Document ID: EPA-HQ-OW-2019-0405-1124
Agency: epa
Document Type: Rule
Title: Clean Water Act Section 401 Certification Rule
Posted Date: 2020-07-13T04:00Z

[Federal Register Volume 85, Number 134 (Monday, July 13, 2020)]
[Rules and Regulations]
[Pages 42210-42287]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12081]

[[Page 42209]]

Vol. 85

Monday,

No. 134

July 13, 2020

Part IV

Environmental Protection Agency

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40 CFR Part 121

Clean Water Act Section 401 Certification Rule; Final Rule

  Federal Register / Vol. 85, No. 134 / Monday, July 13, 2020 / Rules 
and Regulations  

[[Page 42210]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 121

[EPA-HQ-OW-2019-0405; FRL-10009-80-OW]
RIN 2040-AF86

Clean Water Act Section 401 Certification Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is publishing this 
final rule to update and clarify the substantive and procedural 
requirements for water quality certification under Clean Water Act (CWA 
or the Act) section 401. CWA section 401 is a direct grant of authority 
to States (and Tribes that have been approved for ``treatment as a 
State'' status) to review for compliance with appropriate federal, 
State, and Tribal water quality requirements any discharge into a water 
of the United States that may result from a proposed activity that 
requires a federal license or permit. This final rule is intended to 
increase the predictability and timeliness of CWA section 401 
certification actions by clarifying timeframes for certification, the 
scope of certification review and conditions, and related certification 
requirements and procedures.

DATES: This rule is effective on September 11, 2020.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OW-2019-0405, at https://www.regulations.gov. All 
documents in the docket are listed and available at https://www.regulations.gov. Although listed in the index, some information is 
not publicly available, e.g. Confidential Business Information or other 
information whose disclosure is restricted by statute. Certain other 
materials, such as copyrighted material, is not placed on the internet 
and will be publicly available only 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) 564-5700; email address: cwa401@epa.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. General Information
    A. How can I get copies of this document and related 
information?
    B. What action is the Agency taking?
    C. Under what legal authority is this final rule issued?
II. Background
    A. Executive Summary
    B. Executive Order 13868: Promoting Energy Infrastructure and 
Economic Growth
    C. Summary of Stakeholder Engagement
    D. Guidance Document
    E. Effect on Existing Federal, State, and Tribal Laws
    F. Legal Background
    1. The Clean Water Act
    2. The EPA's Role in Implementing Section 401
    3. The EPA's 1971 Certification Regulations
    4. Judicial Interpretations of Section 401
    5. Administrative Law Principles
    6. Response to Comments on the Legal Background
    G. Legal Construct for the Final Rule
    1. Scope of Certification
    2. Timeline for Section 401 Certification Analysis
III. Final Rule
    A. When Section 401 Certification is Required
    B. Pre-filing Meeting Request
    C. Certification Request/Receipt
    D. Certification Actions
    E. Appropriate Scope for Section 401 Certification Review
    F. Timeframe for Certification Analysis and Decision
    G. Contents and Effects of Certification
    H. Certification by the Administrator
    I. Determination of Effect on Neighboring Jurisdictions
    J. The EPA's Role in Review and Advice
    K. Enforcement
    L. Modifications
    M. General Licenses and Permits
IV. Economic Analysis
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review; 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulation and Controlling 
Regulatory Costs
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Unfunded Mandates Reform Act
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act
    K. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    L. Congressional Review Act

I. General Information

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

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

B. What action is the Agency taking?

    In this notice, the Agency is publishing a final rule updating the 
water quality certification regulations in 40 CFR 121.

C. Under what legal authority is this final rule issued?

    The authority for this action is the Federal Water Pollution 
Control Act, 33 U.S.C. 1251 et seq., including sections 304(h), 401, 
and 501(a).

II. Background

A. Executive Summary

    Congress enacted section 401 of the CWA to provide States and 
authorized Tribes with an important tool to help

[[Page 42211]]

protect the water quality of federally regulated waters within their 
borders in collaboration with federal agencies. Under section 401, a 
federal agency may not issue a license or permit to conduct any 
activity that may result in any discharge into waters of the United 
States,\1\ unless the State or authorized Tribe where the discharge 
would originate either issues a section 401 water quality certification 
finding compliance with applicable water quality requirements or 
certification is waived. As described in greater detail below, section 
401 envisions a robust State and Tribal role in the federal licensing 
or permitting proceedings, including those in which local authority may 
otherwise be preempted by federal law. Section 401 also places 
important limitations on how that role may be implemented to maintain 
an efficient process, consistent with the overall cooperative 
federalism construct established by the CWA, as explained below in 
section II.F.1 of this notice.
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    \1\ The CWA, including section 401, uses ``navigable waters,'' 
defined as ``waters of the United States, including territorial 
seas.'' 33 U.S.C. 1362(7). This final rule uses ``waters of the 
United States'' throughout. In January 2020, the EPA revised the 
definition of waters of the United States and expects the final 
definition of the term to control in all CWA contexts. See 85 FR 
22250 (April 21, 2020).
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    Section 401 provides that a State or authorized Tribe must act on a 
section 401 certification request ``within a reasonable period of time 
(which shall not exceed one year)''.\2\ Section 401 does not guarantee 
a State or Tribe a full year to act on a certification request, as the 
statute only grants as much time as is reasonable. 33 U.S.C. 
1341(a)(1). The CWA provides that the timeline for action on a section 
401 certification begins ``after receipt'' of a certification request. 
Id. If a State or Tribe does not grant, grant with conditions, deny, or 
expressly waive the section 401 certification within a reasonable time 
period, section 401 states that the ``the certification requirements of 
this subsection shall be waived with respect to such Federal 
application.'' Id. If the certification requirement has been waived and 
the federal license or permit is issued, any subsequent action by a 
State or Tribe to grant, grant with conditions, or deny section 401 
certification has no legal force or effect.
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    \2\ In some circumstances, the EPA can act as the certifying 
authority. See section III.H of this notice for further discussion. 
``If the State, interstate agency, or Administrator, as the case may 
be, fails or refuses to act on a request for certification, within a 
reasonable period of time (which shall not exceed one year) after 
receipt of such request, the certification requirements of this 
subsection shall be waived with respect to such Federal 
application.'' 33 U.S.C. 1341(a)(1); see also Hoopa Valley Tribe v. 
FERC, 913 F.3d 1099 (D.C. Cir. 2019).
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    Section 401 authorizes States and Tribes to certify that a 
discharge into waters of the United States that may result from a 
proposed activity will comply with certain enumerated sections of the 
CWA, including the effluent limitations and standards of performance 
for new and existing discharge sources (sections 301, 302, and 306 of 
the CWA), water quality standards and implementation plans (section 
303), and toxic pretreatment effluent standards (section 307). When 
granting a section 401 certification, States and Tribes are directed by 
CWA section 401(d) to include conditions, including ``effluent 
limitations and other limitations, and monitoring requirements'' that 
are necessary to assure that the applicant for a federal license or 
permit will comply with applicable provisions of CWA sections 301, 302, 
306, and 307, and with ``any other appropriate requirement of State 
law.''
    As the Agency charged with administering the CWA,\3\ as well as a 
certifying authority in certain instances, the EPA is responsible for 
developing a common regulatory framework for certifying authorities to 
follow when completing section 401 certifications. See 33 U.S.C. 
1251(d), 1361(a). In 1971, the EPA promulgated regulations for 
implementing the certification provisions pursuant to section 21(b) of 
the Federal Water Pollution Control Act of 1948 (FWPCA), but the EPA 
has never updated those regulations to reflect the 1972 amendments to 
the FWPCA (commonly known as the Clean Water Act or CWA), which created 
section 401, despite the fact that there were changes to the relevant 
statutory text. Since the 1972 CWA amendments, the EPA issued two 
guidance documents and participated as amicus curiae in court cases 
concerning CWA section 401, but the Agency has not updated its 
regulations to comport with the 1972 amendments and has not, to date, 
established robust internal procedures for implementing its roles under 
section 401. Over the last several years, litigation over the section 
401 certifications for several high-profile infrastructure projects 
have highlighted the need for the EPA to update its regulations to 
provide a common framework for consistency with CWA section 401 and to 
give project proponents, certifying authorities, and federal licensing 
and permitting agencies additional clarity and regulatory certainty.
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    \3\ The EPA co-administers section 404 with the Army Corps of 
Engineers (the Corps).
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    On April 10, 2019, the President issued Executive Order 13868, 
entitled Promoting Energy Infrastructure and Economic Growth (the 
Executive Order or Order), which directed the EPA to engage with 
States, Tribes, and federal agencies and update the Agency's outdated 
guidance and regulations, including the 1971 certification framework. 
Pursuant to the Executive Order, on August 8, 2019, the EPA signed the 
proposed rule ``Updating Regulations on Water Quality Certifications,'' 
and the proposal was published on August 22, 2019. 84 FR 44080. The 60-
day public comment period for the proposal closed on October 21, 2019. 
Consistent with Executive Order 13868 and the 1972 CWA amendments, this 
final rule provides an updated common framework that is consistent with 
the Act and which seeks to increase predictability and timeliness.
    The following sections provide an overview of section 401, relevant 
court cases, outreach, and other actions that inform today's rule, as 
well as provides responses to salient comments received on these 
topics.

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

    The policy objective of the Executive Order is to encourage greater 
investment in energy infrastructure in the United States by promoting 
efficient federal licensing and permitting processes and reducing 
regulatory uncertainty. The Executive Order identified the EPA's 
outdated section 401 federal guidance and regulations as one source of 
confusion and uncertainty hindering the development of energy 
infrastructure.
    Several commenters on the proposed rule argued that the EPA failed 
to demonstrate that the rule would meet the objectives of the Executive 
Order and the CWA, and they maintained that Presidential policy 
objectives cannot override the CWA's plain language and Supreme Court 
jurisprudence. One commenter stated that the EPA's actions under this 
Executive Order were driven by political considerations and the desire 
to undertake the rulemaking process as expeditiously as possible to 
meet the President's purportedly unlawful directions as stated in the 
Executive Order.
    Other commenters asserted that the proposed rule is consistent with 
the Executive Order. These commenters appreciated the administration's 
recognition of the importance of energy infrastructure projects; the

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administration's recognition of the economic impact the section 401 
process has had on some important energy infrastructure projects; and 
the EPA's review of the section 401 process. Such commenters supported 
the Executive Order's goal of promoting economic growth and supported 
the proposed rule's attempts to protect interstate and foreign commerce 
from unconstitutional discrimination and unreasonable burdens and to 
clearly define the steps and timing for section 401 certifications.
    As discussed throughout this final rule preamble, the Agency has 
determined that the final rule implements the fundamental statutory 
objectives of the CWA, while also complying with the Executive Order. 
The Agency disagrees with commenters who asserted that the rulemaking 
process was inappropriately initiated or inappropriately directed by 
the Executive Order. As noted above, the EPA's 1971 certification 
regulations \4\ (36 FR 22487, Nov. 25, 1971; redesignated at 37 FR 
21441, October 11, 1972; further redesignated at 44 FR 32899, June 7, 
1979) had not been updated since they were promulgated in 1971, 
pursuant to section 21(b) of the FWPCA. Additionally, at the time the 
Executive Order was issued, the EPA's only guidance to the public on 
section 401 implementation was an interim handbook (now rescinded) 
entitled Clean Water Act Section 401 Water Quality Certification: A 
Water Quality Protection Tool for States and Tribes (``Interim 
Handbook''), which had not been updated since its release in 2010 and 
therefore did not reflect the current case law interpreting CWA section 
401.
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    \4\ These regulations were redesignated in 1972 and 1979 under 
the CWA, but no substantive change to the regulatory text has been 
made since 1971 notwithstanding changes to the relevant statutory 
text in the 1972 CWA. Therefore, throughout this final rule 
preamble, the Agency refers to these regulatory provisions as the 
``1971 certification regulations.''
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    The Executive Order directed the EPA to review CWA section 401 and 
the EPA's 1971 certification regulations and interim guidance, issue 
new guidance to States, Tribes, and federal agencies within 60 days of 
the Order, and propose (as appropriate and consistent with law) new 
section 401 regulations within 120 days of the Order. The Executive 
Order also directed the EPA to consult with States, Tribes, and 
relevant federal agencies while reviewing its existing guidance and 
regulations to identify areas that would benefit from greater clarity.
    As part of this review, the Executive Order directed the EPA to 
take into account the federalism considerations underlying section 401 
and to consider the appropriate scope of water quality reviews and 
conditions, the scope of information needed to act on a certification 
request in a reasonable period of time, and expectations for reasonable 
certification review times. Section 3.a. of Executive Order 13868, 
Promoting Energy Infrastructure and Economic Growth. Following the 
release of the EPA's new guidance document, the Executive Order 
directed the EPA to lead an interagency review of all existing federal 
regulations and guidance pertaining to section 401 to ensure 
consistency with the EPA's new guidance and rulemaking efforts. The 
Executive Order directs all federal agencies to update their existing 
section 401 guidance within 90 days after publication of the EPA's new 
guidance. Additionally, the Executive Order directs other federal 
agencies to initiate rulemaking, if necessary, within 90 days of the 
completion of the EPA's rulemaking, to ensure that their own CWA 
section 401 regulations are consistent with the EPA's new rules and 
with the Executive Order's policy goals. Although the Executive Order 
focuses on section 401's impact on the energy sector, section 401 
applies broadly to any proposed federally licensed or permitted 
activity that may result in any discharge into a water of the United 
States. Therefore, updates to the EPA's 1971 certification regulations 
and guidance are relevant to all water quality certifications, not just 
those related to energy sector projects.
    Additional information on the EPA's State and Tribal engagement is 
provided in section II.C of this notice, and additional information on 
the EPA's updated guidance document is provided in section II.D of this 
notice.

C. Summary of Stakeholder Engagement

    On June 11, 2018, the Agency published its 2018 Spring Unified 
Agenda of Regulatory and Deregulatory Actions \5\ announcing that the 
Agency was considering, as a long-term action, the issuance of a notice 
soliciting public comment on whether the section 401 certification 
process would benefit from a rulemaking to promote nationwide 
consistency and regulatory certainty for States, authorized Tribes, and 
stakeholders. The Agency's stakeholder outreach and engagement efforts 
since that announcement are summarized below.
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    \5\ Available at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201804&RIN=2040-AF86.
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    On August 6, 2018, the Agency sent a letter to the Environmental 
Council of the States, the Association of Clean Water Administrators, 
the Association of State Wetland Managers, the National Tribal Water 
Council, and the National Tribal Caucus identifying the Agency's 
interest in engaging in potential clarifications to the section 401 
process. The Agency discussed section 401 during several association 
meetings and calls and received correspondence from several 
stakeholders between Fall 2018 and Spring 2019. Early stakeholder 
feedback received prior to the issuance of the Executive Order, the 
August 6, 2018 letter described above, and the Agency's presentations 
given between Fall 2018 and Spring 2019, may be found in the pre-
proposal recommendations docket (Docket ID No. EPA-HQ-OW-2018-0855).
    Following release of the Executive Order, the EPA continued its 
effort to engage with States and Tribes on how to increase clarity in 
the section 401 certification process, including creating a new website 
to provide information on section 401 and notifying State environmental 
commissioners and Tribal environmental directors of a two-part webinar 
series for States and Tribes. See www.epa.gov/cwa-401. The first 
webinar was held on April 17, 2019, and discussed the Executive Order 
and the EPA's next steps, and solicited feedback from States and Tribes 
consistent with the Executive Order. Shortly thereafter, the EPA 
initiated formal consultation efforts under Executive Order 13132 on 
Federalism with States and Executive Order 13175 on Consultation and 
Coordination with Indian Tribal Governments regarding provisions that 
require clarification within section 401 of the CWA and related federal 
regulations and guidance. The Agency held an initial federalism 
consultation meeting on April 23, 2019, and sent notification of the 
consultation period to States and Tribes on April 24, 2019. 
Consultation ran through May 24, 2019, and the EPA opened a docket for 
pre-proposal recommendations during this time period (Docket ID No. 
EPA-HQ-OW-2018-0855). On May 7, 2019, and May 15, 2019, the EPA held 
Tribal informational webinars, and on May 8, 2019, the EPA held an 
informational webinar for both States and Tribes. See sections V.F and 
V.G of this notice for further details on the Agency's federalism and 
Tribal consultations. Questions and recommendations from the webinar 
attendees are available in the pre-proposal docket (Docket ID No. EPA-
HQ-OW-2018-0855).
    During the consultation period, the EPA participated in phone calls 
and in-person meetings with inter-

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governmental and Tribal associations, including the National Governors 
Association and National Tribal Water Council. The EPA also attended 
the EPA Region 9 Regional Tribal Operations Committee meeting on May 
22, 2019, to solicit recommendations for the rulemaking effort. The EPA 
engaged with federal agencies that issue licenses or permits subject to 
section 401, including the United States Department of Agriculture, the 
Federal Energy Regulatory Commission (FERC), the U.S. Army Corps of 
Engineers (Corps), the Alcohol and Tobacco Tax and Trade Bureau, the 
Nuclear Regulatory Commission, and the Bureau of Reclamation through 
several meetings and phone calls to gain additional feedback from 
federal partners.
    At the webinars and meetings, the EPA provided a presentation and 
sought input on aspects of section 401 and the 1971 certification 
regulations that may benefit from clarification or require updating, 
including timeframe, scope of certification review, and coordination 
among certifying authorities, federal licensing or permitting agencies, 
and project proponents. The EPA also requested input on issues and 
process improvements for the Agency's consideration. Participant 
recommendations from webinars, meetings, and the docket represent a 
diverse range of interests, positions, and suggestions. Several themes 
emerged throughout this process, including support for ongoing State 
and Tribal engagement, support for retention of State and Tribal 
authority, and suggestions for process improvements for CWA section 401 
water quality certifications. The EPA considered all of this 
information and stakeholder input during development of the proposed 
rule, including all recommendations submitted to the pre-proposal 
docket and feedback received prior to the initiation of, during, and 
after the formal consultation period.
    On August 8, 2019, the EPA signed the proposed rule, ``Updating 
Regulations on Water Quality Certifications,'' and the proposal was 
published on August 22, 2019. 84 FR 44080. The 60-day public comment 
period for the proposal closed on October 21, 2019. After signing the 
proposed rule, the EPA conducted a variety of stakeholder outreach 
engagements on the contents of the proposed rule. For example, on 
August 20, 2019, the EPA held a public webcast to present key elements 
of the proposed rule (see https://www.youtube.com/watch?v=eBI7Mj5ucyM&feature=youtu.be). The EPA also held a public 
hearing in Salt Lake City, Utah, on September 5 and 6, 2019, to hear 
feedback from individuals from regulated industry sectors, 
environmental and conservation organizations, State agencies, Tribal 
governments, and private citizens. The EPA continued its engagement 
throughout the public comment period with States and Tribes through in-
person meetings with representatives in Salt Lake City, Utah, and 
Chicago, Illinois. During these meetings, the Agency provided an 
overview of the proposed rule, responded to clarifying questions from 
participants, discussed implementation considerations, and heard 
comments reflecting a range of positions on the proposal and varying 
interpretations of CWA section 401. A transcript of the public hearing 
and related materials and summaries of the State and Tribal meetings 
can be found in the docket for the final rule. At the request of 
individual Tribes, the EPA also held staff-level and leader-to-leader 
meetings with those Tribes.
    A few commenters commended the EPA for its outreach efforts during 
the rule development process. Other commenters asserted that the EPA 
held an abbreviated public engagement process. Some commenters asserted 
that the EPA's consultation efforts with States, Tribes and local 
governments during the rulemaking process were inadequate. The Agency 
disagrees with commenters that its consultation with States or Tribes 
was inadequate. As discussed in section II.C, section V.F, and section 
V.G of this notice, the Agency consulted with States, Tribes, and local 
governments throughout the rulemaking process. See also the Agency's 
response to comments document in the docket for this final rule for 
further response on the Agency's outreach efforts.
    In developing the final rule, the EPA reviewed and considered more 
than 125,000 comments on the proposed rule from a broad spectrum of 
interested parties. Commenters provided a wide range of feedback on 
various aspects of the proposal, including the legal basis for the 
proposed rule and the Agency's proposed definitions and certification 
procedures. Commenters also explained their views on how the proposal 
may impact project proponents, certifying authorities, and federal 
licensing and permitting agencies. The Agency summarizes the most 
salient public comments received on the proposed rule and provides 
responses in the applicable sections of this final rule preamble. A 
separate response to comments document is also available in the docket 
for the final rule at Docket ID No. EPA-HQ-OW-2019-0405.

D. Guidance Document

    Pursuant to the Executive Order, the Agency released updated 
section 401 guidance on June 7, 2019 (``the 2019 Guidance''), available 
at https://www.epa.gov/cwa-401/clean-water-act-section-401-guidance-federal-agencies-states-and-authorized-tribes. Coincident with the 
release of the 2019 Guidance, the EPA rescinded the 2010 Interim 
Handbook on section 401 water quality certification. The Interim 
Handbook had not been updated or revised since its release in 2010, had 
never been finalized, and did not reflect current case law interpreting 
CWA section 401.
    The 2019 Guidance provided information and recommendations for 
implementing the substantive and procedural requirements of section 
401, consistent with the areas of focus in the Executive Order. More 
specifically, the 2019 Guidance focused on aspects of the certification 
process, including the timeline for review and decision-making and the 
appropriate scope of review and conditions. Additionally, the 2019 
Guidance provided recommendations for how federal licensing and 
permitting agencies, States, and Tribes can better coordinate to 
improve the section 401 certification process. The emphasis on early 
coordination and collaboration to increase process efficiency aligns 
with other agency directives under Executive Order 13807, Establishing 
Discipline and Accountability in the Environmental Review and 
Permitting Process for Infrastructure Projects, which established the 
``One Federal Decision'' policy. For major infrastructure projects, 
Executive Order 13807 directs federal agencies to use a single, 
coordinated process for compliance with the National Environmental 
Policy Act (NEPA), 42 U.S.C. 4321 et seq., and emphasizes advance 
coordination to streamline federal permitting actions.
    Some commenters asserted the 2019 Guidance is inconsistent with 50 
years of practice and that it created confusion and uncertainty. Other 
commenters disagreed with the 2019 Guidance's limitations on timing of 
section 401 certifications and the scope of information that States may 
require to fully evaluate section 401 certification requests. Several 
commenters stated that the 2019 Guidance was inappropriately issued 
prior to rulemaking and should be withdrawn, and they asserted that 
either the Interim Handbook should be reinstated or the 2019 Guidance 
should be modified. Some commenters suggested that the issuance of the 
2019 Guidance before rule finalization indicates that the EPA has

[[Page 42214]]

predetermined the outcome of the rulemaking process, contrary to the 
Administrative Procedure Act (APA), and therefore that the guidance 
should be rescinded or superseded by new guidance consistent with the 
final rule.
    The Agency disagrees with commenters who asserted the 2019 Guidance 
was unnecessary. As discussed above and as outlined in the Executive 
Order, the Interim Handbook created regulatory uncertainty and 
confusion because it no longer reflected the current case law 
interpreting CWA section 401, nor had it been updated or finalized. The 
2019 Guidance was intended only to facilitate consistent implementation 
of section 401 and the 1971 certification regulations during this 
rulemaking process, and the Agency disagrees with commenters who 
suggested the 2019 Guidance reflected a predetermined outcome of this 
rulemaking process. The 2019 Guidance addressed the appropriate 
timeline for a State's or Tribe's review and section 401 certification 
decision-making and the appropriate scope of a State's or Tribe's 
certification review and conditions based on the EPA's 1971 
certification regulations. The final rule, on the other hand, is based 
on the Agency's holistic review of the 1972 statutory language, 
addresses a number of additional topics, and reflects and responds to 
public comments.
    Some commenters said the 2019 Guidance should be retained but 
updated once the proposed rule is finalized. Other commenters stated 
the 2019 Guidance should be withdrawn once the proposed rule is 
finalized. One commenter asserted that additional guidance may be 
appropriate, but that the need for guidance depends on the degree of 
clarity in the final rule.
    Coincident with issuing this final rule, the EPA is rescinding the 
2019 Guidance. The EPA continues to support and encourage the extent of 
coordination recommended in the 2019 Guidance, including 
recommendations for project proponents, certifying authorities, and 
federal licensing and permitting authorities to engage in substantive 
discussions as early as possible, and for all parties to operate in 
good faith throughout the certification process. However, the EPA has 
concluded that retaining the 2019 Guidance after issuing this final 
rule could cause confusion. The Agency has determined that the final 
rule provides sufficient additional specificity and clarity on the 
issues discussed in the 2019 Guidance to both meet the expectations of 
the Executive Order and render the 2019 Guidance unnecessary. The EPA 
retains the option to develop new guidance to facilitate implementation 
of this final rule should the need arise.

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

    According to the Executive Order, the EPA is to lead an interagency 
effort to review and examine existing federal guidance and regulations 
``for consistency with EPA guidance and rulemaking.'' Section 3.d. of 
the Executive Order provides that, within 90 days after the EPA issues 
its final section 401 regulations, ``if necessary, the heads of each 
401 implementing Agency shall initiate a rulemaking to ensure that 
their respective agencies' regulations are consistent with'' the EPA's 
final section 401 regulations and ``the policies set forth in section 2 
of [the Executive Order].'' Pursuant to the Executive Order, the other 
federal agencies that issue licenses or permits subject to the 
certification requirements of section 401 are expected to ensure that 
any regulations governing their own processing, disposition, and 
enforcement of section 401 certifications are consistent with the EPA's 
final regulations and the policies articulated in section 2 of the 
Executive Order. The EPA engaged with other section 401 implementing 
agencies before and after the proposed rule was issued, and the EPA 
considered federal agency feedback in developing the proposal and this 
final rule. This final rule preamble includes suggested recommendations 
for federal agencies as they update or draft their section 401 
implementing regulations. For instance, section III.F.2.a of this 
notice encourages federal agencies to establish in their regulations a 
minimum reasonable period of time for State and Tribal action to 
provide notice and regulatory certainty to project proponents and 
certifying authorities about applicable deadlines. However, these are 
only recommendations and the federal agencies themselves must determine 
how to update their own regulations to ensure consistency with this 
final rule and efficient administration of their license and permit 
programs. For its part, the EPA plans to review its National Pollutant 
Discharge Elimination System (NPDES) regulations to ensure its own 
permitting program certification regulations are consistent with this 
final rule.
    In addition to conforming changes that federal agencies may make to 
federal regulations that implement section 401, it is likely that 
States and Tribes will want to evaluate their existing certification 
statutes or regulations to ensure consistency with the EPA's final 
rule.
    Certain commenters stated that the proposed rule would not be 
consistent with existing State law, such as State statutes or 
regulations regarding notice and comment, completeness, impact and 
degradation avoidance, and mitigation. Many of these commenters were 
particularly concerned that existing State-enacted procedures require 
more information and time for State certification review and action 
than provided by the proposed rule. A few commenters challenged the 
EPA's authority to dictate State procedures and stated that the EPA 
should provide flexibility for State regulatory procedures in this 
rulemaking. Several commenters maintained that the proposed rule would 
require statutory and regulatory changes on the State level and 
encouraged the EPA to give States sufficient time to adapt by providing 
an extended effective date for the new rule. One commenter asserted 
that if States were not provided additional time to assess the new 
rule's impact on their State laws and regulations, the new rule could 
require the States to either violate their own laws or deny more 
section 401 certifications, which could result in litigation and 
further delay for projects subject to section 401.
    Several commenters asserted that the proposed rule would make State 
and Tribal section 401 programs less efficient and would lead to 
national inconsistency. Several commenters asserted that the EPA's 
interpretation of the CWA and case law will result in legal challenges 
to the final rule, which would in turn lead to confusion and delays in 
its implementation contrary to the intent of the Executive Order. 
Several commenters also indicated that because States may need to 
change their statutes and regulations in response to the final rule, 
litigation will ensue over those State changes resulting in further 
regulatory uncertainty, defeating the intent of the proposal to make 
the section 401 process more efficient.
    The EPA has considered and appreciates the concerns raised by these 
commenters and is mindful that the lack of clear federal guidance and 
implementation of CWA section 401 following enactment of the 1972 CWA 
amendments has resulted in a patchwork of State and Tribal programs 
with different timing, request, and review requirements for water 
quality certifications. However, the EPA's decades-long delay in 
promulgating section 401 implementing regulations does not undercut the 
EPA's authority and obligation to promulgate

[[Page 42215]]

implementing regulations for this important CWA program. The EPA's 
delay in promulgating regulations also does not change the 1972 CWA 
amendment's statutory language or underlying congressional intent, nor 
does it allow for States or Tribes to implement water quality 
certification programs that exceed the authority granted by Congress.
    The EPA acknowledges that some States and Tribes may update their 
regulations to be consistent with the procedural and substantive 
elements of this final rule. Regulatory consistency across federal, 
State, and Tribal governments with respect to issues like timing, 
waiver, and scope of section 401 reviews and conditions would help 
ensure that section 401 is implemented nationally in an efficient, 
effective, and transparent manner. Although such updates may have an 
initial burden on certifying authorities, they will ultimately result 
in more efficient certification and federal permitting processes. The 
Agency will face a similar task in updating its own NPDES regulations 
after this final rule is published, but will similarly benefit from 
more efficient, effective and transparent certification processes under 
updated regulations. Making the rule effective 30 days after 
publication in the Federal Register would be consistent with applicable 
law; however, the Agency is establishing the effective date 60 days 
after publication of the final rule in the Federal Register. This 
additional time will allow EPA to develop implementation materials for 
States, Tribes and federal agencies, as necessary or appropriate. The 
Agency stands ready to provide technical assistance to States, Tribes, 
and federal agencies seeking to update their certification procedures, 
guidance or regulations.
    By promulgating these long-overdue regulations, it is not the EPA's 
intent that States or Tribes violate either federal, State, or Tribal 
law pending completion of updates to applicable State or Tribal law. 
The Agency is aware that most if not all States have emergency 
rulemaking authorities that may help avoid such outcomes. Furthermore, 
as States and Tribes enact conforming changes to their existing laws, 
pursuant to section 401(b), the EPA remains ready and willing to 
provide any necessary technical assistance.
    A few commenters supporting the proposed rule acknowledged the 
EPA's desire to preserve State sovereignty and principles of 
cooperative federalism while at the same time creating greater national 
consistency in both federal and State regulations implementing section 
401. One commenter observed that the proposed rule would make the 
regulations consistent with the intent of the 1972 CWA amendments while 
allowing the States to retain their primary roles in the section 401 
water quality certification process. Some commenters stated the current 
regulations have allowed States to impose conditions beyond the 
appropriate scope set forth in the statute, leading to lengthy delays 
in the certification process and resulting in a certification process 
that is ill-defined, confusing in scope, and lacking clear deadlines. A 
number of commenters asserted that the proposed rule would promote 
regulatory certainty, help streamline the federal permitting process 
for critical infrastructure development, enhance the ability of project 
proponents to plan for construction, and facilitate early and 
constructive engagement between project proponents, States or 
authorized Tribes, and federal agencies to ensure that proposed 
projects will be protective of local water quality.
    The EPA acknowledges that although many certifications reflect an 
appropriately limited interpretation of the purpose and scope of 
section 401 and are issued without controversy, some certifying 
authorities have implemented water quality certification programs that 
exceed the boundaries set by Congress in section 401. After considering 
all of the comments received, the Agency has made several changes, 
described further below, to provide greater clarity and regulatory 
certainty in the final rule.

F. Legal Background

    This final rule concludes the EPA's first comprehensive effort to 
promulgate federal rules governing the implementation of CWA section 
401. The Agency's 1971 water quality certification regulations pre-
dated the 1972 CWA amendments. This final rule therefore provides the 
EPA's first holistic analysis of the statutory text, legislative 
history,\6\ and relevant case law informing the implementation of the 
CWA section 401 program by the Agency and its federal, State, and 
Tribal partners. The final rule, while focused on the relevant 
statutory provisions and case law interpreting those provisions, is 
informed by the Agency's expertise developed over nearly 50 years of 
implementing the CWA and policy considerations where necessary to 
address certain ambiguities in the statutory text. The following 
sections describe the basic operational construct and history of the 
1972 CWA amendments, how section 401 fits within that construct, and 
certain core administrative and legal principles that provide the 
foundation for this final rule.
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    \6\ The EPA observes that some legislative history related to 
section 401 is internally inconsistent. When interpreting section 
401 for purposes of this rulemaking, the Agency has generally 
accorded such inconsistent and ambiguous legislative history less 
weight.
---------------------------------------------------------------------------

1. The Clean Water Act
    Congress amended the CWA \7\ in 1972 to address longstanding 
concerns regarding the quality of the nation's waters and the federal 
government's ability to address those concerns under existing law. 
Prior to 1972, responsibility for controlling and redressing water 
pollution in the nation's waters largely fell to the Corps under the 
Rivers and Harbors Act of 1899 (RHA). While much of that statute 
focused on restricting obstructions to navigation on the nation's major 
waterways, section 13 of the RHA made it unlawful to discharge refuse 
``into any navigable water of the United States, or into any tributary 
of any navigable water from which the same shall float or be washed 
into such navigable water.'' \8\ 33 U.S.C. 407. Congress had also 
enacted the Water Pollution Control Act of 1948, Public Law 80-845, 62 
Stat. 1155 (June 30, 1948), to address interstate water pollution, and 
subsequently amended that statute in 1956 (giving the statute its 
current formal name), in 1961, and in 1965. The early versions of the 
CWA promoted the development of pollution abatement programs, required 
States to develop water quality standards, and authorized the federal 
government to bring enforcement actions to abate water pollution.
---------------------------------------------------------------------------

    \7\ The FWPCA has been commonly referred to as the CWA following 
the 1977 amendments to the FWPCA. Public Law 95-217, 91 Stat. 1566 
(1977). For ease of reference, the Agency will generally refer to 
the FWPCA in this notice as the CWA or the Act.
    \8\ The term ``navigable water of the United States'' is a term 
of art used to refer to a water subject to federal jurisdiction 
under the RHA. See, e.g., 33 CFR 329.1. The term is not synonymous 
with the phrase ``waters of the United States'' under the CWA, see 
id., and the general term ``navigable waters'' has different 
meanings depending on the context of the statute in which it is 
used. See, e.g., PPL Montana, LLC v. Montana, 132 S. Ct. 1215, 1228 
(2012).
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    These earlier statutory frameworks, however, proved challenging for 
regulators, who often worked backwards from an overly-polluted waterway 
to determine which dischargers and which sources of pollution may be 
responsible. See EPA v. State Water Resources Control Bd., 426 U.S. 
200, 204 (1976). In fact, Congress determined that the prior

[[Page 42216]]

statutes were inadequate to address the decline in the quality of the 
nation's waters, see City of Milwaukee v. Illinois, 451 U.S. 304, 310 
(1981), so Congress performed a ``total restructuring'' and ``complete 
rewriting'' of the existing statutory framework of the Act in 1972, id. 
at 317 (quoting legislative history of 1972 amendments). That 
restructuring resulted in the enactment of a comprehensive scheme 
designed to prevent, reduce, and eliminate pollution in the nation's 
waters generally, and to regulate the discharge of pollutants into 
waters of the United States specifically. See, e.g., S.D. Warren Co. v. 
Maine Bd. of Envtl. Prot., 547 U.S. 370, 385 (2006) (``[T]he Act does 
not stop at controlling the `addition of pollutants,' but deals with 
`pollution' generally[.]'').
    The objective of the new statutory scheme was ``to restore and 
maintain the chemical, physical, and biological integrity of the 
Nation's waters.'' 33 U.S.C. 1251(a). In order to meet that objective, 
Congress declared two national goals: (1) ``that the discharge of 
pollutants into the navigable waters be eliminated by 1985;'' and (2) 
``that wherever attainable, an interim goal of water quality which 
provides for the protection and propagation of fish, shellfish, and 
wildlife and provides for recreation in and on the water be achieved by 
July 1, 1983 . . . .'' Id. at 1251(a)(1)-(2).
    Congress established several key policies that direct the work of 
the Agency to effectuate those goals. For example, Congress declared as 
a national policy ``that the discharge of toxic pollutants in toxic 
amounts be prohibited; . . . that Federal financial assistance be 
provided to construct publicly owned waste treatment works; . . . that 
areawide waste treatment management planning processes be developed and 
implemented to assure adequate control of sources of pollutants in each 
State; . . . [and] that programs for the control of nonpoint sources of 
pollution be developed and implemented in an expeditious manner so as 
to enable the goals of this Act to be met through the control of both 
point and nonpoint sources of pollution.'' Id. at 1251(a)(3)-(7).
    Congress provided a major role for the States in implementing the 
CWA, balancing the traditional power of States to regulate land and 
water resources within their borders with the need for a national water 
quality regulation. For example, the statute highlighted ``the policy 
of the Congress to recognize, preserve, and protect the primary 
responsibilities and rights of States to prevent, reduce, and eliminate 
pollution'' and ``to plan the development and use . . . of land and 
water resources . . . .'' Id. at 1251(b). Congress also declared as a 
national policy that States manage the major construction grant program 
and implement the core permitting programs authorized by the statute, 
among other responsibilities. Id. Congress added that ``[e]xcept as 
expressly provided in this Act, nothing in this Act shall . . . be 
construed as impairing or in any manner affecting any right or 
jurisdiction of the States with respect to the waters (including 
boundary waters) of such States.'' Id. at 1370.\9\ Congress also 
pledged to provide technical support and financial aid to the States 
``in connection with the prevention, reduction, and elimination of 
pollution.'' Id. at 1251(b).
---------------------------------------------------------------------------

    \9\ 33 U.S.C. 1370 also prohibits states with EPA-approved CWA 
programs from adopting any limitations, prohibitions, or standards 
that are less stringent than required by the CWA.
---------------------------------------------------------------------------

    To carry out these policies, Congress broadly defined ``pollution'' 
to mean ``the man-made or man-induced alteration of the chemical, 
physical, biological, and radiological integrity of water,'' id. at 
1362(19), to parallel the broad objective of the Act ``to restore and 
maintain the chemical, physical, and biological integrity of the 
Nation's waters.'' Id. at 1251(a). Congress then crafted a non-
regulatory statutory framework to provide technical and financial 
assistance to the States to prevent, reduce, and eliminate pollution in 
the nation's waters generally. See, e.g., id. at 1256(a) (authorizing 
the EPA to issue ``grants to States and to interstate agencies to 
assist them in administering programs for the prevention, reduction, 
and elimination of pollution''); see also 84 FR 56626, 56632 (Oct. 22, 
2019) (discussing non-regulatory program provisions); 85 FR 22250, 
22253 (April 21, 2020) (same).
    In addition to the Act's non-regulatory measures to control 
pollution of the nation's waters, Congress created a federal regulatory 
program designed to address the discharge of pollutants into a subset 
of those waters identified as ``the waters of the United States.'' See 
33 U.S.C. 1362(7). Section 301 contains the key regulatory mechanism: 
``Except as in compliance with this section and sections 302, 306, 307, 
318, 402, and 404 of this Act, the discharge of any pollutant by any 
person shall be unlawful.'' Id. at 1311(a). A ``discharge of a 
pollutant'' is defined to include ``any addition of any pollutant to 
navigable waters from any point source,'' such as a pipe, ditch or 
other ``discernible, confined and discrete conveyance.'' Id. at 
1362(12), (14). The term ``pollutant'' means ``dredged spoil, solid 
waste, incinerator residue, sewage, garbage, sewage sludge, munitions, 
chemical wastes, biological materials, radioactive materials, heat, 
wrecked or discarded equipment, rock, sand, cellar dirt and industrial, 
municipal, and agricultural waste discharged into water.'' Id. at 
1362(6). Thus, it is unlawful to discharge pollutants into waters of 
the United States from a point source unless the discharge is in 
compliance with certain enumerated sections of the CWA, including by 
obtaining authorizations pursuant to the section 402 NPDES permit 
program or the section 404 dredged or fill material permit program. See 
id. at 1342, 1344. Congress therefore intended to achieve the Act's 
objective ``to restore and maintain the chemical, physical, and 
biological integrity of the Nation's waters'' by addressing pollution 
of all waters via non-regulatory means and federally regulating the 
discharge of pollutants to the subset of waters identified as 
``navigable waters.'' \10\
---------------------------------------------------------------------------

    \10\ Fundamental principles of statutory interpretation support 
the Agency's recognition of a distinction between ``nation's 
waters'' and ``navigable waters.'' As the Supreme Court has 
observed, ``[w]e assume that Congress used two terms because it 
intended each term to have a particular, nonsuperfluous meaning.'' 
Bailey v. United States, 516 U.S. 137, 146 (1995) (recognizing the 
canon of statutory construction against superfluity). Further, ``the 
words of a statute must be read in their context and with a view to 
their place in the overall statutory scheme.'' FDA v. Brown & 
Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (internal 
quotation marks and citation omitted); see also United Savings Ass'n 
v. Timbers of Inwood Forest Associates, 484 U.S. 365, 371 
(``Statutory construction . . . is a holistic endeavor. A provision 
that may seem ambiguous in isolation is often clarified by the 
remainder of the statutory scheme--because the same terminology is 
used elsewhere in a context that makes its meaning clear[.]'') 
(citation omitted). The non-regulatory sections of the CWA reveal 
Congress' intent to restore and maintain the integrity of the 
nation's waters using federal assistance to support state and local 
partnerships to control pollution in the nation's waters in addition 
to a federal regulatory prohibition on the discharge of pollutants 
into the navigable waters. If Congress intended the terms to be 
synonymous, it would have used identical terminology. Instead, 
Congress chose to use separate terms, and the Agency is instructed 
by the Supreme Court to presume Congress did so intentionally. For 
further discussion, see 84 FR at 56632 and 85 FR at 22253.
---------------------------------------------------------------------------

    Within the regulatory programs established by the Act, two 
principal components focus on ``achieving maximum `effluent 
limitations' on `point sources,' as well as achieving acceptable water 
quality standards,'' and the development of the NPDES permitting 
program that imposes specific discharge limitations for regulated 
entities. EPA v. State Water Resources Control Bd., 426 U.S. at 204. 
Together these components provide a framework for the Agency to focus 
on

[[Page 42217]]

reducing or eliminating discharges while creating accountability for 
each regulated entity that discharges into a waterbody, facilitating 
greater enforcement and overall achievement of the CWA water quality 
goals. Id.; see Oregon Natural Desert Association v. Dombeck, 172 F.3d 
1092, 1096 (9th Cir. 1998) (observing that 1972 amendments ``largely 
supplanted'' earlier versions of CWA ``by replacing water quality 
standards with point source effluent limitations'').
    Under this statutory scheme, the States \11\ are authorized to 
assume program authority for issuing section 402 and 404 permits within 
their borders, subject to certain limitations. 33 U.S.C. 1342(b), 
1344(g). States are also responsible for developing water quality 
standards for ``waters of the United States'' within their borders and 
reporting on the condition of those waters to the EPA every two years. 
Id. at 1313, 1315. States must develop total maximum daily loads 
(TMDLs) for waters that are not meeting established CWA water quality 
standards and must submit those TMDLs to the EPA for approval. Id. at 
1313(d). And, central to this final rule, States under CWA section 401 
have authority to grant, grant with conditions, deny, or waive water 
quality certifications for every federal license or permit issued 
within their borders that may result in a discharge into waters of the 
United States. Id. at 1341. These same regulatory authorities can be 
assumed by Indian Tribes under section 518 of the CWA, which authorizes 
the EPA to treat eligible Tribes with reservations in a similar manner 
to States (referred to as ``treatment as States'' or TAS) for a variety 
of purposes, including administering the principal CWA regulatory 
programs. Id. at 1377(e). In addition, States and Tribes retain 
authority to protect and manage the use of those waters that are not 
waters of the United States under the CWA. See, e.g., id. at 1251(b), 
1251(g), 1370, 1377(a).
---------------------------------------------------------------------------

