance water quality 
protection and improvement; it is difficult to see why it would, at 
the same time, significantly narrow the scope of certification so as 
to undermine its power and effectiveness.
    \63\ Indeed, the 1971 Senate Report provided 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).
    \64\ Congress's revisions to section 401 in the 1977 CWA 
amendments also suggest continued support for a broader ``activity'' 
approach. As discussed more fully in section E.2.c below, in 1977, 
Congress made further minor changes to section 401, this time 
inserting section 303 into the list of CWA sections for which a 
state must certify compliance. In the legislative history, Congress 
explained this ``means that a federally licensed or permitted 
activity, including discharge permits under section 402, must be 
certified to comply with State water quality standards adopted under 
section 303.'' H.R. Rep. No. 95-830, at 96 (1977) (emphasis added).
---------------------------------------------------------------------------

iv. Response to Comments Regarding an Activity-Based Scope of 
Certification
    The Agency received numerous comments on the proposed return to an 
activity-based scope of certification review, including comments about 
the statutory language, legislative history, PUD No. 1, and the water 
quality harms associated with the 2020 Rule. This subsection contains 
summaries of these comments and the Agency's response. Comment 
summaries and additional discussion of other aspects of scope of 
certification (i.e., defining the ``activity'' subject to 
certification, water quality requirements, waters considered in acting 
on a request for certification, and scope of conditions) are included 
elsewhere in this section of the preamble.

A. Comments Regarding the Language in Section 401

    The best reading of the statutory text is that the scope of 
certification is the activity subject to the Federal license or permit, 
not merely its potential point source discharges. While the statutory 
text lends itself to more than one conceivable interpretation, the 
interpretation adopted in this final rule is the best reading of the 
text and follows the Supreme Court's authoritative interpretation in 
PUD No. 1. Some commenters asserted that the text of section 401 
dictates a single interpretation of scope, although those commenters 
disagreed on that interpretation. A few such commenters argued that 
section 401(a)(1) unambiguously limits the scope of certification to 
discharges, and that the reference in subsection 401(d) to the 
``applicant's'' compliance does not create any ambiguity regarding the 
scope of certification. Conversely, other commenters argued that the 
statutory language of section 401 unambiguously provides for 
certification on all aspects of the applicant's activity subject to the 
Federal license or permit, not only its potential point source 
discharges. A few of these commenters argued that the Court's holding 
in PUD No. 1 was based on the unambiguous language of the statute.
    EPA disagrees with both sets of commenters. Although the Supreme 
Court's assessment of the statute in PUD No. 1 is the best reading of 
the text with regard to the proper scope of certification, the text is 
subject to more than one possible interpretation. EPA's conclusion is 
supported not only by the two separate sets of commenters arguing in 
support of contrary ``plain meaning'' interpretations of the proper 
scope, but also by the Supreme Court's interpretation of the statute in 
PUD No. 1. The Supreme Court held that the text regarding the scope of 
certification ``is most reasonably read'' as pertaining to the 
activity, the way EPA interprets the statute in this final rule. 511 
U.S. at 712. In the 2020 Rule, EPA likewise acknowledged that the 
statutory language addressing scope of review is subject to more than 
one possible interpretation. See 85 FR 42232, 42251 (``The Agency also 
disagrees with commenters who asserted that the scope of certification 
is expressed unambiguously in section 401.''). Congress's use of 
``discharge'' and ``activity'' in section 401(a)(1) and ``applicant'' 
instead of ``discharge'' in section 401(d) introduced some uncertainty 
as to the proper scope of section 401 review and conditions. In this 
final rule, EPA is following the Supreme Court's authoritative 
interpretation of the statute while also exercising its authority 
granted by Congress to construe, interpret, and implement the CWA.

B. Comments Regarding Statutory Interpretation

    Some commenters asserted that EPA misconstrued section 401(d), 
often reasserting arguments made in the preamble to the 2020 Rule or 
the dissenting opinion in PUD No 1. Some commenters echoed arguments 
made by the dissenting opinion in PUD No. 1 that section 401(a)(1) 
limits a certifying authority to ``ensuring that any discharge 
resulting from a project will comply'' with water quality requirements 
and therefore, ``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.'' 511 U.S. at 726 
(Thomas, J., dissenting). Other commenters similarly argued that the 
reference in section 401(d) to ``applicant'' merely indicates who must 
comply with certification conditions. These comments are similar to the 
position taken in the 2020 Rule that ``the term `applicant' in section 
401(d) [was] merely identifying the

[[Page 66597]]

person or entity responsible for obtaining and complying with the 
certification and any associated conditions and not as expanding the 
regulatory scope of that section.'' 85 FR 42232.
    EPA disagrees with the arguments made by these commenters, the 
dissent in PUD No. 1, and the preamble to the 2020 Rule. First, 
Congress could easily have used the term ``discharge'' in section 
401(d) in place of ``applicant'' and chose not to. Congress used 
similar phrasing in other parts of the CWA. For example, CWA section 
402 contemplates that an NPDES permit may issue only upon a showing 
that a ``discharge will meet'' various enumerated provisions. 33 U.S.C. 
1342(a). In fact, Congress used this very phrasing in section 
401(a)(1)--requiring certification that ``any such discharge will 
comply.'' Id. at 1341(a)(1) (emphasis added). It is Congress's use of 
these different phrases in section 401(a)(1) and section 401(d) that 
led the Supreme Court to decide the issue in PUD No. 1 and now requires 
the Agency to interpret the proper scope of certification. Congress 
added section 401(d) in the same legislation in which it revised 
section 401(a)(1) to refer to ``discharge.'' Congress could have used 
the same term in section 401(d) but it did not. EPA's interpretation of 
section 401(d) accounts for these considerations. Transbrasil, 791 F.2d 
at 205 (D.C. Cir. 1986) (``[W]here different terms are used in a single 
piece of legislation, the court must presume that Congress intended the 
terms to have different meanings.'').
    EPA disagrees with the commenters that suggested that section 
401(d) is irrelevant to the scope of certification. Section 401(d) 
requires the certifying authority--when making a decision to certify 
under section 401(a)(1)--to include conditions necessary to assure that 
the license or permit applicant will comply with water quality 
requirements, including applicable requirements of state law listed 
only in section 401(d). As the Court in PUD No. 1 recognized, section 
401(d) is central to interpreting the scope of section 401. 511 U.S. at 
711-712 (analyzing both section 401(a)(1) and section 401(d) to 
interpret scope). Following this approach, this final rule adopts the 
interpretation of section 401 that, when read as a whole, best aligns 
with the language Congress chose for section 401(a)(1) and section 
401(d), not just the language of section 401(a)(1).

C. Comments on Legislative History

    Some commenters asserted that Congress's 1972 revisions to section 
401(a)(1) support a ``discharge-only'' approach. These commenters 
argued that, when Congress revised ``such activity'' to ``such 
discharge,'' Congress unambiguously limited the scope of certification 
to the ``discharge,'' rather than the ``activity.'' EPA disagrees that 
the better interpretation of the 1972 revisions is that Congress 
intended to narrow the scope of certification. That interpretation 
considers only a portion of the 1972 amendments. It does not grapple 
with how to reconcile the revisions to section 401(a)(1) with the 
addition of section 401(d), which broadly authorizes certifying 
authorities to condition certification decisions--made under section 
401(a)(1)--to assure that the ``applicant'' complies with water quality 
requirements. It also does not grapple with the use by the 1972 
amendments of ``such activity'' later in section 401(a)(1), regarding 
activities without applicable water quality requirements. When Congress 
added section 401(d) and added the new sentence to section 401(a)(1) 
regarding activities without applicable water quality requirements, 
Congress could have used the term ``discharge'' but chose not to do so. 
EPA's interpretation of section 401's scope must account for that 
choice. Moreover, the commenter's interpretation does not harmonize 
with the extensive legislative history suggesting that Congress had no 
intention of substantially narrowing the certification power it had 
previously granted to states. See section IV.E.2.a.iii of this 
preamble, supra.
    A couple of commenters asserted that Congress's revised 
certification language reflected a new emphasis in the CWA on directly 
regulating point source discharges of pollutants, away from indirectly 
regulating activities through ambient water quality standards. The 
preamble to the 2020 Rule made a similar point, that the 1972 
amendments to section 401 made it ``consistent with the overall 
framework of the amended statutory regime, which focuses on regulating 
discharges to attain water quality standards and adds new federal 
regulatory programs to achieve that purpose.'' 85 FR 42232. While EPA 
agrees that the 1972 amendments reflected a new overall emphasis in the 
CWA on regulating point source discharges (through section 402 NPDES 
permits and section 404 dredge and fill permits), this does not change 
EPA's conclusion regarding how best to interpret the scope of section 
401. Section 401 predates these discharge-related permitting provisions 
and, even after the 1972 amendments, remains significantly different in 
character. It remains a direct congressional grant of authority for 
states and authorized Tribes to protect their water resources from 
impacts caused by federally licensed or permitted projects. As 
discussed directly above at section IV.E.2.a.iii of this preamble, the 
legislative history shows that when Congress was enacting new 
discharge-related permitting provisions in 1972, it had no intention of 
fundamentally constraining the certification power that Congress 
granted just two years before.

D. Comments Regarding PUD No. 1

    A few commenters asserted that the Court in PUD No. 1 relied on, 
and deferred to, EPA's 1971 Rule and guidance derived from that rule. 
One commenter asserted that the PUD No. 1 decision was based on 
judicial deference to EPA regulations that predated the 1972 CWA 
amendments and should be distinguished on this basis. Another commenter 
asserted that the Court's reliance on the 1971 Rule significantly 
undermines the validity and applicability of the PUD No. 1 decision for 
this rulemaking. Similar to these commenters, the dissenting opinion in 
PUD No. 1 also asserted that the majority relied ``at least in part'' 
on the 1971 Rule. 511 U.S. at 728-29 (Thomas, J., dissenting).
    EPA first notes that the Court did not rely on EPA's 1971 Rule 
during the Court's own analysis of the statutory text. The Court first 
undertook its own examination of the statutory text, concluding that 
section 401(d) ``is most reasonably read'' as authorizing conditions on 
the entire activity at issue. Id. at 712. Only after reaching that 
conclusion did the Court note that ``[o]ur view of the statute is 
consistent with EPA's regulations implementing Sec.  401.'' Id. 
Therefore, EPA disagrees with commenters that asserted that the Court's 
analysis of the statutory text relied on the 1971 Rule. EPA also 
disagrees with commenters that the Court's discussion of the 1971 Rule 
undermines the applicability of PUD No. 1 for this rulemaking. As 
described above, EPA is not concluding that the proper scope of 
certification is the activity subject to the Federal license or permit 
solely because that was the Supreme Court's holding in PUD No. 1, 
although the Court's authoritative holding on the issue offers 
compelling support. Instead, EPA has independently reviewed the 
statutory text, and agrees with the Court's analysis of section 
401(a)(1) and section 401(d). EPA finds further support for its 
conclusion in additional statutory text of section 401 beyond what the 
Court analyzed in PUD No. 1, the legislative

[[Page 66598]]

history of section 401, the water quality protection goals of section 
401, and the principles of cooperative federalism that underlie the 
CWA--particularly section 401 itself.

E. Comments Regarding Water Quality Harms of the 2020 Rule

    As commenters observed, the distinction between certifying the 
activity or only its associated discharges is more than semantic and 
can in some cases have significant consequences for water quality 
protection. For example, one commenter argued that the 2020 Rule's 
narrower ``discharge-only'' approach to section 401 prohibited states 
and Tribes from considering activities that can result in violations of 
water quality requirements, such as impacts from reduced stream flows, 
thermal loading from removal of streamside vegetation, increases or 
decreases in sediment load, and destabilized stream banks. One 
commenter argued that activities directly adjacent to streams and 
wetlands have a direct relationship to the biological, physical, and 
chemical components and overall health of the water resource. Another 
commenter asserted that without the ability to consider the entire 
activity subject to certification, states and Tribes would 
underestimate the implications of projects on watershed scales and lose 
capacity to manage designated uses. Several commenters specifically 
discussed the importance of an activity-based scope for hydroelectric 
dam projects. One commenter asserted that review under the 2020 Rule 
left water quality impacts from a dam unmitigated, including a change 
in the timing and flow of water, blockage of nutrients, and altered 
chemical makeup of the water due to reservoirs. Similarly, another 
commenter provided additional examples of the water quality impacts 
from hydroelectric dams that are not tied to a specific discharge and 
therefore left out under the 2020 Rule, including increased water 
temperature from decreased water flows, vegetation loss and reduced 
shading from dam reservoirs, fish kills from turbines, and increased 
toxin mobility from elevated turbidity. A different commenter asserted 
that the discharge from the powerhouse or tailrace of FERC-licensed 
hydropower projects is not the only impact from those projects, but 
rather the entire project fundamentally alters the chemical, physical, 
and biological integrity of a river.
    EPA is concerned that some, if not many, of the water quality-
related impacts identified by commenters might fall outside the scope 
of review under the 2020 Rule's ``discharge-only'' approach to scope of 
review. While the potential additional water quality protections 
associated with the ``activity''-based scope (as opposed to a 
``discharge-only'' scope) will vary depending on the nature, size, 
location, and type of project that requires a Federal license or 
permit, this final rule provides the opportunity for additional water 
quality protections compared to the 2020 Rule's approach. For example, 
when looking at a hydropower project, the ``activity'' scope allows a 
certifying authority to consider water quality-related impacts beyond 
the discharges from the tailrace or powerhouse. Depending on the 
activity specifics, such consideration could result in certification 
conditions that could include building or maintaining fish passage or 
habitat restoration related to water quality protection. As another 
example, when reviewing the construction of a pipeline project, the 
``activity'' scope allows a certifying authority to consider water 
quality-related impacts beyond the discharge of dredge or fill material 
from the construction and placement of the pipeline and, depending on 
the activity specifics, can include water quality impacts from non-
discharge related erosion or sedimentation from the pipeline 
construction, as well as later water quality impacts from erosion or 
sedimentation from the operation and maintenance of the pipeline. 
Certifying authorities can consider certification conditions that 
include monitoring, reporting, and adaptive management in response to 
the non-discharge-related water quality impacts of the activity, such 
as temperature, flow, riparian buffer conditions, and species 
impacts.\65\ As another example, when reviewing the construction of a 
boat marina, the ``activity'' scope allows a certifying authority to 
consider not only the discharges associated with dredging and placement 
of fill for the marina, but also, depending on the activity specifics, 
erosion or sedimentation related to construction of the marina, as well 
as water quality impacts related to the subsequent operation of the 
marina (e.g., increased vessel pollution in the water associated with 
increased vessel traffic due to the construction of the dock). See 
section IV.E.2.b of this preamble, directly infra, regarding what is 
included as part of the ``activity'' subject to certification. The 
inability of states and authorized Tribes to protect against such 
impacts under the 2020 Rule could seriously impair their ability to 
protect valuable water resources. This would be inconsistent with 
Congress's intention to provide states and authorized Tribes with a 
powerful tool to prevent their water resources from being adversely 
impacted by projects needing Federal licenses or permits.
---------------------------------------------------------------------------

    \65\ See also Economic Analysis for the Final Rule at section 
4.5 for further discussion on the environmental benefits and 
incremental costs associated with the final rule as compared to the 
2020 Rule baseline.
---------------------------------------------------------------------------

b. Defining the ``Activity'' Subject to Certification
    As discussed above, the Agency is revising Sec.  121.3 regarding 
scope of certification to clarify that a certifying authority's 
evaluation is limited to the water quality related-impacts from the 
activity subject to the Federal license or permit. This is the best 
interpretation of the statutory language and is consistent with 
congressional intent, the Agency's longstanding interpretation prior to 
the 2020 Rule, and PUD No. 1. Although this reading had been the 
Agency's longstanding interpretation prior to the 2020 Rule and should 
be familiar to stakeholders, in response to comments and to aid in 
implementation of this final rule, the Agency is providing further 
clarification around the ``activity'' subject to certification.
    The Agency proposed a definition of the term ``activity as a 
whole'' at Sec.  121.1(a). In this final rule, the Agency is removing 
the phrase ``as a whole'' from the regulatory text throughout part 121. 
Although the Supreme Court used the phrase ``as a whole'' in PUD No. 1, 
511 U.S. at 712, the phrase is not found in the statutory text. This 
modification does not represent a change in substance from proposal. 
The Agency does not interpret the terms ``activity'' and ``activity as 
a whole'' as having different meanings; rather, EPA included the phrase 
``as a whole'' in the proposed rule simply to emphasize that a 
certifying authority's evaluation extends to the activity in its 
entirety, as opposed to just the point source discharges associated 
with the activity. EPA concludes that the final regulatory text at 
Sec.  121.3 makes this clear without the need to add ``as a whole.'' 
The Agency has historically used the word ``activity'' to refer to the 
scope of certification. See, e.g., 1989 Guidance at 8 (``If a State 
grants water quality certification to an applicant for a federal 
license or permit, it is in effect saying that the proposed activity 
will comply with State water quality standards (and the other CWA and 
State law provisions enumerated above).''), 23 (``all of the potential 
effects of a proposed activity on water quality--direct and indirect, 
short and long term, upstream and downstream, construction and

[[Page 66599]]

operations--should be part of a State's certification review.''); 2010 
Handbook at 10 (rescinded in 2019, see supra) (``The granting of Sec.  
401 water quality certification to an applicant for a federal license 
or permit signifies that the state or tribe has determined that the 
proposed activity and discharge will comply with water quality 
standards as well as the other identified provisions of the CWA and 
appropriate requirements of state or tribal law.''). The Court in PUD 
No. 1 appeared to use the terms ``activity as a whole,'' ``activity,'' 
and even ``project in general'' interchangeably. PUD No. 1, 511 U.S. at 
711-12. Accordingly, the Agency is removing the phrase ``as a whole'' 
to better reflect the statutory text and to reduce any confusion that 
this phrase caused commenters.
    The Agency proposed at Sec.  121.1(a) to define the term ``activity 
as a whole'' to capture ``any aspect of the project activity with the 
potential to affect water quality.'' EPA intended for this proposed 
definition to provide certifying authorities with the ability to 
consider any aspect of the federally licensed or permitted activity 
that may adversely impact water quality. The impacts of a federally 
licensed or permitted project on a certifying authority's water 
resources may be caused by aspects of the project's activity other than 
the potential discharge that triggered the need for a section 401 
certification (e.g., non-discharge impacts from the construction and 
operation of the project). The Agency's proposed definition for the 
term ``activity as a whole'' was meant to include all aspects of the 
proponent's ``project in general'' with the potential to affect water 
quality. PUD No. 1, 511 U.S. at 711. Many commenters asserted that the 
proposed definition was ambiguous, confusing, and circular. In light of 
commenter concerns and in the interest of greater clarity, the Agency 
is not finalizing the proposed definition for ``activity as a whole,'' 
and instead will rely on clarifying edits in final rule Sec.  121.3 to 
articulate the activity subject to a certifying authority's review.
    Consistent with its proposal, 87 FR 35345, the Agency finds that 
section 401 is not constrained to those activities directly authorized 
by the Federal license or permit in question. Section 401(a)(3) 
provides compelling textual support for this reading. Specifically, 
section 401(a)(3) makes clear that a certification for a Federal 
license or permit for construction may address potential water quality 
impacts from the subsequent operation even though the operation may be 
subject to a different Federal license or permit. 33 U.S.C. 1341(a)(3) 
(``The certification . . . with respect to the construction of any 
facility shall fulfill the requirements of this subsection with respect 
to certification in connection with any other Federal license or permit 
required for the operation of such facility'' except in the 
circumstances described in section 401(a)(3)). By providing that a 
construction permit certification shall also serve as an operating 
permit certification (unless notice is given of changes which call into 
question whether the operation will in fact comply with water quality 
requirements), section 401(a)(3) necessarily contemplates that the 
certification of the construction permit will have considered whether 
the subsequent operation will comply with water quality requirements.
    EPA finds additional support for this interpretation in section 
401(a)(4). That provision authorizes a certifying authority, after it 
has granted certification for a facility or activity, to review, prior 
to its initial operation, the manner in which a facility or activity 
will be operated if the ``facility or activity is not subject to a 
Federal operating license or permit.'' 33 U.S.C. 1341(a)(4). If the 
certifying authority has already granted certification and the facility 
or activity is not subject to a Federal operating license or permit, by 
implication the certifying authority has certified a pre-operational 
Federal license or permit such as a construction permit. Yet section 
401(a)(4) tasks a certifying authority that has certified a 
construction permit with reviewing the subsequent operation ``for the 
purposes of assuring'' that ``the manner in which the facility or 
activity shall be operated or conducted'' will not violate water 
quality requirements. Id. (emphasis added). For this reason, section 
401(a)(4) adds further support to EPA's conclusion that section 401 is 
best read to authorize a certifying authority to consider all aspects 
of the activity, not only those directly authorized by the relevant 
Federal license or permit at hand.
    This interpretation is consistent with EPA's longstanding position 
before the 2020 Rule. Previously issued EPA guidance provided that 
``because the States' certification of a construction permit or license 
also operates as certification for an operating permit (except for in 
certain instances specified in Section 401(a)(3)), it is imperative for 
a State review to consider all potential water quality impacts of the 
project, both direct and indirect, over the life of the project.'' 1989 
Guidance at 22; 2010 Handbook at 17 (rescinded in 2019, see supra) 
(``Thus, it is important for the [section] 401 certification authority 
to consider all potential water quality impacts of the project, both 
direct and indirect, over the life of the project.'') (citing PUD No. 
1, 511 U.S. at 712 (1994)). Additionally, the Agency issued a 
memorandum in 1985 discussing a question from a certifying authority 
about whether a certification for a section 404 permit for the 
construction of a marina could consider the subsequent operation of the 
marina. Winer Memorandum. The Agency concluded, based largely on its 
reading of section 401(a)(3), that when acting on a request for 
certification for a section 404 permit for the construction of a 
marina, the certifying authority will have considered water quality 
impacts resulting from the subsequent operation of the marina.
    The legislative history offers additional support for this 
interpretation. The legislative history reveals Congress's intent to 
ensure that federally licensed or permitted activities are not 
considered in a piecemeal fashion; rather, Congress recognized the 
importance of considering the effects of subsequent operations during 
site selection, see S. Rep. No. 91-351, at 8 (August 7, 1969) (``Site 
location is integral to effective implementation of the Nation's water 
quality program. There are sites where no facility should be 
constructed, because pollution control technology is not adequate to 
assure maintenance and enhancement of water quality. Those who make the 
decision on site location should be aware of this prior to making any 
investment in new facilities.''), and of early planning to avoid later 
adverse effects, see H.R. Rep. 91-127, at 6 (March 25, 1969) (``The 
purpose of subsection 11(b) is to provide reasonable assurance . . . 
that no license or permit will be issued by a Federal agency for an 
activity that through inadequate planning or otherwise could in fact 
become a source of pollution.''). After reviewing comments that the 
Agency requested on the issue, EPA concludes that section 401 is best 
read to authorize a certifying authority to consider all aspects of the 
activity, not only those directly authorized by the relevant Federal 
license or permit.
    Accordingly, the revised text at final rule Sec.  121.3 indicates 
that a certifying authority shall evaluate the water quality-related 
impacts of the entire activity subject to the Federal license or 
permit, including the construction and operation, and not solely the 
aspect of the activity directly authorized by a given Federal license 
or permit. For example, a section 401 certification on

[[Page 66600]]

a CWA section 404 permit authorizing the discharge of dredge or fill 
material in waters of the United States may consider both the 
construction associated with dredging (e.g., removing sediment from the 
waterbody to place dock pilings) as well as the subsequent operation 
associated with the completion of the dredging (e.g., increased vessel 
pollution in the water associated with increased vessel traffic due to 
the construction of the dock).
    EPA requested comment on how a Federal licensing or permitting 
agency could implement certification conditions addressing aspects of 
the activity that the Federal agency does not otherwise have licensing 
or permitting authority over. One commenter asserted that the bounds of 
the permitting authority of the Federal permitting agency cannot 
dictate the scope of state or Tribal authority under section 401, 
observing that section 401(d) requires the Federal agency to 
incorporate into the Federal license or permit those certification 
conditions the state or authorized Tribe includes to ensure compliance 
with water quality requirements. EPA generally agrees with this 
commenter. Section 401 requires the certification conditions to become 
conditions of the Federal license or permit subject to certification, 
regardless of whether the Federal agency has independent authority to 
condition its license or permit to ensure compliance with water quality 
requirements. However, EPA emphasizes that--for purposes of section 
401--certification conditions cannot ``live on'' past the expiration of 
the Federal permit to which they attach. Section 401(d) requires 
certification conditions to be incorporated into the Federal license or 
permit. Accordingly, once the Federal license or permit expires, any 
certification conditions incorporated into the Federal license or 
permit also expire. This principle holds true regardless of the scope 
of section 401. However, it does not mean that when a certifying 
authority considers whether to grant or deny certification, the 
certifying authority is limited to considering only those aspects of 
the activity that will occur before the expiration of the Federal 
license or permit. For example, if the certifying authority determines 
that no conditions could assure that the activity, including post-
expiration aspects of the activity, will comply with water quality 
requirements, denial of certification would be appropriate.
    A few commenters asserted that the definition for ``activity as a 
whole'' could be used by certifying authorities to impose conditions on 
activities that may only be speculatively or obscurely linked to the 
actual discharge. In addition, a few commenters requested that the 
Agency revise the proposed definition for ``activity as a whole'' to 
provide more clarity on the boundaries of such a term, such as what 
impacts can be considered by the certifying authority and how indirect 
the impacts may be to water quality.
    In response to comments, the Agency revised its explanation of the 
``activity'' approach from proposal to provide more clarity. Although 
each determination will be fact specific, the Agency is clarifying 
important limiting principles that inform delineation of the 
``activity'' under review by the certifying authority. The Agency finds 
that its approach to ``activity'' in this final rule is appropriately 
bounded to allow certifying authorities to only consider adverse 
impacts to waters that prevent compliance with water quality 
requirements. The final text at Sec.  121.3 also makes it clear that 
the analysis is limited to the applicant's activity subject to the 
Federal license or permit at issue (and to considering that activity's 
adverse impacts on water quality). Consistent with the intent of the 
proposed rule, Sec.  121.3 in the final rule clearly limits a 
certifying authority's analysis of any given activity to adverse water 
quality-related impacts that may prevent compliance with water quality 
requirements. As discussed below, the phrase ``will comply'' used in 
sections 401(a)(1) and 401(d) means that the certifying authority is 
limited to examining whether the activity will meet water quality 
requirements; only if the activity will not comply with such 
requirements, does section 401 authorize certifying authorities to 
either condition the activity in such way to ensure compliance or deny 
the activity where compliance cannot be ensured with conditions. 
Accordingly, section 401 and this final rule do not authorize 
certifying authorities to deny or condition a certification due to 
impacts from the activity that do not adversely affect water quality. 
However, the Agency wishes to make clear that certifying authorities 
may address not only adverse water quality impacts caused exclusively 
by the federally licensed or permitted activity, but also adverse 
impacts contributed to by a federally licensed or permitted activity. 
For example, a certifying authority may deny or condition an activity 
that will contribute to ongoing noncompliance with water quality 
requirements. Relatedly, section 401 and this final rule do not 
authorize a certifying authority to condition an activity for the 
purpose of protecting waters that are not impacted by the activity or 
include conditions that do not otherwise affect compliance with the 
applicable water quality requirements in the waters impacted by the 
activity.
    The Agency also finds it unnecessary to establish in this 
rulemaking how indirect or certain the impacts of the activity may be 
to water quality. It is incumbent on the certifying authority to 
develop a record to support its determination that an activity will or 
will not comply with applicable water quality requirements. The Agency 
encourages certifying authorities to clearly state in a certification 
decision why a condition is necessary to assure that the activity will 
comply with water quality requirements or, in a denial, why it cannot 
certify that the activity will comply with water quality requirements. 
See 40 CFR 121.7; see also infra section IV.F of this preamble. If the 
project proponent believes the certification decision is premised on, 
in the words of one commenter, a ``statistically insignificant aspect 
of the project,'' it may challenge the sufficiency of the decision in a 
court of competent jurisdiction. If a project proponent believes a 
certification decision is based on unreasonable conclusions regarding 
the water quality-related impacts of the activity, it may likewise 
challenge that decision in court. This outcome is consistent with 
congressional intent. The legislative history reveals that Congress 
intended project proponents to seek relief in state courts in instances 
where it disagreed with a certification decision. See, e.g., 116 Cong. 
Rec. 8805, 8988 (1970) (Conf. Rep.) (``If a State refuses to give a 
certification, the courts of that State are the forum in which the 
applicant must challenge that refusal if the applicant wishes to do 
so.''); H.R. Rep. No. 92-911, at 122 (1972) (same).
    One commenter argued that the Agency had not adequately explained 
how the ``activity as a whole'' scope would function in practice, and, 
as a result, the definition would introduce regulatory uncertainty, 
pose litigation risk regarding certification decisions, and threaten 
infrastructure projects. The Agency disagrees. When PUD No. 1 endorsed 
a scope of ``activity as a whole'' almost thirty years ago, the Court 
did not offer a specific definition or explanation of that term. 
Nevertheless, certifying authorities and Federal agencies have gained 
significant experience over nearly 50 years implementing an 
``activity'' approach, and EPA expects that certifying authorities and 
Federal agencies remain capable of appropriately delineating the

[[Page 66601]]

``activity'' based on the facts of each situation. EPA is not aware of 
and did not receive any comments identifying any cases in which 
delineation of ``activity'' has been litigated, provided that the scope 
of review was limited to water quality. Moreover, this final rule 
addresses commenter concerns regarding regulatory certainty by 
clarifying important limiting principles that inform delineation of the 
``activity'' under review by the certifying authority including that 
certifying authorities are limited to considering adverse impacts to 
water quality from the activity subject to the Federal license or 
permit. See supra for further discussion.
c. Water Quality Requirements
    As proposed, EPA is finalizing the definition of water quality 
requirements as ``any limitation, standard, or other requirement under 
sections 301, 302, 303, 306, and 307 of the Clean Water Act, any 
Federal and state or Tribal laws or regulations implementing those 
sections, and any other water quality-related requirement of state or 
Tribal law.'' 40 CFR 121.1(j). The final rule definition is consistent 
with congressional intent as well as long-standing Agency 
interpretation of the CWA. A fundamental factor in the scope of a 
section 401 certification is that the certifying authority is limited 
to considering whether the activity will comply with applicable water 
quality requirements. See 33 U.S.C. 1341(a), (d). This serves as a key 
limitation on the otherwise broad authority granted by Congress to 
certifying authorities. As discussed in more detail below, this 
approach was supported by the overwhelming majority of commenters on 
the proposed rule.
i. Water Quality-Related Impacts From Federally Licensed or Permitted 
Projects
    EPA is finalizing that when a certifying authority reviews a 
request for certification, ``[t]he certifying authority's evaluation is 
limited to the water quality-related impacts from the activity subject 
to the Federal license or permit, including the activity's construction 
and operation.'' 40 CFR 121.3(a) (emphasis added). This limitation to 
evaluating water quality-related impacts was included in EPA's proposed 
definition of ``activity as a whole''--``any aspect of the project 
activity with the potential to affect water quality''--and EPA's 
proposal was clear that section 401 is limited to addressing only water 
quality-related impacts. 87 FR 35343.
    The CWA's overall objective is ``to restore and maintain the 
chemical, physical, and biological integrity of the Nation's waters.'' 
33 U.S.C. 1251(a). Among the Act's policy declarations is ``the policy 
of Congress to recognize, preserve, and protect the primary 
responsibilities of States to prevent, reduce, and eliminate 
pollution.'' Id. at 1251(b). When Congress gave certifying authorities 
the ability to review any activity subject to a Federal license or 
permit that may result in a discharge into waters of the United States, 
it added a key limiting principle to that otherwise broad authority--
the review is limited to determining compliance with water quality 
requirements. From its first inclusion of then-section 21(b) in the 
Water Quality Improvement Act of 1970, Congress intended to provide 
states and Tribes with a powerful tool to prevent their water resources 
from being adversely impacted by projects needing Federal licenses or 
permits. See 116 Cong. Rep. 8805, 8984 (March 24, 1970) (``Mr. Muskie: 
No polluter will be able to hide behind a Federal license or permit as 
an excuse for a violation of water quality standard.''). Although 
Congress has changed the words and phrases that convey that limitation, 
legislative history shows consistent congressional intent over time. 
See, e.g., S. Rep. 92-414, at 1487 (1971) (``The purpose of the 
certification mechanism provided in this law is to assure that Federal 
licensing or permitting agencies cannot override State water quality 
requirements.''). In short, Congress intended section 401 to provide 
certifying authorities with broad authority with respect to protecting 
water quality within their jurisdiction but specifically confined that 
authority to water quality.
    Judicial and EPA interpretation on this point also have remained 
constant. The courts have consistently agreed that certifying 
authorities are limited to considering water quality effects. See PUD 
No. 1, 511 U.S. at 711-713 (holding that a state's authority to impose 
conditions under section 401(d) ``is not unbounded''); see also Am. 
Rivers, Inc. v. FERC, 129 F.3d 99, 107 (2d Cir. 1997) (``Section 
401(d), reasonably read in light of its purpose, restricts conditions 
that states can impose to those affecting water quality in one manner 
or another.''). The same is true for prior Agency interpretations, as 
articulated in the 2020 Rule and in prior Agency guidance. See 85 FR 
42250; 1989 Guidance at 22 (``[I]t is imperative for a State review to 
consider all potential water quality impacts of the project, both 
direct and indirect, over the life of the project.'').\66\
---------------------------------------------------------------------------

    \66\ It is also consistent with EPA's interpretation in the 1971 
Rule regarding section 21(b) in the Water Quality Improvement Act of 
1970 (the precursor to current section 401). See, e.g., 40 CFR 
121.2(a)(3) (2019) (certification decisions concern whether ``the 
activity will be conducted in a manner which will not violate 
applicable water quality standards'').
---------------------------------------------------------------------------

    The overwhelming majority of commenters agreed that the scope of 
section 401 certification is limited to water quality. Accordingly, 
while EPA continues to interpret section 401 as providing broad 
authority to certifying authorities to review activities subject to a 
Federal license or permit, the review must be limited to the water 
quality-related impacts from the activity. It would be inconsistent 
with the purpose of CWA section 401 to deny or condition a section 401 
certification based on potential impacts that have no connection to 
water quality (e.g., based solely on potential air quality, traffic, 
noise, or economic impacts that have no connection to water quality).
    Several commenters asserted that certifying authorities considered 
non-water quality-related factors prior to the 2020 Rule and provided 
examples of such factors and the consequences, including project 
delays, ambiguity, and undue burdens on project proponents. A few 
commenters asserted that a handful of states have attempted to block or 
constrain projects based on non-water quality-related reasons and 
discussed specific certification actions as ``state abuse'' of section 
401. Based on commenter feedback and EPA's experience implementing 
section 401, EPA finds that the vast majority of certification 
decisions are based entirely on water quality considerations. 
Nevertheless, the final rule reiterates that certifying authorities are 
limited to considering the water quality-related impacts from an 
activity when determining whether to issue a section 401 certification. 
See Sec.  121.1(j), 121.3.
    A few commenters asserted that the proposed rule would allow 
certifying authorities to condition or deny projects as long as there 
is a nexus to water quality. These commenters argued that the proposed 
rule would allow states to block projects for non-water quality 
reasons, which the commenters asserted include effects on designated 
uses of a water body that are not associated with water quality changes 
(e.g., changes in water flow that might affect aquatic habitat). EPA 
strongly disagrees that this final rule would permit certifying 
authorities to consider non-water quality-related factors as the basis 
for a certification denial or condition. The scope of certification is 
limited to adverse water quality-related impacts from the activity. 
That said, water quality-related impacts can encompass impacts that 
adversely affect the

[[Page 66602]]

chemical, physical, and biological integrity of waters, which could 
include, for example, changes in water flow that might affect aquatic 
habitat. EPA has consistently interpreted water quality impacts 
broadly. See, e.g., 1989 Guidance at 22 (``all of the potential effects 
of a proposed activity on water quality--direct and indirect, short and 
long term, upstream and downstream, construction and operation--should 
be part of a State's certification review''); 2010 Handbook at 17 
(rescinded in 2019, see supra) (``Thus, it is important for the 
[section] 401 certification authority to consider all potential water 
quality impacts of the project, both direct and indirect, over the life 
of the project''). In 1991, EPA sent a letter to FERC in response to 
various FERC documents discussing ``inappropriate'' section 401 
certification conditions, including conditions related to fish, 
wildlife, vegetation, and recreation. Letter from LaJuana S. Wilcher, 
Assistant Administrator of the Office of Water, to Lois D. Cashell, 
FERC Secretary (Jan. 18, 1991). In this letter, EPA expressly rejected 
the notion that water quality is a narrow concept; rather, the Agency 
asserted that the ``protection of water quality includes protection of 
multiple elements which together make up aquatic systems including the 
aquatic life, wildlife, wetlands and other aquatic habitat, vegetation, 
and hydrology required to maintain the aquatic system.'' Id. The letter 
further noted that water quality issues can include toxic pollutants, 
pollutant bioaccumulation, aquatic species composition and diversity, 
habitat loss, stormwater impacts, nonpoint source impacts, and 
hydrological changes. Id. The Agency finds that a multi-faceted 
interpretation of water quality-related impacts represents the best 
interpretation of section 401 and best allows certifying authorities to 
realize the water quality protection goals of the CWA and section 401.
ii. Definition of Water Quality Requirements
    To clarify which provisions of Federal, state, and Tribal law a 
certifying authority may consider when evaluating and ultimately 
deciding which action to take on a request for certification, the 
Agency is finalizing the definition of ``water quality requirements'' 
as proposed (``Water quality requirements means any limitation, 
standard, or other requirement under sections 301, 302, 303, 306, and 
307 of the Clean Water Act, any Federal and state or Tribal laws or 
regulations implementing those sections, and any other water quality-
related requirement of state or Tribal law.''). See 40 CFR 121.1(j).
    The term ``water quality requirements'' is used throughout section 
401, and the term ``any other appropriate requirement of State law'' is 
used in section 401(d), but neither term is defined in the CWA. The 
Agency did not interpret the terms ``water quality requirements'' and 
``other appropriate requirement of State law'' in the 1971 Rule, as 
they were not introduced into the statute until the 1972 CWA 
amendments. Prior to 1972, what is now section 401(a) of the statute 
used the term ``water quality standards,'' and section 401(d) was not 
part of the statute. See Public Law 91-224, 21(b)(1), 85 Stat. 91 
(1970); Public Law 92-500, 401, 85 Stat. 816 (1972).
    The 2020 Rule defined the term ``water quality requirements'' and 
interpreted the statutory phrase ``any other appropriate requirement of 
State law.'' 40 CFR 121.1(n) (2020); see 85 FR 42253. Consistent with 
what EPA characterized as the ``discharge-only'' scope of section 401 
certification, the 2020 Rule limited ``water quality requirements'' to 
only the enumerated provisions of the CWA listed in section 401(a)(1) 
and ``state or tribal regulatory requirements for point source 
discharges into waters of the United States.'' 40 CFR 121.1(n) (2020). 
Citing Justice Thomas's dissent in PUD No. 1, the Agency relied on the 
principle of ejusdem generis (``of the same kind'') to argue that the 
term ``appropriate requirement of State law'' was limited ``only to 
provisions that, like other provisions in the statutory list, impose 
discharge-related restrictions.'' 511 U.S. at 728 (Thomas, J., 
dissenting); 85 FR 42453. As a result, the 2020 Rule narrowed the scope 
of review and ability of certifying authorities to include conditions 
to protect their water quality. For example, a few commenters asserted 
that the 2020 Rule's approach to water quality requirements impeded 
certifying authorities' ability to impose conditions that protect water 
quality, such as standards for erosion and sedimentation control, 
stormwater management, endangered species protection, minimum in-stream 
flows, prevention of aquatic habitat loss, and prevention of 
groundwater contamination. A few other commenters stressed the 
importance of this authority for FERC licensed projects in particular 
because of the length of the license and preemption of state regulatory 
oversight on FERC licenses.
    In finalizing the definition of ``water quality requirements'' as 
proposed, the Agency has reconsidered the 2020 Rule's definition of the 
term and finds that section 401 is best interpreted in a way that 
respects the breadth of the Federal and state and Tribal water quality-
related provisions that Congress intended a certifying authority to 
consider when determining whether to grant certification. Accordingly, 
EPA is defining ``water quality requirements'' to include any 
limitation, standard, or other requirement under the provisions 
enumerated in section 401(a)(1), any Federal and state or Tribal laws 
or regulations implementing the enumerated provisions, and any other 
water quality-related requirement of state or Tribal law--regardless of 
whether they apply to point or nonpoint source discharges. See 40 CFR 
121.1(j); 87 FR 35347 (noting that the proposed definition applied to 
state or Tribal water quality requirements regardless of whether they 
apply to point or nonpoint source discharges).
    Many commenters supported the proposed approach to ``water quality 
requirements,'' including its inclusion of state and Tribal laws 
applying to either point and nonpoint sources, noting it is more 
holistic, consistent with the Act and its purpose, consistent with case 
law, and that it restores and reinforces the authority Congress 
reserved for states and Tribes. However, several commenters did not 
support the proposed approach to defining ``water quality 
requirements,'' arguing that the term should be limited to point source 
discharges and/or limited to whether the discharge complies with water 
quality standards. A few commenters asserted that the term ``water 
quality-related requirements of state or Tribal law'' was too broad and 
would allow certifying authorities to include conditions unrelated or 
weakly related to water quality. Conversely, several other commenters 
believed the proposed definition of ``water quality requirements'' was 
overly restrictive, including a few commenters who recommended removing 
the term ``water quality-related'' in the definition for water quality 
requirements. As discussed below, EPA finds that its definition of 
``water quality requirements'' is the best interpretation considering 
the text of section 401 and appropriately allows certifying authorities 
to certify compliance with the enumerated provisions of the CWA and 
state and Tribal water quality-related provisions (for both point and 
nonpoint sources). EPA's final definition is also supported by the 
purpose, and legislative history of the statute.
    First, the wording that Congress used in the text of section 401 
demonstrates

[[Page 66603]]

that the certifying authority's review is limited to water quality-
related provisions. Looking at the text of the various subsections of 
section 401, each subsection that refers to the act of certifying 
either uses the phrases ``effluent limitation,'' ``quality of waters,'' 
or ``water quality requirements,'' or explicitly enumerates subsections 
of the CWA having to do with water quality--section 301 (effluent 
limitations), section 302 (water quality-related effluent limitations), 
section 303 (water quality standards and implementation plans), 306 
(national standards of performance), and 307 (toxic and pretreatment 
effluent standards). See 33 U.S.C. 1341(a), (d).
    Second, the text is not limited to certifying compliance with 
provisions addressing point source discharges. Section 401(d) includes 
the phrase ``any other appropriate requirement of State law.'' 33 
U.S.C. 1341(d) (emphasis added). The phrase ``any other appropriate'' 
bears examination. The word ``any'' is capacious in its scope, 
literally meaning ``all'' such state law requirements and not just a 
limited subset such as point source-related requirements. See Ali v. 
Federal Bureau of Prisons, 552 U.S. 214 (2008); Harrison v. PPG 
Industries, 446 U.S. 578 (1980). The word ``other'' refers to 
requirements aside from the statutory provisions listed in the 
preceding list in section 401(d) (CWA section 301, etc.). While the 
word ``appropriate'' provides a limiting principle with respect to 
which requirements may be considered and applied, the word 
``appropriate'' is to be interpreted broadly in light of the statute's 
text and purpose. Michigan v. EPA, 576 U.S. 743, 752 (2015) (stating 
that ``appropriate'' is a broad and all-encompassing term that 
naturally and traditionally includes consideration of all the relevant 
factors). In this context, the phrase ``any other appropriate'' is best 
understood as allowing certifying authorities to consider state or 
Tribal laws regarding water quality that are not part of the enumerated 
list of CWA sections and that address water quality protections that 
are different from those covered by the enumerated list. See also PUD 
No. 1, 511 U.S. at 713 (declining to speculate on the scope of state 
laws that would be included in the phrase ``any other appropriate 
requirement of state law'' but finding that, ``at a minimum, 
limitations imposed pursuant to state water quality standards adopted 
pursuant to Sec.  303 are `appropriate' requirements of state law'').
    Application of the maxim ejusdem generis (``of the same kind'') to 
limit ``appropriate requirement of State law'' to only those state law 
provisions that impose discharge-related or point source-related 
restrictions is misplaced. The list of CWA provisions referenced in 
sections 401(a)(1) and 401(d) includes section 303,\67\ which is not 
limited to regulating point-source discharges. Section 303 concerns 
establishment of water quality standards, identification of waters that 
do not meet those standards, and establishment of daily maximum 
pollutant loads for such waters, all of which go well beyond regulation 
of point source discharges.\68\ Considering the breadth of section 303, 
using ejusdem generis to interpret ``any other appropriate requirement 
of State law'' to only apply to point sources is not consistent with 
congressional intent as expressed through the statutory text.
---------------------------------------------------------------------------

    \67\ See H.R. Rep. No. 95-830, 96 (Dec. 6, 1977) (``The 
inserting of section 303 into the series of sections listed in 
section 401 is intended to mean that a federally licensed or 
permitted activity, including discharge permits under section 402, 
must be certified to comply with State water quality standards 
adopted under section 303. The inclusion of section 303 is intended 
to clarify the requirements of section 401. It is understood that 
section 303 is required by the provisions of section 301. Thus, the 
inclusion of section 303 in section 401 while at the same time not 
including section 303 in the other sections of the Act where 
sections 301, 302, 306, and 307 are listed is in no way intended to 
imply that 303 is not included by reference to 301 in those other 
places in the Act, such as sections 301, 309, 402, and 509 and any 
other point where they are listed. Section 303 is always included by 
reference where section 301 is listed.''); see also PUD No. 1, 511 
U.S. at 712-13 (``Although Sec.  303 is not one of the statutory 
provisions listed in Sec.  401(d), the statute allows States to 
impose limitations to ensure compliance with Sec.  301 of the Act, 
33 U.S.C. 1311. Section 301 in turn incorporates Sec.  303 by 
reference.'')
    \68\ A primary objective of section 303 is the establishment of 
water quality standards. Establishment of water quality standards is 
required for waters regardless of whether they receive point source 
discharges. 33 U.S.C. 1313(c). Non-attainment of standards may be 
due to point sources, nonpoint sources, or both. As explained in 
EPA's regulations, water quality standards ``serve the dual 
purposes'' of serving as the regulatory basis for establishing water 
quality based treatment controls for point source discharges and the 
broader purpose of establishing the water quality goals for a 
specific water body. 40 CFR 130.3. Section 303(d) specifically 
directs the identification of waters that do not meet water quality 
standards, considering both point sources and nonpoint sources of 
pollution. 33 U.S.C. 1313(d)(1)(A); see also 40 CFR 
130.7(b)(1)(iii). Section 303(d) also addresses the establishment of 
a ``total maximum daily load'' for each water that does not meet 
standards, set at a level necessary to implement applicable water 
quality standards--again, considering both point sources and 
nonpoint sources. 33 U.S.C. 1313(d)(1)(C); see also 40 CFR 130.1(i) 
(defining total maximum daily load as the sum of loads from both 
point sources and nonpoint sources plus natural background).
---------------------------------------------------------------------------

    The legislative history also supports a definition of ``water 
quality requirements'' not limited to requirements for point source 
discharges. As described earlier, even though in 1972 Congress modified 
the language of then-section 21(b), the legislative history shows that 
Congress intended new section 401 to be substantially the same as 
section 21(b), which did not limit certifying authorities to 
considering only point source discharges. In 1972, Congress understood 
it was making only ``minor,'' insubstantial changes to section 21(b). 
The Senate Report stated that section 401 was ``substantially section 
21(b) of the existing law.'' S. Rep. No. 92-414, at 69 (1971). See also 
remarks of Sen. Baker: ``Section 21(b), with minor changes, appears as 
section 401 of the pending bill S.2770.'' 117 Cong. Rec. 38857 (1971). 
A comparison of section 21(b) and section 401 reveals that the two 
sections are, indeed, substantially the same. Congress's revisions to 
section 401(a) in the 1977 CWA amendments also suggests continued 
support for certifying authority consideration of water quality impacts 
not limited to point sources. In 1977, Congress added section 303 to 
the various lists of CWA sections in section 401. Legislative history 
from 1977 states that Congress intended for ``[t]he inserting of 
section 303 into the series of sections listed in section 401 [ ] to 
mean that a federally licensed or permitted activity, including 
discharge permits under section 402, must be certified to comply with 
State water quality standards adopted under section 303.'' H.R. Rep. 
No. 95-830, at 96 (1977). As discussed above, section 303 requires 
states to adopt water quality standards for its waters and applies to 
waters regardless of the presence of point or nonpoint sources of 
pollution or pollutants.
    The legislative history also indicates that Congress intended the 
phrase ``any other appropriate requirement of state law'' to be read 
broadly. In earlier pre-adoption versions of section 401(d), Congress 
proposed to limit section 401(d) to the enumerated provisions from 
section 401(a)(1) and either ``any more stringent water quality 
requirements under State law provided in section 510 of [the Act],'' S. 
2770, 92nd Cong. (1972), or ``any regulation under section 316 of this 
Act.'' H.R. 11896, 92nd Cong. (1972). Ultimately, Congress did not 
adopt either of those formulations. Instead, consistent with Congress's 
objective to empower states to protect their waters from pollution, 
Congress ``expanded'' beyond these earlier proposals the scope of 
section 401(d) ``to also require compliance with any other appropriate 
requirement of State law which is set forth in the certification.'' S. 
Rep. No. 92-1236, at 138 (1972) (Conf. Rep.).

