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[House Report 113-485]
[From the U.S. Government Publishing Office]

113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     113-485

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 TO AMEND THE FEDERAL WATER POLLUTION CONTROL ACT TO CLARIFY THAT THE 
ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION AGENCY DOES NOT HAVE THE 
   AUTHORITY TO DISAPPROVE A PERMIT AFTER IT HAS BEEN ISSUED BY THE 
          SECRETARY OF THE ARMY UNDER SECTION 404 OF SUCH ACT

                                _______
                                

 June 20, 2014.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Shuster, from the Committee on Transportation and Infrastructure, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 524]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 524) to amend the Federal Water 
Pollution Control Act to clarify that the Administrator of the 
Environmental Protection Agency does not have the authority to 
disapprove a permit after it has been issued by the Secretary 
of the Army under section 404 of such Act, having considered 
the same, report favorably thereon without amendment and 
recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose of Legislation...........................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     4
Legislative History and Consideration............................     4
Committee Votes..................................................     5
Committee Oversight Findings.....................................     7
New Budget Authority and Tax Expenditures........................     7
Congressional Budget Office Cost Estimate........................     7
Performance Goals and Objectives.................................     8
Advisory of Earmarks.............................................     8
Duplication of Federal Programs..................................     8
Disclosure of Directed Rule Makings..............................     8
Federal Mandate Statement........................................     8
Preemption Clarification.........................................     9
Advisory Committee Statement.....................................     9
Applicability of Legislative Branch..............................     9
Section-by-Section Analysis of Legislation.......................     9
Changes in Existing Law Made by the Bill, as Reported............     9

                         Purpose of Legislation

    H.R. 524 amends the Federal Water Pollution Control Act to 
provide that the Administrator of the Environmental Protection 
Agency does not have the authority to disapprove a permit after 
it has been issued by the Secretary of the Army under section 
404 of the Act.

                  Background and Need for Legislation

                          THE CLEAN WATER ACT

    In 1972, Congress passed the Federal Water Pollution 
Control Act Amendments of 1972 (commonly known as the ``Clean 
Water Act'' or the ``CWA''; 33 U.S.C. Sec. 1251 et seq.). The 
objective of the CWA is to restore and maintain the chemical, 
physical, and biological integrity of the Nation's waters. The 
primary mechanisms for achieving this objective are the CWA's 
general prohibition against the discharge of pollutants into 
jurisdictional waterbodies, and the Act's permitting process 
for such discharges, either through a National Pollutant 
Discharge Elimination System (NPDES) permit (see CWA Sec. 402), 
or through a separate permit program, for the discharge of 
dredged or fill material into jurisdictional waterbodies, 
including wetlands (see CWA Sec. 404).
    The U.S. Environmental Protection Agency (EPA) has the 
basic responsibility for administering and enforcing most of 
the CWA, including the NPDES permit program, and the U.S. Army 
Corps of Engineers (Corps) has lead responsibility for 
administering the dredge or fill (wetlands) permit program 
under section 404 of the CWA. However, the EPA does have a 
complementary role in administering section 404, both in the 
development of environmental guidelines (called the 404(b)(1) 
guidelines) to provide a means of evaluating whether any 
discharge of fill is environmentally acceptable, and through 
its review under section 404(c) (discussed below). Under the 
wetlands permitting program, the Corps has authority to issue 
dredge or fill permits (typically for a permit term of five 
years) for the discharge of materials into jurisdictional 
waterbodies at specified disposal sites. It is unlawful for a 
facility to discharge dredged or fill materials into a 
jurisdictional waterbody unless the discharge is authorized by 
and in compliance with a dredge or fill (section 404) permit 
issued by the Corps.