    \11\ The CWA defines ``state'' as ``a State, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
American Samoa, the Commonwealth of the Northern Mariana Islands, 
and the Trust Territory of the Pacific Islands.'' 33 U.S.C. 1362(3).
---------------------------------------------------------------------------

    In enacting section 401, Congress recognized that where States and 
Tribes do not have direct permitting authority (because they do not 
have section 402 or 404 program authorization or where Congress has 
preempted a regulatory field, e.g., under the Federal Power Act), they 
may still play a valuable role in protecting the water quality of 
federally regulated waters within their borders in collaboration with 
federal agencies. Under section 401, a federal agency may not issue a 
license or permit for an activity that may result in a discharge into 
waters of the United States, unless the appropriate authority provides 
a section 401 certification or waives its ability to do so. The 
authority to certify a federal license or permit lies with the agency 
(the certifying authority) that has jurisdiction over the location of 
the discharge to the receiving water of the United States. Id. at 
1341(a)(1). Examples of federal licenses or permits potentially subject 
to section 401 certification include, but are not limited to, CWA 
section 402 NPDES permits in States where the EPA administers the 
permitting program; CWA section 404 and RHA sections 9 and 10 permits 
issued by the Corps; bridge permits issued by the U.S. Coast Guard 
(USCG); and hydropower and pipeline licenses issued by the Federal 
Energy Regulatory Commission (FERC).
    Under section 401, a certifying authority may grant, grant with 
conditions, deny, or waive certification in response to a request from 
a project proponent. The certifying authority determines whether the 
potential discharge from the proposed activity will comply with the 
applicable provisions of sections 301, 302, 303, 306, and 307 of the 
CWA and any other appropriate requirement of state law. Id. Certifying 
authorities may also add to a certification ``any effluent limitations 
and other limitations, and monitoring requirements'' necessary to 
assure compliance. Id. at 1341(d). These additional provisions must 
become conditions of the federal license or permit should it be issued. 
Id. A certifying authority may deny certification if it is unable to 
determine that the discharge from the proposed activity will comply 
with the applicable sections of the CWA and appropriate requirements of 
state law. If a certifying authority denies certification, the federal 
license or permit may not be issued. Id. at 1341(a)(1). A certifying 
authority may waive certification by ``fail[ing] or refus[ing] to act 
on a request for certification, within a reasonable period of time 
(which shall not exceed one year) after receipt of such request.'' Id.
    With the exception of section 401, the EPA has promulgated 
regulatory programs designed to ensure that the CWA is implemented as 
Congress intended in the 1972 CWA.\12\ This includes pursuing the 
overall ``objective'' of the CWA to ``restore and maintain the 
chemical, physical, and biological integrity of the Nation's waters,'' 
id. at 1251(a), while implementing the specific ``policy'' directives 
from Congress to, among other things, ``recognize, preserve, and 
protect the primary responsibilities and rights of States to prevent, 
reduce, and eliminate pollution'' and ``to plan the development and use 
. . . of land and water resources.'' Id. at 1251(b); see also Webster's 
II, New Riverside University Dictionary (1994) (defining ``policy'' as 
a ``plan or course of action, as of a government[,] designed to 
influence and determine decisions and actions;'' an ``objective'' is 
``something worked toward or aspired to: Goal''). The Agency therefore 
recognizes a distinction between the specific word choices of Congress, 
which reflect the need to develop regulatory programs that aim to 
accomplish the goals of the Act while implementing the specific policy 
directives of Congress. For further discussion of these principles, see 
84 FR 56638-39 and 85 FR at 22269-70.
---------------------------------------------------------------------------

    \12\ As noted in section II.F.3 of this notice, the EPA's 1971 
certification regulations were promulgated prior to the 1972 CWA 
Amendments and had not been updated to reflect the current statutory 
text until this final rule was developed.
---------------------------------------------------------------------------

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

[[Page 42218]]

    The classical understanding of the term navigable was first 
articulated by the Supreme Court in The Daniel Ball:

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

    77 U.S. (10 Wall.) 557, 563 (1871). Over the years, this 
traditional test has been expanded to include waters that had been used 
in the past for interstate commerce, see Economy Light & Power Co. v. 
United States, 256 U.S. 113, 123 (1921), and waters that are 
susceptible for use with reasonable improvement, see United States v. 
Appalachian Elec. Power Co., 311 U.S. 377, 407-10 (1940).
    By the time the 1972 CWA amendments were enacted, the Supreme Court 
had held that Congress' authority over the channels of interstate 
commerce was not limited to regulation of the channels themselves but 
could extend to activities necessary to protect the channels. See 
Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S. 508, 523 
(1941) (``Congress may exercise its control over the non-navigable 
stretches of a river in order to preserve or promote commerce on the 
navigable portions.''). The Supreme Court also had clarified that 
Congress could regulate waterways that formed a part of a channel of 
interstate commerce, even if they are not themselves navigable or do 
not cross State boundaries. See Utah v. United States, 403 U.S. 9, 11 
(1971). Congress therefore intended to assert federal regulatory 
authority over more than just waters traditionally understood as 
navigable, while rooting that authority in ``its commerce power over 
navigation.'' SWANCC, 531 U.S. at 168 n.3.
    The EPA recognizes and respects the primary responsibilities and 
rights of States to regulate their land and water resources, as 
reflected in CWA section 101(b). 33 U.S.C. 1251(b), see also id. at 
1370. The oft-quoted objective of the CWA to ``restore and maintain the 
chemical, physical, and biological integrity of the Nation's waters,'' 
id. at 1251(a), must be implemented in a manner consistent with 
Congress' policy directives. The Supreme Court long ago recognized the 
distinction between waters subject to federal authority, traditionally 
understood as navigable, and those waters ``subject to the control of 
the States.'' The Daniel Ball, 77 U.S. (10 Wall.) 557, 564-65 (1870). 
Over a century later, the Supreme Court in SWANCC reaffirmed the 
States' ``traditional and primary power over land and water use.'' 531 
U.S. at 174. Ensuring that States retain authority over their land and 
water resources helps carry out the overall objective of the CWA and 
ensures that the Agency is giving full effect and consideration to the 
entire structure and function of the Act. See, e.g., Hibbs v. Winn, 542 
U.S. 88, 101 (2004) (``A statute should be construed so that effect is 
given to all its provisions, so that no part will be inoperative or 
superfluous, void or insignificant.'') (citation omitted); see also 
Rapanos v. United States, 547 U.S. 715, 755-56 (2006) (Scalia, J., 
plurality) (``[C]lean water is not the only purpose of the statute. So 
is the preservation of primary state responsibility for ordinary land-
use decisions. 33 U.S.C. 1251(b).'') (original emphasis).
    In summary, Congress relied on its authority under the Commerce 
Clause when it enacted the CWA and intended to assert federal authority 
over more than just waters traditionally understood as navigable, but 
it limited the exercise of that authority to ``its commerce power over 
navigation.'' SWANCC, 531 U.S. at 168 n.3. The Court in SWANCC found 
that ``[r]ather than expressing a desire to readjust the federal-state 
balance [in a manner that would result in a significant impingement of 
the States' traditional and primary power over land and water use], 
Congress chose [in the CWA] to `recognize, preserve, and protect the 
primary responsibilities and rights of States . . . to plan the 
development and use . . . of land and water resources . . .'' Id. at 
174 (quoting 33 U.S.C. 1251(b)). The Court found no clear statement 
from Congress that it had intended to permit federal encroachment on 
traditional State power and construed the CWA to avoid the significant 
constitutional questions related to the scope of federal authority 
authorized therein. Id. at 173-74. That is because the Supreme Court 
has instructed that ``[w]here an administrative interpretation of a 
statute invokes the outer limits of Congress' power, we expect a clear 
indication that Congress intended that result.'' Id. at 172. The Court 
has further stated that this is particularly true ``where the 
administrative interpretation alters the federal-state framework by 
permitting federal encroachment upon a traditional state power.'' Id. 
at 173; see also Will v. Michigan Dept. of State Police, 491 U.S. 58, 
65 (1989) (``[I]f Congress intends to alter the `usual constitutional 
balance between the States and the Federal Government,' it must make 
its intention to do so `unmistakably clear in the language of the 
statute.' '') (quoting Atascadero State Hospital v. Scanlon, 473 U.S. 
234, 242 (1985)); Gregory v. Ashcroft, 501 U.S. 452, 461 (1991) 
(``[The] plain statement rule . . . acknowledg[es] that the States 
retain substantial sovereign powers under our constitutional scheme, 
powers with which Congress does not readily interfere''). This means 
that the executive branch's authority under the CWA, while broad, is 
not unlimited, and the waters to which CWA regulatory programs apply 
must necessarily respect those limits. For further discussion of these 
principles, see 84 FR 56655 and 85 FR at 22264. See section II.F.6 of 
this final rule preamble for a summary of public comments and Agency 
responses on interstate commerce.
    In some cases, CWA section 401 denials have been challenged on 
grounds that the denial improperly interfered with interstate commerce. 
See, e.g., Lighthouse Resources, Inc. v. Inslee, No. 3:18-cv-5005, 
Complaint at ]] 206-210; ]] 224-248 (W.D. Wash. filed Jan. 8, 2018) 
(alleging that State's denial of section 401 certification violated 
dormant Commerce Clause and dormant foreign Commerce Clause). In Lake 
Carriers Association v. EPA, 652 F.3d 1 (D.C. Cir. 2011), the court of 
appeals found that the section 401 statutory scheme of delegation of 
authority to States, by itself, does not create an impermissible burden 
on interstate commerce; however, the court signaled that certain 
actions taken by States pursuant to section 401 could be subject to 
dormant Commerce Clause challenges. 652 F.3d at 10 (``If [petitioners] 
believe that the certification conditions imposed by any particular 
state pose an inordinate burden on their operations, they may challenge 
those conditions in that state's courts. If [petitioners] believe that 
a particular state's law imposes an unconstitutional burden on 
interstate commerce, they may challenge that law in federal (or state) 
court.'').
2. The EPA's Role in Implementing Section 401
    The EPA, as the federal agency charged with administering the CWA, 
is responsible for developing regulations and guidance to ensure 
effective implementation of all CWA programs,

[[Page 42219]]

including section 401.\13\ In addition to administering the statute and 
promulgating implementing regulations, the Agency has several other 
roles under section 401.
---------------------------------------------------------------------------

    \13\ See 33 U.S.C. 1251(d) (``Except as otherwise expressly 
provided in this chapter, the Administrator of the Environmental 
Protection Agency . . . shall administer this chapter.''); id. at 
1361(a); Mayo Found. for Medical Educ. and Res. v. United States, 
562 U.S. 44, 45 (2011); Hoopa Valley Tribe v. FERC, 913 F.3d 1099, 
1104 (D.C. Cir. 2019); Ala. Rivers Alliance v. FERC, 325 F.3d 290, 
296-97 (D.C. Cir. 2003); Cal. Trout v. FERC, 313 F.3d 1131, 1133 
(9th Cir. 2002); Am. Rivers, Inc. v. FERC, 129 F. 3d 99, 107 (2d 
Cir. 1997).
---------------------------------------------------------------------------

    The EPA acts as the section 401 certification authority under two 
circumstances. First, the EPA will certify on behalf of a State or 
Tribe where the jurisdiction in which the discharge will originate does 
not itself have certification authority. 33 U.S.C. 1341(a)(1). In 
practice, this results in the EPA certifying on behalf of the many 
Tribes that do not have TAS authority for section 401. Second, the EPA 
will act as the certifying authority where the discharge would 
originate on lands of exclusive federal jurisdiction.\14\
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    \14\ The federal government may obtain exclusive federal 
jurisdiction over lands in multiple ways, including where the 
federal government purchases lands consistent with article 1, 
section 8, clause 17 of the U.S. Constitution and a state chooses to 
cede jurisdiction to the federal government, or where the federal 
government reserved jurisdiction upon granting statehood. See 
Collins v. Yosemite Park Co., 304 U.S. 518, 529-30 (1938); James v. 
Dravo Contracting Co., 302 U.S. 134, 141-42 (1937); Surplus Trading 
Co. v. Cook, 281 U.S. 647, 650-52 (1930); Fort Leavenworth Railroad 
Co. v. Lowe, 114 U.S. 525, 527 (1895). Examples of lands of 
exclusive federal jurisdiction include Denali National Park.
---------------------------------------------------------------------------

    The EPA also notifies neighboring jurisdictions when the 
Administrator determines that a discharge may affect the quality of 
such jurisdictions' waters. Id. at 1341(a)(2). Although section 401 
certification authority lies with the jurisdiction where the discharge 
originates, a neighboring jurisdiction whose water quality is 
potentially affected by the discharge may have an opportunity to raise 
objections to a certification issued for a federal license or permit. 
Where the EPA Administrator determines that a discharge subject to 
section 401 ``may affect'' the water quality of a neighboring 
jurisdiction, the EPA is required to notify that other jurisdiction. 
Id. If the neighboring jurisdiction determines that the discharge 
``will affect'' the quality of its waters in violation of a water 
quality requirement of that jurisdiction, it may notify the EPA and the 
federal licensing or permitting agency of its objection to the license 
or permit. Id. It may also request a hearing on its objection with the 
federal licensing or permitting agency. At such a hearing, section 401 
requires the EPA to submit its evaluation and recommendations with 
respect to the objection. The federal agency will consider the 
jurisdiction's and the EPA's recommendations, and any additional 
evidence presented at the hearing, and ``shall condition such license 
or permit in such manner as may be necessary to insure compliance with 
the applicable water quality requirements'' of the neighboring 
jurisdiction. Id. If the conditions cannot ensure compliance, the 
federal agency shall not issue the license or permit.
    The EPA also must provide technical assistance for section 401 
certifications upon the request of any federal or State agency or 
project proponent. Id. at 1341(b). Technical assistance might include 
provision of any relevant information on or comment on methods to 
comply with applicable effluent limitations, standards, regulations, 
requirements, or water quality standards.
    Finally, the EPA is responsible for developing regulations and 
guidance to ensure effective implementation of all CWA programs, 
including section 401. Legislative history indicates that Congress 
created the water quality certification requirement to ``recognize[ ] 
the responsibility of Federal agencies to protect water quality 
whenever their activities affect public waterways.'' S. Rep. No. 91-
351, at 3 (1969). ``In the past, these [Federal] licenses and permits 
have been granted without any assurance that the [water quality] 
standards will be met or even considered.'' Id. As an example, the 
legislative history discusses the Atomic Energy Commission's failure to 
consider the impact of thermal pollution on receiving waters when 
evaluating ``site selection, construction, and design or operation of 
nuclear powerplants.'' Id.
    The certification requirement first appeared in section 21(b) of 
the FWPCA, and it required States to certify that ``such activity will 
be conducted in a manner which will not violate applicable water 
quality standards.'' Public Law 91-224, 21(b)(1), 84 Stat. 91 (1970) 
(emphasis added). As described above, the 1972 amendments restructured 
the CWA and created a framework for compliance with effluent 
limitations that would be established in discharge permits issued 
pursuant to the new federal permitting program. The pre-existing water 
quality certification requirement was retained in section 401 of the 
1972 amendments but modified to be consistent with the overall 
restructuring of the CWA. The new section 401 required a water quality 
certification to assure that the ``discharge will comply'' with 
effluent limitations and other enumerated regulatory provisions of the 
Act. 33 U.S.C. 1341(a) (emphasis added). The 1972 amendments also 
established a new section 401(d), which provides that certifications 
``shall set forth any effluent limitations and other limitations, and 
monitoring requirements necessary to assure'' compliance with the same 
enumerated CWA provisions and with ``any other appropriate 
requirement'' of State or Tribal law. 33 U.S.C. 1341(d).
    The EPA first promulgated water quality certification regulations 
in 1971 to implement section 21(b) of the FWPCA.\15\ Some operative 
provisions of the EPA's 1971 certification regulations contain language 
from section 21(b) of the FWPCA that Congress changed in the 1972 
amendments. For example, the EPA's 1971 certification regulations 
directed authorities to certify that ``the activity will be conducted 
in a manner which will not violate applicable water quality 
standards.'' 40 CFR 121.2(a)(2)-(3) (emphasis added). These outdated 
provisions do not reflect the language of section 401 (as discussed 
elsewhere in this preamble) and have caused confusion for States, 
Tribes, stakeholders, and courts reviewing section 401 certifications. 
In section 304(h) of the CWA, Congress commanded the EPA to promulgate 
certification guidelines within 180 days of enactment of the 1972 
amendments. See 33 U.S.C. 1314(h) (directing EPA to ``promulgate,'' by 
April 1973, ``guidelines establishing test procedures for the analysis 
of pollutants that shall include the factors which must be provided in 
any certification pursuant to section 401 of this Act''). Yet the EPA 
has not updated its certification regulations to conform with the 1972 
amendments until now. A primary goal for this final rule is to update 
and clarify the Agency's regulations to ensure that they are consistent 
with the CWA.
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    \15\ The EPA's 1971 certification regulations were located at 40 
CFR part 121. The EPA has also promulgated regulations addressing 
how 401 certification applies to the CWA section 402 NPDES program, 
found at 40 CFR 124.53, 124.54, 124.55. See 48 FR 14264 (Apr. 1, 
1983). This final rule does not address the NPDES regulations, and 
the Agency will make any necessary conforming regulatory changes in 
a subsequent rulemaking.
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3. The EPA's 1971 Certification Regulations
    The EPA's 1971 certification regulations required certifying 
authorities to act on a certification request within a ``reasonable 
period of time.'' 40 CFR 121.16(b). The regulations provided that the 
federal licensing or permitting agency

[[Page 42220]]

determines what constitutes a ``reasonable period,'' and that the 
period shall generally be six months but in any event shall not exceed 
one year. Id.
    The 1971 certification regulations 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 a request for 
certification; and second, when the federal licensing or permitting 
agency sends written notification to the EPA Regional Administrator 
that the certifying authority failed to act on a certification request 
within a reasonable period of time after receipt of such a request. Id. 
at 121.16(a)-(b). Once waiver occurs, certification is not required, 
and the federal license or permit may be issued. 33 U.S.C. 1341(a).
    The 1971 certification regulations established different 
requirements that applied when the EPA was the certifying authority, 
including specific information that must be included in a certification 
request and additional procedures. Under these requirements, the 
project proponent was required to submit to the EPA Regional 
Administrator the name and address of the project proponent, a 
description of the facility or activity and of any related discharge 
into waters of the United States, a description of the function and 
operation of wastewater treatment equipment, dates on which the 
activity and associated discharge would begin and end, and a 
description of the methods to be used to monitor the quality and 
characteristics of the discharge. 40 CFR 121.22. Once the request was 
submitted to the EPA, the Regional Administrator was required to 
provide public notice of the request and an opportunity to comment, 
specifically stating that ``all interested and affected parties will be 
given reasonable opportunity to present evidence and testimony at a 
public hearing on the question whether to grant or deny certification 
if the Regional Administrator determines that such a hearing is 
necessary or appropriate.'' Id. at 121.23. If, after consideration of 
relevant information, the Regional Administrator determined that there 
is ``reasonable assurance that the proposed activity will not result in 
a violation of applicable water quality standards,'' the Regional 
Administrator would issue the certification.\16\ Id. at 121.24.
---------------------------------------------------------------------------

    \16\ Use of the terms ``reasonable assurance'' and ``activity'' 
in this operative provision of the EPA's 1971 certification 
regulations was consistent with section 21(b) of the pre-1972 
statutory language. However, those terms are not used in the 
operative provision of CWA section 401, which replaced the pre-1972 
language. See Public Law 91-224, 21(b)(1), 84 Stat. 91 (1970).
---------------------------------------------------------------------------

    The 1971 certification regulations identified a number of 
requirements that all certifying authorities must include in a section 
401 certification. Id. at 121.2. For example, the regulations provided 
that a section 401 certification shall include the name and address of 
the project proponent. Id. at 121.2(a)(2). They also provided that the 
certification shall include a statement that the certifying authority 
examined the application made by the project proponent to the federal 
licensing or permitting agency and bases its certification upon an 
evaluation of the application materials which are relevant to water 
quality considerations or that it examined other information sufficient 
to permit the certifying authority to make a statement that there is a 
``reasonable assurance that the activity will be conducted in a manner 
which will not violate applicable water quality standards.'' Id. at 
121.2(a)(2)-(3). Finally, the regulations provided that the 
certification shall state ``any conditions which the certifying agency 
deems necessary or desirable with respect to the discharge of the 
activity,'' and other information that the certifying authority deems 
appropriate.\17\ Id. at 121.2(a)(4)-(5).
---------------------------------------------------------------------------

    \17\ The term ``desirable'' is also not used in CWA section 401.
---------------------------------------------------------------------------

    The 1971 certification regulations also established a process for 
the EPA to provide notification to neighboring jurisdictions in a 
manner that is similar to that provided in CWA section 401(a)(2). Under 
the 1971 certification regulations, the Regional Administrator was 
required to review the federal license or permit application, the 
certification, and any supplemental information provided to the EPA by 
the federal licensing or permitting agency, and if the Regional 
Administrator 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 thirty days of 
receipt of the application materials and certification. Id. at 121.13. 
If the documents provided were insufficient to make the determination, 
the Regional Administrator could request any supplemental information 
``as may be required to make the determination.'' Id. at 121.12. In 
cases where the federal licensing or permitting agency held a public 
hearing on the objection raised by a neighboring jurisdiction, notice 
of such objection was required to be forwarded to the Regional 
Administrator by the licensing or permitting agency no later than 30 
days prior to the hearing. Id. at 121.15. At the hearing, the Regional 
Administrator was required to submit an evaluation and 
``recommendations as to whether and under what conditions the license 
or permit should be issued.'' Id.
    The 1971 certification regulations established 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 121.30.
    Finally, the 1971 certification regulations established an 
oversight role for the EPA when a certifying authority modified a prior 
certification. The regulation provided that a certifying authority 
could modify its certification ``in such manner as may be agreed upon 
by the certifying agency, the licensing or permitting agency, and the 
Regional Administrator.'' Id. at 121.2(b) (emphasis added).
    As noted throughout this final rule preamble, the EPA's 1971 
certification regulations were promulgated prior to the 1972 CWA 
amendments and in many respects do not reflect the current statutory 
language in section 401. In addition, the EPA's 1971 certification 
regulations do not address some important procedural and substantive 
components of section 401 certification review and action. This final 
rule is intended to modernize the EPA's regulations, align them with 
the current text and structure of the CWA, and provide additional 
regulatory procedures that the Agency believes will help promote 
consistent implementation of section 401 and streamline federal license 
and permit processes, consistent with the objectives of the Executive 
Order.
4. Judicial Interpretations of Section 401
    During the 48 years since its passage, the federal courts on 
numerous occasions have interpreted key provisions of section 401. The 
United States Supreme Court has twice addressed questions related to 
the scope and triggering mechanism of section 401, and lower courts 
also have addressed certain elements of section 401 certifications. 
This section of the preamble summarizes the U.S. Supreme Court 
decisions and major lower court decisions.

[[Page 42221]]

a. U.S. Supreme Court Decisions
i. PUD No. 1 of Jefferson County
    In 1994, the Supreme Court reviewed a water quality certification 
issued by the State of Washington for a new hydroelectric project on 
the Dosewallips River. See PUD No. 1 of Jefferson County v. Washington 
Dep't of Ecology, 511 U.S. 700 (1994) (PUD No. 1). This particular 
decision, though narrow in its holding, has been read by other courts 
as well as the EPA (in past years) and some States and Tribes to 
significantly broaden the scope of section 401 beyond its plain 
meaning.
    The principal dispute adjudicated in PUD No. 1 was whether a State 
or Tribe may require a minimum stream flow as a condition in a 
certification issued under section 401. In this case, the project 
proponent identified two potential discharges from its proposed 
hydroelectric facility: ``the release of dredged and fill material 
during construction of the project, and the discharge of water at the 
end of the tailrace after the water has been used to generate 
electricity.'' 511 U.S. at 711. The project proponent argued that the 
minimum stream flow condition was unrelated to these discharges and 
therefore beyond the scope of the State's authority under section 401. 
Id.
    The Court analyzed sections 401(a) and 401(d); specifically, it 
analyzed the use of different terms in those sections of the statute to 
inform the scope of a section 401 certification. Section 401(a) 
requires the certifying authority to certify that the discharge from a 
proposed federally licensed or permitted project will comply with 
enumerated CWA provisions, and section 401(d) allows the certifying 
authority to include conditions to assure that the applicant will 
comply with enumerated CWA provisions and `` `any other appropriate' 
state law requirements.'' 511 U.S. at 700. Emphasizing that the text of 
section 401(d) ``refers to the compliance of the applicant, not the 
discharge,'' the Court concluded that section 401(d) ``is most 
reasonably read as authorizing additional conditions and limitations on 
the activity as a whole once the threshold condition, the existence of 
a discharge, is satisfied.'' Id. at 712.
    The Court then concluded that this interpretation of the statute 
was consistent with the EPA's 1971 certification regulations, to which 
the Court accorded Chevron deference.\18\ The Court favorably quoted 
the EPA's 1971 certification regulations at 40 CFR 121.2(a)(3); quoted 
the EPA's guidance titled Wetlands and 401 Certification; and stated 
that ``EPA's conclusion that activities--not merely discharges--must 
comply with state water quality standards is a reasonable 
interpretation of Sec.  401 and is entitled to deference.'' 511 U.S. at 
712 (citing, inter alia, Chevron U.S.A. Inc. v. Natural Resources 
Defense Council, Inc., 467 U.S. 837 (1984)).
---------------------------------------------------------------------------

    \18\ The Court apparently failed to identify or understand that 
the EPA's regulations were promulgated prior to the 1972 CWA 
amendments and thus do not interpret the 1972 Act.
---------------------------------------------------------------------------

    The Court was careful to note that a State's authority to condition 
a certification ``is not unbounded'' and that States ``can only ensure 
that the project complies with `any applicable effluent limitations and 
other limitations, under [33 U.S.C. 1311, 1312]' or certain other 
provisions of the Act, `and with any other appropriate requirement of 
State Law.' '' 511 U.S. at 712. The Court concluded that ``state water 
quality standards adopted pursuant to Sec.  303 are among the `other 
limitations' with which a State may ensure compliance through the Sec.  
401 certification process'' and noted that its view ``is consistent 
with EPA's view of the statute,'' again citing the EPA's pre-1972 
regulations and subsequent guidance. Id. at 713.
    Although PUD No. 1 has been interpreted broadly by some to expand 
State authority under section 401--beyond assessing water quality 
impacts from the discharge, so as to allow conditions beyond the 
enumerated CWA provisions--the Court did not stray from the bedrock 
principles that a section 401 certification must address water quality 
and that appropriate conditions include those necessary to assure 
compliance with the State's water quality standards. Indeed, referring 
to the section 401 language allowing certification conditions based on 
``any other appropriate requirements of state law,'' the Court 
explicitly declined to speculate ``on what additional state laws, if 
any, might be incorporated by this language. But at a minimum, 
limitations imposed pursuant to state water quality standards adopted 
pursuant to Sec.  303 are appropriate requirements of state law.'' 511 
U.S. at 713 (emphasis added).
    On the scope of section 401, the dissenting opinion in PUD No. 1 
would have declined to adopt the interpretation suggested by the EPA's 
regulations and guidance and instead analyzed the statutory section as 
a whole, attempting to harmonize sections 401(a) and (d). The dissent 
first noted that, if the majority's conclusion that States can impose 
conditions unrelated to discharges is correct, ``Congress' careful 
focus on discharges in Sec.  401(a)(1)--the provision that describes 
the scope and function of the certification process--was wasted 
effort,'' and that the majority's conclusion ``effectively eliminates 
the constraints of Sec.  401(a)(1).'' 511 U.S. at 726 (Thomas, J., 
dissenting). The dissent then ``easily reconciled'' the two provisions 
by concluding that ``it is reasonable to infer that the conditions a 
State is permitted to impose on certification must relate to the very 
purpose the certification process is designed to serve. Thus, while 
section 401(d) permits a State to place conditions on a certification 
to ensure compliance of `the applicant,' those conditions must still be 
related to discharges.'' Id. at 726-27. The dissent further noted that 
each of the CWA provisions enumerated in section 401 ``describes 
discharge-related limitations'' and therefore that the plain language 
of section 401(d) supports the conclusion that certification conditions 
must address water quality concerns from the discharge, not the 
proposed activity as a whole. Id. at 727. Finally, the dissent applied 
the principle ejusdem generis in its analysis of statutory construction 
and concluded that because ``other appropriate requirements of state 
law'' are included in a list of more specific discharge-related CWA 
provisions, this ``general reference to `appropriate' requirements of 
state law is most reasonably construed to extend only to provisions 
that, like the other provisions in the list, impose discharge-related 
restrictions.'' Id. at 728.
    The dissent also took issue with the majority's reliance, at least 
in part, on the EPA's regulations and its application of Chevron 
deference. The dissent noted that the Court had not first identified 
ambiguity in the statute and that the federal government had not sought 
judicial deference to EPA's regulations. 511 U.S. at 728-29 (Thomas, 
J., dissenting). See also Brief for the United States as Amicus Curiae 
Supporting Affirmance, PUD No. 1 of Jefferson County v. Washington 
Dep't of Ecology, No. 92-1911, (Dec. 1993). The dissent noted that 
there was no EPA interpretation directly addressing the relationship 
between sections 401(a) and (d), and that the only existing EPA 
regulation that addresses the conditions that may appear in section 401 
certifications ``speaks exclusively in terms of limiting discharges.'' 
\19\ Id. (citing 40 CFR 121.2(a)(4)).
---------------------------------------------------------------------------

    \19\ The amicus brief filed by the Solicitor General on behalf 
of the EPA in this case did not grapple with the language in 401(a) 
and (d) at all, but primarily argued that the proposed project had 
two distinct discharges (which were undisputed) and that ``both 
discharges could reasonably be said to cause a violation of the 
State's water quality standards,'' including the designated uses and 
antidegradation components. Brief for the United States as Amicus 
Curiae Supporting Affirmance, PUD No. 1 of Jefferson County v. 
Washington Dep't of Ecology, No. 92-1911 at 12 n. 2 (Dec. 1993) 
(``It is therefore unnecessary to determine in this case whether 
Congress intended by the use of the term ``applicant,'' rather than 
``discharge, '' in section 401(d) to grant States a broader power to 
condition certifications under section 401(d) than to deny them 
under section 401(a) and, if so, whether there are limitations on 
the States' authority to impose such conditions.'') The amicus brief 
also did not inform the Court that the Agency's implementing 
regulations included language from the prior version of the Act.

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

[[Page 42222]]

    The PUD No. 1 decision addressed two other scope-related elements 
of section 401: Whether certification conditions may be designed to 
address impacts to designated uses, and whether conditions related to 
minimum stream flows are appropriate under section 401. First, the 
Court conducted a plain language analysis of the CWA and concluded 
that, ``under the literal terms of the statute, a project that does not 
comply with a designated use of the water does not comply with the 
applicable water quality standards.'' Id. at 715. This means that a 
section 401 certification may appropriately include conditions to 
require compliance with designated uses, which, pursuant to the CWA, 
are a component of a water quality standard. Id. Second, the Court 
acknowledged that the Federal Power Act (FPA) empowers FERC ``to issue 
licenses for projects `necessary or convenient . . . for the 
development, transmission, and utilization of power across, along, 
from, or in any of the streams . . . over which Congress has 
jurisdiction,' '' and that the FPA ``requires FERC to consider a 
project's effect on fish and wildlife.'' Id. at 722. Although the Court 
had previously rejected a State's minimum stream flow requirement that 
conflicted with a stream flow requirement in a FERC license, the Court 
found no similar conflict in this case because FERC had not yet issued 
the hydropower license. Id. Given the breadth of federal permits that 
CWA section 401 applies to, the Court declined to assert a broad 
limitation on stream flow conditions in certifications but concluded 
that they may be appropriate if necessary to enforce a State's water 
quality standard, including designated uses. Id. at 723.
ii. S.D. Warren
    In 2006, the Court revisited section 401 in connection with the 
State of Maine's water quality certification of FERC license renewals 
for five hydroelectric dams on the Presumpscot River. S.D. Warren Co. 
v. Maine Bd. of Envtl. Prot., 547 U.S. 370 (2006) (S.D. Warren). The 
issue presented in S.D. Warren was whether operation of a dam may 
result in a ``discharge'' into the waters of the United States, 
triggering the need for a section 401 certification, even if the 
discharge did not add any pollutants. The Court analyzed the use of 
different terms-- ``discharge'' and ``discharge of pollutants''--within 
the CWA, how those terms are defined, and how they are used in CWA 
sections 401 and 402. The Court noted that section 402 expressly uses 
the term ``discharge of pollutants'' and requires permits for such 
discharges; and that section 401, by contrast, provides a tool for 
States to maintain water quality within their jurisdiction and uses the 
term ``discharge,'' which is not independently defined in the Act.\20\ 
Finding no specific definition of the term ``discharge'' in the 
statute, the Court turned to its common dictionary meaning: A ``flowing 
or issuing out'' and concluded that the term is ``presumably broader'' 
than ``discharge of a pollutant.'' Id. at 375-76.
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    \20\ The Court noted that the Act provides that ``the term 
`discharge' when used without qualification incudes a discharge of a 
pollutant, and a discharge of pollutants.'' 547 U.S. at 375 (quoting 
33 U.S.C. 1362(16)).
---------------------------------------------------------------------------

    The Court held that operating a dam ``does raise a potential for a 
discharge'' and, therefore, triggers section 401. 547 U.S. at 373. In 
so holding, the Court observed that Congress had defined ``pollution'' 
under the Act to mean ``the man-made or man-induced alteration of the 
chemical, physical, biological, and radiological integrity of water,'' 
33 U.S.C. 1362(19), and that ``[t]he alteration of water quality as 
thus defined is a risk inherent in limiting river flow and releasing 
water through turbines.'' 547 U.S. at 385. Such changes in a river 
``fall within a State's legitimate legislative business, and the Clean 
Water Act provides for a system that respects the State's concerns.'' 
Id. at 386. The Court concluded by observing that ``[s]tate 
certifications under [section] 401 are essential in the scheme to 
preserve state authority to address the broad range of pollution.'' Id. 
This sentence, when read in isolation, has been interpreted as 
broadening the scope of section 401 to allow certifying authorities to 
consider potential environmental impacts from a proposed federally 
licensed or permitted project that have nothing to do with water 
quality. However, the Court followed that sentence with a quote from 
Senator Muskie's floor statement during the enactment of section 401:

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

    Id. (emphasis added). The Court then stated, ``These are the very 
reasons that Congress provided the States with power to enforce `any 
other appropriate requirement of State law,' 33 U.S.C. 1341(d), by 
imposing conditions on federal licenses for activities that may result 
in a discharge.'' Id. (emphasis added). Thus, when read in context, the 
Court's statement about a State's authority to address a ``broad range 
of pollution'' under section 401 does not suggest that an ``appropriate 
requirement of State law'' means anything other than water quality 
requirements or that a State's or Tribe's action on a certification 
request can be focused on anything other than compliance with 
appropriate water quality requirements.
b. Circuit Court Decisions
    Over the years, federal appellate courts have also addressed 
important aspects of section 401, including the timing for certifying 
authorities to act on a request and the scope of authority of federal 
agencies other than the EPA to make determinations on section 401 
certifications. This section highlights a few of the most significant 
issues concerning section 401 and the most often cited decisions but 
does not cover the universe of lower federal court or State court case 
law. The Agency intends for this final rule to provide consistency and 
certainty where there may currently be conflicting or unclear but 
locally binding legal precedent.
    Recent case law has provided insight concerning the timing and 
waiver provisions of section 401. In 2018, the Second Circuit addressed 
the question of when the statutory review clock begins. N.Y. State 
Dep't of Envtl. Conservation v. FERC, 884 F.3d 450, 455-56 (2d Cir. 
2018). Considering Millennium Pipeline Company's certification request, 
the court disagreed with the State of New York and held that the 
statutory time limit is not triggered when a State determines that a 
request for certification is ``complete,'' but that the ``plain 
language of Section 401 outlines a bright-line rule regarding the 
beginning of review,'' and that the clock starts after ``receipt of 
such request'' by the certifying authority. Id.

[[Page 42223]]

Otherwise, the court noted that States could ``blur this bright-line 
into a subjective standard, dictating that applications are complete 
only when state agencies decide that they have all the information they 
need. The state agencies could thus theoretically request supplemental 
information indefinitely.'' Id. at 456. The Agency agrees with this 
holding.
    The D.C. Circuit has also recently analyzed the statutory timeline 
for review of a certification and has correctly held that, consistent 
with the plain language of CWA section 401(a)(1), ``while a full year 
is the absolute maximum, [the statute] does not preclude a finding of 
waiver prior to the passage of a full year.'' Hoopa Valley Tribe v. 
FERC, 913 F.3d 1099, 1104 (D.C. Cir. 2019), cert. denied sub nom. Cal. 
Trout v. Hoopa Valley Tribe, 140 S.Ct. 650 (2019). Significantly, the 
court observed that the EPA's own regulations--promulgated by ``the 
agency charged with administering the CWA''--allowed for waiver after 
only six months. Id.
    In Hoopa Valley Tribe, the D.C. Circuit also correctly held that 
``the withdrawal-and-resubmission of water quality certification 
requests does not trigger new statutory periods of review.'' Id. at 
1101. The court found that the project proponent and the certifying 
authorities (California and Oregon) had improperly entered into an 
agreement whereby the ``very same'' request for State certification of 
its relicensing application was automatically withdrawn-and resubmitted 
every year by operation of ``the same one-page letter,'' submitted to 
the States before the statute's one-year waiver deadline. Id. at 1104. 
The court observed that ``[d]etermining the effectiveness of such a 
withdrawal-and-resubmission scheme is an undemanding inquiry'' because 
the statute's text ``is clear'' that failure or refusal to act on a 
request for certification within a reasonable period of time, not to 
exceed one year, waives the State's ability to certify.\21\ Id. at 
1103. The court found that, pursuant to the unlawful withdrawal-and-
resubmission ``scheme,'' the States had not yet rendered a 
certification decision ``more than a decade'' after the initial request 
was submitted to the States. Id. at 1104. The court declined to 
``resolve the legitimacy'' of an alternative arrangement whereby an 
applicant may actually submit a new request in place of the old one. 
Id. Nor did it determine ``how different a request must be to 
constitute a `new request' such that it restarts the one-year clock.'' 
Id. On the facts before it, the court found that ``California's and 
Oregon's deliberate and contractual idleness'' defied the statute's 
one-year limitation and ``usurp[ed] FERC's control over whether and 
when a federal license will issue.'' Id.
---------------------------------------------------------------------------

    \21\ Two decisions from the Second Circuit recently acknowledged 
that project proponents have withdrawn and resubmitted certification 
requests to extend the reasonable time period for a state to review. 
See N.Y. State Dep't of Envtl. Conservation v. FERC, 884 F.3d at 
456; Constitution Pipeline v. N.Y. State Dep't of Envtl. 
Conservation, 868 F.3d 87, 94 (2d Cir. 2018). However, in neither 
case did the court opine on the legality of such an arrangement.
---------------------------------------------------------------------------

    Another important area of case law deals with the scope of 
authority and deference provided to federal agencies other than the EPA 
in addressing issues arising under section 401. Many other federal 
agencies, including FERC and the Corps, routinely issue licenses and 
permits that require section 401 certifications and are responsible for 
enforcing State certification conditions that are incorporated into 
federal licenses and permits. However, because the EPA has been charged 
by Congress with administering the CWA, some courts have concluded that 
those other federal agencies are not entitled to deference on their 
interpretations of section 401. See Ala. Rivers Alliance v. FERC, 325 
F.3d 290, 296-97 (D.C. Cir. 2002); Am. Rivers, Inc. v. FERC, 129 F.3d 
99, 107 (2d. Cir. 1997). Other courts have concluded that FERC has an 
affirmative obligation to determine whether a certifying authority has 
complied with requirements related to a section 401 certification. See 
City of Tacoma v. FERC, 460 F.3d 53, 67-68 (D.C. Cir. 2006) (FERC had 
an obligation to ``obtain some minimal confirmation of such 
compliance''); see also Keating v. FERC, 927 F.2d 616, 622-23, 625 
(D.C. Cir. 1991) (while a federal agency may not question propriety of 
State certification before license has issued, ``FERC must at least 
decide whether the state's assertion of revocation satisfies section 
401(a)(3)'s predicate requirements'').
    In an important determination of procedural authorities, the Second 
Circuit has held that FERC--as the licensing agency--``may determine 
whether the proper state has issued the certification or whether a 
state has issued a certification within the prescribed period.'' Am. 
Rivers, Inc., 129 F.3d at 110-11. This holding is correct; the holding 
is consistent with and supported by the implied statutory authority of 
a federal agency to establish the ``reasonable period of time (which 
shall not exceed one year)'' in the first place. 33 U.S.C. 1341(a)(1).
    Case law also highlights the potential enforcement challenges that 
federal agencies face with section 401 certification conditions that 
are included in federal licenses and permits. Federal agencies have 
been admonished not to ``second guess'' a State's water quality 
certification or its conditions, see, e.g., City of Tacoma, 460 F.3d at 
67; Am. Rivers Inc., 129 F.3d at 107; U.S. Dept. of Interior v. FERC, 
952 F.2d 538, 548 (D.C. Cir. 1992) (``FERC may not alter or reject 
conditions imposed by the states through section 401 certificates.''), 
even where the federal agency has attempted to impose conditions that 
are more stringent than the State's conditions. See Sierra Club v. U.S. 
Army Corps of Engineers, 909 F.3d 635, 648 (4th Cir. 2018) (``the plain 
language of the Clean Water Act does not authorize the Corps to replace 
a state condition with a meaningfully different alternative condition, 
even if the Corps reasonably determines that the alternative condition 
is more protective of water quality''); see also Lake Carriers' Assoc. 
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. . . .''). But in Lake 
Carriers' Assoc., the court also observed, ``[n]otably, the petitioners 
never argued that the certifications failed to `compl[y] with the terms 
of section 401,' . . . by overstepping traditional bounds of state 
authority to regulate interstate commerce'' (citing City of Tacoma, 460 
F.3d at 67), and the court concluded that it ``therefore need not 
consider whether EPA has authority to reject state conditions under 
such circumstances.'' Also, in Snoqualmie Indian Tribe v. FERC, the 
Ninth Circuit upheld FERC's inclusion of minimum flow requirements 
greater than those specified in the State of Washington's certification 
as long as they ``do not conflict with or weaken the protections 
provided by the [State] certification.'' 545 F.3d 1207, 1219 (9th Cir. 
2008). In that case, FERC had added license conditions increasing the 
minimum flows specified in the State's certification in order to 
``produce a great amount of mist'' which it determined would ``augment 
the Tribe's religious experience,'' one of the water's designated uses. 
Id.; see also cases discussed at section III.G of this notice affirming 
a role for federal agencies to confirm whether certifications comply 
with the requirements of section 401.
    This final rule is intended to provide clarity to certifying 
authorities, federal agencies, and project proponents, as it