[[Page 66604]]

    A definition of ``water quality requirements'' that is not limited 
to point sources also is consistent with the underlying purposes of the 
CWA. Congress provided states and authorized Tribes with the primary 
role in protecting the nation's waters from pollution, including 
pollution from federally licensed or permitted projects, and the phrase 
``water quality requirements'' should be interpreted broadly to 
preserve state and Tribal authority and further the water quality 
protective goal of section 401. See S.D. Warren, 547 U.S. at 386 
(``State certifications under [section] 401 are essential in the scheme 
to preserve state authority to address the broad range of pollution . . 
.''); see also S. Rep. 91-414, at 1487 (1971) (``The purpose of the 
certification mechanism provided in this law is to assure that Federal 
licensing or permitting agencies cannot override State water quality 
requirements.'').
    Finally, prior judicial interpretation also supports EPA's 
definition of ``water quality requirements'' as finalized here. EPA 
recognizes that, as noted by the Supreme Court in PUD No. 1, the 
authority granted to certifying authorities in section 401(d) ``is not 
unbounded.'' 511 U.S. at 712. Rather, the scope is limited to 
``ensur[ing] that the project complies with `any applicable effluent 
limitations or other limitations under [33 U.S.C. 1311, 1312] or other 
provisions of the Act,['] `and with any other appropriate requirement 
of State law.' '' Id. Although the Court declined ``to speculate on 
what additional state laws, if any, might be incorporated by this 
language,'' the Court found that ``at a minimum, limitations imposed 
pursuant to state water quality standards adopted pursuant to [section] 
303 are `appropriate' requirements of state law.'' Id. at 713. As 
described earlier in this section, EPA's longstanding position is that 
the scope of certification decisions and conditions are limited to 
water quality-related considerations. EPA's definition of the term 
``water quality requirements'' in the final rule is not intended to 
alter this interpretation.
    EPA is not offering an opinion in this rulemaking about what 
constitutes a ``State law'' as that term is used in section 401(d). In 
the spirit of cooperative federalism, EPA defers to the relevant state 
and Tribe to define which of their state or Tribal provisions qualify 
as appropriate ``State law'' or Tribal law for purposes of implementing 
section 401.
d. Waters Considered in Acting on a Request for Certification
    The Agency also is finalizing an interpretation regarding which 
waters a certifying authority considers when acting on a request for 
certification, with an important clarification in response to 
commenters. At proposal, EPA advanced an approach where a certifying 
authority would consider water quality-related impacts to waters within 
its jurisdiction beyond ``navigable waters'' as defined by the CWA (at 
33 U.S.C. 1362). See 87 FR 35348 (``EPA does not believe that the scope 
of a state's or tribe's certification review is limited only to water 
quality effects in bodies of water meeting the definition of `navigable 
waters' or `waters of the United States' . . .''). Some commenters 
expressed concern with allowing certifying authorities to use the 
certification process to impose conditions relating to waters that are 
not ``waters of the United States'' and disagreed with the Agency's 
proposed position that section 401 could extend to non-``navigable 
waters'' once the threshold discharge into waters of the United States 
is met. A few commenters also noted that states could regulate state 
waters under their own laws.
    The Agency concludes that while a certifying authority is limited 
to considering impacts to ``navigable waters'' when certifying 
compliance with the enumerated provisions of the CWA, a certifying 
authority is not so limited when certifying compliance with 
requirements of state or Tribal law that otherwise apply to waters of 
the state or Tribe beyond navigable waters. As discussed below, this 
interpretation best reflects the text of section 401. EPA recognizes 
that some states regulate waters beyond CWA ``navigable waters,'' while 
other states do not. EPA's interpretation best supports principles of 
cooperative federalism by allowing those states that do have laws 
applicable beyond ``navigable waters'' to apply those laws to those 
state waters in the certification context, and by not requiring other 
states to do so. An examination of the interpretation asserted in the 
2020 Rule and the interpretation offered at proposal reveals that the 
interpretation as clarified in this final rule is the most consistent 
with the statute and best balances the cooperative federalism framework 
of section 401--by not applying provisions of the CWA to state waters 
that Congress otherwise limited to Federal waters, while still 
authorizing states and Tribes to protect those state or Tribal waters 
from federally licensed or permitted projects.\69\ It also realigns 
with the Agency's position prior to the 2020 Rule. 2010 Handbook at 5 
(``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 [ 
] law.'') (rescinded in 2019, see supra).
---------------------------------------------------------------------------

    \69\ The Agency notes that this final interpretation is not 
reflected in the final regulatory text, including at Sec.  121.3 
regarding the scope of certification. The issue of what aspects of 
the activity are considered is distinct from the issue of what 
waters are considered.
---------------------------------------------------------------------------

    When a certifying authority considers whether an activity will 
comply with CWA sections 301, 302, 303, 306, and 307, the certifying 
authority is limited to considering impacts to ``navigable waters.'' 33 
U.S.C. 1341(a)(1). These sections of the CWA apply only to navigable 
waters as defined by the CWA. Id. at 1362(7). EPA concludes that the 
best interpretation of section 401 is that it does not allow a 
certifying authority to apply these CWA provisions beyond the waters 
that Congress intended for them to apply. However, a certifying 
authority must also consider whether the activity will comply with 
``any other appropriate requirement of State law.'' Id. at 1341(d). EPA 
concludes that other appropriate requirements of state or Tribal law 
include requirements that apply to state or Tribal waters beyond those 
waters covered by CWA section 402 and 404 permits. EPA further 
concludes that certifying authorities may consider the application of 
these laws to all waters impacted by the activity to which these laws 
otherwise apply.
    In contrast to the section 402 and section 404 permit programs 
established in the 1972 version of the Act, the Act does not directly 
address what waters are considered for section 401. Section 402 and 
section 404 permits unambiguously cover impacts of discharges to 
navigable waters.\70\

[[Page 66605]]

Conversely, while the text of section 401 states that the need for a 
certification is triggered by a potential discharge into ``the 
navigable waters,'' it does not state that, once the need for 
certification is triggered, a certifying authority must confine its 
review to potential water quality impacts to such ``navigable waters'' 
even when considering requirements of state law that apply beyond 
navigable waters. 33 U.S.C. 1341(a)(1). Instead, in enacting section 
401(d), Congress required a certifying authority to consider whether 
the ``applicant'' will comply with ``any other appropriate requirement 
of State law.'' Id. When Congress enacted section 401(d), it explained 
that this provision ``assure[d] that Federal licensing or permitting 
agencies cannot override State water quality requirements.'' S. Rep. 
No. 92-414, at 69 (1971).
---------------------------------------------------------------------------

    \70\ One way Congress expressly limited the application of 
section 402 permits to discharges to navigable waters is through the 
definition of ``discharge of a pollutant,'' a term that is not used 
in section 401. Section 402 authorizes EPA to issue permits ``for 
the discharge of any pollutant,'' 33 U.S.C. 1342(a)(1), which is 
defined as ``any addition of any pollutant to navigable waters from 
any point source.'' Id. at 1362(12) (emphasis added). EPA may issue 
such a permit upon the condition that the discharge will meet the 
requirements of sections 301, 302, 306, 307, and 308, Id. at 
1342(a)(1), all sections of the CWA that do not apply beyond 
navigable waters. Section 402 also authorizes states to apply for 
their ``own permit program for discharges into navigable waters 
within its jurisdiction.'' Id. at 1342(b) (emphasis added). Section 
404 authorizes the Corps to issue permits ``for the discharge of 
dredged or fill material into the navigable waters'' and authorizes 
any state to apply for their own ``permit program for the discharge 
of dredged or fill material into the navigable waters.'' Id. at 1344 
(emphasis added).
---------------------------------------------------------------------------

    State laws governing state water quality can of course apply to 
waters other than those directly regulated under the CWA. See 87 FR 
35348 (recognizing at proposal that ``states may, under state law, 
protect state waters beyond those that are'' covered by CWA 
permitting). About half of the states have state laws covering at least 
some surface waters beyond CWA navigable waters. EPA and Department of 
Army, Economic Analysis for the Final ``Revised Definition of `Waters 
of the United States' '' Rule, section II.A (December 2022). When 
Congress required states to consider state laws when acting on a 
request for certification, Congress declined to expressly limit this 
authorization to state laws that apply to waters regulated under the 
CWA. While Congress did include the limiting principle of 
``appropriate,'' the text and legislative history of section 401 do not 
suggest that Congress considered state laws that apply to waters beyond 
those directly regulated under the CWA to be ``inappropriate'' state 
laws. Nor does the text and legislative history of section 401 suggest 
that Congress intended to limit the applicability of such laws to only 
a subset of waters to which they normally apply (namely, ``navigable 
waters''). Had Congress desired to prohibit states from considering 
water quality impacts to state waters, it could easily have done so. It 
did not.
    This interpretation is reinforced by the fact that Congress 
intended section 401 to afford states and authorized Tribes broad power 
to protect their waters from harm caused by federally licensed or 
permitted projects. That intent is best realized by interpreting 
section 401 as allowing states and authorized Tribes to apply state law 
or Tribal law to all impacted state or Tribal waters when acting on a 
request for certification. While the section 401 certification 
requirement is triggered by a potential discharge into ``navigable 
waters,'' water quality impacts from the activity could occur in state 
or Tribal waters beyond those navigable waters. Allowing states or 
authorized Tribes to apply state or Tribal law to all potentially 
affected state or Tribal waters is supported by CWA section 510, 
which--``[e]xcept as expressly provided'' in the CWA--preserves a 
state's or authorized Tribe's authority and jurisdiction to protect its 
waters from pollution.
    The best reading of section 401 is that it authorizes a state or 
Tribe to apply state law or Tribal law to all impacted state or Tribal 
waters, rather than limiting states and Tribes to considering only a 
subset of impacted waters. EPA acknowledges it articulated a different 
position on those issues in the 2020 Rule. 85 FR 42234-35. Upon 
reconsideration, EPA believes there are good reasons for changing its 
position now. EPA disagrees with and finds unpersuasive the 2020 Rule 
preamble's attempt to conflate section 401 with sections 402 and 404 by 
saying that ``similar to the section 402 and 404 permit programs, 
section 401 is a core regulatory provision of the CWA.'' Id. While 
section 401 is certainly a critical element of the Act--indeed, it pre-
dated the 1972 CWA amendments and was deemed so important that Congress 
carried it over--section 401 is a direct congressional grant of 
authority for states and authorized Tribes to protect their water 
resources from impacts caused by federally licensed or permitted 
projects, and is significantly different in character from the Act's 
other Federal ``regulatory'' provisions. Section 401, although a 
neighbor to sections 402 and 404 in the CWA's organizational framework, 
is a fundamentally different provision and need not be interpreted 
according to those other provisions' strictures. The preamble to the 
2020 Rule, with little supporting analysis, asserted incorrectly that 
any application of section 401 to non-Federal waters ``would 
effectively broaden the scope of the Federal regulatory programs 
enacted by the 1972 CWA amendments [e.g., sections 402 and 404] beyond 
the limits that Congress intended.'' 85 FR 42234-35. However, the 
interpretation taken in this final rule in no way broadens the scope of 
sections 402 and 404. Finally, the reasons articulated above in support 
of a broad scope of certification (e.g., Congress intended for section 
401 to be a powerful tool for states to protect state waters from 
federally licensed or permitted projects) also support a state or 
authorized Tribe applying state or Tribal law to protect state or 
Tribal waters when acting on a request for certification.
e. Scope of Conditions
    The Agency is adding text at Sec.  121.3(b) to clarify that the 
scope of review for a certification decision is the same as the scope 
of permissible conditions that may be added to that certification. This 
is consistent with the proposed rule, which would have required a grant 
of certification with conditions to include ``[a]ny conditions 
necessary to assure that the activity as a whole will comply with water 
quality requirements,'' 87 FR 35378--the same standard as the proposed 
scope of review for a certification decision. Moreover, the preamble to 
the proposed rule was clear that EPA ``interpret[ed] the scope of 
certification review under sections 401(a)(1) and (d) to be the same. . 
. .'' 87 FR 35346. To clearly convey the Agency's intent, EPA is adding 
regulatory text at Sec.  121.3(b) stating that ``consistent with the 
scope of review identified in paragraph (a) of this section, a 
certifying authority shall include any conditions in a grant of 
certification necessary to assure that the activity will comply with 
applicable water quality requirements.''
    Because the scope of review applies when the certifying authority 
is determining whether to grant certification, the same ``activity'' 
standard should apply to a grant of certification, a grant of 
certification with conditions, and a denial of certification. That is, 
the outcome of the certifying authority's analysis should not dictate 
the scope of review. Logically, the same scope applies to a certifying 
authority's evaluation of potential water quality effects under both 
sections 401(a)(1) and 401(d). This is because the two sections are 
inextricably linked. Section 401(d) requires a certifying authority to 
determine whether ``the applicant'' will--without additional 
conditions--comply with the same CWA provisions identified in section 
401(a)(1) and ``any other appropriate'' requirement of state or Tribal 
law. Only if the certifying authority determines pursuant to section 
401(d) that adding ``any effluent limitations and other limitations, 
and monitoring requirements'' to the Federal license or permit will 
assure that water

[[Page 66606]]

quality requirements will be met, may the certifying authority grant 
the certification contemplated by section 401(a)(1). In other words, 
when a certifying authority determines that it must add conditions 
under section 401(d) to the certification, that is equivalent to 
deciding that, without those conditions, it must deny certification. 
The certifying authority's evaluations and determinations under 
sections 401(a)(1) and 401(d) do not work together in a harmonious 
fashion if the statute is interpreted to apply a different scope of 
review to each section. EPA has never taken the opposite position. In 
the 2020 Rule, EPA also concluded that the scope of sections 401(a)(1) 
and (d) should be the same. 85 FR 42252.\71\
---------------------------------------------------------------------------

    \71\ See also 2010 Handbook at 18 (rescinded in 2019, see supra) 
(``In order to obtain certification of any proposed activity that 
may result in a discharge to waters of the U.S., an applicant must 
demonstrate that the proposed activity and discharge will not 
violate or interfere with the attainment of any limitations or 
standards identified in [section] 401(a) and (d).'')
---------------------------------------------------------------------------

3. Implementation
    At proposal, the Agency identified examples of certification 
conditions possibly falling inside and outside of the water quality-
related scope of section 401 review. Some commenters provided input on 
these examples. Some of those commenters explicitly supported the 
listed examples, whereas other commenters disagreed that the examples 
listed were appropriately within the scope of certification. A few 
commenters argued that the scope of certification should be limited to 
protection of water quality sufficient to support designated uses, as 
opposed to direct protection of those uses, and argued that some 
examples in the proposal constituted the latter. A few commenters 
focused specifically on the examples regarding public fishing access 
and recreation facilities, arguing that they are not linked to 
preserving the water quality necessary for the designated use and 
should not be in the scope of a certifying authority's review. A few 
other commenters asserted that EPA was equating ensuring people can 
enjoy the benefits of water quality with actually ensuring water 
quality and argued that certifications should not include impacts that 
are not directly related to improving or maintaining water quality. 
Some commenters provided their own examples of conditions they 
considered to be related or unrelated to water quality and asked for 
EPA to explicitly state which conditions would be within or outside the 
scope of section 401 certification.
    The Agency declines to explicitly identify which conditions would 
be within or outside the scope of section 401 certification because, 
subject to a case-by-case review of the particular facts presented by 
each certification, a wide variety of conditions could be appropriate 
as necessary to prevent adverse impacts to a state's or Tribe's water 
quality. The appropriateness of any given condition will depend on an 
analysis of all relevant facts, including the certifying authority's 
applicable water quality requirements. For potentially qualifying 
conditions, it is appropriate for the certifying authority to consider 
all potential adverse water quality impacts.
    To be clear, a certifying authority could condition an activity to 
ensure its compliance with any and all components of applicable water 
quality standards (water quality criteria, designated uses, and 
antidegradation requirements). Therefore, certifying authorities could 
include conditions to ensure a project will comply with, in addition to 
water quality criteria, a designated use of a water, see PUD No. 1, 511 
U.S. at 714-15 (emphasis in original) (``We think the language of 
[section] 303 is most naturally read to require that a project be 
consistent with both components, namely the designated use and the 
water quality criteria. Accordingly, 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.''), 
or antidegradation requirements, see id. at 718-19 (recognizing the 
state appropriately justified its minimum flow rate as necessary to 
implement its antidegradation policy). This means conditions, such as 
those to ensure compliance with minimum flow rates to protect fisheries 
(see, e.g., PUD No. 1, 511 U.S. 700); and scheduled releases to 
accommodate existing recreational uses (see, e.g., In re Morrisville 
Hydroelectric Project Water Quality, 2019 VT 84, 224 A.3d 473 (2019)), 
may be appropriate certification conditions depending on the certifying 
authority's water quality standards or other aspects of state or Tribal 
law and the activity's impact on achieving compliance with such 
requirements.
    The preamble to the final 2020 Rule identified examples of 
certification conditions possibly falling outside the water quality-
related scope of section 401 review because they did not address water 
quality impacts, including conditions requiring one-time and recurring 
payments to state agencies for improvements or enhancements that are 
unrelated to the proposed federally licensed or permitted project; 
conditions to address potential non-water quality-related environmental 
impacts from the creation, manufacture, or subsequent use of products 
generated by a proposed federally licensed or permitted activity; and 
conditions related only to non-water quality-related impacts associated 
with air emissions and transportation effects. See 85 FR 42230. Subject 
to a case-by-case review of the particular facts presented by each 
certification, it is reasonable to assume that such non-water quality-
related conditions would generally be beyond the scope of section 401.
    Several commenters asserted that the proposed activity-based scope 
of certification was too ambiguous and would lead to various 
implementation challenges, such as regulatory uncertainty, increased 
litigation risk, increased project costs, and project delays. As 
discussed above, the Agency disagrees that its approach in the final 
rule will lead to implementation challenges. Rather, the final rule's 
approach to the scope of certification simply returns to the 
longstanding practice. Ultimately, the ``activity'' subject to the 
Federal license or permit will depend on the specific facts of a given 
situation. For example, the activity may be the construction and 
operation of a hydroelectric dam, see, e.g., PUD No. 1, 511 U.S. at 
708-09, the construction and operation of a liquified natural gas 
marine import terminal and a pipeline connecting the terminal to an 
interstate natural gas pipeline, see, e.g., AES Sparrows, 589 F.3d at 
723-24, or the construction and operation of a marina, see, e.g., Winer 
Memorandum at 1.
    While the specific ``activity'' subject to certification will be 
fact specific, the final rule clarifies certain limiting principles 
that apply to all certifications. A certifying authority's analysis is 
limited to evaluating the adverse water quality-related impacts from 
the activity when it evaluates whether the activity will comply with 
applicable water quality requirements. As discussed above, both the 
terms ``will comply'' and ``applicable water quality requirements'' 
limit what a certifying authority may consider and ultimately, the 
decisions that a certifying authority can make on a given request for 
certification.

F. Certification Decisions

1. What is the Agency finalizing?
    In Sec.  121.7(a), the Agency is finalizing that ``a certifying 
authority may act on a request for certification in one of four ways: 
grant certification, grant

[[Page 66607]]

certification with conditions, deny certification, or expressly waive 
certification.'' To provide further clarity on how a certifying 
authority may ``act on a request for certification,'' EPA is defining 
recommended minimum contents of a certification decision at Sec.  
121.7(c) through (f) and finalizing that certification decisions must 
be in writing. In a change from proposal and in support of the 
cooperative federalism balance central to section 401, the Agency is 
not requiring certifying authorities to include the components listed 
at Sec.  121.7(c) through (f) in their certification decisions. 
Instead, the final rule defines recommended contents for a grant of 
certification (Sec.  121.7(c)), a grant of certification with 
conditions (Sec.  121.7(d)), a denial of certification (Sec.  
121.7(e)), and an express waiver (Sec.  121.7(f)).
2. Summary of Final Rule Rationale and Public Comment
a. Decisions on a Request for Certification
    Consistent with the CWA, EPA is finalizing the proposed approach 
that a certifying authority must make one of four decisions on a 
request for certification pursuant to its section 401 authority: it may 
grant certification, grant certification with conditions, deny 
certification, or it may expressly waive certification. 40 CFR 
121.7(a). This section briefly describes each of the four decisions a 
certifying authority may make, including what each decision means and 
its impact on the Federal licensing or permitting process. This final 
rule's interpretation of the four decisions a certifying authority may 
make is consistent with the 2020 Rule and longstanding interpretation 
of the 1971 Rule. See 40 CFR 121.7 (2020); 2010 Handbook at 1 
(rescinded in 2019, see supra) (``The central feature of CWA Sec.  401 
is the state or tribe's ability to grant, grant with conditions, deny 
or waive certification.'').
    First, a certifying authority may grant certification. A grant of 
certification means that the certifying authority has determined that 
the activity will comply with water quality requirements. See section 
IV.E in this preamble for further discussion of the scope of 
certification and the term ``water quality requirements.'' Granting 
certification means that the Federal license or permit may be issued. 
See 33 U.S.C. 1341(a)(1). Section 401(a)(1) provides that where there 
are no applicable water quality requirements for an activity, the 
certifying authority ``shall so certify.'' Id. EPA is finalizing minor 
revisions to the regulatory language located at Sec.  121.7(f) of the 
2020 Rule that describes this scenario, with minor edits to reflect the 
final rule scope of certification. See 40 CFR 121.7(g).
    Second, a certifying authority may grant certification with 
conditions. A grant of certification with conditions means that the 
certifying authority has determined that the activity will comply with 
water quality requirements, but only if certain conditions are met. 
Pursuant to section 401(d), if a grant of certification includes 
conditions, those conditions must be incorporated into the Federal 
license or permit. 33 U.S.C. 1341(d) (``Any certification provided 
under this section shall 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 [sections 
301, 302, 306, and 307], and with any other appropriate requirement of 
State law set forth in such certification, and shall become a condition 
on any Federal license or permit . . .'') (emphasis added). As 
discussed later in section IV.G in this preamble, Federal circuit 
courts have routinely held that Federal agencies may not question or 
reject a state's certification conditions. See, e.g., American Rivers, 
129 F.3d at 107 (``[Section 401(d)] is unequivocal, leaving little room 
for FERC to argue that it has authority to reject state conditions it 
finds to be ultra vires.''). Granting certification with conditions 
means the Federal license or permit may be issued, provided the 
conditions are incorporated into that Federal license or permit.
    In this final rule, the Agency is not retaining any regulatory text 
on the incorporation of certification conditions as was included in the 
2020 Rule. See 40 CFR 121.10 (2020). First, the 2020 Rule limited 
incorporation of certification conditions to only those that satisfy 
the content requirements at Sec.  121.7(d) of the 2020 Rule.\72\ 40 CFR 
121.10 (2020). Section 401(d) requires all certification conditions to 
become conditions on a Federal license or permit and does not limit 
incorporation to only those conditions that include certain 
regulatorily defined components. As discussed in section IV.G of this 
preamble, EPA does not interpret the statute as allowing a Federal 
agency to review whether a certifying authority included certain 
regulatorily defined elements in its certification decisions, nor 
reject certifying authority conditions. Second, while the 2020 Rule 
required Federal agencies to clearly identify certification conditions 
in their Federal license or permit, section 401 does not require 
Federal agencies to distinguish among certification conditions in their 
licenses or permits. If the Federal agency finds it useful to 
distinguish certification conditions for implementation purposes, the 
Federal agency may structure its license or permit in such a manner, 
but EPA does not find it necessary to require such a distinction.
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    \72\ For example, the 2020 Rule required certifying authorities 
to include a statement explaining why the condition is necessary to 
assure that the discharge from the proposed project will comply with 
water quality requirements and a citation to Federal, state, or 
Tribal law that authorizes the condition for each certification 
condition on an individual license or permit. 40 CFR 121.7(d)(1) 
(2020).
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    Third, a certifying authority may deny certification. A denial of 
certification means that the certifying authority is not able to 
certify that the activity will comply with water quality requirements. 
If a certifying authority denies certification, the Federal license or 
permit cannot be issued. 33 U.S.C. 1341(a)(1). The 2020 Rule included 
regulatory text that discussed the effects of a denial of 
certification. See 40 CFR 121.8 (2020). Section 121.8(a) of the 2020 
Rule provided that a certification denial would not preclude a project 
proponent from submitting a new certification request. Section 121.8(b) 
provided that if the Federal agency determined that the certifying 
authority's denial satisfied the content requirements at Sec.  121.7(e) 
of the 2020 Rule,\73\ then the Federal agency would provide notice to 
the certifying authority and project proponent and the Federal license 
or permit would not be granted. As discussed below, the Agency is not 
retaining any regulatory text that speaks to the effects of a denial of 
certification because it is unnecessary.
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    \73\ For example, the 2020 Rule required certifying authorities 
to include three components on all denials of certification for 
individual Federal licenses or permits, including the specific water 
quality requirements with which the discharge will not comply, a 
statement explaining why the discharge will not comply with the 
identified water quality requirements, and description of the 
specific water quality data or information, if any, that would be 
needed to assure that the discharge from the proposed project will 
comply with water quality requirements if the denial was due to 
insufficient information. 40 CFR 121.7(e)(1) (2020).
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    A few commenters discussed whether the proposal would prevent a 
project proponent from resubmitting a request for certification 
following a denial. One commenter noted that while the 2020 Rule 
provided that a certification denial would not preclude a project 
proponent from submitting a new certification request, the proposal did 
not include a similar provision. The commenter

[[Page 66608]]

suggested that EPA is taking the position that a certification denial 
is always a permanent final action that is taken with prejudice and 
asserted that if this is EPA's position, it would be a significant 
change from its previous longstanding position affirmed by the 2020 
Rule.
    EPA's removal of regulatory text regarding the effects of a denial 
of certification has no impact on denials without prejudice. EPA 
continues to interpret section 401 as allowing denials without 
prejudice.\74\ Section 401(a)(1) provides that a Federal license or 
permit may not be granted if certification is denied, but it does not 
speak to new requests for certification following a denial of 
certification. Nothing in section 401, nor this final rule, prohibits a 
project proponent from re-applying for certification if a certifying 
authority denies its initial request.
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    \74\ See e.g., New York State Dep't of Env't Conservation v. 
FERC, 991 F.3d 439, 450 at n.11 (2d Cir. 2021) (noting that if a 
state finds that a ``particular application requires 
supplementation,'' the state ``can deny an application without 
prejudice within the one-year deadline, which will presumably prompt 
the applicant to resubmit the application with additional 
material'') (citing New York State Dep't of Env't Conservation v. 
FERC, 884 F.3d 450, 456 (2d Cir. 2018)); Turlock Irrigation Dist. v. 
FERC, 36 F.4th 1179, 1183-84 (D.C. Cir. 2022) (rejecting arguments 
that, if the court upheld the denials without prejudice at issue 
before it, ``State agencies could extend the time for decision 
indefinitely by denying one certification request after another 
without prejudice, thus nullifying section 401's one-year limit'').
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    EPA does not find it necessary to add any additional direction or 
process for certification denials, beyond providing recommended 
contents of a certification denial (as discussed below). If a project 
proponent disagrees with a certifying authority's denial, the project 
proponent may challenge the certifying authority's decision in the 
appropriate court. See S. Rep. 92-414 at 69 (1971) (``Should such an 
affirmative denial occur no license or permit could be issued by such 
Federal agencies . . . unless the State action was overturned in the 
appropriate courts of jurisdiction.''). The 2020 Rule also provided 
that a Federal license or permit may not be issued if a certifying 
authority denies certification in the manner prescribed by the 2020 
Rule (i.e., contains the contents defined at Sec.  121.7(e) of the 2020 
Rule). Under this final rule, Federal agencies may not review whether a 
certifying authority's certification denial contains the contents 
recommended at final rule Sec.  121.7(e).
    Fourth, a certifying authority may expressly waive certification. 
The statute explicitly provides for a constructive waiver if the 
certifying authority fails or refuses to act on a request for 
certification within the reasonable period of time. The statute does 
not explicitly state that a certifying authority may expressly waive 
certification. A few commenters suggested that the final rule should 
remove the term ``expressly'' from the waiver provisions because the 
CWA does not provide any circumstances in which certification can be 
waived before the reasonable period of time expires, and EPA does not 
have the authority to add provisions in which a certifying authority 
can expressly waive certification. However, EPA has determined that 
providing this opportunity in this final rule is consistent with a 
certifying authority's ability to waive through failure or refusal to 
act. 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.''). This interpretation is also 
consistent with the Agency's longstanding interpretation of the waiver 
provision. See 40 CFR 121.9(a)(1) (2020) (allowing a certifying 
authority to expressly waive certification via written notification); 
40 CFR 121.16(a) (2019) (same). Additionally, continuing to allow 
express waivers may create efficiencies where the certifying authority 
knows early in the process that it will waive. An express waiver does 
not mean that the certifying authority has determined that the activity 
will comply with water quality requirements. Instead, an express waiver 
indicates only that the certifying authority has chosen not to act on a 
request for certification. Consistent with the statutory text, an 
express waiver enables the Federal agency to issue a Federal license or 
permit without a certification. 33 U.S.C. 1341(a)(1).
b. Defining What It Means ``To Act on a Request for Certification''
    The Agency is finalizing the definition of what it means ``to act 
on a request for certification'' as proposed at Sec.  121.7(a). Once a 
certifying authority receives a request, the certifying authority must 
``act on a request for certification, within a reasonable period of 
time (which shall not exceed one year) after receipt of such request.'' 
33 U.S.C. 1341(a)(1). The phrase ``to act on a request for 
certification'' is not defined in the statute; nor did EPA define it in 
the 1971 or 2020 Rules. To provide greater clarity regarding how a 
certifying authority ``act[s] on a request for certification'' within 
the reasonable period of time, EPA is defining the phrase to mean that 
a certifying authority is making one of the four certification 
decisions discussed above: granting certification, granting 
certification with conditions, denying certification, or expressly 
waiving certification.
    The Agency is providing clarification regarding what it means to 
``act on a request for certification'' in light of commenter input on 
this topic and recent case law. For example, would other actions beyond 
the four just discussed qualify as ``acting'' on a request for 
certification? The Fourth Circuit recently held that it was permissible 
for a project proponent to withdraw its application to avoid a 
certification denial as long as the certifying authority and project 
proponent were not in a ``coordinated withdrawal and resubmission 
scheme.'' NCDEQ v. FERC, 3 F.4th 655, 672, 676 (4th Cir. 2021). 
However, the court, in dicta, also suggested that the section 401 
phrase ``to act'' could be interpreted to mean something different than 
a final action on a request for certification. According to the court, 
a certifying authority that ``takes significant and meaningful action'' 
and ``in good faith takes timely action to review and process a 
certification request likely would not lose its authority to ensure 
that federally licensed projects comply with the State's water quality 
standards, even if it takes the State longer than a year to make its 
final certification decision.'' Id. at 670.
    EPA proposed to interpret the phrase ``to act on a request for 
certification'' to mean that a certifying authority makes one of the 
four above-described certification decisions: grant, grant with 
conditions, deny, or expressly waive. However, the Agency requested 
comment on this interpretation, as well as any alternative 
interpretations, such as the NCDEQ approach. A few commenters did not 
support the proposed approach and stated that defining ``act'' as 
``decide'' violates the presumption that Congress could have included 
language that it did not. One commenter stated that Congress 
deliberately used the language ``fails or refuses to act'' instead of 
``grant or deny'' when crafting the statutory text of section 401. A 
few other commenters stated that a certifying authority acting in 
``good faith'' to make a final decision on a certification request 
should not be deemed a failure to act even if that decision takes 
longer than one year. Conversely, some commenters supported the 
proposed approach noting it provided much needed clarity and correctly 
rejected the NCDEQ approach.

[[Page 66609]]

    The Agency finds that defining ``to act on a request for 
certification'' as making one of the four above-described certification 
decisions is reasonable, consistent with congressional intent, is 
consistent with longstanding Agency position and case law, and allows 
for greater certainty and transparency in the certification process. 
First, while Congress did not use the words ``grant or deny'' or 
``decide'' in place of ``act on a request for certification,'' in 
context it seems evident that these are the actions Congress had in 
mind. After all, section 401(a)(1) is about the effects of granting or 
denying certification. Moreover, while Congress did not use the words 
``grant or deny,'' it likewise did not use a term that clearly 
indicated that Congress had in mind something short of a final 
``action'' on a request for certification. Congress clearly intended to 
balance state water quality concerns with the need to guard against 
unreasonable delays in the Federal licensing or permitting process. 
See, e.g., 115 Cong. Rec. 9257, 9264 (April 16, 1969) (``The failure by 
the State to act in one way or the other within the prescribed time 
would constitute a waiver of the certification required as to that 
State.''); H.R. Rep. No. 91-940, at 54-55 (March 24, 1970) (Conf. Rep.) 
(``In order to insure that sheer inactivity by the State . . . will not 
frustrate the Federal application, a requirement, similar to that 
contained in the House bill is contained in the conference substitute 
that if within a reasonable period, which cannot exceed one year, after 
it has received a request to certify, the State . . . fails or refuses 
to act on the request for certification, then the certification 
requirement is waived.''). If a certifying authority could merely act 
in a ``significant and meaningful'' way to avoid waiver at the 
expiration of the reasonable period of time, it could delay the Federal 
licensing or permitting process well beyond the statutory one-year 
timeframe and have the same practical effect as denying certification 
without going on the record to do so. While Congress provided states 
and Tribes with a powerful tool to prevent federally licensed or 
permitted activities that will not comply with water quality 
requirements, Congress clearly intended states and Tribes to take an 
affirmative action to prevent such activities. 33 U.S.C. 1341(a)(1) 
(``No license or permit shall be granted if certification has been 
denied . . .'') (emphasis added). The Agency finds that defining ``to 
act'' as taking one of the four decisions contemplated in section 401 
best effectuates congressional intent and respects the cooperative 
federalism balance central to section 401.
    Further, although the Agency has never explicitly defined ``to act 
on a request for certification,'' the interpretation taken in this 
final rule is consistent with prior Agency guidance and the 2020 Rule 
preamble. In the 2020 Rule, the Agency noted that ``[i]f a certifying 
authority fails or refuses to [grant certification, grant certification 
with conditions, deny certification, or expressly waive certification] 
within the reasonable period of time, the CWA provides that the 
certifying authority will be deemed to have waived the certification 
requirement.'' 85 FR 42262 (July 13, 2020). One implication of this 
language is that the Agency thought that ``to act on a request for 
certification'' means to make a final decision on the request (i.e., 
grant, grant with conditions, deny, or expressly waive certification). 
Courts appear to agree. See, e.g., Alcoa Power Generating, Inc. v. 
FERC, 643 F.3d 963, 972 (D.C. Cir. 2011) (noting that ``[i]n imposing a 
one-year time limit on States to `act,' Congress plainly intended to 
limit the amount of time that a State could delay a federal licensing 
proceeding without making a decision on the certification request''); 
NYSDEC, 884 F.3d at 455-56 (noting that a state must act after 
receiving a certification request and that denial ``would constitute 
`acting' on the request under the language of Section 401''); New York 
State Dep't of Environmental Cons. v. FERC, 991 F.3d 439, 443, 450 (2d 
Cir. 2021) (State agency could not ``extend[ ] the deadline . . . to 
issue or deny water quality certification'' beyond ``one year of the 
actual receipt of the application'' for certification); Millennium 
Pipeline Co. v. Seggos, 860 F.3d 696, (D.C. Cir. 2017) (``To prevent 
state agencies from indefinitely delaying issuance of a federal permit, 
. . . . a State [must] grant or deny the certificate'' within one year 
from the receipt of a request for certification).
    Lastly, the Agency finds that the final rule's approach best 
supports a clear, consistent, and transparent certification process. As 
noted at proposal, EPA shared similar concerns as stakeholders with the 
NCDEQ approach, noting that it may make the section 401 certification 
process less predictable and transparent. 87 FR 35350 (June 9, 2022). 
The Agency remains concerned that interpreting ``to act on a request 
for certification'' as any ``significant and meaningful action'' might 
inject significant uncertainty and subjectivity into the certification 
process (e.g., what is a ``significant and meaningful action?'') 
causing significant confusion for stakeholders. Id. EPA finds that the 
final rule approach will provide stakeholders with a clear and 
predictable endpoint for knowing when the certifying authority has 
failed or refused to act, resulting in a waiver. See 33 U.S.C. 
1341(a)(1).
c. Failing or Refusing To Act on a Request for Certification
    Similar to the proposed rule, the Agency is finalizing at Sec.  
121.9(a) that ``the certification requirement shall be waived only if a 
certifying authority fails or refuses to act on a request for 
certification within the reasonable period of time.'' 40 CFR 121.9(a). 
EPA proposed at Sec.  121.8 that ``the certification requirement shall 
be waived if a certifying authority fails or refuses to act on a 
request for certification in accordance with Sec.  121.7(a) within the 
reasonable period of time, as defined at Sec.  121.6.'' EPA has 
reorganized the regulatory text by moving the text proposed at Sec.  
121.8 (``Failure or refusal to act'') to Sec.  121.9 and made several 
revisions. First, EPA made minor non-substantive revisions at Sec.  
121.9(a) to remove unnecessary and redundant internal references to 
Sec. Sec.  121.6 (reasonable period of time) and 121.7(a) (possible 
actions on a request for certification). Second, the Agency has moved 
proposed Sec.  121.9(c), which described the process that occurred once 
a certifying authority failed or refused to act, to Sec.  121.9(b) to 
pair the process that occurs once a certifying authority fails or 
refuses to act with the final rule's express statement on constructive 
waiver. The Agency intends such restructuring to clearly convey that a 
constructive waiver of certification may only occur where a certifying 
authority fails or refuses to act, as defined in this final rule, 
within the reasonable period of time. See section IV.G in this preamble 
for further discussion on Federal agency review for failure or refusal 
to act within the reasonable period of time.
    The plain language of section 401(a)(1) provides that the 
certification requirement is waived if 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).'' Id. As discussed in 
section IV.D of this preamble, a certifying authority and Federal 
agency may jointly agree to set the reasonable period of time up to one 
year. 40 CFR 121.6(b). However, if they are unable to reach agreement, 
it will default to six months. 40 CFR 121.6(c). Accordingly, if the 
certifying authority fails or refuses to act in the agreed-upon or 
default reasonable period of time, the certifying authority will 
constructively waive.

[[Page 66610]]

Section 401(a)(1) clearly indicates Congress's intent to limit 
constructive waivers to situations where a certifying authority did not 
act within the reasonable period of time. See id. (``No license or 
permit shall be granted until the certification required by this 
section has been obtained or has been waived as provided in the 
preceding sentence.'').
    The legislative history of this provision also suggests that 
constructive waivers were intended to prevent delays in the Federal 
licensing or permitting process due to the certifying authority's 
failure to grant or deny certification. See H. Rep. No 92-911, at 122 
(1972) (``In order to insure that sheer inactivity by the State, 
interstate agency or Administrator as the case may be, will not 
frustrate the Federal application, a requirement, that if within a 
reasonable period, which cannot exceed 1 year, after it has received a 
request to certify the State, interstate agency, or Administrator, as 
the case may be, fails or refuses to act on the request for 
certification, then the certification requirement is waived.''). 
Similarly, the 1971 Rule and subsequent Agency guidance recognized that 
constructive waivers could occur due to certifying authority inaction. 
See 40 CFR 121.16(b) (2019) (providing that constructive waiver 
occurred upon the ``failure of the State . . . concerned to act on such 
a request for certification within a reasonable period of time after 
receipt of such request''); 2010 Handbook at 11 (rescinded in 2019, see 
supra) (``State and tribes are authorized to waive [section] 401 
certification . . . by the certification agency not taking action.'').
    The 2020 Rule's interpretation of what it means for a certifying 
authority to fail or refuse to act departed from the longstanding 
Agency position on constructive waivers. The 2020 Rule allowed a 
Federal agency to determine that a certifying authority had failed or 
refused to act, and thereby waived certification--even when the 
certifying authority did in fact act on a request for certification 
within the reasonable period of time--if the Federal agency found that 
the action was somehow procedurally deficient (e.g., did not follow the 
2020 Rule's procedural requirements for a denial of certification). 40 
CFR 121.9(a)(2) (2020); 85 FR 42266. Similarly, a Federal agency could 
determine that a certification condition was waived if the condition 
did not comply with procedural requirements of the 2020 Rule. Id. at 
42250. This aspect of the 2020 Rule drew considerable pre-proposal 
input and public comment to the effect that this interpretation could 
result in a Federal agency ``veto'' of a section 401 certification, and 
that it was contrary to the statute, the legislative history, and case 
law. EPA similarly expressed concern in its Federal Register document 
announcing its intent to revise the 2020 Rule, noting that ``a federal 
agency's review may result in a state or tribe's certification or 
conditions being permanently waived as a result of non-substantive and 
easily fixed procedural concerns identified by the federal agency.'' 86 
FR 29543 (June 2, 2021).
    The 2020 Rule's interpretation of waiver of a certification 
decision is not consistent with the plain language of the statute and 
its legislative history. The mere failure of a certifying authority to 
include certain regulatorily defined elements in its certification 
decision or comply with other procedural requirements of section 401, 
such as following public notice procedures on a request for 
certification, do not qualify as the kind of ``sheer inactivity'' that 
Congress contemplated would result in a constructive waiver. This 
interpretation also resulted in Federal agencies rejecting 
certification decisions intended to prevent adverse water quality 
impacts because of fixable procedural concerns. For example, some 
commenters noted that use of the 2020 Rule's procedural requirements on 
certifications for the Corps' Nationwide General Permits resulted in 
certifications with conditions or denials being treated as constructive 
waivers. As discussed in section IV.G.2 of this preamble, a 
constructive waiver is a severe consequence because a waiver means that 
a Federal license or permit which could adversely impact the certifying 
authority's water quality (i.e., cause noncompliance with water quality 
requirements) may proceed without any input from the certifying 
authority. Accordingly, consistent with the statutory language, 
legislative history, and prior Agency interpretation, EPA is finalizing 
regulatory text to clarify that constructive waivers may occur only if 
a certifying authority fails or refuses to take one of the four actions 
described in this section within the reasonable period of time.
    Consistent with this approach, EPA is also finalizing targeted 
conforming revisions to its part 124 and part 122 regulations, where 
these regulations previously allowed EPA to find that a certifying 
authority waived its right to certify or waived a certification 
condition for reasons other than those specified in final rule Sec.  
121.9 (failure to act on a request for certification within the 
reasonable period of time). EPA is deleting the majority of the 
language in 40 CFR 124.53(e)(2) and (3), which allowed EPA to waive 
certification conditions that did not meet certain requirements.\75\ 
See discussion infra for further discussion on the revisions to Sec.  
124.53.
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    \75\ EPA is also deleting provisions in Sec.  124.53(e) because 
its approach to the contents of a certification decision differed 
from final rule Sec.  121.7, as explained in preamble section 
IV.F.2.d of this preamble.
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    EPA is also finalizing revisions to 40 CFR 124.55(c), which allowed 
EPA to waive certification conditions or denials that were based on 
state law allowing a less stringent permit condition. Specifically, EPA 
is deleting the second sentence of Sec.  124.55(c), which allowed EPA 
to waive a certification denial or condition. The first sentence of 
Sec.  124.55(c) will remain because it is not affected by this final 
rule. Finally, EPA is finalizing revisions to 40 CFR 122.44(d)(3), 
which allowed EPA to waive certifications that were stayed by a court 
or state board under certain circumstances. EPA is deleting the second 
and third sentences, which concerned certification waiver. As a result 
of these deletions and revisions in EPA's part 124 and part 122 
regulations, certification waivers for EPA-issued NPDES permits will be 
governed solely by the certification waiver requirements in Sec.  121.9 
of the final rule.
d. Contents of a Certification Decision
    To further clarify how a certifying authority may ``act on a 
request for certification,'' EPA is finalizing recommended contents of 
a certification decision at Sec.  121.7(c) through (f) and finalizing a 
requirement that all certification decisions be in writing. In a change 
from proposal and in support of the cooperative federalism balance 
central to section 401, the Agency is not mandating the contents that 
certifying authorities must include in their certification decisions. 
Instead, the final rule includes recommended contents for a grant of 
certification (Sec.  121.7(c)), a grant of certification with 
conditions (Sec.  121.7(d)), a denial of certification (Sec.  
121.7(e)), and an express waiver of certification (Sec.  121.7(f)). As 
discussed in more detail below, these recommended contents are similar 
to those proposed (as requirements) with modifications in light of 
commenter input. The Agency is also finalizing revisions to the 
regulatory text located at Sec.  121.7(a) of the 2020 Rule with minor, 
non-substantive revisions to clarify that all certification decisions 
should be within the scope of certification and taken within the 
reasonable period of time. 40 CFR 121.7(b).

[[Page 66611]]

    EPA is finalizing removal of the regulatory text located at Sec.  
121.7(b) of the 2020 Rule, which characterized what actions a 
certifying authority may take based on its evaluation of the request 
for certification. EPA believes it is redundant to retain separate 
regulatory text restating the same ideas as final rule Sec.  121.7(a) 
and (c) through (f).
    While the statute provides that certifying authorities may make one 
of four decisions when processing a request for certification, the CWA 
does not explicitly describe the contents or elements of a 
certification decision. EPA's 1971 Rule defined the contents of a 
certification and express waiver decision for all certifying 
authorities. The 1971 Rule's enumeration of the contents of a 
certification decision was simple but effective and included the name 
and address of the applicant, a statement that the certifying authority 
examined the application, 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,'' and other information 
deemed appropriate by the certifying authority. 40 CFR 121.2(a) (2019). 
In addition, the 1971 Rule provided that a certification could be 
waived upon either (1) written notification from the certifying 
authority that it expressly waived its authority to act on a request, 
or (2) written notification from the Federal licensing or permitting 
agency regarding the failure of the certifying authority to act on a 
request for certification within the reasonable period of time. 40 CFR 
121.16 (2019). The 1971 Rule did not define the contents of a 
certification denial or provide specific requirements for how to 
articulate and incorporate a certification condition.
    In the 2020 Rule, EPA updated those requirements for each type of 
certification decision and more fully addressed the effects of those 
decisions. First, it provided that, when a certifying authority granted 
certification under the 2020 Rule, the certification must be in writing 
and include a written statement that the discharge from the proposed 
project would comply with water quality requirements. 40 CFR 121.7(c) 
(2020); 85 FR 42286.
    Second, when a certifying authority granted certification with 
conditions, the 2020 Rule required that the certifying authority 
explain the necessity of each condition and provide a citation to an 
applicable Federal, state, or Tribal law. 40 CFR 121.7(d) (2020); 85 FR 
42286. This was a change from the 1971 Rule, which broadly provided for 
certifying authorities to include conditions as they ``deem[ed] 
necessary or desirable.'' 40 CFR 121.2(a)(4) (2019). The 2020 Rule 
preamble stated that the requirements were ``intended to increase 
transparency and ensure that any limitation or requirement added to a 
certification . . . is within the scope of certification.'' 85 FR 
42256. EPA observes that this provision was similar to EPA's current 
NPDES program-specific section 401 regulations. See 40 CFR 124.53(e)(2) 
(2023) (requiring a citation for any conditions more stringent than 
those in the draft permit).\76\
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    \76\ The Agency is finalizing revisions to the part 124 
regulations where such provisions are inconsistent with this final 
rule, including deleting 40 CFR 124.53(e)(2). See discussion infra.
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    Third, unlike the 1971 Rule, under which certification denials were 
undefined, the 2020 Rule defined the contents of a denial decision. 
Specifically, the 2020 Rule required certification denials to be made 
in writing and to identify any water quality requirements with which 
the discharge will not comply, include a statement explaining why the 
discharge would not comply with those requirements, and provide any 
specific water quality data or information that would help explain a 
denial based on insufficient information. 40 CFR 121.7(e) (2020); 85 FR 
42286.
    Fourth, the 2020 Rule included similar language to the 1971 Rule 
for express waivers and required written notification from the 
certifying authority indicating an express waiver of its authority to 
act on a request for certification. 40 CFR 121.9(a)(1) (2020); 85 FR 
42286. Lastly, under the 2020 Rule, EPA defined constructive waiver as 
a certifying authority's ``failure or refusal to act on a certification 
request'' which included failing or refusing to (1) act within the 
reasonable period of time, (2) satisfy the procedural requirements for 
a grant or denial of certification imposed by the 2020 Rule, or (3) 
comply with other procedural requirements of section 401 (e.g., provide 
public notice on a certification request). 40 CFR 121.9(a)(2) (2020); 
85 FR 42286. The 2020 Rule also provided that condition-specific 
waivers could occur if the certifying authority failed to satisfy the 
procedural requirements imposed by the 2020 Rule for certification 
conditions. 40 CFR 121.9(b) (2020); 85 FR 42286. See section IV.G in 
this preamble for further discussion on constructive waivers and the 
role of Federal agencies.
    The stated purpose of the 2020 Rule requirements was to promote 
transparency and consistency in certification decisions and to help 
streamline the Federal licensing and permitting processes. 85 FR 42220. 
However, in pre-proposal input, several certifying authorities said 
that the 2020 Rule's requirements for the contents of certification 
decisions delayed rather than streamlined the certification process. 
Conversely, in pre-proposal outreach, project proponents expressed 
interest in keeping the 2020 Rule requirements for the added 
transparency and argued that it is helpful when certifying authorities 
explain their final certification decisions (especially denials). In 
response to this mixed input, the Agency proposed to include some 
requirements for each of the four types of certification decisions. The 
Agency intended for this approach to address both the workload concerns 
expressed by certifying authorities, and the desire of project 
proponents for increased transparency and consistency in the 
certification process.
    Some commenters supported the proposed rule's approach, including 
the removal of the 2020 Rule requirements to include specific statutory 
or regulatory citations for each certification condition and denial, 
and retaining the inclusion of a statement explaining why each of the 
included conditions is necessary to assure that the activity as a whole 
will comply with water quality requirements. Commenters argued that the 
explanation requirement would provide transparency and regulatory 
certainty. However, some commenters asserted that any content 
requirements imposed by EPA would place an undue burden on the 
certifying authority and recommended that the Agency remove all content 
requirements. Conversely, some other commenters expressed interest in 
keeping the 2020 Rule requirements, including a few commenters who 
argued that citations are necessary for legally defensible 
certification decisions, to provide transparency, and to enable the 
project proponent and the public to understand the rationale for a 
condition.
    After reviewing public comments, the Agency is not finalizing any 
requirements for certification decisions. Before the 2020 Rule, EPA did 
not impose requirements on certifying authorities regarding what 
information they must include in a denial or what information they must 
include to support a certification condition. EPA is not aware of any 
major issues regarding clarity or information in certification denials 
or conditions. Instead of mandating detailed requirements for 
certifying authorities, the final rule identifies recommended contents 
for a grant of certification, a grant of certification with conditions, 
a denial of

[[Page 66612]]

certification, and an express waiver of certification. This approach 
addresses workload concerns expressed by certifying authorities and, in 
support of the cooperative federalism balance central to section 401, 
provides certifying authorities with the flexibility to determine how 
best to communicate certification decisions to project proponents and 
Federal agencies. It also will eliminate unnecessary potential disputes 
about whether a certifying authority complied with EPA-issued 
requirements for certification decision documents (in addition to 
whatever requirements the certifying authority imposes on itself). EPA 
expects certifying authorities understand the importance of clear, 
transparent communication with project proponents and Federal agencies. 
Indeed, it is in the certifying authority's own interests to clearly 
convey the reasoning and rationale behind its action. To encourage 
development of clear certification decisions, the Agency is identifying 
recommended--but not required--contents for each certification decision 
type at final rule Sec.  121.7(c) through (f). These contents are 
similar to the contents proposed (to be required) at Sec.  121.7(c) 
through (f), with modifications based on stakeholder input. See 
discussion infra. The recommended contents should provide transparency 
and consistency in the certification process, particularly where a 
certifying authority does not have a standard approach for the contents 
of a certification decision. For its part, the Agency intends to 
include these contents in certification decisions when it acts as a 
certifying authority and encourages other certifying authorities to 
include similar contents in their certification decisions. However, the 
final rule approach provides certifying authorities with the 
flexibility to add different or additional elements or information 
requirements to any of these four certification decisions to provide 
stakeholders with additional clarity and transparency. For example, a 
certifying authority may choose to require a citation to applicable 
Federal or state or Tribal water quality requirements to support a 
certification condition.
    As discussed above, the Agency is recommending, as opposed to 
requiring, additional contents for each type of certification decision. 
Before discussing the specific contents of each certification decision 
in more detail, the Agency would like to address the recommended 
contents that are the same or similar in all four certification 
decisions. First, consistent with the 2020 Rule, the Agency has opted 
to retain language in the recommended contents of a certification 
decision consistent with the 1972 statutory language. Unlike the 2020 
Rule, the 1971 Rule included language that reflected the predecessor 
statute. As discussed in section III in this preamble, the 1972 CWA 
revised the predecessor version of section 401 that the 1971 Rule 
relied upon. To continue to account for this change to the statutory 
text, the Agency is retaining a similar provision as the 2020 Rule that 
certification decisions to grant, grant with conditions, or deny 
certification should indicate whether the certifying authority has 
determined that an activity will comply with the water quality 
requirements identified in the CWA, not just water quality 
standards.\77\ Unlike the 2020 Rule, EPA is finalizing that 
certification decisions should indicate whether the activity, as 
opposed to the discharge, will comply with water quality requirements. 
See section IV.E of this preamble for further discussion on the scope 
of certification.
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    \77\ The 1971 Rule required a certification issued by any 
certifying authority 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.'' 40 CFR 
121.2(a)(3) (2019) (emphasis added).
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    Similar to the Agency's position in the 2020 Rule, the Agency does 
not think that retaining the 1972 statutory language ``will comply'' in 
the regulations requires certifying authorities to provide absolute 
certainty that applicants for a Federal license or permit will never 
violate water quality requirements. See 85 FR 42278. This is not EPA's 
intention, and EPA does not think such a stringent interpretation is 
required by the statutory or final regulatory language. The use of 
language comparable to ``will comply'' is not uncommon in CWA 
regulatory programs. For example, CWA section 402 contemplates that 
NPDES permits will only be issued upon a showing that a discharge 
``will meet'' various enumerated provisions of the CWA. 33 U.S.C. 
1342(a). This standard has not precluded states, Tribes, or EPA from 
routinely issuing CWA compliant NPDES permits to allow pollutant 
discharges, nor has it resulted in permits that are impossible for 
permittees to comply with.
    Nor does EPA expect that the use of ``will comply'' will impede or 
limit a certifying authority's ability to act on a request for 
certification or prevent a certifying authority from relying on 
modeling information, which provides an informed projection of 
potential impacts, to make a certification decision. When a certifying 
authority makes a certification decision, it would be certifying that 
the activity will comply with water quality requirements for the life 
of the Federal license or permit and not just at the moment the Federal 
license or permit is issued. The lifespan of FERC licenses can be 
decades, whereas CWA section 402 or 404 permits usually last five 
years. Given the possible lifespan of a Federal license or permit, and 
the possibility that water quality-related changes or impacts may 
occur, for example, due to climate change or other factors during that 
time, it is reasonable (and perhaps essential in some cases) for 
certifying authorities to rely on modeling to inform certification 
decisions. EPA does not intend or expect the use of the term ``will 
comply'' to limit or impact a certifying authority's ability to rely on 
such modeling to support its certification decisions.
    Second, the Agency continues to require all certification decisions 
to be in writing. While the Agency is not aware of any certification 
decisions being provided in a different manner (e.g., verbally), EPA is 
finalizing the requirement that all certification decisions be in 
writing to ensure the project proponent and Federal agency can clearly 
understand the certification decision and, for a certification with 
conditions, any conditions that must be included in the Federal license 
or permit.
    Third, the Agency is removing the inclusion of the name and address 
of the project proponent from the list of recommended contents of each 
certification decision. The Agency finds this component unnecessary 
since the certification will be included with the Federal license or 
permit that will identify the appropriate project proponent. However, 
the Agency is retaining the identification of the applicable Federal 
license or permit as one of the recommended components for all 
certification decisions. A few commenters suggested that the final rule 
should remove any requirements to include the identification of the 
Federal license or permit. While this final rule is only recommending 
the identification of the Federal license or permit, the Agency 
observes that there must be a Federal license or permit to trigger the 
section 401 process. As such, the Agency intends for this component to 
help clarify which Federal license or permit the certification decision 
applies to.
    Fourth, the Agency is adding regulatory text that encourages 
certifying authorities to clearly identify the certification decision 
type (i.e.,

[[Page 66613]]

grant, grant with conditions, denial, or waiver) to ensure project 
proponents and Federal agencies can easily understand the nature of the 
certification decision. This is particularly important for Federal 
agencies who need to look at a certification decision to determine how 
it should act in response. For example, if a certifying authority 
denies certification, the Federal agency cannot issue the Federal 
license or permit. Similarly, if a certifying authority grants 
certification with conditions, the Federal agency must include those 
conditions in its Federal license or permit.
    Lastly, the Agency is adding regulatory text that encourages a 
certifying authority to indicate that it complied with its public 
notice procedures established pursuant to CWA section 401(a)(1). As 
discussed in section IV.G in this preamble, Federal agency review is 
limited to verifying compliance with the requirements of CWA section 
401, including whether the certifying authority confirmed it complied 
with its public notice procedures established pursuant to CWA section 
401(a)(1). See 40 CFR 121.8. The language added throughout Sec.  121.7 
is intended to aid this aspect of Federal agency review. EPA is not 
defining how exactly a certifying authority must indicate in its 
certification decision that it complied with public notice procedures. 
Instead, a certifying authority may choose to demonstrate that it 
complied with its public notice procedures as it sees fit, including 
but not limited to, by including a copy of the public notice in its 
certification decision, by including a description of the public notice 
process it undertook in the certification decision, or by simply 
including an attestation statement in the certification decision that 
the certifying authority complied with its public notice procedures.
    While the above paragraphs address aspects of the recommended 
components that are the same for all certification decisions, the 
following paragraphs describe the individual requirements EPA is 
recommending for each of the four kinds of certification decisions.
    First, any grant of certification should (1) identify the decision 
as a grant of certification, (2) identify the applicable Federal 
license or permit, (3) include a statement that the activity ``will 
comply'' with water quality requirements, and (4) indicate that the 
certifying authority complied with its public notice procedures 
established pursuant to CWA section 401(a)(1). While the 1971 Rule 
required a statement that there was ``reasonable assurance,'' 40 CFR 
121.2(a) (2019), as explained above, the 2020 Rule and this final rule 
use the term ``will comply'' which is more consistent with the 1972 
statutory language used in sections 401(a)(1) and 401(d).
    Second, EPA is finalizing that any grant of certification with 
conditions should (1) identify the decision as a grant of certification 
with conditions, (2) identify the applicable Federal license or permit, 
(3) include a statement explaining why each condition is necessary to 
assure that the activity will comply with water quality requirements, 
and (4) indicate that the certifying authority complied with its public 
notice procedures established pursuant to CWA section 401(a)(1). The 
Agency proposed that a grant of certification must include any 
conditions necessary to assure that the activity as a whole will comply 
with applicable water quality requirements. Due to the change in 
approach to include recommended components, as opposed to required 
components, for certification decisions, the Agency is removing the 
proposed text at Sec.  121.7(d)(2) and instead adding text at final 
rule Sec.  121.3(b) that requires certifying authorities to include any 
conditions necessary to assure that the activity will comply with 
applicable water quality requirements. The text at final rule Sec.  
121.3(b) reflects the language used in section 401(d).
    The Agency recommends that certifying authorities include a 
statement explaining why each of the included conditions is necessary 
in a certification with conditions, consistent with proposed Sec.  
121.7(d)(3).\78\ A few commenters expressed concern over how such 
justifications should be included in a certification decision, 
including arguing that it would interfere with readability or 
suggesting grouping explanations instead of requiring an explanation 
for each condition. Although the Agency is not requiring the inclusion 
of a statement explaining why a condition is necessary, EPA finds that 
including such a statement will help project proponents and Federal 
agencies understand the reason for the condition and assist in its 
implementation. As discussed in the implementation section below, there 
are several ways a certifying authority can include this information in 
a certification decision to aid readability for ease of implementation, 
such as including justifications in an addendum to the certification. 
See infra. EPA anticipates that such information is readily available 
to the certifying authority as part of its decision-making process.
---------------------------------------------------------------------------