          EPA'S PERMIT VETO AUTHORITY UNDER CWA SECTION 404(C)

    Even though the Corps has the lead responsibility to 
implement the CWA's section 404 permit program, the EPA retains 
residual authority under CWA section 404(c) to oversee, review, 
and object to the Corps' issuance of section 404 permits for 
the discharge of dredged or fill material into jurisdictional 
waters, to ensure that such permitting decisions meet the 
minimum requirements of the CWA. Section 404(c) of the CWA 
confers the EPA authority, under specified procedures, to 
prevent the Corps from authorizing a particular disposal site:
          (c) The Administrator is authorized to prohibit the 
        specification (including the withdrawal of 
        specification) of any defined area as a disposal site, 
        and he is authorized to deny or restrict the use of any 
        defined area for specification (including the 
        withdrawal of specification) as a disposal site, 
        whenever he determines, after notice and opportunity 
        for public hearings, that the discharge of such 
        materials into such area will have an unacceptable 
        adverse effect on municipal water supplies, shellfish 
        beds and fishery areas (including spawning and breeding 
        areas), wildlife, or recreational areas. Before making 
        such determination, the Administrator shall consult 
        with the Secretary. The Administrator shall set forth 
        in writing and make public his findings and his reasons 
        for making any determination under this subsection (CWA 
        Sec. 404(c).)
    To exercise this ``veto'' authority, the EPA must 
determine, after notice and opportunity for public hearings, 
that certain unacceptable adverse environmental effects on 
municipal water supplies, shellfish beds, and fishery areas, 
wildlife, or recreation areas would result. The EPA also must 
consult with the Corps and make public its written findings and 
reasons for any determinations it makes under Section 404(c).
    Once the EPA has approved a Corps section 404 permit, 
generally speaking, the implementation and interpretation of 
the permit is left to the Corps. However, according to the U.S. 
Court of Appeals for the D.C. Circuit, the EPA retains the 
authority to ``prohibit, restrict or withdraw the specification 
[of a disposal site under section 404(c)] ``whenever'' [the 
Administrator of the EPA] makes a determination that the 
statutory ``unacceptable adverse effect'' will result. (See 
Mingo Logan Coal Co. v. U.S. EPA, 714 F.3d 608, 613 (D.C. Cir. 
2013).)

                 EPA REVOCATION OF A SECTION 404 PERMIT

    In the Mingo Logan Coal Co. case before the D.C. Circuit 
Court of Appeals, the Mingo Logan Coal Company (Mingo Logan) 
applied to the Corps for a permit under CWA section 404 to 
discharge fill material in connection with the Spruce No. 1 
surface mine project, located in Logan County, West Virginia. 
Prior to the issuance of the permit, the project applicant 
conducted a lengthy environmental review, in which the EPA 
participated.
    In 2007, the Corps issued the section 404 permit to Mingo 
Logan. While the EPA did express concern with the terms of the 
permit prior to its issuance, the agency did not object to the 
permit at the time of its issuance. Subsequently, the mine 
operated pursuant to, and in compliance with, the Section 404 
permit.
    In September 2009, almost two years after the Corps issued 
the section 404 permit, the EPA requested that the Corps use 
its discretionary authority to suspend, revoke, or modify the 
permit that it had issued to Mingo Logan. The Corps rejected 
the EPA's request, finding no grounds to suspend, revoke, or 
modify the permit. In March 2010, the EPA then published a 
Proposed Determination to prohibit, restrict, or deny the 
authorized discharges to certain of the waters associated with 
the Spruce project site, without alleging any violation of the 
section 404 permit.
    In January 2011, the EPA issued a Final Determination to 
withdraw the discharge authorization, effectively revoking the 
permit and halting development of the mine. This action to 
revoke the permit was more than three years after the permit's 
issuance. The EPA stated that it had the ability under the CWA 
to initiate a section 404(c) action to retroactively withdraw a 
discharge site specification in a permit even after permit 
issuance. (See 75 Fed. Reg. 16788, 16790 (Apr. 2, 2010) (EPA 
Notice of Proposed Determination To Prohibit, Restrict, or Deny 
the Specification, or the Use for Specification (Including 
Withdrawal of Specification), of an Area as a Disposal Site; 
Spruce No. 1 Surface Mine, Logan County, WV).)
    The permit holder challenged the EPA's revocation of the 
Section 404 permit in federal district court. (See Mingo Logan 
Coal Company Inc. v. U.S. EPA, 850 F.Supp.2d 133 (D.D.C. 
2012).) The district court issued an opinion in 2012 that 
overturned the EPA's retroactive withdrawal of the project's 
permit discharge site specification. (See id.) In April 2013, 
the U.S. Court of Appeals for the D.C. Circuit reversed the 
district court, ruling that the EPA had not exceeded its 
authority. (See Mingo Logan Coal Co. v. U.S. EPA, 714 F.3d 608 
(D.C. Cir. 2013).) The permit holder then applied to the U.S. 
Supreme Court to review the case, but in March 2014, the 
Supreme Court announced it would not review the 2013 Appeals 
Court decision. (See Mingo Logan Coal Co. v. U.S. EPA, No. 13-
599 (U.S. Mar. 24, 2014) (cert. denied).)
    In response to the EPA's recent actions to withdraw the 
discharge authorization for the Spruce project after issuance 
of the project's permit, the bill's sponsor introduced H.R. 524 
to provide that the EPA has the authority under section 404(c) 
to withdraw a project's discharge site specification only prior 
to the Corps' issuance of the 404 permit for the project. The 
bill aims to address the concern that the EPA's authority to 
undo a Corps section 404 permit action has the potential to 
disrupt the finality and certainty of the CWA section 404 
permit process, a process that is critical to a wide range of 
industries and projects. There is concern that this lack of 
certainty could chill future investments in vital 
infrastructure and other development projects that require 404 
permits.