[[Page 42224]]

addresses comprehensively and for the first time relevant competing 
case law and attempts to clarify the scope of conditions that may be 
included in a certification and the federal agencies' role in the 
certification process.
5. Administrative Law Principles
    To understand the full context and legal basis for this final rule, 
it is useful to review some key governing principles of administrative 
law. In general, administrative agencies can exercise only the 
authority that has been provided to them by Congress, and courts must 
enforce unambiguous terms that clearly express congressional intent. 
However, when Congress delegates authority to administrative agencies, 
it sometimes enacts ambiguous statutory provisions. To carry out their 
congressionally authorized missions, agencies, including the EPA, must 
often interpret ambiguous statutory terms. However, they must do so 
consistent with congressional intent. In Chevron, U.S.A. v. Natural 
Resources Defense Council, Inc., 467 U.S. 837 (1984) (Chevron), the 
Supreme Court concluded that courts have a limited role when reviewing 
agency interpretations of ambiguous statutory terms. In such cases, 
reviewing courts defer to an agency's interpretation of ambiguous terms 
if the agency's interpretation is reasonable. Under Chevron, federal 
agencies--not federal courts--are charged in the first instance with 
resolving statutory ambiguities to implement delegated authority from 
Congress.
    The Supreme Court has described the Chevron analysis as a ``two-
step'' process. Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2124 
(2016). At step one, the reviewing court determines whether Congress 
has ``directly spoken to the precise question at issue.'' Chevron, 467 
U.S. at 842. If so, ``that is the end of the matter; for the court, as 
well as the agency, must give effect to the unambiguously expressed 
intent of Congress.'' Id. at 842-43. If the statute is silent or 
ambiguous, the reviewing court proceeds to the second step, in which 
the court must defer to the agency's ``reasonable'' interpretation of 
the statute. Id. at 844.
    In the field of judicial review of agencies' regulations that 
interpret statutes that those agencies administer, Chevron deference 
relies on the principle that ``when Congress grants an agency the 
authority to administer a statute by issuing regulations with the force 
of law, it presumes the agency will use that authority to resolve 
ambiguities in the statutory scheme.'' Encino Motorcars, 136 S. Ct. at 
2125 (citing Chevron, 467 U.S. at 843-44). Courts thus have applied 
Chevron deference to an agency's statutory interpretation ``when it 
appears that Congress delegated authority to the agency generally to 
make rules carrying the force of law, and that the agency 
interpretation claiming deference was promulgated in the exercise of 
that authority.'' Mayo Found. for Medical Educ. and Res. v. United 
States, 562 U.S. 44, 45 (2011) (quoting United States v. Mead Corp., 
533 U.S. 218, 226-27 (2001)).
    In Chevron, the Supreme Court reviewed the EPA's interpretation of 
statutory language from the Clean Air Act Amendments of 1977. Congress 
amended the Clean Air Act to impose requirements on States that had not 
achieved the national air quality standards promulgated by the EPA. 
States that had not attained the established air standards had to 
implement a permit program that would regulate ``new or modified major 
stationary sources'' of air pollution. Clean Air Act Amendments of 
1977, Public Law 95-95, 91 Stat. 685 (1977). The EPA promulgated 
regulations defining a ``stationary source'' as the entire plant where 
pollutant-producing structures may be located. The EPA, therefore, 
treated numerous pollution-producing structures collectively as a 
single ``stationary source,'' even if those structures were part of the 
same larger facility or complex. See 40 CFR 51.18(j)(1)(i)-(ii) (1983). 
Under the EPA's regulation, a facility could modify or construct new 
pollution-emitting structures within the facility or complex as long as 
the stationary source--the facility as a whole--did not increase its 
pollution emissions.
    In 1981, the Natural Resources Defense Council (NRDC) opposed the 
EPA's definition of ``stationary source'' and filed a challenge to the 
Agency's regulations. The D.C. Circuit agreed with the NRDC and set 
aside the EPA's regulations. The D.C. Circuit acknowledged that the 
Clean Air Act ``does not explicitly define what Congress envisioned as 
a `stationary source,' to which the permit program . . . should 
apply,'' and also concluded that Congress had not clearly addressed the 
issue in the legislative history. NRDC v. Gorsuch, 685 F.2d 718, 723 
(DC Cir. 1982). Without clear text or intent from Congress, the D.C. 
Circuit looked to the purposes of the program to guide the court's 
interpretation. Id. at 726. According to the court, Congress sought to 
improve air quality when it amended the Clean Air Act, and the EPA's 
definition of ``stationary source'' merely promoted the maintenance of 
current air quality standards.
    In a unanimous decision, the Supreme Court reversed, finding that 
the D.C. Circuit had committed a ``basic legal error'' by adopting ``a 
static judicial definition of the term `stationary source' when it had 
decided that Congress itself had not commanded that decision.'' 
Chevron, 467 U.S. at 842. The Court explained that it is not the 
judiciary's place to establish a controlling interpretation of a 
statute delegating authority to an agency, but, rather, that it is the 
agency's job to ``fill any gap left, implicitly or explicitly, by 
Congress.'' Id. at 843. When Congress expressly delegates to an 
administrative agency the authority to interpret a statute through 
regulation, courts cannot substitute their own interpretation of the 
statute when the agency has provided a reasonable construction of the 
statute. See id. at 843-44.
    During the rulemaking process, the EPA had explained that Congress 
had not fully addressed the definition of ``source'' in the amendments 
to the Clean Air Act or in the legislative history. Id. at 858. The 
Supreme Court agreed, concluding that ``the language of [the statute] 
simply does not compel any given interpretation of the term `source.''' 
Id. at 860. And the legislative history associated with the amendments 
was ``silent on the precise issue.'' Id. at 862.
    In its proposed and final rulemaking, the EPA noted that adopting 
an individualized equipment definition of ``source'' could 
disincentivize the modernization of plants, if industry had to go 
through the permitting process to create changes. Id. at 858. The EPA 
believed that adopting a plant-wide definition of ``source'' could 
result in reduced pollution emissions. Id. Considering the Clean Air 
Act's competing objectives of permitting economic growth and reducing 
pollution emissions, the Supreme Court stated that ``the plantwide 
definition is fully consistent with one of those concerns--the 
allowance of reasonable economic growth--and, whether or not we believe 
it most effectively implements the other, we must recognize that the 
EPA has advanced a reasonable explanation for its conclusion that the 
regulations serve the environmental objectives as well.'' Id. at 863. 
The Court upheld the EPA's definition of the term ``stationary 
source,'' explaining that ``the Administrator's interpretation 
represents a reasonable accommodation of manifestly competing interests 
and is entitled to deference: The regulatory scheme is technical and 
complex, the

[[Page 42225]]

agency considered the matter in a detailed and reasoned fashion, and 
the decision involves reconciling conflicting policies.'' Id. at 
865.\22\
---------------------------------------------------------------------------

    \22\ For other instructive applications of Chevron's 
interpretative principles, see Entergy Corp. v. Riverkeeper, Inc. 
556 U.S. 208, 222-23 (2009) (statutory silence interpreted as 
``nothing more than a refusal to tie the agency's hands''); Zuni 
Pub. School Dist. v Dep't of Educ. 550 U.S. 81, 89-94 (2007) (court 
considered whether agency's interpretation was reasonable in light 
of the ``plain language of the statute'' as well as the statute's 
``background and basic purposes''); Healthkeepers, Inc. v. Richmond 
Ambulance Auth., 642 F.3d 466, 471 (4th Cir. 2011) (``statutory 
construction . . . is a holistic endeavor'').
---------------------------------------------------------------------------

    In the Brand X decision, the Supreme Court further elaborated on 
the Chevron doctrine, upholding agencies' broad power to interpret 
ambiguous statutes as against contrary judicial interpretations. Even 
if a court has ruled on the interpretation of a statute, the ``court's 
prior judicial construction of a statute trumps an agency construction 
otherwise entitled to Chevron deference only if the prior court 
decision holds that its construction follows from the unambiguous terms 
of the statute and thus leaves no room for agency discretion.'' Nat'l 
Cable & Telecomm. Ass'n v. Brand X internet Serv., 545 U.S. 967, 982 
(2005) (emphasis added). Put another way, Brand X held that ``a court's 
choice of one reasonable reading of an ambiguous statute does not 
preclude an implementing agency from later adopting a different 
reasonable interpretation.'' United States v. Eurodif S.A., 555 U.S. 
305, 315 (2009). This principle stems from Chevron itself, which 
``established a `presumption that Congress, when it left ambiguity in a 
statute meant for implementation by an agency, understood that the 
ambiguity would be resolved, first and foremost, by the agency, and 
desired the agency (rather than the courts) to possess whatever degree 
of discretion the ambiguity allows.' '' Brand X, 545 U.S. at 982 
(quoting Smiley v. Citibank, 517 U.S. 735, 740-41 (1996)). As Chevron 
itself noted, even the ``initial agency interpretation is not instantly 
carved in stone.'' Chevron, 467 U.S. at 863.
    In Brand X, the Federal Communications Commission (FCC or 
Commission) interpreted the scope of the Communications Act of 1934, 
which subjects providers of ``telecommunications service'' to mandatory 
common-carrier regulations. Brand X, 545 U.S. at 977-78. Brand X 
internet Services challenged the FCC's interpretation, and the Ninth 
Circuit concluded, based on the court's precedent, that the 
Commission's construction of the Communications Act was impermissible 
Id. at 979-80. The Supreme Court granted certiorari and reversed. The 
Supreme Court upheld the FCC's interpretation of the Communications Act 
by applying Chevron's two-step analysis. The Court found that the 
relevant statutory provisions failed to unambiguously foreclose the 
Commission's interpretation, while other provisions were silent. The 
FCC had ``discretion to fill the consequent statutory gap,'' and its 
construction was reasonable. Id. at 997.
    As the Court noted, the entire ``point of Chevron is to leave the 
discretion provided by the ambiguities of a statute with the 
implementing agencies.'' 545 U.S. at 981 (quoting Smiley, 517 U.S. at 
742). Thus courts cannot rely on judicial precedent to override an 
agency's interpretation of an ambiguous statute. Id. at 982. Instead, 
as a ``better rule,'' a reviewing court can rely only on precedent that 
interprets a statute at ``Chevron step one.'' Id. ``Only a judicial 
precedent holding that the statute unambiguously forecloses the 
agency's interpretation, and therefore contains no gap for the agency 
to fill, displaces a conflicting agency construction.'' Id. at 982-83. 
A contrary rule would produce anomalous results, because the 
controlling interpretation would then turn on whether a court or the 
agency had interpreted the statutory provision first. See id. at 983. 
``[W]hether Congress has delegated to an agency the authority to 
interpret a statute does not depend on the order in which the judicial 
and administrative constructions occur.'' Id. Agencies have the 
authority to revise ``unwise judicial constructions of ambiguous 
statutes.'' Id.
6. Response to Comments on the Legal Background
    The Agency solicited and received numerous comments on the legal 
background for the proposed rule. Among others, these comments included 
legal arguments pertaining to the Tenth Amendment, interstate commerce, 
cooperative federalism, the APA, and the Agency's rulemaking authority. 
The sections below provide the EPA's response to the most salient of 
those comments.
a. The Tenth Amendment and the Commerce Clause
    Some commenters asserted the proposed rule would violate the Tenth 
Amendment, citing the sovereignty that States have over waters of the 
United States. One commenter asserted that jurisdictional power over 
waters of the State was reserved for the States and not delegated to 
Congress. Another commenter asserted that the proposal would constitute 
a ``usurping'' of State authority and overstepping the Tenth Amendment 
rights of the States. The EPA disagrees with these commenters. For the 
reasons set forth in section II.F.1 of this notice and in the following 
paragraph, the Agency considers this final rule to be a careful and 
thoughtful clarification of State and Tribal involvement in federal 
licensing or permitting proceedings, including those in which State and 
Tribal authority may otherwise be preempted by federal law. The final 
rule does not ``usurp'' State authority. As discussed, the EPA's final 
rule is consistent with section 401, strikes the appropriate balance 
Congress intended between federal and State authority, and does not 
limit State authority any more than Congress intended under section 
401.
    The Agency also received a comment asserting that the proposed rule 
would violate the Tenth Amendment because federal agencies cannot 
commandeer States to regulate interstate commerce in particular ways, 
citing New York v. United States, 505 U.S. 144, 166 (1992). The 
commenter noted that in New York, the Supreme Court, in striking down 
portions of the Low-Level Radioactive Waste Policy Amendments Act of 
1985 that required States to regulate as Congress instructed or to take 
title to the waste, found that Congress cannot command States how to 
legislate and that Congress must exercise legislative authority only 
directly upon individuals. The Agency disagrees with this commenter. 
This final rule neither directs the functioning of the States nor 
commands States how to legislate or regulate. The final rule merely 
affirms and clarifies the scope of the authority that Congress granted 
to certifying authorities to review and condition a federal license or 
permit within certain reasonable bounds, informed by the text of the 
Act, and provides a procedural framework for States, Tribes, and 
federal agencies to follow that will promote consistency in 401 
certification proceedings.
    In the proposal, the EPA solicited comment on whether the proposed 
rule appropriately balanced the scope of State authority under section 
401 with Congress' goal of facilitating commerce on interstate 
navigable waters. Some commenters argued that the cases referenced in 
the proposed rule preamble, including Lighthouse Resources, Inc. v. 
Inslee and Lake Carrier's Association v. EPA, 652 F.3d 1 (D.C. Cir. 
2011), are not relevant to this rulemaking. The Agency disagrees with 
the suggestion that these cases are irrelevant because, among other 
things, they demonstrate that section 401

[[Page 42226]]

actions are not insulated from legal challenges asserting State or 
Tribal interference with interstate commerce and violations of the 
Commerce Clause. The Agency did not rely on these decisions to inform 
the substance of the final rule; rather, they were considered as part 
of the overall context of litigation and regulatory uncertainty that 
contributed to the need to update the 1971 certification regulations to 
be consistent with CWA section 401.
    Other commenters supported the proposal and raised concerns that 
States and Tribes could use section 401 actions to override federal 
trade policy with which they disagree. At least one commenter asserted 
that coastal States and States that border Canada and Mexico could 
misuse section 401 to block the construction of international terminals 
for exports, including energy, agricultural, and manufacturing exports. 
This commenter asserted that such misuse could also result in blocking 
imports from trading partners based on objections of a single State. 
The EPA appreciates these comments and agrees that there is a risk that 
State or Tribal certification authority could be misused in the way 
described by the commenter. However, as described elsewhere in this 
final rule preamble and in the Economic Analysis for the Clean Water 
Act Section 401 Certification Rule (``the Economic Analysis,'' 
available in the docket for this final rule), the EPA acknowledges that 
many certifications reflect an appropriately limited interpretation of 
the purpose and scope of section 401 and are issued without 
controversy, and that the limitations expressed in this rulemaking 
should further curb any improper invocation of section 401 authority.
    The EPA has determined that this final rule appropriately balances 
the interests of State or Tribal participation in federal license or 
permit proceedings under section 401 with Congress' goal of 
facilitating interstate commerce on navigable waters. Because Congress 
relied on its authority under the Interstate Commerce Clause when it 
enacted the CWA, including section 401, this rule respects that 
balance. The Agency has for the first time clearly defined the scope of 
certification, reducing the risk that States and Tribes would deny or 
condition certifications for reasons beyond the authority provided in 
section 401 or that such denials or conditions would place undue 
burdens on interstate commerce.
b. Cooperative Federalism
    A number of commenters asserted that the proposed rule is 
inconsistent with the concept of cooperative federalism and the 
important role of States and Tribes as co-regulators, and therefore, 
these commenters believed that the proposed rule undermines the 
cooperative federalism structure established by Congress in the CWA in 
section 101(b) and section 101(g). Most of these commenters noted that 
the CWA recognizes States' primary authority over their water 
resources, designates States as co-regulators under a system of 
cooperative federalism, and expresses intent to preserve and protect 
States' responsibilities and rights. Commenters stated that the CWA was 
founded on a principle of cooperative federalism, and that the EPA 
should not dictate what States can and cannot do. Another commenter 
asserted that the proposed rule would unduly limit States' authority 
and autonomy to protect their water resources. A few commenters 
asserted that the proposed rule would harm Congress' division of 
authority between certifying authorities and federal licensing and 
permitting agencies. Some commenters asserted that the proposed rule 
neglects States' interests.
    Other commenters asserted that the proposed rule is consistent with 
the overall cooperative federalism framework established by Congress in 
the CWA and appropriately balances federal and State authority. A few 
commenters argued that under section 401, Congress was conferring on 
States a narrow exception to act in areas that are otherwise preempted 
entirely by federal law. These commenters described section 401 
certifications as playing a limited role in a much larger federal 
permitting scheme envisioned in the CWA. A few commenters supporting 
the proposed rule described an appreciation for the EPA's desire to 
preserve State sovereignty and cooperative federalism in conjunction 
with greater consistency in implementing section 401. Several 
commenters observed that the proposed rule would promote efficiency and 
would be consistent with the intent of the 1972 CWA amendments, leading 
to consistent nationwide implementation, while allowing the States to 
retain their primary roles under the CWA. Other commenters stated that 
the current regulations have allowed States to impose conditions beyond 
the scope of water quality effects of a discharge, leading to lengthy 
delays and a process that is ill-defined, confusing in scope, and 
lacking clear deadlines. Other commenters suggested that the proposed 
rule supports timely issuance of permits and licenses and agreed that 
the proposed rule would ensure that section 401 certification does not 
exceed the scope of CWA jurisdiction.
    The EPA has considered these diverse comments and concludes that 
the final rule does not infringe upon the roles of States as co-
regulators, nor does it undermine cooperative federalism. The final 
rule does not and cannot alter the basic scope of authority granted by 
Congress to States and Tribes for the review of potential discharges 
associated with federal licenses and permits for compliance with water 
quality standards. States and authorized Tribes, for example, remain 
primarily responsible to develop the water quality standards with which 
federal projects must comply.
    Accordingly, this rule neither diminishes nor undermines 
cooperative federalism. Rather, the final rule clearly identifies when 
a certification is required and the permissible scope of such a 
certification--including conditions of that certification--and 
reaffirms that certifying authorities have a reasonable period of time 
to act on a certification request, which cannot exceed one year. This 
clarity helps define the appropriate parameters of cooperative 
federalism contemplated by section 401, and does not undermine it.
    The EPA disagrees with commenters who suggest that concepts of 
``cooperative federalism'' preclude the EPA from establishing 
regulations to implement section 401. Cooperative federalism must be 
implemented consistent with the statutory framework under the CWA, 
which does not allow EPA to authorize, either explicitly or by 
implication, States to implement this important federal program in a 
manner beyond the authority established by Congress. Indeed, as the 
Agency charged with administering the CWA, EPA's role here is similar 
to its baseline setting function in other aspects of the Act, to ensure 
that there are sufficient authorities and limitations in place for 
States and Tribes to effectively implement CWA programs within the 
scope that Congress established. The final rule provides, for the first 
time, a consistent framework to govern the implementation of CWA 
section 401 that complies with the 1972 CWA amendments.
c. Administrative Procedure Act
    Some commenters asserted that the proposed rule is arbitrary and 
capricious and an abuse of discretion. Some commenters cited Motor 
Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto., 463 U.S. 29 
(1983), and argued that the EPA ``relied on factors which Congress has 
not intended it to consider, entirely failed to consider an

[[Page 42227]]

important aspect of the problem, offered an explanation for its 
decision that runs counter to the evidence before the agency or is so 
implausible that it could not be ascribed to a difference in view or 
the product of agency expertise.'' Id. at 43. One commenter asserted 
that the EPA was arbitrary and capricious because the proposed rule 
lacks analysis of water quality impacts and fails to consider whether 
the proposed rule, if adopted, will ensure that the CWA's overarching 
goal to protect water quality is met. This commenter further asserted 
that when combined with the EPA's recent action to significantly narrow 
the definition of ``waters of the United States,'' the effect of the 
proposed rule could be to leave a regulatory gap, especially in cases 
where federal law preempts State water quality regulations. Commenters 
also argued, citing State Farm, 463 U.S. at 43, that the EPA failed to 
``examine the relevant data and articulate a satisfactory explanation 
for its action including a rational connection between the facts found 
and the choice made.'' These commenters also cited Nat'l Cotton Council 
of Am. v. EPA, 553 F.3d 927, 939 (6th Cir. 2009), and asserted that, 
when the EPA adopts CWA regulations, it cannot ``ignore the directive 
given to it by Congress . . . which is to protect water quality.'' One 
commenter argued that the Agency elevated industrial interests over 
State section 401 authority and therefore considered factors not 
allowed by Congress in violation of the APA, citing Nat'l Lifeline 
Ass'n v. FCC, 915 F.3d 19 (D.C. Cir. 2019) (quoting Motor Vehicle Mfrs. 
Ass'n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983)).
    The final rule is neither arbitrary nor capricious nor an abuse of 
the EPA's discretion. In crafting the final rule, the Agency started 
with the statutory language of the CWA; where the plain language of the 
Act was unclear or otherwise ambiguous, the EPA considered the 
structure and purposes of the Act, relevant legal precedent, and 
legislative history. The EPA also carefully considered the widely 
varying and competing comments received during the pre-proposal 
outreach, including Tribal and State engagement, and more than 125,000 
public comments filed in the public docket, which are described 
throughout this final rule preamble. These are factors that Congress 
intended the Agency to consider. 5 U.S.C. 553(b) and (c). The Agency 
carefully examined the statutory language and the legislative history 
when determining the scope of certification and the appropriate role of 
federal licensing and permitting agencies. The final rule promotes the 
overarching goals of the CWA to prevent, reduce, and eliminate 
pollution in the nation's waters and to regulate discharges into waters 
of the United States, while preserving States' major role in 
implementing the CWA. The Agency has examined relevant and available 
data and articulated a robust basis for the rulemaking in the proposed 
and final rule preambles. See the Economic Analysis and the Supporting 
Statement for the Information Collection Request for the Clean Water 
Act Section 401 Certification Rule for further discussion of available 
data.
    Some commenters asserted the proposed rule is arbitrary and 
capricious because it is a reversal of existing policy and that the 
Agency did not provide adequate support for the policy reversal. Some 
commenters argued that when an agency undertakes a new interpretation, 
it needs a factual record on which to make such a change. These 
commenters asserted that no record exists in the proposed rule and that 
no recognition of prior State and EPA practice is evident. One 
commenter argued that the EPA failed to provide a valid, reasoned basis 
for departing from decades of agency practice. Some commenters also 
asserted that the Agency did not demonstrate that the existing 
regulations are inadequate or explain how the proposed rule will 
provide increased predictability in comparison, noting that litigation 
over section 401 denials falls short of a reasoned explanation. These 
commenters argued that the proposed rule is just as likely to create 
more confusion, unpredictability, and delay given the sweeping changes 
that the proposed rule seeks to implement. Some commenters asserted 
that the EPA was required to and has failed to conduct a careful 
analysis of past certification reviews to demonstrate the need for the 
proposed rule. Some commenters argued that the proposed rule does not 
consider and analyze alternatives, as these commenters assert the 
Agency is required to do, particularly when it proposes to reverse its 
policy, citing State Farm, 463 U.S. at 46-48; Ctr. For Science in the 
Pub. Interest v. Dep't of Treasury, 797 F.2d 995, 999 (D.C. Cir. 1986).
    The Agency disagrees with these commenters and concludes that its 
justification in this rulemaking is more than adequate. The Agency's 
final rule includes for the first time a well-defined scope for State 
and Tribal review and actions under section 401. As articulated 
throughout the proposal and this final rule preamble, the 1971 
certification regulations were promulgated to implement section 21(b) 
of the 1970 FWPCA, not section 401 of the 1972 CWA amendments. See 
section II.F.3 of this notice. The 1972 amendments made two major 
changes affecting the scope of the certification requirement: It 
changed ``activity'' to ``discharge'' in section 401(a) and added 
section 401(d), which describes effluent limitations, other 
limitations, and monitoring requirements that may be included in a 
certification. These important statutory elements were not present or 
contemplated in the 1971 certification regulations, which the EPA is 
updating with this final rule. It is entirely appropriate, and 
necessary, for the EPA to conform to the 1972 CWA amendments when 
updating its almost 50-year-old certification regulations. As noted 
throughout the proposal preamble and the Economic Analysis, the EPA 
acknowledges that many certifications reflect an appropriately limited 
interpretation of the purpose and scope of section 401 and are issued 
without controversy. Although a few high profile certification denials 
are part of the factual and administrative record for this rulemaking, 
and EPA has considered these facts during the rulemaking process, the 
EPA has not relied on these facts as the sole or primary basis for this 
rulemaking. The Agency's longstanding failure to update its regulations 
created the confusion and regulatory uncertainty that were ultimately 
the cause of those controversial section 401 certification actions and 
the resulting litigation. To illustrate the type of uncertainty this 
rule is attempting to resolve, recent court cases indicate that some 
project proponents, certifying authorities and federal agencies have 
different ideas about when the time for review of a certification 
begins and--once begun--whether the review period can be tolled or 
extend beyond one year. See Hoopa Valley Tribe v. FERC, 913 F.3d 1099 
(D.C. Cir. 2019); New York State Dep't of Envtl. Conservation v. FERC, 
884 F.3d 450 (2d Cir. 2018); Constitution Pipeline Co., LLC v. New York 
State Dep't of Envtl. Conservation, 868 F.3d 87 (2d Cir. 2017). 
Questions have also arisen regarding the role of the federal agency in 
determining whether a waiver has occurred. Millennium Pipeline Co. v. 
Seggos, 860 F. 3d 696 (D.C. Cir. 2017). Recent litigation also raises 
the issue of a certifying authority's ability to deny certification for 
other than water quality-related reasons. See Lighthouse Resources, 
Inc. v. Inslee, No. 3:18-cv-5005 (W.D. Wash. filed Jan. 8, 2018).

[[Page 42228]]

    This rule updates the EPA's regulations to be consistent with the 
language of section 401 as enacted in 1972. The final rule, while 
focused on the relevant statutory provisions and case law interpreting 
those provisions, is informed by the Agency's expertise developed over 
nearly 50 years of implementing the CWA and policy considerations where 
necessary to address certain ambiguities in the statutory text. For the 
first time, this final rule aligns the EPA's regulations with the 1972 
amendments and provides clarity to certifying authorities, federal 
licensing and permitting agencies, project proponents, and the general 
public.
    Other commenters asserted that the proposed rule is carrying out 
the direction given by the Executive Order to stop States from 
``hindering the development of energy infrastructure'' and asserted 
that administrative action with such a predestined result should not be 
afforded the level of deference typically afforded. Certain commenters 
also cited Watt v. Alaska, 451 U.S. 259, 273 (1981), and General 
Electric Co. v. Gilbert, 429 U.S. 125, 143 (1976), to argue that the 
EPA is overturning fifty years of practice under the CWA in violation 
of the clear language of 33 U.S.C. 1251(b), 33 U.S.C. 1341, and 33 
U.S.C. 1370; and asserted that the EPA is entitled to less deference 
when overturning past practice.
    The Agency disagrees that this rulemaking result was predetermined 
by the Executive Order. As discussed in this final rule preamble, the 
Executive Order does not specify details about what the regulation must 
say, deferring to the Agency and its technical expertise, as informed 
by public input, to develop a regulation consistent with the CWA. The 
EPA issued a proposed rule, received public comment on that rule, made 
changes in this final rule in response to comments and to increase 
clarity and regulatory certainty for the section 401 certification 
process, and explained the basis for these changes. None of that was 
predetermined. The EPA further disagrees with commenters' assertions 
that either the proposed rule or this final rule violates the CWA. As 
described throughout this notice, the EPA for the first time conducted 
a holistic analysis of the text, structure, and history of CWA section 
401. The final rule is based on this holistic analysis and is 
consistent with the language and congressional intent of section 401 
and is informed by important policy considerations and the Agency's 
expertise. Commenter's reliance on Watt v. Alaska, 451 U.S. 259 273, 
(1981), and General Electric Co. v. Gilbert, 429 U.S. 125, 143 (1976), 
is misplaced because both decisions pre-date Chevron and Brand X. As 
described in section II.F.5 above, EPA has undertaken this rulemaking 
in accordance with key principles of administrative law, respecting 
unambiguous terms of the CWA and interpreting ambiguous language in 
section 401 consistent with congressional intent. The EPA's approach 
and rationale are set out in detail in the proposal and this final rule 
preamble and are supported by applicable Supreme Court precedent.
d. Rulemaking Authority
    Several commenters cited A.L.A. Schechter Poultry Corp. v. United 
States, 295 U.S. 495, 537-38 (1935), and argued that the proposed rule 
is unconstitutional because it reflects the executive branch 
legislating absent congressional delegation to do so. One commenter 
asserted that federal executive agencies have no inherent authority to 
make law and are subject to the legislative powers of the Congress. 
This commenter cited Louisiana Pub. Serv. Comm'n v. FCC, 476 U.S. 355, 
374 (1986), and argued that agency authority is limited to the 
authority granted by Congress, and that the EPA cannot add conditions 
outside the scope of the CWA for which Congress provided. Other 
commenters asserted that by seeking to limit how States exercise their 
authority under section 401, the proposed rule would exceed the 
Agency's statutory authority ``to prescribe such regulations as are 
necessary to carry out [the EPA Administrator's] functions under [the 
Clean Water Act]'' (33 U.S.C. 1361(a)) and would instead intrude upon 
the ``responsibilities and rights'' Congress expressly reserved to the 
States. See 33 U.S.C. 1251(b). Other commenters agreed with the 
proposal, stating that the EPA is tasked with promulgating rules for 
the implementation of the CWA, including one commenter citing Alabama 
Rivers Alliance v. FERC, 325 F.3d 290, 296-97 (2003).
    The EPA agrees that the section 401 rulemaking must be consistent 
with the CWA and the EPA's authority under the Act, but disagrees with 
commenters who asserted that the proposal or this final rule exceeded 
that authority. Section 501 of the CWA gives the Administrator the 
authority to adopt rules ``as are necessary to carry out his functions 
under this chapter.'' 33 U.S.C. 1361(a). Section 101(d) of the CWA 
expressly provides that the Administrator shall administer the CWA. 33 
U.S.C. 1251(d). Section 401 of the CWA includes responsibilities for 
the Administrator to issue certifications when a State or interstate 
agency has no authority to issue a certification under section 
401(a)(1), to ensure the protection of other States' waters under 
section 401(a)(2), and to provide technical assistance under section 
401(b). Section 304(h) of the CWA also specifically directs the EPA to 
``promulgate guidelines establishing test procedures for the analysis 
of pollutants that shall include the factors which must be provided in 
any certification pursuant to section 401 of this Act.'' 33 U.S.C. 
1314(h) (setting April 1973 deadline for doing so). The EPA is doing so 
with this final rule.
    To carry out its functions under section 401, the EPA must adopt 
rules that ensure transparency and accountability for actions taken 
under section 401. This includes defining the scope of section 401 and 
adopting appropriate procedures to implement the timing, public notice 
and other requirements in section 401. Upon examination of the language 
of section 401, the relevant case law and legislative history, the 
Agency recognizes that section 401 contains some ambiguities and lacks 
clarity in some sections. The Administrator's role under section 
101(d), as the person charged with administering the CWA, includes 
adopting reasonable interpretations of the statute to resolve 
ambiguities and provide clarity. For example, because CWA section 
304(h) requires the Administrator to develop guidelines that ``shall 
include the factors that must be provided'' in any CWA section 401 
certification, the EPA appropriately interprets that provision as 
authorizing the Administrator to identify ``factors'' that may not be 
included in a certification. The final rule presents a reasonable 
interpretation of the scope of section 401, which, given the 
ambiguities in sections 401(a) and 401(d), is properly the subject of 
Agency interpretation. The final rule also requires certification 
conditions and denials to be within that scope and that certain 
information be included in a certification or denial to support the 
action. These substantive and procedural regulations are necessary for 
the Administrator to act as a certifying authority, to administer 
section 401 provisions related to neighboring jurisdictions, and to 
provide technical assistance to other certifying authorities, federal 
agencies, and project proponents.
    Other commenters objected to the proposed rule, asserting that it 
would disrespect the separation of powers by not implementing the will 
of Congress as expressed in the CWA. U.S. Const.

[[Page 42229]]

art. II, Sec.  3. As discussed throughout this notice, the proposed 
rule was consistent with statutory language of the CWA and 
congressional intent, and this final rule appropriately implements the 
will of Congress as expressed in the CWA.
    One commenter questioned the EPA's claim that it has the power to 
alter ``unwise'' judicial decisions. A few commenters stated that 
Chevron deference does not give a federal agency the power to rewrite 
federal law, and they asserted, citing INS v. Cardozo-Fonseca, 480 U.S. 
421 (1987); Adams Fruit Co. v. Barrett, 494 U.S. 638, 649-650 (1990); 
Encino Motorcars, LLC. v. Navarro, 136 S. Ct. 2117 (2016); and Kisor v. 
Wilkie, 139 S. Ct. 2400, 2417 (2019), that the proposed rule falls 
outside the scope of Chevron deference. A few commenters argued that 
the proposal's ``holistic'' review inappropriately found ambiguity in 
the statutory language to justify drastic changes to the federal-State 
relationship that section 401 established. These commenters argued that 
instances where federal authority is encroaching on State authority 
warrant heightened concern, citing SWANCC, 531 U.S. 159, 173 (2001), 
and asserted that any changes must be based on a clear statement from 
Congress.
    Other commenters stated that the divergent language of section 
401(a) and section 401(d) creates ambiguity that needs to be resolved. 
These commenters argued that the EPA's proposed interpretation is 
reasonable and necessary to fill that statutory gap. One commenter 
stated that the EPA correctly recognized that the Court's reliance on 
Chevron deference in PUD No. 1 was entirely misplaced, as the Court did 
not begin by first identifying an ambiguity in the statute, and the 
Court ignored the fact that the EPA's own regulations at the time spoke 
only in terms of ``discharges.'' A number of commenters agreed with the 
EPA's proposal to address the ambiguities in the CWA statutory language 
and the inconsistent application of the current regulations that impact 
project applicants and other States' sovereignty. These commenters 
agreed that the proposed rule would promote regulatory certainty, help 
streamline the federal licensing and permitting process for critical 
infrastructure development, enhance the ability of project proponents 
to plan for construction, and facilitate early and constructive 
engagement between permittees, States or authorized Tribes, and federal 
agencies to ensure that proposed projects will be protective of local 
water quality.
    As discussed in section II.F.5 of this notice, Chevron supplies the 
appropriate framework for judicial review of statutory interpretation. 
If the language of a congressional statute is clear, that unambiguous 
meaning controls. If, however, the congressional text is ambiguous, a 
reviewing court will defer to the implementing Agency's permissible 
interpretation. Where, as in CWA section 401(a), Congress used 
unambiguous terms like ``which shall not exceed one year'' and ``after 
the receipt of such request,'' it is reasonable, indeed necessary, for 
the Agency to apply the plain meaning of those terms when drafting its 
implementing regulations. Where terms are ambiguous, such as ``other 
appropriate requirement of State law'' in CWA section 401(d), the EPA 
is authorized to fill the congressional gap and supply a reasonable 
interpretation. Brand X supports the EPA's authority to interpret 
ambiguous terms in section 401 and its ability to make reasonable 
regulatory choices. That case recognizes that an Agency's statutory 
interpretation is precluded only when, in a prior decision, a court 
concluded that its contrary interpretation was compelled by the plain 
language of the relevant text. Brand X, 545 U.S. at 982 (``[A] court's 
prior judicial construction of a statute trumps an agency construction 
otherwise entitled to Chevron deference only if the prior court 
decision holds that its construction follows from the unambiguous terms 
of the statute and thus leaves no room for agency discretion.''). None 
of the EPA interpretations upon which its final regulatory language is 
based, including the Agency's decision that section 401(d) limitations 
and requirements may be placed only on the ``discharge'' and not on the 
``activity,'' are inconsistent with that principle.

G. Legal Construct for the Final Rule

    As the preceding discussion demonstrates, the most challenging 
aspects of section 401 concern the scope of review and action on a 
certification request. The Agency is finalizing a regulation that will 
clarify these aspects and provide additional regulatory certainty for 
States, Tribes, federal agencies, and project proponents on the timing 
and procedural requirements of the CWA. This section summarizes some of 
the core legal principles that inform this final rule, and section III 
of this notice describes how the Agency is applying those legal 
principles to support the final rule.
1. Scope of Certification
    The EPA has for the first time conducted a holistic analysis of the 
text, structure, and history of CWA section 401. As a result of that 
analysis, the EPA is establishing the scope of section 401 as 
protecting the quality of waters of the United States from point source 
discharges associated with federally licensed or permitted activities 
by requiring compliance with water quality requirements, as defined in 
this final rule.
    Since at least 1973, the EPA has issued memoranda and guidance 
documents, and the Department of Justice has filed briefs in various 
court cases on behalf of the EPA, addressing section 401. Only a 
handful of these documents address the scope of section 401, and none 
was the product of a holistic examination of the statute or its 
legislative history. As a result, these documents included little or no 
explanation for the Agency's interpretations. For example, in 1989, the 
EPA issued a guidance document asserting that a section 401 
certification could broadly address ``all of the potential effects of a 
proposed activity on water quality--direct and indirect, short and long 
term, upstream and downstream, construction and operation. . . .'' EPA, 
Wetlands and 401 Certification 23 (April 1989). The guidance document's 
only explanation for this assertion is a reference to section 
401(a)(3), which provides that a certification for a construction 
permit may also be used for an operating permit that requires 
certification. The guidance document, which did not undergo notice and 
comment procedures, does not provide any analysis to support its 
assertion that a certification could address all potential impacts from 
the ``proposed activity'' as opposed to the discharge. Several years 
later, the United States filed an amicus brief in the Supreme Court on 
behalf of the EPA in the PUD No. 1 case. The amicus brief asserted that 
petitioners were ``mistaken'' in their contention that the State's 
minimum flow condition is outside the scope of section 401 because the 
condition would be valid ``if it is necessary to assure that discharges 
resulting from the project will comply with applicable provisions of 
the CWA or `any other appropriate requirement of State law.' '' See 
Brief for the United States as Amicus Curiae Supporting Affirmance, PUD 
No. 1 of Jefferson County v. Washington Dep't of Ecology, No. 92-1911 
at 11-12 (Dec. 1993) (emphasis added). The brief went on to identify 
``two distinct discharges'' that would result from the petitioner's 
facility and that would violate the CWA. The amicus brief did not offer 
an affirmative interpretation to harmonize the different language in 
sections 401(a)

[[Page 42230]]

and 401(d) and instead relied on the plain language in section 401(a). 
More than a decade later, the United States' Supreme Court amicus brief 
in the S.D. Warren case adopted without explanation the Supreme Court's 
analysis in PUD No. 1 that once section 401 is triggered by a 
discharge, a certification can broadly cover impacts from the entire 
activity. Finally, in 2010, the EPA issued its now-rescinded Interim 
Handbook, which included a number of recommendations on scope, timing, 
and other issues, none of which were supported with robust analysis or 
interpretation of the Act. The Interim Handbook, which did not undergo 
notice and comment procedures either, also did not reference the fact 
that the 1971 certification regulations were not updated after the CWA 
was enacted in 1972.
    This rulemaking is the first time that the EPA has undertaken a 
holistic review of the text of section 401 in the larger context of the 
structure and legislative history of the 1972 Act and earlier federal 
water protection statutes, and the first time the Agency has subjected 
its analysis to public notice and comment. The final rule is informed 
by this holistic review and presents a framework that the EPA considers 
to be most consistent with the text of the Act and congressional 
intent. After considering and taking into account the comments 
submitted on the proposed rule, the Agency has made some enhancements 
in this final rule to appropriately capture the scope of authority for 
granting, conditioning, denying, and waiving a section 401 
certification. For further discussion and response to comments on the 
scope of certification, see section III.E of this notice.
a. Water Quality
    The EPA concludes that the scope of a State's or Tribe's section 
401 review or action is not unbounded and must be limited to 
considerations of water quality. Clarifying the proper scope in this 
manner aligns with the objective of the CWA to restore and maintain 
water quality (see CWA section 101(a)) Moreover, there is no suggestion 
in either the plain language or the structure of the statute that 
Congress envisioned section 401 to authorize action beyond that which 
is necessary to address water quality directly. Indeed, as described in 
greater detail above, the 1972 amendments to the CWA resulted in the 
enactment of a comprehensive scheme designed to prevent, reduce, and 
eliminate pollution in the nation's waters generally, and to regulate 
the discharge of pollutants into waters of the United States 
specifically.
    In its recent decision in County of Maui, Hawaii v. Hawaii Wildlife 
Fund, et al., No. 18-260, the Supreme Court reaffirmed that ``Congress' 
purpose as reflected in the language of the Clean Water Act is to 
`restore and maintain the . . . integrity of the Nation's waters,' 
Sec.  101(a)'' (Op. at 2, emphasis added) and underscored the 
importance of interpreting the statutory text ``in light of the 
statute's language, structure, and purposes'' in a manner that avoids 
the creation of ``a massive loophole in the permitting scheme that 
Congress established'' that would ``allow[ ] easy evasion of the 
statutory provision's basic purposes.'' (Op. at 12, 15 (April 23, 
2020)). The EPA's interpretation of the scope of CWA section 401 as 
limited to considerations of water quality is fully consistent with 
these fundamental principles and respects the congressional scheme at 
issue in County of Maui. As discussed below and throughout the 
preamble, this is also true of the Agency's other textual 
interpretations that inform the definitions and requirements of this 
rule relating to, for example, ``discharge,'' ``a reasonable period of 
time (which shall not exceed one year,'' ``water quality 
requirements,'' and ``any other appropriate requirement of State law.''
    The EPA is aware that some certifying authorities may have 
previously interpreted the scope of section 401 in a way that resulted 
in the incorporation of non-water quality-related considerations into 
their certification review process. For example, certifying authorities 
have on occasion required in a certification condition the construction 
of biking and hiking trails, requiring one-time and recurring payments 
to State agencies for improvements or enhancements that are unrelated 
to the proposed federally licensed or permitted project, and the 
creation of public access for fishing along waters of the United 
States. Certifying authorities have also attempted to address all 
potential environmental impacts from the creation, manufacture, or 
subsequent use of products generated by a proposed federally licensed 
or permitted activity or project that may be identified in an 
environmental impact statement or environmental assessment, prepared 
pursuant to the NEPA or a State law equivalent. This includes, for 
example, consideration of impacts associated with air emissions and 
transportation effects.
    The Agency has concluded that interpreting the scope of section 401 
to allow States and Tribes to regulate and consider effects of an 
activity rather than a discharge would invoke the outer limits of power 
that Congress delegated to the Agency under the CWA. The imposition of 
conditions unrelated to water quality is not consistent with the scope 
of the CWA generally or section 401. There is nothing in the text of 
the statute or its legislative history that signals that Congress 
intended to impose, using section 401, federal requirements on licensed 
or permitted activities beyond those addressing water quality-related 
impacts. Indeed, Congress knows how to craft statutes to require 
consideration of multi-media effects (see, e.g., NEPA), and has enacted 
specific statutes addressing impacts to air (Clean Air Act), wildlife 
(Endangered Species Act), and cultural resources (National Historic 
Preservation Act), by way of example.\23\ Subsequent congressional 
action directly addressing a particular subject is relevant to 
determining whether a previously adopted statute reaches that subject 
matter. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 155 
(2000) (determining that ``actions by Congress over the past 35 years'' 
that addressed tobacco directly, when ``taken together,'' ``preclude[d] 
an interpretation'' that a previously adopted statute, the Food, Drug, 
and Cosmetic Act, ``grant[ed] the FDA jurisdiction to regulate tobacco 
products.'').
---------------------------------------------------------------------------

    \23\ See, e.g., 42 U.S.C. 4321 et seq. (NEPA); 42 U.S.C. 7401 et 
seq. (Clean Air Act); 16 U.S.C. 1531 et seq. (Endangered Species 
Act); and 16 U.S.C. 470 et seq. (National Historic Preservation 
Act).
---------------------------------------------------------------------------

    If Congress had intended section 401 of the CWA to authorize 
consideration or the imposition of certification conditions based on 
air quality or transportation concerns, public access to waters, energy 
policy, or other multi-media or non-water quality impacts, it would 
have provided a clear statement to that effect. Neither the CWA nor 
section 401 contains any such clear statement. In fact, Congress 
specifically contemplated a broader policy direction in the 1972 
amendments that would have authorized the EPA to address impacts to 
land, air, and water through implementation of the CWA, but it was 
rejected.\24\ The Agency has concluded