    \78\ The Agency recommends including at least a succinct 
explanation for the certification condition(s) to provide necessary 
transparency and clarity for project proponents and Federal 
agencies. As a practical matter, certifying authorities will likely 
already have developed and considered such information as part of 
their decision-making process and included it in the record to 
substantiate their decision. Aside from borrowing from their 
decision-making record, EPA expects that certifying authorities may 
be able to satisfy this requirement in a number of ways. For 
example, certifying authorities could identify specific water 
quality requirements with which the activity will not comply without 
the condition.
---------------------------------------------------------------------------

    Consistent with the final rule's shift to recommended contents of a 
certification decision, the Agency is not requiring certifying 
authorities to include a specific statutory or regulatory citation in 
support of a certification condition. Rather, the Agency will let 
certifying authorities decide what relevant information to provide in 
support of any conditions. EPA encourages certifying authorities to 
work with project proponents and Federal agencies to determine what 
information would be most useful (e.g., statutory or regulatory 
citations). Additionally, EPA is not distinguishing between 
certification decisions based on an individual or a general Federal 
license or permit. Although EPA made such a distinction in the 2020 
Rule, EPA finds it unnecessary here because it is no longer defining 
required certification decision contents and the recommended contents 
would apply to a certification with conditions regardless of the nature 
of the Federal license or permit.
    Third, EPA is finalizing that any denial of certification should 
(1) identify the decision as a denial of certification, (2) identify 
the applicable Federal license or permit, (3) include a statement 
explaining why the certifying authority cannot certify that the 
proposed activity will comply with water quality requirements, 
including but not limited to a description of any missing water 
quality-related information if the denial is based on insufficient 
information, and (4) indicate that the certifying authority complied 
with its public notice procedures established pursuant to CWA section 
401(a)(1). Although the 1971 Rule did not define the elements of a 
decision to deny certification, this concept was introduced in the 2020 
Rule. The recommended contents for a denial of certification are 
similar to the requirements in the 2020 Rule. The Agency did not 
propose to retain the regulatory text located at Sec.  121.7(e)(2)(iii) 
of the 2020 Rule, which required a certifying authority to describe 
specific water quality data or

[[Page 66614]]

information that would be needed if the denial is due to insufficient 
information. As discussed in the preamble to the proposed rule, the 
Agency noted that certifying authorities could provide this sort of 
information to satisfy the regulatory requirement at Sec.  121.7(e)(2) 
to include a statement explaining why the certifying authority cannot 
certify that the activity as whole will comply with water quality 
requirements. 87 FR 35353. However, some commenters argued that denials 
due to insufficient information should, as in the 2020 Rule, include an 
explanation of what information was missing. Although the Agency is not 
requiring any specific information for denials of certification, the 
Agency is adding language at final rule Sec.  121.7(e)(3) to clarify 
that statements explaining why a certifying authority cannot certify 
that the activity will comply with water quality requirements may 
include, but are not limited to, a description of any missing water 
quality-related information if the denial is based on insufficient 
information.
    The Agency recommends including at least a succinct explanation for 
the certification denial to provide necessary transparency and clarity 
for project proponents and Federal agencies. As a practical matter, 
certifying authorities will likely already have developed and 
considered such information as part of their decision-making process 
and included it in the record to substantiate their decision. Aside 
from borrowing from their decision-making record, EPA expects that 
certifying authorities may be able to satisfy this requirement in 
several ways. For example, certifying authorities could identify 
specific water quality requirements with which the activity will not 
comply, or identify what information about the project or potential 
water quality effects is missing or incomplete that led the certifying 
authority to not be able to determine whether the activity will comply 
with water quality requirements. EPA anticipates that certifying 
authorities will work with project proponents and Federal agencies to 
determine what information would be most useful. Additionally, EPA is 
not distinguishing between certification decisions based on an 
individual or a general Federal license or permit. Although EPA took 
this approach in the 2020 Rule, EPA is no longer defining required 
certification decision-specific contents and the recommended contents 
would apply to a denial of certification regardless of the nature of 
the Federal license or permit.
    Lastly, EPA is finalizing that any express waiver made by a 
certifying authority should (1) identify the decision as an express 
waiver of certification, (2) identify the applicable Federal license or 
permit, (3) include a statement that the certifying authority expressly 
waives its authority to act on the request for certification, and (4) 
indicate that the certifying authority complied with its public notice 
procedures established pursuant to CWA section 401(a)(1). This approach 
is consistent with the 1971 Rule and 2020 Rule, except the final rule 
merely recommends inclusion of such a statement of express waiver 
instead of requiring it. As noted above, an express waiver indicates 
only that the certifying authority has chosen not to act on a request 
for section 401 certification. Accordingly, the certifying authority 
would only need to state that it is waiving certification and would not 
need to make any statement about why it has decided to waive or its 
assessment of the project's impact on its water quality.
    In this final rule, EPA is also, in large part, finalizing removal 
of 40 CFR 124.53(e)(1) through (3), which address the contents of a 
certification for an EPA-issued NPDES permit. EPA proposed to delete of 
the entirety of Sec.  124.53. See 87 FR 35357. Most of the contents 
identified at Sec.  124.53(e) are not consistent with the contents 
identified at Sec.  121.7(d) and (e). For example, Sec.  124.53(e)(2) 
required a citation (but not an explanation) for each condition of 
certification, whereas final rule Sec.  121.7(e) recommends including 
an explanation (but not a citation) for each condition. Further, Sec.  
124.53(e)(1) identified what conditions must be included in a 
certification but did not match the conditions identified at final rule 
Sec.  121.3(b). Final rule Sec.  121.3(b) incorporates the final rule's 
concepts of the entire ``activity'' scope of review and ``water quality 
requirements'' while Sec.  124.53(e)(1) did not. To be clear, all 
certification decisions, including those on EPA-issued NPDES permits, 
must comply with this final rule Sec.  121.3(b). As discussed above, 
certifying authorities may work with EPA and/or project proponents to 
determine what information would be most useful to include in a 
certification with conditions on an EPA-issued NPDES permit (e.g., a 
citation to the CWA or state law for conditions more stringent than 
those in the draft permit).
    EPA is finalizing revisions to Sec.  124.53(e)(3), now Sec.  
124.53(e), which allows, but does not require, certifying authorities 
to include a statement in a grant of certification regarding the extent 
to which each condition of the draft permit can be made less stringent 
without violating the requirements of state law, including water 
quality standards. EPA has concluded that this provision, as finalized, 
is not inconsistent with the Agency's approach to certification 
decisions in the final rule because it is a recommended and not 
required component of a certification decision. This provision will 
assist the NPDES program in its implementation by ensuring that permit 
conditions in final NPDES permits are consistent with state law. 
However, any statement included pursuant to Sec.  124.53(e) would be 
informational, for the benefit of EPA permit writers, and would not be 
a condition of certification. Section 124.53(e) would not allow the 
Agency to reject or modify certification conditions; rather, this 
provision allows certifying authorities to provide EPA with input on 
draft permit conditions. This is not the only opportunity for a 
certifying authority to provide input on draft NPDES permit conditions. 
Certifying authorities could also provide input on draft NPDES permit 
conditions through the public notice process or upon review of a draft 
NPDES permit.
3. Implementation
    A few commenters suggested that the definition of ``to act'' needed 
additional clarity to state the that the four actions proposed are the 
only ways in which a certifying authority may ``act'' on a request for 
certification. EPA finds that the regulatory text at final rule Sec.  
121.7(a) clearly provides that the four decisions (grant, grant with 
conditions, denial, express waiver) are the only ways in which a 
certifying authority may act. However, EPA wishes to clarify that any 
attempt at a ``hybrid'' version of those four decisions does not meet 
the standard of ``acting'' on a request for certification (e.g., a 
waiver with conditions, a conditional denial). See Waterkeepers 
Chesapeake, et al. v. FERC, 56 F.4th 45, 49 (D.C. Cir. 2022) (holding 
that FERC could not issue a license ``[i]f a state has neither granted 
a certification nor failed or refused to act on a certification 
request'' and finding that ``Maryland's subsequent backtracking in the 
settlement agreement, in which it `conditionally waiv[ed]' its 
authority to issue a water quality certification after the fact, is 
neither a `fail[ure]' nor a `refus[al]' to act'' and therefore could 
not ``qualify as a section 401(a)(1) waiver.''). To further clarify how 
a certifying authority may act on a request for certification, the 
Agency is finalizing regulatory text that encourages certifying 
authorities to clearly identify whether a decision is a grant, grant 
with conditions, denial, or express waiver.

[[Page 66615]]

    As discussed above, EPA is not defining how exactly a certifying 
authority must indicate in its certification decision that it complied 
with public notice procedures. Instead, a certifying authority may 
choose how it wishes to demonstrate that it complied with its public 
notice procedures. Possible options include, but are not limited to, 
providing a copy of the public notice in its certification decision, 
describing in the certification decision the public notice process it 
undertook, checking a checkbox that indicates that the certifying 
authority complied with public notice procedures, or including an 
attestation statement that the certifying authority complied with its 
public notice procedures.
    Although the Agency is no longer requiring certifying authorities 
to include decision-specific contents in each of the four certification 
decisions, the Agency strongly encourages certifying authorities to 
include the recommended contents located at final rule Sec.  121.7(c) 
through (f). EPA finds these recommended contents best reflect the 
types of information project proponents and Federal agencies may need 
to clearly understand and easily implement a certification decision. 
Specifically, clearly identifying the nature of the certification 
decision (i.e., a grant, grant with conditions, denial, or waiver) is 
an important way to promote transparency and to avoid 
misunderstandings. The Agency believes all recommended contents should 
be readily available to the certifying authority as part of its 
decision-making process, and therefore easily incorporated into a 
certification decision.
    The Agency received comments expressing concern over providing a 
justification statement for each certification condition because of 
readability concerns. To be clear, the Agency is not requiring these 
contents to be included in certification decisions, nor prescribing how 
they should be incorporated into a certification decision. 
Nevertheless, EPA believes there are several options to address such 
readability concerns and still provide the recommended information. For 
example, a certifying authority may choose to include explanations 
(e.g., statement, citations, etc.) immediately following the 
certification condition it supports. Alternatively, a certifying 
authority could organize those explanations in the form of a table and 
reference them in the document. Either of those methods is an 
acceptable way to provide the support for why the conditions are 
necessary.
    The recommended contents for certification decisions found at final 
rule Sec.  121.7(c) through (f) do not represent the totality of 
information that a certifying authority may find useful to share with 
project proponents and Federal agencies.\79\ Certification decisions 
can act as important implementation tools for certifying authorities to 
convey best practices, rationales, and other pertinent information to 
both project proponents and Federal agencies. However, for 
certifications with conditions, it is important to clearly indicate 
what information is merely background or supplementary information as 
opposed to the actual conditions that must be incorporated into the 
Federal license or permit. For example, when EPA acts as the certifying 
authority it clearly denotes which aspects of the certification with 
conditions are general information versus the actual certification 
conditions. Clearly parsing out this information in the decision 
document ensures project proponents are best positioned to understand 
and comply with certification conditions.
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    \79\ As discussed above, the Agency intends to include the 
recommended contents in certification decisions when it acts as a 
certifying authority and encourages other certifying authorities to 
include similar contents in their certification decisions.
---------------------------------------------------------------------------

    Related to the importance of clearly communicating certification 
decisions to project proponents and Federal agencies is the importance 
of drafting clear certification conditions. EPA recognizes that 
certification conditions are an important tool that enable certifying 
authorities to ensure that projects needing Federal licenses or permits 
will be able to move forward without adverse impacts to water quality. 
EPA encourages certifying authorities to develop certification 
conditions in a way that enables projects to adapt to future water 
quality-related changes, i.e., so-called ``adaptive management 
conditions.'' For example, if a certifying authority is concerned about 
future downstream, climate change-related impacts on aquatic species 
due to increased reservoir temperatures during the lifespan of a 
hydropower dam license, the certifying authority might develop a 
condition that would require a project proponent to take subsequent, 
remedial action in response to reservoir temperature increases (e.g., 
conditions that might require monitoring and, as necessary, a change in 
reservoir withdrawal location in the water column, a change in the 
timing of releases, etc.).
    The Agency wishes to clarify the nature and effect of adaptive 
management conditions. A few commenters asserted that adaptive 
management conditions are the same as ``reopener'' clauses and that 
they are important to ensure water quality resources will be protected 
throughout the life of the project if the project changes or conditions 
of the waters impacted by the project change. Conversely, one commenter 
asserted that certifying authorities should not be able to add adaptive 
management conditions to certifications because such conditions are 
reopener conditions that could lead to new conditions being 
incorporated into the Federal permit long after the certification is 
issued. EPA agrees that adaptive management conditions are an important 
tool to enable a certification to assure that the project will comply 
with water quality activities over the life of the project. However, 
the Agency disagrees that these conditions are the same as ``reopener'' 
clauses.\80\ Reopener clauses purport to authorize a certifying 
authority to ``reopen'' and modify a certification at a later date, 
sometimes due to the occurrence of a specific event. As discussed at 
section IV.I of this preamble, certifying authorities cannot 
``bootstrap'' themselves greater authority to modify a certification 
beyond what is authorized in this final rule at Sec.  121.10. On the 
other hand, adaptive management conditions are set at the time the 
certification is granted and provide a concrete action that must occur 
in the event certain criteria are met. The text of an adaptive 
management condition does not change after certification is granted. 
This promotes regulatory certainty, in contrast with a unilateral 
modification pursuant to a ``reopener'' clause. For example, a 
condition may require a project proponent to increase monitoring 
efforts or conduct remediation if the baseline, routine monitoring 
established in the certification reveals an increase in a specific 
pollutant due to the activity. To ensure project proponents and Federal 
agencies understand and are able to implement any such adaptive 
management conditions, EPA recommends that certifying authorities 
clearly define and explain in the certification document the basis for 
these conditions and the circumstances in which adaptive management 
conditions would require action by the project proponent (e.g., 
expectations for undertaking additional planning and

[[Page 66616]]

monitoring; thresholds triggering adaptive responses; requirements for 
ongoing compliance). EPA has previously acknowledged the use of 
``adaptive management'' conditions in prior guidance, see, e.g., 2010 
Handbook at 32 (rescinded in 2019, see supra).
---------------------------------------------------------------------------

    \80\ See discussion in section IV.I of this preamble about 
``reopener'' clauses or conditions and the Agency's position on a 
certifying authority's ability to unilaterally modify a 
certification after the reasonable period of time.
---------------------------------------------------------------------------

    Once a certifying authority acts on a request for certification, 
the certifying authority should send the certification decision to the 
project proponent requesting certification. Ultimately, section 
401(a)(1) requires the project proponent to provide the Federal agency 
with the certification from a certifying authority. However, EPA 
encourages certifying authorities to include Federal agencies on any 
certification decision transmittal to the project proponent to ensure 
all parties have a clear, consistent understanding of the status of the 
decision (e.g., copy the Federal agency point of contact on email 
correspondence).

G. Federal Agency Review

1. What is the Agency finalizing?
    The Agency is finalizing regulatory text at Sec.  121.8 to clarify 
that Federal agency review is limited to verifying compliance with the 
requirements of CWA section 401. Specifically, the final rule provides 
that to the extent a Federal agency verifies compliance with the 
requirements of CWA section 401, its review is limited to (1) whether 
the appropriate certifying authority issued the certification decision; 
(2) whether the certifying authority confirmed it complied with its 
public notice procedures established pursuant to section 401(a)(1); and 
(3) whether the certifying authority acted on the request for 
certification within the reasonable period of time. 40 CFR 121.8. EPA 
proposed at Sec.  121.9 that Federal agency review of a certification 
decision is limited to confirming four factors: the nature of the 
decision, that the proper certifying authority issued the decision, 
that the certifying authority complied with its own public notice 
procedures for a request for certification, and that the decision was 
issued in the reasonable period of time. As discussed in more detail 
below, the Agency removed the first factor (the nature of the decision) 
and modified the third factor to clarify that Federal agency review is 
limited to verifying that the certifying authority confirmed compliance 
with its public notice procedures. Aside from the three elements listed 
at Sec.  121.8, EPA concludes that Federal agencies lack the authority 
to review other aspects of a certification decision for purposes of 
determining whether a ``certification required by [section 401] has 
been obtained or has been waived.'' 33 U.S.C. 1341(a)(1).
    As proposed, the Agency is declining to define how a certifying 
authority must demonstrate its compliance with the three CWA section 
401 requirements listed above. See 87 FR 35356 (June 9, 2022). The 
Agency proposed at Sec.  121.9(b) to define a process that a Federal 
agency must follow if it determined that a certification decision did 
not indicate the nature of the certification decision or the certifying 
authority did not provide public notice on the request for 
certification. As discussed below, the Agency is not finalizing Federal 
agency review for whether the certification decision indicates the 
nature of the decision, and therefore EPA need not finalize a 
subsequent process. Although the final rule allows Federal agencies to 
verify that a certifying authority confirmed compliance with its public 
notice procedures, the Agency is returning to its pre-2020 Rule posture 
and declining to define a process that Federal agencies must follow if 
they are unable to verify compliance. The Agency is finalizing as 
proposed a process for the Federal agency to follow if it determines 
that a certifying authority failed or refused to act within the 
reasonable period of time at final rule Sec.  121.9(b). Specifically, 
Sec.  121.9(b) requires the Federal agency to promptly notify the 
certifying authority and project proponent in writing that the 
certification requirement has been waived and that such notice from the 
Federal agency shall satisfy the project proponent's obligation under 
CWA section 401.
    The Agency has also reorganized the regulatory text to move the 
Federal agency review provision to Sec.  121.8, before the provision in 
the final rule regarding what it means to fail or refuse to act. The 
Agency believes this reorganization will more clearly communicate that 
a Federal agency may only determine that a certifying authority 
inadvertently waived where a certifying authority fails or refused to 
act within the reasonable period of time. The text as finalized 
represents the best reading of the text of section 401, congressional 
intent, and relevant case law, and incorporates recommendations from 
public comments received on the proposed rule.
2. Summary of Final Rule Rationale and Public Comment
    Section 401 does not explicitly provide a defined role for Federal 
licensing or permitting agencies to review certifications. However, the 
Agency has long recognized, both in regulation and guidance, that some 
degree of Federal agency review of certification decisions is 
appropriate. The 1971 Rule provided Federal agencies with the ability 
to determine whether a certifying authority acted within the reasonable 
period of time. See 40 CFR 121.16(b) (2019) (``The certification 
requirement with respect to an application for a license or permit 
shall be waived upon . . . Written notification from the licensing or 
permitting agency to the Regional Administrator of the failure of the 
State or interstate agency concerned to act on such request for 
certification within a reasonable period of time after receipt of such 
request . . .''). Prior EPA guidance acknowledged that the Federal 
licensing or permitting agency may review the procedural requirements 
of a certification decision. 2010 Handbook at 32 (rescinded in 2019, 
see supra) (``For example, the federal permitting or licensing 
authority may review the procedural requirements of [section] 401 
certification, including whether the proper state or tribe has 
certified, whether the state or tribe complied with applicable public 
notice requirements, and whether the certification decision was 
timely.'') (citing American Rivers, 129 F.3d at 110-111; City of Tacoma 
v. FERC, 460 F.3d 53, 68 (D.C. Cir. 2006)). However, this prior 
guidance also acknowledged the limitations of Federal agency review and 
stated that Federal agencies cannot pick and choose among a certifying 
authority's certification conditions. Id. at 10 (citing American 
Rivers, 129 F.3d at 110-11).
    A number of courts have acknowledged a limited role for Federal 
agencies to ensure that a certifying authority meets certain statutory 
requirements of section 401. The D.C. Circuit has held that section 
401(a)(1) authorized FERC, as the relevant Federal licensing agency, 
``to determine that the specific certification `required by [section 
401 has] been obtained,' '' because otherwise, ``without that 
certification, FERC lack[ed] authority to issue a license.'' City of 
Tacoma, 460 F.3d at 67-68 (``If the question [raised to FERC] 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 FERC must address it.''). The court did not define what a 
``certification required by this section'' included, but suggested it 
included at a minimum, ``explicit requirement[s] of section 401,'' 
including that the certifying authority provide public notice, which 
was the section 401 requirement at issue in the case before

[[Page 66617]]

the court. Id. at 68. It is important to note that, while the court 
found that FERC had an obligation under the facts of that case to 
confirm the public notice requirement was satisfied, the court did not 
frame this requirement as a prerequisite in every instance where the 
agency is presented with a certification decision. Rather, the court 
found that FERC had to confirm compliance in the case before it because 
public notice had been ``called into question.'' See id.
    In an earlier case, the Second Circuit ruled that FERC did not have 
authority to substantively review certification conditions to ``decide 
which conditions are within the confines of [section] 401(d) and which 
are not.'' American Rivers, 129 F.3d at 107. In reaching this 
conclusion, the court noted that FERC nonetheless did have authority to 
determine whether the appropriate certifying authority issued the 
certification decision and whether the certification decision was 
issued within the reasonable period of time. The court explained that 
``[w]hile [FERC] may determine whether the proper state has issued the 
certification or whether a state has issued a certification within the 
prescribed period, [FERC] does not possess a roving mandate to decide 
that substantive aspects of state-imposed conditions are inconsistent 
with the terms of [section] 401.'' Id. at 110-11.
    In a more recent case, the D.C. Circuit upheld a FERC order 
declining to weigh in on the validity of a certifying authority's 
denials of certification. Turlock Irrigation Dist. v. FERC, 36 F.4th 
1179 (D.C. Cir. 2022). At issue in the case was the re-licensing of two 
hydroelectric facilities. Id. at 1181. The hydroelectric facilities 
argued that the denials were invalid under the facts of the case.\81\ 
FERC found that no party disputed that the certifying authority denied 
the requests (without prejudice). Turlock Irrigation Dist. Modesto 
Irrigation Dist., 174 FERC ] 61,042, 61,175 (2021). ``FERC reasoned 
that the [certifying authority], `by denying the applications without 
prejudice, indeed acted on [ ] them. . . .' '' Turlock, 36 F.4th at 
1182. FERC declined the facilities' invitation to decide whether the 
denials where nonetheless somehow ``invalid'' under Federal law 
``because they were `on non-substantive grounds' and not `on the 
technical merits of the certification requests.' '' Id. at 1182-83. 
FERC ``conclude[d] that it is not the [FERC] Commission's role to 
review the appropriateness of a state's decision to deny 
certification.'' 174 FERC at ] 61,176. The Court of Appeals upheld 
FERC's order.\82\ Turlock, 36 F.4th at 1184.
---------------------------------------------------------------------------

    \81\ For the certification requests of both hydropower 
facilities, the certifying authority denied certification without 
prejudice to re-request certification within days of the expiration 
of the one year reasonable period of time. Id. The facilities re-
requested certification and, about one year later, the certifying 
authority did so again. The certifying authority gave as the reason 
for denial that the project proponents had not completed the state 
environmental review process, which the certifying authority was 
required by law to consider in making its certification decision. 
Id. The Agency takes no position here regarding repeated denials 
without prejudice, generally for the same reasons as it is not 
taking a position regarding repeated withdrawal and resubmittals 
(e.g., the inquiry is highly fact specific and the caselaw is in 
flux). See section IV.D.2.c of this preamble.
    \82\ The petitioners in the D.C. Circuit case petitioned the 
Supreme Court for certiorari but the Supreme Court denied the 
petition on April 17, 2023. Turlock Irrigation District and Modesto 
Irrigation District v. FERC, et al., Docket No. 22-616.
---------------------------------------------------------------------------

    The 2020 Rule went a step further than the Federal agency review 
recognized by courts. The 2020 Rule required Federal agencies to 
review, in every instance, a certification decision to confirm that 
several requirements are met, including non-statutory requirements 
imposed by the 2020 Rule, as a prerequisite to accepting the 
certification decision. 85 FR 42267 (July 13, 2020). The 2020 Rule 
required the Federal licensing agency to ensure (1) compliance with 
``other procedural requirements of section 401'' (which included public 
notice requirements), (2) compliance with the reasonable period of 
time, and (3) compliance with the rule's requirements related to 
providing a legal and technical basis within the certification document 
for the action taken. The 2020 Rule preamble explained that ``[i]f a 
federal agency, in its review, determines that a certifying authority 
failed or refused to comply with the procedural requirements of the 
Act, including the procedural requirements of this final rule, the 
certification action, whether it is a grant, grant with conditions, or 
denial, will be waived.'' Id. at 42266. The 2020 Rule took the same 
approach with review of individual conditions, i.e., if a condition 
does not meet procedural requirements, it is waived (even though the 
certification itself stands). Id. at 42263. The 2020 Rule did not 
extend Federal agency review to more substantive requirements of the 
Act (e.g., whether a certification decision was within the scope of 
certification). Id. at 42267.
    The 2020 Rule contained little direction to Federal agencies about 
how to conduct the required review (e.g., how to confirm public notice 
took place), other than noting in the preamble that the Federal 
agency's review role does not require the agency to ``make a 
substantive inquiry into the sufficiency of the information provided in 
support of a certification, condition, or a denial.'' Id. at 42268. 
This lack of clarity in the 2020 Rule led to stakeholder confusion and 
misunderstanding about the nature of the Federal agency's review (e.g., 
assertions from both Federal agencies and states and Tribes in 
implementation, pre-proposal input, and public comment that the review 
was to be ``substantive'' in nature). Additionally, although the 2020 
Rule limited Federal agency review to certain procedural components, 
Federal agency stakeholders expressed concerns about being required by 
the 2020 Rule to undertake even this responsibility.
    Certifying authorities have expressed concern over the potential 
consequences of Federal agency review required by the 2020 Rule. A few 
commenters discussed their experience with the 2020 Rule and Federal 
agency review, including specific examples where Federal agencies 
deemed certification decisions waived. Most commenters who discussed 
Federal agency review critiqued the 2020 Rule's approach and argued 
that allowing, even requiring, Federal agencies to deem non-compliant 
certification decisions waived was inconsistent with the CWA and 
relevant case law (citing Sierra Club v. U.S. Army Corps of Engineers, 
909 F.3d 635, 645 (4th Cir. 2018); United States v. Marathon Dev. 
Corp., 867 F.2d 96, 101 (1st Cir. 1989)). A few commenters asserted 
that the 2020 Rule provided Federal agencies with improper authority to 
``veto'' or ``override'' certifying authorities' decisions under the 
2020 Rule. As discussed below, EPA generally agrees with these 
commenters. EPA continues to agree with the concerns it expressed in 
its Notice of Intent to revise the 2020 Rule, stating that ``EPA is 
concerned that a federal agency's review may result in a state or 
tribe's certification or conditions being permanently waived as a 
result of nonsubstantive and easily fixed procedural concerns 
identified by the federal agency.'' 86 FR 29543 (June 2, 2021).
    The following subsections discuss the extent of Federal agency 
review, how certifying authorities might demonstrate compliance with 
the facial requirements of section 401, and the Federal agency review 
process under this final rule.
a. Extent of Federal Agency Review
    The final rule confirms that Federal agencies may review a 
certification decision only for the limited purpose of verifying 
compliance with the requirements of CWA section 401. EPA

[[Page 66618]]

proposed at Sec.  121.9 that Federal agency review of a certification 
decision is limited to confirming four factors: the nature of the 
decision, that the proper certifying authority issued the decision, 
that the certifying authority provided public notice on the request for 
certification, and that the decision was issued in the reasonable 
period of time. As discussed in more detail below, the Agency removed 
the first factor (the nature of the decision) and modified the third 
factor to clarify that Federal agency review is limited to verifying 
that the certifying authority confirmed compliance with its public 
notice procedures.
    As a result, the final rule provides that Federal agencies may 
verify (1) whether the appropriate certifying authority issued the 
certification decision, (2) whether the certifying authority confirmed 
it complied with its public notice procedures established pursuant to 
section 401(a)(1), and (3) whether the certifying authority acted on 
the request for certification within the reasonable period of time. 40 
CFR 121.8. Federal agencies may find that a certifying authority waived 
its ability to act on a request for certification only for failures to 
act within the reasonable period of time. The Agency finds this Federal 
agency review role is reasonable and consistent with the text of 
section 401, prior Agency guidance, and case law.
    A Federal agency's review of a certifying authority's action (to 
ensure that the certification decision meets certain statutory 
requirements) does not require a Federal agency to inquire as to 
whether the certification is consistent with the substantive elements 
of state or Tribal law concerning certification or whether the 
certification action is within the proper ``scope of certification.'' 
As recognized by prior Agency guidance and the 2020 Rule, section 401 
does not authorize Federal agencies to review or change the substance 
of a certification (e.g., determine whether the certification or its 
conditions are within section 401's scope). See 85 FR 42268; 2010 
Handbook at 10 (rescinded in 2019, see supra). As discussed below, the 
Agency has revised the proposed regulatory text to better emphasize the 
limited extent of Federal agency review.
    Several commenters noted that section 401 does not give Federal 
agencies the authority to nullify or reject a certifying authority's 
water quality certification or conditions. Some of these commenters 
asserted that courts have affirmed that Federal agencies do not have 
the authority to ignore conditions of certification. EPA agrees. 
Federal circuit courts have routinely held that Federal agencies may 
not question or criticize the substance of a state's water quality 
certification or conditions, see, e.g., City of Tacoma, 460 F.3d at 67 
(``[The Federal agency's] role is limited to awaiting, and then 
deferring to, the initial decision of the state.''); American Rivers, 
129 F.3d at 111 (``[The Federal agency] does not possess a roving 
mandate to decide that substantive aspects of state-imposed conditions 
are inconsistent with the terms of [section] 401.''); 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.''). Courts have also cautioned Federal agencies against 
imposing conditions in a Federal license or permit they believe are 
more stringent than the certifying authority's conditions. See Sierra 
Club v. U.S. Army Corps of Eng'rs, 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' Ass'n. v. EPA, 652 F.3d 1, 6, 12 (D.C. Cir. 2011) 
(concluding that additional notice and comment on state certification 
conditions would have been futile because ``the petitioners have failed 
to establish that EPA can alter or reject state certification 
conditions . . .'').
    Rather, courts have generally found that Federal agencies may 
review certification decisions only to see whether the decision 
satisfies the facial statutory requirements of section 401, including 
whether the decision was issued within the reasonable period of time, 
whether public notice procedures were followed, and whether the 
appropriate certifying authority issued the decision. The court in City 
of Tacoma found that if the facial public notice requirement of section 
401 is ``called into question'' before the Federal agency, the Federal 
agency must determine if it was met. 460 F.3d at 68 (requiring the 
Federal agency ``to obtain some minimal confirmation of such 
compliance, at least in a case where compliance has been called into 
question.'').
    EPA proposed to expressly limit Federal agency review at Sec.  
121.9 to confirming four factors: the nature of the decision, that the 
proper certifying authority issued the decision, that the certifying 
authority provided public notice on the request for certification, and 
that the decision was issued in the reasonable period of time. Several 
commenters agreed with limiting the 2020 Rule's breadth of Federal 
agency review, with some of these commenters supporting all four of the 
proposed review provisions. A few commenters wrote in favor of the 
proposed rule's limited ``ministerial'' role for Federal agencies. EPA 
agrees that Federal agency review is limited in nature. As discussed 
below, the Agency is finalizing regulatory text at Sec.  121.8 to 
affirmatively limit Federal agency review to verifying compliance with 
the facial requirements of CWA section 401. However, the Agency is 
revising the proposed list of factors that a Federal agency may review, 
including removing the first factor (the nature of the decision) from 
the final regulatory text.
    Conversely, a few commenters recommended prohibiting Federal agency 
review of any certification decisions in the final rule, with one 
commenter arguing that Federal agency review erodes cooperative 
federalism principles, and another noting that Federal agency review is 
unwarranted by the statutory text. A few commenters noted that section 
401 does not define a role for Federal agency review of certification 
decisions. A couple of commenters argued that the additional oversight 
provided by Federal agency review of certification decisions is 
inefficient and ineffective for routine projects with minimal impacts. 
EPA acknowledges that the text of section 401 does not explicitly 
define a role for Federal licensing or permitting agencies to review 
certification decisions. However, the Agency has long recognized, both 
in regulation and guidance, some degree of appropriate Federal agency 
review of certification decisions. Additionally, as discussed above, a 
few courts have acknowledged a limited role for Federal agencies to 
ensure that a certifying authority meets certain requirements of 
section 401. The Agency disagrees that this final rule's approach to 
Federal agency review would erode cooperative federalism principles or 
prove inefficient for projects. Rather, the final rule recognizes a 
Federal agency's legitimate interest in receiving a certification in 
accordance with section 401 to lawfully proceed with its licensing and 
permitting process.
    On the other hand, other commenters wrote in support of the 2020 
Rule's approach to Federal agency review, arguing that Federal agencies 
are obligated to determine if procedural requirements have been met and 
warned that without Federal oversight, certifying authorities would 
have little incentive--and might be

[[Page 66619]]

disincentivized--to provide information supporting their certification 
actions. A few commenters argued that the 2020 Rule's approach to 
Federal agency review was a less costly and more efficient mechanism 
than judicial review.
    EPA declines to impose in this final rule a requirement that 
Federal agencies review every certification decision for compliance 
with the statutory requirements of section 401. EPA recognizes that the 
preamble to the 2020 Rule indicated that Federal agency review is 
mandatory in every instance. 85 FR 42267-69 (``the Agency has concluded 
that under the final rule, federal agencies have an affirmative 
obligation to review certifications to ensure that certifying 
authorities have complied with procedural requirements and have 
included the required information for certifications, conditions, and 
denials . . .''). However, most case law on this topic focuses on the 
extent of Federal agency review, not the issue of if or when section 
401 imposes a duty on the Federal agency to confirm compliance. The 
exception to courts not addressing this issue is City of Tacoma, where 
the court found that if the public notice requirement of section 401 is 
``called into question'' before the Federal agency, the agency must 
determine if it was met. 460 F.3d at 68.\83\ This final rule does not 
address what circumstances might compel a Federal agency to review 
certification decisions, nor does it require Federal agencies to review 
every certification decision. Instead, this final rule allows Federal 
agencies to review specified aspects of a certification decision, 
recognizing that Federal agencies have an interest in ensuring 
certifications relating to their permits are facially compliant with 
CWA section 401.
---------------------------------------------------------------------------

    \83\ In Keating v. FERC, the court required FERC to consider the 
application of section 401(a)(3) to a certifying authority's 
purported revocation of a certification. 927 F.2d 616 (D.C. Cir. 
1991) (``FERC must at least decide whether the state's assertion of 
revocation satisfies section 401(a)(3)'s predicate requirements--
i.e., whether it is timely and motivated by some change in 
circumstances after the certification was issued.'').
---------------------------------------------------------------------------

    The Agency also disagrees with commenter assertions that the Agency 
is removing Federal oversight. The Agency is still authorizing Federal 
agencies to review much of what they could under the 2020 Rule. In 
fact, the Agency is clarifying in regulatory text that Federal agency 
review includes verification that the certifying authority confirmed 
that it complied with its public notice procedures and that the correct 
certifying authority acted on the request for certification (aspects 
that were not directly addressed in the 2020 Rule). The one aspect of 
the 2020 Rule that the Agency is removing is Federal agency review of 
the procedural and informational requirements (e.g., citation 
requirements) of the 2020 Rule (as opposed to the facial requirements 
of section 401). The Agency disagrees with commenters who argued that 
this will lead to a lack of supporting information in certification 
decisions or create a structure for misuse. EPA encourages certifying 
authorities to include supporting information with certification 
decisions and is finalizing this recommendation at Sec.  121.7. 
Furthermore, it is in the certifying authority's interest to include 
such information to ensure project proponents and Federal agencies--not 
to mention any court reviewing the certification decision--understand 
why a condition is placed on a certification or why a certification is 
being denied. See supra section IV.F of this preamble for further 
discussion of the contents of a certification decision.
    It is unclear why some commenters concluded that the 2020 Rule's 
Federal agency review process would reduce litigation or create any 
efficiencies when compared to direct judicial review. Those commenters 
did not provide any data or information to substantiate a time or cost 
differential between the 2020 Rule's Federal agency review process and 
any possible judicial review associated with certification decision. 
Nothing about the 2020 Rule's approach to Federal agency review removed 
or reduced the opportunity or potential for judicial review on a 
certification decision. In fact, the 2020 Rule's mandate that Federal 
agencies review for compliance with the rule's own procedural and 
informational requirements (e.g., citation requirements) added another 
possible avenue for judicial review. Federal courts could be called 
upon to decide whether a Federal agency properly found that a 
certifying authority waived certification for its failure to fully 
comply with the 2020 Rule's informational requirements. In fact, one 
such case was recently filed in the D.C. Circuit Court of Appeals. 
Brookfield White Pine Hydro LLC v. FERC, No. 23-1075 (D.C. Cir.) 
(petition for review filed March 20, 2023, regarding FERC determination 
that a denial of certification satisfied the procedural requirements of 
the 2020 Rule).
    Furthermore, Federal agency review of the substance of 
certification decisions in lieu of judicial review is inconsistent with 
the legislative history of section 401. Indeed, Congress recognized 
that state courts were the proper venue for any issues or concerns 
surrounding the substance of a certification decision. See, e.g., H.R. 
Rep. No. 91-940, at 55-56 (March 24, 1970) (``If a State refuses to 
give a certification, the courts of that State are the forum in which 
the applicant must challenge that refusal if the applicant wishes to do 
so.''); S. Rep. 92-414, at 1487 (October 28, 1971) (``Should such an 
affirmative denial occur no license or permit could be issued by such 
Federal agencies as the Atomic Energy Commission, Federal Power 
Commission, or the Corps of Engineers unless the State action was 
overturned in the appropriate courts of jurisdiction.''); H.R. Rep. 92-
911, at 122 (March 11, 1972) (``If a State refuses to give a 
certification, the courts of that State are the forum in which the 
applicant must challenge the refusal if the applicant wishes to do 
so.'').
    The Agency is finalizing regulatory text substantively similar to 
proposed Sec.  121.9(a)(2) that allows a Federal agency to verify 
whether the appropriate certifying authority--meaning the entity 
responsible for certifying compliance with applicable water quality 
requirements where the discharge originates or will originate--issued 
the certification decision. 40 CFR 121.8. EPA made one non-substantive 
change to proposed text to verify whether the ``appropriate'', as 
opposed to ``proper'', certifying authority issued the certification 
decision. Section 401 requires a project proponent to provide the 
Federal licensing or permitting agency a certification from the state 
or authorized Tribe ``in which the discharge originates or will 
originate.'' 33 U.S.C. 1341(a)(1). If the project proponent provides 
the Federal agency with a certification from the wrong certifying 
authority, then the Federal agency cannot issue its license or permit. 
Allowing a Federal agency to confirm that the appropriate certifying 
authority has issued certification is consistent with case law, 
American Rivers, 129 F.3d at 110-11, and prior Agency regulations and 
guidance, 85 FR 42267; 2010 Handbook at 10 (rescinded in 2019, see 
supra).
    The Agency is finalizing regulatory text that allows a Federal 
agency to verify that the certifying authority confirmed it complied 
with its public notice procedures established pursuant to section 
401(a)(1). 40 CFR 121.8. EPA proposed that a Federal agency may review 
a certification decision to determine whether the certifying authority 
``provided public notice'' on the request for certification at Sec.  
121.9(a)(3). Some commenters noted

[[Page 66620]]

that public notice procedures vary amongst certifying authorities, 
including one commenter that noted that establishing generally 
applicable procedures for public notice is not necessarily the same as 
providing public notice on every application. EPA agrees with these 
commenters. Section 401(a)(1) requires a certifying authority to 
establish procedures for public notice, and a public hearing where 
necessary, on a request for certification. 33 U.S.C. 1341(a)(1). 
Accordingly, EPA has revised the regulatory text, now located at Sec.  
121.8, to better reflect the statutory text and to clarify that a 
Federal agency may review whether the certifying authority confirmed it 
complied with its public notice procedures.
    One commenter stated that Federal agencies have little knowledge of 
the public notice procedures of certifying authorities, and that any 
issues with the procedural process would be addressed in state court. 
While EPA agrees that questions regarding compliance with specific 
state public notice laws and regulations would be addressed in state 
proceedings, EPA disagrees that it is therefore inappropriate for a 
Federal agency to seek verification from the certifying authority that 
it complied with its public notice procedures, a Federal statutory 
requirement. The Agency appreciates commenter concerns regarding a 
Federal agency's lack of substantive knowledge about a certifying 
authority's public notice procedures. Therefore, the Agency is limiting 
Federal agency review regarding public notice to simply verifying that 
the certifying authority confirmed it complied with its public notice 
procedures. This should not require the Federal agency to delve into 
any specifics regarding a state or authorized Tribe's public notice 
procedures, but rather should entail merely asking the certifying 
authority to provide confirmation of its compliance. To aid in this 
review, EPA recommends that certifying authorities indicate compliance 
with their public notice procedures in its certification decision. See 
section IV.F of this preamble for further discussion on ways a 
certifying authority can indicate its compliance; see also infra.
    The Agency is also finalizing regulatory text substantively similar 
to proposed Sec.  121.9(a)(4) that allows a Federal agency to verify 
whether a certifying authority acted on a request for certification 
within the reasonable period of time. 40 CFR 121.8. Section 401 
provides that certification ``shall be waived'' if the certifying 
authority fails or refuses to act within the reasonable period of time. 
A Federal agency cannot issue its license or permit until certification 
``has been obtained or has been waived.'' 33 U.S.C. 1341(a)(1). It is 
thus reasonable for the Federal agency to determine whether a 
certifying authority acted within the reasonable period of time, and 
this has been the Agency's longstanding position in regulation and 
guidance. See 40 CFR 121.16(b) (2019); 85 FR 42267; 2010 Handbook at 10 
(rescinded in 2019, see supra). Additionally, as discussed above, this 
is also consistent with case law on Federal agency review. See American 
Rivers, 129 F.3d at 110-11 (explaining that FERC ``may determine . . . 
whether a state has issued a certification within the prescribed 
period''); see also Alcoa Power Generating, 643 F.3d at 972-73 (holding 
that, like the public notice requirements at issue in City of Tacoma, 
the issue of whether a certifying authority acted upon a certification 
request within the statutory one-year period was an issue properly 
before FERC).
    The Agency is not finalizing the regulatory text proposed at Sec.  
121.9(a)(1), which provided that a Federal agency may also review a 
certification decision to confirm the nature of the decision (i.e., 
whether the certification decision is a grant, grant with conditions, 
denial, or express waiver). The Agency does not disagree with this 
aspect of the proposal, but the Agency finds the regulatory text 
unnecessary and somewhat confusing when listed among the other 
components of Federal agency review. Certainly, a Federal agency needs 
to look at the certification decision to determine how it should act in 
response. For instance, the Federal agency cannot issue the relevant 
license or permit if the certification decision is a denial. If the 
decision is a grant with conditions, the Federal agency must include 
those conditions in its license or permit. However, looking at the 
certification document to see how the certifying authority decided to 
act represents a different sort of ``review'' than the other components 
of Federal agency review identified in Sec.  121.8. The other 
components all concern verifying compliance with the statutory 
requirements of section 401. EPA concludes that it is best to remove 
this provision to avoid confusion. Further, as one commenter noted, the 
decision should generally be apparent on its face. Certifying 
authorities and Federal agencies have over 50 years of experience with 
developing and receiving certification decisions, respectively. 
Additionally, the Agency is finalizing regulatory text at Sec.  
121.7(a) that clearly defines the four possible ways a certifying 
authority may act on a request for certification, as well as regulatory 
text at Sec.  121.7(c) through (f) that clearly outlines recommended 
contents for a certification decision. These final rule provisions 
should provide certifying authorities with sufficient clarity regarding 
possible actions they may take and how to develop clear certification 
decisions.
b. Demonstrating Compliance With the Facial Requirements of Section 401
    Consistent with the proposed rule, EPA is declining to define the 
specific information a certifying authority must include in a 
certification decision to demonstrate compliance with the facial 
requirements of section 401. Section 401 does not expressly address 
what specific information certifying authorities must include in a 
certification decision, nor does it address the process of Federal 
agency review. While the statute does contain important information 
about the identity of the appropriate certifying authority, the length 
of the reasonable period of time, and a requirement for public notice 
procedures, it does not prescribe how a certifying authority must 
demonstrate compliance with those requirements.
    At proposal, EPA did not define the specific information a 
certifying authority must include in its certification decision to 
demonstrate that it has met the facial requirements of section 401. 
However, EPA requested comment on whether the Agency should identify in 
regulation different elements of a certification decision that might be 
appropriate for Federal agency review, or whether EPA should defer to 
Federal agencies to define those elements.
    In the final rule, the Agency is declining to define the specific 
information a certifying authority must include in a certification 
decision to demonstrate that it has met the facial requirements of 
section 401. Certifying authorities are the entities most familiar with 
their certification process, and certifying authorities, and not EPA or 
other Federal agencies, are in the best position to determine how to 
demonstrate compliance. EPA expects that it should only take minimal 
effort by a certifying authority to demonstrate compliance for Federal 
agency verification. However, as discussed below, the Agency is 
providing recommendations for how certifying authorities can 
demonstrate compliance with these requirements.
    To support a streamlined review of whether a certifying authority 
complied with its public notice procedures, EPA is finalizing a 
recommendation for a

[[Page 66621]]

certifying authority to indicate such compliance in its certification 
decision.\84\ By doing so, the Federal agency should be able to simply 
look at the certification decision and quickly and easily determine 
whether the certifying authority indicated that it followed its public 
notice procedures.
---------------------------------------------------------------------------

    \84\ See section IV.F of this preamble regarding contents of 
certification decisions.
---------------------------------------------------------------------------

    A few commenters discussed how certifying authorities currently, or 
could, demonstrate compliance with their public notice procedures, 
including providing a copy of the public notice in the certification 
decision or including a description of the public notice process it 
undertook in its certification decision. EPA finds that these and other 
approaches to demonstrating compliance with public notice procedures 
would be sufficient to satisfy Federal agency review. In fact, it would 
be sufficient for the certifying authority to simply state in its 
certification decision that the certifying authority complied with its 
public notice procedures. This inquiry does not require the Federal 
agency to research or inquire about the particulars of a state or 
Tribal laws and regulations regarding public notice, but rather merely 
verify that the certifying authority confirmed it complied with its 
public notice procedures. EPA is not defining how a certifying 
authority must communicate such confirmation, but EPA does not 
anticipate that such demonstrations will be burdensome. As the court 
noted in City of Tacoma, Federal agencies only need ``to obtain some 
minimal confirmation of such compliance.'' 460 F.3d at 68.
    The Agency is also not defining how a certifying authority must 
demonstrate that it provided a certification decision within the 
reasonable period of time. However, EPA finds that other provisions in 
this final rule should aid in making such a demonstration. For example, 
final rule Sec.  121.6(a) requires a certifying authority to send the 
project proponent and the Federal agency a written confirmation of the 
date that the request for certification was received, while Sec.  
121.6(b) requires the Federal agency and certifying authority to 
jointly agree on the reasonable period of time in writing. Using this 
documentation, the Federal agency should be able to verify whether the 
certifying authority acted on the request for certification within the 
reasonable period of time. If the Federal agency needs further 
information to verify that the certification decision was issued within 
the reasonable period of time, the certifying authority could satisfy 
this inquiry by providing documentation of the date it furnished the 
project proponent with a decision.
    The Agency is also not defining how to demonstrate that the 
certification is from the appropriate certifying authority, meaning the 
state or authorized Tribe responsible for certifying compliance with 
applicable water quality requirements where the discharge originates or 
will originate.\85\ EPA finds that the project proponent bears the 
burden of demonstrating that it has obtained a certification from the 
appropriate certifying authority. See 33 U.S.C. 1341(a)(1) (``Any 
applicant . . . shall provide the licensing or permitting agency a 
certification from the State in which the discharge originates or will 
originate . . .''). Accordingly, if a Federal agency chooses to verify 
that the appropriate certifying authority issued the certification 
decision, it should work with the project proponent to obtain location 
information, such as a map, indicating where the discharge originates 
or will originate. The Federal agency and project proponent may also 
discuss any questions regarding jurisdiction with the certifying 
authority, or as needed, EPA in its technical assistance capacity under 
section 401(b).
---------------------------------------------------------------------------

    \85\ But see section IV.H of this preamble for further 
discussion on instances where EPA acts as the certifying authority 
instead of a state or authorized Tribe.
---------------------------------------------------------------------------

c. Federal Agency Review Process
    Consistent with the 1971 Rule and 2020 Rule, the Agency is 
finalizing regulatory text to reaffirm that a waiver of certification 
occurs only if the certifying authority fails to act within the 
reasonable period of time. See 40 CFR 121.9(a)(2)(i) (2020); 40 CFR 
121.16(b) (2019). If the Federal agency reviews for timeliness and 
determines that the reasonable period of time has passed without the 
certifying authority acting on the request for certification, then the 
Federal agency may determine that a constructive waiver has occurred. 
40 CFR 121.9(b). Similar to the approach in the 2020 Rule, the Agency 
is finalizing regulatory text describing how the Federal agency must 
communicate its waiver determination to the project proponent and 
certifying authority. See id. Specifically, if a Federal agency 
determines that the certification decision was not issued within the 
reasonable period of time, the Federal agency shall promptly notify the 
certifying authority and project proponent in writing that a waiver has 
occurred. Id. Similar to the 2020 Rule, see Sec.  121.9(b) of the 2020 
Rule, the Agency is also finalizing regulatory text that clarifies that 
such notification from the Federal agency satisfies the project 
proponent's requirement to obtain certification. 40 CFR 121.9(b). The 
Agency made minor revisions to the text proposed at Sec.  121.9(c) to 
clarify that a waiver only satisfies the project proponent's obligation 
to obtain a certification and does not satisfy any other obligations 
under section 401 (e.g., need to provide the Federal agency 
supplemental information pursuant to Sec.  121.12). However, as 
discussed in more detail below, the Agency is declining to finalize 
regulatory text on the process that Federal agencies and certifying 
authorities must follow for non-compliance with other facial 
requirements of CWA section 401 including potential consequences and 
remedy procedures. This is consistent with the Agency's approach to 
Federal agency review prior to the 2020 Rule and avoids unnecessarily 
encumbering the certification process with additional procedures.
    Many commenters agreed with the proposal's characterization of 
constructive waiver as a ``severe consequence.'' Some commenters 
expressed support for the position in the proposal that constructive 
waiver may only occur when the certifying authority fails or refuses to 
act (i.e., to grant, grant with conditions, deny, or expressly waive) 
within the reasonable period of time. A few commenters stated that 
procedural technicalities should not be a basis for an involuntary or 
implicit waiver of certification.
    EPA agrees with commenters that a constructive waiver occurs only 
where a certifying authority fails to act on a request for 
certification (i.e., grant, deny, expressly waive) within the 
reasonable period of time. The Agency recognizes that a constructive 
waiver is a severe consequence; as discussed in section IV.F in this 
preamble, a waiver means that a Federal license or permit which could 
adversely impact the certifying authority's water quality (i.e., cause 
noncompliance with water quality requirements) may proceed without any 
input from the certifying authority. EPA encourages Federal agencies, 
project proponents, and certifying authorities to communicate early and 
often to prevent inadvertent waivers due to passage of time. For 
example, a Federal agency could set up an MOA or other agreement with 
certifying authorities to establish notification protocols prior to 
finding a waiver of certification (e.g., where a certifying authority 
has not acted by 30 days prior to the end of the reasonable period of 
time, the Federal agency will notify the certifying

[[Page 66622]]

authority that a waiver will occur if it does not receive a 
certification decision or a request to extend the reasonable period of 
time in that 30 day period).\86\
---------------------------------------------------------------------------

    \86\ Nothing in section 401 precludes a Federal licensing or 
permitting agency from considering input provided by a state or 
authorized Tribe in a late certification decision. But that 
consideration would occur outside the context of section 401 and 
would be akin to consideration of input provided by the state or 
Tribe in any other context (e.g., a public comment period). For 
example, if a certifying authority included conditions in a late 
certification, nothing in section 401 precludes the Federal 
licensing or permitting agency from considering including similar 
conditions in its Federal license or permit, even though section 401 
would not compel the Federal agency to do so.
---------------------------------------------------------------------------