                                Hearings

    No hearings were held on H.R. 524.
    In the 112th Congress, the Subcommittee on Water Resources 
and Environment held a hearing on the EPA's surface mining 
policies and related regulatory activities, including the EPA's 
retroactive withdrawal of the discharge authorization of the 
Spruce Mine's section 404 permit.

                 Legislative History and Consideration

    On February 6, 2013, Representative David McKinley of West 
Virginia introduced H.R. 524, a bill to provide that the 
Administrator of the Environmental Protection Agency does not 
have the authority to disapprove a permit after it has been 
issued by the Secretary of the Army under section 404 of the 
CWA.
    On April 9, 2014, the Committee on Transportation and 
Infrastructure met in open session to consider H.R. 524, and 
ordered the bill reported favorably to the House by record vote 
with a quorum present. The vote was 34 yeas to 19 nays. No 
amendments were offered.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires each committee report to include the 
total number of votes cast for and against on each record vote 
on a motion to report and on any amendment offered to the 
measure or matter, and the names of those members voting for 
and against. During consideration of H.R. 524, a total of one 
record vote was taken, which was on a final vote ordering the 
bill reported. The bill was reported to the House with a 
favorable recommendation after a record vote which was disposed 
of as follows: 

                      Committee Oversight Findings

    With respect to the requirements of clause 3(c)(1) of rule 
XIII of the Rules of the House of Representatives, the 
Committee's oversight findings and recommendations are 
reflected in this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives does not apply where a cost estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974 has been timely submitted prior to the filing of the 
report and is included in the report. Such a cost estimate is 
included in this report.

               Congressional Budget Office Cost Estimate

    With respect to the requirement of clause 3(c)(3) of rule 
XIII of the Rules of the House of Representatives and section 
402 of the Congressional Budget Act of 1974, the Committee has 
received the enclosed cost estimate for H.R. 524 from the 
Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 17, 2014.
Hon. Bill Shuster,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 524, a bill to 
amend the Federal Water Pollution Control Act to clarify that 
the Administrator of the Environmental Protection Agency does 
not have the authority to disapprove a permit after it has been 
issued by the Secretary of the Army under section 404 of such 
Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susanne S. 
Mehlman.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 524--A bill to amend the Federal Water Pollution Control Act to 
        clarify that the Administrator of the Environmental Protection 
        Agency does not have the authority to disapprove a permit after 
        it has been issued by the Secretary of the Army under section 
        404 of such Act

    Section 404 of the Federal Water Pollution Control Act 
(Clean Water Act) established a program to regulate the 
discharge of dredged or fill material (for example, rock, sand, 
soil, clay, plastics, construction debris, wood chips, or waste 
from mining or other excavation activities) into waters of the 
United States, including wetlands. Proposed activities that 
could result in such discharges are regulated through a permit 
and review process wherein the U.S. Army Corps of Engineers 
(Corps) is responsible for making permitting decisions. Under 
current law, the Environmental Protection Agency (EPA) has the 
authority to revoke or modify permits issued by the Corps. 
Enacting this legislation would prohibit EPA from revoking a 
permit issued by the Corps under section 404 of the Clean Water 
Act.
    Based on information from EPA, CBO estimates that enacting 
this legislation would have no significant effect on the 
federal budget because EPA seldom revokes permits issued by the 
Corps. Since 1972, EPA has revoked permits from the Corps for 
only two projects.
    Pay-as-you-go procedures do not apply to H.R. 524 because 
enacting the bill would not affect direct spending or revenues.
    H.R. 524 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Susanne S. 
Mehlman. This estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                    Performance Goals and Objectives