[[Page 42231]]

that inclusion of the phrase ``any other appropriate requirement of 
State law'' in section 401(d) hardly provides clear direction from 
Congress that section 401(d) could extend beyond water quality. 
Therefore EPA concludes that section 401(d)--like section 401(a) and 
the rest of the Act--is limited to considerations of ``water quality.'' 
\25\
---------------------------------------------------------------------------

    \24\ As Congress drafted the 1972 CWA amendments, the House bill 
(H.R. 11896) included section 101(g) within its ``Declaration of 
Goals and Policy'' providing, ``(g) In the implementation of this 
Act, agencies responsible therefor shall consider all potential 
impacts relating to the water, land, and air to insure that other 
significant environmental degradation and damage to the health and 
welfare of man does not result.'' H.R. 11896, 92nd Cong. (1971) 
(emphasis added). Section 101(g) of the House bill was 
``eliminated'' at conference, and the Act was ultimately passed with 
no federal policy, goal, or directive to address non-water quality 
impacts through the CWA. S. Rep. 92-1236, at 100 (1972) (Conf. 
Rep.).
    \25\ The Agency also concludes that the term ``applicant'' in 
section 401(d) creates ambiguity in the statute. See section 
II.G.1.b of this notice for discussion of the use of the term 
``applicant'' in section 401(d).
---------------------------------------------------------------------------

    Pursuant to the plain language of section 401, when a State or 
authorized Tribe (and in some cases, the EPA) issues a certification, 
it has determined that the discharge into waters of the United States 
from a proposed federally licensed or permitted activity will comply 
with applicable effluent limitations for new and existing sources (CWA 
sections 301, 302, and 306), water quality standards and implementation 
plans (section 303), toxic pretreatment effluent standards (section 
307), and--by way of its power to add conditions pursuant to section 
401(d)--other ``appropriate requirements'' of State or Tribal law. 33 
U.S.C. 1341(a)(1), (d). The enumerated CWA provisions identify 
requirements to ensure that discharges of pollutants do not degrade 
water quality,\26\ and specifically referenced throughout section 401 
is the requirement to ensure compliance with ``applicable effluent 
limitations'' and ``water quality requirements,'' underscoring the 
focused intent of this provision on the protection of water quality 
from discharges.\27\ See 33 U.S.C. 1341(a), (b), (d). The legislative 
history for the Act provides further support for the EPA's 
interpretation, as it frequently notes that the focus of the section is 
on assuring compliance with water quality requirements and water 
quality standards and the elimination of any discharges of pollutants. 
See, e.g., S. Rep. No. 92-414, at 69 (1971).
---------------------------------------------------------------------------

    \26\ For example, CWA section 306 defines the standard of 
performance for new sources of discharges as ``a standard for the 
control of the discharge of pollutants which reflects the greatest 
degree of effluent reduction which the Administrator determines to 
be achievable through application of best available demonstrated 
control technology, processes, operating methods, or other 
alternatives, including, where practicable, a standard permitting no 
discharge of pollutants.'' 33 U.S.C. 1316(a)(1). Section 303 notes 
that new or revised state water quality standards ``[s]hall be such 
as to protect the public health or welfare, enhance the quality of 
water and serve the purposes of this chapter.'' Id. at 
1313(c)(2)(A).
    \27\ The term ``effluent limit'' is defined as, ``any 
restriction established by a State or the Administrator on 
quantities, rates, and concentrations of chemical, physical, 
biological, and other constituents which are discharged from point 
sources into navigable waters, the waters of the contiguous zone, or 
the ocean, including schedules of compliance[,]'' 33 U.S.C. 
1362(11); and the CWA requires that ``water quality standards'' 
developed by states and tribes ``consist of the designated uses of 
the navigable waters involved and the water quality criteria for 
such waters based upon such uses.'' Id. at 1313(c)(2)(A).
---------------------------------------------------------------------------

    The CWA does not define what is an ``appropriate requirement'' of 
State law for purposes of adding conditions to a section 401 
certification.\28\ In interpreting this term, the Agency acknowledges 
the need to respect the clear policy direction from Congress to 
recognize and preserve State authority over land and water resources 
within their borders, see 33 U.S.C. 1251(b), and the Agency must avoid 
interpretations of the CWA that infringe on traditional State land use 
planning authority. See SWANCC, 531 U.S. at 172-73; Will, 491 U.S. at 
65. One interpretation of this clause in section 401(d) could be that 
it authorizes the denial of certification or the imposition of 
conditions in a federal license or permit based on non-water quality-
related impacts if those requirements are based on any existing State 
or Tribal law. Such an interpretation, however, is counterintuitive in 
a statute aimed at protecting the ``chemical, physical, and biological 
integrity of the nation's waters.'' For example, it is difficult to 
imagine what guiding principle would help one determine whether to 
import state labor law or professional licensing requirements into a 
section 401 certification; such requirements could arguably be relevant 
to a dam project, but mere relevance is not nearly sufficient to sweep 
these types of laws within the ambit of an environmental statute aimed 
at water quality. The CWA does not give EPA a clear basis to venture 
into such regulatory arenas, which (in the absence of clearly expressed 
congressional direction) are more appropriately reserved to the powers 
of the States, ``powers with which Congress does not readily 
interfere.'' Gregory, 501 U.S. at 461 (describing the ``plain statement 
rule'').
---------------------------------------------------------------------------

    \28\ The EPA notes that during congressional hearings on the 
1972 amendments, the House Committee was presented with testimony 
that the term ``applicable water quality requirements'' should be 
defined, but no definition was included in the enacted bill. See 
section III.E.2.b for further discussion on this legislative 
history.
---------------------------------------------------------------------------

    The Agency does not believe that Congress intended the phrase ``any 
other appropriate requirement of State law'' to be read so broadly. 
Instead, the ejusdem generis canon helps to inform the appropriate 
interpretation of the statutory text. Under this principle, where 
general words follow an enumeration of two or more things, they apply 
only to things of the same general kind or class specifically 
mentioned. See Wash. State Dept. of Social and Health Services v. 
Keffeler, 537 U.S. 371, 383-85 (2003). Here, the general term 
``appropriate requirement'' in section 401(d) follows an enumeration of 
four specific sections of the CWA that are all focused on the 
protection of water quality from point source discharges to waters of 
the United States.\29\ Given the text, structure, purpose, and 
legislative history of the CWA and section 401, and informed by 
important policy considerations and the Agency's expertise, the EPA 
interprets ``appropriate requirement'' for section 401 certification 
purposes to include those provisions of State or Tribal law that 
contain requirements for point source discharges into waters of the 
United States, including provisions that are more stringent than 
federal law. See S. Rep. No. 92-414, at 69 (1971) (``In addition, the 
provision makes clear that any water quality requirements established 
under State law, more stringent than those requirements established 
under the Act, shall through certification become conditions on any 
Federal license or permit.''). In this respect, the EPA agrees with the 
logic of Justice Thomas's dissent in PUD No. 1, wherein he concludes 
that ``the general reference to `appropriate' requirements of State law 
is most reasonably construed to extend only to provisions that, like 
other provisions in the list, impose discharge-related restrictions.'' 
PUD No. 1, 511 U.S. at 728 (Thomas, J., dissenting). The Agency's 
interpretation gives meaning to Congress's decision to use the word 
``appropriate'' in the phrase ``any other appropriate requirement of 
State law set forth in such certification.''
---------------------------------------------------------------------------

    \29\ See Section II.G.1.c for further discussion on point source 
discharges to waters of the United States in the context of section 
401. Although section 401(a) mentions five sections of the CWA, 
section 401(d) omits section 303. In PUD No. 1, the Court 
interpreted section 303 to be included in section 401(d) by 
reference to section 301. PUD No. 1, 511 U.S. at 712-13.
---------------------------------------------------------------------------

    Consistent with the proposal, the final rule limits the scope of 
section 401 and the term ``appropriate requirements of State law'' to 
those requirements directly related to water quality. As discussed in 
greater detail in section III.E.2.b of this notice, the final rule 
definition of ``water quality requirements'' has been modified from the 
proposal, but does not stray from the core principle and focus of Title 
IV of the CWA--to protect the quality of waters of the United States 
from point source discharges.

[[Page 42232]]

b. Activity or Discharge
    Based on the text, structure, and legislative history of the CWA, 
the EPA is affirming under this final rule that a certifying 
authority's review and action under section 401 must be limited to 
water quality impacts from the potential discharge associated with a 
proposed federally licensed or permitted project. Section 401(a) 
explicitly provides that the certifying authority, described as ``the 
State in which the discharge originates or will originate,'' must 
certify that ``any such discharge will comply with the applicable 
provisions of sections 301, 302, 303, 306, and 307 of this Act'' 
(emphasis added). The plain language of section 401(a) therefore 
directs authorities to certify that the discharge resulting from the 
proposed federally licensed or permitted project will comply with the 
CWA. Section 401(d) uses different language and requires the certifying 
authority to ``set forth any effluent limitations and other 
limitations, and monitoring requirements necessary to assure that any 
applicant for a Federal license or permit will comply with any 
applicable effluent limitations and other limitations, under section 
301 or 302 of this title, standard of performance under section 306 of 
this title, or prohibition, effluent standard, or pretreatment standard 
under section 307 of this title, and with any other appropriate 
requirement of State law set forth in such certification'' (emphasis 
added).\30\ The use of the term ``applicant'' in section 401(d)--
instead of ``discharge'' as found in section 401(a)--creates ambiguity, 
and has been interpreted as broadening the scope of section 401(a), 
beyond consideration of water quality impacts from the ``discharge'' 
which triggers the certification requirement, to allow certification 
conditions that address water quality impacts from any aspect of the 
construction or operation of the activity as a whole. See PUD No. 1, 
511 U.S. at 712.
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    \30\ As a matter of practice, the Corps seeks State 
certification for ``its own discharges of dredged or fill 
material,'' ``[a]lthough the Corps does not process and issue 
permits for its own activities.'' 33 CFR 336.1(a)(1).
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    The ordinary meaning of the word ``applicant'' is ``[o]ne who 
applies, as for a job or admission.'' See Webster's II, New Riverside 
University Dictionary (1994). In section 401(d), this term is used to 
describe the person or entity that applied for the federal license or 
permit that requires a certification. The use of this term in section 
401(d) is consistent with the text of the CWA, which uses the term 
``applicant'' throughout to describe an individual or entity that has 
applied for a grant, a permit, or some other authorization.\31\ 
Importantly, the term is also used in section 401(a) to identify the 
person responsible for obtaining the certification: ``Any applicant for 
a Federal license or permit to conduct any activity including, but not 
limited to, the construction or operation of facilities, which may 
result in any discharge into the navigable waters, shall provide the 
licensing or permitting agency a certification from the State . . . .'' 
In the section 401 context, the term ``applicant'' also may include in 
some circumstances the federal licensing or permitting agency, such as 
where the federal agency is seeking certification for a general license 
or permit.
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    \31\ See, e.g., 33 U.S.C. 1311 (``An application for an 
alternative requirement under this subsection shall not stay the 
applicant's obligation to comply with the effluent limitation 
guideline or categorical pretreatment standard which is the subject 
of the application.''); id. at 1344 (``Not later than the fifteenth 
day after the date an applicant submits all the information required 
to complete an application for a permit under this subsection, the 
Secretary shall publish the notice required by this subsection.'')
---------------------------------------------------------------------------

    Relying on the presence of the term ``applicant'' in section 401(d) 
to interpret section 401(d) as allowing certification conditions that 
are unrelated to a discharge would expand section 401 regulatory 
authority beyond the scope of those sections of the Act enumerated in 
section 401. Those enumerated CWA sections focus on regulating 
discharges to waters of the United States. The Agency is not aware of 
any other instance in which the term ``applicant'' (or permittee or 
owner or operator) as used in the CWA has been interpreted to 
significantly expand the jurisdictional scope or meaning of the 
statute. The Agency therefore understands the term ``applicant'' in 
section 401(d) as merely identifying the 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. 
This interpretation of the term ``applicant,'' which appropriately ties 
the term to the discharges that are the regulatory focus of section 401 
as a whole and to the purposes of this section, is consistent with and 
supported by the use in section 401(d) of the phrase ``applicant for a 
Federal license or permit,' which refers back to the fuller phrase set 
forth at the beginning of section 401(a): ``applicant for a Federal 
license or permit to conduct any activity . . . which may result in any 
discharge into the navigable waters.'' (Emphasis added.) This 
interpretation also gives reasonable, and permissible, meaning to the 
term ``appropriate'' in the phrase ``any other appropriate requirement 
of State law set forth in such certification.'' The textual history and 
legislative history of section 401, discussed below, provide additional 
support for this interpretation.
    Section 401 was updated as part of the 1972 CWA amendments to 
reflect the restructuring of the Act, as described in section II.F.1 of 
this notice. Two important phrases were modified between the 1970 and 
the 1972 versions of section 401 that help explain what Congress 
intended with the 1972 amendments. First, the 1970 version provided 
that an authority must certify ``that such activity . . . will not 
violate water quality standards.'' Public Law 91-224 Sec.  21(b)(1) 
(emphasis added). Significantly, Congress modified this language in 
1972, requiring an authority to certify ``that any such discharge shall 
comply with the applicable provisions of [the CWA].'' 33 U.S.C. 1341(a) 
(emphasis added). On its face, this modification made the 1972 version 
of section 401 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. 33 U.S.C. 1311, 1312, 1313, 1316, 1317, 1342 and 
1344.
    Second, the 1972 version included section 401(d) for the first 
time. This provision authorizes conditions to be imposed on a 
certification ``to assure that any applicant for a Federal license or 
permit will comply with any applicable effluent limitations and other 
limitations, under section 301 or 302 of this Act, standard of 
performance under section 306 of this Act, or prohibition, effluent 
standard, or pretreatment standard under section 307 of this Act, and 
with any other appropriate requirement of State law set forth in such 
certification . . . .''Id. at 1341(d). This new section also requires 
such conditions to be included in the federal license or permit. Id.
    Together, these amendments to the pre-1972 statute focus section 
401 on discharges that may affect water quality, enumerate newly 
created federal regulatory programs with which section 401 mandates 
compliance, and require that water quality-related certification 
conditions be included in federal licenses and permits and thereby 
become federally enforceable. The legislative history describing these 
changes supports a conclusion that the provisions were added 
intentionally and with the purpose of making the new section 401 
consistent with the new

[[Page 42233]]

framework of the Act. 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).
    An EPA attorney previously analyzed the modifications made to 
section 401 between the 1970 and 1972 Acts. See Memorandum from 
Catherine A. Winer, Attorney, EPA Office of General Counsel, Water 
Division, to David K. Sabock, North Carolina Department of Natural 
Resources (Nov. 12, 1985).\32\ In its analysis, the attorney 
characterized the legislative history quoted above as ``not very 
explicit,'' and characterized the new section 401 language as ``not 
altogether clear.'' Id. Based on this analysis, the attorney found at 
that time that ``the overall purpose of section 401 is clearly `to 
assure that Federal licensing or permitting agencies cannot override 
water quality requirements' '' and that ``section 401 may reasonably be 
read as retaining its original [i.e., pre-1972] scope, that is, 
allowing state certifications to address any water quality standard 
violation resulting from an activity for which a certification is 
required, whether or not the violation is directly caused by a 
`discharge' in the narrow sense.'' Id. (citing S. Rep. No. 92-414, at 
69 (1971)).
---------------------------------------------------------------------------

    \32\ Available at https://www.epa.gov/sites/production/files/2015-01/documents/standards-marinas-memo.pdf.
---------------------------------------------------------------------------

    The EPA has now performed a holistic analysis of the text and 
structure of the CWA, the language of section 401, and the amendments 
made between 1970 and 1972. Based on this review, the EPA now concludes 
that the 1972 version of section 401 made specific changes to ensure 
that discharges were controlled in compliance with the 1972 CWA 
regulatory programs and appropriate requirements of State law. For the 
reasons noted above in section II.F.1 of this notice, identifying and 
regulating discharges, as opposed to managing ambient water quality, 
promotes accountability and enforcement of the Act in a way that the 
1970 and earlier versions did not. The EPA also observes that, had 
Congress intended the 1972 amendments to retain the original scope 
concerning ``activity,'' it could have easily crafted section 401(d) to 
authorize certification conditions to assure that ``the activity'' 
would comply with the specified CWA provisions, but it did not. 
Instead, Congress' use of the term ``discharge'' in section 401(a) 
frames the scope of the certification requirement under the Act. As a 
result, the Agency now considers a more natural and more reasonable 
interpretation of the 1972 amendments to be that Congress rejected the 
idea that the scope of a certifying authority's review or its 
conditions should be defined by the term ``activity.'' Congress 
specifically did not carry forward the term ``activity'' in the 
operative phrase in section 401(a) and did not incorporate it into the 
new provision authorizing certification conditions in section 401(d). 
Under basic canons of statutory construction, the EPA begins with the 
presumption that Congress chose its words intentionally. See, e.g., 
Stone v. INS, 514 U.S. 386, 397 (1995) (``When Congress acts to amend a 
statute, we presume it intends its amendment to have real and 
substantial effect.''). This is also consistent with the dissent in PUD 
No. 1, wherein Justice Thomas concluded that ``[i]t is reasonable to 
infer that the conditions a State is permitted to impose on 
certification must relate to the very purpose the certification process 
is designed to serve. Thus, while Sec.  401(d) permits a State to place 
conditions on a certification to ensure compliance of the 
`applicant'[,] those conditions must still be related to discharges.'' 
PUD No. 1, 511 U.S. at 726-27 (Thomas, J., dissenting). The EPA has 
concluded that this interpretation is reasonable and the most 
appropriate reading of the statute and related legal authorities.
    As described in detail in section II.F.4.a.i of this notice, the 
Supreme Court in PUD No. 1 considered the scope of a State's authority 
to condition a section 401 certification. In response to petitioners' 
argument in that case that certification conditions may only be limited 
to the ``discharge'' referenced in section 401(a), the Court noted that 
``[t]he text refers to the compliance of the applicant, not the 
discharge.'' Id. at 712. Without further analysis of the ambiguity 
created by the use of the term ``applicant'' in section 401(d), the 
Court concluded that ``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 712. The Court did not grapple with the range of 
actions that its interpretation may require of the applicant, or 
whether the entire range would or should be within the scope of section 
401. The Court did not evaluate or find support for its interpretation 
in the legislative history of the 1972 amendments to the CWA, nor did 
the Court find that Congress had established an intent that the term 
``applicant'' in section 401(d) should mean ``activity.'' Although some 
have argued that the Court's conclusion is based on a plain language 
interpretation of section 401(d), for the reasons explained below, the 
EPA disagrees. The EPA concludes that the use of the term ``discharge'' 
in section 401(a) and ``applicant'' in section 401(d) creates 
ambiguity, that the plain text of 401(d) also is ambiguous, and that 
neither the Court's analysis nor its holding in PUD No. 1 foreclose 
alternative interpretations.
    In its discussion of the CWA, the Supreme Court in PUD No. 1 did 
not analyze section 401 at ``Chevron step one'' or rely on ``the 
unambiguous terms'' of the CWA to support its reading of section 401. 
See Brand X, 545 U.S. at 982. Instead, the Court ``reasonably read'' 
section 401(d) ``as authorizing additional conditions and limitations 
on the activity as a whole once the threshold condition, the existence 
of a discharge, is satisfied.'' PUD No. 1, 511 U.S. at 712 (emphasis 
added). To support what it considered to be a reasonable reading of 
section 401(d), the Court looked at the EPA's 1971 certification 
regulations at 40 CFR 121.2(a)(3) and related guidance available at 
that time, PUD No. 1, 511 U.S. at 712, but the Court did not have 
before it the EPA's interpretation of how sections 401(a) and 401(d) 
could be harmonized. In fact, the Court either was not aware of or did 
not mention that the EPA's 1971 certification regulations in place at 
that time predated the 1972 CWA amendments and therefore contained 
outdated terminology implementing what was functionally a different 
statute. As described above, the EPA's 1971 certification regulations 
were consistent with the text of the pre-1972 CWA, and they required a 
State to certify that the ``activity'' will comply with the Act. The 
1972 CWA amendments changed this language to require a State to certify 
that the ``discharge'' will comply with the Act.
    Based in part on what the EPA now recognizes was infirm footing, 
the Court found that ``EPA's conclusion that activities--not merely 
discharges--must comply with state water quality standards is a 
reasonable interpretation of Sec.  401 and is entitled to deference.'' 
Id. (emphasis added). As amicus curiae in the Supreme Court, the United 
States did not seek Chevron ``deference for the EPA's regulation in 
[the PUD No. 1 case]'' or for the EPA's interpretation of section 401. 
Id. at 729 (Thomas, J., dissenting). In fact, the United States' amicus 
brief for the Court did not analyze or interpret the different

[[Page 42234]]

language in sections 401(a) and 401(d) and instead asserted that it was 
unnecessary to harmonize the provisions to resolve the dispute. See 
Brief for the United States as Amicus Curiae Supporting Affirmance, PUD 
No. 1 of Jefferson County v. Washington Dep't of Ecology, No. 92-1911 
at 12 n. 2 (Dec. 1993). The amicus brief asked the Court to analyze the 
two undisputed discharges from the proposed federally licensed project 
and to determine whether they would cause violations of the State's 
water quality standards. Id. at 11-16.
    Given the circumstances of the PUD No. 1 litigation, and the fact 
that the Supreme Court did not analyze section 401 under Chevron step 1 
or rely on unambiguous terms in the CWA to support its interpretation 
of the statute, PUD No. 1 does not foreclose the Agency's 
interpretation of section 401 in this final rule. See Brand X, 545 U.S. 
at 982-83. The Supreme Court's ``choice of one reasonable reading'' of 
section 401 does not prevent the EPA ``from later adopting a different 
reasonable interpretation.'' \33\ Eurodif S.A., 555 U.S. at 315. An 
agency may engage in ``a formal adjudication or notice-and-comment 
rulemaking'' to articulate its interpretation of an ambiguous statute. 
Christensen v. Harris County, 529 U.S. 576, 587 (2000). When it does, 
courts apply ``Chevron-style'' deference to the agency's 
interpretation. Id. That is exactly what the EPA is doing in this final 
rule. The EPA has for the first time, holistically interpreted the text 
of sections 401(a) and 401(d) to support this update to the Agency's 
1971 certification regulations while ensuring consistency with the 
plain language of the 1972 CWA.
---------------------------------------------------------------------------

    \33\ The EPA is not modifying the Agency's longstanding 
interpretation of the Act that was confirmed by the Court in PUD No. 
1 that ``a water quality standard must `consist of the designated 
uses of the navigable waters involved and the water quality criteria 
for such waters based upon such uses' '' and that ``a project that 
does not comply with a designated use of the water does not comply 
with the applicable water quality standards.'' 511 U.S. at 714-15 
(emphasis in original; quoting 33 U.S.C. 1313(c)(2)(A)).
---------------------------------------------------------------------------

c. Discharges From Point Sources to Waters of the United States
    Based on the text, structure, and purpose of the Act, the history 
of the 1972 CWA amendments, relevant legislative history, and 
supporting case law, and informed by important policy considerations 
and the Agency's expertise, the EPA has concluded that a certifying 
authority's review and action under section 401 is limited to water 
quality impacts to waters of the United States resulting from a 
potential point source discharge from a proposed federally licensed or 
permitted project. The text of section 401(a) clearly specifies that 
certification is required for any federal license or permit to 
``conduct any activity . . . which may result in any discharge into the 
navigable waters'' (emphasis added). Prior interpretations extending 
section 401 applicability beyond such waters conflict with and would 
render meaningless the plain language of the statute. And although the 
statute does not define with specificity the meaning of the unqualified 
term discharge, interpreting section 401 to cover all discharges 
without qualification would undercut the bedrock structure of the CWA 
regulatory programs, which are focused on addressing point source 
discharges to waters of the United States. CWA section 502(14) defines 
``point source'' as ``any discernible, confined and discrete 
conveyance, including but not limited to any pipe, ditch, channel, 
tunnel, conduit, well, discrete fissure, container, rolling stock, 
concentrated animal feeding operation, or vessel or other floating 
craft, from which pollutants are or may be discharged.'' \34\
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    \34\ In the section 404 context, point sources include 
bulldozers, mechanized land clearing equipment, dredging equipment, 
and the like. See, e.g., Avoyelles Sportsmen's League, Inc. v. 
Marsh, 715 F.2d 897, 922 (5th Cir. 1983).
---------------------------------------------------------------------------

    As described in section II.F.1 of this notice, the CWA is 
structured such that the federal government provides assistance, 
technical support, and grant money to assist States in managing all of 
the nation's waters. By contrast, the federal regulatory provisions, 
including CWA sections 402 and 404, apply only to point source 
discharges to waters of the United States. 33 U.S.C. 1362(7). Section 
401 is the first section of Title IV of the CWA, titled Permits and 
Licenses, and it requires water quality-related certification 
conditions to be legally binding and federally enforceable conditions 
of federal licenses and permits. Id. at 1341(d). Similar to the section 
402 and 404 permit programs, section 401 is a core regulatory provision 
of the CWA. Accordingly, the scope of its application is most 
appropriately interpreted, consistent with the other federal regulatory 
programs, as addressing point source discharges into waters of the 
United States.
    The EPA is not aware of any court decisions that have directly 
addressed the scope of waters covered by section 401; however, the 
plain text of section 401 is clear and EPA's interpretation is 
supported by legislative history (see section II.G.1.b of this notice). 
Additionally, public commenters noted that many state Attorneys General 
submitted comments on the Agency's rulemaking to define ``waters of the 
United States'' asserting that modifying that definition would modify 
the scope of state review under section 401, further supporting the 
EPA's interpretation that section 401 is limited to waters of the 
United States.
    In Oregon Natural Desert Association v. Dombeck, the Ninth Circuit 
relied on the text and structure of section 401 to interpret the 
meaning of ``discharge'' in section 401. 172 F.3d 1092 (9th Cir. 1998). 
In that case, a citizen's organization challenged a decision by the 
U.S. Forest Service to issue a permit to graze cattle on federal lands 
without first obtaining a section 401 certification from the State of 
Oregon. The government argued that a certification was not needed 
because the ``unqualified'' term ``discharge''--as used in CWA section 
401--is ``limited to point sources but includes both polluting and 
nonpolluting releases.'' Id. at 1096. Finding that the 1972 amendments 
to the CWA ``overhauled the regulation of water quality,'' the court 
said that ``[d]irect federal regulation [under the CWA] now focuses on 
reducing the level of effluent that flows from point sources.'' Id. The 
court stated that the word ``discharge'' as used consistently in the 
CWA refers to the release of effluent from a point source. Id. at 1098. 
The court found that cattle--even if they wade in a stream--are not 
point sources. Id. at 1098-99. Accordingly, the court held that 
certification under section 401 was not required. Id. at 1099.
    The EPA previously suggested that the scope of section 401 may 
extend to nonpoint discharges to non-federal waters \35\ once the 
requirement for the section 401 certification is triggered. 
Specifically, in the EPA's now-withdrawn Interim Handbook, the Agency 
included the following paragraphs,
---------------------------------------------------------------------------

    \35\ Non-federal waters refer to those waters that are not 
waters of the United States.

    The scope of waters of the U.S. protected under the CWA includes 
traditionally navigable waters and also extends to include 
territorial seas, tributaries to navigable waters, adjacent 
wetlands, and other waters. Since Sec.  401 certification only 
applies where there may be a discharge into waters of the U.S., how 
states or tribes designate their own waters does not determine 
whether Sec.  401 certification is required. Note, however, that 
once Sec.  401 has been triggered due to a potential discharge into 
a water of the U.S., additional waters may become a consideration in 
the certification decision if it [sic] is an aquatic resource 
addressed by

[[Page 42235]]

``other appropriate provisions of state [or tribal] law.''
* * * * *
    Section 401 applies to any federal permit or license for an 
activity that may discharge into a water of the U.S. The Ninth 
Circuit Court of Appeals ruled that the discharge must be from a 
point source, and agencies in other jurisdictions have generally 
adopted the requirement. Once these thresholds are met, the scope of 
analysis and potential conditions can be quite broad. As the U.S. 
Supreme Court has held, once Sec.  401 is triggered, the certifying 
state or tribe may consider and impose conditions on the project 
activity in general, and not merely on the discharge, if necessary 
to assure compliance with the CWA and with any other appropriate 
requirement of state or tribal law.

    Interim Handbook, 5, 18 (citations omitted). To support the first 
referenced paragraph on the scope of waters, the Interim Handbook cited 
section 401(d), presumably referring to the use of the term 
``applicant'' rather than ``discharge'' used in section 401(a).\36\ To 
support the second paragraph on the scope of discharges, the Interim 
Handbook cited the PUD No. 1 and S.D. Warren Supreme Court decisions. 
It appears that both paragraphs from the Agency's Interim Handbook 
relied on the PUD No. 1 Court's interpretation of the ambiguity created 
by the different language in sections 401(a) and 401(d).\37\
---------------------------------------------------------------------------

    \36\ Interim Handbook, at 5 n. 23. Tellingly, footnote 23 of the 
Interim Handbook also states, ``Note that the Corps may consider a 
401 certification as administratively denied where the certification 
contains conditions that require the Corps to take an action outside 
its statutory authority or are otherwise unacceptable. See, e.g., 
RGL 92-04, `Section 401 Water Quality Certification and Coastal Zone 
Management Act Conditions for Nationwide Permits.''
    \37\ The S.D. Warren decision did not analyze or adopt the PUD 
No. 1 Court's analysis of sections 401(a) and 401(d).
---------------------------------------------------------------------------

    For many of the same reasons why the Agency is not interpreting the 
use of the word ``applicant'' in section 401(d) as broadening the scope 
of certification beyond the discharge itself, the Agency is also 
declining to interpret section 401(d) as broadening the scope of waters 
and the types of discharges to which the CWA federal regulatory 
programs apply. As an initial matter, the Agency agrees with the Ninth 
Circuit's analysis and holding in Dombeck that section 401 
certification is not required for nonpoint source discharges. Oregon 
Natural Desert Association v. Dombeck, 172 F.3d 1092, 1098-99 (9th Cir. 
1998). Were the Agency to interpret the use in section 401(d) of the 
term ``applicant'' instead of the term ``discharge'' as authorizing the 
federal government to implement and enforce CWA conditions on, or that 
affect, non-federal waters, that single word (``applicant'') would 
effectively broaden the scope of the federal regulatory programs 
enacted by the 1972 CWA amendments beyond the limits that Congress 
intended. Such an interpretation could permit the application of the 
CWA's regulatory programs, including section 401 certification 
conditions that are enforced by federal agencies, to land and water 
resources more appropriately subject to traditional State land use 
planning authority where not otherwise preempted by federal law. See, 
e.g., SWANCC, 531 U.S. at 172-73.
    As described in section II.F.4.a.i of this notice and pursuant to 
its authority to reasonably interpret ambiguous statutes to fill gaps 
left by Congress, the EPA is interpreting the language in sections 
401(a) and (d) differently than the Supreme Court did in PUD No. 1. The 
Court's prior interpretation, that once a ``discharge'' triggers the 
certification requirement in section 401(a) the certification itself 
may cover the entire ``activity,'' was not based on the plain 
unambiguous text of the statute, but rather was based on the Court's 
own interpretation of ambiguous text in light of the interpretation of 
the statute set forth in the 1971 certification regulations (see 
section II.F.4.a.i of this notice). The EPA's interpretation under this 
final rule is also based on a reasonable interpretation of the text, 
structure, and legislative history of section 401 and is informed by 
important policy considerations and the Agency's expertise, and the 
Agency's current rule is not foreclosed by the Court's prior 
interpretation. See Brand X, 545 U.S. at 982.
    For the reasons above, the EPA is concluding that section 401 is a 
regulatory provision that creates federally enforceable requirements, 
and for this and other reasons, its application must be limited to 
point source discharges into waters of the United States. This 
interpretation is consistent with the text and structure of the CWA as 
well as the principal purpose of this rulemaking, i.e., to ensure that 
the EPA's regulations (including those defining a section 401 
certification's scope) are consistent with the current CWA.\38\ For 
further discussion on the Agency's interpretation and comments received 
on discharges under section 401, see section III.A.2.a of this notice.
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    \38\ Although the legislative history on section 401 sometimes 
lacks clarity and can be internally inconsistent, the Agency's 
interpretation is consistent with much of the legislative history 
from the 1972 amendments. See, e.g., H.R. Rep. No. 92-911, at 124 
(1972) (``It should be clearly noted that the certifications 
required by section 401 are for activities which may result in any 
discharge into navigable waters. It is not intended that State 
certification is or will be required for discharges into the 
contiguous zone or the oceans beyond the territorial seas.''); 118 
Cong, Rec. 33,692, 33,698 (1972) (``[t]he Conferees agreed that a 
State may attach to any Federally issued license or permit such 
conditions as may be necessary to assure compliance with water 
quality standards in that State.''); S. Rep. No. 92-411, at 69 
(1971) (``This section is substantially 21(b) of existing law 
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.'' (parentheticals 
omitted)); 117 Cong. Rec. 38,797, 38,855 (1971) (Mr Muskie: 
``Sections 401 and 402 provide for controls over discharge.'')
---------------------------------------------------------------------------

2. Timeline for Section 401 Certification Analysis
    Based on the language of the CWA and consistent with the relevant 
case law, the EPA is clarifying that a certifying authority must act on 
a section 401 certification within a reasonable period of time, which 
shall not exceed one year, and that there is no tolling provision to 
stop the clock at any time.
    The text of section 401 expressly states that a certifying 
authority must act on a section 401 certification request within a 
reasonable period of time, which shall not exceed one year. 33 U.S.C. 
1341(a)(1). Importantly, as the words ``shall not exceed'' suggest, the 
CWA does not guarantee that a certifying authority may take a full year 
to act on a section 401 certification request. The certifying authority 
may be subject to a shorter period of time, provided it is reasonable. 
See Hoopa Valley Tribe v. FERC, 913 F.3d 1099, 1104 (DC Cir. 2019) 
(``Thus, while a full year is the absolute maximum, it does not 
preclude a finding of waiver prior to the passage of a full year. 
Indeed, the [EPA]--the agency charged with administering the CWA--
generally finds a state's waiver after only six months.'' (citing 40 
CFR 121.16)). The CWA's legislative history indicates that inclusion of 
a maximum period of time was to ``insure that sheer inactivity by the 
[certifying authority] will not frustrate the Federal application.'' 
H.R. Rep. No. 92-911, at 122 (1972).
    The timeline for action on a section 401 certification must 
conclude within a reasonable period of time (not to exceed one year) 
after receipt of a certification request. Id.; 33 U.S.C. 1341(a)(1). 
The CWA does not specify any legal requirements for what constitutes a 
request or otherwise define the term. As discussed further in section 
III.C, this final rule addresses that ambiguity to provide additional 
clarity and regulatory certainty. Additionally,

[[Page 42236]]

the EPA has long recommended that a project proponent requiring a 
federal license or permit subject to section 401 certification hold 
early discussions with both the certifying authority and the federal 
agency, to better understand the certification process and potential 
data or information needs.
    The CWA does not contain provisions for tolling the timeline for 
any reason, including to request or receive additional information from 
the project proponent. If the certifying authority has not acted on a 
request for certification within the reasonable time period, the 
certification requirement will be waived and the federal agency may 
proceed to issue the license or permit.
    The final rule provides for specific timeframes for certain 
procedural requirements (e.g., pre-meeting filing requests, discussed 
in final rule preamble section III.B; and public notice when EPA acts 
as the certifying authority, discussed in final rule preamble section 
III.H). Throughout this final rule, EPA intends that the term ``days'' 
refers to calendar days as opposed to business days. For further 
discussion on the Agency's interpretation of the timeline for section 
401 certification analysis and related comments, see section III.F of 
this notice. This final rule is intended to provide greater clarity and 
certainty and to address some of the delays and confusion associated 
with the timing elements of the section 401 certification process.

III. Final Rule

    This final rule is intended to make the Agency's regulations 
consistent with the current text of CWA section 401, increase 
efficiencies, and clarify aspects of CWA section 401 that have been 
unclear or subject to differing legal interpretations in the past. The 
Agency is replacing the entirety of the 1971 certification regulations 
at 40 CFR part 121 with this final rule. The following sections further 
explain the Agency's rationale for the final rule, provide a detailed 
explanation and analysis for the substantive changes that the Agency is 
finalizing, and respond to significant public comments received on the 
proposed rule.
    The EPA's 1971 certification regulations were issued when the 
Agency was but a few months old and the CWA had not yet been amended to 
include the material revisions to section 401.\39\ In modernizing 40 
CFR part 121, this final rule recognizes and responds to significant 
changes to the CWA that occurred after the 1971 regulations were 
finalized, especially the 1972 and 1977 amendments to the CWA.
---------------------------------------------------------------------------

    \39\ See 36 FR 22487, Nov. 25, 1971, redesignated at 37 FR 
21441, Oct. 11, 1972, further redesignated at 44 FR 32899, June 7, 
1979; Reorganization Plan No. 3 of 1970 (creating the EPA), 84 Stat. 
2086, effective Dec. 2, 1970.
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    Updating the 1971 certification regulations to clarify 
expectations, timelines, and deliverables also increases efficiencies. 
Some aspects of the 1971 certification regulations have been 
implemented differently by different authorities, likely because the 
scope and timing of review were not clearly addressed in EPA's 
regulations. While the EPA recognizes that States and Tribes have broad 
authority to implement State and Tribal law to protect their water 
quality, see 33 U.S.C. 1251(b), section 401 is a federal regulatory 
program that contains limitations on when and how States and Tribes may 
exercise this particular authority. This final rule modernizes and 
clarifies the EPA's regulations and will help States, Tribes, federal 
agencies, and project proponents know what is required and what to 
expect during a section 401 certification process, thereby reducing 
regulatory uncertainty. For further discussion on ways the final rule 
will reduce regulatory uncertainty, see the Economic Analysis available 
in the docket for this final rule.
    The EPA's 1971 certification regulations did not fully address the 
public notice requirements called for under CWA section 401(a)(1). The 
EPA is finalizing public notice requirements applicable to the EPA as 
the certifying authority but is not extending these requirements to 
other certifying authorities. The EPA encourages certifying authorities 
to consider how their public notice requirements can be developed or 
modified to ensure timely decision-making and to work with federal 
licensing and permitting agencies to minimize conflicts between State 
program administration and the federally established reasonable period 
of time.
    Because the EPA has frequently received requests for information 
regarding certifying authority requirements, the Agency solicited 
comment on whether it would be appropriate or necessary to require 
certifying authorities to submit their section 401 procedures and 
regulations to the EPA for informational purposes. One commenter stated 
that it would be useful for the EPA to compile procedures of certifying 
authorities and make these publicly available in one location, while 
another commenter stated that it was unnecessary and inappropriate for 
the EPA to compile procedures of certifying authorities. Some 
commenters stated that it is not necessary for certifying authorities 
to submit their section 401 certification procedures and regulations to 
the EPA. One commenter noted that their procedures are public 
information available on the state website. Another commenter stated 
that a regulation that requires submittal of section 401 procedures is 
unnecessary and duplicative because the State already works with the 
EPA on section 401 procedures.
    The EPA has considered these comments, and the final rule does not 
include a requirement for certifying authorities to submit their 
procedures to the EPA. However, to promote transparency and regulatory 
certainty, the EPA strongly encourages certifying authorities to make 
their certification regulations and any ``water quality requirements'' 
that may be considered during a certification process available online. 
In the interest of transparency, clarity, and public accessibility, the 
EPA may consider compiling certifying authorities' procedures and water 
quality requirements on its website in the future.
    In addition to the substantive changes in the final rule described 
below, the Agency made a number of revisions to streamline and clarify 
the regulatory text, and to more closely align that text to the 
language in section 401. These changes include revising the definitions 
of ``Administrator'' and ``discharge''; replacing the language 
``proposed discharge location'' in section 121.11(a) with ``facility or 
activity'' for consistency with section 401; revising certain text in 
sections 121.7(f), 121.12, and 121.16 for consistency with section 401; 
and removing redundant language throughout the final rule.