    A couple of commenters suggested that EPA require the Federal 
agency to extend the reasonable period of time in instances where the 
certifying authority failed to act and extending the reasonable period 
of time would not exceed the one-year statutory time period from 
receipt of the request for certification. These commenters asserted 
that allowing constructive waiver before one year would be inconsistent 
with cooperative federalism principles, and one of these commenters 
asserted that section 401(a)(1) prohibited a finding of a constructive 
waiver until after one year. Conversely, one commenter expressed 
concern over the proposal's preamble language encouraging Federal 
agencies to extend the reasonable period of time where a certifying 
authority inadvertently waives certification, asserting that section 
401 clearly provides that if a reasonable period of time is established 
and the certifying authority does not act within that reasonable period 
of time then waiver has occurred, and EPA cannot create a regulatory 
override over clear statutory language.
    Aside from providing that a waiver occurs if the certifying 
authority does not act within the reasonable period of time, the 
statute does not provide direction on what should occur if a certifying 
authority fails to meet the other statutory requirements in section 
401. As discussed earlier, the legislative history indicates that 
Congress added the waiver provision to prevent ``sheer inactivity'' by 
a certifying authority from holding up the licensing or permitting 
process. See H.R. Rep. No. 91-940, at 54-55 (March 24, 1970) (Conf. 
Report). Consistent with the statutory language and legislative 
history, EPA believes that Congress intended such an extreme outcome 
only in situations where certifying authorities fail or refuse to make 
a decision, and not where a certifying authority, otherwise attempting 
to make a timely decision, fails to comply with other requirements of 
section 401. Case law also provides support for the Federal agency 
allowing the certifying authority to either demonstrate that its 
decision meets section 401's requirements or remedy the situation, as 
opposed to the Federal agency having authority to deem any failure an 
automatic waiver of certification. See City of Tacoma, 460 F.3d at 68-
69 (``FERC should seek an affirmation from Ecology that it complied 
with state law notice requirements when it issued its water quality 
certification or, if it did not, that it has done so in response to 
this decision.'').
    The Agency is declining to define the process that a Federal agency 
and certifying authority must follow if the Federal agency's review 
reveals that the wrong certifying authority issued the certification 
decision, or the Federal agency was unable to obtain confirmation that 
the certifying authority complied with its public notice procedures. 
Most commenters providing input on this topic expressed support for 
proposed Sec.  121.9(b) that if the Federal licensing or permitting 
agency determines that certain statutory requirements (e.g., public 
notice) have not been met, it must provide the certifying authority 
with an opportunity to remedy the situation. However, a few commenters 
expressed concern with the proposed automatic extensions for certifying 
authorities that failed to comply with public notice procedures, 
suggesting that it might incentivize certifying authorities to ignore 
procedures and improperly extend the time for certification. Upon 
further reconsideration, the Agency is declining to include regulatory 
text addressing the potential consequences and remedies to deficient 
certification decisions, aside from failure or refusal to act within 
the reasonable period of time. As discussed in further detail below, 
this restores the Agency's pre-2020 Rule approach to Federal agency 
review and avoids unnecessarily encumbering the certification process 
with more procedure.
    The Agency proposed at Sec.  121.9(b) that if a Federal agency 
determines that a section 401 certification decision does not clearly 
indicate whether it is a grant, grant with conditions, denial, or 
express waiver, the Federal agency must notify the certifying authority 
of the deficiency and provide the certifying authority with an 
opportunity to remedy it. As discussed above, the Agency is not 
finalizing regulatory text regarding Federal agency review of the 
nature of the certification decision, so the proposed text regarding 
next steps is no longer needed.
    The Agency did not propose any regulatory text explicitly 
discussing the consequences or next steps where Federal agency review 
reveals that the wrong certifying authority provided the certification 
decision. However, the proposed rule preamble provided that if Federal 
agency discovers that the wrong certifying authority issued the 
certification, then the Federal agency should notify the project 
proponent that it must seek certification from the appropriate 
certifying authority before the Federal license or permit may be 
issued. The Agency is not including regulatory text regarding next 
steps for this aspect of Federal agency review, but continues to 
encourage the Federal agency to promptly notify the project proponent 
where the Federal agency determines that the certification decision was 
not issued by the appropriate certifying authority. As noted above, 
section 401 requires a project proponent to seek certification from the 
jurisdiction in which the discharge originates or will originate. 33 
U.S.C. 1341(a)(1). Therefore, it is incumbent on the project proponent 
to identify and obtain certification (or waiver) from the proper 
certifying authority--the entity responsible for certifying compliance 
with applicable water quality requirements where the discharge 
originates or will originate--before it can obtain a Federal license or 
permit. See 40 CFR 121.1(b).
    The Agency is not finalizing the process proposed at Sec.  121.9(b) 
for the Federal agency to follow if it is unable to obtain confirmation 
from the certifying authority that the certifying authority complied 
with its public notice procedures. The Agency proposed that the Federal 
agency must notify the certifying authority if it determined that the 
certifying authority did not provide public notice on the request for 
certification and provide the certifying authority with an opportunity 
to remedy the noted deficiency. 87 FR 35357. The proposal further 
provided that, if necessary, the Federal agency must extend the 
reasonable period of time to provide the certifying authority with an 
opportunity to remedy the deficiency, but the reasonable period of time 
may not exceed one year from the receipt of the certification request. 
Id.
    Most commenters providing input on this aspect of the proposed rule 
expressed support for Federal agencies extending the reasonable period 
of time to allow for correction of deficiencies up to the statutory 
one-year limit. A few commenters suggested that the final rule should 
allow certifying authorities to

[[Page 66623]]

correct errors even after the reasonable period of time has ended, 
including one commenter who suggested it should extend beyond the one-
year timeframe. Conversely, one commenter urged EPA to reconsider 
requiring automatic extensions of the reasonable period of time as 
necessary to allow the certifying authority with an opportunity to 
remedy any deficiency. The commenter explained that it does not oppose 
small extensions of time for certifying authorities to provide 
additional detail or make minor changes necessary to satisfy the 
elements. However, the commenter expressed concern that certifying 
authorities may abuse this extension process by submitting purposely 
incomplete decisions. According to the commenter, if a certifying 
authority submits a clearly deficient certification decision, the 
certifying authority should not be entitled to more time; instead, the 
certification should be waived. Another commenter suggested that 
corrections should be made within the reasonable period of time and be 
limited to ``errors made in good faith.'' This commenter cautioned that 
this provision should not allow or incentivize certifying authorities 
to ignore procedures or take more time.
    The Agency is declining to define any specific process to remedy 
any deficiencies identified through Federal agency review. As an 
initial matter, the Agency did not provide a regulatory process for 
Federal agency review prior to the 2020 Rule (aside from failure or 
refusal to act within the reasonable period of time). Rather, prior EPA 
guidance merely acknowledged that the Federal licensing or permitting 
agency may review the procedural requirements of a certification 
decision. See 2010 Handbook at 32 (rescinded in 2019, see supra) (``For 
example, the federal permitting or licensing authority may review the 
procedural requirements of [section] 401 certification, including 
whether the proper state or tribe has certified, whether the state or 
tribe complied with applicable public notice requirements, and whether 
the certification decision was timely.'') (citing American Rivers, 129 
F.3d at 110-111; City of Tacoma v. FERC, 460 F.3d 53, 68 (D.C. Cir. 
2006)). The Agency is not aware of any issues, procedural or otherwise, 
with Federal agencies and certifying authorities managing this process 
pre-2020 Rule. Because this final rule returns the Agency to its pre-
2020 Rule posture on Federal agency review, the Agency is accordingly 
declining to define a process to address deficiencies identified 
through Federal agency review. The Agency expects this will provide 
certifying authorities and Federal agencies with the flexibility to 
address such procedural deficiencies in accordance with pre-2020 Rule 
practices.
    The Agency emphasizes that other aspects of this final rule should 
prevent the need for specific EPA-mandated process to remedy 
deficiencies identified through Federal agency review. First, as 
discussed in section IV.D of this preamble, certifying authorities have 
an active role in setting the reasonable period of time with the 
Federal agency. See 40 CFR 121.6(b). This approach provides certifying 
authorities with an opportunity to ensure the length of the reasonable 
period of time considers their specific timing needs and concerns. 
Second, the final rule provides certifying authorities and Federal 
agencies with the ability to extend the reasonable period of time as 
needed, or automatically in limited cases. See 40 CFR 121.6(d) and (e). 
Together, these components of the final rule should provide certifying 
authorities with ample opportunities to ensure they have the 
appropriate amount of time to act on a request for certification and 
comply with the facial components of section 401. EPA notes that its 
proposed automatic extensions for curing deficiencies (at proposed 
Sec.  121.9(b)) would have applied only for failure to indicate the 
nature of the decision and failure to provide public notice. In this 
final rule, EPA has removed Federal agency review of the nature of the 
decision and expressly limited review of public notice to simply 
verifying that the certifying authority confirmed that it complied with 
its public notice procedures. Additionally, as discussed in section 
IV.F of this preamble, the Agency encourages certifying authorities to 
include an indication that they complied with their public notice 
procedures established in all certification decisions. This serves two 
purposes. First, it ensures the certifying authority remains cognizant 
of satisfying all statutory requirements in section 401, including the 
need to establish and comply with public notice procedures. Second, it 
clearly communicates the certifying authority's compliance with this 
requirement of section 401 so that in the event the Federal agency 
chooses to review for such compliance it may easily determine that the 
certifying authority confirmed compliance with its public notice 
procedures.
3. Implementation
    As discussed throughout this preamble, EPA emphasizes the 
importance of communication between certifying authorities, Federal 
agencies, and project proponents early and often through the 
certification process. Consistent communication can ensure that 
stakeholders develop a common understanding around timing and 
information needs to complete the certification process and comply with 
the facial requirements of section 401. Ideally, such communication 
minimizes the need for Federal agency review. However, in the event a 
Federal agency reviews a certifying authority's action, it is limited 
to reviewing whether the action complies with the requirements of 
section 401 as explicitly defined at final rule Sec.  121.8. Federal 
agency review does not require, nor allow, a Federal agency to review 
the substance of a certification decision or specific certification 
condition (e.g., determine whether the certification or its conditions 
is within the scope of section 401).
    In the proposal, EPA requested comment on whether the Agency should 
develop procedures regarding how a certifying authority should respond 
to a Federal agency's notice regarding deficiencies in its 
certification decision. Several commenters provided various 
recommendations on the procedural aspects of the Federal agency review 
process, including recommending that the final rule should require the 
Federal agency to immediately notify the certifying authority after a 
deficiency was identified, recommending that Federal agencies develop 
procedures providing how a certifying authority should respond to a 
Federal agency's notice regarding deficiencies, and suggesting that the 
final rule include a requirement that the Federal agency notify the 
certifying authority that the certification has been received within 
the reasonable period of time, and the certification conditions have 
been incorporated into the relevant Federal license or permit.
    Under this final rule, if the Federal agency determines that the 
certifying authority did not act on a request for certification within 
the reasonable period of time, then the final rule requires the Federal 
agency to promptly notify the certifying authority and project 
proponent in writing that the certification requirement has been 
waived. 40 CFR 121.9(b). This final rule does not require a Federal 
agency to notify the certifying authority an impending deadline to act 
on a certification request prior to finding

[[Page 66624]]

waiver for failing or refusing to act. Certifying authorities are 
ultimately responsible for managing resources and ensuring that they 
act on a request for certification within the reasonable period of 
time. However, the Agency encourages Federal agencies to reach out to 
certifying authorities to remind them of impending deadlines to act 
prior to finding constructive waiver, or setting up MOAs or other 
agreements to establish notification protocols prior to finding a 
waiver of certification.
    EPA encourages Federal agencies to promptly notify certifying 
authorities if they are seeking confirmation of certifying authority 
compliance with public notice procedures, and to promptly notify 
project proponents if they determine the certification decision was not 
issued by the appropriate certifying authority. In either event, the 
final rule does not define the contents of such notification, but EPA 
encourages Federal agencies to provide notification in writing so the 
certifying authority and/or project proponent can respond accordingly.
    EPA does not find it necessary to impose a regulatory requirement 
for the Federal agency to notify the certifying authority that the 
certification has been received within the reasonable period of time, 
and that the certification conditions have been incorporated into the 
relevant Federal license or permit. As discussed above, Federal agency 
review is not a mandatory requirement under this final rule. The 
certifying authority should know whether it has issued its decision in 
the reasonable period of time due to its involvement in setting the 
reasonable period of time. As long as the certifying authority provides 
its certification decision within the reasonable period of time, the 
Federal licensing or permitting agency is required to incorporate any 
certification conditions into its license or permit. See 33 U.S.C 
1341(d).

H. EPA's Roles Under Section 401

1. What is the Agency finalizing?
    Under section 401, EPA serves three different roles. First, EPA 
acts as the certifying authority on behalf of states or Tribes that do 
not have ``authority to give such certification.'' 33 U.S.C. 
1341(a)(1). Second, EPA is also responsible for providing technical 
assistance upon request from Federal agencies, certifying authorities, 
or Federal license or permit applicants. Id. at 1341(b). Lastly, EPA is 
responsible for notifying other states or authorized Tribes that may be 
affected by a discharge from a federally licensed or permitted 
activity, and where required, for providing an evaluation and 
recommendations on such notified state or authorized Tribe's 
objections. Id. at 1341(a)(2). This section focuses on EPA's role as a 
certifying authority and in providing technical assistance. The 
Agency's third role under section 401(a)(2), or the neighboring 
jurisdictions process, is discussed in section IV.K in this preamble.
    Consistent with the proposal, the Agency is finalizing revisions to 
the regulatory text at Sec. Sec.  121.16 and 121.17 to clarify EPA's 
process when it acts as the certifying authority, such as updating its 
public notice and hearing provisions. More specifically, the Agency is 
finalizing that when EPA is the certifying authority, it must provide 
public notice within 20 days of the date the request for certification 
is received. 40 CFR 121.17(a). The final rule also states that when EPA 
acts as the certifying authority, it is subject to the same 
requirements as other certifying authorities. EPA is also finalizing 
the regulatory text on EPA's technical assistance role at Sec.  121.18 
which reflects the statutory text at section 401(b) more directly.
2. Summary of Final Rule Rationale and Public Comment
a. EPA's Role as a Certifying Authority
    EPA is finalizing revisions to the part 121 regulations to provide 
greater clarity about EPA's process when it acts as the certifying 
authority. Pursuant to section 401 of the CWA, EPA acts as the 
certifying authority on behalf of states or Tribes that do not have 
``authority to give such certification.'' 33 U.S.C. 1341(a)(1). The 
1971 Rule required EPA to provide certification in two scenarios: 
first, where EPA promulgated standards pursuant to section 10(c)(2) of 
the 1970 Water Quality Improvement Act; and second, where water quality 
standards had been established, but no state or interstate agency had 
authority to provide certification. 40 CFR 121.21 (2019). As discussed 
in section III in this preamble, the 1971 Rule was promulgated prior to 
the enactment of the 1972 CWA amendments; as a result, the language in 
the 1971 Rule regarding EPA as a certifying authority did not reflect 
the amended text of section 401. In the 2020 Rule, EPA updated this 
provision with new regulatory text that indicated that EPA provides 
certification consistent with the 1972 statutory text and noted that 
EPA was required to comply with part 121 when it acted as a certifying 
authority. 40 CFR 121.13 (2020).
    EPA is finalizing minor, conforming modifications to Sec.  
121.13(a) and (b) of the 2020 Rule. Specifically, consistent with the 
language in section 401(a)(1), the Agency is reaffirming that EPA is 
required to provide certification or waiver where no state, Tribe, or 
interstate agency has the authority to provide certification. 40 CFR 
121.16(a). The Agency is also reaffirming that, when it acts as a 
certifying authority, EPA must comply with both section 401 and the 
requirements in part 121. See 40 CFR 121.16(b).
    Currently, EPA acts as the certifying authority in two scenarios: 
(1) on behalf of Tribes without ``treatment in a similar manner as a 
state'' (TAS) and (2) on lands of exclusive Federal jurisdiction in 
relevant respects. In the first scenario, if a Tribe does not obtain 
TAS for section 401, EPA acts as the certifying authority for any 
federally licensed or permitted activity that may result in any 
discharge that originates in Indian country lands. As discussed in 
section IV.L in this preamble, a Tribe may obtain TAS for section 401 
for the purpose of issuing water quality certifications. When EPA 
certifies on behalf of Tribes without TAS, its actions as a certifying 
authority are informed by its Tribal policies and the Federal trust 
responsibility to federally recognized Tribes. EPA's 1984 Indian 
Policy, recently reaffirmed by EPA Administrator Regan, recognizes the 
importance of coordinating and working with Tribes when EPA makes 
decisions and manages environmental programs that affect Indian 
country. See EPA Policy for the Administration of Environmental 
Programs on Indian Reservations (November 8, 1984), available at 
https://www.epa.gov/sites/default/files/2015-04/documents/indian-policy-84.pdf; see also Memorandum from Michael S. Regan to All EPA 
Employees, Reaffirmation of the U.S. Environmental Protection Agency's 
Indian Policy (September 30, 2021), available at https://www.epa.gov/system/files/documents/2021-09/oita-21-000-6427.pdf. This includes 
coordinating and working with Tribes on whose behalf EPA reviews and 
acts upon requests for certification on federally licensed or permitted 
projects.
    In the second scenario, EPA acts as the certifying authority in 
situations where any discharge from any activity subject to section 401 
certification originates where the Federal Government has exclusive 
jurisdiction in relevant respects. Some commenters said they had 
concerns with EPA acting as the certifying authority for all national 
parks. One commenter more broadly argued that section 401 does not 
authorize EPA to issue certifications for lands subject to exclusive 
Federal

[[Page 66625]]

jurisdiction and that it would be contrary to the statutory language 
and intent for EPA to act as a certifying authority over such lands. 
This commenter asserted that this approach would remove authority from 
states to protect water quality under section 401 in large areas within 
their borders.
    As an initial matter, EPA wishes to emphasize that not all Federal 
lands or national parks are lands of exclusive Federal jurisdiction. 
Rather, exclusive Federal jurisdiction is established only under 
limited circumstances pursuant to the Enclave Clause of the U.S. 
Constitution, article 1, section 8, clause 17. These circumstances 
include (1) where the Federal Government purchases land with state 
consent to jurisdiction, consistent with article 1, section 8, clause 
17 of the U.S. Constitution; (2) where a state chooses to cede 
jurisdiction to the Federal Government; and (3) where the Federal 
Government reserved jurisdiction upon granting statehood. See Paul v. 
United States, 371 U.S. 245, 263-65 (1963); 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).
    EPA disagrees with the commenter asserting that section 401 does 
not authorize EPA to issue certifications for lands subject to 
exclusive Federal jurisdiction in relevant respects and that it would 
be contrary to the statutory language and intent for EPA to act as a 
certifying authority over such lands. Section 401(a)(1) specifically 
anticipates circumstances in which no state or interstate agency has 
authority to provide certification, directing that ``[i]n any such 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) (emphasis added). Lands of exclusive Federal 
jurisdiction in relevant respects present a case where states lack 
authority for certification pursuant to section 401, as states lack 
legislative jurisdiction in these areas absent specific congressional 
action. See Paul, 371 U.S. at 263 (finding precedent establishes ``that 
the grant of `exclusive' legislative power to Congress over enclaves 
that meet the requirements of Art. I, s 8, cl. 17, by its own weight, 
bars state regulation without specific congressional action.''). In 
section 401, Congress did not take specific action to grant authority 
to states to issue certification over lands of exclusive jurisdiction. 
On the contrary, Congress provided in section 401(a)(1) that the EPA 
Administrator shall issue certification ``in any such case'' where no 
state or interstate agency has authority to give certification, and 
otherwise recognized the Administrator as a certifying authority. In 
addition to the statutory text, the legislative history further 
supports that Congress did not grant authority to states to issue 
certification where states otherwise lack authority, such as lands of 
exclusive Federal jurisdiction in relevant respects. See 116 Cong. Rep. 
9316, 9328 (March 25, 1970) (statement of Rep. Harsha) (emphasis added) 
(``Another area of great complexity is that covered by section 21--
certification by the States to Federal agencies in cases where 
application has been made for Federal licenses or permits. That 
certification must come from the States unless, of course, the waters 
involved are under the direct supervision of the Federal Government or 
there is no State certifying authority.''). As a result, EPA finds that 
section 401 directs the Administrator to issue certification in lands 
of exclusive Federal jurisdiction in relevant respects. The Agency 
further disagrees that the Administrator issuing certification for 
lands of exclusive Federal jurisdiction in relevant respects removes 
authority from states, as states under section 401 and the U.S. 
Constitution do not have a jurisdictional basis providing authority to 
issue certification for lands of exclusive Federal jurisdiction in 
relevant respects.
    Under this final rule, consistent with the 2020 Rule, when EPA acts 
as the certifying authority, it is subject to the same requirements as 
other certifying authorities (e.g., reasonable period of time to act on 
a request for certification) under section 401 and 40 CFR part 121. In 
contrast to the 2020 Rule, this final rule does not retain the request 
for additional information provisions included in Sec.  121.14 of the 
2020 Rule when EPA is the certifying authority. EPA proposed to remove 
Sec.  121.14 of the 2020 Rule which introduced limits on EPA's ability, 
as a certifying authority, to request additional information from a 
project proponent once the reasonable period of time began. See 87 FR 
35359 (June 9, 2022). These provisions included a requirement that EPA 
must initially request additional information within 30 days of 
receiving a request for certification and limitations on the type and 
scope of additional information EPA may request. 40 CFR 121.14(a) 
through (c) (2020). Additionally, the 2020 Rule required EPA to provide 
the project proponent with a deadline to respond to requests for 
additional information and acknowledged that a project proponent's 
failure to provide additional information would neither extend the 
reasonable period of time, nor prevent EPA from acting on the request 
for certification. Id. at Sec.  121.14(d) and (e).
    Consistent with the proposal, EPA is removing Sec.  121.14 of the 
2020 Rule in its entirety because it finds these provisions not 
conducive to an efficient certification process for several reasons. 
The preamble to the 2020 Rule stated that it was ``reasonable to assume 
that Congress intended some appropriate limits be placed on the timing 
and nature of such requests [for additional information]'' because of 
the overarching statutory timeline. 85 FR 42271 (July 13, 2020). Yet, 
neither the 2020 Rule preamble nor its regulatory text articulated how 
a 30-day limitation on EPA's initial request for additional information 
is compelled or even consistent with the statutory limitation that a 
certifying authority must act within a reasonable period of time. 
Although it is ideal for EPA to have relevant information to inform its 
analysis early in the reasonable period of time, various questions or 
needs may arise later in the review process that are critical to EPA 
acting on a request for certification. There is nothing in the 
statutory language that compels or even suggests that EPA should have a 
limited ability to use the reasonable period of time to request 
additional information to evaluate a request for certification and make 
a fully informed decision. If the Agency is limited in its ability to 
request additional information to inform its decision, it may need to 
deny a request for certification instead of utilizing the additional 
information to possibly grant certification. Such an outcome would 
unnecessarily impede the Federal license or permitting process.
    The 2020 Rule also unnecessarily injected ambiguity into the 
certification process. Section 121.14(b) of the 2020 Rule limited 
requests for additional information to that which is ``directly related 
to the discharge,'' while Sec.  121.14(c) of the 2020 Rule limited 
requests only to information than can be ``collected or generated 
within the reasonable period of time.'' Yet neither the phrase 
``directly related to the discharge'' nor ``collected or generated 
within the reasonable period of time'' was defined nor explained in the 
preamble or regulatory text to the 2020 Rule which introduced 
uncertainty into what kind of information EPA could actually request. 
For example, how would the Agency determine if the information was 
directly related to the discharge or that the information could

[[Page 66626]]

be collected or generated within the reasonable period of time? 
Furthermore, the statutory language and this final rule already place a 
number of limitations on all certifying authority decisions. As 
finalized in Sec.  121.7(b), all certifying authorities, including EPA, 
must act within the reasonable period of time and within the scope of 
certification. EPA finds that these regulatory requirements are 
sufficient to ensure the Agency will act on requests for certification 
in a timely and appropriate manner. Consistent with the Agency's 
removal of the limitations on EPA's ability to request additional 
information, EPA is also finalizing the removal of the provisions at 
Sec.  121.14(d) and (e) of the 2020 Rule, which discussed how EPA and 
project proponents must respond to requests for additional information 
or lack thereof.
    Consistent with the proposal, Sec.  121.17 provides that when EPA 
acts as the certifying authority, it ``shall provide public notice of 
the request for certification.'' 40 CFR 121.17(a). The Agency revised 
proposed Sec.  121.17 to clarify that EPA will provide public notice on 
the request for certification itself, as opposed to merely providing 
public notice on the receipt of the request for certification. As 
proposed, this final rule does not limit or specify the particular 
manner(s) in which the public notice will occur to support broader 
public participation. The Agency is also finalizing as proposed that if 
a public hearing is determined appropriate when EPA acts as the 
certifying authority, the hearing should be scheduled ``at an 
appropriate time and place and, to the extent practicable, give all 
interested and potentially affected parties the opportunity to present 
evidence or testimony in person or by other means.'' 40 CFR 121.17(b).
    The statutory language of section 401(a)(1) requires states and 
interstate agencies to establish procedures for public notice and 
hearings. The 1971 Rule stated that EPA could provide public notice 
either by mailing notice to state and local authorities, state agencies 
responsible for water quality improvement, and ``other parties known to 
be interested in the matter'' (including adjacent property owners and 
conservation organizations), or, if mailed notice is deemed 
``impracticable,'' by publishing notice in a newspaper of general 
circulation in the area where the activity is proposed. 40 CFR 121.23 
(2019). With regard to hearings, the 1971 Rule provided that the 
Regional Administrator with oversight for the area of the proposed 
project has discretion to determine that a hearing is ``necessary or 
appropriate,'' and that ``[a]ll interested and affected parties'' would 
have reasonable opportunity to present evidence and testimony at such 
hearings. Id. EPA updated this provision in the 2020 Rule to expand the 
scope of possible parties that may receive notice to avoid 
unintentionally narrowing the list of potentially interested parties. 
85 FR 42271. Additionally, under the 2020 Rule, EPA placed a timeframe 
on when the Agency had to provide public notice following receipt of a 
certification request and retained discretion to provide for a public 
hearing as necessary or appropriate. Id; see 40 CFR 121.15 (2020).
    EPA is finalizing Sec.  121.17 as proposed, with minor, non-
substantive revisions, to facilitate participation by the broadest 
number of potentially interested stakeholders and clarify that 
following such public notice, the Administrator shall provide an 
opportunity for public comment. Consistent with the Federal 
Government's commitment to empower communities, protect public health 
and the environment, and advance environmental justice in Executive 
Orders 14096, 14008, 13990, and 12898, the final rule allows for 
outreach designed to reach all potentially interested stakeholders, 
including communities with environmental justice concerns. The Agency 
encourages doing so by using all appropriate communication and outreach 
means and methods (e.g., through local newspapers, online or electronic 
media, or other appropriate media). This approach will allow EPA 
greater flexibility to address on a case-by-case basis specific issues 
regarding notice, such as broadband access issues and requirements for 
regional publications, to provide notice in the most appropriate way to 
allow for broad participation. Additionally, EPA is not providing an 
exhaustive list or examples of potentially interested parties to avoid 
unintentionally excluding some interested stakeholders on that list. 
EPA generally believes those stakeholders to whom it is appropriate to 
provide public notice may include state, Tribal, county, and municipal 
authorities, heads of state agencies responsible for water quality, 
adjacent property owners, and conservation organizations.
    EPA is also finalizing as proposed to provide public notice within 
20 days following the date the request for certification is received. 
The 1971 Rule did not set a time frame for EPA's public notice after 
receiving a request for certification. In contrast, the 2020 Rule 
stated that EPA would provide public notice 20 days from receipt of a 
certification request. In EPA's view, continuing to provide a timeframe 
for EPA's issuance of public notice after receiving a request for 
certification will contribute to better accountability, transparency, 
and certainty with respect to EPA's handling of requests for 
certification. Generally, EPA finds it will be able to provide public 
notice within the final rule's timeframe. EPA finalized an identical 
timeframe under the 2020 Rule, which it has been able to meet without 
difficulty in most instances.
    EPA is also finalizing as proposed that once the Administrator 
provides public notice on a request for certification, the 
Administrator must provide an opportunity for public comment. EPA is 
not defining the length of the public comment period. Rather, EPA's 
view is that the appropriate timeframe for comment is more 
appropriately determined on a case-by-case basis, considering project-
specific characteristics. In general, EPA anticipates a 30-day comment 
period; however, comment periods as short as 15 days or as long as 60 
days may be warranted in some cases, based on the nature of the 
project.
    EPA may also hold a public hearing after it provides public notice 
on a request for certification. EPA is finalizing the public hearing 
provision at Sec.  121.17(b) as proposed, with minor revisions to 
remove superfluous language. For context, the 1971 Rule provided that 
the Regional Administrator may hold a public hearing at their 
discretion. 40 CFR 121.23 (2019). Although ``[a]ll interested and 
affected parties'' have the opportunity to present evidence and 
testimony at a public hearing, the scope of the hearing is limited to 
the question of ``whether to grant or deny certification.'' Id. The 
2020 Rule carried forward the position that the Agency has discretion 
to determine whether a public hearing is necessary or appropriate; 
however, the 2020 Rule removed the limitation on the subject matter of 
the public hearing. Consistent with the 2020 Rule, under Sec.  
121.17(b) of this final rule, stakeholder input at public hearings may 
cover any relevant subject matter on the proposed project to best 
inform EPA as it makes its certification decision.
    Commenters generally supported EPA's clarifications around the 
process when it acts as the certifying authority, including the public 
notice and hearing provision updates and procedural revisions. These 
commenters said the revisions will help EPA act on requests in a timely 
manner. EPA agrees that clarifications in the final rule regarding

[[Page 66627]]

the process when EPA acts as the certifying authority should support 
timely actions and streamline the process. EPA finds that the 
provisions at Sec. Sec.  121.16 and 121.17 will provide stakeholders 
with greater certainty and predictability around the section 401 
certification process where EPA acts as the certifying authority.
b. EPA's Role as a Technical Advisor
    Section 401(b) provides certifying authorities, project proponents, 
and Federal agencies with the ability to ask EPA for technical advice 
on applicable effluent limitations, or other limitations, standards, 
regulations, or requirements, or water quality criteria, and any 
methods to comply with such limitations, standards, regulations, 
requirements, or criteria. See also H.R. Rep. No. 92-911, at 124 (1972) 
(``The Administrator may perform services of a technical nature, such 
as furnishing information or commenting on methods to comply with 
limitations, standards, regulations, requirements, or criteria, but 
only upon the request of a State, interstate agency, or Federal 
agency.''). The 1971 Rule acknowledged this role but limited it to 
provision of technical advice on water quality standards. 40 CFR 121.30 
(2019). In the 2020 Rule, the Agency modified this provision to expand 
the scope of technical advice and assistance EPA might provide to 
better align with the statutory text. 85 FR 42274-75.
    Consistent with the scope of section 401(b), EPA is finalizing the 
proposed revisions to the regulatory text at Sec.  121.18 to reflect 
the statutory text more directly. Under this final rule, EPA shall 
provide technical advice, upon request by a Federal agency, certifying 
authority, or project proponent, on (1) applicable effluent 
limitations, or other limitations, standards (including water quality 
standards such as water quality criteria), regulations, or 
requirements, and (2) any methods to comply with such limitations, 
standards, regulations, or requirements. See 40 CFR 121.18. Federal 
agencies, certifying authorities, and project proponents may request 
EPA's technical assistance at any point in the certification process.
3. Implementation
    The Agency has made revisions throughout this final rule to clarify 
and help in the implementation of EPA's roles under section 401. With 
respect to EPA's technical advisor role, EPA does not intend this final 
rule to give EPA the authority to make certification decisions for 
states and authorized Tribes, or to independently review state or 
Tribal certifications or certification requests. See H.R. Rep. 92-911, 
at 124 (1972) (``The Committee notes that a similar provision in the 
1970 Act has been interpreted to provide authority to the Administrator 
to independently review all State certifications. This was not the 
Committee's intent. The Administrator may perform services of a 
technical nature, such as furnishing information or commenting on 
methods to comply with limitations, standards, regulations, 
requirements or criteria, but only upon request of a State, interstate 
agency or Federal agency.''). Nor does the Agency consider its role 
under section 401(b) to include providing monetary or financial support 
to certifying authorities in implementing their section 401 programs. 
The Agency observes that there are other means for certifying 
authorities to seek financial assistance for their water quality 
certification programs (e.g., CWA section 106 grants).
    Regarding identifying lands subject to exclusive Federal 
jurisdiction, a commenter supported the approach taken in the proposal 
to not provide an exclusive list of such areas. While supporting the 
approach of not providing an exclusive list, the commenter recommended 
the development of guidance to identify areas where EPA acts as a 
certifying authority to assist stakeholders and ensure effective 
participation in proceedings in these circumstances. While 16 U.S.C. 
Chapter 1 identifies multiple national parks as having lands of 
exclusive Federal jurisdiction,\87\ EPA does not maintain a map or list 
delineating all lands of exclusive Federal jurisdiction. In the 
preamble to the 2020 Rule, EPA noted that the number and extent of 
lands under exclusive Federal jurisdiction are subject to change and 
stated that it is the obligation of the project proponent to determine 
the identity of the appropriate certifying authority when seeking 
section 401 certification. 85 FR 42270. EPA is maintaining this 
position in the final rule. Because such jurisdictional status is 
subject to change, EPA is not providing an exclusive list of lands 
subject to exclusive Federal jurisdiction. However, EPA is able to 
offer technical assistance to stakeholders if questions arise regarding 
the appropriate certifying authority on a given federally licensed or 
permitted project.
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    \87\ These include lands within Denali National Park, Mount 
Rainier National Park, Olympic National Park, Hot Springs National 
Park, Hawai'i Volcanoes National Park, Yellowstone National Park, 
Yosemite National Park, Sequoia National Park, Crater Lake National 
Park, Glacier National Park, Rocky Mountain National Park, Mesa 
Verde National Park, Lassen Volcanic National Park, Great Smoky 
Mountains National Park, Mammoth Cave National Park, and Isle Royale 
National Park.
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    The Agency is also providing further insight on its plans to 
incorporate environmental justice into its role as a certifying 
authority. As discussed in section III in this preamble, the Agency 
intends for this final rule to address essential water quality 
protection policies identified in Executive Order 13990, including 
environmental justice. In addition to the policy directive from 
Executive Order 13990, other executive orders emphasize the importance 
of advancing environmental justice in Federal agency actions. See E.O. 
12898, 59 FR 7629 (February 11, 1994) (directing agencies to make 
environmental justice part of their mission by identifying and 
addressing, as appropriate, disproportionately high and adverse human 
health or environmental effects of their programs, policies, and 
activities on minority and low-income populations in the United 
States), E.O. 14008, 85 FR 7619 (January 27, 2021) (expanding on the 
policy objectives established in E.O. 12898 and directing Federal 
agencies to develop programs, policies, and activities to address the 
disproportionately high and adverse human health environmental, 
climate-related and other cumulative impacts on vulnerable, 
historically marginalized, and overburdened communities, as well as the 
accompanying economic challenges of such impacts); E.O. 14096, 88 FR 
25251 (Apr. 21, 2023) (expanding on the policy objectives of E.O. 12898 
and E.O. 14008 by further embedding environmental justice for all 
through a whole-of-government approach to environmental justice and 
directing Federal agencies to consider measures to address and prevent 
disproportionate and adverse environmental and health impacts on 
communities, to actively facilitate meaningful public participation and 
just treatment for all people in agency decision-making, to identify 
and address gaps in science, data, and research related to 
environmental justice, and to increase accountability and transparency 
in Federal environmental justice policy).\88\
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    \88\ The Agency also finalized and published the FY 2022-2026 
EPA Strategic Plan in March 2022, which includes new environmental 
justice strategic goals and emphasis to be embedded in all EPA work. 
See https://www.epa.gov/planandbudget/strategicplan.
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    Consistent with these directives and EPA technical guidance, when 
EPA acts as a certifying authority, the Agency should consider impacts 
on communities with environmental justice concerns who 
disproportionately bear the burdens of environmental pollution

[[Page 66628]]

and hazards, including Tribal Nations. In considering impacts from a 
federally licensed or permitted project, water quality-related impacts 
on communities with environmental justice concerns are issues that fall 
within the relevant scope of analysis and should inform decision-making 
on requests for certification. Specifically, the Agency intends to 
consider the extent to which the ``activity'' or any discharge 
associated with the activity may cause water quality-related effects 
with the potential to impact communities with environmental justice 
concerns. Additionally, as discussed above, the Agency finds that 
broadening the public notice provision will provide communities seeking 
to advance environmental justice with greater opportunities to inform 
the certification process.

I. Modifications

1. What is the Agency finalizing?
    The Agency is finalizing the proposed modification provision at 
Sec.  121.10 with revisions to further clarify the process based on 
public comments. Consistent with the proposed approach, EPA is 
finalizing a modification provision that only concerns modifications to 
a grant of certification (with or without conditions) and does not 
apply to a denial of certification or a waiver of certification. The 
Agency has revised the regulatory text of the proposed rule to 
explicitly provide in the final rule that the certifying authority is 
not required to obtain the Federal agency's agreement on the actual 
language of the modification after reaching an agreement to modify the 
certification. Based on commenter feedback and recommendations, EPA is 
finalizing a provision for modifications to a grant of certification 
that balances the certifying authorities' need for flexibility to 
protect water quality and the potential reliance interests of project 
proponents and Federal agencies once the certifying authority has 
issued a grant of certification.
2. Summary of Final Rule Rationale and Public Comment
    Prior to the 2020 Rule, the Agency's longstanding 1971 Rule allowed 
certification modifications to occur after a certification was issued, 
provided the certifying authority, Federal agency, and the EPA Regional 
Administrator agreed to the modification. 40 CFR 121.2(b) (2019). When 
the Agency revised the section 401 regulations in 2020, the rule did 
not provide a process for modification of certification decisions after 
the certifying authority had acted within the reasonable period of 
time; instead, the 2020 Rule preamble acknowledged that certification 
modifications could occur through other mechanisms (e.g., as provided 
in other Federal regulations) and encouraged Federal agencies to 
establish procedures in regulation ``to clarify how modifications would 
be handled in these specific scenarios.'' 85 FR 42279 (July 13, 2020).
    The Agency acknowledges that the absence of a modification 
provision in the 2020 Rule caused significant confusion during 
implementation regarding whether and under what circumstances 
modifications to certification conditions were allowed. Stakeholders 
also expressed significant support for the ability to modify 
certification conditions, noting that minor changes may occur in the 
project that may not rise to a level that requires a new certification 
(e.g., needing to extend the certification's ``expiration'' date to 
match a permit extension, or shifting the certified ``work window'' to 
reduce the amount of work occurring during high-flow periods), but may 
be significant enough to warrant a modification of the certification.
    To introduce more clarity and balance the appropriate amount of 
flexibility and certainty for all stakeholders, EPA proposed that a 
certifying authority may modify a previously granted certification 
(with or without conditions) after reaching an agreement to do so with 
the Federal licensing or permitting agency. This final rule is 
consistent with the Agency's proposed intent, with minor changes to the 
regulatory text to better support implementation. Specifically, the 
final rule provides additional clarity regarding the agreement between 
the Federal agency and the certifying authority. The Agency also 
removed proposed references to revoking or modifying a denial or waiver 
of certification and clarified the title of the provision to explicitly 
reflect the final provision's focus on modifications to grants of 
certification.
    Although this provision addresses a potential modification to a 
certification, after the certification modification is complete, EPA 
expects the Federal agency to follow the appropriate Federal license or 
permit modification process when incorporating any certification 
modifications into a previously issued Federal license or permit.
    This final rule remains consistent with the proposal and the 
position in the 2020 Rule that CWA section 401 does not provide the 
authority for unilateral modifications to a certification decision--
either by the certifying authority or by the Federal licensing or 
permitting agency--after the statutory reasonable period of time in 
which a certifying authority has to act on a request for certification. 
To be clear, the Agency does not intend for modifications to be used to 
avoid or extend the reasonable period of time because Sec.  121.10 in 
the final rule only applies to previously granted certifications.
a. Returning to a Modification Process
    CWA section 401 does not expressly authorize or prohibit 
modifications of certifications. Some commenters recommended that the 
final rule not include a provision for certification modifications 
because it conflicts with the one-year limit for certifying authority 
action. A few commenters argued that Congress defined and precisely 
time-limited the ability of certifying authorities to review the 
potential impacts of federally licensed or permitted projects. These 
commenters argued that the ability to modify or ``reopen'' a 
certification decision renders the express time limits Congress imposed 
in section 401(a)(1) meaningless. EPA disagrees and concludes that the 
best interpretation of section 401 is one that allows for modifications 
with reasonable guardrails like the ones in this final rule. This 
interpretation is supported by the text of section 401, which envisions 
the certifying authority participating in the Federal licensing or 
permitting process after the issuance of a certification. See 33 U.S.C. 
1341(a)(3)-(4).\89\
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    \89\ See Keating v. FERC, 927 F.2d 616, 621-22 (D.C. Cir.1991) 
(summarizing section 401(a)(3)); see also 115 Cong. Rec. 9257, 9268-
9269 (April 16, 1969) (discussing a hypothetical need for a state to 
take another look at a previously certified federally licensed or 
permitted activity where circumstances change between the issuance 
of the construction permit and the issuance of the operation 
permit).
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    The Agency does not view modifications as contrary to the text of, 
or congressional intent supporting, the reasonable period of time 
limitation. First, on its face, the reasonable period of time 
limitation only applies to the certifying authority's original action 
on the request for certification. See 33 U.S.C. 1341(a)(1) (requiring a 
certifying authority to act on a request for certification within a 
reasonable period of time not to exceed one year); see also 40 CFR 
121.7(a) and (b) (interpreting the term ``to act on a request for 
certification'' to mean the certifying authority must make a decision 
to grant, grant with conditions, deny, or expressly waive certification 
within the reasonable period of time). The statute

[[Page 66629]]

is silent regarding subsequent modifications. Second, in imposing the 
reasonable period of time limitation, Congress was concerned by the 
potential for the certifying authority's ``sheer inactivity'' to delay 
the project. See H.R. Rep. 92-911, at 122 (1972). That concern is not 
present with modifications to a grant of certification because the 
certifying authority will have already acted on the request.
    EPA requested comment on whether it should place a time limit on 
when a certifying authority can modify its grant of certification in 
relation to the issuance of the Federal license or permit. While a few 
commenters argued that a certification should not be modified after the 
Federal license or permit is issued, several commenters asserted that 
certification modifications may be necessary to account for unforeseen 
water quality impacts during the life of the Federal license or permit, 
particularly for projects that can last decades. To balance stakeholder 
interests, EPA is not imposing such a time limit on when modifications 
to a grant of certification can occur in relation to the issuance of 
the Federal license or permit. The final rule's modification provision 
provides project proponents, certifying authorities, and Federal 
agencies with the flexibility to address project changes and avoid the 
burden of having to seek a new certification where the certifying 
authority and the Federal agency agree.
    EPA also requested comment on whether EPA should identify a list of 
scenarios that may warrant certification modification. The preamble to 
the proposed rule provided examples of minor changes that may not rise 
to the level of requiring a new request for certification, but may be 
significant enough to warrant a modification of the granted 
certification (e.g., needing to extend the certification's 
``expiration'' date to match a permit extension, or shifting the 
certified ``work window'' to reduce the amount of work occurring during 
high-flow periods). 87 FR 35361 (June 9, 2022). However, EPA did not 
propose an exclusive list of scenarios that may warrant modification. 
EPA received a wide range of comments on whether to list such 
scenarios, with most commenters requesting flexibility to address new 
information or project changes without providing specific details about 
what they meant by ``new information'' or ``project changes.'' A couple 
of commenters recommended that EPA develop a list of scenarios where 
modifications are appropriate, whereas a few commenters expressed 
support for the modification process precisely because the proposal did 
not define all circumstances in which modification is appropriate.
    After reviewing public comment, EPA is not finalizing such a list 
because the certifying authority and Federal agency are in the best 
position to work together to determine whether a new certification or a 
certification modification is appropriate in a given situation. 
Although EPA understands the perspective of most commenters that it may 
be helpful to have examples of circumstances where a modification to a 
certification may be appropriate, EPA is declining to include a non-
exhaustive list in the regulatory text so that certifying authorities 
and Federal agencies retain the flexibility to determine their 
certification modification needs after considering the local water 
quality and project-specific context. Even without a list in the 
regulation, EPA still expects that the Federal agency will not 
unreasonably withhold its agreement to modifications, especially for 
administrative edits, such as correcting typographical errors, changing 
a point of contact, or adjusting a certification's expiration date to 
reflect an updated license or permit expiration date.
    In contrast to identifying scenarios warranting certification 
modifications, a few commenters recommended that EPA develop guidance 
regarding scenarios where a new request for certification is necessary, 
instead of a certification modification, to provide clarity on the 
outer limits of modifications. As noted above, EPA is declining to 
finalize any bright line scenarios (e.g., specific new information or 
changed circumstances) for when a modification is appropriate versus 
when a new certification request is required. The Agency cannot 
anticipate all the scenarios in which one path may be appropriate over 
the other, nor can the Agency predict how state, territorial, and 
Tribal certification modification processes will determine which path 
to take. Beyond modifications to existing certifications, there may be 
circumstances that warrant the submission of a new request for 
certification, such as if certain elements of the activity (e.g., the 
location or size of the activity) change materially in a manner that 
could impact water quality after a project proponent submits a request 
for certification. If the activity changes so materially after the 
request for certification as to constitute a different activity, this 
may warrant a new request for certification. The 2020 Rule preamble 
also recognized this possibility. See 85 FR 42247 (``[I]f certain 
elements of the proposed project (e.g., the location of the project or 
the nature of any potential discharge that may result) change 
materially after a project proponent submits a certification request, 
it may be reasonable for the project proponent to submit a new 
certification request.'').
b. Limits to Modification of Certification Decisions
    In Sec.  121.10 of the final rule, EPA is finalizing limits to 
certification modifications. The Agency made small changes to the 
proposed regulatory text to clarify these limits, including an 
adjustment of the provision title from ``Modifications'' to 
``Modification to a grant of certification'' to clarify that 
modifications are limited to grants of certification. 40 CFR 121.10. 
Another adjustment was to flip the substance of proposed Sec.  
121.10(a) and (b) in the final rule so that the text first identifies 
the modification process and then its limitations. Furthermore, the 
Agency removed references to modifying denials or waivers of 
certification from proposed Sec.  121.10(a) and revised the term 
``modify'' in proposed Sec.  121.10(a)(4) to ``change'' in Sec.  
121.10(b)(2) of the final rule.
    As noted above, EPA intends that a modification to a grant of 
certification means a change to an element or portion of a 
certification or its conditions--it does not mean a wholesale change in 
the type of certification decision or a reconsideration of the decision 
whether to certify (e.g., changing a grant of certification to a denial 
of certification). Section 121.10(b) of the final rule makes this clear 
by providing that a certifying authority may not--through the final 
rule's modification provision--revoke a grant of certification or 
change it into a denial or waiver. Constraining certifying authorities 
from fundamentally changing their certification action through a 
modification process recognizes reliance interests and promotes 
regulatory certainty. Further, EPA has concerns that changing the 
fundamental nature of the certification action (e.g., change a grant, 
denial, or waiver to something entirely different) may be inconsistent 
with the congressional admonition to act on a certification request 
within the statutory reasonable period of time. In addition, commenters 
indicated much greater interest regarding modification to grants of 
certification, and very little interest regarding modifications to a 
denial or waiver. Commenters also expressed confusion regarding EPA's 
proposed language regarding modifications to a denial or waiver.
    While the final rule text does not address modifications to denials 
or waivers for the reasons discussed above,

[[Page 66630]]

EPA nonetheless concludes for the reasons mentioned above that section 
401 does not authorize a certifying authority to ``modify'' a denial or 
waiver into a fundamentally different decision such as a grant of 
certification. As discussed in the proposed rule preamble, if a 
certifying authority has previously waived certification, that waiver 
may not be modified because there would be no ``certification'' to 
modify. 87 FR 35361-62. Thus, a certifying authority may not ``modify'' 
a waiver by changing it into a grant, a grant with conditions, or a 
denial. And finally, a denial of certification cannot be modified into 
a grant (with or without conditions) of certification or a waiver of 
certification.\90\
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    \90\ Of course, nothing in section 401 or this final rule would 
preclude a project proponent from requesting certification again 
after a denial without prejudice and then the certifying authority 
could act in a different manner upon the second request if 
circumstances have changed. See section IV.F in this preamble.
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    In contrast to this position, some commenters stated that EPA 
should allow for certification revocations. A few of these commenters 
recommended allowing revocations when done in accordance with the 
certifying authority's laws or regulations. One commenter suggested 
that EPA change the modification provision to allow for a denial of 
certification to be modified or revoked prior to the finalization of a 
Federal license or permit denial. Another commenter recommended 
allowing a granted certification to be revoked or modified into a 
denial of certification when new information is received pertaining to 
a project, which may substantively change the scope of work that may 
result in a discharge. Another commenter suggested that EPA should add 
language to clarify that the certifying authority retains the right to 
revoke the certification in circumstances where the project proponent 
provided false or misleading information on which the certification 
decision was based.
    The Agency recognizes the ongoing need to adapt to new and changing 
information about water quality impacts of a project after a 
certification decision has been issued, but the Agency is declining to 
broaden the final rule's modification provision to be a mechanism to 
revoke or reverse a certification decision. As discussed above, while 
the statutory language and legislative history appear to countenance a 
role for certifying authorities after a certification is issued, EPA 
concludes that this role does not include unilateral action to revoke 
or reverse the decision.\91\ EPA reiterates that if the activity 
changes significantly after a certification decision has been issued 
(e.g., material change in the breadth or location of the activity), 
this may warrant a new request for certification.
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    \91\ This statement and more broadly Sec.  121.10 of this final 
rule are not meant to address certifying authority action on a 
request for certification upon remand from a court or administrative 
tribunal of the certifying authority's initial action on the 
request. Section 121.10 is also not intended to address or govern 
court vacatur of certification decisions, or action by a certifying 
authority after a court vacatur (although the Agency notes that it 
is unclear how a vacated certification decision could be 
``modified''). This final rule does not address the situations of 
vacatur or remand by a court or administrative tribunal.
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i. Timing of Modifications to a Grant of Certification
    Under this final rule, a certification modification could occur 
only if the certifying authority had granted certification (with or 
without conditions) within the reasonable period of time. The Agency 
maintains this position from the proposal in the final rule because the 
reasonable period of time limitation in the statute concerns the 
certifying authority's action on a request for certification. 
Accordingly, the Agency is finalizing a modification provision where a 
modification to an element or a portion of a granted certification 
occurs after the reasonable period of time in which the certifying 
authority acted. See 87 FR 35361 (``Under this proposed rulemaking, a 
certification modification could occur after the reasonable period of 
time in which the original certification decision was made.'').
    EPA requested comment on whether the certification modification 
process should account for (1) whether there is a Federal license or 
permit modification process already in place and (2) the point in time 
at which a modification may be made (e.g., if new information 
supporting a modification arises either before or after issuance of the 
license or permit). The Agency is not including a time limit on when 
modifications can occur so that modifications can happen at any time 
after the reasonable period of time ends, including prior to and after 
the issuance of a Federal license or permit until the expiration of the 
license or permit.
    Many commenters supported there being no time limit for 
modifications. These commenters expressed the view that modifications 
are necessary to reflect changing conditions, scientific understanding 
of water quality effects, and changes to the project. Multiple 
commenters explained that placing a time limit on modifications may 
impede the project proponent's ability to remain in compliance on 
projects with unanticipated or unpredictable project scope and schedule 
changes and that restarting the certification process because of a 
project change during construction could result in significant impacts 
to project costs and public safety and would not be efficient, 
effective, or predictable. A few commenters highlighted the need for 
certification modifications, especially for projects with longer 
lifespans, such as large pipelines and hydropower projects with FERC 
licenses for 30-50 years. These commenters argued that there should not 
be a limit on the period when certification modifications can be 
addressed because some projects are ongoing for a long time, during 
which time water quality concerns may arise. Conversely, one commenter 
argued that EPA should not finalize a modification provision; however, 
the commenter recommended that if a modification provision is 
finalized, no modifications to certifications should occur after the 
Federal license or permit is issued.
    After considering public comment, the Agency is promulgating a 
final rule at Sec.  121.10 that provides the opportunity for 
certification modification at any point after certification issuance 
(until the expiration of the Federal license or permit), provided the 
Federal agency and the certifying authority agree in writing prior to 
modifying the grant of certification. As commenters noted, changes to 
an activity with implications for water quality can occur at any point 
in time after a certification is granted. Accordingly, the Agency finds 
this approach best reflects the reality that projects change over time 
and provides flexibility for project proponents, certifying 
authorities, and Federal agencies to adapt to changing circumstances 
without needing to reinitiate the certification process.
ii. Agreement for a Modification to a Grant of Certification
    Consistent with the Agency's longstanding approach to certification 
modifications, EPA is finalizing the ability for a certifying authority 
to modify a grant of certification (with or without conditions) 
provided that the Federal agency and certifying authority agree in 
writing that the certifying authority may modify the certification. 
However, such agreement does not require the certifying authority and 
Federal agency to agree to the substance of such a modification. 
Although EPA recommends that the modification process be collaborative, 
EPA is not

[[Page 66631]]

suggesting that Federal agencies and certifying authorities must 
collaborate on the specific language of the certification modification, 
as discussed more below. Additionally, the certifying authority may 
modify only those portions of the certification that the two parties 
agreed upon.
    Similar to the 1971 Rule, EPA is finalizing that a modification may 
only occur where a Federal agency and certifying authority agree in 
writing that the certification may be modified. While the parties must 
agree that one or another part of the certification can be modified, 
the certifying authority is not required to obtain the Federal agency's 
agreement on the specific language of such modification. Simply put, 
EPA expects that the certifying authority and the Federal agency's 
agreement would identify those portions of the certification decision 
that the certifying authority could modify, and then the certifying 
authority would be responsible for drafting the modification language. 
Because of commenter requests for greater clarity regarding what the 
Federal agency gets to review prior to agreeing to a modification, EPA 
is finalizing additional text in Sec.  121.10(a) to clarify that the 
certifying authority is not required to obtain the Federal agency's 
agreement on the language of the modification.
    Some of the commenters who supported the proposed process for 
Federal agency and certifying authority agreement to a modification 
asserted that the Federal agency should not have a role in determining 
the specific language of a modification for various reasons, including 
concern that adding a new conferencing and agreement process could lead 
to delays and the fact that the Federal agency does not review 
certification content during the original certification issuance.
    EPA agrees with these commenters. Congress recognized certifying 
authorities as the ``most qualified'' to make decisions about impacts 
to their water quality, and not Federal agencies. See 115 Cong. Rec. 
29035, 29053 (Oct. 8, 1969) (Mr. Muskie: ``By requiring compliance 
certification from the water pollution control agency, [the 
certification provision] would assign policing responsibility to those 
agencies most qualified to make an environmental decision and not to 
those committed to carrying out some other function at minimum 
cost.''). The Agency finds that certifying authorities are best 
equipped to both determine the language of a certification decision and 
the language of any subsequent modification to that decision. 
Accordingly, EPA is finalizing a process where the certifying authority 
only needs Federal agency agreement over the portions of the 
certification to be modified rather than the modified language itself. 
The Agency notes that certifying authorities are free to discuss the 
substance of a modification with a Federal agency but are not compelled 
to do so under this final rule.
    Additionally, EPA requested comment on whether the final rule 
should provide project proponents with an explicit role in the 
modification process. A few commenters recommended that the project 
proponent should have a role in the process, for various reasons: 
because section 401 is framed around the role of the applicant, because 
the Federal agency and certifying authority may lack the technical 
knowledge for the modification; because often the project proponent is 
the party initiating the project modification; and because including 
the project proponent in the modification decision or at least 
providing an opportunity for public notice is a more transparent and 
legally defensible approach that considers the project proponent's 
reliance interests.
    Consistent with the 1971 Rule, Sec.  121.10 as finalized does not 
provide the project proponent with a formal role in the modification 
process. However, the Agency does not expect the process described in 
Sec.  121.10 to prevent engagement with the project proponent before or 
after the certifying authority and Federal agency have agreed that the 
certifying authority may modify the previously granted certification. 
EPA recommends that certifying authorities engage with the stakeholders 
who will be impacted by a modification to the certification; some 
certifying authorities may even be required under their regulations to 
make any proposed modifications to their certification decisions 
available for public notice and comment.
    Unlike the 1971 Rule, the Agency is not finalizing a role for EPA 
in the certification modification process where the Agency is neither 
the certifying authority nor the Federal licensing or permitting 
agency. As noted in the 2020 Rule preamble, the statute does not 
expressly provide EPA with a role in the certification modification 
process, unlike the Agency's other roles under section 401.\92\ See 85 
FR 42278. Additionally, although the 1971 Rule provided the Agency with 
an oversight role in the modification process, the preamble to the 1971 
Rule did not explain why. See 36 FR 8563-65 (May 8, 1971). The Agency 
does not see the need to reintroduce such a role now, especially where 
EPA was not involved in the original certification decision and is not 
the relevant Federal permitting agency. EPA concludes that it should 
not have an oversight role in the certification modification process.
---------------------------------------------------------------------------