    With respect to the requirement of clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives, the 
performance goal and objective of this legislation is to 
provide that the Administrator of the Environmental Protection 
Agency does not have the authority to disapprove a permit after 
it has been issued by the Secretary of the Army under section 
404 of the CWA.

                          Advisory of Earmarks

    Pursuant to clause 9 of rule XXI of the Rules of the House 
of Representatives, the Committee is required to include a list 
of congressional earmarks, limited tax benefits, or limited 
tariff benefits as defined in clause 9(e), 9(f), and 9(g) of 
rule XXI of the Rules of the House of Representatives. No 
provision in the bill includes an earmark, limited tax benefit, 
or limited tariff benefit under clause 9(e), 9(f), or 9(g) of 
rule XXI.

                    Duplication of Federal Programs

    Pursuant to section 3(j) of H. Res. 5, 113th Cong. (2013), 
the Committee finds that no provision of H.R. 524 establishes 
or reauthorizes a program of the federal government known to be 
duplicative of another federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    Pursuant to section 3(k) of H. Res. 5, 113th Cong. (2013), 
the Committee estimates that enacting H.R. 524 does not 
specifically direct the completion of any specific rule makings 
within the meaning of section 551 of title 5, United States 
Code.

                       Federal Mandate Statement

    The Committee adopts as its own the estimate of federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act (P.L. 104-4).

                        Preemption Clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any Committee on a bill or joint 
resolution to include a statement on the extent to which the 
bill or joint resolution is intended to preempt state, local, 
or tribal law. The Committee states that H.R. 524 does not 
preempt any state, local, or tribal law.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act are created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (P.L. 104-1).

               Section-by-Section Analysis of Legislation

Section 1. Permits for Dredged or Fill Material

    Section 1 amends section 404(c) of the CWA to provide that 
the Administrator of the Environmental Protection Agency has 
the authority to prohibit the specification (including the 
withdrawal of specification) of any defined area as a disposal 
site, or deny or restrict the use of any defined area for 
specification (including the withdrawal of specification) as a 
disposal site, under section 404(c) of the CWA only until such 
time as the Secretary of the Army has issued a permit under 
section 404 covering such area. Once the Secretary of the Army 
has issued a section 404 permit for the use of an area as a 
disposal site, the Administrator no longer has the authority to 
prohibit, deny, restrict, or withdraw the use of such area as a 
disposal site.
    The bill does not alter the authority of the Corps to issue 
a Section 404 permit, or to modify, suspend, or revoke a 
section 404 permit should it find a violation of the permit. 
The bill also does not change the requirements that the EPA 
must satisfy in order to exercise its ``veto'' authority under 
CWA section 404(c).

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
H.R. 524, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

FEDERAL WATER POLLUTION CONTROL ACT

           *       *       *       *       *       *       *

TITLE IV--PERMITS AND LICENSES

           *       *       *       *       *       *       *

                  permits for dredged or fill material

  Sec. 404. (a) * * *

           *       *       *       *       *       *       *

  (c) [The Administrator is authorized] Until such time as the 
Secretary has issued a permit under this section, the 
Administrator is authorized to prohibit the specification 
(including the withdrawal of specification) of any defined area 
as a disposal site, and he is authorized to deny or restrict 
the use of any defined area for specification (including the 
withdrawal of specification) as a disposal site, whenever he 
determines, after notice and opportunity for public hearings, 
that the discharge of such materials into such area will have 
an unacceptable adverse effect on municipal water supplies, 
shellfish beds and fishery areas (including spawning and 
breeding areas), wildlife, or recreational areas. Before making 
such determination, the Administrator shall consult with the 
Secretary. The Administrator shall set forth in writing and 
make public his findings and his reasons for making any 
determination under this subsection.

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