A. When Section 401 Certification Is Required

1. What is the Agency finalizing?
    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. Consistent with section 
401(a)(1), section 121.2 of the final rule provides that:
    Certification is required for any license or permit that authorizes 
an activity that may result in a discharge.
    This provision is modified from the proposal to provide greater 
clarity regarding when a certification is

[[Page 42237]]

required, but the Agency does not intend for this change to alter the 
meaning of the provision from the proposal. This final rule preamble 
also clarifies in section III.M that certification also is required 
before a federal agency issues a general license or permit which may 
result in a discharge. As discussed further below, in the final rule 
the term ``discharge'' is defined to mean a point source discharge into 
a water of the United States, and the term ``license or permit'' is 
defined to mean a license or permit issued by a federal agency to 
conduct any activity which may result in a discharge. The final rule 
reflects that section 401 is triggered by the potential for a discharge 
to occur, rather than an actual discharge.
2. Summary of Final Rule Rationale and Public Comment
    Section 121.2 of the final rule is consistent with the Agency's 
longstanding interpretation and is not intended to alter the scope of 
applicability established in the CWA.
a. ``Discharge''
    In section 401 and under the final rule, the presence of, or 
potential for, a discharge is a key element of when a water quality 
certification is required. Consistent with the text of the statute, 
under the final rule section 401 is triggered by the potential for a 
discharge to occur, rather than the presence of an actual discharge. 
The final rule defines the term ``discharge'' consistent with the 
proposal but replaces the term ``navigable waters'' in the proposed 
definition with ``waters of the United States'' in the final 
definition. This change is not intended to change the meaning of the 
definition; rather, it provides clarity and consistency across other 
CWA programs.
    Many commenters agreed that the requirement for a section 401 
certification is triggered by the potential for a discharge from a 
federally licensed or permitted activity. One commenter stated that the 
EPA's reliance on an actual discharge would disregard the broad scope 
of section 401, which is designed to consider all potential discharges 
over the life of a federally licensed or permitted activity. One 
commenter stated that the proposed definition of ``discharge'' does not 
contemplate a potential discharge. The commenter asserted that such an 
interpretation would conflict with the text of section 401 which states 
that water quality certification applies to any ``federal license or 
permit to conduct any activity . . . which may result in a discharge.''
    The EPA agrees with commenters that the language of the statute 
triggers the section 401 certification requirement based on a potential 
discharge.\40\ Section 401 is different from other parts of the Act 
\41\ and provides certifying authorities with a broad opportunity to 
review proposed federally licensed or permitted projects that may 
result in a discharge into waters of the United States within their 
borders. The Agency does not agree that the concept of ``potential'' 
must be incorporated into the rule text definition of ``discharge'' 
itself; the final rule provision at section 121.2 clearly states that a 
401 certification is required for ``an activity which may result in a 
discharge'' (emphasis added).
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    \40\ A certification is required for ``a Federal license or 
permit to conduct any activity . . . which may result in any 
discharge into the navigable waters . . .'' 33 U.S.C. 1341(a)(1) 
(emphasis added).
    \41\ See, e.g., National Pork Producers Council v. EPA, 635 F.3d 
738, 751 (5th Cir. 2011) (holding that ``the EPA cannot impose a 
duty to apply for a permit on a [concentrated animal feeding 
operation] that `proposes to discharge' or any CAFO before there is 
an actual discharge.''); Waterkeeper Alliance, Inc. v. EPA, 399 F.3d 
486, 505 (2d Cir. 2005) (same).
---------------------------------------------------------------------------

    In the proposal, the EPA requested that certifying authorities and 
project proponents submit comment on prior experiences with undertaking 
the certification process and later determining that the proposed 
federally licensed or permitted project would not result in an actual 
discharge. The EPA also requested comment on whether there are specific 
procedures that could be helpful in determining whether a proposed 
federally licensed or permitted project will result in an actual 
discharge, and how project proponents may establish for regulatory 
purposes that there is no potential discharge and therefore no 
requirement to pursue a section 401 certification. See 84 FR 44080. One 
commenter supported allowing the certifying authority or project 
proponent to determine, after the certification process is triggered, 
that a section 401 certification is not required where there is no 
actual or potential discharge. Another commenter expressed concern that 
this would allow the project proponent to determine that a section 401 
certification is no longer required if the project proponent 
determines, after the section 401 certification process is triggered, 
that there is no actual or potential discharge. Another commenter 
stated that a project that is clearly defined early in the federal 
licensing or permitting and certification processes would help project 
proponents, certifying authorities, and federal agencies establish 
whether there is a potential discharge, and therefore promote 
compliance with section 401 obligations or clarify that 401 
certification is not required. One commenter supported a process for 
determining when a project with a potential for a discharge will result 
in an actual discharge. A few commenters stated that a process for 
determining whether or not there will be an actual discharge ignores 
the statutory phrase ``may result in a discharge,'' and they asserted 
that giving project proponents a role in such a process is improper 
because they have no authority to find that section 401 would not 
apply.
    This final rule does not provide a process for certifying 
authorities or project proponents to determine whether a federally 
licensed or permitted project may have a potential or actual discharge. 
However, the federal agencies whose licenses or permits may be subject 
to section 401 should consider whether such procedures, if incorporated 
into their implementing regulations, may provide additional clarity 
within their licensing and permitting programs. The EPA observes that, 
if a certifying authority or project proponent determines after the 
certification process is triggered that there is no actual discharge 
from the proposed federally licensed or permitted project and no 
potential for a discharge, there is no longer a need to request or 
obtain certification. The EPA notes that ultimately the project 
proponent is responsible for obtaining all necessary permits and 
authorizations, including a section 401 certification. If the federal 
licensing or permitting agency determines that there is a potential for 
a discharge, as part of its evaluation of the proposed project, it may 
not issue the federal license or permit unless a section 401 
certification is granted or waived by the certifying authority. If a 
project proponent requests a section 401 certification and later 
asserts that section 401 does not apply, the EPA recommends that the 
project proponent discuss the matter with, and provide supporting 
information and documentation to, the certifying authority and the 
federal agency. As provided in section 401(b) and section 121.16 of the 
final rule, the EPA is available to provide technical assistance 
throughout the section 401 process when requested to do so.
    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. This 
interpretation, reflected in both the proposal and this final rule, is 
consistent with the text of the statute

[[Page 42238]]

and with U.S. Supreme Court precedent. In S.D. Warren, the Court 
considered whether discharges from a dam \42\ were sufficient to 
trigger section 401, even if those discharges did not add pollutants to 
waters of the United States. Because section 401 uses the term 
discharge but the Act does not provide a specific definition for the 
term,\43\ the Court applied its ordinary dictionary meaning, ``flowing 
or issuing out.'' S.D. Warren Co. v. Maine Bd. of Envtl. Prot. et al., 
547 U.S. 370, 376 (2006). The Court concluded that Congress intended 
this term to be broader than the term ``discharge of pollutants'' that 
is used in other provisions of the Act, like section 402. See, e.g., 33 
U.S.C. 1342, 1344; S.D. Warren, 547 U.S. at 380-81. For further 
discussion of S.D. Warren, see section II.F.4.a.ii of this notice, and 
for further discussion of discharges, see section III.A.2.a of this 
notice. The Court held that discharges from the dam triggered section 
401 because ``reading Sec.  401 to give `discharge' its common and 
ordinary meaning preserves the state authority apparently intended.'' 
S.D. Warren, 547 U.S. at 387. The EPA's interpretation reflected in 
this final rule is consistent with the Court's conclusion.
---------------------------------------------------------------------------

    \42\ In S.D. Warren, the Court was not asked to decide whether 
the discharges from the dams were point source discharges.
    \43\ The Act provides, ``The term `discharge' when used without 
qualification includes a discharge of a pollutant, and a discharge 
of pollutants.'' 33 U.S.C. 1362(16).
---------------------------------------------------------------------------

    Many public commenters addressed the proposed definition of 
``discharge.'' Some commenters stated that the definition of 
``discharge'' in the proposed rule should not contain the word 
``discharge.'' Some commenters stated that the proposed rule's 
definition of discharge is unnecessary because there is no ambiguity in 
that statutory term. Many commenters cited S.D. Warren to argue that 
the EPA's definition of ``discharge'' was too narrow, and that the rule 
should define discharge by its common meaning, ``issuing or flowing 
out.'' Several commenters were concerned that if discharge was defined 
as being from a point source then the discharge would need to contain 
pollutants, because of the CWA definition of ``point source.'' \44\ One 
commenter recommended that ``discharge'' be defined as ``the specific 
outflow from a point source into navigable waters.'' Another commenter 
asserted that S.D. Warren was wrongly decided and that section 401 
should be triggered only by discharges of pollutants.
---------------------------------------------------------------------------

    \44\ The CWA defines point source as ``any discernible, confined 
and discrete conveyance . . . from which pollutants are or may be 
discharged.'' 33 U.S.C. 1362(14) (emphasis added).
---------------------------------------------------------------------------

    The EPA has considered these comments and concludes that, given the 
diverse interpretations presented in public comments, including a 
definition of ``discharge'' in the section 401 certification 
regulations will increase clarity. Consistent with the proposal, the 
Agency has concluded that a discharge need not involve pollutants in 
order to trigger section 401. The EPA disagrees with commenters who 
asserted that a point source discharge necessarily requires a discharge 
of pollutants. The definition of point source in section 502(14) of the 
CWA provides that a point source is a conveyance from which pollutants 
are or may be discharged. A discharge of pollutants is not required for 
a conveyance to be considered a point source. As discussed immediately 
above and in section III.A.2.a of this notice, the EPA's longstanding 
position is that the term ``discharge'' as used in section 401 is 
limited to point sources but includes releases regardless of whether 
they contain pollutants. The Agency disagrees with commenters who 
stated that using the term ``discharge'' within the definition of 
``discharge'' creates confusion or ambiguity. Indeed, the final rule 
definition is consistent with the CWA section 502(16) definition of 
``discharge,'' which also contains the term ``discharge.'' The EPA also 
disagrees with commenters who asserted that the proposed definition was 
narrower than the Court's opinion in S.D. Warren. As noted above, the 
final rule's definition is consistent with the Court's application of 
the ordinary meaning of the term. Finally, the EPA disagrees with the 
commenter's recommendation to define ``discharge'' as the specific 
outflow from a point source into navigable waters. The EPA has 
concluded that this language could be construed quite narrowly to mean 
a discharge from a specific ``outfall'' such as a pipe or outlet, while 
excluding discharges from dredge or fill projects.
    One commenter requested that the EPA clarify that section 401 
certification is required only where there is a discharge of pollutants 
to a water of the United States, and not simply a withdrawal of water. 
As discussed above, the EPA does not interpret section 401 as requiring 
a discharge of pollutants. However, the EPA agrees with commenters that 
a section 401 certification is not required for a water withdrawal that 
has no associated potential for a point source discharge to a water of 
the United States. Multiple court decisions have concluded that a water 
withdrawal is not a discharge and therefore does not trigger the need 
for a water quality certification.\45\
---------------------------------------------------------------------------

    \45\ 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).
---------------------------------------------------------------------------

b. ``From a Point Source''
    The final rule provides that, to trigger section 401, a discharge 
must be from a point source. Several commenters agreed that a section 
401 certification is required only where there is a point source 
discharge. A few commenters agreed that Title IV of the CWA focuses on 
point source discharges, specifically in sections 402 and 404, leading 
them to conclude that section 401 should apply only to point sources as 
well. One commenter stated that the trigger for section 401 is 
specifically a potential point source discharge, citing to Oregon 
Natural Desert Ass'n v. Dombeck, 172 F.3d 1092 (9th Cir. 1998). Some 
commenters stated that the Supreme Court in S.D. Warren held that the 
certification requirement was not limited to discharges of pollutants, 
but that the discharge must nonetheless be a point source discharge, 
citing Dombeck. Other commenters also referred to S.D. Warren to assert 
that the Supreme Court refused to limit the term ``discharge'' to only 
include a point source discharge. These commenters stated that the 
Supreme Court held that the term ``discharge of pollutants'' was 
limited to point sources and the term ``discharge'' was significantly 
broader. In doing so, many commenters took issue with the EPA's 
reliance on Dombeck. One commenter cited Russello v. United States, 464 
U.S. 16 (1983), to argue generically that ``when `Congress includes 
particular language in one section of a statute but omits it in another 
section of the same Act, it is generally presumed that Congress acts 
intentionally and purposely in the disparate inclusion or exclusion.' 
''
    The final rule requirement that a discharge must be from a point 
source to trigger section 401 is consistent with case law from the 
Ninth Circuit, which concluded that the word ``discharge'' as used 
consistently throughout the CWA refers to the release from a point 
source, and that use is also appropriate for section 401. Dombeck, 172 
F.3d at 1099. The EPA has consistently implemented the interpretation 
of section 401 articulated by the Dombeck court and adopts the Ninth 
Circuit's interpretation in this final rule. The interpretation that a 
discharge must be a point source discharge is consistent with the 
structure of the Act and with the other

[[Page 42239]]

CWA regulatory programs (see section III.A.2.a of this notice).\46\
---------------------------------------------------------------------------

    \46\ See, e.g., Briefs of the United States in ONDA v. Dombeck, 
Nos. 97-3506, 97-35112, 97-35115 (9th Cir. 1997), and ONDA v. USFS, 
No. 08-35205 (9th Cir. 2008).
---------------------------------------------------------------------------

    The EPA disagrees with commenters who asserted that the Supreme 
Court in S.D. Warren specifically addressed whether a discharge must be 
from a point source. The Court's focus in S.D. Warren was on whether 
pollutants must be added to constitute a ``discharge.'' S.D. Warren, 
547 U.S. at 376-87. See also ONDA v. USFS, 550 F.3d 778, 783-84 (9th 
Cir. 2008) (noting that ``[t]he issue in S.D. Warren was narrowly 
tailored to determine whether a discharge from a point source could 
occur absent addition of any pollutant to the water emitted from the 
dam turbines''). The Court stated that the term discharge is broader 
than ``discharge of a pollutant'' and ``discharge of pollutants,'' but 
noted that ``discharge'' is not defined in the statute. S.D. Warren, 
547 U.S. at 376. The Court also noted that for purposes of section 401, 
``neither the EPA nor FERC has formally settled the definition, or even 
set out agency reasoning,'' and the Court therefore continued to rely 
on the dictionary definition of the term to mean ``flowing or issuing 
out'' or ``to emit; to give outlet to; to pour forth . . .'' Id. In 
2008, after the S.D. Warren decision was issued, the Ninth Circuit was 
asked to revisit its 1998 decision in Dombeck. In response, 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 Sec.  401 of the Act, as explained in Dombeck. Accordingly, the 
principles of stare decisis apply, and this court need not revisit the 
issue decided in Dombeck.'' ONDA v. USFS, 550 F.3d 778, 785 (9th Cir. 
2008). The Agency agrees.
    In this final rule, the EPA is formally establishing a definition 
for the term ``discharge'' for purposes of CWA section 401 and setting 
out its reasoning in support of the definition. The final rule's 
definition is consistent with the Agency's longstanding interpretation 
of the statute and with relevant Ninth Circuit case law, and nothing in 
S.D. Warren or PUD No. 1 precludes the EPA from adopting the definition 
in the final rule.\47\
---------------------------------------------------------------------------

    \47\ On April 23, 2020, the United States Supreme Court issued a 
decision in County of Maui, Hawaii v. Hawaii Wildlife Fund, et al., 
No. 18-260, which addressed the question whether the Clean Water Act 
requires a NPDES permit under section 402 of the Act when pollutants 
originate from a point source but are conveyed to navigable waters 
by groundwater. 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.'' Op. at 15 (emphasis in original). The Court articulated 
a number of factors that may prove relevant for purposes of section 
402 permitting. Id. at 16. Consistent with the Court's decision, if 
a discharge of a pollutant is determined to require a federal permit 
under section 402 as the functional equivalent of a direct 
discharge, it will also be subject to section 401 because, as 
discussed above, the term ``discharge'' under section 401 includes a 
discharge of a pollutant subject to section 402. S.D. Warren Co. v. 
Maine Bd. of Envtl. Prot., 547 U.S. 370, 375 (2006) (citing 33 
U.S.C. 1362(16)). This conclusion is consistent with the Court's 
decision in Maui.
---------------------------------------------------------------------------

c. ``Into a Water of the United States''
    Consistent with the proposal, the final rule reflects that section 
401 is triggered by a potential discharge into a water of the United 
States. 33 U.S.C. 1341(a)(1), 1362(7). Potential discharges into State 
or Tribal waters that are not waters of the United States do not 
trigger the requirement to obtain section 401 certification. Id. at 
1342(a)(1).
    Many commenters agreed that certification is required where there 
is a discharge into a water of the United States. Some of these 
commenters agreed that section 401 would not apply to non-federal 
waters. A couple of commenters expressed concern that by limiting the 
requirement for a section 401 certification to activities that 
discharge directly to waters of the United States, there would be many 
federally permitted projects where section 401 certification would not 
be required even though discharges from those projects could impact 
State or Tribal waters. A few commenters argued that the EPA's 
deference to States has been inconsistent, noting that the Agency's 
proposed rulemaking to define ``waters of the United States'' placed 
strong emphasis on States' authority to protect their water resources, 
while the proposed section 401 rulemaking reduces States' authority to 
protect their water resources. These commenters said that they had 
difficulty reconciling the States' expanded role under the ``waters of 
the United States'' rule with the diminished role of States in the 
proposed rule.
    The final rule's interpretation that a discharge must be into a 
water of the United States to trigger the section 401 certification 
requirement is consistent with the plain text of the statute, is 
supported by the legislative history, and is consistent with other CWA 
regulatory program requirements that apply to discharges to waters of 
the United States, not discharges to State or Tribal waters. Id.; see 
also H.R. Rep. No. 92-911, at 124 (1972) (``It should be clearly noted 
that the certifications required by section 401 are for activities 
which may result in any discharge into navigable waters.'') (emphasis 
added); see also section III.A.2.a of this notice for discussion on 
discharges to waters of the United States. The EPA disagrees with 
commenters who suggested that this rule is inconsistent with the 
recently finalized rule defining ``waters of the United States.'' Both 
rules are intended to provide clarity on the scope of federal authority 
and State or Tribal authority to regulate certain waters. The final 
definition of ``waters of the United States'' reestablishes the 
appropriate balance between waters subject to federal regulation and 
those waters or features that are subject to exclusive State or Tribal 
jurisdiction. As described further in section II.F of this notice, 
section 401 provides a role for States and authorized Tribes to 
participate in federal license or permitting processes, including those 
in which they may otherwise be preempted by federal law. States and 
Tribes retain authority to regulate and protect waters of the State or 
Tribe in accordance with State and Tribal law and where not preempted 
by federal law. As explained in detail in the proposed rule preamble, 
section 401 is a federal regulatory provision, as certification 
conditions are incorporated into federal licenses and permits and are 
enforceable by the federal government. If section 401 was expanded to 
cover activities with discharges to non-federal waters, such an 
expansion would authorize the federal government to regulate waters and 
features that are beyond the scope of CWA regulatory authority; 
Congress did not intend these waters to be subject to federal 
regulation.
d. Federal License or Permit
    Section 401 certification requirements are triggered when a project 
proponent applies for a federal license or permit to conduct an 
activity which may result in any discharge into a water of the United 
States. 33 U.S.C. 1341(a)(1). However, in those cases where a federal 
agency discharges dredged or fill material into waters of the United 
States but does not issue itself a license or permit, the Corps' 
regulations require reasonable and appropriate efforts to demonstrate 
compliance with effluent limitations and state water quality standards, 
which typically includes seeking certification.\48\ Consistent with the

[[Page 42240]]

proposal, the final rule defines the term ``license or permit'' to mean 
``any license or permit granted by an agency of the Federal Government 
to conduct any activity which may result in a discharge.''
---------------------------------------------------------------------------

    \48\ See Appendix C of Engineer Regulation 1105-2-100; 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.'').
---------------------------------------------------------------------------

    The CWA does not list specific federal licenses and permits that 
are subject to section 401 certification requirements. The EPA believes 
that the most common examples of licenses or permits that may be 
subject to section 401 certification are CWA section 402 NPDES permits 
issued by EPA in States where the EPA administers the NPDES permitting 
program; CWA section 404 permits for the discharge of dredged or fill 
material and 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 FERC. The final rule does not provide an 
exclusive list of federal licenses and permits that may be subject to 
section 401. Instead, the final rule focuses on whether there is 
potential for the activity authorized by the federally issued license 
or permit to result in a discharge from a point source into a water of 
the United States.
    A few commenters requested clarification on the requirement for a 
federal license or permit to trigger the need for a section 401 
certification. One commenter asserted that the proposal was unclear 
because the proposed regulatory text did not tie the need for a section 
401 certification to an application for a federal license or permit. 
The EPA disagrees with the suggestion that the proposal does not tie 
the need for a section 401 certification to the application for a 
federal license or permit. Section 121.2 of the proposed rule stated 
that ``any applicant for a license or permit to conduct any activity 
which may result in a discharge shall provide the Federal agency a 
certification from the certifying authority . . .'' As noted above, the 
proposal and this final rule define the term ``license or permit'' as 
one issued by a federal agency.
    A few commenters suggested that additional language be added to the 
proposed definition of ``discharge'' to clearly describe what 
constitutes a point source, including language concerning equipment and 
construction activities associated with the discharge of dredged or 
fill material. The EPA believes that defining ``point source'' in the 
final rule is unnecessary in light of the statutory definition (33 
U.S.C. 1362(14)) and court decisions concluding that bulldozers, 
mechanized land clearing machinery, and similar types of equipment used 
for discharging dredge or fill material are ``point sources.'' \49\
---------------------------------------------------------------------------

    \49\ See, e.g., Avoyelles Sportsmen's League v. Marsh, 715 F.2d 
897 (5th Cir. 1983); U.S. v. Larkins, 657 F.Supp. 76 (W.D. Kent. 
1987), aff'd, 852 F.2d 189 (6th Cir. 1988).
---------------------------------------------------------------------------

    Another commenter asserted that States have required facilities to 
obtain a section 401 certification where the facility has a permit from 
a State with delegated authority under section 402. Section 401 
certification is not required for State- or Tribally-issued permits 
when the State or Tribe has assumed operation of the permit program in 
lieu of the federal government.\50\ The CWA statutory language is clear 
that the license or permit triggering the need for a section 401 
certification must be a federal license or permit, that is, one issued 
by a federal agency. Implementation of a State or Tribal permit program 
in lieu of the federal program does not ``federalize'' the resulting 
licenses or permits for purposes of section 401. Section 401 
certification does not apply to those authorizations issued by the 
State or Tribe.\51\ The CWA anticipates that States and Tribes issuing 
those permits will ensure consistency with CWA provisions and other 
appropriate requirements of State and Tribal law as part of their 
permit application evaluation.
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    \50\ State or Tribal implementation of a license or permit 
program in lieu of the federal program, such as a CWA section 402 
permit issued by an authorized state, does not federalize the 
resulting licenses or permits and therefore does not trigger section 
401 certification. 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). The legislative history of the CWA 
amendments of 1977, discussing state assumption of section 404, also 
noted that ``[t]he conferees wish to emphasize that such a State 
program is one which is established under State law and which 
functions in lieu of the Federal program. It is not a delegation of 
Federal authority.'' H.R. Rep. No. 95-830, at 104 (1977).
    \51\ As described elsewhere in this notice, the Corps' existing 
certification regulations provide a reasonable period of time of 60 
days for federally issued CWA section 404 permits. 33 CFR 
325.2(b)(1)(ii); see also final rule preamble section III.F. To the 
extent that certifying authorities believe that this timeline is too 
short to provide certification for a Federally issued section 404 
permit, States are authorized to assume administration of that 
program for certain waters. 40 CFR 233; see also Final Report of the 
Assumable Waters Subcommittee (May 2017), available at https://www.epa.gov/cwa404g/nacept-assumable-waters-subcommittee-final-report-may-10-2017.
---------------------------------------------------------------------------

    One commenter noted that the proposal indicated that the Corps does 
not process and issue permits for its own activities and stated that 
federal agencies should be subject to the same certification request 
submittal requirements as non-federal agency project proponents. In 
response, the EPA notes that the CWA ties the requirement for a section 
401 certification to a federal license or permit. As a result, in 
circumstances where there is no federal license or permit, including 
when federal agency activities do not require a license or permit, 
section 401 certification is not required. Nonetheless, the Corps' 
current regulations indicate that section 401 requires the Corps to 
seek section 401 certification for dredge and fill projects involving a 
discharge into waters of the United States, regardless of whether the 
Corps issues itself a permit for those activities.\52\
---------------------------------------------------------------------------

    \52\ 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.'').
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B. Pre-Filing Meeting Request

1. What is the Agency finalizing?
    The EPA proposed to establish a pre-filing meeting process when the 
EPA is the certifying authority to ensure that the Agency receives 
early notification of anticipated projects and can discuss information 
needs with the project proponent. Many commenters stated that it would 
be helpful for project proponents to request pre-filing meetings with 
all certifying authorities (not just the EPA), although most commenters 
did not say that certifying authorities should be required to accept 
such meetings. In light of these comments, and because the benefits of 
the pre-filing process are applicable regardless of the identity of the 
certifying authority, the EPA is finalizing a requirement that all 
project proponents, including federal agencies when they seek 
certification for general licenses or permits, submit a request for a 
meeting with the appropriate certifying authority at least 30 days 
prior to submitting a certification request.\53\ The final rule 
requires only that the project proponent request the pre-filing meeting 
and leaves to the discretion of the certifying authority whether a pre-
filing meeting may be

[[Page 42241]]

necessary or appropriate for a particular project. The meeting request 
itself provides advance notification to the certifying authority that a 
certification request may be forthcoming and therefore promotes early 
coordination, even when the certifying authority does not hold a pre-
filing meeting.
---------------------------------------------------------------------------

    \53\ The EPA recognizes that some activities conducted in 
response to a hurricane or other similar event may require emergency 
procedures that do not allow for compliance with pre-request meeting 
procedures. Federal licensing and permitting agencies should 
establish such emergency procedures by regulation to ensure that 
project proponents, certifying authorities, and the public are made 
aware of the types of circumstances that could prevent compliance 
with ordinary pre-filing meeting request requirements. Nothing in 
this final rule precludes federal agencies from establishing 
emergency procedures to ensure continuation of operations or other 
appropriate emergency procedures, including procedures that may not 
allow for compliance with pre-request meeting procedures.
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2. Summary of Final Rule Rationale and Public Comment
    The EPA is expanding the proposed pre-filing meeting request 
requirement, and under this final rule, all project proponents, 
including federal agencies when they seek certification for general 
licenses or permits, must submit a request for a pre-filing meeting 
with the appropriate certifying authority at least 30 days prior to 
submitting a certification request. This requirement will ensure that 
certifying authorities receive early notification and have an 
opportunity to discuss the project and potential information needs with 
the project proponent before the statutory timeframe for review begins. 
The final rule also encourages the certifying authority to take actions 
to initiate coordination with the Federal agency after receiving the 
pre-filing meeting request.
    In order to facilitate early engagement and coordination, and using 
its discretion to interpret the term ``request'' as applied to 
certification procedures, the EPA is finalizing a regulatory 
requirement in section 121.4 of the final rule that all project 
proponents must submit a request for a pre-filing meeting at least 30 
days in advance of submitting a certification request. Under the final 
rule, certifying authorities are given an opportunity to accept or host 
such a pre-filing meeting, but they retain discretion to decline the 
request or simply not respond. Under the final rule, if the certifying 
authority does not respond to the request, the project proponent may 
submit a certification request as long as it includes documentation, as 
required in section 121.5 of the final rule, that it requested the pre-
filing meeting at least 30 days prior to submitting the certification 
request.
    In addition to requiring the project proponent to request a pre-
filing meeting, the proposed rule would have required EPA to respond 
within a certain period of time and also required the parties to 
discuss certain topics and to be prepared to share certain information 
during the pre-filing meeting. The final rule no longer requires those 
additional procedures and instead encourages certifying authorities, 
project proponents and federal licensing and permitting agencies to 
engage in early coordination. Under the final rule, if the certifying 
authority grants the pre-filing meeting, the project proponent and the 
certifying authority are encouraged to discuss the nature of the 
proposed project and potential water quality effects. The final rule 
also encourages the project proponent to provide a list of other 
required State, interstate, Tribal, territorial, and federal 
authorizations and to describe the anticipated timeline for 
construction and operation. After receiving the pre-filing meeting 
request, the certifying authority is encouraged to contact the federal 
agency and to identify points of contact, so as to facilitate 
information sharing between the certifying authority and Federal agency 
throughout the certification process. In the final rule, the EPA 
encourages these important steps to help promote an efficient 
certification process. These recommendations are consistent with many 
recommendations in EPA's 2019 Guidance (which EPA is rescinding in this 
action, as no longer necessary in light of this final rule) as well as 
with recommendations made in the proposed rule preamble.
    The Agency believes that the term ``request'' as used in the 
statute is broad enough to include an implied requirement that, as part 
of the submission of a request for certification, a project proponent 
also provide the certifying authority with advance notice that a 
certification request is imminent. The relatively short time (no longer 
than one year and possibly much less) that certifying authorities are 
provided under the CWA to act on a certification request (or else waive 
the certification requirements of section 401(a)) provides additional 
justification in this context to interpret the term ``request for 
certification'' to allow the EPA to require a pre-filing meeting 
request.
    Many commenters supported the EPA's proposal to require project 
proponents to request pre-filing meetings. Several commenters supported 
the proposed pre-filing process where the EPA is the certifying 
authority, while others supported extending it to all certifying 
authorities. Several commenters stated that such meetings, while useful 
for a variety of purposes (e.g., identifying what information may be 
needed from a project proponent), should not be mandatory. Other 
commenters stated that such meetings should be used only for complex, 
non-routine projects. Some commenters asserted that the pre-filing 
process could penalize States who choose not to attend pre-filing 
meetings, even though it may not be feasible or necessary in all 
instances, and argued that the EPA should not seek to supplant a 
State's expertise on when a pre-filing meeting is necessary. Several 
commenters noted that some States have established their own pre-filing 
meeting requirements and should be encouraged to develop their own 
criteria, including choosing whether to hold such pre-filing meetings. 
Additionally, some commenters felt that the proposed 30-day notice for 
such meetings was too short, while another commenter requested that the 
EPA provide ``safeguards'' to ensure that States do not use the pre-
filing meeting as an opportunity to request unreasonable information or 
studies that would delay a certification request. Some commenters noted 
that while likely to yield useful information, the proposed regulations 
lack a means of enforcing the pre-filing procedures and asserted that 
the process could reward applicants who fail to cooperate with pre-
filing procedures. Some commenters noted that the proposal did not 
include expected outcomes from such early collaboration and asserted 
that this could result in inadequate certification requests. Some 
commenters stated that the EPA's proposal did not include sufficient 
guidance on best practices for pre-filing meetings, such as what 
information the project proponent should be prepared to share with the 
certifying authority.
    The EPA agrees with commenters who stated that pre-filing meetings 
would generally improve early coordination and promote efficiency in 
section 401 certification decision-making, although the utility of such 
meetings could depend on the complexity of the project and resources of 
the certifying authority. The EPA also agrees with commenters who 
stated that pre-filing meetings under the final rule should have an 
accountability mechanism, and thus the final rule requires the project 
proponent to include documentation of its pre-filing meeting request in 
any certification request filed with the certifying authority (see 
section III.C of this notice). The EPA recommends that project 
proponents submit a pre-filing meeting request in writing and maintain 
a copy of the written request, as the final rule requires such 
documentation to be submitted in a certification request. If a project 
proponent does not submit a pre-filing meeting request or does not 
maintain documentation that it made the request, the subsequent 
certification request will not meet the requirements of the final rule, 
and in such circumstances the reasonable period of time would not 
start.

[[Page 42242]]

    The final rule does not set a limit on how early a project 
proponent may submit a pre-filing meeting request or initiate 
discussions with a certifying authority in order to encourage early and 
ongoing coordination between the project proponent and the certifying 
authority. The Agency disagrees with the suggestion that a pre-filing 
meeting requirement could delay a certification request. Even if the 
certifying authority does not agree to meet, the project proponent is 
free to submit a certification request 30 days after submitting the 
meeting request. See section III.C of this notice. In some cases, a 
project proponent may find it beneficial to engage with a certifying 
authority well in advance of the 30-day pre-filing meeting period, 
particularly for complex projects. The 30-day period after submittal of 
the pre-filing meeting request and prior to the submission of a 
certification request provides an opportunity for the project proponent 
to verify whether a section 401 certification is required and for the 
certifying authority to identify potential information, in addition to 
the certification request requirements in this rule, that may be 
necessary for the certifying authority to act on the certification 
request. Ultimately, the Agency believes that this provision of the 
final rule will allow for a more efficient and predictable 
certification process for all parties.
    Under the final rule, certifying authorities are not required to 
grant pre-filing meeting requests. The EPA has determined that 
certifying authorities are in the best position to determine when a 
pre-filing meeting is necessary to help ensure that they receive all 
necessary information to act on certification requests within the 
reasonable period of time. The Agency encourages project proponents and 
certifying authorities to use the pre-filing meeting to discuss the 
proposed project and to determine what information is needed to enable 
the certifying authority to act on the certification request in the 
reasonable period of time. Additionally, certifying authorities and 
project proponents may use the pre-filing meeting to discuss other 
appropriate water quality requirements that may be applicable to the 
certification request and any necessary procedural requirements (e.g., 
ascertain whether the State or Tribe requires any fees). The EPA 
expects that certifying authorities may take advantage of a pre-filing 
meeting request for larger or more complex projects and might choose to 
decline the request for more routine and less complex projects. The 
pre-filing meeting may be conducted in-person, or remotely (through 
telephone, online, or other virtual platforms), as deemed appropriate 
by the certifying authority.
    Certifying authorities are encouraged to develop pre-filing meeting 
procedures tailored to identify information that may be needed to 
review and act on a certification request. Such procedures could vary 
depending on the project type, project complexity, or the triggering 
federal license or permit, to enable greater efficiency and 
predictability in the certification process. The Agency emphasizes that 
any pre-filing meeting procedures or pre-filing expectations developed 
or promulgated by certifying authorities cannot modify the requirements 
for a certification request established in this final rule. The EPA 
also notes that any new State or Tribal pre-filing meeting procedures 
may not be used to extend the 30-day timeline following a pre-filing 
meeting request for project proponents to submit a certification 
request, nor may pre-filing meeting procedures be used to extend or 
modify the reasonable period of time established by a Federal agency. 
The EPA believes that requiring a pre-filing meeting request too early 
could be an abuse of the process and result in an unreasonable 
extension of the reasonable period of time that Congress envisioned, 
which is not to exceed one year. Rather, such procedures should be 
focused on allowing both the project proponent and the certifying 
authority an opportunity to develop a common understanding and 
expectation of the types of information that may be necessary for a 
certifying authority to act on a certification request consistent with 
section 401 and this final rule.
    Some commenters asserted that pre-filing meetings should not limit 
a State's ability to request additional information after a 
certification request has been made. Other commenters did not think 
that pre-filing meetings should preclude project proponents from 
withdrawing and resubmitting certification requests to extend the 
reasonable period of time, which they stated is sometimes necessary for 
complex projects. Under the final rule, the pre-filing meeting request 
requirement does not affect a certifying authority's ability to request 
additional information from a project proponent once the reasonable 
period of time has started (see section III.F.2.a of this notice), but 
such information requests cannot operate to extend the reasonable 
period of time (see section III.F for further discussion on how 
certifying authorities may request an extension to the reasonable 
period of time from the federal agency). This requirement also does not 
affect the ability of project proponents to withdraw a certification 
request voluntarily (see section III.F of this notice). The Agency 
disagrees with commenters who asserted that the pre-filing meeting 
request requirement would penalize certifying authorities who choose 
not to avail themselves of the pre-filing meeting; accepting a pre-
filing meeting is not a mandatory requirement. The Agency anticipates 
that certifying authorities will act in good faith when evaluating pre-
filing meeting requests and identifying information they may need to 
review and act on a certification request. The Agency notes that early 
engagement and coordination, including participation in a pre-filing 
meeting, may help increase the quality of information that is provided 
by project proponents and may reduce the need for the certifying 
authority to make additional information requests during the reasonable 
period of time.
    In addition to pre-filing meetings between certifying authorities 
and project proponents, commenters also suggested a variety of ways in 
which federal agencies could facilitate information-sharing prior to 
the certifying authority's receiving a certification request. For 
example, one commenter expressed support for advance coordination 
between States and federal agencies to streamline federal licensing and 
permitting actions. A couple of commenters suggested that federal 
agencies should notify States and Tribes of projects that require a 
section 401 certification as soon as possible. One of these commenters 
stated that the coordination between State and federal environmental 
review requirements and processes should be done without diminishing 
section 401 certification authority. Another commenter objected to 
federal agency use of pre-filing meetings to inform the duration of the 
reasonable period of time for review for certification actions, unless 
there were clear inputs and outcomes for such meetings.
    The EPA recognizes that federal agencies are uniquely positioned to 
promote pre-filing coordination with certifying authorities and with 
project proponents, so as to harmonize project planning activities and 
to promote timely action on certification requests. The Agency 
acknowledges that other federal agencies may provide for pre-filing 
discussions in their regulations, see, e.g., 18 CFR 5.1(d)(1) and 33 
CFR 325.1(b), and recognizes that many certifying authorities and 
federal agencies already have coordination

[[Page 42243]]

memos, memoranda of agreement, or other cooperative mechanisms in 
place. The Agency is not finalizing specific requirements for federal 
agency coordination with certifying authorities (except when federal 
agencies are themselves seeking certification, see section III.M of 
this notice). However, if there is a pre-application process required 
or facilitated by the federal licensing or permitting agency and if the 
timing of that process would allow the project proponent to request a 
pre-filing meeting from the certifying authority at least 30 days 
before submitting a certification request, then a joint meeting among 
federal agencies, certifying authorities, and project proponents could 
also be used as the pre-filing meeting for a certification request.
    In general, the EPA encourages federal agencies to notify 
certifying authorities as early as possible about proposed projects 
that may require a section 401 certification. Additionally, the EPA 
encourages federal agencies (1) to timely respond to requests from 
certifying authorities for information concerning the proposed federal 
license or permit, and (2) to the extent consistent with agency 
regulations and procedures, provide technical and procedural assistance 
to certifying authorities and project proponents upon request. The EPA 
also encourages project proponents and certifying authorities to engage 
in any additional pre-filing discussion opportunities that may 
facilitate greater communication and information sharing, and therefore 
a more efficient and informed certification decision.

C. Certification Request/Receipt

1. What is the Agency finalizing?
    Under this final rule, a project proponent must submit a 
certification request to a certifying authority to initiate an action 
under section 401. Consistent with the text of the CWA, the final rule 
provides that the statutory timeline for certification review starts 
when the certifying authority receives a ``certification request,'' 
rather than when the certifying authority receives a ``complete 
application'' or ``complete request'' as determined by the certifying 
authority. After considering public comments, the final rule has been 
revised to provide a general definition of ``certification request'' 
and provide two different lists of documents and information that must 
be included in a certification request: One list for individual 
licenses and permits and a separate list for the issuance of a general 
license or permit. The certification request requirements, as well as 
other provisions of the final rule tailored to the issuance of general 
licenses and permits, are described in detail in section III.M of this 
notice.
    To better account for water quality certifications required for 
general licenses or permits, the definition of ``project proponent'' 
has been modified as follows pursuant to section 121.1(j) of the final 
rule:
    Project proponent means the applicant for a license or permit or 
the entity seeking certification.
    This final rule's definition of ``project proponent'' extends all 
of the substantive and procedural requirements in this final rule to 
federal agencies seeking certification for a general license or permit.
    Pursuant to section 121.1(c) of the final rule,
    Certification request means a written, signed, and dated 
communication that satisfies the requirements of section 121.5 (b) or 
(c).
    Section 121.5(b) of the final rule includes an enumerated list of 
documents and information that must be included in a certification 
request for an individual license or permit, including the seven 
components from the proposed rule and two new components. A 
certification request must include all components to start the 
statutory clock. A certification request submitted for an individual 
license or permit shall:
    1. Identify the project proponent(s) and a point of contact;
    2. identify the proposed project;
    3. identify the applicable federal license or permit;
    4. identify the location and nature of any potential discharge that 
may result from the proposed project and the location of receiving 
waters;
    5. include 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;
    6. include a list of all other federal, interstate, tribal, state, 
territorial, or local agency authorizations required for the proposed 
project, including all approvals or denials already received;
    7. include documentation that a pre-filing meeting request was 
submitted to the certifying authority at least 30 days prior to 
submitting the certification request;
    8. contain the following statement: `The project proponent hereby 
certifies that all information contained herein is true, accurate, and 
complete, to the best of my knowledge and belief'; and
    9. contain the following statement: `The project proponent hereby 
requests that the certifying authority review and take action on this 
CWA 401 certification request within the applicable reasonable period 
of time.'
    The statutory reasonable period of time for a certifying authority 
to act on a certification request begins when the certifying authority 
is in ``receipt of such request.'' The EPA is finalizing the definition 
of the term ``receipt'' as proposed:
    Receipt means the date that a certification request is documented 
as received by a certifying authority in accordance with applicable 
submission procedures.
    Together, these provisions will provide greater certainty for 
project proponents, certifying authorities, and federal agencies 
concerning when the reasonable period of time has started. Each of 
these provisions is discussed in greater detail below.
2. Summary of Final Rule Rationale and Public Comment
    The Act places the burden on the project proponent to obtain a 
section 401 certification from a certifying authority in order to 
receive a federal license or permit. As discussed in the preamble to 
the proposed rule, the section 401 certification process begins on the 
date when the certification request is received by a certifying 
authority. The statute limits the time for a certifying authority to 
act on a request as follows:

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

    33 U.S.C. 1341(a)(1) (emphasis added). The plain language of the 
Act requires that the reasonable period of time to act on certification 
not extend beyond one year after the receipt of the certification 
request. The statute, however, does not define those terms. As 
discussed in the preamble to the proposed rule, because they are not 
defined and their precise meaning is ambiguous, these terms are 
susceptible to different interpretations. This ambiguity has resulted 
in inefficiencies in the certification process; individual 
certification decisions that have extended beyond the statutory 
reasonable period of time; regulatory uncertainty; and litigation. See 
section II.F of this notice. As the Agency charged with administering 
the CWA, the EPA is authorized to interpret through rulemaking 
undefined terms, including those associated with CWA section 401 
certifications. See Chevron,

[[Page 42244]]

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 
844 (1984). Given the large number of certification requests submitted 
each year \54\ and the statutory requirement that those requests be 
acted on within a reasonable period of time not to exceed one year, the 
EPA is finalizing definitions for the terms ``certification request'' 
and ``receipt'' to provide project proponents, certifying authorities, 
and federal agencies with clear regulatory text stating when the 
statutory reasonable period of time begins.
---------------------------------------------------------------------------

    \54\ See section 2 of the Economic Analysis.
---------------------------------------------------------------------------

    The EPA is finalizing a definition for ``certification request'' 
that requires a written, signed, and dated communication that satisfies 
the requirements of section 121.5(b) or (c) of the final rule. A 
certification request that meets the requirements of the final rule 
begins the certifying authority's reasonable period of time. The 
structure of the final rule is somewhat different than the proposal 
because, as described above, the final rule contains two separate lists 
for certification requests; however, the purpose and function of the 
``certification request'' remains consistent with the proposal.
    Commenters provided numerous recommendations for what should be 
included in a certification request, including but not limited to 
information on prior contamination at the project site, payment of 
applicable fees, specific project proponent contacts, specific 
geographic information, construction and mitigation plans, engineering 
plans, sediment sampling plans, aquatic resources and their condition, 
the characteristics of the discharge, description of all affected 
wetlands and waters, State-listed species information and habitat 
assessments, baseline data and information, and the complete federal 
license or permit application, as well as a statement from the project 
proponent that all information is true and correct. Conversely, a few 
commenters recommended removing the specific components of a 
``certification request'' and argued that the proposed information was 
not necessary for a certifying authority to act on a request for 
certification. The EPA considered all of these comments and made some 
modifications in the final rule. The final definition of 
``certification request'' requires that the project proponent's written 
submission contain the components identified in either section 121.5(b) 
or (c) of the final rule.
    Section 121.5(b) of the final rule addresses certification requests 
submitted by project proponents, as the term is defined in the final 
rule, and it requires the seven components listed in the proposed 
definition, with a slight modification in one component, as well as two 
additional components: A statement that all information contained in 
the request is true, accurate, and complete to the best of the project 
proponent's knowledge, and documentation that a pre-filing meeting 
request was submitted to the certifying authority at least 30 days 
prior to submitting the certification request. These additional 
components are discussed further below. The Agency has modified the 
fourth factor in the final rule to require project proponents to 
identify the location and the nature of any potential discharge that 
may result from the proposed project and the location of receiving 
waters. This modification clarifies that project proponents should 
identify the nature of the discharge, including (as appropriate) the 
potential volume, extent, or type of discharge associated with the 
proposed project. This modification is similar to the modification made 
in the factors to be considered by a federal agency when setting the 
reasonable period of time. See section III.F for further discussion. 
The inclusion of this information will provide the certifying authority 
with clear notice that the project proponent has submitted a 
certification request and a sufficient baseline of information to allow 
it to begin its evaluation in a timely manner.
    The Agency requested comment on whether it should include a 
reference to ``any applicable fees'' among the components of its 
definition of a certification request. Many commenters stated that a 
certifying authority's applicable fees should be a required element in 
the final rule. One commenter suggested that applicable fees for a 
section 401 certification might be affected by the type of federal 
license or permit for which they are applying. After considering all of 
the public comments on this issue and conducting additional research 
into whether and how certifying authorities may require fees for 
section 401 certifications, the EPA has decided not to include a 
reference to fees in the enumerated list of elements of a certification 
request. States vary in how and when they require fees in the 
certification process. They have different fee structures and different 
requirements for the timing of paying a certification-related fee. The 
Agency encourages the project proponent and the certifying authority to 
discuss during the pre-filing meeting the certifying authority's fee 
structure and the project proponent's obligation, if any, to pay a fee 
related to the section 401 certification. Given the States' differing 
practices in this area, the final rule does not include proof of fee 
payment as a required component of a certification request to trigger 
the statutory timeframe for State or Tribal action.
    Consistent with the proposal, the final rule requires a project 
proponent to identify the location of any potential discharge in the 
certification request. To meet this requirement, the EPA recommends 
that the project proponent provide locational information about the 
extent of the project footprint and all potential discharge locations, 
as shown on design drawings and plans. The EPA recommends that project 
proponents be prepared to provide underlying geographic data such as 
shapefiles or geodatabases. Alternatively, the project proponent should 
consider identifying potential discharge locations on hard copy maps. 
The Agency acknowledges that the appropriate format and method to 
identify potential discharge locations may change with evolving 
technology and recommends that project proponents and certifying 
authorities discuss the best approach to providing the information 
required for the certification request.
    The EPA received comments from the public and feedback from other 
federal agencies that the categories of information identified in the 
proposed definition of certification request may not be appropriate for 
a federal agency seeking section 401 certification for a general 
license or permit. For example, at the time of certification, a federal 
agency may not know the location of every potential discharge that may 
in the future be covered under a general license or permit. In response 
to these comments and to improve the utility and clarity of the final 
rule, the Agency is also finalizing in section 121.5(c) of the final 
rule a separate list of documents and information required for a 
``certification request for issuance of a general license or permit.'' 
See section III.M of this notice for further discussion of the 
certification process for general licenses or permits.
    The Agency received public comments emphasizing the efficiencies 
that can be gained by federal agencies issuing general licenses and 
permits, such as general NPDES permits issued by the EPA and Nationwide 
or Regional section 404 general permits issued by the Corps. A few 
commenters stated that federal agencies should follow procedures that 
are consistent with other project proponents when submitting 
certification requests and