    \92\ See section IV.H in this preamble discussing EPA's specific 
roles identified in section 401, including acting as a certifying 
authority on behalf of jurisdictions lacking authority, notifying 
other jurisdictions where their water may be affected by a discharge 
from another jurisdiction, and providing technical assistance upon 
request.
---------------------------------------------------------------------------

    The cooperative approach in the final rule does not allow for 
unilateral modifications by certifying authorities, which includes 
through any ``reopener'' clauses included in a grant of certification. 
Reopener clauses purport to authorize a certifying authority to 
``reopen'' and modify a certification at a later date. The final rule's 
position on unilateral modification is consistent with the position 
taken in the 2020 Rule. See 85 FR 42279. The Agency continues to 
disagree with commenters who stated that certifying authorities should 
be allowed to unilaterally modify or revoke a section 401 certification 
decision if they have asserted this ability through a ``reopener'' 
condition incorporated into the original certification decision.
    Some commenters recommended that EPA allow reopener clauses and 
discussed their prevalence in certifications. For example, one 
commenter asserted that certifications often include ``reopener'' or 
similar conditions and cited to a few state regulations that the 
commenter viewed as authorizing reopeners or unilateral modifications. 
Another commenter asserted that virtually every condition of one 
certifying authority is subject to further modification and provided an 
example of one such certification where the certifying authority 
reserved the right to add or modify the conditions of certification 
under various specified circumstances. Another commenter recommended 
that the final rule make clear that certifying authorities can reopen 
certification based on a showing of changed circumstances and ongoing 
effects of project operations failing to meet water quality standards.
    Other commenters recommended that the final rule prohibit 
``reopener'' and similar certification conditions that purport to allow 
certifying authorities to unilaterally add or revise certification 
requirements after the reasonable period of time ends or after the 
issuance of the Federal license or permit. A few commenters asserted 
that reopener conditions are plainly inconsistent with section 401 
because they allow certifying authorities to make certification 
decisions after the

[[Page 66632]]

maximum one-year period allowed by the statute and after the Federal 
license or permit had been issued. The commenters continued that 
reopeners transform section 401's limited grant of authority to states 
to certify Federal license and permit applications into an ongoing 
regulatory role. Another commenter asserted that ``reopeners'' are 
contrary to the express and prescriptive provisions for post-
certification authority that Congress provided in CWA section 401(a)(3) 
and 401(a)(4).
    As discussed above, EPA's final rule does not authorize certifying 
authorities to unilaterally (i.e., without Federal agency agreement) 
``reopen'' or modify a certification decision. This holds true 
regardless of whether a certifying authority has inserted language into 
its grant of certification asserting this extra power.\93\ EPA is the 
Federal agency tasked with administering and interpreting the CWA, see 
33 U.S.C. 1351(d), 1361(a), including section 401, see Ala. Rivers 
Alliance v. FERC, 325 F.3d 290, 296-97 (D.C. Cir. 2003); NYSDEC, 884 
F.3d at 453, n.33, and EPA's interpretation supersedes any contrary 
interpretation taken by a certifying authority. Certifying authorities 
cannot bootstrap themselves greater authority to modify a certification 
beyond what is authorized in this final rule at Sec.  121.10. However, 
EPA wishes to emphasize the distinction between reopener clauses and 
adaptive management conditions, the latter of which are permissible 
under the final rule. See section IV.F of this preamble for further 
discussion of adaptive management conditions.
---------------------------------------------------------------------------

    \93\ This statement is not meant to address a certifying 
authority's action on a state or tribally- issued license or permit, 
which sometimes concurrently acts as the state or Tribe's section 
401 certification decision. Such matters are outside the scope of 
this rulemaking.
---------------------------------------------------------------------------

c. Changes to the NPDES Regulations for Certification Modifications
    EPA is also finalizing deletion of 40 CFR 124.55(b), which 
described the circumstances under which a modification may be made to a 
certification on an EPA-issued NPDES permit. The approach to 
modifications in Sec.  124.55(b) differed from the approach EPA is 
finalizing at Sec.  121.10. First, it addressed a subset of situations 
in which a modification would be permissible (i.e., a change in state 
law or a stay, vacatur, or remand of a certification), while staying 
silent regarding whether modifications would be appropriate in other 
situations. Second, it suggested that in the identified situations, 
such as a change in state law or regulation, a previously issued grant 
of certification could be converted to a waiver, while this final rule 
takes the general position that a certifying authority cannot change a 
grant of certification into a fundamentally different certification 
action through a modification pursuant to Sec.  121.10. Third, it did 
not require EPA as the Federal permitting agency to agree to the 
modification. Forth, it arguably suggested that in the identified 
situations, a modification was more appropriate than a new request for 
certification, an issue that EPA intentionally does not address in this 
final rule. Finally, it expressly precluded EPA from incorporating 
modified conditions into the NPDES permit except in one narrow 
circumstance: to delete a NPDES permit condition based on a condition 
in a certification invalidated by a state court or board, and only upon 
the request of the permittee. However, as discussed supra at section 
IV.G of this preamble, section 401(d) requires a Federal permitting 
agency to incorporate certification conditions into the Federal permit 
as conditions of that permit. EPA sees no reason why this fundamental 
principal should not apply to conditions of a modified certification. 
For this reason, EPA expects Federal agencies will agree to allow a 
modification only when the agency is willing to modify its license or 
permit or otherwise incorporate the modified certification conditions 
into its license or permit. EPA is finalizing deletion of Sec.  
124.55(b) because of these differences in approach between this final 
rule and Sec.  124.55(b). As a result of the deletion of Sec.  
124.55(b), all certification modifications, including those for EPA-
issued NPDES permits, must follow the approach finalized at Sec.  
121.10. A corresponding technical edit was made to 40 CFR 
122.62(a)(3)(iii) to remove the reference to Sec.  124.55(b).
    EPA requested comment on whether the final rule should allow a 
certifying authority to unilaterally modify a certification in the 
circumstances identified in former Sec.  124.55(b) such as a change in 
state law or regulation upon which a certification is based, or if a 
court of competent jurisdiction or appropriate state board or agency 
stays, remands, or vacates a certification after Federal license or 
permit issuance. A few commenters recommended retaining 40 CFR 
124.55(b) instead of the proposed Sec.  121.10. To support their 
recommendation to retain 40 CFR 124.55(b), one commenter stated that 
EPA failed to describe any confusion, regulatory uncertainty, or other 
problems attributed to the certification modification provisions in the 
NPDES program.
    In response to these commenters, EPA notes that the modification 
provision previously located at 40 CFR 124.55(b) only applied to 
modifications to certifications for NPDES permits issued by EPA and did 
not extend to licenses and permits issued by other Federal agencies. 
Therefore, retaining 40 CFR 124.55(b) instead of the provision proposed 
at 40 CFR 121.10 would not have provided additional clarity for 
stakeholders interested in modifying a certification for those licenses 
and permits issued by other Federal agencies. Furthermore, EPA intends 
for Sec.  121.10 to apply to all certification modifications, including 
those on certifications for EPA-issued NPDES permits. Finally, EPA was 
concerned that leaving Sec.  124.55(b) in place could introduce 
stakeholder confusion when read with final rule Sec.  121.10 because it 
may have wrongly indicated that the circumstances in Sec.  124.55(b) 
are the only circumstances in which EPA might agree to modify a 
certification on an EPA-issued NPDES permit, and as discussed above, 
Sec.  124.55(b) conflicted with several key features of this final 
rule's approach to modifications. However, nothing in this final rule 
prohibits EPA in its capacity as a Federal permitting agency to 
continue to agree to modifications to certifications in the types of 
circumstances previously prescribed in 40 CFR 124.55(b), as long as 
such modifications are consistent with Sec.  121.10 of the final rule. 
The final rule is broadening the circumstances under which the Agency 
might agree with a certifying authority that a modification is 
appropriate for a certification of an EPA-issued NPDES permit.
    EPA does not expect to develop an exhaustive list of circumstances 
under which EPA (when acting as the Federal permitting agency) expects 
to agree to a modification to a grant of certification by a certifying 
authority; however, EPA will work with certifying authorities where 
unanticipated water quality impacts, shifting project design plans, and 
new information warrant a modification to a grant of certification (and 
subsequently a modification to an EPA-issued NPDES permit). The Agency 
may develop guidance in the future regarding Agency agreements to 
modifications of grants of certification for NPDES permits issued by 
EPA.
3. Implementation
    As previously discussed, the Agency is finalizing a process for 
modifying a grant of certification that requires the certifying 
authority and Federal agency

[[Page 66633]]

to agree that a modification is appropriate but does not require 
agreement on the substance of the modification. The process is meant to 
support a cooperative approach to adapting to changing circumstances or 
new information in an efficient and transparent way. As with other 
parts of the final rule, EPA is updating the section 401 regulations 
regarding modifications to support some of the past practices that 
certifying authorities and Federal agencies became familiar with over 
50 years prior to the 2020 Rule. This includes a collaborative 
modification process like the one in the 1971 Rule. EPA is not aware of 
issues with modifications pursued under the 1971 Rule and notes that 
many stakeholders requested implementation guidance after the 2020 Rule 
omitted a process for modifying certification decisions. Therefore, the 
modification provision of the final rule will restore flexibility and 
efficiency where certifying authorities and Federal agencies find it 
appropriate to update a previously issued grant of certification rather 
than restart the section 401 certification process in response to 
changed circumstances or new information. However, EPA does not expect 
the modification provision to address every issue that may arise after 
a certification has been granted.
    Certifying authorities and Federal agencies are encouraged to work 
together to address new information or changed water quality conditions 
throughout the life of the project such that congressional intent 
behind section 401--enabling states to protect their water quality--can 
be preserved. In the spirit of cooperative federalism central to 
section 401, EPA expects that Federal agencies will not unreasonably 
withhold agreement to a modification. The provision at 40 CFR 121.10 
also does not preclude Federal agencies from developing a process for 
coordinating on certification modifications within the framework 
provided in this final rule.
    EPA recommends that certifying authorities maintain clear records 
surrounding the development of certification decisions and any 
modifications to previously granted certifications, including 
justifications for modifying any certification conditions.\94\ EPA 
wishes to emphasize that the same scope of section 401 that applies to 
a certification decision also applies to any subsequent modification to 
a grant of certification. See 40 CFR 121.3(b).
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    \94\ See discussion in section IV.F.2.d of this preamble 
regarding EPA's recommendation that certifying authorities include 
in their certification conditions a statement explaining why each of 
the included conditions is necessary to assure that the activity 
will comply with water quality requirements. See also 40 CFR 
121.7(d)(3).
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J. Enforcement and Inspections

1. What is the Agency finalizing?
    This section of the preamble discusses several issues that have 
arisen with respect to enforcement of the requirement to obtain CWA 
section 401 certifications and enforcement of certification conditions. 
EPA did not propose to retain any regulatory text regarding enforcement 
of the requirement to obtain section 401 certification or enforcement 
of certification conditions.\95\ However, EPA requested comment on 
whether it should add regulatory text on its interpretations on the 
enforceability of certification conditions by Federal agencies and 
certifying authorities; the judicial holdings regarding the application 
of the CWA citizen suit provision to certifications and certification 
conditions; and the interpretation of the term ``review'' in CWA 
section 401(a)(4). EPA is not finalizing any regulatory text on 
enforcement, consistent with the proposal. See 87 FR 35363 (June 9, 
2022). Nevertheless, in light of the pre-proposal input and public 
comments EPA received on this issue, as well as stakeholder concern and 
confusion over how the 2020 Rule addressed CWA section 401 enforcement, 
EPA will discuss some of the more common concerns that have been 
identified regarding enforcement of the requirement to obtain section 
401 certification and enforcement of certification conditions. To be 
clear, EPA is not offering new interpretations or positions on the 
issues discussed below.
---------------------------------------------------------------------------

    \95\ EPA is finalizing regulatory text regarding Federal agency 
review of certification decisions. See section IV.G of this preamble 
for further discussion.
---------------------------------------------------------------------------

2. Summary of Final Rule Rationale and Public Comment
a. General Enforcement Issues
    Section 401 contains three provisions directly relevant to 
enforcement. First, section 401(a)(4) provides certifying authorities 
with an opportunity, prior to operation, to inspect a certified 
federally licensed or permitted activity or facility that does not 
require a Federal operating license to assure its operation will not 
violate water quality requirement. 33 U.S.C. 1341(a)(4). If the 
certifying authority determines that the operation will violate 
applicable water quality requirements, the Federal agency may suspend 
the Federal license or permit after a public hearing. Id. Second, 
section 401(a)(5) provides that any certified Federal license or permit 
may be ``suspended or revoked'' by the Federal agency ``upon the 
entering of a judgment under [the CWA] that such facility or activity 
has been operated in violation'' of the enumerated sections of the CWA. 
Id. at 1341(a)(5). Third, section 401(d) provides that if a grant of 
certification includes conditions, those conditions ``shall become a 
condition on any Federal license or permit subject to the provisions of 
this section.'' Id. at 1341(d).
    Of these three provisions, the 1971 Rule only included regulatory 
text on section 401(a)(4), as discussed below in the section on 
inspection authority. The 1971 Rule did not contain any regulatory 
provisions addressing section 401(a)(5) or section 401(d) (the latter 
of which was not added to the statute until the 1972 amendments). The 
2020 Rule addressed section 401(d) and section 401(a)(4). Regarding 
section 401(d), the 2020 Rule stated that the Federal agency ``shall be 
responsible for enforcing certification conditions'' incorporated into 
its license or permit. 40 CFR 121.11(c) (2020). Regarding section 
401(a)(4), the 2020 Rule allowed the pre-operation inspection under 
section 401(a)(4) of all certified projects, regardless of whether they 
had received a subsequent Federal operating license or permit. Id. at 
Sec.  121.11(a) and (b) (2020). The 2020 Rule preamble also stated that 
the ``CWA does not provide an independent regulatory enforcement role 
for certifying authorities,'' 85 FR 42275 (July 13, 2020), and declined 
to finalize an interpretation regarding CWA section 505 citizen suits 
and section 401. Id. at 42277.
    In both pre-proposal input and public comment, stakeholders 
generally agreed that Federal agencies could enforce certification 
conditions. However, stakeholders expressed concern that the 2020 Rule 
prevented states and Tribes from exercising their independent 
enforcement authority and relied solely on Federal agencies to enforce 
certification conditions. Many commenters raised concerns over Federal 
agencies' willingness or capacity to enforce certifications and 
certification conditions. For example, some commenters asserted that 
Federal agency resource limitations coupled with the large 
jurisdictional territories necessitate state and Tribal enforcement, 
otherwise the conditions may never be enforced. Conversely, some 
commenters asserted that certifying authorities did not have an 
enforcement role either under section 401 or any other provision of the 
CWA,

[[Page 66634]]

including section 505 (the CWA's citizen suit provision). Other 
commenters asserted that section 505 provided for citizen suit 
enforcement of both failures to obtain section 401 certification and 
failure to comply with certification conditions. Many commenters 
requested that EPA expressly state in the final rule that states and 
Tribes have independent authority under the CWA to enforce 
certifications and certification conditions.
    EPA observes that this final rule is generally focused on 
interpreting the text of section 401 itself, and not other provisions 
of the CWA. Section 401 does not directly address state or Tribal 
enforcement authority and the Agency is declining to add regulatory 
text on that issue. Consistent with the approach taken in the 2020 
Rule, this rulemaking does not include interpretations of other 
enforcement-related sections of the CWA, such as section 505. As such, 
the Agency is not adding regulatory text to address state or Tribal 
enforcement authority with respect to section 505.
    The Agency views section 401 certification conditions that are 
incorporated into the Federal license or permit as enforceable by 
Federal licensing or permitting agencies. Section 401(d) provides that 
if a grant of certification includes any conditions, those conditions 
``shall become a condition on any Federal license or permit.'' As a 
result, the Federal agency can enforce any such conditions in the same 
manner as it can enforce any other conditions of its license or permit. 
EPA expressed this interpretation in the 2020 Rule, 85 FR 42275-76, and 
a decade prior to that rulemaking. See, e.g., 2010 Handbook at 32 
(rescinded in 2019, see supra). EPA also observes that Federal agencies 
have considerable discretion in deciding whether and when to enforce 
requirements and conditions in their licenses and permits. See Heckler 
v. Cheney, 470 U.S. 821, 831 (1985) (discussing why it is important for 
agencies to retain enforcement discretion).
    However, as noted above, the 2020 Rule included regulatory text 
that explicitly stated that Federal agencies were responsible for 
enforcing certification conditions incorporated into its Federal 
license or permit. 40 CFR 121.11(c) (2020). EPA proposed to remove this 
regulatory provision because it introduced ambiguity into the Agency's 
longstanding position that nothing in section 401 precludes states from 
enforcing certification conditions when authorized under state law (and 
not precluded by other Federal law besides section 401). It has also 
led to stakeholder confusion over whether the 2020 Rule prevented 
states and Tribes from exercising their independent enforcement 
authority and whether the 2020 Rule limited Federal agency discretion 
regarding their enforcement of section 401 conditions in their licenses 
or permits. Most commenters supported EPA's proposal to remove the 2020 
Rule's language at Sec.  121.11(c). However, some commenters disagreed 
with EPA's proposed approach, arguing that the enforcement of 
certification conditions incorporated into Federal licenses or permits 
must lie exclusively with the Federal permitting and licensing 
agencies. EPA disagrees. The Agency has consistently taken the view 
that nothing in section 401 precludes states from enforcing 
certification conditions when so authorized under state law. In the 
2020 Rule preamble, the Agency concluded that ``[n]othing in this final 
[2020] rule prohibits States from exercising their enforcement 
authority under enacted State laws.'' 85 FR 42276. EPA did, however, 
consider this authority limited to ``where State authority is not 
preempted by federal law.'' Id. A decade prior to the 2020 Rule, EPA 
had already recognized that states enforce certification conditions 
when authorized to do so under state law. See e.g., 2010 Handbook at 
32-33 (rescinded in 2019, see supra) (``Many states and tribes assert 
they may enforce 401 certification conditions using their water quality 
standards authority.'').
    Some commenters argued that Federal and certifying authority 
enforcement will lead to confusion, unnecessary litigation, and 
possibly duplicative or inconsistent enforcement actions and 
conditions. EPA disagrees that Federal and certifying authority 
enforcement will lead to confusion or duplicative actions. After over 
50 years of section 401 implementation experience, EPA expects that 
certifying authorities and Federal agencies are well-versed in 
coordinating enforcement actions. Nevertheless, EPA recommends that 
certifying authorities clearly indicate which certification conditions 
derive from state or Tribal law.
    With respect to CWA citizen suits and their application to both the 
requirement to obtain section 401 certification and the requirement to 
comply with certification conditions, some courts have addressed these 
issues. First, the Ninth Circuit Court of Appeals held that citizen 
suits may be brought to enforce the requirement to obtain 
certification. ONDA v. Dombeck, 172 F.3d 1092, 1095 (9th Cir. 1998). In 
ONDA, the court rejected the argument that CWA section 505 authorizes 
only suits to enforce certification conditions but not the requirement 
to obtain a certification. The court pointed to the plain language of 
section 505, which cross-references the entirety of section 401 (and 
not, for example, only section 401(d), which concerns certification 
conditions). Id. Second, a few Federal courts have held that 
certification conditions can be enforced through CWA citizen suits. In 
Deschutes River Alliance, a U.S. district court considered the issue at 
length and ultimately held that CWA section 505 authorizes citizens to 
enforce certification conditions. See Deschutes River Alliance v. 
Portland Gen. Elec. Co., 249 F. Supp. 3d 1182, 1188 (D. Or. 2017) 
(considering the issue with respect to a FERC license); see also Pub. 
Emps. for Envtl. Responsibility v. Schroer, No. 3:18-CV-13-TAV-HBG, 
2019 WL 11274596, at *8-10 (E.D. Tenn. June 21, 2019) (relying in part 
on Deschutes River Alliance and considering the issue with respect to a 
section 404 permit issued by the Corps). EPA is not aware of any 
Federal court that has considered the issue and reached the opposite 
conclusion. Deschutes River Alliance also noted that certifying states 
(in addition to the citizen group before the court) are among the 
persons that may enforce certification conditions via the CWA citizen 
suit provision. 249 F. Supp. 3d at 1191-92. The court reasoned that 
section 505 is the only provision of the CWA that could bestow Federal 
authority upon states to enforce certification conditions and, given 
this, interpreting section 505 to preclude state enforcement of 
certification conditions would run ``contrary to the CWA's purpose and 
framework.'' Id. at 1191.
b. Certifying Authority Inspection Authority
    As discussed above, section 401(a)(4) identifies one set of 
circumstances where the certifying authority may review the manner in 
which a facility or activity will operate once the facility or activity 
has received certification. 33 U.S.C. 1341(a)(4). The certifying 
authority's review is limited to determining if the post-construction 
operation of the facility or activity will ensure that applicable 
effluent limitations, other limitations, or other applicable water 
quality requirements will not be violated. Section 401(a)(4) further 
states that when the certifying authority notifies the Federal agency 
that the operation or activity will violate effluent limits, other 
limits or other water quality requirements, the Federal agency, after 
public hearing, may suspend the Federal license or permit.

[[Page 66635]]

Id. The Federal license or permit shall remain suspended until there is 
reasonable assurance that the facility or activity will not violate CWA 
section 301, 302, 303, 306, or 307. Id.
    The 1971 Rule clarified that the ability to ``review the manner in 
which the facility or activity shall be operated or conducted'' meant 
the right to inspect a facility or activity, and that the inspection is 
limited to a situation where there was a Federal construction license 
or permit and a subsequent Federal operating license or permit was not 
required. The 1971 Rule set forth the procedure regarding inspection 
and subsequent inspection findings; however, these regulations only 
applied where EPA was the certifying authority. See 40 CFR 121.26 
through 121.28 (2019). The 2020 Rule interpreted section 401(a)(4) to 
apply to all certifying authorities. It also expanded the ability to 
conduct inspections pursuant to section 401(a)(4) to any certified 
project where the Federal license or permit and certification were 
issued prior to operation, instead of only for projects where there was 
a Federal construction license or permit and a subsequent Federal 
operating license or permit was not required. 40 CFR 121.11(a) (2020); 
85 FR 42277. In pre-proposal input, several stakeholders pressed the 
Agency to allow for inspections before, during, and post-operation.
    EPA is removing Sec.  121.11(a) and (b) from the 2020 Rule in this 
final rule because the 2020 Rule incorrectly interpreted the limited 
applicability of section 401(a)(4) and the statutory language does not 
need further clarification. A few commenters recommended that the 
Agency add regulatory text regarding section 401(a)(4). However, the 
Agency finds that the statute clearly outlines the inspection 
authorities available under section 401. On its face, section 401(a)(4) 
applies to a limited circumstance where a Federal license or permit and 
certification are issued prior to operation of the facility or activity 
and a subsequent Federal operating license or permit is not necessary 
for the facility or activity to operate. Under these limited 
circumstances, the statute is clear that the licensee or permittee must 
provide the certifying authority with the ability to ``review'' the 
facility or activity to determine whether it will comply with effluent 
limitations, other limitations, or other water quality requirements. 
EPA interprets the term ``review'' found in section 401(a)(4) as broad 
enough to include inspection, but it is not necessarily limited to 
inspection. It arguably also includes the right to review preliminary 
monitoring reports or other such records that can assist the certifying 
authority in determining whether the operation of the facility or 
activity will comply with effluent limitations, other limitations, or 
other water quality requirements. EPA requested comment on whether it 
should articulate this interpretation of section 401(a)(4) in 
regulatory text. A few commenters recommended that EPA adopt regulatory 
text regarding its proposed interpretation of the term ``review'' found 
in section 401(a)(4). After considering public comments, however, EPA 
finds it unnecessary to add regulatory text defining the term 
``review'' as used in section 401(a)(4).
    EPA emphasizes that section 401(a)(4) does not necessarily limit 
the certifying authority's ability to inspect facilities or activities 
before or during operation in accordance with the certifying 
authority's laws and regulations. The Agency is aware that states and 
Tribes may have their own authority to inspect a facility or activity 
to determine compliance with conditions set forth in a section 401 
certification. Similarly, section 401(a)(4) does not necessarily limit 
a Federal agency's ability to inspect a facility during the life of the 
license or permit pursuant to that Federal agency's laws and 
regulations.

K. Neighboring Jurisdictions

1. What is the Agency finalizing?
    The Agency is finalizing its proposed approach to the section 
401(a)(2) process, referred to as the neighboring jurisdictions 
process, with some modifications to the regulatory text for clarity. 
See 40 CFR part 121, subpart B.
    The Agency is adding text to Sec.  121.12 of the final rule, which 
provides the contents of a notification to the Regional Administrator, 
to clarify that Federal licensing and permitting agencies notify EPA 
upon receipt of a Federal license or permit application \96\ and 
certification or waiver by providing written notification to the 
``appropriate'' Regional Administrator. EPA is also modifying the 
proposed text of Sec.  121.13, which provided that a Federal license or 
permit ``may not be issued pending the conclusion of the process 
described'' in Sec. Sec.  121.14 and 121.15, to more clearly state that 
a Federal license or permit ``shall not be issued pending the 
conclusion of the process described'' in Sec.  121.13 (EPA's 
determination of effects on neighboring jurisdictions) as well as 
Sec. Sec.  121.14 and 121.15.\97\
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    \96\ See section IV.C.2 of the preamble regarding the 
expectation that the Federal license or permit application be 
complete. See section IV.K.2 of this preamble infra for further 
discussion about the contents of the Federal agency's notification 
to EPA.
    \97\ See section IV.K.2.d. of this preamble infra for further 
discussion of the requirement for the neighboring jurisdictions 
process to conclude before issuance of a license or permit by a 
Federal agency.
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    For purposes of language consistency and clarity, the Agency 
removed ``certified or waived'' from the proposed language of Sec.  
121.13(a), which stated that ``[w]ithin 30 days after the Regional 
Administrator receives notice in accordance with Sec.  121.12(a), the 
Regional Administrator shall determine whether a discharge from the 
certified or waived project may affect water quality in a neighboring 
jurisdiction.'' The removal of ``certified or waived'' is intended to 
remove redundancy, as Sec.  121.12(a) already states that the Federal 
agency shall provide written notification to the appropriate Regional 
Administrator ``[w]ithin five days of the date that it has received 
both the application and either a certification or waiver for a Federal 
license or permit,'' and to ensure conformity of the use of ``discharge 
from the project'' across subpart B.
    Additionally, EPA is finalizing most of Sec.  121.13(c), which 
provides the contents of the Regional Administrator's may affect 
notification, as proposed, except the Agency is revising the proposed 
language in Sec.  121.13(c)(3) to conform the statement that the Agency 
provides to notified neighboring jurisdictions more closely with the 
statutory text of section 401(a)(2) and provide greater clarity about 
notification needed for an objection. Rather than providing a statement 
that the notified neighboring jurisdiction ``has 60 days'' to provide 
written notification ``whether it has determined that the discharge 
will violate any of its water quality requirements,'' as proposed in 
Sec.  121.13(c)(3), the final rule states that the Agency provides a 
statement that the notified neighboring jurisdiction ``has 60 days 
after such notification'' from the Agency to provide written 
notification ``if it has determined that the discharge will violate any 
of its water quality requirements.'' 40 CFR 121.13(c)(3). This revision 
more closely reflects the statutory text of section 401(a)(2) which 
provides that a notified neighboring jurisdiction may object to 
issuance of a Federal license or permit ``[i]f, within sixty days after 
receipt'' of notification from the Agency it ``determines that such 
discharge will affect the quality of its waters so as to violate any 
water quality requirements.'' 33 U.S.C. 1341(a)(2). As a result, the 
text of Sec.  121.13(c)(3) of the final rule also more clearly conveys 
the statutory time

[[Page 66636]]

and content requirements of the notification needed for an objection 
than the proposed regulatory text.
    EPA is also modifying the proposed text of Sec. Sec.  121.13 and 
121.14 to remove language requiring the Administrator and notified 
neighboring jurisdiction to provide notification to the certifying 
authority during the neighboring jurisdictions process, to more closely 
reflect the statutory language in section 401(a)(2), which does not 
require such notification to the certifying authority in this process.
    Further, the Agency is modifying the proposed text of Sec. Sec.  
121.14 and 121.15 to clarify that references to a ``neighboring 
jurisdiction'' in these provisions refer to a ``notified'' neighboring 
jurisdiction, meaning a neighboring jurisdiction that has received 
notification that the Regional Administrator has determined that a 
discharge from the project may affect the neighboring jurisdiction's 
water quality. The proposed text of Sec.  121.14(a) referenced notice 
being provided to a neighboring jurisdiction ``in accordance with Sec.  
121.13(c),'' and the language in Sec. Sec.  121.14 and 121.15 referred 
to ``the neighboring jurisdiction'' or ``a neighboring jurisdiction'' 
without more explicitly stating that the provisions were addressing 
``notified'' neighboring jurisdictions. In the final rule, EPA is 
revising the internal citation in Sec.  121.14(a) to more appropriately 
reference Sec.  121.13(b), the provision in the final rule requiring 
the Regional Administrator to provide notification upon determining 
that discharge from the project may affect water quality in a 
neighboring jurisdiction. Likewise, EPA is revising the ``neighboring 
jurisdiction'' references in Sec. Sec.  121.14 and 121.15 to specify 
that these refer to a ``notified'' neighboring jurisdiction, to remove 
ambiguity and improve clarity in these sections.
    The Agency is also adding language to the provision in Sec.  121.15 
to clarify the process for the Federal agency to provide notice of a 
hearing on a section 401(a)(2) objection, and provide greater 
transparency as to how Federal agencies provide such notification. The 
proposed text of Sec.  121.15(b) required the Federal agency conducting 
a hearing on an objection from a neighboring jurisdiction to ``provide 
public notice at least 30 days in advance of the hearing.'' In the 
final rule, Sec.  121.15(b) requires the Federal agency in such 
circumstances to ``provide public notice at least 30 days in advance of 
the hearing to interested parties, including but not limited to the 
neighboring jurisdiction, the certifying authority, the project 
proponent, and the Regional Administrator.'' This addition clarifies 
that that such notice must go to interested parties to ensure that they 
can prepare for and provide their testimony or comments at the public 
hearing. It further provides a greater level of transparency regarding 
how all Federal licensing or permitting agencies will provide public 
notice of a hearing on an objection.
    Additionally, for purposes of improving the efficiency and clarity 
of the neighboring jurisdictions process in circumstances where a 
notified neighboring jurisdiction seeks to withdraw a previously issued 
objection, EPA is adding text in Sec. Sec.  121.14 and 121.15 of the 
final rule to allow for withdrawal of an objection in these 
circumstances. Specifically, Sec.  121.14(c) of the final rule provides 
that ``[t]he notified neighboring jurisdiction may withdraw its 
objection prior to the public hearing. If the notified neighboring 
jurisdiction withdraws its objection, it shall notify the Regional 
Administrator and the Federal agency, in writing, of such withdrawal.'' 
Consistently, EPA is adding text to Sec.  121.15(a) of the final rule, 
providing that the Federal licensing or permitting agency shall hold a 
public hearing on the notified neighboring jurisdiction's objection 
``unless the objection is withdrawn in accordance with Sec.  
121.14(c).'' As discussed further below, EPA finds that including a 
provision addressing withdrawal of an objection improves the efficiency 
of the neighboring jurisdictions process, as it recognizes the 
possibility that neighboring jurisdictions may be able to resolve 
objections before the hearing stage of the neighboring jurisdictions 
process, and conserves resources that would otherwise be expended to 
conduct and participate in such a hearing in these circumstances. 
Additionally, the added text regarding withdrawal of an objection in 
Sec. Sec.  121.14 and 121.15 of the final rule add clarity by 
establishing a uniform procedure for executing withdrawal of an 
objection.
    As discussed in greater detail below, EPA is finalizing its 
proposed approach to the definition of neighboring jurisdiction, the 
scope of the neighboring jurisdictions process, the circumstances 
initiating the neighboring jurisdictions process, and the timing in 
which a Federal licensing or permitting agency must provide 
notification to EPA pursuant to section 401(a)(2). The Agency is also 
maintaining its previously stated positions regarding the roles of the 
Federal licensing or permitting agency, EPA, and a neighboring 
jurisdiction in the neighboring jurisdictions process, but is providing 
some further discussion regarding certain aspects of these roles below 
to provide added clarity.
2. Summary of Final Rule Rationale and Public Comment
a. Definition of Neighboring Jurisdiction
    The Agency is finalizing the definition of neighboring jurisdiction 
at Sec.  121.1(g) as proposed. This final rule revises the definition 
of this term used in the 2020 Rule to clarify that it includes ``any 
state, or Tribe with treatment in a similar manner as a state for Clean 
Water Act section 401 in its entirety or only for Clean Water Act 
section 401(a)(2), other than the jurisdiction in which the discharge 
originates or will originate.'' See 40 CFR 121.1(g). In contrast, the 
definition of ``neighboring jurisdiction'' in the 2020 Rule 
inaccurately suggested that a neighboring jurisdiction may only include 
a state or TAS Tribe that EPA determines may be affected by a discharge 
from another jurisdiction. 40 CFR 121.1(i) (2020). As EPA noted in the 
proposed rule, a neighboring jurisdiction's status is not based upon 
EPA's ``may affect'' determination, but rather a neighboring 
jurisdiction has this status by being a jurisdiction other than the one 
where the discharge originates or will originate. Thus, the current 
definition is more consistent with the statutory text establishing the 
process set forth in section 401(a)(2) for purposes of considering the 
water quality effects to ``any other state'' than the previous 
definition for the 2020 Rule. The current definition also reflects the 
TAS provisions for Indian Tribes to administer section 401 that are 
being finalized in Sec.  121.11.
    A few commenters addressing the definition of neighboring 
jurisdiction in the proposed rule advocated for EPA to adopt a narrower 
definition of this term. EPA finds that a narrower definition of 
neighboring jurisdiction is not supported by the statutory text in 
section 401(a)(2), which establishes a process for considering water 
quality effects to ``any other state.'' This statutory language does 
not impose any other requirement on a neighboring jurisdiction other 
than not being the jurisdiction in which the discharge originates or 
will originate, meaning the jurisdiction with certifying authority. 
Accordingly, EPA declines to adopt a narrower definition of neighboring 
jurisdiction. Additionally, EPA notes that the definition of 
neighboring jurisdiction makes clear that this term is not limited to 
adjacent or downstream states or Tribes with TAS for section 401, 
consistent with the relevant statutory language in section 401(a)(2).

[[Page 66637]]

b. Scope of the Neighboring Jurisdictions Process
    The Agency is also maintaining in the final rule the interpretation 
of the scope of section 401(a)(2) stated in the proposed rule. In the 
proposed rule, EPA interpreted the scope of section 401(a)(2) as 
limited by the statutory language to considering potential effects only 
from a ``discharge'' from an activity, explaining that this is based 
upon the statutory language in section 401(a)(2) which limits EPA to 
considering whether a ``discharge'' from an activity may affect the 
water quality of a neighboring jurisdiction, and likewise limits a 
neighboring jurisdiction to determining whether a ``discharge'' from 
the activity will affect its water quality so as to violate any water 
quality requirements. 87 FR 35365 (June 9, 2022). A few commenters 
observed that EPA's proposed interpretation of the scope of section 
401(a)(2) differed from its proposed interpretation of the scope for 
certification, and one such commenter asserted that EPA's differing 
interpretations of scope for certification and the neighboring 
jurisdictions process in section 401(a)(2) is arbitrary. EPA disagrees.
    The neighboring jurisdictions process established in section 
401(a)(2) is distinct from the process for certification, which is a 
prior step in the statutory regime. Whereas the text of section 
401(a)(1) and section 401(d) refers to a ``certification'' of 
compliance with water quality requirements, the text of section 
401(a)(2) does not refer to the actions taken by the Administrator or a 
neighboring jurisdiction as ``certifications.'' Instead, the text of 
section 401(a)(2) is clear that the neighboring jurisdictions process 
is distinct from, and follows after, a ``certification'' made pursuant 
to section 401(a)(1) and section 401(d). EPA rejects the assertion that 
the scope of the neighboring jurisdictions process in section 401(a)(2) 
must be the same as the scope of certification, as there are different 
statutory provisions relating to certification and the neighboring 
jurisdictions process, and interpreting them the same would not be 
consistent with the language of these distinct statutory provisions. 
Section 401(d), which is key to EPA's conclusion regarding scope of 
certification, applies only to certification and not to the neighboring 
jurisdictions process established in section 401(a)(2). Likewise, the 
Supreme Court's reasoning in PUD No. 1 regarding the proper scope of 
certification (which EPA agrees with) does not extend to the 
neighboring jurisdictions process in section 401(a)(2).
    In contrast to statutory language pertaining to certification, 
which supports a broader scope, the text of section 401(a)(2) 
establishes that the Administrator and notified neighboring 
jurisdictions consider the potential discharges of the project. 
Specifically, pursuant to section 401(a)(2) the Administrator considers 
whether ``such a discharge'' may affect the water quality of a 
neighboring jurisdiction, and likewise, a notified neighboring 
jurisdiction considers whether ``such discharge'' will affect its water 
quality so as to violate water quality requirements. EPA interprets 
this language as limiting the neighboring jurisdictions process to 
discharges from the project. One commenter asserted that the scope of 
section 401(a)(2), outlining the neighboring jurisdictions process, is 
the same as section 401(a)(1), relating to certification, because 
section 401(a)(2) is inextricably linked to section 401(a)(1) through 
the use of ``such'' referring to the scope of discharges addressed in 
section 401(a)(1).
    While EPA agrees that the ``such'' language employed in section 
401(a)(2) refers to discharges from ``any activity'' subject to 
certification pursuant to section 401(a)(1), the Agency does not 
conclude that section 401(a)(1) compels the scope of the neighboring 
jurisdictions process to be the same as the scope of certification. As 
discussed above, the scope of certification is based, in part, upon 
statutory text within both section 401(a)(1) and section 401(d), and 
nothing in either of these statutory provisions or section 401(a)(2) 
compels the neighboring jurisdictions process to have the same scope as 
certification. This interpretation is also consistent with the 
legislative history regarding the neighboring jurisdictions process. 
The text of the neighboring jurisdictions process in the Water Quality 
Improvement Act of 1970 (in section 21(b)(2)) used ``such a discharge'' 
and ``such discharge'' language later employed in section 401(a)(2), 
even though the 1970 act used the term ``activity'' in place of 
``discharge'' in what is now section 401(a)(1). The ``discharge'' 
language for the neighboring jurisdictions process remained unchanged 
during the 1972 amendments that changed the language regarding 
certification from ``such activity'' to ``such discharge'' in CWA 
section 401(a)(1). The fact that the ``discharge'' language in section 
401(a)(2) remained consistent throughout amendments supports that 
Congress intended the scope of the neighboring jurisdictions process to 
consider ``discharges,'' and it adopted and maintained a statutory 
regime with differing scopes for certification and the neighboring 
jurisdictions process.
    EPA's interpretation of the scope of the neighboring jurisdictions 
process is further supported by procedural differences between this 
process and certification. Several procedural differences reflect a 
more limited authority for notified neighboring jurisdictions than that 
of certifying authorities. A more limited scope of review is consistent 
with the more limited nature of the neighboring jurisdictions process. 
As discussed further below, neighboring jurisdictions only receive 
notification under section 401(a)(2) when EPA determines that a 
discharge from the project may affect their water quality, unlike 
section 401(a)(1) certification where the project proponent for the 
Federal license or permit must request certification from the 
certifying authority regardless of the known or suspected potential 
impacts to water quality. Likewise, notified neighboring jurisdictions 
determine whether discharge from the project will affect the quality of 
their waters so as to violate any water quality requirements, a 
standard inverse to that of a certifying authority determining if it 
can certify compliance with water quality requirements pursuant to 
section 401(a)(1). This distinction matters because the neighboring 
jurisdiction must make an affirmative case to support a ``will affect'' 
determination, a higher bar than that of a certifying authority, which 
could deny certification because of a lack of information supporting a 
conclusion that the activity will comply with water quality 
requirements. Additionally, in contrast to the certification decision 
made by the certifying authority, the outcome of the neighboring 
jurisdictions process following a hearing is determined by the Federal 
licensing or permitting agency, based upon the recommendations of the 
neighboring jurisdiction and EPA, and any additional information 
presented at the hearing. Taken together, these procedural distinctions 
reflect a more limited authority for notified neighboring jurisdictions 
in the neighboring jurisdictions process than the role of a certifying 
authorities, which supports EPA's interpretation finding a more limited 
scope for the neighboring jurisdictions process.
    In addition to the differences between the extent of authority of a 
notified neighboring jurisdiction and a certifying authority, the 
statutory text of section

[[Page 66638]]

401 also reflects differences in the timing of the neighboring 
jurisdictions process compared to the timing of certification, which 
likewise support EPA's interpretation of differing scopes for these 
steps. In the neighboring jurisdictions process, both EPA and notified 
neighboring jurisdictions are provided less time to make determinations 
regarding the water quality effects to a neighboring jurisdiction (30 
days and 60 days, respectively) than a certifying authority has for 
acting on a request for certification (up to a year). The difference in 
the timing of determinations at these steps supports differing scopes, 
as it may be possible for EPA and notified neighboring jurisdictions to 
complete determinations in the more limited time provided for in the 
neighboring jurisdictions process based upon a more discrete analysis 
focused on discharges.
c. Circumstances Initiating the Neighboring Jurisdictions Process
    The Agency is finalizing its proposed approach to clarify that both 
grants of certification (with or without conditions) and waivers of 
certification initiate the neighboring jurisdictions process 
established by section 401(a)(2). Section 401(a)(2) provides that the 
Federal licensing or permitting agency must immediately notify the EPA 
Administrator upon receipt of a Federal license or permit application 
and certification. 33 U.S.C. 1341(a)(2). Under the 1971 Rule, EPA's 
section 401(a)(2) review was initiated upon receipt of either a 
certification or a waiver, which was treated as a substitute for 
certification. See 40 CFR 121.11, 121.16 (2019). In the 2020 Rule, 
EPA's section 401(a)(2) review was initiated only upon receipt of a 
certification. 40 CFR 121.12(a) (2020); see 85 FR 42287 (July 13, 
2020). Additionally, the 2020 Rule further provided that a Federal 
agency may issue a license or permit upon issuance of a written notice 
of waiver. 40 CFR 121.9(e) (2020). As proposed, EPA is returning to the 
approach taken in the 1971 Rule that the neighboring jurisdictions 
process is initiated by either a certification or waiver.
    Although the statutory text does not explicitly identify waiver of 
certification as an action that initiates the neighboring jurisdictions 
process in section 401(a)(2),\98\ the Agency maintains that it is 
reasonable to interpret the waiver of certification as a substitute for 
a grant of certification for purposes of section 401(a)(2) review for 
several reasons. First, this treatment is consistent with the purpose 
of section 401(a)(2). Section 401(a)(2) provides a mechanism for a 
notified neighboring jurisdiction to object to the issuance of a 
Federal license or permit when it determines that discharge from a 
project originating in another jurisdiction will affect the quality of 
its waters thus violating its water quality requirements. A waiver does 
not indicate a certifying authority's substantive opinion regarding the 
water quality implications (for itself or another jurisdiction) of a 
project subject to Federal licensing or permitting. Rather, a 
certifying authority may affirmatively waive certification for a 
variety of reasons, including a lack of resources to evaluate the 
project. In addition, a certifying authority may be deemed to have 
waived certification if that certifying authority fails or refuses to 
act on a request for certification before the end of the reasonable 
period of time. See section IV.F of this preamble for further 
discussion on waivers of certification. Ultimately a waiver of 
certification allows the Federal licensing or permitting agency to 
issue its license or permit without receipt of a water quality 
certification. As a result, a waived certification could result in 
water quality impacts that might violate a neighboring jurisdiction's 
water quality requirements. It is reasonable to afford a mechanism for 
EPA and a neighboring jurisdiction to evaluate that possibility.
---------------------------------------------------------------------------

    \98\ See 33 U.S.C. 1341(a)(2) (``Upon receipt of such 
application and certification the licensing or permitting agency 
shall immediately notify the Administrator of such application and 
certification.'') (emphasis added).
---------------------------------------------------------------------------

    Second, the approach taken under the 2020 Rule to exclude waivers 
from the neighboring jurisdictions process created a method for 
certifying authorities to circumvent the neighboring jurisdictions 
process in circumstances where they are aware of water quality concerns 
from a neighboring jurisdiction regarding a project. As noted above, 
EPA finds that section 401(a)(2) was established as a mechanism to 
allow notified neighboring jurisdictions an opportunity to object to 
the issuance of a Federal license or permit in circumstances where they 
find a discharge from the licensed or permitted project will violate 
their water quality requirements. EPA does not find that the statutory 
language of section 401(a)(2) supports such circumvention of the 
neighboring jurisdictions process, as this would thwart the very 
purpose of the process established by the statutory text.
    Finally, including waivers as actions initiating the neighboring 
jurisdictions process was the Agency's position for over 50 years prior 
to the 2020 Rule. See 40 CFR 121.16 (2019). The final rule provides 
clarification on when waiver of certification has occurred, allowing 
Federal agencies to provide EPA notice of the Federal license or permit 
application and waiver as required by Sec.  121.12 of the final rule. 
Therefore, consistent with the approach taken in the 1971 Rule, the 
Agency is restoring the interpretation that waivers, in addition to 
certifications, initiate the neighboring jurisdictions process 
established in section 401(a)(2).
    Accordingly, in Sec.  121.12(a) of the final rule, the Agency is 
clarifying that the neighboring jurisdictions process is initiated when 
the Federal agency ``has received both the application and either a 
certification or waiver for a Federal license or permit,'' and must 
provide notice to EPA. Additionally, as proposed, the Agency is 
removing the regulatory provision located at Sec.  121.9(e) of the 2020 
Rule, which provided that a Federal agency may issue a license or 
permit upon issuance of a written notice of waiver. As discussed above, 
under this final rule waivers of certification also initiate the 
neighboring jurisdictions process and EPA may make a ``may affect'' 
determination based upon a waiver of certification. See 40 CFR 
121.12(a). Consistent with the language at Sec.  121.13(d) of the final 
rule, a Federal agency shall not issue a Federal license or permit 
pending the conclusion of the neighboring jurisdictions process.
    Several commenters provided input on the proposed approach to have 
waiver initiate the neighboring jurisdictions process. A few commenters 
agreed that a waiver should initiate the neighboring jurisdictions 
process and asserted that this approach would improve the neighboring 
jurisdictions process. Conversely, a few other commenters argued that a 
waiver should not initiate the neighboring jurisdictions process and 
asserted that that there is no statutory basis for the inclusion of 
waivers in this process. One of these commenters added that expanding 
the notification process beyond what the statute provides would lead to 
needless process and delays.
    EPA disagrees with the assertion that the statute does not support 
waiver initiating the neighboring jurisdictions process established in 
section 401(a)(2). As explained above, EPA is interpreting waiver of 
certification as a substitute for a grant of certification for purposes 
of section 401(a)(2) based upon the purpose of this statutory 
provision.\99\

[[Page 66639]]

Employing a more restrictive interpretation would otherwise allow 
certifying authorities to circumvent the neighboring jurisdictions 
process by waiving certification on projects affecting the water 
quality of neighboring jurisdictions, which is counter to the purpose 
of the process established in section 401(a)(2). Additionally, EPA also 
does not agree that this interpretation will result in unnecessary 
delays for Federal licensing or permitting because the statute limits 
the time EPA and the notified neighboring jurisdiction have to respond 
to a notification (30 days and 60 days, respectively). Further, as the 
process established by section 401(a)(2) provides an important 
mechanism for notified neighboring jurisdictions to meaningfully engage 
with Federal agencies on objections where they find a discharge from a 
project will violate their water quality requirements, EPA does not 
find this approach results in unreasonable process.
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    \99\ In fact, the language in section 401(a)(1) describes 
waivers of certification as a substitute for a granted certification 
because the Federal licensing or permitting agency is unable to 
proceed with their licensing or permitting process ``until the 
certification required by [section 401(a)(1)] has been obtained or 
has been waived.'' 33 U.S.C. 1341(a)(1). By listing the two 
scenarios under which the process continues, it is reasonable to 
consider a waiver of certification as a substitute for a 
certification.
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d. Neighboring Jurisdictions Process Must Conclude Before Federal 
License or Permit Issuance
    The proposed text of Sec.  121.13(d) included language intended to 
explain that the neighboring jurisdictions process must conclude before 
a Federal agency issues a license or permit, stating that ``[a] Federal 
license or permit may not be issued pending the conclusion of the 
process described in Sec. Sec.  121.14 and 121.15.'' This proposed text 
retained language similar to Sec.  121.12(c) of the 2020 Rule, which 
stated that ``[t]he federal license or permit may not be issued pending 
the conclusion of the processes.'' 40 CFR 121.12(c) (2020). The Agency 
is modifying the proposed text of Sec.  121.13 to more clearly state 
that a Federal agency is prohibited from issuing a license or permit 
subject to section 401 certification pending conclusion of the 
neighboring jurisdictions processes addressed in Sec. Sec.  121.13, 
121.14, and 121.15. Specifically, EPA changed the proposed text of 
Sec.  121.13(d) from providing that the Federal license or permit ``may 
not be'' issued pending the conclusion of the neighboring jurisdictions 
process to more directly stating that the Federal license or permit 
``shall not be'' issued pending the conclusion of the neighboring 
jurisdictions process. Further, EPA modified the text of Sec.  121.13 
to make clear that the neighboring jurisdictions process includes the 
processes described in Sec. Sec.  121.13, 121.14, and 121.15. These 
changes are consistent with the proposed regulatory text, but provide 
further clarity that pursuant to Sec.  121.13, and the statutory text 
of section 401(a)(2), a Federal agency cannot proceed with issuing its 
license or permit until the neighboring jurisdictions process set forth 
in Sec. Sec.  121.13, 121.14, and 121.15 has concluded.
    In practical terms, this means that Federal agencies must wait to 
issue a Federal license or permit until the neighboring jurisdictions 
process has concluded. The neighboring jurisdictions process may 
conclude in several different ways, depending on factual and procedural 
circumstances. One way the neighboring jurisdictions process concludes 
occurs when the appropriate Regional Administrator has completed the 
``may affect'' determination within 30 days after receiving notice from 
the Federal agency, pursuant to Sec.  121.13(a), without making a ``may 
affect'' finding. In such circumstances, the neighboring jurisdictions 
process has concluded, and the Federal agency may proceed with issuing 
the Federal license or permit without waiting for further proceedings.
    In contrast, when the appropriate Regional Administrator completes 
the ``may affect'' determination by making a ``may affect'' finding and 
provides notification of this finding pursuant to Sec.  121.13(b), the 
Federal agency must wait to issue the Federal license or permit until 
the notified neighboring jurisdiction has made a ``will violate'' 
determination, pursuant to Sec.  121.14, within 60 days of the 
notification from EPA pursuant to Sec.  121.13, or this time period has 
passed. Where a notified neighboring jurisdiction has determined that a 
discharge will violate its water quality requirements and has provided 
notification of its objection and request for hearing pursuant to Sec.  
121.14(a) and (b), the Federal agency cannot issue the license or 
permit until either the public hearing process described in Sec.  
121.15 is completed, or the notified neighboring jurisdiction withdraws 
its objection pursuant to Sec.  121.14(c).
    A few commenters raised concerns regarding the neighboring 
jurisdictions process delaying the issuance of Federal licenses or 
permits. Additionally, a commenter asserted that EPA should consider 
only requiring the neighboring jurisdictions process for larger, 
complex individual permit projects because of wide-ranging implications 
of this process. The Agency notes that the neighboring jurisdictions 
process is a component of the section 401 statutory regime established 
by section 401(a)(2) and is not a regulatory creation by EPA.\100\ 
Moreover, as section 401(a)(2) sets timelines for certain actions in 
the neighboring jurisdictions process, it is clear from the statutory 
text that Congress considered the timing of this process when it was 
established. As discussed further below, EPA is adding clarity 
regarding the procedures involved in the neighboring jurisdictions 
process in the final rule, which are intended to improve efficiency and 
reduce the time necessary for this process. EPA also finds no basis in 
the statutory text supporting an exception to this process for general 
permits or less complex individual permits. Instead, the type of 
project and discharge covered in the Federal license or permit are 
factors that may be considered by EPA and any notified neighboring 
jurisdictions in their determinations regarding the water quality 
effects of a discharge from a project in the neighboring jurisdictions 
process.
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    \100\ Several commenters suggested that the neighboring 
jurisdictions process resulted, in part, from the 1971 Rule. As 
discussed, the statutory text of section 401(a)(2) establishes this 
process.
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e. Federal Licensing or Permitting Agency's Role in Initiating the 
Neighboring Jurisdictions Process
    Section 401(a)(2) requires the Federal licensing or permitting 
agency to notify EPA immediately upon receipt of a Federal license or 
permit application and the related section 401 water quality 
certification. 33 U.S.C. 1341(a)(2). This notification from the Federal 
agency commences the remaining steps of the neighboring jurisdictions 
process addressed in section 401(a)(2) and discussed in Sec. Sec.  
121.13, 121.14, and 121.15 of the final rule. The 1971 Rule established 
some procedural requirements for this notification process, which EPA 
updated in the 2020 Rule. The 2020 Rule included additional specificity 
on the timing of Federal agency notification but did not contain a 
standardized process for notification. 40 CFR 121.12(a) (2020). 
Instead, under the 2020 Rule, EPA relied on Federal agencies to develop 
notification processes and procedures that work within their licensing 
or permitting programs. 85 FR 42273.
    In the proposed rule, the Agency likewise proposed regulatory text 
to