[[Page 42245]]

complying with other aspects of the rule. The EPA agrees with 
commenters that consistent procedural and substantive requirements for 
all water quality certifications would promote regulatory certainty for 
project proponents, federal agencies, and certifying authorities and 
has modified the final rule definition of ``project proponent'' to 
promote consistent water quality certifications. Section 121.1(j) of 
the final rule defines ``project proponent'' to mean ``the applicant 
for a license or permit or the entity seeking certification.'' With 
this modified definition, the final rule clarifies that federal 
agencies that issue general licenses or permits must comply with all of 
the procedural and substantive requirements of this final rule.
    Consistent with the proposal, sections 121.5(b) and (c) of the 
final rule include the following statement--``The project proponent 
hereby requests that the certifying authority review and take action on 
this CWA 401 certification request within the applicable reasonable 
period of time.'' This requirement is intended to remove any potential 
ambiguity on the part of the certifying authority about whether the 
written request before it is, in fact, a ``certification request'' that 
triggers the statutory timeline. One commenter noted that, if a project 
proponent is uncertain whether the certifying authority will be able to 
certify its project within the reasonable period of time, the project 
proponent could submit a non-compliant certification request that omits 
one or more components, which would prevent the reasonable period of 
time clock from starting. The Agency agrees with this commenter that if 
a project proponent does not submit a certification request as defined 
at section 121.5(b) of the final rule, then the reasonable period of 
time does not begin. The Agency encourages pre-filing meetings, 
engagement, and information sharing between project proponents and 
certifying authorities, but such engagement does not start the 
reasonable period of time unless a certification request, as defined in 
the final rule, is submitted to the certifying authority.
    Sections 121.5(b) and (c) of the final rule include two additional 
provisions that were not in the proposed rule: A statement that all 
information contained in the certification request is true, accurate, 
and complete to the best of the requester's knowledge and belief, and 
documentation that a pre-filing meeting request was submitted to the 
certifying authority at least 30 days prior to submitting the 
certification request. Both requirements are intended 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, and to ensure that the project proponent 
has complied with the requirement to request a pre-filing meeting with 
the certification authority. If a certification request does not 
include these components, it does not meet the conditions of section 
121.5(b) or (c) of the final rule and it does not start the statutory 
clock.
    Notwithstanding the text of section 401(a)(1), which refers to a 
``request for certification,'' some commenters asserted that requiring 
a ``certification request,'' as opposed to a ``complete application,'' 
contravened congressional intent and cooperative federalism, and 
represented a change in the EPA's longstanding practice. As discussed 
in the preamble to the proposed rule, section 401 does not use the term 
``complete application'' or prescribe what a ``certification request'' 
would require. The reference in prior EPA guidance to a ``complete 
application,'' without explaining what an ``application'' must include, 
has led to inconsistent and subjective determinations about the 
sufficiency of certification request submittals. This, in turn, has 
caused uncertainty about when the statutory reasonable period of time 
begins to run. The Agency is authorized to interpret ambiguous 
statutory terms, see Chevron, 467 U.S. at 844, and is finalizing what 
it deems the most appropriate, reasonable interpretation of 
``certification request'' to reduce uncertainty and enable project 
proponents and certifying authorities to objectively and transparently 
understand which submittals start the reasonable period of time.
    Some commenters also asserted that a standardized definition of 
``certification request'' cannot capture all of the kinds of 
information necessary for the certifying authority to make an informed 
decision on a certification request. They expressed concern that 
project proponents would be incentivized to circumvent a certifying 
authority's meaningful review by not providing additional information. 
Additionally, some commenters suggested that certifying authorities 
should be given the flexibility to develop their own definition of a 
``request'' or ``application'' to meet their applicable State and 
Tribal laws and needs. While the Agency acknowledges these commenter 
concerns, the EPA disagrees. As discussed above, the Agency is 
authorized to interpret the term ``certification request'' because the 
Act does not define the term, nor does it prescribe the amount of 
information that must be included in a certification request. See 
Chevron, 467 U.S. at 844. In this final rule, the Agency is 
interpreting ``certification request'' to include components that the 
Agency believes are necessary to provide a certifying authority with 
clear notice that a request has been submitted and a sufficient 
baseline of information for the certifying authority to begin its 
review. It is important to distinguish between the amount of 
information appropriate to start the certifying authority's reasonable 
period of time and the amount of information that may be necessary for 
the certifying authority to take final action on a certification 
request. The components of a ``certification request'' identified in 
the final rule are intended to be sufficient information to start the 
reasonable period of time but may not necessarily represent the 
totality of information a certifying authority may need to act on a 
certification request. 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 (see section III.H of this notice for 
specific procedures when the EPA is the certifying authority). Indeed, 
in many cases it may be in the interest of the project proponent and 
may provide a more efficient certification process if relevant 
information about the discharge and potential impacts to the receiving 
waters is provided to the certification authority early in the 
certification process.
    As discussed in section III.B of this notice, the Agency is 
finalizing a pre-filing meeting request requirement for all project 
proponents, including federal agencies when they seek a section 401 
certification for general licenses or permits. The Agency is including 
a documentation requirement for the pre-filing meeting as a component 
of a certification request to ensure that certifying authorities are 
given an opportunity to engage in early discussions with project 
proponents and federal agencies, if desired. The Agency encourages 
project proponents and certifying authorities to use the pre-filing 
meeting to discuss the proposed project and to determine what 
information (if any), in addition to that required to be submitted as 
part of the ``certification request,'' may be needed to enable the 
certifying authority to take final action on the certification request 
in the reasonable period of time. The

[[Page 42246]]

certifying authority may also take this opportunity to discuss any 
other State or Tribal permits that may be applicable or required for 
the proposed project.
    Although some commenters requested that the Agency include more 
detailed certification request components, the Agency believes 
additional detailed information is best ascertained through pre-filing 
meetings and engagement during the reasonable period of time. If pre-
filing meetings, discussions, and submittals during the reasonable 
period of time fail to produce the information necessary for a 
certifying authority to grant certification or grant certification with 
conditions, the final rule reaffirms that certifying authorities retain 
the ability to deny or waive a certification request. It is important 
to reiterate that the burden is on the project proponent to submit a 
certification request to the certifying authority and work 
cooperatively to provide additional information as appropriate to 
facilitate the certification process. Likewise, the burden is on the 
certifying authority to evaluate the certification request in good 
faith and to request information, documents, and materials that are 
within the scope of section 401 as provided in this final rule and that 
can be produced and evaluated within the reasonable period of time.
    The Agency also disagrees with commenters who asserted that the 
proposed definition of ``certification request'' would narrow State 
authority, that it contradicted the goals and purpose of the CWA, and 
that it was contrary to the plain language of section 401. The term 
``request'' is not defined in the Act. As discussed above, the Agency 
is authorized to interpret ambiguous statutory terms, and believes the 
final definition of ``certification request'' and the provisions in 
sections 121.5(b) and (c) of the final rule will provide needed clarity 
and help ensure that certifying authorities have sufficient notice and 
information to begin their evaluation of a certification request. The 
final rule does not limit the ability of a certifying authority to 
communicate with project proponents and to identify and request 
additional information necessary to take an informed action on a 
certification request in the reasonable period of time. Indeed, by 
providing greater clarity on when the statutory reasonable period of 
time begins and by encouraging early and constructive dialogue between 
project proponents and certifying authorities, the final rule 
facilitates a certifying authority's efforts to protect waters of the 
United States within its borders within the timeframe mandated by 
Congress.
    A number of commenters provided examples of projects that had been 
delayed because a certifying authority repeatedly requested additional 
information before a certification request would be considered 
``complete.'' These commenters asserted that these types of repeated 
requests for additional information undermine the statutory requirement 
to act on a certification request within a reasonable period of time, 
not to exceed one year. Other commenters asserted that a certifying 
authority cannot reasonably act on a certification request based only 
on the information required by the proposed rule. The EPA acknowledges 
the desire for certifying authorities to have all necessary information 
as soon as possible in the certification process, but the Agency must 
balance that desire while remaining loyal to the statutory requirement 
for timely action on a request. The Agency believes that its final rule 
strikes the appropriate balance by identifying the kinds of information 
that provide a reasonable baseline about any project while recognizing 
the ability of certifying authorities and project proponents to request 
and provide additional information both before and after the review 
clock starts.
    The Agency also sees the value in finalizing certification request 
components that are objective and do not require subjective 
determinations by a certifying authority about whether the request 
submittal requirements have been satisfied. A certification request 
must have all components listed at section 121.5(b) or (c) of the final 
rule to start the statutory reasonable period of time. If any of the 
components of section 121.5(b) or (c) of the final rule is missing from 
the certification request, the statutory reasonable period of time does 
not start. With respect to the component of a certification request for 
project proponents at section 121.5(b)(5) of the final rule, the EPA 
acknowledges that not all proposed projects may be subject to 
monitoring or treatment for a discharge (e.g., section 404 dredge or 
fill permits rarely allow for a treatment option). The final rule has 
been modified slightly to add the word ``manage'' to broaden the scope 
of information that may be provided by project proponents. However, if 
a project is not subject to monitoring, treatment, or management 
requirements for its discharge, the project proponent should state that 
in the certification request. The effect of such statement would be to 
make that component inapplicable to that project. Many commenters 
expressed concern that the proposed components of a certification 
request would require subjective determination regarding the 
appropriate level of detail. However, the Agency believes that the 
final certification request components do not require a subjective 
inquiry into their sufficiency or any inquiry beyond whether they have 
been provided in the request.
    The final rule requires a certification request to include a 
statement that, to the best of the project proponent's knowledge and 
belief, all information contained in the request is true, accurate, and 
complete. This requirement is intended to ensure that project 
proponents are making a good-faith effort to provide the certifying 
authority with accurate information necessary to begin its evaluation 
of the certification request. Additionally, as discussed above, the EPA 
anticipates that the project proponent and the certifying authority 
will coordinate information needs before and throughout the reasonable 
period of time, if necessary. The EPA expects that the project 
proponent both will provide a certification request that includes the 
components identified in the final rule and will engage with the 
certifying authority, as requested, to understand and respond to 
appropriate and reasonable additional information requests that are 
within the scope of section 401 and can be generated and reviewed 
within the reasonable period of time. For its part, the EPA expects 
that the certifying authority will act within the scope of section 401, 
as provided in the CWA and in this final rule.
    The EPA solicited comment on whether the Agency should generate a 
standard form for all certification requests. Most commenters did not 
support the development of a standard form and noted that most States 
have their own forms for ``complete applications.'' At this time, the 
Agency is not developing a standard form for project proponents to use 
to submit certification requests, but notes that States and Tribes that 
wish to continue using standard forms may choose to update those forms 
to be consistent with the final definition of ``certification 
request.'' The Agency may consider developing such forms in the future, 
if useful to project proponents and certifying authorities.
    Some commenters asked for clarification on the practical effect on 
the review clock of a project proponent's independently withdrawing a 
certification request by its own choice and not at the request of a 
certifying authority. If a project proponent withdraws a certification 
request because the project is no longer being

[[Page 42247]]

planned or if certain elements of the proposed project materially 
change from what was originally proposed or from what is described or 
analyzed in additional information submitted by the project proponent, 
it is the EPA's interpretation that the certifying authority no longer 
has an obligation to act on that request. To avoid scenarios like those 
presented in Hoopa Valley and to address the EPA's policy concern that 
section 401 certification delays also delay implementation of updated 
State and Tribal water quality standards and other requirements, the 
EPA expects that voluntary withdrawal by the project proponent will be 
done sparingly and only in response to material modifications to the 
project or if the project is no longer planned. In these circumstances, 
if the project proponent seeks to obtain a certification in the future, 
the project proponent must submit a new certification request. At a 
minimum, the project proponent would have to wait 30 days before re-
submitting a certification request, because under the final rule 
project proponents must request a pre-filing meeting at least 30 days 
before submitting a certification request, and voluntary withdrawal by 
a project proponent of a prior certification request does not obviate 
this pre-filing requirement. For further discussion about project 
proponent withdrawal, see section III.F of this notice.
    Commenters asked the Agency to clarify when a change in the 
proposed project would be so significant that it would require a new 
request. Many commenters asserted that the proposed rule would prevent 
extending the reasonable period of time even though the scope of the 
project changes during the reasonable period of time. Other commenters 
noted that the proposed rule did not account for project changes that 
may result from the federal license or permit review processes. A 
couple of commenters stated that the EPA should provide guidance to 
federal agencies on when a new certification request would be necessary 
based on the type and change in a project's scope, while one commenter 
asked the Agency to clarify whether projects that change in scope or 
design require a new certification.
    After considering public comments on this issue, the final rule 
does not identify each circumstance that may warrant the submission of 
a new certification request because the Agency believes that such 
circumstances are best addressed on a case-by-case basis. However, if 
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. Administrative changes, such as a change in the 
point of contact or the list of other required permits, and minor 
changes to the proposed project, such as those that do not change the 
project footprint in a material way, should not warrant the submission 
of a new certification request. The EPA recognizes that complex 
projects that are subject to multi-year federal licensing or permitting 
procedures may change over time as a result of those federal 
procedures. From a practical standpoint, the EPA encourages project 
proponents to maintain close coordination and communication with 
certifying authorities and recommends that the project proponent 
provide information about any project changes to the certifying 
authority regardless of when the change occurred or whether a 
certification has already been issued by the certifying authority. As 
an additional measure, the Act and the final rule provide certifying 
authorities with the opportunity to inspect a certified project prior 
to initial operation to ensure the project will comply with the 
certification.
    The Agency is finalizing the definition of ``receipt'' as proposed, 
so as to provide clarity for project proponents and certifying 
authorities about when the certification request is deemed received and 
the statutory clock begins. The CWA does not define the term ``receipt 
of such request'' in section 401(a)(1), which has led States, Tribes, 
and project proponents, as well as courts, to use different 
definitions. ``Receipt of the request'' has been used alternately to 
mean receipt by the certifying authority of the request in whatever 
form it was submitted by the project proponent, or receipt of a 
``complete application'' as determined by differing regulations 
established by certifying authorities. The statute also does not 
specify how requests are to be ``received'' by the certifying 
authority--whether by mail, by electronic submission, or some other 
means. The EPA understands that some certifying authorities have 
established general submission procedures for project proponents to 
follow when seeking State or Tribal licenses or permits. The EPA 
encourages the use of consistent procedures for all submittals, 
including section 401 certification requests. The final rule 
requirement that certification requests be documented as received ``in 
accordance with applicable submission procedures'' is intended to 
recognize that certifying authorities may have different procedures for 
submission of requests established in State or Tribal law. For 
instance, some certifying authorities may require hard copy paper 
submittals, while others may require or allow electronic submittals. If 
the certifying authority accepts hard copy paper submittals, the EPA 
recommends that the project proponents submitting a hard copy request 
send the request via certified mail (or similar means) to confirm 
receipt of the certification request. If the certifying authority 
allows for electronic submittals, the EPA recommends that the project 
proponent set up an electronic process to confirm receipt of the 
request. Nothing in the final rule precludes the use of electronic 
signatures when deemed appropriate by the certifying authority. The EPA 
recommends that project proponents retain a copy of any written or 
electronic confirmation of submission or receipt for their records.
    One commenter disagreed with the suggestion that the word 
``receipt'' is ambiguous but nonetheless agreed with the proposed rule 
because, this commenter asserted, states have made efforts to evade the 
one-year reasonable period of time. For the reasons explained above, 
EPA disagrees with the commenter and concludes that the word is 
ambiguous. Another commenter stated that section 401 does not require 
certifying authorities to act ``upon'' receipt of a request, but 
``after'' receipt of a request. This commenter is correct that the 
statute requires certifying authorities to act on a certification 
request ``within a reasonable period of time (which shall not exceed 
one year) after receipt of such request.'' As discussed above, the 
Agency has the authority to interpret ambiguous statutory terms, 
including the terms ``request'' and ``receipt of such request.'' The 
Agency has defined ``receipt'' to mean ``the date that a certification 
request is documented as received by a certifying authority in 
accordance with applicable submission procedures.'' Therefore, under 
the EPA's final rule, the statutory clock begins on the date when the 
certification request is documented as received by the certifying 
authority.
    Some commenters recommended that ``receipt'' should mean the date 
when a certification request and all materials required by State or 
Tribal law are documented as received by a certifying authority in 
accordance with applicable submission procedures. The Agency disagrees 
with these commenters. The EPA is aware that some States have 
regulations establishing what should be in a request for certification 
and when

[[Page 42248]]

it will be considered ``complete.'' For instance, the California Code 
of Regulations states: ``Upon receipt of an application, it shall be 
reviewed by the certifying agency to determine if it is complete. If 
the application is incomplete, the applicant shall be notified in 
writing no later than 30 days after receipt of the application, of any 
additional information or action needed.'' Cal. Code Regs. tit. 23, 
3835(a). The EPA also notes that some State regulations may require the 
completion of certain processes, studies, or other regulatory 
milestones before it will consider a certification request 
``complete.'' Although the CWA provides flexibility for certifying 
authorities to follow their own administrative procedures, particularly 
for public notice and comment, see 33 U.S.C. 1341(a), these procedures 
cannot be implemented in such a manner as to violate the CWA. The Act 
requires the timeline for review to begin ``after receipt'' of a 
certification request, notwithstanding any completeness determination 
procedure, and it requires certifications to be processed within a 
``reasonable period of time (which shall not exceed one year.'').
    One principal goal of this rulemaking is to provide additional 
clarity and certainty about the certification process, including when 
the reasonable period of time begins. Establishing a consistent and 
objective list of information necessary to start the statutory 
reasonable period of time is necessary to achieve that goal. As 
discussed above, the Agency has defined the elements necessary to 
provide the certifying authority with sufficient notice and information 
to begin to evaluate a request for certification. If there are 
additional information needs aside from the finalized components 
provided in a certification request, the certifying authority and 
project proponent may discuss those needs during the pre-filing meeting 
(see section III.B of this notice) or during the reasonable period of 
time. The requirement that certification requests be received ``in 
accordance with applicable submission procedures'' cannot be used by 
certifying authorities to introduce unreasonable delay between when an 
agency receives a certification request and when ``receipt'' occurs, as 
this would contravene this final rule.
    Many commenters expressed concern that the proposal lacked any 
requirement that a request be ``administratively complete.'' One 
commenter asserted that without a robust administrative record on which 
to rely, certifying authorities would be more vulnerable to successful 
challenges of their certification determinations. The final rule 
establishes that a certification request is administratively complete 
when it contains the items set forth in section 121.5(b) or (c). The 
final rule requires that the project proponent request a pre-filing 
meeting with the certifying authority before submitting the 
certification request, thereby providing that certifying authority the 
opportunity to discuss any additional informational needs it may have. 
If a project proponent fails to supply the certifying authority with 
information necessary to assure that the discharge from the proposed 
project complies with the water quality requirements, the certifying 
authority may so specify in a denial of the certification. If the 
certifying authority requests information from the project proponent 
that is beyond the scope of section 401, the project proponent's remedy 
lies with a court of competent jurisdiction. To avoid situations where 
the certifying authority requests information from project proponents 
that cannot be developed and submitted within the reasonable period of 
time, the EPA recommends that both the project proponent and the 
certifying authority work in good faith, consistent with section 401, 
and have early and sustained coordination and communication to 
streamline the overall certification process.
    Some commenters asserted that under the proposed rule, the federal 
agency would not have a reliable way to determine whether a certifying 
authority has received a request because the proposed rule required 
only project proponents, and not certifying authorities, to alert 
federal agencies when a project proponent had submitted a certification 
request. Project proponents have the burden of requesting certification 
from a certifying authority and for providing federal agencies with the 
certification to help fulfill the requirements of a federal license or 
permit. After reviewing public comments, the Agency has decided not to 
finalize the requirement proposed at section 121.4(b) in order to 
provide all interested parties with greater clarity and a common 
understanding regarding the status of a certification request. To 
effectuate notice of a certification request at the earliest point in 
time, section 121.5(a) of the final rule requires a project proponent 
to submit a certification request to the appropriate certifying 
authority and the federal licensing or permitting agency concurrently. 
Including this requirement in the final rule will provide the federal 
agency with notification about a certification request and sufficient 
information to determine the reasonable period of time for that 
certification request. This process will also address commenter 
concerns by providing federal agencies and certifying authorities with 
a concurrent notice when a certification request is received. As 
discussed above, the Agency recognizes that certifying authorities may 
have different submission procedures and recommends that project 
proponents submit copies to the federal agency in a manner consistent 
with the certifying authority's submission procedures, to ensure that 
the request is received at the same time. The final rule requires the 
federal agency to communicate the reasonable period of time to the 
certifying authority within 15 days of receiving the certification 
request from the project proponent in accordance with section 121.5(a) 
of the final rule. The EPA expects federal licensing and permitting 
agencies to provide the notice required in this final rule and strongly 
encourages federal agencies to promulgate or update agency-specific 
regulations to implement CWA section 401 and this final rule. However, 
in the unlikely event that the federal agency does not provide the 
required notice, the EPA recommends that certifying authorities assume 
that the federal agency's promulgated default reasonable period of time 
applies (e.g., the Corps' 60 days). If the federal agency fails to 
provide notification and has not promulgated a default or categorical 
reasonable period of time, the Agency recommends that certifying 
authorities assume the reasonable period of time expires one year from 
the date the certification request was received. The Agency recommends 
that all parties retain copies of certification requests for their 
records in case there is any misunderstanding about the beginning of 
the reasonable period of time.
    EPA acknowledges that many States and Tribes have established their 
own requirements for section 401 certification request submittals, 
which may be different from or more extensive than the ``certification 
request'' requirements set forth in this final rule. However, these 
additional requirements should not be used to expand the certification 
request requirements in this final rule, which are intended to 
establish clear expectations for certifying authorities and project 
proponents, and which provide a transparent and consistent framework 
for when the reasonable period of time begins. The EPA notes that 
certifying

[[Page 42249]]

authorities may update their existing section 401 certification 
regulations to be consistent with the EPA's regulations. Additionally, 
the EPA observes that certifying authorities may wish to work with 
neighboring jurisdictions to develop regulations that are consistent 
from State to State. This may be particularly useful for interstate 
projects, like pipelines and transmission lines, requiring water 
quality certifications from more than one State.
    Some commenters requested additional clarification about when 
project proponents should submit a certification request, relative to 
the timelines in federal licenses or permits or other federal laws. One 
commenter stated it would be helpful to specify a point in the federal 
permitting timeline when project proponents should submit a 
certification request. The commenter suggested that this point in time 
should be based on when States would have adequate information to make 
a certification decision. One commenter explained that if a State is 
required to issue section 401 certification before NEPA environmental 
documentation is complete and made available, the State would have to 
initiate state environmental review before NEPA documents are 
available, which is an unnecessarily burdensome approach for both the 
State and the applicant. Other commenters noted that the proposed rule 
could place an unnecessary burden on States and Tribes if an EIS 
results in a no action alternative being chosen, but the State or Tribe 
has already expended resources to complete a section 401 certification. 
The EPA also observes that some federal permit or license procedures 
can be lengthy and can result in project modifications in the early 
stages of the process.
    The Agency is not prescribing a specific point in a federal 
licensing or permitting process when project proponents are required to 
submit a certification request. The Agency is aware that FERC's 
regulations already establish when during the hydropower licensing 
process a project proponent may request certification. Specifically, 
FERC's regulations require project proponents to complete a years-long 
process that includes environmental studies and reviews before a 
project proponent may request certification for that federal license. 
See 18 CFR 5.22, 5.23. The Agency encourages all federal licensing and 
permitting agencies to evaluate their programs and processes and to 
consider promulgating or updating their section 401 implementing 
regulations to specify when a section 401 certification request should 
be submitted. Providing additional specificity and procedures for 
project proponents may reduce the duplication of work between federal, 
State and Tribal authorities and may make the certification process 
more efficient. In the absence of formal guidance or rulemaking from 
the appropriate federal licensing or permitting agency, the EPA 
recommends that project proponents, certifying authorities, and federal 
agencies coordinate and discuss the appropriate timing for a section 
401 certification request in light of the federal licensing or 
permitting process and other project approval requirements.

D. Certification Actions

1. What is the Agency finalizing?
    Consistent with the text of the CWA, under the final rule a 
certifying authority may take one of four actions pursuant to its 
section 401 authority: Grant certification, grant certification with 
conditions, deny certification, or waive its opportunity to provide a 
certification. These actions are reflected in section 121.7 of the 
final regulatory text. Any action by the certifying authority to grant, 
grant with conditions, or deny a certification request must be within 
the scope of certification (see section III.E of this notice), must be 
completed within the established reasonable period of time (see section 
III.F of this notice), and must otherwise be in accordance with section 
401 of the CWA (see section III.G of this notice). Alternatively, a 
certifying authority may expressly waive the certification requirement. 
Under the final rule, certifying authorities may also implicitly waive 
the certification requirement by failing or refusing to act (see 
section III.G.2.d of this notice). All certification actions must be in 
writing, and the contents and effects of such actions are discussed 
below in section III.G of this notice. The final rule is consistent 
with the Agency's longstanding interpretation of what actions may be 
taken in response to a certification request.
2. Summary of Final Rule Rationale and Public Comment
    Under the final rule, if the certifying authority determines that 
the discharge from a proposed project will comply with specific 
provisions enumerated in CWA section 401(a) and with other appropriate 
State or Tribal water quality requirements, it may grant that 
certification with or without conditions, as appropriate. To provide 
additional clarity, section 121.1(n) of the final rule defines ``water 
quality requirements'' (see section III.E.2.b of this notice for 
further discussion of this definition). If the certifying authority 
cannot certify (with or without conditions) that the discharge from a 
proposed project will comply with ``water quality requirements,'' it 
may either deny or waive certification. There may be multiple reasons 
why a certifying authority is unable to certify, including a lack of 
resources for reviewing the certification request, higher priority work 
that the certifying authority must attend to, or evidence that the 
discharge will not comply with ``water quality requirements.'' Under 
the former circumstances, waiver would be appropriate; and under the 
latter circumstance, denial would be appropriate.
a. Grant
    When a certifying authority grants a section 401 certification, it 
has concluded that the potential point source discharge into waters of 
the United States from the proposed project will be consistent with 
``water quality requirements.'' Granting certification allows the 
federal agency to proceed with issuing the license or permit.
b. Grant With Conditions
    If the certifying authority determines that the potential discharge 
from a proposed project would be consistent with ``water quality 
requirements'' only if certain conditions are met, the authority may 
include such conditions in its certification. Where the certifying 
authority grants certification with conditions in accordance with 
section 401 and this final rule, the federal agency may proceed to 
issue the license or permit. Certification conditions that satisfy the 
requirements of this final rule must be incorporated into the federal 
license or permit, if issued, and become federally enforceable.
c. Deny
    A certifying authority may deny certification if it is unable to 
certify that the potential discharge from a proposed project would be 
consistent with ``water quality requirements'' as defined in this rule. 
CWA section 401(a)(1) provides that ``[n]o license or permit shall be 
granted if certification has been denied by the State, interstate 
agency, or the Administrator, as the case may be.'' 33 U.S.C. 
1341(a)(1).
    This final rule reaffirms the ability of a project proponent to 
submit a new certification request if a previous request is denied. 
Some commenters agreed that it would always be proper to allow project 
proponents to request certification again if the certifying

[[Page 42250]]

authority denied their previous request(s). Other commenters 
interpreted this provision as preventing certifying authorities from 
denying with prejudice and recommended that the final rule explicitly 
allow certifying authorities the option to deny with prejudice. These 
commenters asserted that denial with prejudice is a tool that preserves 
certifying authorities' resources in cases where they are asked to 
review substantially similar certification requests for the same 
project once it has already determined that the project cannot comply 
with water quality requirements. Some commenters argued that section 
401 does not preclude certifying authorities from denying requests with 
prejudice, and that regulations that precluded certifying authorities 
from doing so would be inconsistent with the statute. Other commenters 
noted that the statute does not explicitly authorize denial with 
prejudice or prevent a project proponent from requesting a new section 
401 certification after a request is denied. The EPA agrees that the 
statute is silent on this issue. The EPA is not aware that any other 
CWA program authorizes a permit application to be denied with prejudice 
or explicitly precludes a permit applicant from re-applying for a 
permit after an initial denial. For consistency with other CWA 
programs, and because nothing in section 401 prohibits a project 
proponent from submitting a new certification request after a denial is 
issued, the EPA is finalizing this provision as proposed. In the event 
that a denial is issued, the EPA recommends that the project proponent 
discuss with the certifying authority whether project plans could be 
altered or whether additional information could be developed to 
demonstrate that the discharge from the proposed project will comply 
with applicable water quality requirements upon submittal of a new 
certification request.
d. Waive
    Under the final rule, a certifying authority may waive its 
opportunity to certify in two ways (see section 121.9(a) of the final 
regulatory text). First, the certifying authority may waive expressly 
by issuing a written statement that it is waiving certification. 
Second, the certifying authority may implicitly or constructively waive 
by failing or refusing to act within the reasonable period of time, 
failing to act in accordance with the procedural requirements of 
section 401, or failing to act in accordance with the requirements in 
sections 121.7(c)-(e) of this rule.\55\ As discussed throughout this 
final rule preamble, section 401 requires a certifying authority to act 
on a certification request within a reasonable period of time, not to 
exceed one year. If the certifying authority fails or refuses to act 
within that reasonable period, the certification requirement will be 
deemed waived by the federal licensing or permitting agency. Id. As 
described further in section III.G.2.d of this notice, if a 
certification grant, grant with conditions, or denial does not satisfy 
the procedural requirements of this final rule, it is waived. When a 
certifying authority waives the requirement for a certification, under 
this final rule the federal agency may proceed to issue the license or 
permit in accordance with its implementing regulations.
---------------------------------------------------------------------------

    \55\ As noted elsewhere in this notice, waiver of a specific 
certification condition does not waive the entire certification.
---------------------------------------------------------------------------

E. Appropriate Scope for Section 401 Certification Review

1. What is the Agency finalizing?
    While Congress did not provide a single, clear, and unambiguous 
definition of the appropriate scope of section 401, the text, 
structure, and legislative history of the CWA (including the name of 
the statute itself--the Federal Water Pollution Control Act Amendments 
of 1972 or, more commonly, the Clean Water Act) demonstrate that 
section 401 appropriately focuses on addressing water quality impacts 
from potential or actual discharges from federally licensed or 
permitted projects. The EPA, as the federal entity charged with 
administering the CWA, has authority to reasonably resolve any 
ambiguity in section 401's scope through notice and comment rulemaking. 
To accomplish this, the Agency is finalizing as proposed section 121.3 
of the regulatory text, which contains the following clear and concise 
statement of the scope of certification:
    The scope of a Clean Water Act section 401 certification is limited 
to assuring that a discharge from a Federally licensed or permitted 
activity will comply with water quality requirements.
    The Agency is also finalizing definitions of the terms 
``discharge'' and ``water quality requirements.'' Together, these 
provisions of the final rule provide clarity on the scope of section 
401. As explained in section III.A of this notice, based on the text 
and structure of the Act, as well as the history of modifications 
between the 1970 version and the 1972 amendments, the EPA has concluded 
that section 401 is best interpreted as protecting water quality from 
federally licensed or permitted activities that may result in point 
source discharges into waters of the United States. The Agency is 
finalizing the definition of discharge with only one change, replacing 
``navigable waters'' with ``waters of the United States'':
    Discharge for purposes of this part means a discharge from a point 
source into a water of the United States.
    The Agency chose to use the more commonly used term ``waters of the 
United States'' to increase clarity in the final rule; however, this 
does not change the meaning of the definition. As described further 
below, the term ``water quality requirements'' is used throughout 
section 401, and the term ``other appropriate requirements of State 
law'' is used in section 401(d), but neither of these terms is defined 
in the CWA. As the terms are used in the CWA, the EPA interprets 
``other appropriate requirements of state law'' to mean a subset of 
``water quality requirements.'' To give more specific meaning to this 
ambiguous and undefined language, the final rule defines the term 
``water quality requirements'' as follows:

    Water quality requirements means applicable provisions of 
sections 301, 302, 303, 306, and 307 of the Clean Water Act, and 
state or tribal regulatory requirements for point source discharges 
into waters of the United States.

    The final rule uses the term ``water quality requirements'' to 
define the universe of provisions that certifying authorities may 
consider under sections 401(a) and 401(d). This definition has been 
modified from the proposal to provide additional clarity.
    The scope of certification in section 121.3 is the foundation of 
the final rule. The scope is based on the text, structure, and 
legislative history of the CWA, is informed by important policy 
considerations and the Agency's expertise, and informs all other 
provisions of the final rule. The scope of certification provides 
clarity to certifying authorities, federal agencies, and project 
proponents regarding the nature and breadth of the environmental review 
that is expected and the type of information that may reasonably be 
needed to review a certification request. The scope applies to all 
actions on a certification request, including a decision to grant, 
grant with conditions, or deny. The scope of certification also helps 
inform what may be a reasonable period of time for a certifying 
authority to review and act on a certification request.

[[Page 42251]]

    To help ensure that section 401 certification actions are taken 
within the scope of certification, the EPA is finalizing certain 
requirements for certifications in section 121.7(c) of the final rule, 
certification conditions in section 121.7(d) of the final rule, and 
denials in section 121.7(e) of the final rule. For further discussion 
of the contents and effects of certification conditions and denials, 
see section III.G of this notice.
2. Summary of Final Rule Rationale and Public Comment
    The Agency is finalizing as proposed the scope of certification in 
section 121.3 of the final rule. Consistent with the proposal, the 
scope of a section 401 certification in the final rule is limited to 
assuring that a ``discharge'' from a federally licensed or permitted 
activity--rather than the activity as a whole--``will comply'' with 
``water quality requirements.'' The definition of ``water quality 
requirements'' has been modified in the final rule to provide 
additional clarity.
a. Activity Versus Discharge
    The Agency is finalizing the rule as proposed, focusing the scope 
of section 401 on the discharge from a federally licensed or permitted 
activity, as opposed to the activity as a whole. As described in 
section II.G.1.b of this notice, section 401(a) explicitly provides 
that the certifying authority, described as ``the State in which the 
discharge originates or will originate,'' must certify that ``any such 
discharge will comply with the applicable provisions of sections 301, 
302, 303, 306 and 307 of this Act'' (emphasis added). The plain 
language of section 401(a) therefore directs authorities to certify 
that the discharge resulting from the proposed federally licensed or 
permitted project will comply with the CWA. Although section 401(d) 
authorizes a certifying authority to establish conditions to assure 
that the ``applicant'' will comply with applicable water quality 
requirements, the EPA does not interpret the use of ``applicant'' in 
section 401(d) as broadening the scope beyond consideration of water 
quality impacts from the ``discharge,'' as set out in section 401(a).
    Some commenters asserted that the proposed scope of review for 
section 401 conflicts with the language of the CWA, applicable case 
law, and the legislative history of the CWA. These commenters asserted 
that the proper scope of section 401 should include all water quality 
impacts from the federally licensed or permitted activity or the 
project as a whole. Many commenters relied on the Supreme Court's 
rationale in PUD No. 1 and argued that the plain language of section 
401(d) is unambiguous and reasonably read as authorizing conditions and 
limitations on the activity as a whole. Commenters asserted that the 
plain meaning of the statutory language is clear, as is the legislative 
intent, and further asserted that the EPA's reliance on Chevron is 
misplaced. Commenters claimed that the Court in PUD No. 1 found the 
statutory language unambiguous and analyzed section 401 under Chevron 
step 1 and therefore, they argue, Brand X does not support EPA's 
reanalysis of the statutory language in a manner contrary to the PUD 
No. 1 opinion. These commenters asserted that even if it was not a 
Chevron step 1 analysis, the Court's majority opinion is a reasonable, 
holistic reading of section 401. These commenters also asserted that 
the Court did not rely on the EPA's interpretation of the statute, but 
relied on the plain language of the statute and therefore, they argue, 
Brand X does not support the EPA's reanalysis of the statutory language 
in a manner contrary to PUD. No. 1. Some commenters also asserted that 
the proposed scope of certification improperly departs from the EPA's 
longstanding interpretation without providing an adequate 
justification.
    Other commenters agreed with the EPA's interpretation of the 
statutory language and case law analysis in the proposed rule preamble, 
including the interpretation of the scope of certification, and agreed 
that section 401 is a limited grant of federal authority to States and 
Tribes. These commenters found the EPA's interpretation of section 401 
reasonable despite their view that it was inconsistent with the 
majority opinion in PUD No.1. These commenters also observed that the 
Court in PUD No.1 did not have the benefit of an EPA interpretation of 
the 1972 version of section 401.
    The Agency disagrees with commenters who asserted that the proposed 
scope of certification conflicts with the CWA, case law, and 
legislative history, and disagrees with the contention that the 
proposed scope was not supported by adequate justification. The scope 
of certification in the final rule is based on the EPA's holistic 
examination of section 401 and the legislative history. Congress' 
change in section 401(a) from ``activity'' to ``discharge'' in the 1972 
amendments reflects the ``total restructuring'' and ``complete 
rewriting'' of the existing statutory framework in 1972 that resulted 
in the core provisions of the CWA that regulate discharges into waters 
of the United States. See City of Milwaukee v. Illinois, 451 U.S. 304, 
317 (1981) (quoting legislative history of 1972 amendments). See also 
County of Maui, Hawaii v. Hawaii Wildlife Fund, et al., No. 18-260, Op. 
at 2 (April 23, 2020). The final rule gives due weight to Congress' 
intentional choice to change the language in section 401(a) to ensure 
that ``discharges'' from federally licensed or permitted activities, 
rather than the activity as a whole, comply with appropriate water 
quality requirements.
    The Agency also disagrees with commenters who asserted that the 
scope of certification is expressed unambiguously in section 401. As 
demonstrated by the variation in public comments received, section 401 
is susceptible to a multitude of interpretations. The EPA also 
disagrees with the suggestion that the PUD No. 1 Court found section 
401 to be unambiguous. Nowhere in the opinion does the Court conclude 
that section 401 is unambiguous. In fact, the Supreme Court in PUD No. 
1 offered its own interpretation of the ambiguous language in section 
401 when it ``reasonably read'' the scope of section 401 to allow 
conditions and limitations on the activity as a whole. As discussed in 
detail in section II.F.4.a.i of this notice, although the Court did not 
articulate a Chevron step one or step two analysis in its decision, the 
Court did reference EPA's 1971 certification regulations with approval 
and concluded that the EPA's ``reasonable interpretation'' (based on 
those regulations) is entitled to deference. Id. The Court further 
found the EPA's regulations to be consistent with the Court's own 
reasonable reading of the language of sections 401(a) and (d). Id. at 
712. As discussed in section II.F.4.a.i of this notice, the Court's 
``reasonable reading'' of a statute undercuts any argument that the 
statute's text or meaning is unambiguous.
    For the first time, the EPA has presented in this final rule the 
Agency's interpretation and analysis of section 401. The Agency's 
interpretation of the scope of section 401 as presented in section 
121.3 of this final rule is not foreclosed by the holding in PUD No. 1. 
The Court's conclusion that section 401 applied to the activity as a 
whole, rather than the discharge, did not follow from the unambiguous 
terms of the statute. Nat'l Cable & Telecomm. Ass'n v. Brand X internet 
Serv., 545 U.S. 967, 982 (2005). The scope of certification in section 
121.3 of this final rule is permissible and is based on a reasonable 
interpretation of the ambiguity created

[[Page 42252]]

by the different language Congress used in sections 401(a) and 401(d) 
of the Act.
    Some commenters supported the alternative interpretation presented 
in the proposed rule to the effect that only the CWA sections 
enumerated in section 401(a) may be used as a basis for a water quality 
certification denial, while section 401(d) lists the considerations for 
applying conditions to a granted water quality certification. These 
commenters stated that this approach reflects the plain language of the 
CWA, and therefore that ``any other appropriate requirement of State 
law'' could be considered only when applying conditions to a water 
quality certification and cannot be grounds for a denial. Other 
commenters stated that section 401(a) and section 401(d) do not and 
have never been interpreted to have different scopes. After considering 
all public comments on this and other issues, the Agency is not 
finalizing the proposed alternative interpretation. The EPA believes 
that interpreting section 401 as establishing different standards for 
issuing a denial under section 401(a) and for requiring conditions 
under section 401(d) is likely to lead to implementation challenges, 
including confusion by project proponents, certifying authorities and 
federal licensing and permitting agencies. Moreover, if a certifying 
authority determines that it must add conditions under section 401(d) 
to justify a grant of certification under section 401(a), that is 
equivalent to deciding that--without those conditions--it must deny 
certification. The standard is therefore essentially the same. As 
explained above in this section and in section II.F.4.a.i of this 
notice, the Agency is finalizing what it has determined to be the most 
appropriate, reasonable interpretation of section 401 that is based on 
a holistic analysis of section 401, the entirety of the CWA, and the 
legislative history.
    Some commenters argued that the focus of the CWA 1972 amendments on 
discharges does not override what they assert are the plain terms of 
section 401 and accused the EPA of selectively picking language to 
support a narrower scope. Some commenters disagreed with the EPA's view 
that the proposed rule is necessary to update EPA's certification 
regulations to conform with the 1972 CWA amendments, and they 
maintained that the EPA's reading of the statute is inconsistent with 
Supreme Court precedent. Other commenters agreed that the proposed rule 
is necessary, as the existing water quality certification regulations 
were promulgated prior to the 1972 CWA amendments, and these commenters 
agreed that the conflicting interpretations that have followed the 
original promulgation need to be addressed through revised regulations.
    For the reasons explained in section II.F of this notice, the EPA 
concludes that the existing certification regulations must be updated 
to reflect the language of the 1972 CWA amendments. This final rule 
reflects the EPA's holistic review of the CWA statutory text, the 
history of that text, and legislative history, and is informed by 
relevant case law. The EPA acknowledges that the final rule's focus on 
discharges, as opposed to the activity as a whole, is not consistent 
with the majority opinion in PUD No. 1; however, the Agency's rationale 
supporting its interpretation is grounded in the text of the statute, 
gives due weight to word choices made by Congress, and is clearly 
explained in the proposed and final rule preambles.
    Some commenters asserted that the proposed rule was inconsistent 
with other holdings in PUD No. 1, including that (1) States could 
condition a certification on any limitations necessary to ensure 
compliance with State water quality standards or other appropriate 
requirements of State law; (2) a minimum flow condition was an 
appropriate requirement of State law; and (3) a State's authority to 
impose minimum flow requirements would not be limited on the theory 
that it interfered with FERC's authority to license hydroelectric 
projects. The EPA disagrees with these commenters. First, neither the 
proposed rule nor the final rule prohibits water quality-related 
certification conditions that are necessary to assure compliance with 
appropriate State or Tribal law. Rather, the rule clarifies the scope 
of laws that are appropriate for consideration and as the basis for 
certification conditions. As described in this section of the notice, 
the EPA made some changes in the final rule to provide additional 
clarity and regulatory certainty. Second, neither the proposed rule nor 
the final rule address minimum flow issues.
    Some commenters asserted it was inappropriate for the proposed rule 
to rely on Justice Thomas' ``nonbinding'' dissent in PUD No. 1 instead 
of the holding of the majority opinion. One commenter suggested that 
reliance on the dissent exposes the EPA to legal challenge, injecting 
even more uncertainty into water quality certification programs. For 
the reasons explained in sections II.F.4.a.i, the EPA disagrees with 
these commenters. The EPA is not relying on any single judicial opinion 
for its interpretation of ambiguous statutory terms in this final rule. 
Rather, the final rule reflects the EPA's holistic analysis of the 
text, structure, and history of CWA section 401, informed by the 
Agency's expertise developed over nearly 50 years of implementing the 
CWA.
    Commenters asserted that the proposed rule would weaken the ability 
of States and Tribes to protect water quality, and some commenters 
asserted that the proposed rule would lead to negative impacts to the 
environment and public health. Some commenters asserted that the 
purpose of the rule is not consistent with the CWA's goal of protecting 
and enhancing the quality of the nation's waters. These commenters 
maintained that the proposed rule would not facilitate States' and 
Tribes' ability to carry out their roles and responsibilities under the 
CWA. Some commenters asserted that most federally licensed or permitted 
projects may result in water quality impacts beyond just those from a 
point source discharge, and argued that the appropriate scope of the 
certification is the activity and not only the discharge. These 
commenters provided examples of project impacts that they asserted may 
affect water quality but would be tangential to the discharge itself, 
including increased water withdrawals, releasing pollutants into 
groundwater, increased erosion and sedimentation, reduced stormwater 
infiltration, disconnecting ecosystems, and harming endangered species. 
Other commenters expressed concern that limiting the scope of section 
401 to discharges would not allow States and Tribes to address indirect 
impacts from the project, such as impacts resulting from hydrological 
changes or increases in impervious surfaces that result in high-
velocity runoff events that can deposit sediment or other pollutants 
into waterways.
    The Agency recognizes the importance of protecting water quality 
and that aquatic resources serve a variety of important functions for 
protection of overall water quality. Ultimately, the Agency's 
interpretation of section 401 is a legal interpretation that has been 
established within the overall framework and construct of the CWA, 
informed by important policy considerations and the Agency's expertise. 
The purpose of this rulemaking is to provide a clear articulation of 
what is authorized by CWA section 401, including the appropriate 
procedures and scope of decision-making for water quality 
certifications, that is supported by a robust and comprehensive legal 
analysis of the statute. The federal licenses and permits that are 
subject to section 401 are also subject to additional federal agency 
statutory reviews, including the