[[Page 66640]]

provide clarity regarding the timing by which a Federal agency must 
provide notification to EPA pursuant to section 401(a)(2), and further 
proposed additional procedures for Federal agencies to follow when 
providing notification to EPA. In the final rule, EPA is maintaining 
its interpretation of the timing for Federal agencies to provide 
notification pursuant to the statutory text in section 401(a)(2), and 
otherwise finalizing the proposed procedures for Federal agencies to 
follow when providing notification to EPA with some minor changes to 
the text of Sec.  121.12 and the deletion of the definition of 
``application'' proposed at Sec.  121.1(c).
i. Timing of Notice From a Federal Agency
    As noted, to initiate the neighboring jurisdictions process, a 
Federal licensing or permitting agency must ``immediately'' notify EPA 
when it receives a Federal license or permit application and a section 
401 certification. 33 U.S.C. 1341(a)(2). EPA is finalizing its proposed 
interpretation of ``immediately'' to mean within five calendar days of 
the Federal agency's receipt of the application for a Federal license 
or permit and either receipt of certification or waiver. This approach 
retains the same interpretation of ``immediately'' used in the 2020 
Rule. 40 CFR 121.12(a) (2020); see 85 FR 42273.
    EPA is also finalizing the regulatory text in Sec.  121.12(a) of 
the final rule providing that ``[w]ithin five days of the date that it 
has received both the application and either a certification or waiver 
for a Federal license or permit, the Federal agency shall provide 
written notification to the appropriate Regional Administrator.'' EPA 
is finalizing this provision with only minor changes from the proposal 
for added clarity. Specifically, EPA added language to specify that the 
Federal agency shall provide the written notification to the 
``appropriate'' Regional Administrator, but otherwise maintained the 
proposed text providing that the period for the Federal agency to 
provide such notification commences upon ``the date that it has 
received both the application and either a certification or waiver.'' 
See 87 FR 35380.
    As previously discussed, this provision reflects EPA's 
interpretation that the neighboring jurisdictions process set forth in 
section 401(a)(2) is initiated by either certification or waiver. See 
supra for further discussion on actions initiating the neighboring 
jurisdictions process. It further makes clear that the Federal agency 
is only considered to be in receipt of an application for a Federal 
license or permit and certification within the meaning of section 
401(a)(2) when such agency has received both an application for a 
Federal license or a permit, as discussed above, and has either 
received a corresponding certification or a waiver has occurred.\101\
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    \101\ Although this statutory language is unambiguous, EPA is 
further discussing when receipt occurs due to questions and 
conflicting practices among Federal licensing and permitting 
agencies. For example, some Federal agencies provide notice to EPA 
concurrently with its public notice on the licensed or permitted 
application, see, e.g., 33 CFR 325.2(b)(1)(i) (``The public notice 
for such activity . . . will serve as the notification to the 
Administrator . . . pursuant to section 401(a)(2) of the Clean Water 
Act.''). Such practices are not consistent with the statutory 
language or this final rule. It is necessary that certification or 
waiver occur for EPA to make a determination as to whether a 
discharge from the activity ``may affect'' the water quality of a 
neighboring jurisdiction under section 401(a)(2), as EPA only makes 
such a determination where certification or waiver has occurred, and 
considers any conditions included in a certification in making this 
determination.
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    EPA received several comments on its proposal to retain the five-
day interpretation of ``immediately'' in the context of section 
401(a)(2). A few commenters agreed with EPA maintaining the five-day 
interpretation of immediately, asserting that this period was adequate 
for such notice and consistent with the statutory language. However, 
one commenter argued that providing Federal agencies with five calendar 
days to notify EPA is an unrealistic timeframe, and asked EPA to 
consider interpreting ``immediately'' as five business days or ten 
calendar days. EPA disagrees that the five-day period is unrealistic. 
EPA did not encounter significant challenges in implementing this 
interpretation in the 2020 Rule. The Agency finds five days a prompt 
yet reasonable amount of time for Federal agencies to complete 
notification to EPA pursuant to section 401(a)(2). This interpretation 
reflects the urgency connotated in the statutory language of section 
401(a)(2), while also recognizing that the Federal agency needs some 
amount of time to process receipt of the Federal license or permit 
application and certification or waiver from the project proponent or 
certifying authority, and then transmit notice to the appropriate EPA 
regional office. Additionally, EPA finds that this approach provides 
clarity to Federal agencies regarding the timing of notification to EPA 
pursuant to section 401(a)(2), and also ensures consistency in 
practices across Federal licensing and permitting agencies.
    Several commenters discussed the proposed language, finalized in 
Sec.  121.12(a) of the final rule, which establishes that a Federal 
agency's obligation to provide notification to EPA only commences upon 
the Federal agency's receipt of both the Federal license or permit 
application and either certification or waiver. One commenter agreed 
with this approach, noting that the Agency's clarification on this 
point will ensure that EPA and neighboring jurisdictions have necessary 
information to make determinations within the neighboring jurisdictions 
process, and that this otherwise addresses confusion and information 
gaps caused by prior inconsistent information sharing practices. A few 
commenters, however, suggested that the Federal agency should be able 
to provide notification to EPA prior to receipt of certification, such 
as upon a receipt of an application for a Federal license or permit and 
a request for certification. One such commenter argued that requiring 
the Federal agency to be in receipt of both the Federal license or 
permit application and certification before notifying EPA would 
increase delays in the Federal licensing or permitting process. EPA 
disagrees that notification provided by a Federal agency prior to 
receipt of certification satisfies the notification requirement in 
section 401(a)(2), as this is inconsistent with the statutory language, 
which provides that the Federal agency shall provide notification 
``[u]pon receipt of such application and certification.'' As a result, 
notification prior to receipt of certification or waiver would not be 
sufficient to satisfy a Federal agency's obligation pursuant to section 
401(a)(2). Furthermore, EPA disagrees that notification after a Federal 
agency receives a certification decision will increase delays in the 
Federal licensing or permitting process. Rather, a certification 
decision may render the need to notify EPA under section 401(a)(2) moot 
(i.e., denial) or it may inform EPA's analysis for its ``may affect'' 
determination and make it unnecessary to make a ``may affect'' finding 
(i.e., a certification with conditions).
    A few commenters argued that requiring Federal agencies to provide 
notification to EPA after receipt of a certification precluded Federal 
agencies from providing notification to EPA earlier (e.g., after 
receipt of an application for a Federal license or permit), therefore 
prohibiting Federal agencies from engaging in early coordination with 
EPA. However, this is not correct. Nothing in the proposed text, or 
final rule, prevents a Federal agency from providing notification to 
EPA of a Federal license or permit

[[Page 66641]]

application for purposes of early coordination. Rather, such notice for 
coordination purposes does not satisfy the requirement that the Federal 
agency provide notification to EPA upon receipt of the Federal license 
or permit application and certification or waiver, pursuant to Sec.  
121.12 of the final rule, and would not commence the 30-day period for 
EPA's ``may affect'' determination pursuant to section 401(a)(2). Thus, 
EPA is providing this clarification in the final rule.
    With regard to the meaning of ``application'' for purposes of 
section 401(a)(2), the Agency is maintaining the position stated in the 
proposed rule that within this context the term ``application'' is used 
to refer to the ``application for such Federal license or permit.'' See 
87 FR 35366. Section 401 uses the term ``application'' throughout 
section 401(a); however, when read in context, the term is used for 
both ``applications for certification'' and ``applications for such 
Federal license or permit.'' 33 U.S.C. 1341(a)(1)-(2). The Agency 
considers the ``request for certification'' to be an ``application for 
certification.'' See section IV.C in this preamble for further 
discussion on request for certification. The context of the relevant 
statutory language in section 401(a)(2), directing the Federal agency 
to provide notification to EPA ``[u]pon receipt of such application and 
certification,'' reflects that this use of the term ``application'' 
refers to ``application for such Federal license or permit,'' rather 
than ``application for certification.'' Id. at 1341(a)(2). Accordingly, 
the obligation for the Federal agency to provide notification to EPA 
pursuant to section 401(a)(2) is initiated upon receipt of both a 
Federal license or permit application and either a section 401 
certification or a waiver of certification.
    In the proposed rule, EPA noted that there are instances where a 
Federal license or permit application does not accompany a 
certification or waiver, and therefore proposed to define the term 
``application'' to mean ``an application for a license or permit 
submitted to a Federal agency, or if available, the draft license or 
permit'' to account for differing Federal licensing or permitting 
practices. EPA received a few comments related to this definition in 
the context of the Federal agency providing notification to EPA 
pursuant to section 401(a)(2). One commenter argued that EPA should not 
require the Federal agency to have a draft Federal license or permit 
when it notifies EPA under the neighboring jurisdictions process. In 
contrast, another commenter supported draft Federal licenses or permits 
being included in notification to EPA where such drafts are provided 
before a certification decision. However, as previously discussed, in 
the context of requests for certification, many commenters opposed to 
EPA's proposed approach of requiring the project proponent to include 
the draft Federal license or permit in all requests for certification. 
As a result, EPA is finalizing a bifurcated approach. A project 
proponent seeking certification on the issuance of a general license or 
permit must submit a copy of the draft Federal license or permit in its 
request for certification. A project proponent seeking certification on 
an individual license or permit must submit a copy of the Federal 
license or permit application in its request for certification. See 
section IV.C in this preamble for discussion on bifurcated request for 
certification process; 40 CFR 121.5(a). As a result of the comments 
received related to the proposed definition of ``application'' and 
finalized approach regarding use of draft Federal licenses or permits 
in the request for certification context, EPA is not finalizing the 
proposed definition of the term ``application'' in the proposed rule. 
Although the Agency is not proposing a definition of the term 
``application'' in the final rule, it recognizes that with respect to 
general Federal licenses and permits, there is no formal 
``application,'' and for that reason acknowledges that Federal agencies 
may provide a draft Federal license or permit in notification to EPA 
pursuant to section 401(a)(2).\102\
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    \102\ For this final rulemaking, EPA is not suggesting that 
Corps civil works projects are exempt from neighboring jurisdictions 
processes, even though there are no ``applications'' or draft 
Federal licenses or permits. Rather, EPA expects the Corps to 
determine how best to comply with all section 401 requirements. 
Compliance may involve the Corps sending a project study in 
conjunction with a certification or a waiver of certification.
---------------------------------------------------------------------------

ii. Contents of Notification From a Federal Agency
    Although the text of section 401(a)(2) requires a Federal agency to 
notify EPA upon receipt of a Federal license or permit application and 
certification,\103\ it does not define the contents of such 
notification. 33 U.S.C. 1341(a)(2). The 1971 Rule and 2020 Rule 
provided some direction on information that could be submitted to EPA 
as part of the neighboring jurisdictions process, but neither 
regulation defined the contents of the section 401(a)(2) notification. 
See 40 CFR 121.12(b) (2020); 40 CFR 121.13 (2019).
---------------------------------------------------------------------------

    \103\ As previously discussed, EPA interprets the waiver of 
certification as a substitute for a grant of certification for 
purposes of section 401(a)(2). See section IV.K.2.c. of this 
preamble for further discussion of this interpretation.
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    The 1971 Rule provided that upon receipt of an application for a 
license or permit with an accompanying certification, the Federal 
agency shall forward copies of the application and certification to the 
Regional Administrator. 40 CFR 121.11 (2019). It further stated that 
only those portions of the application which relate to water quality 
shall be forwarded to the Regional Administrator and allowed for the 
Regional Administrator to ask for supplemental information if the 
documents forwarded did not contain sufficient information to make the 
determination provided for in Sec.  121.13. See 40 CFR 121.12 and 
121.13 (2019). In the preamble to the 2020 Rule, EPA stated its 
expectation that Federal agencies would develop notification processes 
and procedures, but noted that the Administrator could request copies 
of the certification and Federal license or permit application. 85 FR 
42273. During implementation of the 2020 Rule, some but not all 
agencies developed their own procedures, and such procedures varied 
between Federal agencies and across the country.
    EPA is finalizing its proposed approach to add regulatory text 
defining the minimum level of information that must be included in the 
notification to EPA to provide consistency in practices across Federal 
agencies and to streamline the notification process. In Sec.  
121.12(a), the Agency provides that the notification must be in writing 
and contain a general description of the proposed project, including 
but not limited to the Federal license or permit identifier, project 
location information (e.g., latitude and longitude), a project summary 
including the nature of any discharge and size or scope of activity, 
and whether the Federal agency is aware of any neighboring jurisdiction 
providing comment on the project. If the Federal agency is aware that a 
neighboring jurisdiction provided comment about the project, the 
notification shall include a copy of those comments. 40 CFR 
121.12(a)(2). Additionally, the notification shall include a copy of 
the certification or notice of waiver, and the Federal license or 
permit application. 40 CFR 121.12(a)(1).
    EPA is also finalizing the proposed approach allowing the Regional 
Administrator to submit a written request to a Federal agency upon 
determining there is a need for supplemental information to make a 
determination about potential neighboring jurisdiction effects pursuant 
to section 401(a)(2). 40 CFR

[[Page 66642]]

121.12(b). This provision allows the Regional Administrator to request 
that such information be provided in a timely manner for EPA's ``may 
affect'' determination and provides that the Federal agency ``shall 
obtain that information from the project proponent and forward the 
additional information to the Administrator within such timeframe.'' 
Likewise, the Agency is finalizing the proposed language allowing the 
Regional Administrator to develop agreements with Federal agencies to 
refine the notification process and the provision of supplemental 
information, in Sec.  121.12(c) of the final rule.
    One commenter addressing these proposed provisions argued that the 
Federal agency should not be required to provide EPA with any 
information other than the certification or waiver of certification and 
the Federal license or permit application, because requiring such 
information would exceed EPA's authority under section 401(a)(2) and 
could result in burden on the Federal agency and the applicant. The 
commenter further asserted that if the final rule includes supplemental 
information requirements for section 401(a)(2) notification, then such 
information should be limited to existing information that is readily 
available. EPA disagrees that the provision in Sec.  121.12(b) of the 
final rule allowing the Regional Administrator to request supplemental 
information where needed to make a ``may affect'' determination exceeds 
the Agency's statutory authority pursuant to section 401(a)(2). The 
statutory text of section 401(a)(2) does not preclude the Agency from 
seeking supplemental information in such circumstances, and otherwise 
does not limit what information the Agency considers in making a ``may 
affect'' determination. See 33 U.S.C. 1341(a)(2). Additionally, the 
Agency finds that as a practical matter, it is both reasonable and in 
the best interests of the Federal licensing or permitting agency and 
the project proponent for the Agency to have adequate information to 
inform its ``may affect'' determination. Although EPA is not creating 
formalized strictures on the supplemental information the Regional 
Administrator may request pursuant to Sec.  121.12(b) of the final 
rule, given the uncertainty of addressing unknown circumstances 
necessitating such supplemental information, it generally anticipates 
that such supplemental information would be information readily 
available to the Federal agency or project proponent.
f. EPA's Role Under Section 401(a)(2)
    Section 401(a)(2) provides that whenever a discharge ``may affect, 
as determined by the Administrator, the quality of the waters of any 
other State,'' the Administrator must notify the neighboring 
jurisdiction, Federal agency, and the project proponent of the 
determination within thirty days of the date of notice of the 
application. 33 U.S.C. 1341(a)(2). In Sec.  121.13 of the final rule, 
EPA is finalizing its proposed approach to making a ``may affect'' 
determination and providing notification of a determination that a 
discharge from a project may affect the water quality of a neighboring 
jurisdiction, although it is doing so with changes to the proposed 
regulatory text to omit the requirement that EPA provide such notice to 
a certifying authority, and to provide further clarification that a 
Federal license or permit cannot be issued without the neighboring 
jurisdictions processes concluding, as discussed above. EPA is 
otherwise maintaining its positions regarding the requirement that EPA 
make a ``may affect'' determination, the timing of this determination 
and notification, the meaning of ``may affect'' and EPA's ``may 
affect'' analysis, and procedural and content requirements of ``may 
affect'' notification, as reflected in Sec.  121.13 of the final rule 
and discussed further below.
i. Requirement for EPA To Make ``May Affect'' Determination
    At proposal, EPA stated its interpretation that the statutory text 
of section 401(a)(2) requires the Agency to determine whether a 
discharge ``may affect'' a neighboring jurisdiction once it receives 
notification of the application and certification or waiver. 87 FR 
35367. Therefore, EPA proposed regulatory text in Sec.  121.13(a) 
providing that the Regional Administrator ``shall determine whether a 
discharge from the certified or waived project may affect water quality 
in a neighboring jurisdiction.'' EPA is finalizing the proposed 
language in Sec.  121.13(a) of the final rule with revisions to remove 
the term ``certified or waived.'' The removal of ``certified or 
waived'' is intended to ensure language conformity across subpart B, 
and remove redundancy, as Sec.  121.12(a) of the final rule already 
states that once the Federal agency ``has received both the application 
and either a certification or waiver,'' the Federal agency ``shall 
provide written notification to the appropriate Regional 
Administrator.'' 40 CFR 121.12(a) (emphasis added).
    Under the 1971 Rule, the Regional Administrator was required to 
review the Federal license or permit application, the certification, 
and any supplemental information provided to EPA, and, if the Regional 
Administrator determined that there was ``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 would notify the affected jurisdictions within thirty 
days of receipt of the Federal license or permit application materials 
and certification. See 40 CFR 121.13 (2019). Similarly, the 2020 Rule 
acknowledged EPA's responsibility to notify a neighboring jurisdiction 
whenever it determined that a discharge from the certified activity may 
affect the water quality of the neighboring jurisdiction. 40 CFR 
121.12(b) (2020); 85 FR 42274. However, the 2020 Rule asserted that it 
was within the Agency's discretion whether to make a ``may affect'' 
determination in the first place, and that EPA was, therefore, not 
required to make such a determination. 85 FR 42273.
    To date, EPA is only aware that one Federal district court has 
addressed EPA's obligation to make a determination pursuant to section 
401(a)(2). In Fond du Lac Band of Lake Superior Chippewa v. Wheeler, 
519 F. Supp. 3d 549 (D. Minn. 2021), the court addressed two issues 
concerning section 401(a)(2): (1) whether EPA is required to make a 
``may affect'' determination and (2) whether EPA's ``may affect'' 
determination is judicially reviewable. The court concluded that EPA is 
required to determine whether the discharge may affect the quality of a 
neighboring jurisdiction's waters pursuant to section 401(a)(2). In 
coming to this conclusion, the court examined the statutory text and 
found that it requires EPA to make ``a discrete factual determination . 
. . within a specific timeframe . . . based on an application and 
certification. . . .'' Id. at 564. The court found that ``the existence 
of such a clear and limited timeframe supports the argument that the 
statute imposes a duty on EPA to make a `may affect' determination.'' 
Id. Further, the court concluded that Federal courts have the 
jurisdiction to review EPA's ``may affect'' determination.\104\
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    \104\ Notably, the court in Fond du Lac did not opine on the 
specific meaning of ``may affect'' or factors that EPA should 
consider in making a ``may affect'' determination. See 519 F. Supp. 
3d 549.
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    The Agency agrees with the court in Fond du Lac that EPA, pursuant 
to section 401(a)(2), must determine whether a discharge ``may affect'' 
a

[[Page 66643]]

neighboring jurisdiction once it receives notification of the Federal 
license or permit application and certification or waiver from the 
Federal agency consistent with Sec.  121.12(a) of the final rule. As 
discussed by the court in Fond du Lac, the statutory language in 
section 401(a)(2), which requires the Agency to provide notification 
within a set timeframe to a neighboring jurisdiction when it finds that 
discharge from the project may affect its water quality, supports 
finding that EPA is required to make a ``may affect'' determination. 
See Fond du Lac, 519 F.Supp.3d at 563-64. Accordingly, the Agency is 
finalizing language in Sec.  121.13(a) of the final rule, with the 
modifications discussed above, to reflect this interpretation and 
clarify that the Regional Administrator shall make this determination, 
consistent with the Agency's interpretation of section 401(a)(2).
    EPA received comments regarding its interpretation of section 
401(a)(2) requiring the Agency to make a ``may affect'' determination, 
and commenters were divided on whether EPA is required to make a ``may 
affect'' determination. Some commenters agreed with EPA's 
interpretation and the language in the proposal stating that section 
401(a)(2) requires EPA to make a ``may affect'' determination upon 
receiving notice from the Federal licensing or permitting agency. 
Reasons cited for supporting this position included the rationale 
provided by the court in Fond du Lac, cited by some commenters, and the 
assertion that this approach better allows neighboring jurisdictions to 
protect their water quality and provides transparency regarding the 
Agency's actions.
    Some other commenters asserted that section 401 provides EPA 
discretion whether to make a ``may affect'' determination, and that EPA 
need not make this determination with regard to all Federal licenses or 
permits subject to section 401. In addition to asserting the position, 
taken in the 2020 Rule, that the statutory language provides EPA 
discretion as to whether to make a ``may affect'' determination, some 
of these commenters otherwise argued that requiring EPA to make a ``may 
affect'' determination for all Federal licenses or permits subject to 
section 401 would be an inefficient use of EPA resources and would 
result in unnecessary delays in the Federal licensing or permitting 
process.
    EPA finds that the statutory language in section 401(a)(2) provides 
EPA discretion when making a ``may affect'' determination. However, the 
Agency does not agree that the statutory text provides EPA with 
discretion to decide that the Agency will not make a may affect 
determination following appropriate notification from the Federal 
agency. As noted by the court in Fond du Lac, this interpretation would 
be inconsistent with the statutory text of section 401(a)(2) directing 
the Agency to provide notification within a set timeframe to a 
neighboring jurisdiction when it finds that a discharge from a project 
may affect its water quality. See Fond du Lac, 519 F.Supp.3d at 563 
(noting that it would be odd ``if a decisionmaker . . . was mandated by 
law to do everything that was necessary to make a particular type of 
decision . . . but was not mandated by law to actually make the 
decision.''). Given the Agency's interpretation that it is required to 
make a ``may affect'' determination upon appropriate notification from 
the Federal licensing or permitting agency pursuant to section 
401(a)(2), the Agency finds that use of resources for this purpose is 
necessary to comply with the statute. Finally, the Agency rejects the 
argument that making ``may affect'' determinations in accordance with 
Sec.  121.13(a) of the final rule will add unnecessary delays to the 
Federal licensing or permitting process, as the Agency is finding that 
it is required to make a ``may affect'' determination pursuant to 
section 401(a)(2), and the statutory text provides a set, relatively 
short, timeframe for the Agency to make this determination (30 days). 
See 33 U.S.C. 1341(a)(2).
ii. Timing of EPA's ``May Affect'' Determination and Notification
    As previously discussed, section 401(a)(2) requires EPA to provide 
notification ``within thirty days of the date of notice of application 
for such Federal license or permit'' to the neighboring jurisdiction, 
the Federal Agency, and the project proponent whenever it determines 
that a discharge from a project may affect the water quality of a 
neighboring jurisdiction. 33 U.S.C. 1341(a)(2). EPA finds that the 
``notice of application for such license or permit'' references the 
prior statutory text of section 401(a)(2) requiring the Federal agency 
to immediately notify the Administrator ``[u]pon receipt of such 
application and certification.'' See section IV.K.2.e in this preamble 
for discussion regarding timing of Federal agency notification to EPA 
pursuant to section 401(a)(2). Accordingly, EPA finds that section 
401(a)(2) provides EPA with a 30-day period to make its ``may affect'' 
determination and provide any required notification after receiving 
notice from the Federal agency of the Federal license or permit 
application and certification or waiver. EPA has, therefore, 
incorporated this 30-day period into the provisions it is finalizing in 
Sec.  121.13(a) and (b) regarding its ``may affect'' determination and 
``may affect'' notification, as it proposed. This is consistent with 
the approach taken in the 2020 Rule, which also provided a 30-day 
period for the EPA to make a ``may affect'' determination and provide 
``may affect'' notification following appropriate notice from the 
Federal agency. See 40 CFR 121.12 (2020).
    A few commenters discussed the period EPA is provided to make a 
``may affect'' determination or ``may affect'' notification. One 
commenter argued that 30 days is too long of a period for EPA to make 
``may affect'' determinations, and suggested EPA limit the timeframe to 
complete these determinations to 15 days. Another commenter requested 
that EPA establish a reasonable period of time to provide notification 
to the Federal agency and certifying authority calculated from the date 
the individual certification is issued for purposes of avoiding 
unnecessary permitting delays. As discussed above, the statute provides 
EPA with a 30-day period to make a ``may affect'' determination and 
provide any required notification, and EPA declines to shorten the time 
period for the Agency to take such actions. EPA notes that the 2020 
Rule also provided a 30-day timeframe for the Agency to perform these 
actions, and EPA did not find that this approach resulted in 
unnecessary Federal licensing or permitting delays. Accordingly, the 
Agency finds it reasonable to retain the 30-day period reflected in 
statute for making a ``may affect'' determination and providing any 
required notification.
iii. EPA's ``May Affect'' Determination and ``May Affect'' Standard
    Section 401(a)(2) provides that EPA makes the ``may affect'' 
determination in the neighboring jurisdictions process, as discussed 
above, but notably does not delineate specific factors for the Agency 
to consider in determining whether a discharge from a project may 
affect the water quality of a neighboring jurisdiction. See 33 U.S.C. 
1341(a)(2). Likewise, the 2020 Rule did not address in either preamble 
or regulatory text whether there are specific factors that the EPA 
considers in making a ``may affect'' determination or whether any other 
interested party can be involved in making this determination. See 85 
FR 42273. During the pre-proposal outreach, stakeholders raised 
concerns that EPA had not clearly identified what factors it intended 
to use in determining whether a discharge ``may affect'' the water 
quality of a neighboring jurisdiction. Stakeholders also objected

[[Page 66644]]

to EPA asserting sole discretion over this ``may affect'' determination 
without obtaining input from the neighboring jurisdiction or other 
stakeholders.
    In the preamble to the proposed rule, EPA asserted that the Agency, 
in making a ``may affect'' determination, has discretion to look at a 
variety of factors depending on the type of Federal license or permit 
and discharge. 87 FR 35367. EPA further stated that factors it may 
consider in making a ``may affect'' determination include but are not 
limited to the type of project and discharge covered in the Federal 
license or permit, the proximity of the project and discharge to other 
jurisdictions, certification conditions and other conditions already 
contained in the draft Federal license or permit, and the neighboring 
jurisdiction's water quality requirements. 87 FR 35367-68. The Agency 
clarified that it was not proposing to identify specific factors EPA 
must analyze in making a ``may affect'' determination, given the range 
of Federal licenses or permits that are covered by CWA section 
401(a)(2) and EPA's discretion to look at various factors. 87 FR 35368. 
The Agency noted that each ``may affect'' determination is likely to be 
fact-dependent and based on situation-specific circumstances and 
expressed uncertainty that it could provide a required list of factors 
for it to consider in making a ``may affect'' determination. Id. 
However, the Agency solicited comment on whether such a list of 
specific factors that EPA must consider in making a ``may affect'' 
determination should be set forth in regulation and, if so, what 
factors should be included. Id.
    Additionally, in the proposal, the Agency clarified its position 
that it has sole discretion under section 401(a)(2) to examine the 
facts and determine whether the discharge ``may affect'' the quality of 
a neighboring jurisdiction's waters once it receives notice from a 
Federal agency initiating its obligation to make a ``may affect'' 
determination. 87 FR 35368. As a result, EPA stated that the Agency is 
not required to engage with stakeholders or seek their input in making 
this determination, and otherwise noted interested parties may have 
recourse under the Administrative Procedure Act, as discussed in Fond 
du Lac case. Id.; see also Fond du Lac, 519 F.Supp.3d at 565-67. 
However, EPA stated that it intends to consider the views of 
neighboring jurisdictions in making its ``may affect'' determination if 
such views are provided in a timely manner. Id. Specifically, the 
Agency proposed regulatory language in Sec.  121.12(a), as discussed 
above, to define the contents of a Federal agency's notification to EPA 
to include an indication of whether any neighboring jurisdictions have 
expressed water quality concerns or provided such comment on the 
project.\105\
---------------------------------------------------------------------------

    \105\ The Agency notes, as it did at proposal, that there are 
other opportunities for stakeholders to provide input into the 
certification and Federal licensing or permitting process, including 
the public notice and comment processes on the certification and the 
Federal license or permit.
---------------------------------------------------------------------------

    The Agency is maintaining its position that it has sole discretion, 
pursuant to section 401(a)(2), to examine the facts and determine 
whether the discharge ``may affect'' the quality of a neighboring 
jurisdiction's waters. This interpretation regarding the Agency's 
discretion is consistent with the statutory language of section 
401(a)(2), which directs EPA to notify neighboring jurisdictions 
``[w]henever such a discharge may affect, as determined by the 
Administrator. . . .'' 33 U.S.C. 1341(a)(2) (emphasis added). The 
Agency is further maintaining its position that EPA is not required to 
engage with stakeholders or seek their input in making a ``may affect'' 
determination. However, as previously discussed, the Agency may 
consider the neighboring jurisdiction's views on the effect of a 
discharge from the project on its water quality as a factor in making a 
``may affect'' determination. Further, in Sec.  121.12(a) of the final 
rule, EPA is finalizing the proposed regulatory text defining the 
contents of a Federal agency's notification to EPA to include an 
indication of whether any neighboring jurisdictions have expressed 
water quality concerns or provided such comment on the project. This 
provision may increase EPA's awareness of water quality concerns raised 
by neighboring jurisdictions at the time the Agency receives notice 
prompting it to make a ``may affect'' determination, and EPA reiterates 
its intention to consider such views of neighboring jurisdictions if 
provided in a timely manner.
    Some commenters disagreed with EPA's position on the role of 
neighboring jurisdictions or other stakeholders during in its ``may 
affect'' process. A few commenters suggested that EPA consult with or 
involve neighboring jurisdictions in making ``may affect'' 
determinations. Additionally, a commenter argued that it was 
appropriate and reasonable for EPA to solicit input from the project 
proponent and Federal licensing or permitting agency in the process of 
making a ``may affect'' determination. EPA finds its position regarding 
its sole discretion in making a ``may affect'' determination and the 
role of stakeholders, including neighboring jurisdictions, in such a 
determination is reasonable and consistent with the statutory text of 
section 401(a)(2). Section 401(a)(2) specifically recognizes EPA's 
discretion in making a ``may affect'' determination, and does not 
establish a role for stakeholders in EPA's determination. Further, 
section 401(a)(2) provides EPA with only 30 days to make a ``may 
affect'' notification and provide any required notification to 
neighboring jurisdictions. EPA does not find the limited period of time 
that the statute affords the Agency for its ``may affect'' 
determination and any required notification consistent with a process 
in which it engages stakeholders and solicits their input, and imposing 
such a process would burden the Agency. Accordingly, EPA declines to 
adopt such a process for ``may affect'' determinations.
    EPA is not further defining the meaning of ``may affect'' in 
section 401(a)(2), aside from identifying factors that it may consider 
in making a ``may affect'' determination, as the statutory language 
provides sufficient clarity that this standard is met ``[w]henever such 
a discharge may affect, as determined by the Administrator, the quality 
of the waters'' of a neighboring jurisdiction. 33 U.S.C. 1341(a)(2). 
Some commenters sought, or offered, further interpretations of the 
``may affect'' standard in section 401(a)(2). Such commenters asserted 
differing interpretations of the meaning of the ``may affect'' 
standard, including recommending that EPA make an actual demonstration 
that there may be an effect and suggesting that it is a low threshold 
(i.e., some reasonable possibility an effect may exist). As stated 
above, EPA is not defining the meaning of the ``may affect'' standard. 
This standard is necessarily broadly applicable, as it must be applied 
to differing Federal licenses and permits in a wide range of factual 
circumstances. Moreover, section 401(a)(2) recognizes the 
Administrator's discretion applying this standard in a ``may affect'' 
determination.
    Although EPA is not attempting to further define the ``may affect'' 
standard in the final rule, it notes that this standard is 
distinguishable from the standard that notified neighboring 
jurisdictions apply to make a determination regarding an objection, 
which is whether ``such discharge will affect the quality of its waters 
so as to violate any water quality requirements'' in its jurisdiction. 
See 33 U.S.C. 1341(a)(2). Unlike the standard applied by notified 
neighboring jurisdictions in making a determination regarding an

[[Page 66645]]

objection, the standard applied by EPA in its ``may affect'' analysis 
does not require consideration of whether water quality effects of 
discharge from the project will result in violation of water quality 
requirements. Instead, the standard applied by EPA in its ``may 
affect'' determination only requires analysis of whether discharge from 
the project may have water quality effects on a neighboring 
jurisdiction.\106\ Additionally, the ``may affect'' standard, in 
contrast to the standard applied by notified neighboring jurisdictions, 
does not require a finding that the discharge ``will'' effect water 
quality. Accordingly, EPA finds this standard may be met where there 
may be an effect to a neighboring jurisdiction's water quality, but 
such effect is not certain to occur.
---------------------------------------------------------------------------

    \106\ See section IV.E of this preamble for further discussion 
on the breadth of water quality effects that may be considered under 
section 401.
---------------------------------------------------------------------------

    EPA is finalizing the proposed approach to identify factors that 
EPA may consider in making a ``may affect'' determination and is not 
establishing specific factors that EPA must analyze in making a ``may 
affect'' determination. EPA is also reiterating the factors that it 
identified in the preamble of its proposal as factors it may consider 
in making a ``may affect'' determination. Accordingly, EPA is 
identifying that such factors include, but are not limited to, the type 
of project and discharge covered in the Federal license or permit, the 
proximity of the project and discharge to neighboring jurisdictions, 
certification conditions and, as applicable, other conditions already 
contained in the draft Federal license or permit, the neighboring 
jurisdiction's water quality requirements, and the views of the 
neighboring jurisdiction on the effect of discharge from the project on 
its water quality. Based on public comments, EPA is also identifying 
additional factors it may consider. Specifically, EPA may consider the 
current water quality and characteristics of the water receiving the 
discharge in making a ``may affect'' determination. However, EPA 
reiterates that it is neither limited to considering, nor required to 
consider, the factors identified here.
    With regard to the Agency's proposed approach of identifying 
factors it may consider in making a ``may affect'' determination, most 
commenters addressing this approach supported EPA providing some 
identification of such factors in the final rule. Such commenters noted 
that identification of factors clarifies and provides broader 
understanding of the EPA's process in making a ``may affect'' 
determination and could improve efficiency in making this 
determination. Some commenters agreed that EPA has discretion in making 
a ``may affect'' determination, but asserted that this discretion is 
constrained by the statutory bounds of section 401.
    However, commenters were notably divided on the approach the Agency 
should take to identifying these factors. Some commenters recommended 
that EPA establish an exclusive list of factors it considers in making 
``may affect'' determinations, limiting the factors considered in each 
determination to only those identified on this list. Commenters 
supporting this position collectively asserted that this approach would 
limit subjectivity in such determinations, increase predictability, and 
allow Federal agencies and project proponents to better plan for these 
determinations. Other commenters supported EPA codifying a list of 
factors it must consider in making a ``may affect'' determination, but 
providing that EPA may consider other factors. In contrast, some other 
commenters supported EPA's proposed approach to identify examples of 
factors the Agency may consider, but did not recommend requiring EPA to 
consider factors in recognition of the fact-dependent nature of ``may 
affect'' determinations.
    EPA agrees that its discretion regarding making a ``may affect'' 
determination is bounded by the statutory grant of authority in section 
401. EPA disagrees with the approaches suggested by certain commenters 
that EPA identify either an exclusive list of factors for the Agency to 
consider in making this determination, or establish a minimum list of 
factors that EPA must consider, as these approaches do not recognize 
the fact-dependent nature of a ``may affect'' determination and do not 
provide the flexibility necessary for the Agency to make ``may affect'' 
determinations involving different types of licenses and permits. 
Identifying an exclusive list of factors for the Agency to consider in 
making a ``may affect'' determination could preclude the Agency from 
considering important information relevant to determining whether 
discharge from a project may affect the water quality of a neighboring 
jurisdiction. Additionally, this approach does not appear to be 
consistent with the statutory language in section 401(a)(2), which does 
not impose limitations on the information the Agency may consider in 
making this determination, but rather recognizes the Agency's 
discretion in making this determination. Likewise, establishing a 
minimum list of factors that EPA must consider in a ``may affect'' 
determination could require the Agency to consider factors even where 
they are not relevant to determining whether discharge may affect the 
water quality of a neighboring jurisdiction. This approach would not 
prove efficient, which is of particular concern as the Agency is only 
afforded 30 days to make a ``may affect'' determination and provide any 
required ``may affect'' notification. Instead, the Agency finds that 
identifying examples of factors that it may consider in making a ``may 
affect'' determination, as it has above, provides greater clarity 
without inappropriately limiting the Agency from considering other 
relevant factors or requiring it to apply factors where they are 
irrelevant.
iv. ``May Affect'' Notification
    If EPA determines that a discharge from a project may affect a 
neighboring jurisdiction's water quality, section 401(a)(2) requires 
EPA to notify the neighboring jurisdiction, Federal agency, and the 
project proponent. 33 U.S.C. 1341(a)(2). As previously discussed, EPA 
must provide such notification within 30 days from notice provided by 
the Federal agency in accordance with section 401(a)(2). See id.; 
section IV.K.2.f.ii in this preamble for discussion on timing of EPA's 
may affect finding and any resulting notice. Notably, a finding by EPA 
that a discharge from a project may affect a neighboring jurisdiction's 
water quality pursuant to section 401(a)(2) is often referred to as a 
``may affect'' finding, and the resulting notification of this finding 
is referred to as a ``may affect'' notification. Section 401(a)(2) does 
not require EPA to provide notification in circumstances where it has 
completed its ``may affect'' determination but has not found that a 
discharge from the project may affect a neighboring jurisdiction's 
water quality (i.e., has not made a ``may affect'' finding). See 33 
U.S.C. 1341(a)(2). Accordingly, in its proposal, EPA stated that it is 
not required to provide notification of its ``may affect'' 
determination in such circumstances. Consistently, EPA further stated 
that if a Federal agency does not receive notification from EPA that a 
discharge may affect a neighboring jurisdiction's water quality within 
30 days after the proper notice, then the Federal agency may proceed 
with processing the Federal license or permit. 87 FR 35368.
    EPA received comments relating to its ``may affect'' notification 
in the neighboring jurisdictions process. A few commenters expressed 
concern that EPA is not required to provide a response when not finding 
that a

[[Page 66646]]

discharge may affect the water quality of a neighboring jurisdiction 
and suggested that lack of a response could have meaning other than 
this finding. Some of these commenters proposed that EPA provide 
notification to neighboring jurisdictions in circumstances where the 
Agency's ``may affect'' determination does not result in ``may affect'' 
finding, or otherwise suggested that the Agency provide public notice 
regarding its ``may affect'' determination. Some commenters supporting 
these approaches to notification asserted that they would increase 
transparency regarding EPA's ``may affect'' determination and inform 
interested parties regarding this determination.
    In consideration of the statutory constraints on EPA to make a 
``may affect'' determination and provide ``may affect'' notification 
within 30 days of proper notice from the Federal agency, EPA is not 
expanding the notification requirements beyond the circumstances and to 
the parties it is required to provide such notification pursuant to 
section 401(a)(2). The neighboring jurisdictions process established in 
section 401(a)(2) does not direct the EPA to provide notification 
outside of circumstances in which the Agency has determined that a 
discharge from the project may affect a neighboring jurisdiction's 
water quality. Likewise, the statutory language does not provide for 
``may affect'' notification to other parties besides the relevant 
neighboring jurisdiction, the Federal agency, and the project 
proponent. See 33 U.S.C. 1341(a)(2). Accordingly, the statutory 
language reflects a more limited process for the Agency to provide 
``may affect'' notification than suggested by certain commenters, which 
is consistent with the limited duration of time afforded the Agency for 
making a ``may affect'' determination and providing such notification 
in section 401(a)(2). Given the limited 30-day period for Agency action 
in this context, and in consideration of the overall volume of ``may 
affect'' determinations made by the Agency, EPA finds it reasonable to 
maintain the notification requirements established in the statutory 
text of section 401(a)(2), and is not expanding these requirements 
beyond the statutory bounds.
    In addition to incorporating the notification requirements on EPA 
in section 401(a)(2) pertaining to a ``may affect'' finding, the 2020 
Rule established additional procedures for EPA in providing such 
notification. The 2020 Rule required EPA to provide such notification 
to the certifying authority, as well as the neighboring jurisdiction, 
Federal agency, and the project proponent. 40 CFR 121.12(c) (2020). 
Additionally, the 2020 Rule required the notification to be dated and 
in writing and established certain requirements on the content of such 
notification. 40 CFR 121.12(c)(1) (2020). Specifically, the 2020 Rule 
required that the notification identify the materials provided by the 
Federal agency and inform the neighboring jurisdiction that it had 60 
days to notify the Administrator and the Federal agency, in writing, 
whether it had determined that the discharge will violate any of its 
water quality requirements, to object to the issuance of the Federal 
license or permit, and to request a public hearing from the Federal 
agency. Id. In contrast, the 1971 Rule did not define the contents of a 
``may affect'' notification from EPA to a neighboring jurisdiction, 
Federal agency, and project proponent. However, the 1971 Rule required 
EPA to send the neighboring jurisdiction a copy of the application and 
certification it received to initiate the neighboring jurisdictions 
process. 40 CFR 121.14 (2019).
    EPA proposed retaining regulatory text similar to that in the 2020 
Rule requiring EPA to provide the ``may affect'' notification to the 
neighboring jurisdiction, Federal agency, the project proponent, and 
the certifying authority. The Agency further proposed maintaining 
content requirements for the ``may affect'' notification, but proposed 
revising these requirements to establish that the notification shall be 
in writing and shall include a statement that the Agency has determined 
that the discharge may affect the neighboring jurisdiction's water 
quality, as well as a description of the next steps in the neighboring 
jurisdictions process, a copy of the certification or waiver, and a 
copy of the Federal license or permit application.
    In Sec.  121.13(b) and (c) of the final rule, EPA is finalizing the 
proposed approach for providing a ``may affect'' notification with 
minor changes to the content requirements for a ``may affect'' 
notification and the omission of the requirement that EPA provide such 
notice to a certifying authority. As noted above, EPA revised the 
proposed text of Sec.  121.13(c), addressing the contents of the 
Regional Administrator's ``may affect'' notification, to conform the 
statement that the Agency provides to notified neighboring 
jurisdictions more closely with the statutory text of section 401(a)(2) 
and provide greater clarity about notification needed for an objection. 
Rather than providing a statement that the notified neighboring 
jurisdiction ``has 60 days'' to provide written notification ``whether 
it has determined that the discharge will violate any of its water 
quality requirements,'' as proposed in Sec.  121.13(c)(3), the final 
rule states that the Agency provides a statement that the notified 
neighboring jurisdiction ``has 60 days after such notification'' from 
the Agency to provide written notification ``if it has determined that 
the discharge will violate any of its water quality requirements.'' 40 
CFR 121.13(c)(3). This revision ensures that the ``may affect'' 
notification reflects the statutory text of section 401(a)(2) and more 
clearly conveys the statutory time and content requirements of the 
notification needed for an objection than the proposed regulatory text.
    Likewise, as previously mentioned, Sec.  121.13(b) and (c) of the 
final rule was revised to omit the requirement that EPA provide the 
``may affect'' notification to the certifying authority. Although the 
2020 Rule required EPA to provide the ``may affect'' notification to 
the certifying authority, and proposed retaining this provision, EPA is 
omitting such notification to the certifying authority in the final 
rule to more closely reflect the statutory language in section 
401(a)(2), which does not require such notification to the certifying 
authority. This is consistent with the Agency's approach in the final 
rule to likewise remove language from the proposed regulatory text 
requiring a notified neighboring jurisdiction to provide notification 
to the certifying authority in Sec.  121.14. Both changes reflect the 
structure of the neighboring jurisdictions process established in 
section 401(a)(2), which does not provide a specified role for the 
certifying authority.
    In addition to EPA's role in the neighboring jurisdictions process 
to make a ``may affect'' determination and provide ``may affect'' 
notification, as addressed in Sec.  121.13 of the final rule and 
described above, the Agency also has at role at a hearing on an 
objection of a notified neighboring jurisdiction, which is reflected in 
Sec.  121.15(c) of the final rule and discussed further below. See 
section IV.K.2.h in this preamble for discussion of the Agency's role 
to provide its evaluation and recommendations concerning the objection 
at such hearing and Sec.  121.15(c).
g. Neighboring Jurisdiction's Role Under Section 401(a)(2)
    CWA section 401(a)(2) provides that if, within 60 days after 
receipt of EPA's ``may affect'' notification, a neighboring 
jurisdiction determines that such discharge will affect the quality of 
its waters so as to violate any water quality

[[Page 66647]]

requirements in its jurisdiction, and within such 60-day period 
notifies the Administrator and the Federal licensing or permitting 
agency in writing of its objection to the issuance of such Federal 
license or permit and requests a public hearing, the Federal licensing 
or permitting agency shall hold a public hearing on the objection. 33 
U.S.C. 1341(a)(2). Therefore, only neighboring jurisdictions notified 
by EPA may object to issuance of a Federal license or permit and 
request a hearing on this objection pursuant to section 401(a)(2). 
Further, in order for a notified neighboring jurisdiction to make an 
objection, it must (1) determine that a discharge from the project for 
which it received such notification will affect the quality of its 
waters so as to violate any of its water quality requirements, and (2) 
provide written notification of its objection and request for hearing 
to EPA and the Federal licensing or permitting agency within sixty days 
after receipt of notification from EPA. Notably, the determination made 
by a notified neighboring jurisdiction as to whether a discharge from 
the project will affect the quality of its waters so as to violate any 
water quality requirements is often referred to as a ``will violate'' 
determination. The provisions in the final rule regarding a notified 
neighboring jurisdiction's ``will violate'' determination and 
notification of objection and request for hearing are discussed below.
i. ``Will Violate'' Determination and Standard
    Under section 401(a)(2), a notified neighboring jurisdiction's 
``will violate'' determination is based upon whether a discharge from 
the project ``will affect the quality of its waters so as to violate 
any water quality requirements'' in its jurisdiction. 33 U.S.C. 
1341(a)(2). EPA incorporated this standard in the proposed text of 
Sec.  121.14(a), which reflected that the neighboring jurisdiction 
``determines that a discharge will violate any of its water quality 
requirements.'' However, EPA did not propose to further define the 
``will violate'' standard applied by notified neighboring 
jurisdictions, or otherwise identify specific factors that neighboring 
jurisdictions may or must consider in making this determination.
    EPA is revising the proposed text of Sec.  121.14 to clarify that 
the ``will violate'' determination is made only by a notified 
neighboring jurisdiction, and is therefore adding text to Sec.  
121.14(a) providing that a ``will violate'' determination is made by 
``a neighboring jurisdiction notified by the Regional Administrator 
pursuant to Sec.  121.13(b),'' and is otherwise revising references to 
``the neighboring jurisdiction'' in the proposed text to ``the notified 
neighboring jurisdiction'' in Sec.  121.14 of the final rule. EPA is 
otherwise modifying the text of Sec.  121.14(a) to further reflect that 
the notified neighboring jurisdiction is evaluating ``discharge from 
the project.'' 40 CFR 121.14. These changes were made to add clarity, 
as pursuant to section 401(a)(2), only notified neighboring 
jurisdictions make a ``will violate'' determination, and this 
determination evaluates discharge from the project for which the 
neighboring jurisdiction received such notification from EPA. See 33 
U.S.C. 1341(a)(2). EPA is otherwise maintaining the proposed approach 
in the final rule to not further define the ``will violate'' standard 
in regulation or identify factors for consideration in making this 
determination.
    EPA received comment related to the ``will violate'' standard 
applied by notified neighboring jurisdictions. One commenter requested 
that EPA modify proposed Sec.  121.14 to ensure that the regulation 
reflects that the ``will affect'' standard includes a discharge's 
contributions to water quality violations and that the discharge itself 
does not have to be the sole cause of the water quality violation. EPA 
finds that the statutory text of section 401(a)(2), and the consistent 
text of Sec.  121.14(a), sufficiently establish the ``will violate 
standard,'' and therefore declines to further define this standard. 
Like the Agency's ``may affect'' standard, the ``will violate'' 
standard is necessarily broadly applicable, as it must be applied to 
differing Federal licenses and permits in a wide range of factual 
circumstances. Accordingly, the Agency is not modifying Sec.  121.14 as 
suggested by the commenter; however, EPA agrees that the ``will 
violate'' standard includes a discharge's contributions to water 
quality violations. Therefore, the neighboring jurisdiction does not 
have to find that the discharge itself violates water quality 
requirements and, instead, can find that the discharge contributes to 
violations of water quality requirements to determine the ``will 
violate'' standard is met. EPA further notes that the public, including 
interested stakeholders, will have the opportunity to participate in 
any hearing on an objection conducted by the Federal licensing or 
permitting agency, pursuant to section 401(a)(2) and Sec.  121.15 of 
the final rule.
ii. Notification of Objection and Request for Hearing
    As previously noted, section 401(a)(2) requires a notified 
neighboring jurisdiction to provide written notification of its 
objection and request for hearing to EPA and the Federal licensing or 
permitting agency within sixty days after receipt of notification from 
EPA in order to raise an objection. See 33 U.S.C. 1341(a)(2). The 
statutory text, however, does not further describe the contents of this 
written notification. The 1971 Rule did not describe the contents or 
form that such an objection notification must take. However, the 2020 
Rule provided that ``[n]otification of objection and request for a 
hearing from the neighboring jurisdiction shall: be in writing; 
identify the receiving waters it determined will be affected by the 
discharge; and identify the specific water quality requirements it 
determines will be violated by the certified project. 40 CFR 
121.12(c)(2) (2020); 85 FR 42274.
    EPA proposed to revise the specific regulatory requirements for 
what a neighboring jurisdiction is required to include in an objection 
notification and request for hearing sent pursuant to section 401(a)(2) 
in proposed Sec.  121.14(b). Consistent with the statutory text of 
section 401(a)(2), the Agency proposed to retain the requirement that 
the objection be in writing. Additionally, EPA proposed that the 
notification of objection and request for hearing from the notified 
neighboring jurisdiction include ``[a] statement that the neighboring 
jurisdiction objects to the issuance of the Federal license or permit'' 
(proposed Sec.  121.14(b)(1)), and ``[a] request for a public hearing 
from the Federal agency on its objection'' (proposed Sec.  
121.14(b)(3)). However, rather than requiring the notified neighboring 
jurisdiction to identify the receiving waters affected by the discharge 
and the specific water quality requirements violated as required in the 
2020 Rule, EPA proposed in Sec.  121.14(b)(2) that the notification 
include ``[a]n explanation of the reasons supporting the neighboring 
jurisdiction's determination that the discharge will violate its water 
quality requirements, including but not limited to, an identification 
of those water quality requirements that will be violated.'' EPA 
proposed in Sec.  121.14(a), that the notification of objection and 
request for hearing from the notified neighboring jurisdiction be made 
``within 60 days after receiving notice in accordance with Sec.  
121.13(c),'' and otherwise that such notification be made to the 
Regional Administrator, the

[[Page 66648]]

Federal agency, and the certifying authority.
    In Sec.  121.14, the Agency is finalizing the proposed contents of 
a notification of objection and request for hearing from a notified 
neighboring jurisdiction with modifications for purposes of adding 
clarity and more closely conforming this regulatory text with section 
401(a)(2). Consistent with revisions throughout Sec. Sec.  121.14 and 
121.15 in the final rule, EPA revised references to ``the neighboring 
jurisdiction'' in the proposed text of Sec.  121.14 to ``the notified 
neighboring jurisdiction'' in the final rule to clarify that pursuant 
to section 401(a)(2) only a neighboring jurisdiction notified by EPA 
makes a ``will violate'' determination and may provide notification of 
an objection and request a hearing. Likewise, consistent with revisions 
throughout Subpart B of the final rule, EPA revised Sec.  121.14 of the 
final rule to clarify that the ``discharge'' that the notified 
neighboring jurisdiction considered in its ``will violate'' 
determination is ``discharge from the project'' in accordance with 
section 401(a)(2). Otherwise, EPA is maintaining the requirements that 
the notification of objection and request for hearing be in writing and 
include (1) a statement that the notified neighboring jurisdiction 
objects to the issuance of the Federal license or permit, (2) an 
explanation of the reasons supporting the notified neighboring 
jurisdiction's determination that the discharge from the project will 
violate its water quality requirements, including but not limited to, 
an identification of those water quality requirements that will be 
violated, and (3) a request for public hearing from the Federal agency 
on the notified neighboring jurisdiction's objection.
    EPA received comments regarding the contents of a notification of 
objection and request for hearing from a notified neighboring 
jurisdiction. Some commenters stated that EPA should eliminate any 
content requirements that go beyond the express language in section 
401(a)(2), including an explanation of the reasons supporting the 
determination that the discharge will violate water quality 
requirements. More specifically, these commenters objected to the 
requirement that the neighboring jurisdiction identify the water 
quality requirements that will be violated on the basis that this 
requirement is too burdensome on the notified neighboring jurisdiction. 
Other commenters concurred that the objection should include 
identifiable and justifiable reasons supporting the determination that 
the discharge will violate water quality requirements. In addition, 
some commenters stated that the neighboring jurisdiction should be 
required to include a citation to the water quality requirements that 
it believes will be violated.
    EPA does not find that Sec.  121.14(b) is too burdensome on the 
notified neighboring jurisdiction, and otherwise finds it reasonable 
that the notified neighboring jurisdiction's notification of an 
objection and request for hearing include an explanation of the reasons 
supporting the ``will violate'' determination. Section 401(a)(2) of the 
CWA states that a notified neighboring jurisdiction may make an 
objection and request a hearing ``[i]f . . . [the neighboring 
jurisdiction] determines that such discharge will affect the quality of 
its waters so as to violate any water quality requirements. . . .'' 33 
U.S.C. 1341(a)(2) (emphasis added). To accomplish this, the neighboring 
jurisdiction necessarily must consider its water quality requirements 
and complete an analysis or evaluation to determine that a discharge 
from the project will violate such water quality requirements. All EPA 
is requiring in Sec.  121.14(b)(2) of the final rule is that the 
neighboring jurisdiction provide an explanation of that analysis or 
evaluation in its notification of objection and request for hearing, 
including the identification of the water quality requirements that 
will be violated. This will inform the Federal licensing or permitting 
agency, EPA, and the project proponent of the reasoning for the 
objection; allow the Federal agency and EPA to prepare for a hearing on 
the objection; and may assist in determining whether there is a way to 
resolve the objection before the public hearing. EPA finds this 
requirement is reasonable to inform the neighboring jurisdictions 
process and does not find it imposes an unreasonable burden on the 
notified neighboring jurisdiction.
    Some commenters recommended that EPA require the neighboring 
jurisdiction to identify a Federal license or permit condition(s) that 
it thinks would resolve the objection in its notification of objection 
and request for hearing. Conversely, one commenter stated that EPA 
should not require the neighboring jurisdiction to provide conditions 
that would resolve the objection. EPA is not requiring the notified 
neighboring jurisdiction to include conditions with its objection 
notification and request for hearing; however, EPA recommends that the 
neighboring jurisdiction provide Federal license or permit conditions 
that will resolve the objection, if this is possible. Identifying 
conditions to resolve an objection, where possible, may help inform the 
hearing process, and could also help resolve an objection in advance of 
a hearing. In circumstances where the notified neighboring jurisdiction 
does not find any conditions would resolve the objection, EPA notes 
that the neighboring jurisdiction could simply state this in its 
objection notification and hearing request.
    A few commenters asserted that the project proponent, as opposed to 
the neighboring jurisdiction, has the burden to show that a Federal 
license or permit should be issued. EPA observes that section 401(a)(2) 
only provides the notified neighboring jurisdiction, the Federal 
licensing or permitting agency, and EPA with explicit roles and duties 
in the neighboring jurisdictions process. CWA section 401(a)(2) 
requires the neighboring jurisdiction to determine whether the 
discharge will violate its water quality requirements after EPA makes a 
``may affect'' determination, and if so, object to the issuance of the 
Federal license or permit and request a public hearing. After that, if 
the neighboring jurisdiction does not withdraw its objection, the 
Federal licensing or permitting agency must hold a public hearing and 
determine whether any conditions are necessary to ensure that the 
neighboring jurisdiction's water quality requirements are met. See 33 
U.S.C. 1341(a)(2) (``Such Agency . . . shall condition such license or 
permit in such manner as may be necessary to insure compliance with 
applicable water quality requirements.''). Section 401(a)(2) does not 
provide an explicit role for the project proponent in the neighboring 
jurisdictions process, although the project proponent may provide input 
at the public hearing. Accordingly, this final rule cannot require a 
project proponent to demonstrate that a Federal license or permit 
should be issued through the neighboring jurisdictions process.
    Some commenters asserted that the neighboring jurisdiction should 
be required to identify the ``potentially affected'' receiving water in 
an objection notification and request for hearing. This request appears 
similar to language in the 2020 Rule that required a notified 
neighboring jurisdiction to ``identify the receiving waters it 
determined will be affected by the discharge.'' 40 CFR 121.12(c)(2) 
(2020). One of these commenters stated that failure to identify the 
receiving water makes it impossible to determine the validity of the 
concerns raised to resolve the neighboring jurisdiction's concerns and 
allows the neighboring jurisdiction to

[[Page 66649]]

raise arbitrary concerns to slow down the Federal licensing or 
permitting process.
    EPA declines to require the notified neighboring jurisdiction to 
specifically identify affected receiving waters in its notification of 
objection and request for hearing. However, as EPA noted in its 
proposal, the Agency anticipates that this information is likely to be 
included in a notified neighboring jurisdiction's explanation of the 
reasons supporting its ``will violate'' determination, and EPA 
encourages neighboring jurisdictions to include this information where 
possible, as it may assist the Federal agency in evaluating the 
objection. As the notified neighboring jurisdiction has a limited time 
period of 60-days to make its ``will violate'' determination and issue 
any notification of an objection and request for hearing, imposing a 
requirement that this notification identify all waters where discharge 
will violate water quality requirements may not be feasible in all 
circumstances. Accordingly, EPA is not including this requirement.
    In addition to the requirements regarding the content of a 
notification of objection and request for hearing, EPA is also 
finalizing the procedural requirements in Sec.  121.14(a) with some 
modifications for purposes of added clarity and consistency with 
section 401(a)(2). Consistent with the statutory language in section 
401(a)(2), EPA is retaining the requirement that the notified 
neighboring jurisdiction provide notification of its objection and 
request for hearing within 60 days of a ``may affect'' notice from EPA 
but is updating the internal citation to reflect that this notification 
is provided by the Regional Administrator ``pursuant to Sec.  
121.13(b)'' of the final rule. Additionally, as mentioned above, EPA is 
removing the requirement in the proposed regulatory text that a 
notified neighboring jurisdiction provide notification to the 
certifying authority in order to more closely reflect the statutory 
language in section 401(a)(2), which does not require notification to 
the certifying authority.
    EPA received comments regarding its proposal to require the 
notified neighboring jurisdiction to send the ``will affect'' 
notification to the certifying authority, as well as to the Federal 
licensing or permitting agency and Regional Administrator. Some 
commenters supported this proposed approach. Conversely, another 
commenter stated that the neighboring jurisdiction should not be 
required to send the notification to the certifying authority because 
there is no statutory basis for this requirement and CWA section 
401(a)(2) provides no role for the certifying authority. As noted, in 
the final rule, EPA has eliminated the requirement that the notified 
neighboring jurisdiction send the notification to the certifying 
authority to conform the regulatory text more closely with the 
statutory language in section 401(a)(2), which does not require 
notification to the certifying authority. EPA agrees that, unlike the 
Regional Administrator and the Federal agency, the certifying authority 
does not have a specific role under CWA section 401(a)(2). In fact, the 
neighboring jurisdictions process occurs after the certifying authority 
has acted on a request for certification. However, like the project 
proponent, the certifying authority may participate in the neighboring 
jurisdictions process by providing comments during the public hearing. 
EPA encourages the Federal agency to involve the certifying authority 
in conversations that occur prior to the public hearing, if it believes 
that the certifying authority may have information that could inform 
discussions with the notified neighboring jurisdiction.
iii. Withdrawal of Objection Prior to Hearing
    CWA section 401(a)(2) states that if a notified neighboring 
jurisdiction notifies EPA and the Federal agency ``in writing of its 
objection to the issuance of [the] license or permit and requests a 
public hearing on such objection, the licensing or permitting agency 
shall hold such a hearing.'' 33 U.S.C. 1341(a)(2). Therefore, for a 
hearing to be required under section 401(a)(2), there must be (1) a 
written objection from the notified neighboring jurisdiction and (2) a 
request for a public hearing on the objection. Id. EPA proposed that if 
one of these elements were not present, then the Federal agency would 
not be required to hold a hearing and requested comment on whether to 
develop regulatory text for a process where the neighboring 
jurisdiction could withdraw its objection and eliminate the requirement 
to hold a public hearing. 87 FR 35370.
    EPA received numerous comments recommending that it include 
language allowing notified neighboring jurisdictions to withdraw their 
objections before the hearing, thus, eliminating the need to hold a 
public hearing. Some of these commenters stated that allowing the 
neighboring jurisdiction to withdraw its objection is in line with 
section 401's cooperative federalism scheme, while other commenters 
stated that allowing for withdrawal provides for efficiency in the 
Federal licensing or permitting process. EPA agrees that including a 
provision addressing withdrawal of an objection improves the efficiency 
of the neighboring jurisdictions process, as it recognizes the 
possibility that neighboring jurisdictions may be able to resolve 
objections before the hearing stage of the neighboring jurisdictions 
process, conserving resources that would otherwise be expended to 
conduct and participate in such a hearing in these circumstances. EPA 
observes that nothing in the statute prohibits withdrawal of an 
objection, which would remove the prerequisite condition for a Federal 
agency to hold a public hearing. EPA also finds that including a 
provision addressing the circumstances of withdrawal provides added 
clarity by establishing a uniform procedure for executing withdrawal of 
an objection. Accordingly, EPA has included a provision in Sec.  
121.14(c) that allows a notified neighboring jurisdiction to withdraw 
its objection prior to the public hearing. The final rule states that 
if the notified neighboring jurisdiction withdraws its objection, it 
shall notify the Regional Administrator and Federal agency in writing 
of the withdrawal. See 40 CFR 121.14(c). If the neighboring 
jurisdiction withdraws the objection, the Federal agency will not need 
to proceed with a public hearing and can move forward with issuing the 
Federal license or permit. EPA has also added language to this effect 
at Sec.  121.15(a). It should be noted that the Federal agency might 
have to comply with its own public notice procedures if it agreed to 
add certain Federal license or permit conditions in return for 
withdrawal of the objection.
h. Objection and Public Hearing Process Under Section 401(a)(2)
    CWA section 401(a)(2) requires the Federal licensing or permitting 
agency to hold a public hearing on the objection of a notified 
neighboring jurisdiction if such neighboring jurisdiction provides 
notification of its objection and request for hearing in the required 
60-day timeframe. 33 U.S.C. 1341(a)(2). As explained above, EPA is 
adding language to Sec.  121.15(a) which clarifies that if the 
neighboring jurisdiction withdraws its objection, then the Federal 
agency does not have to proceed with a public hearing. Otherwise, 
consistent with section 401(a)(2), the final rule provides that the 
Federal agency must hold the public hearing upon a request for hearing 
from a notified neighboring jurisdiction in accordance with the 
requirements for the notification and request for hearing

[[Page 66650]]

in Sec.  121.14(b) of the final rule. 40 CFR 121.15(a).
    Section 401(a)(2) does not provide for a specific process for the 
public hearing conducted by the Federal licensing or permitting agency. 
It merely states that the hearing is public and shall be held by the 
Federal licensing or permitting agency. 33 U.S.C. 1341(a)(2). The 
statute further provides that the EPA Administrator must submit an 
evaluation and recommendations regarding the objection at the hearing. 
Id. Further, section 401(a)(2) states that additional evidence may be 
presented at the hearing. After the public hearing, the Federal 
licensing or permitting agency must consider the recommendations of the 
neighboring jurisdiction and EPA Administrator as well as any 
additional evidence presented at the hearing and, based on that 
information, must condition the Federal license or permit as may be 
necessary to ensure compliance with applicable water quality 
requirements. If additional conditions cannot ensure compliance with 
applicable water quality requirements, the Federal agency shall not 
issue the license or permit. Id. Notably, the statute is silent as to 
whether public notice of the public hearing is required; the nature of, 
and specific procedures for, the public hearing; the need for a court 
reporter or transcript; whether the Federal licensing or permitting 
agency's decision is appealable; and other such matters.
    The Agency proposed to add transparency to the neighboring 
jurisdictions process by requiring the Federal agency to provide for a 
minimum of a 30-day public notice of the hearing, but declined to 
define the type of public hearing that the Federal agency must hold. 
Commenters provided various recommendations regarding the Federal 
agency's public hearing, including those addressing the notice of 
hearing, hearing procedures, and the location of a hearing. One 
commenter, who supported EPA's approach to the public hearing process, 
suggested that EPA should develop hearing procedures that can act as a 
default for Federal agencies that do not have public hearing 
procedures. On the other hand, another commenter stated that EPA should 
not impose a minimum notice requirement for the public hearing.
    EPA is finalizing the proposed requirement that the Federal agency 
must provide notice at least 30-days prior to the public hearing, but 
is adding text to clarify that only a notified neighboring jurisdiction 
can make a request for hearing, and specify that the Federal agency 
must provide such public notice to interested parties. Consistent with 
revisions to Sec.  121.14 of the final rule, discussed above, EPA is 
adding language to Sec.  121.15 of the final rule to make clear that 
pursuant to section 401(a)(2) only a notified neighboring jurisdiction 
may provide notification of an objection and request a hearing. 
Additionally, EPA is adding language in Sec.  121.15(b) that requires 
the Federal agency to provide public notice ``to interested parties, 
including but not limited to the notified neighboring jurisdiction, the 
certifying authority, the project proponent, and the Regional 
Administrator,'' at least 30 days prior to the public hearing. 40 CFR 
121.15(b). This language was included to ensure that all interested 
parties will have notice of the public hearing such that they can 
prepare for and provide their testimony or comments at the public 
hearing.
    The Agency is otherwise maintaining the approach of not defining 
the type of public hearing that the Federal agency must hold, since 
many Federal agencies have their own regulations regarding public 
hearings on licenses and permits, and the Federal agencies are better 
suited to determine the appropriate process for holding their own 
public hearings. However, EPA recommends that the Federal agency accept 
comments and additional evidence on the objection at the public 
hearing. EPA also defers to the Federal agency to decide whether the 
public hearing would be conducted in-person and/or remotely through 
telephone, online, or other virtual platforms depending on the 
circumstances and the Federal agency's public hearing regulations. In 
determining the method for conducting the hearing and hearing location, 
EPA encourages the Federal agency to take into consideration the 
purpose of CWA section 401(a)(2) to establish a mechanism allowing 
notified neighboring jurisdictions an opportunity to object to the 
issuance of a Federal license or permit in circumstances where they 
find a discharge from the licensed or permitted project will violate 
their water quality requirements. Thus, interested parties, which 
include representatives of the neighboring jurisdiction, should be able 
to easily attend the public hearing.
    As previously mentioned, section 401(a)(2), also establishes a role 
for EPA at the public hearing, providing that the Agency ``shall . . . 
submit [its] evaluation and recommendations with respect to any such 
objection to the licensing or permitting agency'' at the public 
hearing. 33 U.S.C. 1341(a)(2). Consistently, EPA is finalizing Sec.  
121.15(c) as proposed which mirrors the statute by stating that ``[a]t 
the hearing, the Regional Administrator shall submit to the Federal 
agency its evaluation and recommendation(s) concerning the objection.'' 
40 CFR 121.15(c). As stated in its proposal, EPA interprets its role in 
providing the evaluation and recommendations on the notified 
neighboring jurisdiction's objection as that of an objective and 
neutral evaluator providing recommendations to the Federal licensing or 
permitting agency based upon its expert, technical analysis of the 
record before it. 87 FR 35369. EPA intends to conduct its evaluation 
and make any recommendations based on the information before it, giving 
equal consideration to the information and views--if provided--by 
interested parties, including the objecting neighboring jurisdiction, 
project proponent, and certifying authority. Id. Consistent with this 
approach, as a general matter EPA does not intend to invite public 
comment and input from, or engage with, interested parties when 
developing its evaluation and recommendations on the objection. 
However, EPA may, where it deems it appropriate, seek additional 
information regarding a notified neighboring jurisdiction's objection 
to be sure EPA is able to develop an informed and well-supported 
evaluation and accompanying recommendations. This approach to 
developing its evaluation and recommendations is consistent with the 
hearing process established by section 401(a)(2), which recognizes a 
role for the notified neighboring jurisdiction independent of the 
Agency and allows for presentation of evidence at the hearing by any 
interested stakeholder, including the notified neighboring 
jurisdiction. If a stakeholder agrees or disagrees with EPA's 
evaluation and recommendations presented at the hearing, such 
stakeholder may have an opportunity to provide additional information 
and comment directly to the Federal agency for its consideration.
    After conducting the public hearing, pursuant to CWA section 
401(a)(2), the Federal licensing or permitting agency must consider the 
recommendations of the notified neighboring jurisdiction and EPA, as 
well as any additional evidence presented at the hearing, as it 
determines whether additional permit or license conditions are 
necessary to ensure compliance with applicable water quality 
requirements. 33 U.S.C. 1341(a)(2). The Act does not accord special 
status to EPA's evaluation and recommendations compared with the 
notified neighboring jurisdiction's input

[[Page 66651]]

or other evidence received at the hearing; rather, the section appears 
to contemplate that the Federal agency will consider all of the 
information presented in making its decision.
    If the Federal licensing or permitting agency determines that 
additional conditions may be necessary to ensure compliance with the 
neighboring jurisdiction's water quality requirements, the Federal 
licensing or permitting agency must include those conditions in the 
Federal license or permit pursuant to section 401(a)(2). 33 U.S.C. 
1341(a)(2). In addition, if the Federal licensing or permitting agency 
cannot include conditions that will ensure compliance with applicable 
water quality requirements, the Federal agency cannot issue the Federal 
license or permit. Id. EPA is finalizing regulatory text that 
specifically incorporates these statutory requirements. 40 CFR 
121.15(d) and (e). If the Federal agency decides that conditions are 
necessary to ensure that a project will comply with a neighboring 
jurisdiction's water quality requirements, EPA notes that the Federal 
agency may also have to comply with its own public notice and comment 
requirements before finalizing the Federal license or permit.
    A few commenters provided input on how the Federal agency should 
engage with stakeholders after the conclusion of the public hearing. 
EPA declines to prescribe how a Federal agency must engage with 
stakeholders after the public hearing. However, EPA encourages the 
Federal agency to consult with the objecting neighboring jurisdiction 
and certifying authority, as well as all necessary parties, before 
making a decision under CWA section 401(a)(2).
    EPA did not propose to establish a deadline by which the Federal 
licensing or permitting agency must make a determination after the 
public hearing on the notified neighboring jurisdiction's objection but 
requested comment on whether such a deadline should be established. A 
few commenters recommended that EPA create a timeline of the 
neighboring jurisdictions process and specifically include timelines 
for establishing a public hearing, making determinations, and finishing 
the post-public hearing process. Several commenters recommended that 
EPA establish a deadline for the Federal agency to make a decision 
after the public hearing on the objection. At least one commenter 
stated that establishing a deadline would be inappropriate and 
inconsistent with CWA section 401(a)(2), arguing that Congress 
consciously chose not to impose a deadline on the Federal agency and 
did not include language that would allow EPA to establish a deadline. 
In the final rule, the Agency is declining to add specific timelines 
for the neighboring jurisdictions process beyond those already 
established in the statute. There are many factors, including the 
complexity of the facts at issue in an objection and a Federal agency's 
own regulations, that impact the duration of time necessary for a 
Federal agency to complete its determination following a hearing on a 
neighboring jurisdiction's objection. However, EPA encourages Federal 
agencies to communicate with the notified neighboring jurisdiction and 
other interested stakeholders regarding its expectations or 
considerations in determining the time to make a decision on the 
Federal license or permit after a public hearing.
3. Implementation
    As discussed in detail above, once a Federal agency receives a 
Federal license or permit application and a certification or waiver, it 
may proceed with the neighboring jurisdictions process (i.e., notify 
EPA as required under this final rule). The Agency wishes to reiterate 
that all certifications or waivers will trigger the neighboring 
jurisdictions process, even those for minor or remote projects. The 
requirement to notify EPA under section 401(a)(2) depends on the 
Federal agency's receipt of a Federal license or permit application and 
certification or waiver; it does not depend on the location of the 
project or the nature of the Federal license or permit. The Agency is 
aware that there are instances where a Federal license or permit 
application does not accompany a certification or waiver (e.g., 
certification on general permits or Corps civil works projects). 
Certifications or waivers on those projects are not exempt from the 
neighboring jurisdictions process. Rather, EPA expects Federal agencies 
to determine how best to comply with all section 401 requirements. For 
example, on a Corps civil works project, compliance may involve the 
Corps sending a project study in conjunction with a certification or a 
waiver of certification. Ultimately, EPA is responsible for determining 
whether a discharge from a project may affect the water quality of a 
neighboring jurisdiction. As stated in Sec.  121.13(d) of the final 
rule, and discussed above, a Federal agency cannot issue a license or 
permit pending the conclusion of the neighboring jurisdictions process, 
set forth in Sec. Sec.  121.13, 121.14, and 121.15 of the final rule.
    Several commenters discussed the need for collaboration between EPA 
and other stakeholders prior to the initiation of the neighboring 
jurisdictions process. EPA agrees that early coordination can generally 
be beneficial to all parties, though this may not always be necessary 
depending on project complexity and resources. The Agency has 
encouraged early coordination and communication throughout the final 
rule, including pre-filing meeting requests and request for 
certification. Additionally, EPA observes that section 401 requires 
certifying authorities to develop public notice procedures for requests 
for certification. See 33 U.S.C. 1341(a)(1). A certifying authority's 
public notice procedures for certification could provide an additional 
opportunity for neighboring jurisdictions and other stakeholders to 
participate in the process. Generally, early engagement can provide 
stakeholders the opportunity to communicate needs and requirements, 
potentially streamlining processes and helping ensure any concerns are 
noted and addressed. EPA disagrees with one commenter's assertion that 
EPA has a responsibility to proactively work with project proponents 
and other Federal agencies as early as possible in the Federal 
licensing or permitting process. As discussed above, EPA has a 
specific, statutorily defined role in the neighboring jurisdictions 
process, which does not require the Agency to proactively coordinate 
with other Federal agencies or project proponents or take any action 
pursuant to section 401(a)(2) prior to receiving notice from the 
Federal agency of its receipt of the application and either a 
certification or waiver.

L. Treatment in a Similar Manner as a State Under Section 401

1. What is the Agency finalizing?
    The Agency is finalizing the proposed provisions enabling Tribes to 
obtain TAS solely for section 401, as well as provisions on how Tribes 
can obtain TAS for the limited purpose of participating as a 
neighboring jurisdiction under section 401(a)(2).\107\ Section 121.11 
of the final rule includes the criteria an applicant Tribe would be

[[Page 66652]]

required to meet to be treated in a similar manner as states, the 
information the Tribe would be required to provide in its application 
to EPA, and the procedure EPA would use to review the Tribal 
application.
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    \107\ Prior to this final rule, in the absence of TAS provisions 
tailored specifically for section 401, Tribes had received TAS for 
section 401 when eligible for TAS to administer the section 303(c) 
program for water quality standards. 40 CFR 131.4(c) (``Where EPA 
determines that a Tribe is eligible to the same extent as a State 
for purposes of water quality standards, the Tribe likewise is 
eligible to the same extent as a State for purposes of 
certifications conducted under Clean Water Act section 401.'').
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    Consistent with the requirements provided in CWA section 518, the 
final rule requires that four criteria must be met for Tribes to obtain 
TAS for section 401, including section 401(a)(2). First, the Tribe must 
be federally recognized by the U.S. Department of the Interior and meet 
the definitions finalized in Sec.  121.1(d) and (e). Second, the Tribe 
must have a governing body that carries out ``substantial governmental 
duties and powers'' over a defined area. Third, the Tribe must have 
appropriate authority to regulate and manage water resources within the 
borders of the Tribe's reservation. Lastly, the Tribe must be 
reasonably expected, in the Regional Administrator's judgment, to be 
capable of administering a section 401 water quality certification 
program.
    The Tribe may satisfy the first criterion by stating that it is 
included on the list of federally recognized Tribes that is published 
periodically by the U.S. Department of the Interior. Alternatively, the 
Tribe may submit other appropriate documentation (e.g., if the Tribe is 
not yet included on the U.S. Department of the Interior list but is 
federally recognized).
    To meet the second criterion, the Tribe would show that it conducts 
``substantial governmental duties and powers,'' which the Agency views 
as performing governmental functions to promote the health, safety, and 
welfare of the affected population within a defined geographical area. 
See 54 FR 39101; 81 FR 65906. This requires a descriptive statement 
that (1) describes the form of Tribal government, (2) describes the 
types of essential governmental functions currently performed by the 
Tribal governing body, including but not limited to, the exercise of 
the power of eminent domain, taxation, and police power, and (3) 
identifies the sources of authorities to carry out these functions.
    To meet the third criterion that the Tribe has the authority to 
manage the water resources within the borders of the Tribe's 
reservation, the Tribe would submit a descriptive statement comprised 
of two components: (1) a map or legal description of the area over 
which the Tribe has authority to regulate surface water quality, and 
(2) a statement signed by the Tribe's legal counsel or equivalent 
explaining the legal basis for the Tribe's regulatory authority. EPA 
notes that section 518 of the CWA includes a delegation of authority 
from Congress to eligible Indian Tribes to regulate the quality of 
waters of their reservations under the CWA. See 81 FR 30183 (May 16, 
2016). Absent rare circumstances that may affect a Tribe's ability to 
effectuate the delegation of authority, Tribes may rely on the 
congressional delegation of authority included in section 518 of the 
statute as the source of authority to administer a section 401 water 
quality certification program. This is identical to the way Tribes have 
been demonstrating authority for eligibility to administer 401 
certifications under existing TAS regulations, the only change being 
that under the final regulations, Tribes will be able to seek TAS 
eligibility for section 401 only. Similarly, as with Tribes already 
administering section 401 under prior TAS approvals, the authority to 
issue certifications exercised by a Tribe authorized under the new 
regulation will, by virtue of the congressional delegation, apply 
throughout the reservation area covered by the TAS approval, 
irrespective of land ownership or the Tribal membership status of the 
Federal license or permit applicant. See, e.g., 81 FR 30190. Therefore, 
grants or waivers of certification by an authorized Tribe, as well as 
any conditions included in a certification or denials of certification 
by an authorized Tribe, would apply to any application for a Federal 
license or permit throughout the relevant reservation without any 
separate need to demonstrate inherent Tribal jurisdiction.
    A Tribe may satisfy the fourth criterion regarding its capability 
by either (1) providing a description of the Tribe's technical and 
management skills to administer a water quality certification program 
or (2) providing a plan that proposes how the Tribe will acquire such 
skills. Additionally, when considering Tribal capability, EPA would 
also consider whether the Tribe can demonstrate the existence of 
institutions that exercise executive, legislative, and judicial 
functions, and whether the Tribe has a history of successful managerial 
performance of public health or environmental programs.
    Section 121.11 of the final rule is intended to ensure that Tribes 
treated in a similar manner as states for the purposes of the section 
401 water quality certification program are qualified, consistent with 
CWA requirements, to implement a water quality certification program. 
The procedures are meant to provide more opportunities for Tribes to 
engage fully in the program and are not intended to act as a barrier to 
Tribal administration of the section 401 program. The procedures are 
modeled after the TAS regulatory provisions for the CWA section 303(c) 
water quality standards (WQS) program, located at 40 CFR 131.8, and the 
TAS provisions for the CWA section 303(d) impaired water listing and 
total maximum daily load program, located at 40 CFR 130.16. The WQS TAS 
regulations, developed in the early 1990s, have acted as a model for 
other programs including the section 303(d) regulations. See 81 FR 
65905. Additionally, EPA's TAS regulations allow Tribes to 
simultaneously obtain TAS for sections 303(c) and 401. As a result, the 
part 131 and part 130 TAS regulations provide an appropriate model for 
this final rule.
    These provisions provide more opportunities and clarity for Tribes 
interested in participating in the section 401 certification process. 
Although the CWA clearly allows Tribes to obtain TAS for section 401, 
current regulations and practice treat TAS for section 401 as an 
adjunct to TAS for the CWA section 303(c) program for water quality 
standards. To date, 83 federally recognized Tribes (out of 574) have 
received TAS for section 401 concurrently with obtaining TAS for 
section 303(c).\108\ The TAS provisions in this final rule do not 
eliminate or modify the section 401 procedures already found in part 
131. Instead, they provide an alternate path for Tribes wishing to 
obtain TAS status only for section 401 and not also for section 303(c).
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    \108\ See https://www.epa.gov/tribal/tribes-approved-treatment-state-tas. To date, one Tribe with TAS for section 303(c) (Havasupai 
Tribe in Arizona) has declined TAS for section 401.
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    Upon receiving TAS for section 401, Tribes have two roles. First, 
Tribes that receive section 401 TAS are responsible for acting as a 
certifying authority for projects that may result in a discharge into 
waters of the United States on their Indian reservations. As certifying 
authorities, Tribes with TAS may grant, grant with conditions, deny, or 
waive certification based on whether a federally licensed or permitted 
project will comply with sections 301, 302, 303, 306, and 307 of the 
CWA and any other appropriate requirements of Tribal law. See 33 U.S.C. 
1341(a)(1) and (d). Second, Tribes that receive section 401 TAS are 
accorded the status of ``neighboring jurisdiction'' for purposes of 
section 401(a)(2). If EPA makes a ``may affect'' finding during its 
determination with respect to that neighboring jurisdiction, the 
notified neighboring jurisdiction, including Tribes with TAS for 
section 401 and

[[Page 66653]]

Tribes with TAS for section 401(a)(2), may object to the issuance of 
the Federal license or permit if they determine that a discharge from 
the project ``will violate'' any of its water quality requirements and 
request a public hearing from the Federal licensing or permitting 
agency. 33 U.S.C. 1341(a)(2); 40 CFR part 121, subpart B.
2. Summary of Final Rule Rationale and Public Comment
    The final rule's inclusion of TAS provisions solely for section 401 
and 401(a)(2) provides alternate paths for Tribes to engage in the 
section 401 process without also needing to apply for section 303(c), 
promoting cooperative federalism and Tribal rights. Many of the 
commenters addressing the proposal to add provisions enabling Tribes to 
obtain TAS solely for section 401 and for section 401(a)(2) expressed 
support for finalizing the proposed TAS provisions. These commenters 
supported the inclusion of section 401 TAS provisions for various 
reasons including interest in supporting Tribal agency, increasing 
Tribal participation in Federal licensing and permitting processes, 
providing Tribes a tool for protecting water quality and treaty rights, 
recognizing the vast knowledge of Tribal communities and their 
sovereignty, respecting the role waters play in Tribal cultures, and 
affording Tribes more options regarding administration of CWA programs.
    EPA appreciates these commenters' support. Promulgating a 
regulation expressly providing a process and requirements for section 
401 TAS in the absence of section 303(c) TAS is consistent with section 
518 and would provide clarity and increased opportunities for 
interested Tribes to participate in section 401. CWA section 518 
authorizes the Agency to treat eligible Tribes with reservations in a 
similar manner to states ``for purposes of subchapter II of this 
chapter and sections . . . 1341, . . . of this title to the degree 
necessary to carry out the objectives of this section.'' See 33 U.S.C. 
1377(e). Section 518(e) establishes eligibility criteria for TAS.\109\
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    \109\ Section 518(e) authorizes EPA to treat eligible Tribes in 
a similar manner as a state if (1) the Indian tribe has a governing 
body carrying out substantial governmental duties and powers; (2) 
the functions to be exercised by the Indian tribe pertain to the 
management and protection of water resources which are held by an 
Indian tribe, held by the United States in trust for Indians, held 
by a member of an Indian tribe if such property interest is subject 
to a trust restriction on alienation, or otherwise within the 
borders of an Indian reservation; and (3) the Indian tribe is 
reasonably expected to be capable, in the Administrator's judgment, 
of carrying out the functions to be exercised in a manner consistent 
with the terms and purposes of this chapter and of all applicable 
regulations. See 33 U.S.C. 1377(e).
---------------------------------------------------------------------------

    Additionally, developing regulations on section 401 TAS as a 
standalone process for Tribes seeking this authority who are not 
concurrently applying for section 303(c) TAS may encourage more Tribes 
to seek TAS for section 401. Decoupling section 401 TAS from section 
303(c) recognizes that section 401 and section 303(c) administration 
are related, but distinct functions and is responsive to Tribal 
stakeholders who have expressed an interest in participating in the 
section 401 certification process.
    However, EPA recognizes that some Tribes may not desire or have the 
resources to apply for the section 401 certification program. Pre-
proposal input suggested that Tribes may wish to be notified about and 
have the ability to object to and provide information regarding, 
potential Federal licenses and permits that may impact their waters. 
Several Tribal stakeholders have expressed concern that Tribes without 
TAS are not able to participate in the section 401(a)(2) neighboring 
jurisdictions process. In response to pre-proposal input, EPA proposed 
a separate TAS provision for the section 401(a)(2) neighboring 
jurisdictions process. Many commenters from the public comment period 
indicated support for the proposed TAS provisions, including 
specifically for section 401(a)(2). Commenters asserted that waters on 
reservations are susceptible to degradation from upstream discharges 
and that the TAS provisions for section 401(a)(2) provided a mechanism 
for objecting and requesting a hearing on the issuance of Federal 
licenses and permits for those discharges while limiting administrative 
burdens associated with obtaining TAS for section 401(a)(1). As a 
result of this input, EPA is finalizing as proposed to provide Tribes 
with an opportunity to seek TAS authorization for the limited purpose 
of being a neighboring jurisdiction pursuant to section 401(a)(2). The 
final rule promotes Tribal engagement by providing an opportunity for 
Tribes to protect their water quality through participating in the 
section 401 certification process without needing to assume all of the 
authorities and responsibilities of section 401. Tribes applying for 
TAS solely for section 401(a)(2) will still need to meet the same four 
criteria discussed above. However, since participating as a neighboring 
jurisdiction under section 401(a)(2) does not involve any exercise of 
regulatory authority and involves carrying out fewer functions than 
acting as a certifying authority, EPA anticipates that demonstrations 
that the applicant Tribe satisfies the criteria will be more 
streamlined than the demonstrations in applications for TAS for 
purposes of administering the entirety of section 401. See discussion 
infra.
    Some commenters expressed concern about the addition of TAS 
provisions for section 401 and section 401(a)(2). Some of these 
commenters asserted that section 401 is limited to ensuring compliance 
with EPA-approved water quality standards, and they questioned how 
Tribes without EPA-approved water quality standards under section 
303(c) of the Clean Water Act would implement section 401. EPA 
disagrees that section 401 is limited to ensuring compliance with Clean 
Water Act section 303(c) water quality standards. The term ``water 
quality requirements'' is used throughout section 401, and EPA has 
defined ``water quality requirements'' to include any limitation, 
standard, or other requirement under the provisions enumerated in 
section 401(a)(1), any Federal and state or Tribal laws or regulations 
implementing the enumerated provisions, and any other water quality-
related requirement of state or Tribal law regardless of whether they 
apply to point or nonpoint source discharges. 40 CFR 121.1(j). Under 
this approach, authorized Tribes can base their section 401 
certification decisions on compliance with water quality requirements 
other than Tribal water quality standards approved under section 
303(c). Examples include Tribal ordinances or other Tribal laws related 
to water quality, or, if present, Federal water quality standards 
promulgated by EPA for reservation waters.\110\
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    \110\ Federal water quality standards are currently in place for 
the Confederated Tribes of the Colville Reservation. See 40 CFR 
131.35. EPA recently published a proposed rule that would establish 
Federal baseline water quality standards for waters on Indian 
reservations that do not have water quality standards in effect for 
CWA purposes. 88 FR 29496 (May 5, 2023). Upon finalizing the rule, 
those Federal baseline water quality standards would serve as the 
applicable water quality standards in effect for CWA purposes.
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    Other commenters who raised concerns about the TAS provisions 
requested that EPA provide explicit acknowledgement of the specific 
circumstances regarding Oklahoma's authority under the Safe, 
Accountable, Flexible, Efficient Transportation Equity Act of 2005 
(SAFETEA). Some of these commenters said that EPA should note that the 
TAS provisions for section 401 and section 401(a)(2) are subject to 
limitations consistent with this authority.

[[Page 66654]]

    EPA holds that the provisions in this final rule for obtaining TAS 
for section 401 and section 401(a)(2) have no effect on the separate 
TAS requirement of section 10211(b) of SAFETEA. Additionally, the 
section 401(a)(2) neighboring jurisdiction role is similar to the 
affected state commenting role established under section 505(a)(2) of 
the Clean Air Act. See 87 FR 35372 (June 9, 2022). Functioning as a 
neighboring jurisdiction under section 401(a)(2) does not involve any 
exercise of regulatory authority by a Tribe (or state) who may be 
affected by a federally licensed or permitted discharge from a 
neighboring jurisdiction. The neighboring jurisdiction role involves an 
opportunity to provide input regarding water quality impacts and to 
inform decision making of the Federal licensing or permitting agency. 
Ultimately, it is the Federal agency that exercises regulatory 
authority through its licensing or permitting decision, and the 
certifying authority in the neighboring state or Indian reservation 
where the discharge originates that exercises authority to grant, grant 
with conditions, deny, or waive certification. The section 401(a)(2) 
neighboring jurisdiction role is similar to the affected state 
commenting role established under section 505(a)(2) of the Clean Air 
Act. See 87 FR 35372.
3. Implementation
    As this final rule includes TAS provisions solely for section 401 
and section 401(a)(2) for the first time, the Agency is developing 
materials to aid the implementation of this aspect of the final rule. 
To implement the TAS provisions in this rule, EPA will need to 
communicate how Tribes can apply and process any incoming TAS 
applications from Tribes. This implementation section also includes 
discussion of how Tribes can implement a certification program or 
participate in the neighboring jurisdictions process if they obtain TAS 
for section 401 and/or section 401(a)(2).
    Commenters requested that EPA provide transparency on TAS 
applications through establishing guidelines for applying and 
identifying necessary materials for applications, as well as keeping 
applicant Tribes updated on their application status. EPA agrees that 
the TAS application process should be transparent and has included 
provisions in this final rule to create clarity and efficiencies in the 
application process. To provide direction on how a Tribe may meet the 
criteria described in section IV.L.1 of this preamble, EPA has 
described the contents of an application for TAS for section 401. See 
40 CFR 121.11(b). To assist applicant Tribes, the Agency is also 
developing a template which would provide explanations and instructions 
for documenting how the Tribe meets the eligibility requirements. The 
template would consist of areas for Tribes to include a statement that 
the Tribe is recognized by the Secretary of the Interior, a descriptive 
statement that demonstrates the Tribal government carries out 
substantial duties and powers, a descriptive statement of the Tribe's 
authority to regulate water quality, and a narrative statement that 
describes the Tribe's capability to administer a section 401 water 
quality certification program. Consistent with existing TAS regulations 
for other programs, this final rule also provides that Tribal 
applicants include additional documentation that may be required by EPA 
to support the Tribal application. Each TAS application will present 
its own set of legal and factual circumstances, and EPA anticipates 
that in some cases it may be necessary to request additional 
information when reviewing a Tribe's application. Such requests would, 
for instance, generally relate to ensuring that the application 
contains sufficient complete information to address the required 
statutory and regulatory TAS criteria. This could include, for 
instance, information relating to a unique issue pertaining to the 
applicant Tribe or its reservation or an issue identified during the 
comment process described below. Consistent with longstanding practice, 
the Agency would work with Tribes in an appropriately streamlined 
manner to ensure that their TAS applications contain all necessary 
information to address applicable statutory and regulatory criteria. If 
a Tribe has previously qualified for TAS under another EPA program, the 
Tribe is only required to submit information that was not previously 
submitted as part of a prior TAS application.
    The final rule also describes EPA's procedures to review and 
process an application for section 401 TAS. See 40 CFR 121.11(c). Once 
EPA receives a complete Tribal application, it will promptly notify the 
Tribe of receipt and process the application in a timely manner. Within 
30 days after receipt of the Tribe's complete application for section 
401 TAS, EPA shall provide notice to appropriate governmental entities 
\111\ of the application, including information on the substance of and 
basis for the Tribe's assertion of authority to regulate reservation 
water quality. Appropriate governmental entities will be given 30 days 
to provide comment on the Tribe's assertion of authority. Consistent 
with prior practice regarding such notice in connection with TAS 
applications for other programs, EPA also intends to provide 
sufficiently broad notice (e.g., through local newspapers, electronic 
media, or other appropriate media) to inform other potentially 
interested entities of the applicant Tribe's complete application and 
of the opportunity to provide relevant information regarding the 
Tribe's assertion of authority. If the Tribe's assertion of authority 
is challenged, EPA will determine whether the Tribe has adequately 
demonstrated authority to regulate water quality on the reservation 
after considering all relevant comments received.
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    \111\ EPA defines the term ``appropriate governmental entities'' 
as ``States, tribes, and other Federal entities located contiguous 
to the reservation of the tribe which is applying for treatment as a 
State.'' 56 FR 64876, 64884 (December 12, 1991).
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    However, if a Tribe previously qualified for TAS for another 
program that also required a Tribe to demonstrate authority to regulate 
reservation water quality (i.e., CWA section 303(c) program, CWA 
section 303(d) program, CWA section 402 program, or CWA section 404 
program) and EPA provided a notice and comment opportunity, the Agency 
would not require notice on the Tribe's assertion of authority to 
appropriate governmental entities in the section 401 TAS application 
unless there were different jurisdictional issues or significant new 
factual or legal information relevant to jurisdiction. EPA thinks this 
approach could help streamline the process and avoid a potentially 
duplicative notice process. This approach will apply prospectively 
only, i.e., where the Tribe obtains TAS for the CWA section 303(c), 
402, or 404 programs after the effective date of this rule. In other 
words, if a Tribe first gains TAS for another CWA regulatory program 
after this rule is effective, and subsequently seeks TAS under this 
rule, additional notice and comment would not be required as part of 
the section 401 TAS application unless different jurisdictional issues 
or significant new factual or legal information relevant to 
jurisdiction are presented in the section 401 TAS application. If the 
Regional Administrator determines that a Tribe's application meets the 
requirements in Sec.  121.11(b), the Regional Administrator will 
promptly notify the Tribe in writing. A decision by the Regional 
Administrator that a Tribe does not meet the requirements in Sec.  
121.11(b) would not preclude the Tribe from resubmitting the 
application at a future date. If the Regional Administrator

[[Page 66655]]

determines that a Tribal application is deficient or incomplete, EPA 
will identify such deficiencies and gaps so the Tribe can make changes 
as appropriate and necessary.

M. Implementation Considerations

    EPA recognizes that both certifying authorities and Federal 
agencies have existing regulations addressing implementation of section 
401. For example, as discussed in section IV.C in this preamble, the 
Agency is aware that some certifying authorities have regulations 
defining the contents of a request for certification. As a result of 
this rulemaking effort, certifying authorities may choose to modify 
their existing regulations (e.g., they may choose to define the 
contents of a certification request instead of relying on EPA's 
definition). Similarly, EPA is aware that the Corps and FERC have 
separate section 401 implementation regulations addressing their 
respective Federal licensing or permitting programs.\112\ EPA expects 
that Federal agencies with existing section 401 implementing 
regulations will evaluate their regulations and other guidance 
documents to ensure consistency with this final rule.
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    \112\ See e.g., 33 CFR 325.2 (water quality certification on 
section 404 permits); 18 CFR 4.34 (water quality certification on 
FERC hydropower licenses).
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    Given that EPA intends many of the provisions of the final rule to 
represent a return to past practices with added clarity, the Agency 
anticipates that implementation of the final rule will not require a 
significant overhaul of state, Tribal, or other Federal regulations. 
EPA will support implementation of the final rule through training 
sessions for each of the various stakeholder groups, as well as through 
engagement with an interagency Federal CWA section 401 workgroup.
    The Agency also wishes to clarify the applicability of the final 
rule to ongoing certification actions. As of the effective date of this 
final rule, which will be 60 days after publication of the final rule 
in the Federal Register, all actions taken as part of the section 401 
certification process must be taken pursuant to the final rule. 
However, the final rule does not apply retroactively to actions already 
taken under the 2020 Rule. For example, if a certifying authority 
received a request for certification, prior to the effective date of 
this final rule, and the certifying authority has not acted on the 
request for certification as of the effective date, any decision issued 
by the certifying authority after the effective date of this final rule 
must comply with the requirements in the final rule (e.g., scope of 
certification) and any Federal agency review of a certification 
decision must comply with Sec.  121.8. However, the validity of the 
request for certification would be determined under the 2020 Rule and 
the project proponent would not need to re-request certification 
consistent with the final rule. The certifying authority may request 
more information to help inform its decision-making on the request for 
certification, including information relevant to determining water-
quality impacts from the activity subject to certification, but the 
certifying authority must still issue its certification decision within 
the reasonable period of time, which would not pause while the 
certifying authority is seeking more information.\113\ A ``reasonable 
period of time'' determined under the 2020 Rule prior to the effective 
date of the final rule would not automatically change because this 
final rule went into effect; however, the certifying authority may 
request an extension to the reasonable period of time pursuant to Sec.  
121.6(e) of the final rule, or avail itself to an automatic extension 
to the reasonable period of time pursuant to Sec.  121.6(d)--provided 
that the reasonable period of time does not exceed one year from the 
date that the request for certification was received. Additionally, 
after the effective date, if a project proponent has not submitted a 
request for certification or if the project proponent has only 
submitted a pre-filing meeting request by the time the final rule goes 
into effect, the project proponent is responsible for submitting a 
request for certification in accordance with Sec.  121.5 of the final 
rule. Finally, after the effective date, a certifying authority and 
Federal agency can apply the final rule's modification process at Sec.  
121.10 to any certification decision, even if that decision was 
provided while a prior rule (e.g., 1971 Rule or 2020 Rule) was in 
effect.\114\ Similarly, if a Federal agency determined pursuant to the 
2020 Rule and prior to the effective date of the final rule that a 
certifying authority constructively waived certification for failure to 
comply with the procedural requirements of the 2020 Rule, that 
determination is not affected by this final rule going into effect, 
even if the relevant Federal license or permit has not yet been issued. 
As discussed above, if a ``reasonable period of time'' was established 
under the 2020 Rule prior to the effective date of the final rule, that 
reasonable period of time would not automatically change because this 
final rule went into effect.
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    \113\ Under both this final rule and the 2020 Rule, a certifying 
authority may request more information to help inform its decision-
making after a request for certification is made and the reasonable 
period of time has begun. See section IV.C of this preamble and 85 
FR 42245 (July 13, 2020) (``Nothing in the final rule's definition 
of ``certification request'' precludes a project proponent from 
submitting additional, relevant information or precludes a 
certifying authority from requesting and evaluating additional 
information within the reasonable period of time'').
    \114\ However, if the relevant Federal license or permit has not 
yet been issued, the project proponent could request certification 
anew, and the certifying authority would then need to act on that 
request consistent with this final rule.
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    The approach the Agency adopts here regarding the applicability of 
the final rule to ongoing certification actions is consistent with the 
approach taken by the Agency after a court vacatur of the 2020 Rule in 
2021 and the Supreme Court's stay of that vacatur in 2022. See section 
III.C.3 for background on the litigation to the 2020 Rule. The Agency 
is not aware of any disruptions or delays in the certification process 
as the result of the Agency's approach to ongoing certification actions 
in those instances.

N. Severability

    The purpose of this section is to clarify the Agency's intent with 
respect to the severability of provisions of this rule in the event of 
litigation. In the event of a stay or invalidation of any part of this 
rule, the Agency's intent is to preserve the remaining portions of the 
rule to the fullest possible extent. To dispel any doubt regarding 
EPA's intent and to inform how the regulation would operate if severed, 
EPA has added the following regulatory text at Sec.  121.19: ``The 
provisions of this part are separate and severable from one another. If 
any provision is stayed or determined to be invalid, the remaining 
provisions shall continue in effect.'' The Agency would have adopted 
each portion of this rule independent of the other portions. As 
explained below, the Agency carefully crafted this rule so that each 
provision or element of the rule is capable of operating independently. 
Moreover, the Agency has organized the rule so that if any provision or 
element of this rule is determined by judicial review or operation of 
law to be invalid, that partial invalidation will not render the 
remainder of this rule invalid.
    Section 121.3 regarding the scope of review for certification 
decisions is a good example of how the Agency structured the final rule 
so its various provision and elements operate independently. The 
provisions regarding scope operate entirely independently from the 
other provisions of this rule, as Sec.  121.3, which concerns scope, is 
not cross-referenced or necessary for the operation of any other 
section of part 121 or any other EPA

[[Page 66656]]

regulation. The other provisions of this rule operate the same 
regardless of whether the scope of certification is water quality-
related impacts from the full activity subject to the Federal license 
or permit or only its point source discharges. First, the rule's 
provisions regarding when certification is required (Sec.  121.2) would 
be the same regardless of the scope of certification. The Agency's 
rationale for when certification is required does not rely on and is 
independent of the Agency's rationale for the proper scope of 
certification. What triggers a requirement to apply for certification 
is a distinct issue, independent from what the certifying authority can 
consider in its subsequent certification decision. Second, this rule's 
definition of water quality requirements remains valid regardless of 
the scope of certification. The rule defines ``water quality 
requirements'' to mean ``any limitation, standard, or other requirement 
under sections 301, 302, 303, 306, and 307 of the Clean Water Act, any 
Federal and state or Tribal laws or regulations implementing those 
sections, and any other water quality-related requirement of state or 
Tribal law.'' Section 121.1(j). The first two clauses (listing the 
sections of the CWA identified in section 401 and the state or Tribal 
laws implementing them) clearly hold true regardless of scope of 
certification. In addition, regardless of the scope of certification 
(i.e., either the full activity subject to the Federal license or 
permit or only its point source discharges), in order to qualify as an 
``appropriate'' requirement of state or Tribal law, the requirement 
must be ``water quality-related.'' Additionally, the issue of which 
waters to consider when acting on a request for certification is 
independent of the issue of the proper scope of certification. Under 
either a ``discharge-only'' or activity-based scope of certification, 
the question remains whether certifying authorities may consider 
impacts to state or Tribal waters beyond ``navigable waters.'' EPA's 
interpretation regarding which waters may be considered is also 
severable from all other aspects of this final rule. No provision of 
this final rule operates differently depending on which waters a 
certifying authority may consider when acting on a request for 
certification.\115\ Further, the Agency's interpretation regarding 
scope of the neighboring jurisdictions process in section 401(a)(2) is 
independent and does not rely on the Agency's interpretation regarding 
the scope of certification. As explained in this preamble, the 
certification process and the neighboring jurisdictions process are two 
distinct processes with distinct statutory text and legislative 
history. EPA's interpretation of the scope of the neighboring 
jurisdictions process expressly accounts for these differences.
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    \115\ In fact, the Agency's interpretation of which waters may 
be considered in certification is not reflected in the regulatory 
text, including the text regarding scope of certification at Sec.  
121.3.
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    The other topics addressed in this rulemaking all function the same 
regardless of the scope of certification. Many are important process 
improvements (e.g., how to set the reasonable period of time, when 
extensions are permissible, what are the elements of a request for 
certification, when and how to modify a grant of certification) that 
function the same regardless of scope. All the topics addressed in this 
rulemaking beyond scope are important provisions that EPA would have 
promulgated absent promulgation of a rule changing the scope of 
certification. As explained throughout this preamble, these other 
aspects of the rule provide independent benefits to the certification 
process including regulatory certainty and transparency, efficient 
certification reviews, and enhanced cooperative federalism. Regardless 
of the scope of certification, for the reasons articulated in this 
preamble, EPA would adopt the same pre-filing meeting requirement 
(Sec.  121.4); the same minimum contents for a request for 
certification (Sec.  121.5); the same process for determining the 
reasonable period of time (Sec.  121.6); the same four ways a 
certifying authority may act on a request (grant, grant with 
conditions, deny, or expressly waive) (Sec.  121.7); the same 
limitations regarding Federal agency review (Sec.  121.8); the same 
standard for when inadvertent waiver occurs (Sec.  121.9); the same 
procedure and limitations for modifying a grant of certification (Sec.  
121.10); the same requirements for Indian Tribes to administer a 
certification program (Sec.  121.11); the same procedures regarding the 
neighboring jurisdictions process (Sec. Sec.  121.12 through 121.15); 
the same additional procedures for when EPA acts as a certifying 
authority (Sec. Sec.  121.16 and 121.17); the same rules regarding EPA 
review and advice (Sec.  121.18), and would otherwise take the same 
approach as it did in this final rule. EPA's rationales for adopting 
these provisions apply equally regardless of the scope of certification 
and these provisions would function equally under any scope of 
certification.
    Likewise, the other provisions of this rule operate independently 
from each other and are intended to be severable. For example, the 
contents of a request for certification (Sec.  121.5) function 
independently from the procedures for setting and extending the 
reasonable period of time (Sec.  121.6). The process and limitations 
for modifying a grant of certification (Sec.  121.10) have no bearing 
on a federally recognized Tribe's ability to apply for TAS for section 
401 (Sec.  121.11). The limitations on Federal agency review (Sec.  
121.8) have no bearing on when a request for certification is required 
(Sec.  121.2). Were any element of these provisions stayed or 
invalidated by a reviewing court, the elements that remained in effect 
would continue to provide vital improvements to the certification 
process including regulatory certainty and transparency, efficient 
certification reviews, enhanced cooperative federalism, and where 
appropriate, reasonable flexibility to adapt to changing circumstances. 
The examples provided throughout this section are illustrative, rather 
than exhaustive, and EPA intends each portion of the rule to be 
independent and severable. Further, if the application of any portion 
of this rule to a particular circumstance is determined to be invalid, 
the Agency intends that the rule remain applicable to all other 
circumstances.