[[Page 42253]]

National Environmental Policy Act, the Endangered Species Act, and the 
National Historic Preservation Act, all of which are intended to 
provide a comprehensive environmental evaluation of potential impacts 
from a proposed project. In addition, where applicable, the CWA's 
longstanding regulatory permitting programs, like those under sections 
402 and 404, will continue to address water quality issues related to 
the discharge of pollutants into waters of the United States, and the 
CWA's non-regulatory measures, like protection of water quality from 
nonpoint sources of pollution under section 319, will continue to 
address pollution of water generally to achieve the objective of 
restoring and maintaining the chemical, physical, and biological 
integrity of the nation's waters. Section 401, on the other hand, 
provides specific and defined authority for States and Tribes to 
protect their water quality in the context of a federal licensing and 
permitting process, including those processes in which State or Tribal 
authority may otherwise be entirely preempted by federal law. The 
language of section 401 makes it clear that this authority is limited 
and does not broadly encompass all potential environmental impacts from 
a project.
    Some commenters requested examples of what considerations would be 
outside the scope of certification, based on the Agency's limiting the 
scope of certification to discharges, rather than to the entire 
activity or project. Commenters mentioned specific considerations that 
they believed should be excluded from the scope of certification in the 
regulatory text, such as effects caused by the presence of pollutants 
in a discharge that are not attributable to the discharge from a 
federally licensed activity, effects attributable to features of the 
permitted activity besides the discharge, and effects caused by the 
absence or reduction of discharge. The Agency generally agrees that 
such considerations would be beyond the scope of certification as 
articulated in this final rule; however, the Agency is not modifying 
the regulatory text to reflect these specific considerations, as there 
may be unique project-specific facts or circumstances that must inform 
whether a particular impact is caused by the discharge, as defined in 
this final rule.
b. Water Quality Requirements
    Under the final rule, the term ``water quality requirements'' means 
applicable effluent limitations for new and existing sources (CWA 
sections 301, 302, and 306), water quality standards (section 303), 
toxic pretreatment effluent standards (section 307), and State or 
Tribal regulatory requirements for point source discharges into waters 
of the United States, including those more stringent than federal 
standards. The definition in the final rule has been modified from the 
proposal to provide additional clarity.
    The term ``water quality requirements'' is used throughout section 
401, and the term ``other appropriate requirements of State law'' is 
used in section 401(d), but neither of these terms is defined in the 
CWA.\56\ Because the EPA interprets ``other appropriate requirements of 
state law'' to be a subset of ``water quality requirements,'' the final 
rule uses the term ``water quality requirements'' to define the 
universe of provisions that certifying authorities may consider when 
evaluating a certification request pursuant to CWA sections 401(a) and 
401(d). The EPA's interpretation of these terms and the final 
definition are intended to closely align the scope and application of 
section 401 regulations with the text of the statute.
---------------------------------------------------------------------------

    \56\ In 1971, EPA Administrator Ruckelshaus provided a written 
statement to the Chairman of the House Committee on Public Works 
concerning H.R. 11896. H.R. Rep. No. 92-911, at 147-171 (1972). The 
Administrator described 401(d) as it was drafted at the time as 
requiring certifications to ``assure compliance with Sections 301 
and 302 and `any other applicable water quality requirement in such 
State.' '' Id. at 166. The Administrator noted that ``[t]he scope of 
the catchall phrase is not defined in Section 401, and the question 
arises as to whether certification by the State is to include 
certification with respect to discharges from point sources to meet 
the provisions of Sections 306 or 307.'' Id. The Administrator 
stated that 401(d) could be ``more clearly expressed if the term 
`applicable water quality requirement' was defined. . . .'' and then 
offered an interpretation and a definition of the term. Id. The 
Administrator's recommendation was not adopted in the enacted bill, 
and this rulemaking is the first formal step the EPA has taken to 
clarify the meaning of the terms in section 401(d).
---------------------------------------------------------------------------

    An interpretation of section 401 that most closely aligns with the 
text of the statute would limit ``water quality requirements'' to 
sections 301, 302, 303, 306 and 307 of the CWA and State and Tribal 
laws and regulations that are either counterparts to or that implement 
these enumerated sections of the Act. The EPA considered adopting this 
interpretation in the final rule, but recognizes that, in some cases, 
it may be difficult to determine whether a State or Tribal statute or 
regulation was adopted ``to implement'' sections 301, 302, 303, 306 and 
307 of the CWA. In many cases, State or Tribal statutes may have been 
enacted prior to the 1972 CWA amendments, but updated or modified over 
the decades to implement or incorporate portions of the enumerated CWA 
provisions.
    To avoid placing a potentially burdensome factual inquiry on States 
and Tribes, the final rule definition of ``water quality requirements'' 
is drafted more broadly to include those enumerated provisions of the 
CWA and State and Tribal regulatory requirements that pertain 
specifically to point source discharges into waters of the United 
States. This is consistent with the plain language of the statute 
because, with one exception, each of the enumerated CWA provisions in 
section 401 describes discharge-related limitations. The only exception 
is section 303, which addresses water quality standards, but these are 
primarily used to establish numeric limits in point source discharge 
permits. Further, and as described in section III.A of this notice, 
section 401 applies only to actual or potential discharges into waters 
of the United States. The final definition of ``water quality 
requirements'' therefore closely aligns with the text of the statute, 
while providing an objective test for whether a particular provision is 
within the scope of section 401. The Agency anticipates that this 
approach will increase clarity and efficiency in the certification 
process. Under this final rule, a State or Tribal regulatory 
requirement that applies to point source discharges into waters of the 
United States is a ``water quality requirement'' and is therefore 
within the scope of certification.
    The phrase ``state or tribal regulatory requirements for point 
source discharges into waters of the United States'' in the final 
rule's definition includes those provisions of State or Tribal law that 
are more stringent than federal law, as authorized in CWA section 510. 
33 U.S.C. 1370. The legislative history supports the EPA's 
interpretation in this final rule. See S. Rep. No. 92-414, at 69 (1971) 
(``In addition, the provision makes clear that any water quality 
requirements established under State law, more stringent than those 
requirements established under this Act, also shall through 
certification become conditions on any Federal license or permit.''). 
It is important to note, however, that these more stringent provisions 
may not alter the scope of certification as provided in this final 
rule. For example, nonpoint source discharges and discharges to other 
non-federal waters are not within the scope of certification and are 
not included in the definition of ``water quality requirements.'' 
Accordingly, they are not factors to be considered

[[Page 42254]]

when making decisions on certification requests.
    Some commenters agreed that the proposed definition limiting ``any 
other appropriate requirement of state law'' to ``EPA-approved state or 
tribal Clean Water Act regulatory program provisions'' is the correct 
interpretation of the Act because section 401 cannot apply beyond the 
authority of the CWA. These commenters agreed that the principle 
ejusdem generis and the logic of Justice Thomas's dissent in PUD No. 1 
show that the appropriate interpretation of ``any other appropriate 
requirement of state law'' extends ``only to provisions that, like 
other provisions in the statutory list, impose discharge-related 
restrictions,'' which are the ``regulatory provisions of the CWA.'' 
Other commenters expressed confusion regarding the meaning and scope of 
the phrase ``EPA-approved state or tribal Clean Water Act regulatory 
program provisions'' in the proposed rule and asked for clarification 
on which regulatory programs would be included in that term. Some 
commenters stated that this lack of clarity made the scope of the 
proposed rule ambiguous such that States and Tribes would not be able 
to implement the regulations.
    The EPA has made some enhancements to the final rule definition of 
``water quality requirements'' to provide better clarity and regulatory 
certainty. The final rule does not require these State and Tribal 
provisions to be EPA-approved. In making this change, the Agency 
considered that there may be State or Tribal regulatory provisions that 
address point source discharges into waters of the United States that 
only partially implement certain CWA programs or that were not 
submitted to the EPA for approval. The EPA also considered, as noted by 
some commenters, that States and Tribes may submit to the EPA CWA 
regulatory program provisions, including water quality standards and 
applications for ``treatment as States'' (TAS), and wait months or 
sometimes years for the EPA to act on those submittals. The final rule 
language addresses this concern by broadening the universe of State and 
Tribal laws that may be considered ``water quality requirements'' 
compared to the proposal.
    A few commenters expressed concern that the proposed rule failed to 
recognize that most Tribes do not have EPA-approved water quality 
regulations. These commenters asserted that in areas where the EPA is 
the certifying authority, the Administrator would not be able to 
consider water quality protective ordinances or water quality standards 
adopted by Tribes, leaving no protection for most Tribal waters. The 
EPA appreciates these comments, and under the final rule, State and 
Tribal regulatory provisions for point source discharges into waters of 
the United States are ``water quality requirements'' regardless of 
whether they have been approved by the EPA. Therefore, if a Tribe has 
adopted water quality standards under Tribal law that serve as a basis 
for effluent limitations or other requirements for point source 
discharges into waters of the United States, the certifying authority 
must consider those provisions when evaluating a certification request.
    Some commenters asserted that the proposed rule would limit the 
ability of a Tribe to adopt water quality regulations or to obtain TAS 
for section 401 certifications. Neither the proposal nor the final rule 
affect in any way the ability of a Tribe to adopt CWA water quality 
standards or obtain TAS. The EPA understands there may be unique 
challenges with Tribal implementation of CWA statutory authorities, but 
reiterates that pursuant to section 401(b), the EPA is available and 
obligated to provide technical expertise on any matter related to 
section 401. In addition, the EPA actively and routinely provides 
financial and technical assistance to Tribes for the development of 
aquatic resource protection programs. Such assistance includes Tribal 
capacity building for new or enhanced regulatory programs, as well as 
development of laboratory, field, and quantitative methods, tools, and 
trainings for monitoring and assessing aquatic resources. With this 
final rule, the Agency is reaffirming its responsibilities under 
section 401 to serve as a resource and consultant to Tribes requesting 
technical assistance.
    Some commenters, citing the broad interpretation of ``any other 
appropriate requirement of State law'' in EPA's Interim Handbook, 
stated that the EPA has not provided an adequate explanation or 
rationale for departing from its prior interpretation of the CWA. The 
EPA disagrees with the suggestion that it has not provided sufficient 
or adequate explanation for the interpretation presented in the 
proposed rule. In any event, the final rule is based in part on the 
plain language of section 401, which provides that the enumerated 
sections of the CWA and ``any other appropriate requirement of State 
law'' must be considered in a water quality certification. The CWA does 
not define what is an ``appropriate requirement of State law,'' and the 
EPA reasonably interprets this term to refer to a subset of ``water 
quality requirements,'' a term that is also used throughout section 
401. The final rule, like the proposal, is informed by the principle 
ejusdem generis. Under this principle, where general words follow an 
enumeration of two or more things, they apply only to things of the 
same general kind or class specifically mentioned. See Wash. State 
Dept. of Social and Health Services v. Keffeler, 537 U.S. 371, 383-85 
(2003). Given the breadth of potential interpretations of ``water 
quality requirements'' and ``other appropriate requirement of State 
law'' described throughout this notice, the Agency concludes that the 
most appropriate interpretation is one that remains loyal to the text 
of the statute. Accordingly, the final definition of ``water quality 
requirements'' includes sections 301, 302, 303, 306, and 307 of the CWA 
and State or Tribal statutes and regulations governing point source 
discharges into waters of the United States.
    A few commenters stated that the EPA's reliance on the canon of 
statutory interpretation ejusdem generis is unfounded because, if the 
context of a statute dictates an alternative interpretation, ejusdem 
generis should not apply, citing N. & W. Ry. v. Train Dispatchers, 499 
U.S. 117 (1991). The EPA disagrees with these commenters who assert 
that the context of section 401(d) dictates a different result. The use 
of the word ``appropriate'' in section 401(d) indicates that Congress 
intended to limit the phrase ``requirement of state law'' in some 
meaningful manner. It is reasonable to conclude that Congress intended 
that limitation to be informed by the enumerated provisions of the CWA 
that appear in section 401, as well as other key statutory touchstones 
like the terms ``discharge'' and ``navigable waters,'' i.e., ``waters 
of the United States.'' See Harrison v. PPG Industries, Inc., 446 U.S. 
578, 578-79 (1980) (rejecting application of ejusdem generis where--
unlike the word ``appropriate'' in section 401(d)--the relevant 
statutory phrase ``any other final action'' did not contain limiting 
language that rendered its meaning uncertain and in need of further 
interpretation). The phrase ``any other appropriate requirement of 
State law'' in section 401(d) is not unlimited or expansive, but rather 
it contains limiting language (``appropriate'') that must not be read 
out of the statute. In short, the canon of statutory interpretation of 
ejusdem generis is a tool that the EPA reasonably and properly used to 
inform the interpretation of the ambiguous statutory text in section 
401.
    Many commenters agreed with the analysis in the proposed rule 
preamble

[[Page 42255]]

that section 401 focuses on protecting water quality and is not 
intended to address other environmental impacts such as air emissions, 
transportation effects, climate change, and other examples mentioned in 
the preamble to the proposed rule. These commenters stated that the 
proposed rule's definition of water quality requirements appropriately 
ensures that the scope of certification addresses water quality 
concerns within the scope of the CWA. A few commenters stated that the 
legislative history for the CWA generally supports water quality as the 
appropriate boundary for the scope of water quality certifications, 
citing 116 Cong. Reg. 8,984 (Mar. 24, 1970), and S. Rep. No. 92-414 
(1971). The EPA agrees with these commenters and concludes that the 
final rule appropriately limits water quality certifications issued 
under section 401 to water quality issues.
    Some commenters maintained that the proposed rule's definition of 
water quality requirements would allow a certifying authority only to 
consider numeric water quality criteria. Some commenters requested that 
the definition of water quality requirements be revised to explicitly 
include aquatic use criteria and impacts such as streamflow and water 
quantity. Some commenters expressed concern that the scope of water 
quality requirements under the proposed rule would no longer allow 
States and Tribes to consider water quality standards that go beyond 
the scope of, or are more stringent than, the CWA. Neither the proposed 
definition of ``water quality requirements'' nor the final rule would 
limit States to evaluating only numeric water quality criteria in a 
certification review. While numeric water quality criteria are a 
central element of a water quality certification, the final definition 
allows States and Tribes to evaluate narrative water quality standards 
and other regulatory requirements that apply to point source discharges 
into waters of the United States.
    Some commenters requested that the final rule clarify that 
requiring minimum in-stream flows is beyond the scope of water quality 
requirements and that fish and wildlife impacts are not within the 
proper scope of section 401, because those impacts are more 
appropriately addressed under other federal statutes and regulations. 
The EPA agrees that, in some cases, these elements may be beyond the 
scope of section 401. However, neither the proposed rule nor the final 
rule specify whether minimum flow conditions would be appropriate 
certification conditions. Given the case-specific nature of such an 
analysis, the final rule does not include categorical exclusions 
requested by these commenters.
    Some commenters stated that the proposed rule would violate the 
broad savings clause in section 510, which applies to any pollution 
control or abatement requirement. These commenters asserted that 
nothing in section 510 excludes conditions imposed under section 401. 
These commenters further asserted that numerous courts have held that 
sections 401 and 510 evince Congress' clear intent not to preempt but 
to ``supplement and amplify'' State authority. The EPA interprets 
section 401 as providing an opportunity for States and Tribes to 
evaluate and address water quality concerns during the federal license 
or permit processes, which, in some cases, might otherwise preempt 
State authority. There is nothing in the text of section 401(d) that 
supports the idea that States have unbounded authority--as a result of 
section 510 or otherwise--to impose an unlimited universe of conditions 
on an applicant for a federal license or permit. Any such conditions 
must be--as the statute specifies--based on certain enumerated 
provisions of the CWA and on any other ``appropriate'' requirements of 
State law. As the Agency charged with administering the CWA, EPA is 
authorized to interpret ``appropriate'' in a way that balances the 
scope and focus of section 401 and State prerogative under section 510. 
If Congress intended for section 401 to reserve all State authorities 
over pollution control and abatement, as it did under section 510, 
Congress could have specifically referenced section 510 within section 
401. Congress did not do so, and instead cited to other specific 
provisions of the CWA and referenced other ``appropriate'' requirements 
of State law.
    In fact, the 1972 Senate Bill version of section 401(d) explicitly 
referenced section 510 and provided that a certification could include 
conditions necessary to assure that the applicant would comply with 
``any more stringent water quality requirements under State law as 
provided in section 510 of this Act . . .'' S. 2770, 92nd Cong. (1972). 
This language was not included in the enacted bill, but the Senate Bill 
version demonstrates that Congress considered including a reference to 
section 510 within section 401, but did not do so. This is further 
evidence that Congress did not intend section 401 to operate as a broad 
savings clause for any pollution control or abatement requirement, as 
some commenters assert.
    These commenters also fail to account for the use of the word 
``appropriate'' in section 401(d) as a meaningful limitation on what 
may be considered as part of the scope of certification under section 
401. For the reasons stated above, the Agency concludes that State and 
Tribal regulatory requirements for point source discharges into waters 
of the United States properly allow States to participate in the 
section 401 certification process, consistent with the CWA.
    As discussed throughout this section and as illustrated by public 
comments, the terms ``water quality requirements'' and ``any other 
appropriate requirement of state law'' lend themselves to a range of 
potential interpretations. Informed by the public comments received, 
the EPA considered a number of different interpretations prior to 
finalizing the definition of the term ``water quality requirements.'' 
At one end of the spectrum, the Agency considered whether the text of 
section 401(d) could mean that the only State or Tribal law-based 
limitations allowed in a certification would be ``monitoring'' 
requirements ``necessary to assure'' that the applicant for a federal 
license or permit will ``comply with'' ``any other appropriate 
requirement of State law.'' While this may be a permissible 
interpretation of section 401(d), and it may appear consistent with the 
directive in CWA section 304(h) that the EPA establish test procedures 
for the analysis of pollutants and factors that must be included in a 
certification, the EPA is not adopting this interpretation in the final 
rule. Such an interpretation would significantly limit the universe of 
conditions related to ``appropriate requirements of State law'' to only 
monitoring conditions and would be narrower than the interpretation set 
forth in both the proposed and final rule. This interpretation also 
would not provide any additional clarity as to the scope of State or 
Tribal law that could be the basis for those monitoring conditions.
    At the other end of the spectrum, the EPA considered whether 
section 401(d) certification conditions could be based on any State or 
Tribal law, regardless of whether it is related to water quality. This 
interpretation reflects the current practice of some certifying 
authorities. The Agency rejected this broad and open-ended 
interpretation of section 401(d) as inconsistent with the structure and 
purposes of section 401 as reflected in the text of the provision, 
including Congress's inclusion of the limiting modifier ``appropriate'' 
in the phrase ``any other appropriate requirement of State law.'' By 
including the term ``appropriate,'' Congress placed at least some 
limits on the phrase ``any other

[[Page 42256]]

. . . requirement of State law.'' The EPA concludes that such an open-
ended interpretation would be far more broad than the proposed rule and 
the final rule, would exceed the scope of authority provided under the 
CWA, and would further reduce regulatory certainty.
    The EPA also considered another broader interpretation that would 
authorize certification conditions based on any State or Tribal water 
quality-related provision. Such an interpretation could bring in 
conditions that purport to address non-federal waters or that regulate 
nonpoint source discharges. Some commenters stated that section 401 
provided a broad grant of authority to States and Tribes to protect 
water quality without limitations. These commenters asserted that to 
interpret the statute otherwise would read ``any other appropriate 
requirement of state law'' out of the statute. These commenters also 
cited other cases that suggest that a broad scope of State laws may be 
considered for a water quality certification. The EPA did not adopt 
this broad interpretation in the final rule because the EPA concluded 
that it is not required by the statute and is not the better reading of 
section 401(d). Although the interpretation has some superficial 
appeal, it errs by equating ``appropriate'' with ``any'' and thereby 
fails to provide meaning to the word ``appropriate.'' Under the 
familiar interpretative canon, no portion of a statute may be construed 
as mere surplusage. Such an interpretation would also be inconsistent 
with the regulatory framework of the CWA, which addresses point source 
discharges from waters of the United States.
    Finally, the EPA considered an interpretation that would limit 
water quality requirements to those provisions of State or Tribal law 
that restore or maintain the physical, chemical, and biological 
integrity of the nation's waters, consistent with CWA section 101(a). 
These same principles could also be applied to only waters of the 
United States, or narrowed to only include water quality requirements 
that restore or maintain the chemical integrity of waters. Although 
this may be a permissible interpretation of the statute, the EPA 
concluded that it may not provide sufficient specificity or regulatory 
certainty.
    The EPA considered all of these public comments and the varying 
interpretations described above and is finalizing a definition of 
``water quality requirements'' that strikes a balance among various 
competing considerations while remaining loyal to the text of the CWA. 
The final rule is a reasonable interpretation of the ambiguous 
statutory text, is within the clear scope of the CWA, and will provide 
additional clarity and regulatory certainty for certifying authorities, 
project proponents, and federal licensing and permitting agencies.
c. Scope of Certification Conditions and Denials
    The scope of certification described above is the foundation of the 
final rule and it informs all other provisions of the final rule, 
including all actions taken by a certifying authority. Under this final 
rule, certification conditions and denials must be within the scope of 
certification as provided in section 121.3 of the final rule. In other 
words, a condition must be necessary to assure that the discharge from 
a proposed federally licensed or permitted project will comply with 
water quality requirements, as defined at section 121.1(n) of this 
final rule, and a denial must be due to the inability of a certifying 
authority to determine that the discharge from the proposed project 
will comply with water quality requirements.
    To promote transparency and to help assure that certifying 
authorities understand and consider the appropriate scope of 
information when developing a certification condition or issuing a 
denial, the final rule also requires a certifying authority to include 
specific information to support each condition or denial. These 
requirements help to build a comprehensive administrative record and to 
document the certifying authorities' basis for the condition or denial. 
As discussed in greater detail in section III.G.2.b of this notice, 
this final rule requires that the following information be included in 
a certification to support each condition:
    1. A statement explaining why the condition is necessary to assure 
that the discharge from the proposed project will comply with water 
quality requirements; and
    2. A citation to federal, state, or tribal law that authorizes the 
condition.
    Similarly, as discussed in greater detail in section III.G.2.c of 
this notice, the final rule requires that the following information be 
included in a denial of certification:

    1. The specific water quality requirements with which the 
discharge will not comply;
    2. A statement explaining why the discharge will not comply with 
the identified water quality requirements; and
    3. If the denial is due to insufficient information, the denial 
must describe 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.

    These requirements are intended to increase transparency and ensure 
that any limitation or requirement added to a certification, and any 
denial, is within the scope of certification.
    As discussed in section II.G.1.a of this notice, the EPA is aware 
that some certifying authorities may have previously interpreted the 
scope of section 401 to include non-water quality-related 
considerations. For example, the EPA understands some certifying 
authorities have included conditions in a certification that have 
nothing to do with effluent limitations, monitoring requirements, water 
quality, or even the CWA. Such requirements were perhaps based on other 
non-water quality-related federal statutory or regulatory programs 
(NEPA, ESA), or on concerns about environmental media other than water. 
Or such requirements might have been related to State, Tribal, or local 
laws, policies, or guidance that are unrelated to the regulation of 
point source discharges to waters of the United States. Similarly, the 
EPA is aware of circumstances in which some States have denied 
certifications on grounds that are unrelated to water quality 
requirements and that are beyond the scope of CWA section 401.\57\ The 
EPA does not believe that such actions are authorized by section 401, 
because they go beyond assuring that ``discharges'' from federally 
licensed or permitted activities comply with ``water quality 
requirements.'' See also section II.G.1 of this notice for further 
discussion of the terms ``discharge'' and ``water quality 
requirements.''
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    \57\ See Letter from Thomas Berkman, Deputy Commissioner and 
General Counsel, New York State Department of Environmental 
Conservation, to Georgia Carter, Vice President and General Counsel, 
Millennium Pipeline Company, and John Zimmer, Pipeline/LNG Market 
Director, TRC Environmental Corp. (Aug. 30, 2017) (denying section 
401 certification because ``FERC failed to consider or quantify the 
effects of downstream [greenhouse gas emissions] in its 
environmental review of the Project'').
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    Some commenters provided comment regarding the appropriate scope of 
denials. These commenters asserted that the proposed scope of review 
would limit a certifying authority's ability to deny certification. A 
few commenters asserted that states should be able to deny 
certification if any state requirements would not be met. Other 
commenters argued that the scope of denial should be limited to just 
those CWA provisions enumerated in section 401(a). As discussed in 
section III.D of this notice, the final rule provides a

[[Page 42257]]

certifying authority the ability to deny certification if it is unable 
to certify that the proposed discharge will comply with ``water quality 
requirements'' as defined in this rule. The Agency disagrees with 
commenters who asserted that a certifying authority should be able to 
deny certification if any State or Tribal requirements would not be 
met. As discussed above in section III.E.2.b of this notice, extending 
the scope of review to any State or Tribal law would be inconsistent 
with Congress's inclusion of the limiting modifier ``appropriate'' in 
the phrase ``any other appropriate requirement of State law,'' and the 
Agency is not finalizing the proposed alternative interpretation that 
would limit the scope of denials to the CWA provisions enumerated in 
section 401(a). The Agency's interpretation of the scope of 
certification, including the scope of denials, strikes a balance among 
competing considerations while remaining loyal to the text of the CWA.
    Many commenters specifically addressed the appropriate scope of 
conditions. Some commenters urged the EPA not to use a small number of 
examples of conditions that did not directly relate to protecting water 
quality to justify narrowing the scope of certification conditions. 
These commenters provided additional examples of conditions that 
certifying authorities have included in certifications, such as 
building and maintaining fish passages, compensatory mitigation, 
temporal restrictions on activities to mitigate hazards or protect 
sensitive species, pre-construction monitoring and assessment of 
resources, habitat restoration, tree planting along waterways, spill 
management plans, stormwater management plans, and facilitating public 
access. The EPA appreciates commenters' providing additional examples 
of certification conditions. The EPA agrees that in many instances, 
each of these examples may be beyond the scope of certification as 
articulated in this final rule. However, there may be unique project-
specific facts or circumstances, including the nature of the discharge 
and applicable water quality standards and related designated uses, 
that must inform whether a particular condition is within the scope of 
certification, as defined in this final rule.
    A few commenters stated that narrowing States' and Tribes' ability 
to condition licenses and permits may lead to more certification 
denials. The EPA disagrees with these commenters, as the scope of 
certification in the final rule informs the scope of appropriate 
conditions and the appropriate bases for denial. In other words, if 
this final rule would preclude a State from requiring tree planting as 
a certification condition, the final rule would also preclude a State 
from denying certification based on a lack of trees planted in or 
around the project area.
    Some commenters stated that limiting the proposed definition of 
``water quality requirements'' to exclude State laws that are not EPA-
approved would preclude conditions based on State-required riparian 
buffers, erosion and sedimentation controls, chloride monitoring, 
mitigation, fish and wildlife protection, drinking water protections, 
fish ladders, and adaptive management measures. As discussed above, the 
Agency is finalizing a definition of ``water quality requirements'' 
that removes the condition that State or Tribal law requirements must 
be ``EPA-approved.'' Under the final rule, the definition of ``water 
quality requirements'' includes ``state or tribal regulatory 
requirements for point source discharges into a water of the United 
States,'' and includes State or Tribal provisions that are more 
stringent than federal requirements.
    One commenter suggested that instead of limiting section 401 
certification conditions to water quality-related conditions, the EPA 
should consider having each State define the reserved authorities under 
section 401 that it intends to apply in a certification, as well as the 
types of discharges associated with those State authorities. The EPA 
disagrees with this commenter's suggestion, as it would result in a 
greater patchwork of State regulations, with potentially every State 
establishing a different scope of certification and a different range 
of discharges that may be subject to certification in each State. One 
principal goal of this rulemaking is to provide greater clarity, 
regulatory certainty, and predictability for the water quality 
certification process. Finalizing a rule like the one suggested by this 
commenter would undercut those outcomes significantly.
    The EPA recognizes that, historically, many State and Tribal 
certification actions have reflected an appropriately limited 
interpretation of the purpose and scope of section 401. However, as 
discussed above, the Agency is also aware that some certifications have 
included conditions that may be unrelated to water quality, including 
many of the types noted above, such as requirements for biking and 
hiking trails to be constructed, one-time and recurring payments to 
State agencies for improvements or enhancements that are unrelated to 
the proposed federally licensed or permitted project, and public access 
for fishing and other activities along waters of the United States. 
Using the certification process to yield facility improvements or 
payments from project proponents that are unrelated to water quality 
impacts from the proposed federally licensed or permitted project is 
inconsistent with the authority provided by Congress.
    Some commenters stated that the EPA should clarify in the final 
rule that certification conditions must be directly related to impacts 
to water quality requirements from the project proponent's activity, 
and not water quality concerns caused by other entities. One commenter 
stated that the guiding principle for courts tasked with determining 
the propriety of section 401 certification conditions has been whether 
the condition was designed to directly address water quality effects 
caused by the licensee's or permittee's activity, and courts have 
emphasized that state agencies evaluating requests for water quality 
certifications may not consider the effects of activities other than 
those being licensed. This commenter recommended that the EPA revise 
section 121.5(d) of the proposed rule to state, ``Any condition must 
directly address a water quality effect caused by the particular 
activity for which the applicant is seeking a license or permit.'' The 
EPA agrees with these commenters that certification conditions must be 
directly related to water quality impacts from the proposed project. 
However, the EPA has concluded that the requirements in section 
121.7(d) of the final rule accomplish the commenter's request, and the 
EPA did not modify the final rule to include what EPA believes would be 
a redundant provision. The EPA is also aware of certification 
conditions that purport to require project proponents to address 
pollutants that are not discharged from the construction or operation 
of a federally licensed or permitted project. As discussed in this 
section, certification conditions must be necessary to assure that the 
discharge from a proposed federally licensed or permitted project will 
comply with water quality requirements, because this is the extent of 
authority provided in section 401.
    The Agency proposed a definition for ``condition'' in an attempt to 
clarify that conditions included in a water quality certification must 
be within the scope of certification, as defined in this final rule. 
Some commenters supported the proposed definition of condition and the 
structure of the proposed rule. Other commenters stated that the EPA

[[Page 42258]]

unnecessarily defined ``condition'' to allow for federal review of 
water quality certifications. One commenter stated that the argument 
that Congress intended to allow the EPA to define the term 
``condition'' under section 401 misconstrues the structure of section 
401(d). This commenter stated that under the plain language of section 
401(d), States impose ``limitations'' and ``monitoring requirements'' 
in a certification, and the certification itself then becomes ``a 
condition'' on the federal permit. This commenter further stated that 
there is no ambiguity in the statute, which requires that the entire 
certification is incorporated into the federal license or permit.
    The Agency disagrees that it misinterpreted section 401(d) of the 
statute and further disagrees with the suggestion that there is no 
ambiguity in section 401(d).\58\ The EPA acknowledges that 
interpretations other than what were presented in the proposed rule 
could be permissible under the statute, if adequately supported by a 
reasoned explanation. The EPA considered the specific interpretation 
advanced by this commenter and is not adopting this interpretation in 
the final rule. As a practical matter, courts that have considered 
challenges to certification conditions have routinely focused their 
review on those specific conditions, rather than the entire 
certification itself. See PUD No. 1, 511 U.S. at 713-14; Deschutes 
River All. v. Portland Gen. Elec. Co., 331 F. Supp. 3d 1187, 1192, 
1199-1209 (D. Or. 2018); Airport Communities Coal. v. Graves, 280 F. 
Supp. 2d 1207, 1214-17 (W.D. Wash. 2003). The EPA's final rule is 
consistent with these courts' interpretations. For these reasons and to 
promote clarity and regulatory certainty, the EPA is declining to adopt 
this particular interpretation. However, based on other enhancements in 
the final rule, the Agency has decided not to finalize a definition for 
``condition.'' Together, the ``scope of certification'' and ``water 
quality requirements,'' as well as the rule's language specifying the 
elements required in a certification with conditions, appropriately 
limit what can be properly considered a condition under the final rule, 
such that defining the term is not necessary. Moreover, section 
121.7(a) of the final rule specifically provides that any action to 
grant a certification with conditions must be within the scope of 
certification. The scope of certification extends to the scope of 
conditions that are appropriate for inclusion in a certification--
specifically, that these conditions must be necessary to assure that 
the discharge from a federally licensed or permitted activity will 
comply with water quality requirements, as defined at section 121.1(n) 
of this final rule.
---------------------------------------------------------------------------

    \58\ The legislative history of the 1972 amendments does not 
provide a clear answer on this issue. See H.R. Rep. No. 91-911, at 
124 (1972) (``the effluent limitations and other limitations and any 
monitoring requirements will become a condition on any Federal 
license or permit.'' But see S. Rep. No. 92-414, at 69 (1971) 
(``such a certification becomes an enforceable condition on the 
Federal license or permit.'')
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F. Timeframe for Certification Analysis and Decision

1. What is the Agency finalizing?
    In this final rule, the EPA is reaffirming that CWA section 401 
requires certifying authorities to act on a request for certification 
within a reasonable period of time, which shall not exceed one year. By 
establishing an absolute outer bound of one year following receipt of a 
certification request, Congress signaled that certifying authorities 
have the expertise and ability to evaluate potential water quality 
impacts from even the most complex proposals within a reasonable period 
of time after receipt of a request, and in all cases within one year. 
Under the final rule, federal agencies determine the reasonable period 
of time for a certifying authority to act on a certification request, 
and the final rule establishes procedures for setting, communicating, 
and (where appropriate) extending the reasonable period of time. The 
EPA is also reaffirming that section 401 does not include a tolling 
provision, and the period of time to act on a certification request 
does not pause or stop once the certification request has been 
received. The final rule provides additional clarity on what is a 
``reasonable period'' and how the period of time is established.
2. Summary of Final Rule Rationale and Public Comment
a. Reasonable Period of Time
    The EPA is finalizing the proposed rule's provision that federal 
licensing and permitting agencies determine the reasonable period of 
time, either categorically or on a case-by-case basis. Some federal 
licensing and permitting agencies have appropriately exercised their 
authority to set the reasonable period of time through promulgated 
regulations, including EPA, FERC and the Corps. EPA's regulations at 40 
CFR 124.53(c)(3) provide that ``the State will be deemed to have waived 
its right to certify unless that right is exercised within a specified 
reasonable time not to exceed 60 days from the date the draft permit is 
mailed to the certifying State agency. . . .'' FERC's regulations at 18 
CFR 5.23(b)(2) provide that ``[a] certifying agency is deemed to have 
waived the certification requirements of section 401(a)(1) of the Clean 
Water Act if the certifying agency has not denied or granted 
certification by one year after the date the certifying agency received 
a written request for certification.'' The Corps' regulations at 33 CFR 
325.2(b)(1)(ii) state that ``[a] waiver may be explicit, or will be 
deemed to occur if the certifying agency fails or refuses to act on a 
request for certification within sixty days after receipt of such a 
request unless the district engineer determines a shorter or longer 
period is reasonable for the state to act.'' The Executive Order 
directed all federal agencies with licenses or permits that may trigger 
section 401 certification to update their existing regulations to 
promote consistency across the federal government upon completion of 
this rulemaking to modernize the EPA's certification regulations.
    Public commenters provided a variety of perspectives about which 
entity should set the reasonable period of time. Some commenters agreed 
with the proposed rule that federal agencies are the appropriate entity 
to determine the reasonable period of time, subject to the statutory 
one-year limit. One commenter said the federal agencies should set the 
time period to maximize efficiency, increase timeliness of decision-
making, and reduce uncertainty. Some commenters asserted that the 
reasonable period of time should be set by the certifying authority, 
because they believe that federal agencies lack expertise on State 
environmental and administrative requirements and therefore may set a 
reasonable period of time that is incompatible with those requirements 
or too short for complex projects. Other commenters asserted that 
federal agencies do not have authority under section 401 to determine 
the reasonable period of time. One commenter asserted that while 
federal agencies have the authority to adopt regulations setting a 
``reasonable time'' for decisions, citing Millennium Pipeline Co. v. 
Seggos, 860 F. 3d 696, 700 (D.C. Cir. 2017), the CWA did not give 
federal agencies unfettered discretion to set deadlines that prevent 
States and Tribes from exercising their substantive authority under 
section 401, citing City of Tacoma v. FERC, 460 F.3d 53, 67 (D.C. Cir. 
2006). One commenter noted that it is a conflict of interest for the 
federal agency to determine the

[[Page 42259]]

``reasonable period of time'' where that federal agency is both the 
project proponent and the agency issuing the license or permit. Other 
commenters believed that the EPA should determine the reasonable period 
of time in coordination with the certifying authority. Finally, some 
commenters stated that a one-year reasonable period of time should be 
provided without any additional federal agency discretion, which they 
asserted would increase regulatory certainty and ensure sufficient time 
to meet Tribal consultation obligations.
    The EPA has considered these comments and concluded that it is 
reasonable and appropriate for federal agencies to set the reasonable 
period of time. The Agency disagrees that certifying authorities should 
set the reasonable period of time and disagrees that the EPA should set 
the reasonable period of time for all certification requests. The 
Agency also disagrees that certifying authorities should always have an 
entire year to act on a certification request, as a year may not be 
``reasonable'' in all cases, and section 401 does not guarantee one 
year but rather states the action shall be taken within a reasonable 
period of time which ``shall not exceed one year.'' 33 U.S.C. 
1341(a)(1). The statutory language of section 401 provides that a 
certification shall be waived if the certifying authority fails or 
refuses to act within the reasonable period of time, but the statute is 
silent on who should set the reasonable period of time. Id. The Agency 
is authorized to reasonably interpret the statute (see Chevron, 467 
U.S. at 843-44) and concludes that federal licensing and permitting 
agencies should continue to fill this role as they have done for the 
past several decades. This interpretation is consistent with judicial 
and administrative precedent \59\ and with federal regulations that 
were promulgated decades ago through public notice and comment 
rulemaking (see, e.g., 33 CFR 325.1(b)(ii) and 18 CFR 5.23(b)(1)). From 
a practical standpoint, federal licensing and permitting agencies have 
decades of experience in processing applications in accordance with 
their license and permit programs, and it is reasonable for the EPA to 
conclude that federal agencies would have the necessary knowledge and 
expertise to establish a reasonable period of time that is appropriate 
considering the applicable federal procedures.
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    \59\ Hoopa Valley Tribe v. FERC, 913 F.3d 1099, 1104 (D.C. Cir. 
2019) (``Thus, while a full year is the absolute maximum, it does 
not preclude a finding of waiver prior to the passage of a full 
year. Indeed, the [EPA]--the agency charged with administering the 
CWA--generally finds a state's waiver after only six months. See 40 
CFR 121.16.''); Constitution Pipeline Company, LLC, 164 FERC P 61029 
(F.E.R.C.), 2018 WL 3498274 (2018) (``[T]o the extent that Congress 
left it to federal licensing and permitting agencies, here the 
Commission, to determine the reasonable period of time for action by 
a state certifying agency, bounded on the outside at one year, we 
have concluded that a period up to one year is reasonable.''). See 
the Economic Analysis for further discussion on the litigation 
posture of the Constitution Pipeline Company, LLC case.
---------------------------------------------------------------------------

    The Agency disagrees with the commenter's suggestion that there is 
a conflict of interest when the federal agency setting the reasonable 
period of time is also the project proponent. This final rule requires 
federal agencies to comply with the same requirements, including 
requirements concerning the reasonable period of time, as other project 
proponents when they require a federal permit that triggers the 
certification process.
    In setting the reasonable period of time for a certification--
either on a project-by-project basis or categorically--this final rule 
requires federal agencies to consider:
    1. The complexity of the proposed project;
    2. The nature of any potential discharge; and
    3. The potential need for additional study or evaluation of water 
quality effects from the discharge.
    With one exception discussed further below, the EPA is finalizing 
these factors as proposed. These factors maintain flexibility for 
federal agencies to consider project-specific or categorical 
information that should be readily available. If certifying authorities 
believe more time is necessary than what is established by the federal 
agency, they may request an extension to the reasonable period of time 
as described below.
    A federal agency may decide that it is more efficient to establish 
the reasonable period of time based on common attributes of a category 
of licenses, permits, or potential discharges--rather than on a case-
by-case basis. This type of categorical approach may be set out through 
rulemaking or other procedures in accordance with law. Establishing 
categorical reasonable periods of time may be more efficient, conserve 
resources, and increase regulatory transparency.
    Some commenters supported the proposed three factors for 
determining the reasonable period of time. Other commenters recommended 
that a variety of additional factors be added, including but not 
limited to State law requirements for public participation and 
procedure; State agency workload and resource constraints; substantive 
State law requirements for environmental review, type of permit, or 
timing of season-dependent field studies; time to review a 
certification request and any subsequent supplemental information; time 
for all stakeholders to provide input on a certification request; time 
for project proponents to provide additional information; other federal 
program requirements; and the extent of potential impact from a 
discharge. Several commenters noted that under the process set forth in 
the proposed rule, the federal agency could be required to set the 
reasonable period of time based on the three factors, but without 
receiving the actual certification request.
    After considering these public comments, the EPA is finalizing 
three factors that federal agencies must consider when setting the 
reasonable period of time. In response to comments, the second factor 
has been modified to require the federal agency to consider the nature 
of any potential discharge. This modification clarifies that, in 
establishing the reasonable period of time, federal agencies should 
consider not only the potential for a discharge, but also the nature of 
any potential discharge, including (as appropriate) the potential 
volume, extent, or type of discharge associated with a particular 
project or particular category of license or permit. Consistent with 
the proposal, these factors may be used to establish a reasonable 
period of time on a project-by-project basis or categorically.
    Many of the factors that commenters recommended would be subsumed 
by one of the factors that the EPA is finalizing, such as project 
complexity. Many of the concerns that commenters raised about the 
proposal--for example, that the reasonable period of time does not 
account for State public notice procedures--would also be a concern 
under the status quo 1971 certification regulations. However, over the 
past few decades, certifying authorities and federal agencies have 
formulated joint applications, memoranda of agreement, and other 
mechanisms to ensure that public participation requirements are met 
within the reasonable period of time. The EPA expects certifying 
authorities and federal agencies to continue these cooperative 
approaches to facilitate implementation of the final rule.
    The EPA received a variety of comments regarding a potential 
default reasonable period of time of six months, including conflicting 
views on whether