V. Economic Analysis

    Pursuant to Executive Orders 12866 (Regulatory Planning and Review) 
and 14094 (Modernizing Regulatory Review), EPA has prepared an economic 
analysis (Economic Analysis for the Final Rule) to inform the public of 
potential effects associated with this rulemaking. This analysis is not 
required by the CWA.
    To support the final rulemaking, EPA prepared an Economic Analysis 
for the Final Rule and other related rule analyses to assess potential 
impacts of the rule. These analyses seek to evaluate the benefits and 
costs of the rulemaking and the effects of the rule on vulnerable 
groups and small entities. The Economic Analysis for the Final Rule 
presents an overview of practice under the 1971 Rule and 2020 Rule 
(baselines),\116\ a description of the final rule changes, and an 
assessment of the potential impacts of the final rulemaking on project 
proponents, certifying authorities, and Federal agencies as changes 
from each baseline of regulatory practice to the new requirements. 
Appendix A in the Economic Analysis for the Final Rule provides a 
plain-language comparison of the 1971 Rule, 2020 Rule, and final

[[Page 66657]]

rulemaking provisions in a table format. Within the Economic Analysis 
for the Final Rule, the Agency included discussion of the environmental 
benefits and process costs with examples relative to the final 
rulemaking provisions. EPA also assessed environmental justice impacts 
of the rulemaking on vulnerable communities and impacts on small 
entities. The Agency also prepared an Information Collection Request 
Supporting Statement which describes the overall burden of the section 
401 regulations, thus including any new burdens resulting from this 
final rule. See section VI.B of this preamble.
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    \116\ Due to ongoing litigation on the 2020 Rule, EPA considers 
two baselines in the economic analysis.
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    Section 401 certification decisions have varying effects on 
certifying authorities and project proponents. However, the Agency has 
limited data regarding the number of requests for certification 
submitted and the certification decisions taken on requests for 
certification (i.e., whether certifications were granted, granted with 
conditions, denied, or waived). The Agency does not maintain a national 
database of certifying authority decisions and therefore did not have 
enough data available to perform a fully quantitative economic 
analysis. Given the absence of data related to section 401 regulations, 
EPA performed a qualitative analysis of the section 401 certification 
process under the 1971 Rule, the 2020 Rule, and under the final 
rulemaking.
    The Agency reviewed information from several sources to 
characterize section 401 baseline conditions and understand potential 
impacts of the regulatory changes. Specifically, the Agency 
investigated State and territory websites and assembled available 
information concerning section 401 fees and certification decisions. 
EPA also conducted a focused review of pre-proposal input letters \117\ 
and public comments \118\ to extract any information concerning 
economic impacts of section 401 and key issues identified during 
implementation of section 401.
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    \117\ Docket ID No. EPA-HQ-OW-2021-0302.
    \118\ Docket ID No. EPA-HQ-OW-2022-0128.
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    Section 401 is a direct grant of authority to states and authorized 
Tribes. Accordingly, EPA does not provide program oversight to state or 
Tribal programs. Nevertheless, EPA reviewed state and territory 
websites to investigate data availability on certification decisions 
and found that seven certifying authorities have section 401 
certification decision documents publicly available. The Agency 
reviewed a random sample of 200 certification decisions from seven 
different state websites \119\ and used a machine reading approach to 
determine whether the Agency could derive any information on timing and 
certification decisions to inform this rulemaking.\120\ Due to 
significant data limitations, EPA was unable to use the review of the 
certification decisions to make any conclusions to inform this 
rulemaking. More information about the analysis that EPA performed when 
reviewing these decision documents can be found in the Economic 
Analysis for the Final Rule.
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    \119\ Arkansas, California Water Board of San Diego, Idaho, 
Mississippi, New Hampshire, Oregon, and Washington.
    \120\ For more detailed information about the Agency's 
methodology for selecting random samples and conducting the machine 
reading analysis, please see Clean Water Act Section 401 Water 
Quality Certification Improvement Rule--Final Rule, Memorandum to 
the File, Certification Decision PDF Extraction Effort, available in 
Docket ID No. EPA-HQ-OW-2022-0128.
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    Within the Economic Analysis, the Agency describes the various 
Federal licenses and permits that require section 401 certification and 
the potential actions that certifying authorities may take pursuant to 
their section 401 authority. Additionally, the Agency summarized the 
annual number of licenses and permits that require section 401 
certification under different Federal authorities to determine the 
extent of licensing and permitting actions within the section 401 
universe. These types of information are used in the Economic Analysis 
for the Final Rule to describe implementation practices and trends 
under the baselines and serve as the basis for assessing impacts of the 
final rulemaking.
    In determining the potential effects of the final rulemaking, EPA 
described the impacts of rule revisions in several key areas including 
pre-filing meetings, contents of requests for certification, reasonable 
period of time, neighboring jurisdictions, and Tribal provisions for 
implementing section 401. The 1971 Rule baseline did not include a pre-
filing meeting request requirement. However, because pre-filing 
meetings allow for early discussion of project details, such meetings 
would ultimately be expected to reduce burden elsewhere in the section 
401 certification process. The 2020 Rule did not provide certifying 
authorities with the option to waive or shorten the pre-filing meeting 
request requirement. The Agency anticipates that the pre-filing meeting 
request provision will provide flexibility for certifying authorities 
to decide whether to require pre-filing meeting requests and whether to 
hold pre-filing meetings based on project complexity and other factors. 
Relative to both the 1971 Rule and 2020 Rule baselines, the Agency 
expects that the minimum content requirements for all requests for 
certifications will support a transparent and efficient certification 
process. Additionally, relative to each of the two baselines, the 
changes concerning the reasonable period of time for certification 
review will balance equities between certifying authorities and Federal 
agencies and provide flexibility for certifying authorities and Federal 
agencies to determine the optimal length for the reasonable period of 
time or any extensions, provided they do not exceed one year from the 
date the request for certification was received. For example, the final 
rule will allow certifying authorities to ensure that the reasonable 
period of time is informed by the size and complexity of the project, 
the certifying authority's available resources (e.g., staff size), 
public notice and comment requirements, and other relevant timing 
considerations (e.g., Federal license or permit deadlines; associated 
National Environmental Policy Act deadlines; and/or anticipated 
timeframe for neighboring jurisdictions process). Allowing the 
certifying authority and Federal agency to negotiate a reasonable 
period of time at or before the beginning of the certification process 
(subject to a six-month default) is also likely to improve the 
efficiency of the review process. The final rule also provides greater 
clarity regarding the process to protect neighboring jurisdiction 
waters (e.g., by specifying the contents of a notification from a 
Federal agency to EPA), which is expected to increase its efficiency. 
This clarity and efficiency are expected when using the 1971 Rule as 
the baseline, as well as for the 2020 Rule baseline (though potentially 
to a lesser extent due to some updated provisions in the 2020 Rule). 
Neither the 1971 Rule nor the 2020 Rule included TAS provisions. Final 
revisions permitting Tribes to obtain TAS solely for section 401 and, 
if desired, to only obtain TAS for the purpose of participating as 
neighboring jurisdictions under section 401(a)(2), will provide Tribes 
with a greater ability to protect their water resources from the 
adverse effects of pollution from federally licensed or permitted 
projects.
    In some areas, the rulemaking would revive practices that had been 
widely implemented for 50 years before the 2020 Rule. Specifically, the 
rule would return the scope of a certifying authority's section 401 
review as encompassing the ``activity'' which is consistent with 
longstanding Agency and certifying authority practice and

[[Page 66658]]

allows certifying authorities to protect their waters from the widest 
range of impacts. The Agency is finalizing a certification modification 
process, allowing certifying authorities and Federal agencies the 
flexibility to mutually agree on circumstances warranting modification. 
Provided that certification modification efforts are appropriately 
coordinated, the modification process under the final rule would allow 
certifying authorities to adapt to changes in environmental and 
regulatory conditions, and provide needed flexibility to accommodate 
changed circumstances after issuance of a grant of certification, with 
or without conditions.
    EPA anticipates that the rulemaking will enhance the ability of 
states and Tribes to protect their water resources by clarifying key 
components of the water quality certification process and improving 
coordination between Federal agencies, certifying authorities, and 
project proponents.

VI. 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 12866: Regulatory Planning and Review and Executive 
Order 14094: Modernizing Regulatory Review

    This action is a ``significant regulatory action'' as defined in 
Executive Order 12866, as amended by Executive Order 14094. 
Accordingly, EPA submitted this action to the Office of Management and 
Budget (OMB) for Executive Order 12866 review. Documentation of any 
changes made in response to Executive Order 12866 review is available 
in the docket for this action. The Agency prepared an economic analysis 
of the potential impacts associated with this action, and concluded 
that the benefits of the rule justify the costs. This analysis, the 
Economic Analysis for the Final Rule, is available in the docket for 
this action (Docket ID No. EPA-HQ-OW-2022-0128) and is briefly 
summarized in section V in this preamble.

B. Paperwork Reduction Act (PRA)

    The information collection activities in this rulemaking have been 
submitted for approval to the Office of Management and Budget (OMB) 
under the PRA. The Information Collection Request (ICR) document that 
EPA prepared has been assigned EPA ICR number 2603.08 (OMB Control No. 
2040-0295). You can find a copy of the ICR in the docket for this rule, 
and it is briefly summarized here.
    The information collected under section 401 is used by certifying 
authorities and EPA to evaluate potential water quality impacts from 
federally licensed or permitted projects. When states or Tribes with 
TAS act as the certifying authority, the primary collection of this 
information is performed by the Federal agencies issuing the licenses 
or permits or the states and Tribes acting as certifying authorities. 
When EPA acts as the certifying authority or evaluates potential 
neighboring jurisdiction impacts, the information is collected by EPA. 
Information collected directly by EPA under section 401 in support of 
the section 402 NPDES program is already captured under existing ICR 
No. 0229.255 (OMB Control No. 2040-0004). The information collected 
under section 518(e) is used by EPA to determine whether a Tribe is 
eligible for TAS for section 401 or TAS for section 401(a)(2). 
Information collected directly by EPA under section 518(e) in support 
of the process for Tribes to obtain TAS for CWA section 303(c) and 
section 401 simultaneously is already captured under existing ICR No. 
0988.14 (OMB Control No. 2040-0049). The information collection 
requirements are not enforceable until OMB approves them.
    The revisions clarify the nature of the information project 
proponents must include in a request for section 401 certification. 
They also contain a pre-filing meeting request requirement for project 
proponents which may be waived or shortened by a certifying authority. 
The revisions also provide Tribes with the ability to obtain TAS solely 
for either section 401 or section 401(a)(2). Total annual burden for 
respondents (project proponents and certifying authorities and Tribes 
applying for TAS) are anticipated to be 861,274 hours with the 
associated annual labor costs being approximately $48 million. EPA 
expects these revisions to provide greater clarity regarding section 
401 requirements, to reduce the overall preparation time spent by a 
project proponent on requests for certification, and to reduce the 
review time for certifying authorities.
    In the interest of transparency, EPA is providing the following 
summary of the relevant portions of the burden assessment associated 
with EPA's existing certification regulations. EPA does not expect any 
measurable change in information collection burden associated with the 
rulemaking changes.
    Respondents/affected entities: Project proponents, state and Tribal 
reviewers (certifying authorities), Tribes applying for TAS.
    Respondent's obligation to respond: Required to obtain section 401 
water quality certification; voluntary for Tribes to apply for TAS.
    Estimated number of respondents: 154,006 responses from 77,146 
respondents annually.
    Frequency of response: Variable (one per Federal license or permit 
application, or only once) depending on type of information collected.
    Total estimated burden: 861,274 hours (per year). Burden is defined 
at 5 CFR 1320.3(b).
    Total estimated cost: $48 million (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 EPA's 
regulations in 40 CFR are listed in 40 CFR part 9. When OMB approves 
this ICR, the Agency will announce that approval in the Federal 
Register and publish a technical amendment to 40 CFR part 9 to display 
the OMB control number for the approved information collection 
activities contained in this final rule.

C. Regulatory Flexibility Act (RFA)

    I certify that this final rule will not have a significant economic 
impact on a substantial number of small entities under the RFA. The 
small entities subject to the requirements of this action are project 
proponents that are small businesses applying for Federal licenses or 
permits subject to section 401 certification, which includes 
construction, manufacturing, mining, and utility businesses. Section 
401 requires project proponents to obtain a water quality certification 
from the certifying authority where the potential discharge originates 
or will originate before it may obtain such Federal license or permit.
    EPA is not able to quantify the impacts of the rulemaking on small 
entities due to several data limitations and uncertainties, which are 
described within the Economic Analysis for the Final Rule, available in 
the docket for this rulemaking. However, EPA is including a qualitative 
assessment of the potential impacts of the rulemaking on project 
proponents that are small entities in the Economic Analysis for the 
Final Rule. Based on the qualitative analysis, the Agency has 
determined that some small entities may experience some impact from the 
rulemaking but that the impact would not be significant, nor would the 
number of small entities be substantial. See the Economic

[[Page 66659]]

Analysis for the Final Rule for details of the qualitative analysis.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or 
more as described in UMRA, 2 U.S.C. 1531-1538, and does not 
significantly or uniquely affect small governments. While this action 
creates enforceable duties for the private sector, the cost does not 
exceed $100 million or more. This action does not create enforceable 
duties for state and Tribal governments. See the Economic Analysis for 
the Final Rule in the docket for further discussion on UMRA.

E. Executive Order 13132: Federalism

    Under the technical requirements of Executive Order 13132 (64 FR 
43255, August 10, 1999), EPA has determined that this rulemaking does 
not have federalism implications but expects that this rulemaking may 
be of significant interest to state and local governments. Consistent 
with EPA's policy to promote communication between EPA and state and 
local governments, EPA conducted outreach and engagement with state and 
local government officials and representatives prior to the 
finalization of this rule to permit them to have meaningful and timely 
input into its development.
    EPA is finalizing updates to its CWA section 401 regulation to 
provide greater clarity and flexibility for certifying authorities in 
relation to acting on pre-filing meeting requests, contents of requests 
for certification, acting within the reasonable period of time, 
modifying a grant of certification, and participating in the 
neighboring jurisdictions process. EPA is also finalizing 
clarifications to the scope of Federal agency review; however, nothing 
in EPA's rulemaking would preempt state law. These regulatory 
clarifications and revisions will reinforce the authority granted to 
states by CWA section 401 to protect their water quality, which had 
been exercised by the states prior to implementation of the 2020 Rule.
    Prior to proposing a rule in June 2022, EPA solicited 
recommendations and conducted pre-proposal outreach, such as virtual 
listening sessions, where many state and local governments, 
intergovernmental associations, and other associations representing 
state and local governments participated. Specifically, EPA hosted 
webinar-based listening sessions for pre-proposal input on June 14, 
June 15, June 23, and June 24, 2021, with over 400 participants from 
most states and a few territories. Furthermore, EPA accommodated 
requests for listening sessions with representatives from the 
Association of Clean Water Administrators, the Association of State 
Wetland Managers, the Environmental Council of the States, Western 
States Water Council, Indiana Department of Environmental Management, 
Maryland Department of the Environment, New Mexico Environmental 
Department, New York Department of Environmental Conservation, Oregon 
Department of Environmental Quality, Virginia Department of 
Environmental Quality, and Washington Department of Ecology. All pre-
proposal input letters and summaries of the webinar-based listening 
sessions are available in Docket ID No. EPA-HQ-OW-2021-0302. These 
webinars, meetings, and input letters provided a wide and diverse range 
of interests, positions, and recommendations to the Agency.
    After publishing the proposed rule in the Federal Register, 
stakeholders were encouraged to submit comment letters during a 60-day 
public comment period, and EPA held a public hearing on July 18, 2022 
for all stakeholders to provide public comment on the proposed rule. 
Additionally, EPA hosted three listening sessions specifically for 
state and territory government representatives on June 15, 22, and 28, 
2022--there were over 175 attendees at these listening sessions. 
Summaries of the public hearing sessions and of the input received 
during the state/territory listening sessions can be found in the 
docket for this rulemaking. Furthermore, EPA reviewed and responded to 
the public comment letters from state, territory, and local governments 
in a Response to Comments document that can also be found in the docket 
for this rulemaking.
    Comments on the proposed rule were submitted by various state and 
territory governmental agencies, predominately state environmental 
agencies or departments, with some comments from state departments of 
agriculture, wildlife (and fish and game), public health, and 
transportation. In addition, some comments were submitted by governors' 
offices and attorneys general, with a few joint comments from multiple 
state attorneys general. A few comments were submitted by state-
specific, state-level water boards or departments. Comments were also 
submitted by several national and regional state associations. Many of 
these commenters were generally supportive of the rulemaking effort and 
elements of the proposed rule, but also offered suggestions and/or 
critiques of specific aspects of the proposed rule. Commenters in 
support of the proposed rule generally critiqued the 2020 Rule or 
offered support for the 1971 Rule approach to section 401. These 
commenters argued that the proposed rule was an improvement over the 
2020 Rule in terms of cooperative federalism and/or the purported 
approach to the CWA and discussed the importance of state involvement 
under the CWA and section 401, with several commenters discussing 
specific approaches in their states. On the other hand, other state 
commenters, including a large group of state attorneys general that 
signed onto one letter, voiced support for the 2020 Rule, arguing that 
the narrowed scope of certification review introduced in the 2020 Rule 
was necessary to prevent the abuse or misuse of CWA section 401 by 
certifying authorities.
    As discussed throughout this preamble, EPA acknowledges that the 
final rule may change how states and territories administer the section 
401 program, but anticipates that the adjustments incorporated into the 
final rule will provide states and territories with additional 
flexibility (1) in waiving or shortening the pre-filing meeting request 
requirement, (2) in defining additional content requirements for 
requests for certification, (3) in negotiating the length of the 
reasonable period of time (including development of categorical 
agreements), (4) in reviewing the water quality-related impacts from 
the activity, (5) in development of their certification decision 
documents, (6) in the ability to modify a grant of certification, and 
(7) in the neighboring jurisdictions process if a potential discharge 
originating in another jurisdiction may affect their water quality. 
Finally, the final rule provides clarity for states acting as 
certifying authorities on several key aspects of the certification 
process, including (1) the minimum contents of a request for 
certification, (2) the start of the reasonable period of time (and the 
default length of the reasonable period of time), (3) the water 
quality-related scope of review, (4) the recommended contents of 
certification decisions, (5) the extent of Federal agency review, (6) 
the limits to modifications of certifications, and (7) the neighboring 
jurisdictions process.
    As mentioned above, all state and local government comment letters 
and recommendations received during the comment period are included in 
the rulemaking docket (Docket ID No. EPA-HQ-OW-2022-0128).

[[Page 66660]]

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

    This action may have implications for Tribal governments. However, 
it will neither impose substantial direct compliance costs on federally 
recognized Tribal governments, nor preempt Tribal law. This action may 
change how Tribes with TAS for section 401 administer the section 401 
program, but it will not have an administrative impact on Tribes on 
whose behalf EPA issues certifications. As discussed in the preamble, 
EPA expects this final rule to expand and further clarify the 
opportunities for Tribal participation in the CWA section 401 water 
quality certification process.
    EPA consulted with Tribal officials under the EPA Policy on 
Consultation and Coordination with Indian Tribes early in the process 
of developing this rulemaking to allow them to have meaningful and 
timely input into its development. EPA has developed a final ``Summary 
Report of Tribal Consultation and Engagement for the Clean Water Act 
Section 401 Water Quality Certification Improvement Rule'' which 
further describes EPA's efforts to engage with Tribal representatives 
and is available in the docket for this rulemaking.
    As required by section 7(a), EPA's Tribal Consultation Official has 
certified that the requirements of the executive order have been met in 
a meaningful and timely manner. A copy of the certification is included 
in the docket for this action.
    As previously mentioned, the Agency initiated a Tribal consultation 
and coordination process before proposing a rule by sending a 
``Notification of Consultation and Coordination'' letter, dated June 7, 
2021, to all 574 of the Tribes federally recognized at that time (see 
Docket ID No. EPA-HQ-OW-2021-0302). The letter invited Tribal leaders 
and designated consultation representatives to participate in the 
Tribal consultation and coordination process for this rulemaking. In 
addition to two national Tribal webinars held on June 29 and July 7, 
2021, the Agency convened other listening sessions, that Tribal members 
and representatives attended, for certifying authorities and the 
public. EPA continued outreach and engagement with Tribes and sought 
other opportunities to provide information and hear feedback from 
Tribes at national and regional Tribal meetings during and after the 
end of the consultation period. The Agency did not receive any 
consultation requests. All Tribal and Tribal organization letters and 
webinar feedback are included in the pre-proposal docket (Docket ID No. 
EPA-HQ-OW-2021-0302), and a summary of the Tribal consultation and 
coordination effort may be found in the docket for this action (Docket 
ID No. EPA-HQ-OW-2022-0128). Many Tribal feedback letters or meeting 
participants expressed an interest in receiving additional information 
and in continued engagement with the Agency during development of the 
proposed rulemaking; however, most of these Tribal representatives 
highlighted other ongoing rulemakings that also required their 
engagement.
    After publishing the proposed rule in the Federal Register, 
stakeholders were encouraged to submit comment letters during a 60-day 
public comment period, and EPA held a public hearing on July 18, 2022 
for all stakeholders to provide public comment on the proposed rule. 
Additionally, EPA hosted three listening sessions specifically for 
Tribal representatives on June 15, 22, and 28, 2022--there were over 75 
attendees at these listening sessions. Summaries of the public hearing 
sessions and of the input received during the Tribal listening sessions 
can be found in the docket for this rulemaking. Furthermore, EPA 
reviewed and responded to the public comment letters from Tribal 
representatives in a Response to Comments document that can also be 
found in the docket for this rulemaking.
    Most Tribal commenters expressed support for the proposed rule's 
return to pre-2020 rule practices to restore Tribal sovereignty for the 
protection of their water resources. Many Tribal commenters supported 
inclusion of a section 401 TAS process independent of TAS for section 
303(c), asserting that it would increase Tribal authority related to 
the neighboring jurisdictions process and increase Tribal regulatory 
capability as certifying authorities. Many Tribal commenters supported 
EPA's return to the Agency's longstanding ``activity as a whole'' scope 
of review. Many Tribal commenters also expressed support for the 
proposed rule's approach to extensions to the reasonable period of 
time, as well as the proposed removal of the regulatory prohibition on 
withdrawal and resubmission of requests for certification. Some Tribal 
commenters supported increased flexibility for modifications.
    While many of the Tribal commenters supported the proposed rule, 
some Tribal commenters expressed disagreement or concern with portions 
of the proposed rule. A few Tribal commenters said that they were 
concerned with the inability to participate in the neighboring 
jurisdictions process if EPA does not commit in the regulation to 
consulting with Tribes during EPA's 30-day review period. Another issue 
some Tribal commenters raised was the need for more clarity regarding 
Tribal enforcement of section 401 certification conditions. 
Additionally, a few Tribal commenters expressed concern that the 
default 60-day reasonable period of time would not be enough time for 
their review of large, complex projects. As mentioned throughout this 
preamble, the Agency expects the adjustments made from the proposed 
rule to the final rule to address any Tribal representative concerns 
while continuing to provide the flexibility and clarity that many 
Tribal representatives requested. For more information about the Tribal 
consultation and coordination efforts, please see the final ``Summary 
Report of Tribal Consultation and Engagement for the Clean Water Act 
Section 401 Water Quality Certification Improvement Rule'' in the 
docket (Docket ID No. EPA-HQ-OW-2022-0128).

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

    EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern environmental health or safety risks 
that EPA has reason to believe may disproportionately affect children, 
per the definition of ``covered regulatory action'' in section 2-202 of 
the Executive order.
    Therefore, this action is not subject to Executive Order 13045 
because it does not concern an environmental health risk or safety 
risk. Since this action does not concern human health, EPA's Policy on 
Children's Health also does not apply.

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

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy. See the Economic Analysis for the Final 
Rule in the docket for further discussion on Executive Order 13211.

I. National Technology Transfer and Advancement Act

    This final rulemaking does not involve technical standards.

[[Page 66661]]

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations and 
Executive Order 14096: Revitalizing Our Nation's Commitment to 
Environmental Justice for All

    EPA believes that it is not practicable to assess whether the human 
health or environmental conditions that exist prior to this action 
result in disproportionate and adverse effects on communities with 
environmental justice concerns. The Economic Analysis for the Final 
Rule includes information about the data limitations and uncertainties 
that exist regarding both baseline environmental conditions and how 
stakeholders, including certifying authorities, may respond to this 
final rule.
    The Agency recognizes that the burdens of environmental pollution 
disproportionately fall on certain communities with environmental 
justice concerns, and EPA is responsive to environmental justice 
concerns through multiple provisions in this rule.
    One of the ways the Agency addresses environmental justice concerns 
through the final rule is through the pre-filing meeting request 
requirement, which provides a mechanism to ensure certifying 
authorities can request and receive information needed to protect their 
water resources and ensure the activity will comply with applicable 
water quality requirements, including through consideration of 
information and input from potentially affected communities with 
environmental justice concerns during early engagement. In addition to 
informing the certification process, this also advances the goals of 
Executive Order 14096, including ``meaningful involvement.''
    Additionally, the final rule empowers certifying authorities to 
make a well-informed decision that may affect communities with 
environmental justice concerns because under the final rule, the 
certifying authority can determine the additional contents of requests 
for certification (as long as those contents are relevant to the water 
quality-related impacts from the activity and are identified prior to 
when a project proponent submits a request). Starting the certifying 
authority's review of a request for certification with the necessary 
information about water quality-related impacts from the activity 
promotes environmental justice and transparency in the certification 
process. This also enables certifying authorities to share a greater 
level of detail with the public (including any communities that may be 
impacted by a proposed project), so that participants in the public 
notice and comment process can provide better informed input.\121\
---------------------------------------------------------------------------

    \121\ Under CWA section 401(a)(1), certifying authorities are 
required to establish procedures for public notice and, to the 
extent it deems appropriate, procedures for public hearings. 33 
U.S.C. 1341(a)(1).
---------------------------------------------------------------------------

    Under the final rule's collaborative approach for determining the 
reasonable period of time, certifying authorities can take the needs of 
potentially affected communities into account when determining the 
amount of time they need to review and evaluate the potential impacts 
of a proposed project on the communities' water resources (e.g., a 
certifying authority may suggest a longer reasonable period of time to 
facilitate outreach to communities or to conduct studies on a proposed 
project's impact on local communities). Additionally, the ``activity'' 
approach for scope of review has the potential to benefit communities 
with environmental justice concerns by ensuring that the certifying 
authority can broadly review the potential water quality impacts on 
affected communities.
    Furthermore, the TAS provisions for section 401 as a whole or only 
for section 401(a)(2) give Tribes additional options to obtain TAS, as 
well as more opportunities to provide input and voice any water quality 
concerns during the section 401 process. Lastly, when EPA is acting as 
the certifying authority, the Agency is finalizing the proposed updates 
to the public notice provision to facilitate participation by the 
broadest number of potentially interested stakeholders, including 
communities with environmental justice concerns.
    The information supporting this Executive order review, including a 
description of data limitations and uncertainties, is contained in the 
Economic Analysis for the Final Rule, which can be found in the docket 
for this action and is briefly summarized in section V in this 
preamble.

K. Congressional Review Act (CRA)

    This action is subject to the CRA, and EPA will submit a rule 
report to each House of Congress and to the Comptroller General of the 
United States. This action is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

List of Subjects

40 CFR Part 121

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

40 CFR Part 122

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Hazardous substances, Reporting and 
recordkeeping requirements, Water pollution control.

40 CFR Part 124

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Hazardous waste, Indians--lands, Reporting and 
recordkeeping requirements, Water pollution control, Water supply.

Michael S. Regan,
Administrator.

    For the reasons set forth in the preamble, EPA amends 40 CFR parts 
121, 122, and 124 as follows:

0
1. Revise part 121 to read as follows:

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

Sec.
Subpart A--General
121.1 Definitions.
121.2 When certification is required.
121.3 Scope of certification.
121.4 Pre-filing meeting requests.
121.5 Request for certification.
121.6 Reasonable period of time.
121.7 Certification decisions.
121.8 Extent of Federal agency review.
121.9 Failure or refusal to act.
121.10 Modification to a grant of certification.
121.11 Requirements for Indian Tribes to administer a water quality 
certification program.
Subpart B--Neighboring Jurisdictions
121.12 Notification to the Regional Administrator.
121.13 Determination of effects on neighboring jurisdictions.
121.14 Objection from notified neighboring jurisdiction and request 
for a public hearing.
121.15 Public hearing and Federal agency evaluation of objection.
Subpart C--Certification by the Administrator
121.16 When the Administrator certifies.
121.17 Public notice and hearing.
Subpart D--Review and Advice
121.18 Review and advice.
Subpart E--Severability
121.19 Severability

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

Subpart A--General


Sec.  121.1  Definitions.

    As used in this part, the following terms shall have the meanings 
indicated:

[[Page 66662]]

    (a) Administrator means the Administrator, Environmental Protection 
Agency (EPA).
    (b) Certifying authority means the entity responsible for 
certifying compliance with applicable water quality requirements in 
accordance with Clean Water Act section 401.
    (c) Federal agency means any agency of the Federal Government to 
which application is made for a Federal license or permit that is 
subject to Clean Water Act section 401.
    (d) Federal Indian Reservation, Indian reservation, or reservation 
means all land within the limits of any Indian reservation under the 
jurisdiction of the United States Government, notwithstanding the 
issuance of any patent, and including rights-of-way running through the 
reservation.
    (e) Indian Tribe or Tribe means any Indian Tribe, band, group, or 
community recognized by the Secretary of the Interior and exercising 
governmental authority over a Federal Indian Reservation.
    (f) License or permit means any license or permit issued or granted 
by an agency of the Federal Government to conduct any activity which 
may result in any discharge into waters of the United States.
    (g) Neighboring jurisdiction means any state, or Tribe with 
treatment in a similar manner as a state for Clean Water Act section 
401 in its entirety or only for Clean Water Act section 401(a)(2), 
other than the jurisdiction in which the discharge originates or will 
originate.
    (h) Project proponent means the applicant for a Federal license or 
permit, or the entity seeking certification.
    (i) Regional Administrator means the Regional designee appointed by 
the Administrator, Environmental Protection Agency.
    (j) Water quality requirements means any limitation, standard, or 
other requirement under sections 301, 302, 303, 306, and 307 of the 
Clean Water Act, any Federal and state or Tribal laws or regulations 
implementing those sections, and any other water quality-related 
requirement of state or Tribal law.


Sec.  121.2  When certification is required.

    Certification or waiver is required for any Federal license or 
permit that authorizes any activity which may result in any discharge 
from a point source into waters of the United States.


Sec.  121.3  Scope of certification.

    (a) When a certifying authority reviews a request for 
certification, the certifying authority shall evaluate whether the 
activity will comply with applicable water quality requirements. The 
certifying authority's evaluation is limited to the water quality-
related impacts from the activity subject to the Federal license or 
permit, including the activity's construction and operation.
    (b) Consistent with the scope of review identified in paragraph (a) 
of this section, a certifying authority shall include any conditions in 
a grant of certification necessary to assure that the activity will 
comply with applicable water quality requirements.


Sec.  121.4  Pre-filing meeting requests.

    The project proponent shall request a pre-filing meeting with the 
certifying authority at least 30 days prior to submitting a request for 
certification in accordance with the certifying authority's applicable 
submission procedures, unless the certifying authority waives or 
shortens the requirement for a pre-filing meeting request.


Sec.  121.5  Request for certification.

    (a) Where a project proponent is seeking certification from any 
certifying authority, the request for certification shall include the 
following minimum contents:
    (1) If the request for certification is for an individual Federal 
license or permit, it shall be in writing, signed, and dated and shall 
include the following:
    (i) A copy of the Federal license or permit application submitted 
to the Federal agency; and
    (ii) Any readily available water quality-related materials that 
informed the development of the application.
    (2) If the request for certification is for the issuance of a 
general Federal license or permit, it shall be in writing, signed, and 
dated and shall include the following:
    (i) A copy of the draft Federal license or permit; and
    (ii) Any readily available water quality-related materials that 
informed the development of the draft Federal license or permit.
    (b) Where a project proponent is seeking certification from the 
Regional Administrator, if not already included in the request for 
certification in accordance with paragraph (a) of this section, a 
request for certification shall also include the following, as 
applicable:
    (1) A description of the proposed activity, including the purpose 
of the proposed activity and the type(s) of discharge(s) that may 
result from the proposed activity;
    (2) The specific location of any discharge(s) that may result from 
the proposed activity;
    (3) A map or diagram of the proposed activity site, including the 
proposed activity boundaries in relation to local streets, roads, and 
highways;
    (4) A description of current activity site conditions, including 
but not limited to relevant site data, photographs that represent 
current site conditions, or other relevant documentation;
    (5) The date(s) on which the proposed activity is planned to begin 
and end and, if known, the approximate date(s) when any discharge(s) 
may commence;
    (6) A list of all other Federal, interstate, Tribal, state, 
territorial, or local agency authorizations required for the proposed 
activity and the current status of each authorization; and
    (7) Documentation that a pre-filing meeting request was submitted 
to the certifying authority in accordance with applicable submission 
procedures, unless the pre-filing meeting request requirement was 
waived.
    (c) Where a project proponent is seeking certification from a 
certifying authority other than the Regional Administrator, and that 
certifying authority has identified contents of a request for 
certification in addition to those identified in paragraph (a) of this 
section that are relevant to the water quality-related impacts from the 
activity, the project proponent shall include in the request for 
certification those additional contents identified prior to when the 
request for certification is made.
    (d) Where a project proponent is seeking certification from a 
certifying authority other than the Regional Administrator, and that 
certifying authority has not identified contents of a request for 
certification in addition to those identified in paragraph (a) of this 
section that are relevant to the water quality-related impacts from the 
activity, the project proponent shall include in the request for 
certification those additional contents identified in paragraph (b) of 
this section.


Sec.  121.6  Reasonable period of time.

    (a) The reasonable period of time begins on the date that the 
certifying authority receives a request for certification, as defined 
in Sec.  121.5, in accordance with the certifying authority's 
applicable submission procedures. The certifying authority shall send 
written confirmation to the project proponent and Federal agency of the 
date that the request for certification was received.

[[Page 66663]]

    (b) The Federal agency and the certifying authority may jointly 
agree in writing to the reasonable period of time for the certifying 
authority to act on the request for certification, provided the 
reasonable period of time does not exceed one year from the date that 
the request for certification was received. Such written agreements may 
establish categorical reasonable periods of time.
    (c) If the Federal agency and the certifying authority do not agree 
in writing on the length of the reasonable period of time, the 
reasonable period of time shall be six months.
    (d) If a longer period of time is necessary to accommodate the 
certifying authority's public notice procedures or force majeure events 
(including, but not limited to, government closure or natural 
disasters), upon written notification by the certifying authority to 
the Federal agency prior to the end of the reasonable period of time, 
the reasonable period of time shall be extended by the period of time 
necessitated by public notice procedures or the force majeure event. In 
such written notification to the Federal agency, the certifying 
authority shall identify how much additional time is required and 
provide a justification for such extension. Such an extension shall not 
cause the reasonable period of time to exceed one year from the date 
that the request for certification was received.
    (e) The Federal agency and certifying authority may agree in 
writing to extend the reasonable period of time for any reason, 
provided that the extension shall not cause the reasonable period of 
time to exceed one year from the date that the request for 
certification was received.


Sec.  121.7  Certification decisions.

    (a) A certifying authority may act on a request for certification 
in one of four ways: grant certification, grant certification with 
conditions, deny certification, or expressly waive certification.
    (b) A certifying authority shall act on a request for certification 
within the scope of certification and within the reasonable period of 
time.
    (c) A grant of certification shall be in writing and should include 
the following:
    (1) Identification of the decision as a grant of certification;
    (2) Identification of the applicable Federal license or permit;
    (3) A statement that the activity will comply with water quality 
requirements; and
    (4) An indication that the certifying authority complied with its 
public notice procedures established pursuant to Clean Water Act 
section 401(a)(1).
    (d) A grant of certification with conditions shall be in writing 
and should include the following:
    (1) Identification of the decision as a grant of certification with 
conditions;
    (2) Identification of the applicable Federal license or permit;
    (3) A statement explaining why each of the included conditions is 
necessary to assure that the activity will comply with water quality 
requirements; and
    (4) An indication that the certifying authority complied with its 
public notice procedures established pursuant to Clean Water Act 
section 401(a)(1).
    (e) A denial of certification shall be in writing and should 
include the following:
    (1) Identification of the decision as a denial of certification;
    (2) Identification of the applicable Federal license or permit;
    (3) A statement explaining why the certifying authority cannot 
certify that the activity will comply with water quality requirements, 
including but not limited to a description of any missing water 
quality-related information if the denial is based on insufficient 
information; and
    (4) An indication that the certifying authority complied with its 
public notice procedures established pursuant to Clean Water Act 
section 401(a)(1).
    (f) An express waiver shall be in writing and should include the 
following:
    (1) Identification of the decision as an express waiver of 
certification;
    (2) Identification of the applicable Federal license or permit;
    (3) A statement that the certifying authority expressly waives its 
authority to act on the request for certification; and
    (4) An indication that the certifying authority complied with its 
public notice procedures established pursuant to Clean Water Act 
section 401(a)(1).
    (g) If the certifying authority determines that no water quality 
requirements are applicable to the activity, the certifying authority 
shall grant certification.


Sec.  121.8  Extent of Federal agency review.

    To the extent a Federal agency verifies compliance with the 
requirements of Clean Water Act section 401, its review is limited to 
whether: the appropriate certifying authority issued the certification 
decision; the certifying authority confirmed it complied with its 
public notice procedures established pursuant to Clean Water Act 
section 401(a)(1); and the certifying authority acted on the request 
for certification within the reasonable period of time.


Sec.  121.9  Failure or refusal to act.

    (a) The certification requirement shall be waived only if a 
certifying authority fails or refuses to act on a request for 
certification within the reasonable period of time.
    (b) If the Federal agency determines that the certifying authority 
did not act on a request for certification within the reasonable period 
of time, the Federal agency shall promptly notify the certifying 
authority and project proponent in writing that the certification 
requirement has been waived in accordance with Sec.  121.8. Such notice 
shall satisfy the project proponent's requirement to obtain 
certification.


Sec.  121.10  Modification to a grant of certification.

    (a) Provided that the Federal agency and the certifying authority 
agree in writing that the certifying authority may modify a grant of 
certification (with or without conditions), the certifying authority 
may modify only the agreed-upon portions of the certification. The 
certifying authority is not required to obtain the Federal agency's 
agreement on the language of the modification.
    (b) The certifying authority shall not, through a modification 
pursuant to paragraph (a) of this section:
    (1) Revoke a grant of certification (with or without conditions); 
or
    (2) Change a grant of certification (with or without conditions) 
into a denial or waiver of certification.


Sec.  121.11  Requirements for Indian Tribes to administer a water 
quality certification program.

    (a) The Regional Administrator may accept and approve a Tribal 
application for purposes of administering a water quality certification 
program if the Tribe meets the following criteria:
    (1) The Indian Tribe is recognized by the Secretary of the Interior 
and meets the definitions in Sec.  121.1(d) and (e);
    (2) The Indian Tribe has a governing body carrying out substantial 
governmental duties and powers;
    (3) The water quality certification program to be administered by 
the Indian Tribe pertains to the management and protection of water 
resources that are within the borders of the Indian reservation and 
held by the Indian Tribe, within the borders of the Indian reservation 
and held by the United States in trust for Indians, within the borders 
of the Indian reservation and held by a member of the Indian Tribe if 
such property interest is subject to a trust restriction on alienation, 
or otherwise within the borders of the Indian reservation; and

[[Page 66664]]

    (4) The Indian Tribe is reasonably expected to be capable, in the 
Regional Administrator's judgment, of carrying out the functions of an 
effective water quality certification program in a manner consistent 
with the terms and purposes of the Clean Water Act and applicable 
regulations in this chapter.
    (b) Requests by an Indian Tribe for administration of a water 
quality certification program should be submitted to the appropriate 
EPA Regional Administrator. The application shall include the following 
information, provided that where the Tribe has previously qualified for 
eligibility or ``treatment as a state'' under another EPA-administered 
program, the Tribe need only provide the required information that has 
not been submitted in a previous application:
    (1) A statement that the Tribe is recognized by the Secretary of 
the Interior.
    (2) A descriptive statement demonstrating that the Tribal governing 
body is currently carrying out substantial governmental duties and 
powers over a defined area. The statement should:
    (i) Describe the form of Tribal government;
    (ii) Describe the types of governmental functions currently 
performed by the Tribal governing body such as, but not limited to, the 
exercise of police powers affecting (or relating to) the health, 
safety, and welfare of the affected population, taxation, and the 
exercise of the power of eminent domain; and
    (iii) Identify the source of the Tribal government's authority to 
carry out the governmental functions currently being performed.
    (3) A descriptive statement of the Tribe's authority to regulate 
water quality. The statement should include:
    (i) A map or legal description of the area over which the Tribe 
asserts authority to regulate surface water quality; and
    (ii) A statement by the Tribe's legal counsel or equivalent 
official that describes the basis for the Tribe's assertion of 
authority and may include copies of documents such as Tribal 
constitutions, by-laws, charters, executive orders, codes, ordinances, 
and/or resolutions that support the Tribe's assertion of authority.
    (4) A narrative statement describing the capability of the Indian 
Tribe to administer an effective water quality certification program. 
The narrative statement should include:
    (i) A description of the Indian Tribe's previous management 
experience that may include the administration of programs and services 
authorized by the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450, et seq.), the Indian Mineral Development Act (25 
U.S.C. 2101, et seq.), or the Indian Sanitation Facility Construction 
Activity Act (42 U.S.C. 2004a);
    (ii) A list of existing environmental or public health programs 
administered by the Tribal governing body and copies of related Tribal 
laws, policies, and regulations;
    (iii) A description of the entity (or entities) which exercise the 
executive, legislative, and judicial functions of the Tribal 
government;
    (iv) A description of the existing, or proposed, agency of the 
Indian Tribe which will assume primary responsibility for establishing 
and implementing a water quality certification program; and
    (v) A description of the technical and administrative capabilities 
of the staff to administer and manage an effective water quality 
certification program or a plan which proposes how the Tribe will 
acquire additional administrative and technical expertise. The plan 
must address how the Tribe will obtain the funds to acquire the 
administrative and technical expertise.
    (5) Additional documentation required by the Regional Administrator 
which, in the judgment of the Regional Administrator, is necessary to 
support a Tribal application.
    (c) The procedure for processing a Tribe's application is as 
follows:
    (1) The Regional Administrator shall process an application of an 
Indian Tribe submitted pursuant to paragraph (b) of this section in a 
timely manner. The Regional Administrator shall promptly notify the 
Indian Tribe of receipt of the application.
    (2) Except as provided in paragraph (c)(4) of this section, within 
30 days after receipt of the Tribe's application, the Regional 
Administrator shall provide appropriate notice. The notice shall:
    (i) Include information on the substance and basis of the Tribe's 
assertion of authority to regulate the quality of reservation waters;
    (ii) Be provided to all appropriate governmental entities; and
    (iii) Provide 30 days for comments to be submitted on the Tribal 
application. Comments shall be limited to the Tribe's assertion of 
authority.
    (3) If a Tribe's asserted authority is subject to a competing or 
conflicting claim, the Regional Administrator, after due consideration, 
and in consideration of other comments received, shall determine 
whether the Tribe has adequately demonstrated that it meets the 
requirements of paragraph (a)(3) of this section.
    (4) Where, after November 27, 2023, EPA has determined that a Tribe 
qualifies for treatment in a similar manner as a state for the Clean 
Water Act section 303(c) Water Quality Standards Program, Clean Water 
Act section 303(d) Impaired Water Listing and Total Maximum Daily Loads 
Program, Clean Water Act section 402 National Pollutant Discharge 
Elimination System Program, or Clean Water Act section 404 Dredge and 
Fill Permit Program, and has provided notice and an opportunity to 
comment on the Tribe's assertion of authority to appropriate 
governmental entities as part of its review of the Tribe's prior 
application, no further notice to governmental entities, as described 
in paragraph (c)(2) of this section, shall be provided with regard to 
the same Tribe's application for the water quality certification 
program, unless the application presents to the EPA Regional 
Administrator different jurisdictional issues or significant new 
factual or legal information relevant to jurisdiction.
    (5) Where the Regional Administrator determines that a Tribe meets 
the requirements of this section, they shall promptly provide written 
notification to the Indian Tribe that the Tribe is authorized to 
administer the water quality certification program.
    (d) An Indian Tribe may submit a Tribal application for purposes of 
administering only the Clean Water Act section 401(a)(2) portion of a 
water quality certification program.

Subpart B--Neighboring Jurisdictions


Sec.  121.12  Notification to the Regional Administrator.

    (a) Within five days of the date that it has received both the 
application and either a certification or waiver for a Federal license 
or permit, the Federal agency shall provide written notification to the 
appropriate Regional Administrator.
    (1) The notification shall include a copy of the certification or 
waiver and the application for the Federal license or permit.
    (2) The notification shall also contain a general description of 
the proposed project, including but not limited to the Federal license 
or permit identifier, project location (e.g., latitude and longitude), 
a project summary including the nature of any discharge and size or 
scope of activity, and whether the Federal agency is aware of any 
neighboring jurisdiction providing

[[Page 66665]]

comment about the project. If the Federal agency is aware that a 
neighboring jurisdiction provided comment about the project, it shall 
include a copy of those comments in the notification.
    (b) If the Regional Administrator determines there is a need for 
supplemental information to make a determination about potential 
neighboring jurisdiction effects pursuant to Clean Water Act section 
401(a)(2), the Regional Administrator may make a written request to the 
Federal agency that such information be provided in a timely manner for 
EPA's determination, and the Federal agency shall obtain that 
information from the project proponent and forward the additional 
information to the Administrator within such timeframe.
    (c) The Regional Administrator may enter into an agreement with a 
Federal agency regarding the manner of this notification process and 
the provision of supplemental information.


Sec.  121.13  Determination of effects on neighboring jurisdictions.

    (a) Within 30 days after the Regional Administrator receives notice 
in accordance with Sec.  121.12(a), the Regional Administrator shall 
determine whether a discharge from the project may affect water quality 
in a neighboring jurisdiction.
    (b) If the Regional Administrator determines that the discharge 
from the project may affect water quality in a neighboring 
jurisdiction, within 30 days after receiving notice in accordance with 
Sec.  121.12(a), the Regional Administrator shall notify the 
neighboring jurisdiction, the Federal agency, and the project proponent 
in accordance with paragraph (c) of this section.
    (c) Notification from the Regional Administrator shall be in 
writing and shall include:
    (1) A statement that the Regional Administrator has determined that 
a discharge from the project may affect the neighboring jurisdiction's 
water quality;
    (2) A copy of the Federal license or permit application and related 
certification or waiver; and
    (3) A statement that the neighboring jurisdiction has 60 days after 
such notification to notify the Regional Administrator and the Federal 
agency, in writing, if it has determined that the discharge will 
violate any of its water quality requirements, to object to the 
issuance of the Federal license or permit, and to request a public 
hearing from the Federal agency.
    (d) A Federal license or permit shall not be issued pending the 
conclusion of the process described in this section, and Sec. Sec.  
121.14 and 121.15.


Sec.  121.14  Objection from notified neighboring jurisdiction and 
request for a public hearing.

    (a) If a neighboring jurisdiction notified by the Regional 
Administrator pursuant to Sec.  121.13(b) determines that a discharge 
from the project will violate any of its water quality requirements, it 
shall notify the Regional Administrator and the Federal agency in 
accordance with paragraph (b) of this section within 60 days after 
receiving such notice from the Regional Administrator.
    (b) Notification from the notified neighboring jurisdiction shall 
be in writing and shall include:
    (1) A statement that the notified neighboring jurisdiction objects 
to the issuance of the Federal license or permit;
    (2) An explanation of the reasons supporting the notified 
neighboring jurisdiction's determination that the discharge from the 
project will violate its water quality requirements, including but not 
limited to, an identification of those water quality requirements that 
will be violated; and
    (3) A request for a public hearing from the Federal agency on the 
notified neighboring jurisdiction's objection.
    (c) The notified neighboring jurisdiction may withdraw its 
objection prior to the public hearing. If the notified neighboring 
jurisdiction withdraws its objection, it shall notify the Regional 
Administrator and the Federal agency, in writing, of such withdrawal.


Sec.  121.15  Public hearing and Federal agency evaluation of 
objection.

    (a) Upon a request for hearing from a notified neighboring 
jurisdiction in accordance with Sec.  121.14(b), the Federal agency 
shall hold a public hearing on the notified neighboring jurisdiction's 
objection to the Federal license or permit, unless the objection is 
withdrawn in accordance with Sec.  121.14(c).
    (b) The Federal agency shall provide public notice at least 30 days 
in advance of the hearing to interested parties, including but not 
limited to the notified neighboring jurisdiction, the certifying 
authority, the project proponent, and the Regional Administrator.
    (c) At the hearing, the Regional Administrator shall submit to the 
Federal agency its evaluation and recommendation(s) concerning the 
objection.
    (d) The Federal agency shall consider recommendations from the 
notified neighboring jurisdiction and the Regional Administrator, and 
any additional evidence presented to the Federal agency at the hearing, 
and determine whether additional Federal license or permit conditions 
may be necessary to ensure that any discharge from the project will 
comply with the neighboring jurisdiction's water quality requirements. 
If such conditions may be necessary, the Federal agency shall include 
them in the Federal license or permit.
    (e) If additional Federal license or permit conditions cannot 
ensure that the discharge from the project will comply with the 
notified neighboring jurisdiction's water quality requirements, the 
Federal agency shall not issue the Federal license or permit.

Subpart C--Certification by the Administrator


Sec.  121.16  When the Administrator certifies.

    (a) Certification or waiver by the Administrator is required where 
no state, Tribe, or interstate agency has authority to give such a 
certification.
    (b) When acting pursuant to this section, the Administrator shall 
comply with the requirements of Clean Water Act section 401 and this 
part.


Sec.  121.17  Public notice and hearing.

    (a) Within 20 days of the date that the request for certification 
was received, the Administrator shall provide public notice of the 
request for certification. Following such public notice, the 
Administrator shall provide an opportunity for public comment.
    (b) If the Administrator determines that a public hearing on a 
request for certification is appropriate, the Administrator shall 
schedule such hearing at an appropriate time and place and, to the 
extent practicable, give all interested and potentially affected 
parties the opportunity to present evidence or testimony in person or 
by other means.

Subpart D--Review and Advice


Sec.  121.18  Review and advice.

    Upon the request of any Federal agency, certifying authority, or 
project proponent, the Administrator shall provide any relevant 
information on applicable effluent limitations, or other limitations, 
standards, regulations, or requirements, or water quality criteria, and 
shall, when requested by any Federal agency, certifying authority, or 
project proponent, comment on any methods to comply with such 
limitations, standards, regulations, requirements, or criteria.

[[Page 66666]]

Subpart E--Severability


Sec.  121.19  Severability.

    The provisions of this part are separate and severable from one 
another. If any provision is stayed or determined to be invalid, the 
remaining provisions shall continue in effect.

PART 122--EPA ADMINISTERED PERMIT PROGRAMS: THE NATIONAL POLLUTANT 
DISCHARGE ELIMINATION SYSTEM

0
2. The authority citation for part 122 continues to read as follows:

    Authority:  The Clean Water Act, 33 U.S.C. 1251 et seq.


0
3. Amend Sec.  122.4 by revising paragraph (b) to read as follows:


Sec.  122.4  Prohibitions (applicable to State NPDES programs, see 
Sec.  123.25).

* * * * *
    (b) When the applicant is required to obtain a State or other 
appropriate certification under section 401 of the CWA and that 
certification has not been obtained or waived;
* * * * *

0
4. Amend Sec.  122.44 by revising paragraph (d)(3) to read as follows:


Sec.  122.44  Establishing limitations, standards, and other permit 
conditions (applicable to State NPDES programs, see Sec.  123.25).

* * * * *
    (d) * * *
    (3) Conform to the conditions in a State certification under 
section 401 of the CWA when EPA is the permitting authority;
* * * * *

0
5. Amend Sec.  122.62 by revising paragraph (a)(3)(iii) to read as 
follows:


Sec.  122.62  Modification or revocation and reissuance of permits 
(applicable to State programs, see Sec.  123.25).

* * * * *
    (a) * * *
    (3) * * *
    (iii) For changes based upon modified State certifications of NPDES 
permits, see Sec.  121.10 of this chapter.
* * * * *

PART 124--PROCEDURES FOR DECISIONMAKING

0
6. The authority citation for part 124 continues to read as follows:

    Authority:  Resource Conservation and Recovery Act, 42 U.S.C. 
6901 et seq.; Safe Drinking Water Act, 42 U.S.C. 300f et seq.; Clean 
Water Act, 33 U.S.C. 1251 et seq.; Clean Air Act, 42 U.S.C. 7401 et 
seq.


0
7. Amend Sec.  124.53 by revising paragraphs (b) through (e) to read as 
follows:


Sec.  124.53  State certification.

* * * * *
    (b) Consistent with the requirements set forth in Sec. Sec.  121.4 
and 121.5 of this chapter, applications for individual permits may be 
forwarded by the Regional Administrator to the certifying State agency 
with a request to act on the request for certification consistent with 
Sec.  121.7 of this chapter.
    (c) If State certification has not been requested by the time the 
draft permit is prepared, the Regional Administrator shall send the 
certifying State agency a request for certification consistent with 
Sec.  121.5 of this chapter and include a copy of the draft permit.
    (d) State certification shall be granted or denied within the 
reasonable period of time as required under CWA section 401(a)(1). The 
State shall send a notice of its action, including a copy of any 
certification, to the applicant and the Regional Administrator.
    (e) State certification on a draft permit may include a statement 
of the extent to which each condition of the draft permit can be made 
less stringent without violating the requirements of State law, 
including water quality standards.

0
8. Amend Sec.  124.54 by revising paragraphs (a) and (b) to read as 
follows:


Sec.  124.54  Special provisions for State certification and 
concurrence on applications for section 301(h) variances.

    (a) When an application for a permit incorporating a variance 
request under CWA section 301(h) is submitted to a State, the 
appropriate State official shall either:
    (1) Deny the request for the CWA section 301(h) variance (and so 
notify the applicant and EPA) and, if the State is an approved NPDES 
State and the permit is due for reissuance, process the permit 
application under normal procedures; or
    (2) Forward a copy of the certification required under CWA section 
401(a)(1) to the Regional Administrator.
    (b) When EPA issues a tentative decision on the request for a 
variance under CWA section 301(h), and no certification has been 
received under paragraph (a) of this section, the Regional 
Administrator shall forward the tentative decision to the State. If the 
State fails to deny or grant certification and concurrence under 
paragraph (a) of this section within the reasonable period of time 
provided in CWA section 401(a)(1), certification shall be waived and 
the State shall be deemed to have concurred in the issuance of a CWA 
section 301(h) variance.
* * * * *

0
9. Amend Sec.  124.55 by:
0
a. Revising paragraph (a);
0
b. Removing paragraph (b);
0
c. Redesignating paragraphs (c) through (f) as paragraphs (b) through 
(e), respectively; and
0
d. Revising newly redesignated paragraphs (b) and (c).
    The revisions read as follows:


Sec.  124.55  Effect of State certification.

    (a) When certification is required under CWA section 401(a)(1), no 
final permit shall be issued:
    (1) If certification is denied; or
    (2) Unless the final permit incorporates the conditions specified 
in the certification.
    (b) A State may not condition or deny a certification on the 
grounds that State law allows a less stringent permit condition.
    (c) A condition in a draft permit may be changed during agency 
review in any manner consistent with a corresponding certification. No 
such changes shall require EPA to submit the permit to the State for 
recertification.
* * * * *
[FR Doc. 2023-20219 Filed 9-26-23; 8:45 am]
BILLING CODE 6560-50-P