[[Page 42260]]

six months is too long or too short, and whether a default reasonable 
period of time would increase or decrease clarity and regulatory 
certainty. Some commenters asserted that a default reasonable period of 
time of six months would be too short in cases in which certifying 
authorities have not received all necessary information from project 
proponents, or for project proponents requiring FERC licenses. Another 
commenter stated that without a default period of time, the rule would 
introduce regulatory uncertainty and result in inefficiencies and 
delays. The Agency has considered these comments and is finalizing the 
rule as proposed with no default or minimum reasonable period of time. 
The final rule thus provides federal licensing and permitting agencies 
the maximum flexibility to develop appropriate procedures for their 
permitting programs as they update their certification regulations in 
accordance with the Executive Order.
    The final rule also clarifies the process by which federal agencies 
and certifying authorities communicate regarding the reasonable period 
of time. A clear understanding of the reasonable period of time will 
prevent certifying authorities from inadvertently waiving their 
opportunity to certify a request and will provide regulatory certainty 
to the project proponent. As explained in section III.C of this notice, 
the Agency has modified the proposed rule to respond to commenter 
concerns and is finalizing a requirement that the project proponent 
provide the certification request to the federal agency concurrently 
when it submits the certification request to the certifying authority. 
Under the final rule and consistent with the proposal, within 15 days 
of receiving the certification request from the project proponent, the 
federal agency must provide, in writing, the following information to 
the certifying authority: The date of receipt, the applicable 
reasonable period of time to act on the certification request, and the 
date upon which waiver will occur if the certifying authority fails or 
refuses to act. This provision is substantively identical to the one 
proposed, with minor modifications to increase clarity.
    Public commenters expressed implementation concerns regarding the 
process for federal agencies to communicate the reasonable period of 
time to the certifying authority. One commenter believed that the 15-
day turnaround time may not be practical, and a few commenters 
suggested that there is no accountability for federal agencies that 
fail to provide the required information within 15 days. A few 
commenters recommended adding a procedure for adjudicating 
circumstances where the certifying authority disagrees with the 
reasonable period of time set by the federal agency. One commenter 
noted there is no requirement that the federal agency explain the 
chosen time period, making it more difficult to challenge the federal 
agency's decision or to petition for more time. One commenter said that 
federal agencies should be required to communicate the reasonable 
period of time even when agencies have promulgated time periods 
categorically by project type in their section 401 implementing 
regulations.
    The EPA has considered these comments and is finalizing as proposed 
the process for federal agencies to communicate the reasonable period 
of time. The EPA understands that this process may create additional 
administrative burdens on federal agencies, given the number of section 
401 certification requests that are submitted each year. However, the 
Agency expects that the benefit of clarity and transparency that this 
additional process will provide for all parties involved in a section 
401 certification process will outweigh any additional burden on 
federal agencies. The EPA also expects the federal agencies will 
quickly routinize this process by developing and using forms, 
electronic notifications, or other tools to minimize the potential 
administrative burden associated with providing written notice of the 
reasonable period of time. The EPA does not anticipate that federal 
agencies will fail to set, or fail to notify certifying authorities of, 
the reasonable period of time under this final rule. The EPA expects 
federal agencies to communicate and act in good faith and in accordance 
with this final rule regarding the establishment of a reasonable period 
of time. Consistent with the proposal, the final rule authorizes 
federal agencies to establish categorical reasonable periods of time 
for types of licenses or permits, thereby increasing efficiency and 
transparency. To provide additional certainty to certifying authorities 
and project proponents, the EPA recommends that federal agencies 
promulgate in their updated certification regulations a minimum 
reasonable period of time that may be extended on a case-by-case basis, 
so long as it does not exceed one year from receipt of the 
certification request. To the extent that federal agencies are 
considering establishing additional procedures for communicating the 
reasonable period of time to certifying authorities (e.g., directing 
all project proponents to a public website to view categorically-
established reasonable periods of time in federal agency regulations), 
the EPA supports the development of such procedures so long as they 
comply with the requirements in this rule. The EPA disagrees with the 
suggestion that a separate appeal process is necessary for certifying 
authorities to adjudicate the federal agency's reasonable period of 
time, as this final rule provides a process for the certifying 
authority to request an extension to the established reasonable period 
of time and describes clear factors for federal agencies to consider 
when setting the reasonable period of time in the first instance.
    The EPA is clarifying that section 401 does not prohibit a federal 
agency from extending an established reasonable period of time, 
provided that the extended time period is reasonable and does not 
exceed one year from receipt. Some commenters stated that it would 
increase regulatory uncertainty for project proponents if the 
reasonable period of time could be modified. However, most commenters 
on this issue agreed that the rule should allow the flexibility to 
modify timeframes, and many of these commenters agreed that the rule 
should mirror the statute and maintain the maximum timeframe of one 
year. A few commenters suggested that the Agency clarify the process 
for modifying the time period, for instance by requiring specific 
information to be included in an extension request, or by providing 
federal agencies with a deadline to respond to extension requests. 
Another commenter said the rule should provide a dispute resolution 
process in the event the federal agency denies the State's request for 
an extension. A few commenters stated that federal agencies should be 
prohibited from shortening the reasonable period of time, and other 
commenters asserted that federal agencies, in the spirit of cooperative 
federalism, should consult with certifying authorities about when 
shorter timelines may be appropriate.
    The EPA does not expect reasonable periods of time to be extended 
frequently, but the final rule is intended to provide federal agencies 
with additional flexibility to account for unique circumstances that 
may reasonably require a longer period of time than was originally 
established. For such cases, the EPA is finalizing as proposed the 
process by which the extended time period should be communicated in 
writing to the certifying authority and the project proponent to ensure 
that all parties are aware of the change. This provision is 
substantively identical to the proposed provision, with minor 
modifications to

[[Page 42261]]

increase clarity. The EPA finds it unnecessary to include additional 
timelines and procedures in the regulatory text because, as many 
commenters on the proposed rule pointed out, many certifying 
authorities and federal agencies already have established procedures in 
place through cooperative agreements or memoranda of agreement. The 
Agency intends to maintain flexibility in the final rule for federal 
agencies and certifying authorities to coordinate in this manner and to 
routinize these processes to increase efficiencies. Under the final 
rule, the reasonable period of time could be extended, as there may be 
project-specific cases when this is appropriate, so long as the period 
of time remains ``reasonable.'' Consistent with the proposal, the final 
rule does not authorize a reasonable period of time to be shortened 
once it is established. The Agency has made edits in final rule section 
121.6 to clarify that the reasonable period of time can be extended, 
but not shortened, once it is established. This change provides 
flexibility in circumstances where unique or complex issues may arise, 
but maintains certainty for the certifying authority that the 
reasonable period of time, once established, cannot be made shorter.
    The EPA is reaffirming in this final rule that the federal agency 
also determines whether waiver has occurred. Some commenters asserted 
that federal agencies do not have authority to determine that waiver 
has occurred. The EPA has considered these comments and disagrees with 
them. Relevant court decisions and the EPA's 1971 certification 
regulations recognized the role of the federal agency to determine 
whether a waiver has occurred. See Millennium Pipeline Company, L.L.C., 
860 F.3d at 700-01 (acknowledging that a project proponent can ask the 
federal agency to determine whether a waiver has occurred). Consistent 
with the proposal, this final rule clarifies the procedures for a 
federal agency to notify a certifying authority and project proponent 
that a waiver has occurred. As discussed in section III.G.2.d of this 
notice below and pursuant to section 121.9 of the final rule, if the 
certifying authority fails or refuses to act before the date specified 
by the federal agency, the federal agency is required to communicate in 
writing to the certifying authority and the project proponent that 
waiver has occurred.
b. Tolling
    Section 401 does not include a tolling provision. Consistent with 
the proposal, the EPA concludes in this final rule that the period of 
time to act on a certification request does not pause or stop for any 
reason once the certification request has been received. One recent 
court decision held that withdrawing and resubmitting the same 
certification request for the purpose of circumventing the one-year 
statutory deadline does not restart the reasonable period of time. 
Hoopa Valley Tribe v. FERC, 913 F.3d 1099 (D.C. Cir. 2019) (Hoopa 
Valley). The EPA agrees with the Hoopa Valley court that ``Section 
401's text is clear'' that one year is the absolute maximum time 
permitted for a certification, and that the statute ``does not preclude 
a finding of waiver prior to the passage of a full year.'' Id. at 1103-
04. The court of appeals noted that ``[b]y shelving water quality 
certifications, the states usurp FERC's control over whether and when a 
federal license will issue. Thus, if allowed, the withdrawal-and-
resubmittal scheme could be used to indefinitely delay federal 
licensing proceedings and undermine FERC's jurisdiction to regulate 
such matters.'' Id. at 1104. The court further observed that the 
legislative history supports its interpretation of the statute's plain 
language, because ``Congress intended Section 401 to curb a state's 
`dalliance or unreasonable delay.''' Id. at 1104-05 (emphasis in 
original).
    The Hoopa Valley case raised another important issue: Perpetual 
delay of relicensing efforts (in that case for more than a decade) 
delays the implementation and enforcement of water quality requirements 
that have been updated and made more stringent in the years or decades 
since the last relicensing process. See id. at 1101.\60\ This concern 
was also raised in stakeholder recommendations received during pre-
proposal outreach. One stakeholder specifically cited the delays in the 
Hoopa Valley case as a ``concrete example of how the Sec.  401 
certification process was being manipulated by a state certification 
agency to delay implementation of effective water quality controls and 
enhancement measures'' and that ``allowing the Sec.  401 certification 
process to be used to achieve further delays in the re-licensing 
process is in turn an abuse of the certification process.'' Letter from 
National Tribal Water Council to David P. Ross, Assistant Administrator 
of the Office of Water, EPA (Mar. 1, 2019).
---------------------------------------------------------------------------

    \60\ This is a concern shared by the EPA. The Agency has taken 
steps to promote its own compliance with CWA deadlines, including 
acting on State and Tribal water quality standard submittals, 
because prior delays have created a significant backlog of state 
submittals awaiting an Agency action. Memorandum from David P. Ross, 
Assistant Administrator of the Office of Water, to Regional 
Administrators (June 3, 2019). These delays and backlogs prevent 
States and Tribes from timely implementing and enforcing updated 
programs and standards that could otherwise be improving water 
quality.
---------------------------------------------------------------------------

    Given the Hoopa Valley court's plain language analysis of the 
statute and the potential water quality impacts from allowing 
certification decisions to be delayed, and the Agency's agreement with 
that analysis, section 121.6(e) of the final rule provides:

    The certifying authority is not authorized to request the 
project proponent to withdraw a certification request and is not 
authorized to take any action to extend the reasonable period of 
time other than specified in section 121.6(d).

    This clear statement reflects the plain language of section 401 
and, as described above, is supported by legislative history. The 
Agency expects this clarification to reduce delays and to help ensure 
that certification requests are processed within the reasonable period 
of time established by the federal agency, and at most, within one year 
from receipt of the request.
    Some commenters agreed that section 401 establishes an outer bound 
of one year for the reasonable period of time. However, other 
commenters argued that the rule should allow flexibility on the 
timeline beyond one year. Many of these commenters argued States should 
not be limited to one year if they have received inadequate information 
and if projects are complex. One commenter asserted that section 401 
allows for a State to ``act on'' a request within one year without 
reaching a final decision in that one year, and the commenter asserted 
that this interpretation provides a legal basis to allow extensions 
exceeding one year.
    Some commenters supported the proposed provision to the effect that 
the certifying authority is not authorized to request the project 
proponent to withdraw a request or take other action to modify or 
restart the time period. Most of these commenters stated that the 
proposed rule makes clear the allowable time may not exceed the maximum 
of one year, and some of these commenters agreed that no tolling should 
be allowed. Some of these commenters cited the Hoopa Valley case, and 
one commenter cited the CWA legislative history. However, some 
commenters disagreed with the suggestion that certifying authorities 
should be prohibited from coordinating with project proponents to 
modify or restart the reasonable period of time, as they asserted this 
would be contrary to well-established practice. Some commenters stated 
that a reasonable period of time longer than one year may

[[Page 42262]]

be warranted for complete information to be submitted and for 
accommodating adequate State review and certification of projects. Most 
of these commenters asserted that withdrawal and resubmittal to toll 
the timeline is the best way to manage unforeseen issues or information 
gaps. A few of these commenters stated that the words ``for the purpose 
of'' in proposed rule section 121.4(f) (``[t]he certifying authority is 
not authorized to request the project proponent to withdraw a 
certification request or to take any other action for the purpose of 
modifying or restarting the established reasonable period of time'' 
(emphasis added)) creates a subjective element depending on the 
certifying authority's intent, and would create ambiguity in the rule 
if finalized as proposed.
    The Agency understands that in cases where the certifying authority 
and project proponent are working collaboratively and in good faith, it 
may be desirable to allow the certification process to extend beyond 
the reasonable period of time and beyond the one-year statutory 
deadline. However, the final rule reflects the statutory language that 
the reasonable period of time may not exceed one year, 33 U.S.C. 
1341(a)(1), and the Hoopa Valley holding that certifying authorities 
and project proponents lack discretion under the CWA to engage in a 
coordinated effort to extend the reasonable period of time. 
Additionally, the Agency disagrees with the commenter's assertion that 
the term ``act on'' provides a legal basis to extend the reasonable 
period of time beyond one year. As discussed in section III.D of this 
notice, a certifying authority may take one of four actions on a 
certification request: Grant certification, grant certification with 
conditions, deny certification, or expressly waive certification. If a 
certifying authority fails or refuses to take one of these actions 
within the reasonable period of time, the CWA provides that the 
certifying authority will be deemed to have waived the certification 
requirement. 33 U.S.C. 1341(a)(1). The Agency agrees with public 
commenters that it would increase clarity to remove the words ``for the 
purpose of'' in proposed rule section 121.4(f), and the final rule has 
been modified accordingly. The Agency has also clarified in final rule 
section 121.6(e) that the certifying authority may take action to 
extend the reasonable period of time only in accordance with section 
121.6(d). Because the final rule does not contemplate that the 
reasonable period of time can be tolled or ``restarted,'' as described 
below in this section, final regulatory text section 121.6(e) was also 
edited from the proposal so as to increase clarity and to remove the 
term ``restarting.''
    Many commenters asked for clarification on a project proponent's 
ability to withdraw and resubmit a request, noting that project 
proponents often voluntarily withdraw and resubmit applications. Some 
commenters requested that the Agency clarify what action a certifying 
authority should take when a project proponent withdraws a request. In 
response, the Agency notes that nothing in the final rule precludes 
project proponents from voluntarily withdrawing requests of their own 
accord. However, to prevent scenarios like the Hoopa Valley case, and 
to address the EPA's policy concern about section 401 delays, the 
Agency expects that project proponents will rarely voluntarily withdraw 
requests for certification. The EPA expects that such withdrawals will 
take place only if the project plans have been modified such that a new 
certification request is required, or if the project is no longer 
planned. If a project proponent withdraws a certification request 
because the project is no longer being planned or if the project 
materially changes from what was originally proposed, as described 
above, the certifying authority no longer has an obligation to act on 
that request within the reasonable period of time. In all cases, 
project proponent withdrawals would not result in tolling or pausing 
the clock, but rather any resubmitted request would be subject to the 
pre-filing meeting request requirement. After receipt by the certifying 
authority, the new request would initiate a new reasonable period of 
time as determined by the federal agency.
    Some commenters supported stopping the clock when project 
proponents are not responsive to requests for additional information, 
or do not provide adequate information to the certifying authority. 
Some commenters requested clarification on whether withdrawn requests 
that are resubmitted would restart a paused clock, or completely 
restart the reasonable period of time. Commenters also asked for 
clarification on whether the contents of the request, i.e., whether it 
is substantially the same or a different request, would affect the 
restarting of the clock.
    The Agency is reaffirming in this final rule that the clock does 
not toll for any reason. The Agency disagrees that the clock should 
toll while project proponents gather additional information or for any 
other reason, as there is no statutory basis for tolling. As described 
above, the reasonable period of time begins when a certifying authority 
receives a certification request as defined in the final rule, and it 
ends when the certifying authority takes action to grant, grant with 
conditions, deny, or waive. The Agency is clarifying that the 
reasonable period of time does not continue to run after a 
certification decision is issued regardless of whether there is time 
remaining in the ``reasonable period of time.'' As explained in section 
III.L of this notice, a certifying authority cannot modify the 
certification after issuing a decision to the federal agency.
    The EPA recognizes that there may be project-specific situations 
when the reasonable period of time may be extended (not to exceed one 
year) to account for project complexities or the need to gather 
additional information. Procedures for extending the reasonable period 
of time are explained above and included in the final rule. As 
discussed above, the EPA expects voluntary withdrawals of certification 
requests to occur only when the project has materially changed, as 
described above, or is no longer planned. In such a case, a new request 
would initiate a new reasonable period of time and would not 
``restart'' the clock from a prior withdrawn request for certification. 
The EPA would not expect such a new request to be identical to a 
previously withdrawn request for certification.
    Many commenters noted that given the proposed rule's shortened 
timeframes, limitations on States and Tribes collecting additional 
information, and provisions allowing the reasonable period of time to 
begin prior to ``an application being complete,'' States may decide to 
deny certification rather than risking the possibility that a federal 
agency would determine that the State waived certification. These 
commenters noted that the process of successive State denials of 
certification and the resulting litigation could result in delaying 
projects and defeating the intent of the proposed rule to promote 
efficiency and certainty.
    The Agency disagrees with these commenters. Neither the proposal 
nor the final rule shortened the timeframe for certification. The 
statute requires action on a certification request within a reasonable 
period of time not to exceed one year. The proposed rule and this final 
rule provide exactly the same timeframe as the statute provides. To the 
extent commenters view the clarifications in the rule that the statute 
does not authorize tolling or a ``withdrawal and resubmit'' scheme as 
``shortening the timeframe,'' the Agency disagrees because these 
mechanisms that have previously been used to

[[Page 42263]]

extend the reasonable period of time are not authorized by the statute. 
Similarly, neither the proposal nor this final rule limits the ability 
of a certifying authority to collect additional information from a 
project proponent. The final rule provides an objective list of 
information that a project proponent must provide to a certifying 
authority to start the reasonable period of time. As described above, 
this is intended to provide transparency and predictability so all 
parties understand what information is necessary to start the 
reasonable period of time. The Agency encourages the parties to engage 
throughout the certification process to help ensure the certifying 
authority has the information needed to act on the certification 
request.
    Additionally, the final rule includes a number of provisions that 
should reduce the need for certifying authorities to deny certification 
based on insufficient information. Section III.B of this notice 
describes a mandatory pre-filing meeting request, which will allow 
project proponents and certifying authorities to begin early 
conversations about proposed projects prior to the start of the 
reasonable period of time. Additionally, section III.C of this notice 
discusses factors that a project proponent should consider in 
determining when to submit a certification request, as the timing of 
request submission affects the information that may be available for 
certifying authorities to make timely decisions. Section III.C 
identifies opportunities for federal licensing and permitting agencies 
to establish by rule an appropriate point in the federal licensing or 
permitting process when a project proponent should request 
certification. Finally, this final rule establishes certain criteria 
that the EPA as a certifying authority must follow when making 
additional information requests (e.g., only requesting information that 
is related to the discharge; only requesting information that can be 
collected within the reasonable period of time). The Agency encourages 
all certifying authorities to consider whether similar criteria would 
help clarify expectations when certifying authorities seek additional 
information during the certification process.

G. Contents and Effects of Certification

1. What is the Agency finalizing?
    Under the final rule, any action by the certifying authority to 
grant, grant with conditions, or deny a certification request must be 
within the scope of certification, must be completed within the 
reasonable period of time, and must otherwise be in accordance with 
section 401 of the CWA. Alternatively, a certifying authority may waive 
the certification requirement, whether expressly or by failing to act. 
The Agency is finalizing the requirement that any action on a 
certification request must be in writing and must clearly state whether 
the certifying authority has chosen to grant, grant with conditions, or 
deny certification. This final rule also requires that any express 
waiver of the certification requirement by the certifying authority be 
in writing.
    Under the final rule, a certification must include certain 
supporting information for each condition, including, at a minimum, 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 the federal, State, or Tribal law that 
authorizes the condition. The final rule also includes slightly 
different information requirements to support conditions in a 
certification for issuance of a general license or permit. These 
requirements are described in section III.M below. The EPA had proposed 
also to require a statement of whether and to what extent a less 
stringent condition could satisfy applicable water quality 
requirements. The EPA is not including that provision in the final 
rule.
    In circumstances where certification is denied, the EPA is 
finalizing the requirement that the written notification of denial 
state the reasons for denial, 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 if the denial is due to insufficient 
information, the denial must describe 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. The Agency has made minor editorial changes to these 
provisions in the final rule to increase clarity, but the final rule 
provisions retain the same meaning as the proposed rule provisions. The 
final rule also includes slightly different information requirements to 
support a denial of a certification for issuance of a general license 
or permit. These requirements are described in section III.M below.
    Under the final rule, if a certification or denial does not include 
the information requirements described further below, the certification 
or the denial will be considered waived by the federal licensing or 
permitting agency. Likewise, if a certification condition is not 
supported by the required information, the condition will be considered 
waived under the final rule. Under the final rule, a waived condition 
does not result in waiver of the entire certification.
    Additionally, if a certifying authority fails to follow the 
procedural requirements of section 401, such as the public notice 
provisions, or fails to complete its review within the reasonable 
period of time, the certification will be deemed waived.
2. Summary of Final Rule Rationale and Public Comments
    The CWA does not define the term ``certification'' or offer a 
definitive list of its contents or elements. Section 304(h) of the CWA 
requires the EPA to promulgate factors which must be provided in any 
section 401 certification, and under section 501(a) the EPA may 
reasonably interpret the statute to add content to those terms. See 33 
U.S.C. 1251(d); 33 U.S.C. 1361(a); Chevron, 467 U.S. at 843-44. The 
EPA's 1971 certification regulations included certification 
requirements. In this final rule, EPA is updating those requirements 
for each type of certification action and is more fully addressing the 
effects of those actions.
a. Grant
    Granting a section 401 certification demonstrates that the 
certifying authority has concluded that the potential discharge into 
waters of the United States from the proposed activity will be 
consistent with water quality requirements. Granting certification 
allows the federal agency to proceed with issuing the license or 
permit. Consistent with the proposal, the final rule requires all 
certification grants, with or without conditions, to be in writing and 
to include a written statement that the discharge from the proposed 
federally licensed or permitted project will comply with water quality 
requirements, as defined at section 121.1(n) of the final rule. The 
Agency has concluded that this is a straightforward requirement and one 
that promotes transparency for the public.
b. Grant With Conditions
    If the certifying authority determines that the potential discharge 
from a proposed activity would be consistent with water quality 
requirements only if certain conditions are met, the authority may 
include such conditions in its certification. The EPA proposed that 
three elements be included in a certification to support each 
condition.

[[Page 42264]]

The Agency is finalizing two of those elements.
    Some commenters supported the proposed requirement for certifying 
authorities to cite applicable State or Tribal law and to provide an 
explanation of the necessity for each condition. Some commenters agreed 
that these requirements would provide transparency, and assist the 
federal license or permitting agency with implementation and 
enforcement. Other commenters asserted that these requirements would be 
overly burdensome for certifying authorities. Some commenters asserted 
that certifying authorities already generally cite the applicable State 
laws and regulations on which they base their conditions, and other 
commenters said that these requirements would create new obligations 
for certifying authorities. Other commenters confirmed that the value 
of including this information in every certification, in terms of 
transparency and regulatory certainty, will far outweigh the minimal 
additional administrative burden of including this information in a 
certification. The EPA agrees that requiring an explanation for the 
necessity of the condition and a citation to the underlying State, 
Tribal, or federal laws, as appropriate, will promote transparency and 
consistency and is finalizing these requirements. The EPA intends this 
provision to require citation to the specific State or Tribal statute 
or regulation or the specific CWA provision, e.g., CWA section 
301(b)(1)(C), that authorizes the condition, and that general citations 
to CWA section 401 or other general authorization or policy provisions 
in federal, State, or Tribal law would be insufficient to satisfy the 
proposed requirement.
    Some commenters also supported the proposed requirement for 
certifying authorities to identify whether a less stringent condition 
could satisfy applicable water quality requirements. However, most 
commenters asserted that this requirement would be burdensome for 
certifying authorities, suggesting that States and Tribes would need to 
conduct two detailed analyses for the certification: One to establish 
appropriate conditions, and another to evaluate whether a less 
stringent condition would be sufficient. A commenter suggested that 
proposed section 121.5(d)(1) may conflict with proposed section 
121.5(d)(3). This commenter recommended replacing section 121.5(d)(3) 
with a requirement that the certifying authority include only the least 
stringent conditions necessary to satisfy applicable water quality 
requirements. The EPA has considered these comments. Under the final 
rule, certifying authorities will not have to identify whether and to 
what extent a less stringent condition could satisfy applicable water 
quality requirements. As described in the preamble for the proposed 
rule, this provision is included in the EPA's existing certification 
regulations for the NPDES permit program (see 40 CFR 124.53(e)(3)), but 
the EPA agrees with the commenters that asserted that it may be 
difficult to provide an explanation as to why a condition is necessary 
and to also identify a less stringent condition that could satisfy 
water quality requirements.
    The EPA disagrees with the suggestion that the information 
requirements for conditions in section 121.5(d)(1) and (2) of the final 
rule would be burdensome for certifying authorities. Certifying 
authorities should already be generating this type of information to 
build complete and legally defensible administrative records to support 
their certification actions. As a general matter, if a certifying 
authority determines that one or more conditions are necessary for a 
section 401 certification, the certifying authority should clearly 
understand and articulate why it is necessary and should identify the 
legal authority for requiring such conditions. Including this 
information in the certification itself provides transparency for the 
project proponent, the federal licensing and permitting agency, and the 
public at large. For these reasons, the EPA has determined that these 
are appropriate requirements, and they are included in the final rule.
    During pre-proposal stakeholder engagement, the EPA also heard from 
federal agencies that, because several court decisions have concluded 
that such agencies do not have authority to ``review and reject the 
substance of a State certification or the conditions contained 
therein,'' Am. Rivers, Inc., 129 F.3d at 106, non-water quality-related 
conditions are often included in federal licenses and permits. Once 
included in the federal license or permit, federal agencies have found 
it challenging to implement and enforce these non-water quality-related 
conditions. Additionally, stakeholders in pre-proposal engagement and 
in public comments expressed concern that federal agencies do not 
always enforce the certification conditions incorporated in their 
federal licenses or permits.
    EPA agrees that it is important for federal agencies to have a 
clear understanding of the basis for certification conditions, because 
conditions must be included in a federal license or permit. Several 
appellate courts have analyzed the plain language of the CWA and 
concluded that the Act ``leaves no room for interpretation'' and that 
``state conditions must be'' included in the federal license or permit. 
Sierra Club v. U.S. Army Corps of Engineers, 909 F.3d 635, 645 (4th 
Cir. 2018) (emphasis in original); see also U.S. Dep't of Interior v. 
FERC, 952 F.2d 538, 548 (D.C. Cir. 1992) (``FERC may not alter or 
reject conditions imposed by the states through section 401 
certificates.''); Am. Rivers, Inc. v. FERC, 129 F.3d 99, 107 (2d Cir. 
1997) (recognizing the ``unequivocal'' and ``mandatory'' language of 
section 1341(d)); Snoqualmie Indian Tribe v. FERC, 545 F.3d 1207, 1218 
(9th Cir. 2008) (collecting cases). The EPA acknowledges commenters who 
asserted that federal agencies may not consistently enforce 
certification conditions, and also acknowledges that federal agencies 
can apply discretion in enforcement decisions. However, providing a 
citation to the legal authority underpinning a certification condition 
is one way to make it easier for federal agencies to enforce these 
conditions. Federal agencies during pre- and post-proposal engagement 
acknowledged that this information will help them understand how best 
to implement and enforce certification conditions. In addition, 
including this information in each certification will provide 
transparency for the overall certification process and allow the 
project proponent to understand the legal basis for each condition and 
to assess whether a condition is within the statute's lawful scope and 
what recourse may be available to challenge it in an appropriate court 
of competent jurisdiction. Overall, the EPA concludes that the benefits 
of providing this information will significantly outweigh any 
additional administrative burden that certifying authorities may incur 
because of these new requirements.
    One commenter asserted that the language in proposed section 
121.8(b) should be changed from ``[t]he license or permit must clearly 
identify any conditions that are based on the certification'' to 
``[t]he license or permit must clearly identify any conditions that are 
from the certification.'' This commenter asserted that the conditions 
cannot be based on the certification because federal agencies do not 
have authority to develop their own certification conditions or to 
modify a condition in a certification prior to incorporating it into 
the federal permit. The EPA has made this change in

[[Page 42265]]

section 121.10 of the final rule for clarity and to reaffirm that if a 
condition meets the procedural requirements of section 401 and includes 
the elements listed in 121.7(d) of the final rule, the condition must 
be incorporated into the federal license or permit in its entirety, as 
drafted by the certifying authority. Consistent with the proposal, 
under the final rule, deficient certification conditions do not 
invalidate the entire certification, nor do they invalidate the 
remaining conditions in the certification. As discussed below, the 
Agency has clarified in the final rule that conditions that do not meet 
these requirements will be deemed waived.
c. Deny
    A certifying authority may choose to deny certification if it is 
unable to certify that the discharge from a proposed project would be 
consistent with applicable water quality requirements. If a 
certification is denied, the federal agency may not issue a license or 
permit for the proposed project. Id. at 1341(a). Consistent with the 
proposal, the final rule requires certification denials to be made in 
writing and to include three elements to support certification denials. 
The Agency has made minor editorial changes to these provisions in the 
final rule to increase clarity, but the final rule provisions retain 
the same meaning as the proposed rule provisions.
    Some commenters agreed with the proposal to require certain 
information in a certification denial. One commenter asserted that when 
preparing denials, it would be helpful for certifying authorities to 
specify water quality requirements with which the proposed project will 
not comply, as this would assist federal agencies with their duty to 
determine whether a section 401 certification facially satisfies the 
requirements of section 401. Another commenter recommended that the 
final rule also require a statement that there is no certification 
condition which would prevent noncompliance with water quality 
requirements.
    Other commenters opposed the proposed requirement that 
certification denials include ``the specific water quality data or 
information, if any, that would be needed to assure that the discharge 
from the proposed project complies with water quality requirements.'' 
These commenters asserted that this requirement was vague, unnecessary, 
and burdensome and further asserted that it would improperly place a 
new burden on certifying authorities that should be borne by project 
proponents to show why their project complies with water quality 
requirements. A few of these commenters recommended that insufficient 
information should be a basis for denial.
    As a general matter, the EPA disagrees with the suggestion that 
including this information in a denial would be overly burdensome for 
certifying authorities. Indeed, a number of States asserted in public 
comments that the primary reason why certifications cannot be issued 
within the reasonable period of time is that project proponents have 
not provided sufficient information or a ``complete'' certification 
request. If this is the case, certifying authorities should be able to 
identify what information is lacking that precludes a determination 
that the project will comply with water quality requirements, as the 
term is defined in the final rule. Clearly establishing a record to 
support the basis for a denial should already be done as a matter of 
course to establish a complete defensible administrative record for the 
certifying authority's action. Further, any denial should be informed 
by the record before the certifying authority and should be issued with 
information sufficient to allow the project proponent to understand the 
basis for denial and have an opportunity to modify the project or to 
provide new or additional information in a new certification request.
    The EPA is finalizing the requirement that a certification denial 
be in writing and include three elements to support the denial. The 
required elements will lead to more transparent decision-making and a 
more complete record of the administrative action. The final rule's 
requirements may also facilitate discussions between certifying 
authorities and project proponents about what may be necessary to 
obtain a certification should the project proponent submit a new 
certification request in the future. A certifying authority's 
explanation of why a discharge from a proposed project will not comply 
with relevant water quality requirements will also assist reviewing 
courts in understanding whether the denial is appropriately based on 
the scope of certification discussed in section III.E of this notice.
    Some commenters asserted that the proposed rule would prohibit 
certifying authorities from denying certification based on a lack of 
information sufficient to grant certification. The EPA disagrees with 
these commenters. Indeed, by requiring that ``if the denial is due to 
insufficient information, the denial must describe 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,'' the final rule reaffirms and clarifies that 
insufficient information about the proposed project can be a basis for 
a certification denial. If the certifying authority determines that 
there is no specific data or information that would allow the 
certifying authority to determine that the discharge will comply with 
water quality requirements, it should indicate as such and provide the 
basis for the determination in its written decision to deny 
certification.
    As noted in the preamble to the proposed rule, the EPA is aware 
that some certifying authorities have requested ``additional 
information'' in the form of multi-year environmental investigations 
and studies, including completion of a NEPA review, before the 
certifying authority would act on a certification request. As discussed 
in section III.H of this notice, the final rule explicitly prohibits 
the EPA from requesting additional information that cannot be generated 
within the reasonable period of time. The rationale for this 
prohibition applies to all certifying authorities; the Agency believes 
that such requests for additional information, regardless of which 
certifying authority generates such requests, would be contrary to the 
plain language of the statute, which requires certifying authorities to 
act on a request within a reasonable period of time that does not 
exceed one year. While additional information requests may be a 
necessary part of the certification process, such requests may not 
result in extending the period of time beyond which the CWA requires 
certifying authorities to act.
d. Waiver
    When a certifying authority waives the requirement for a 
certification, under this final rule the federal agency may proceed to 
issue the license or permit in accordance with its implementing 
regulations. A certifying authority may waive expressly by issuing a 
written statement that it is waiving certification, or implicitly waive 
by failing or refusing to act. Waiver may occur due to a failure or 
refusal to act in accordance with the procedural requirements of 
section 401 or within the reasonable period of time (see section III.F 
of this notice), or by failing or refusing to provide information 
required to support certifications (section 121.7(c) of the final rule) 
or denials (section 121.7(e) of the final rule). A condition may also 
be waived by failing or refusing to provide information required to 
support

[[Page 42266]]

certification conditions (section 121.7(d) of the final rule).
i. Explicit Waiver
    Under the final rule, a certifying authority may waive expressly by 
issuing a written statement that it is waiving the requirement for 
certification. Some commenters supported allowing certifying 
authorities to explicitly waive certification. One commenter observed 
that doing so could allow the federal permitting authority to proceed 
more quickly with issuing a license or permit if it need not wait until 
the end of the reasonable period of time. Several commenters asserted 
that the statute does not provide for express waiver. A few other 
commenters stated that certifying authorities should be required to 
provide a detailed statement explaining their reasoning for waiving 
certification.
    The EPA has determined that, although the statute does not 
explicitly provide for express or affirmative waiver, providing this 
opportunity in the final rule is not inconsistent with a certifying 
authority's ability to waive through failure or refusal. 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.''). The EPA also agrees with the 
commenters who stated that allowing explicit waivers may create 
efficiencies in circumstances where the certifying authority knows 
early in the process that it will waive. The EPA is not requiring 
certifying authorities to provide a detailed statement explaining their 
reasoning for waiving, as the Agency recognizes certifying authorities 
may waive for a variety of reasons. Consistent with the proposal, the 
final rule provides that a certifying authority may expressly waive by 
providing written notification of waiver to the project proponent and 
federal agency.
    An express or affirmative waiver does not reflect a determination 
that the discharge will comply with water quality requirements. 
Instead, an express or affirmative waiver indicates that the certifying 
authority has chosen not to act on a certification request. The EPA 
agrees with the commenter who noted that express or affirmative waiver 
enables the federal agency to proceed with issuing a license or permit 
where the certifying authority has stated it does not intend to act, 
thereby avoiding the need to wait for the reasonable period of time to 
lapse.
ii. Implicit Waiver
    The plain language of section 401(a)(1) provides that the 
certification requirement is waived when a certifying authority ``fails 
or refuses to act on a request for certification, within a reasonable 
period of time (which shall not exceed one year).'' 33 U.S.C. 
1341(a)(1). The Agency proposed to define ``fails or refuses to act'' 
with the intention of providing greater clarity for project proponents, 
certifying authorities, and federal agencies about when an implicit or 
constructive waiver could occur. The Agency is not finalizing the 
proposed definition of ``fails or refuses to act'' and is instead 
providing additional clarification in the final rule about specific 
procedural failures that could trigger a federal agency to determine 
that waiver has occurred.
    Under the proposed rule, waiver would occur if the certifying 
authority actually or constructively failed or refused to act within 
the scope of certification or within the reasonable period of time. The 
proposed rule preamble explained that the phrase ``fails or refuses to 
act'' lends itself to at least two interpretations. Under one 
interpretation, a certifying authority that takes no action, or refuses 
to take action, has waived certification. Under an alternative 
interpretation, a certifying authority that takes action beyond the 
scope of section 401 has failed or refused to act in a way Congress 
intended and has waived certification. The proposed definition was 
intended to resolve this ambiguity in the statute.
    Some commenters supported the proposed definition of ``fail or 
refuse to act,'' including the implicit or constructive waiver 
provision. A few commenters cited City of Tacoma v. FERC, 460 F.3d 53 
(D.C. Cir. 2006), in support of the proposed rule, and these commenters 
agreed that it would be appropriate for federal agencies to facially 
review certifications. Some of these commenters said that this approach 
is not supported by the text of the statute or by congressional intent. 
Many commenters asserted that the legislative history of the waiver 
provision makes clear that it was intended only to prevent a State's 
sheer inactivity. One of these commenters noted that the legislative 
history acknowledges that the waiver provision cannot protect against 
arbitrary State agency action and that the courts are the forum to 
challenge a State's refusal to give a certification.\61\ Some 
commenters stated that allowing the federal agency to review a 
certification denial as a failure to act is unreasonable and 
essentially grants the federal government veto power over State action.
---------------------------------------------------------------------------

    \61\ The EPA observes that some legislative history related to 
section 401 is internally inconsistent and should not be relied upon 
as a definitive statement of congressional intent. The history 
quoted by these commenters (H.R. Rep. No. 92-911, at 121-22 (1972)) 
says both that a failure or refusal amounts to waiver and that a 
refusal must be addressed in a State court challenge brought by the 
project proponent. ``In such situations, where there is conflicting 
legislative history and `the statute is silent or ambiguous with 
respect to the specific issue,' our [the court's] role is to 
determine `whether the agency's answer is based on a permissible 
construction of the statute.''' Smriko v. Ashcroft, 387 F.3d 279, 
288 (3d Cir. 2004) (quoting Chevron); United States v. Deardorff, 
343 F. Supp. 1033, 1037-38 (S.D.N.Y 1971) (the canon of statutory 
interpretation that ``legislative history not be used to interpret a 
statute that is clear and unambiguous on its face . . . is 
particularly apposite where the legislative history is itself 
somewhat ambiguous.'').
---------------------------------------------------------------------------

    The EPA disagrees with commenters who asserted that federal 
agencies cannot review certifications. As discussed below, some courts 
have concluded that federal agencies have an affirmative obligation to 
determine whether a certifying authority has complied with requirements 
related to a section 401 certification. See City of Tacoma v. FERC, 460 
F.3d 53, 67-68 (D.C. Cir. 2006); Keating v. FERC, 927 F.2d 616, 622-
623, 625 (D.C. Cir. 1991). The final rule affirms that it is the 
responsibility of the federal agency to facially review certifications 
to ensure that certifying authorities have complied with the procedural 
requirements of section 401. If 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.
    After considering public comments and other enhancements in this 
final rule, the Agency is not finalizing the definition of ``fail or 
refuse to act.'' The Agency concludes that the key ambiguous term in 
this statutory phrase is ``to act'' and reasonably interprets this term 
to mean not just any act or action, but an act or action that is ``in 
conformance with applicable statutes and regulations.'' The final rule 
provides a clear and unambiguous list of actions that are not in 
conformance with section 401 and that therefore amount to waiver. The 
clarity in the final rule provides certifying authorities with 
sufficient notice that all actions on certification requests must be 
taken in accordance with the procedural requirements of the statute and 
this final

[[Page 42267]]

rule. Accordingly, the Agency has decided that a separate definition of 
``fail or refuse to act'' is not necessary. Treatment of procedural 
deficiencies as waivers is consistent with the EPA's existing 
regulations for the NPDES program. See 40 CFR 124.53(e)(2) (providing 
that for certification on a draft permit, ``[f]ailure to provide such 
citation waives the right to certify with respect to that condition'').
    The waiver provision in section 121.9 of the final rule has been 
expanded to provide additional clarity on the circumstances that amount 
to a failure or refusal to act. As discussed in section III.G.2.e of 
this notice, a federal agency must determine whether waiver has 
occurred, either expressly or implicitly through a failure or refusal 
to act. Section 401 provides that certifying authorities may take one 
of four possible actions on a certification request: Grant, grant with 
conditions, deny, or waive. As long as a certifying authority takes one 
of these four actions within the reasonable period of time and in 
accordance with the procedural requirements of the Act and this final 
rule, the certifying authority will have acted on the certification 
request. However, section 401 provides that where a certifying 
authority ``fails or refuses'' to act on a certification request, 
certification shall be waived. 33 U.S.C. 1341(a)(1). Under the final 
rule, a certifying authority waives certification if it fails or 
refuses to act on a certification request in accordance with the 
procedural requirements of section 401 and this final rule, including 
but not limited to issuing public notice, acting within the reasonable 
period of time, providing certification for projects that are within 
their jurisdiction, providing certification decisions in writing, and 
including the information required to support a certification or 
denial. The final rule also provides that a certification condition may 
be waived if the certifying authority fails or refuses to provide 
information required in section 121.7(d). Under the final rule, 
deficient conditions are severable from the certification. In other 
words, waiver of a specific certification condition does not waive the 
entire certification.
e. Federal Agency Review of Certifications
    The proposed rule would have required federal agencies to review a 
certification action to determine whether it was issued in accordance 
with the procedural requirements of the Act and determine whether the 
action was taken within the ``scope of certification'' as provided in 
the rule. The EPA has considered public comments and relevant court 
decisions and is retaining in the final rule the requirement that 
federal agencies review certification actions for compliance with the 
procedural requirements of section 401, including procedural 
requirements in this final rule. However, the final rule does not 
require federal agencies to substantively evaluate or determine whether 
a certification action was taken within the scope of certification. As 
a general matter, federal agencies may not readily possess the 
expertise or detailed knowledge concerning water quality and State or 
Tribal law matters that would be necessary to make such substantive 
determinations. The EPA has determined that other provisions of this 
final rule, such as the definitions of ``water quality requirements,'' 
``discharge,'' and ``certification,'' and the information requirements 
for certification conditions and denials listed in section 121.7(d) and 
section 121.7(e), will help ensure that certifying authorities have the 
information and necessary tools to act on a certification request 
within the scope of certification as provided in this rule. The Agency 
is not finalizing the provisions in section 121.6(c) and section 
121.8(a)(1)-(2) of the proposed rule.
i. Federal Agency Procedural Review
    The final rule requires federal agencies to determine whether a 
certifying authority's certification, certification condition, or 
denial includes the information requirements in sections 121.7(c), 
121.7(d), or 121.7(e) of the final rule. This federal agency review is 
entirely procedural in nature and does not require any specific 
expertise or knowledge in water quality or State or Tribal law. Under 
the final rule, the federal agency's review is limited to determining 
whether the certification action was taken in accordance with 
procedural requirements and whether the certification, condition, or 
denial includes all of the required information. Federal agency review 
under the final rule does not include a substantive evaluation of the 
sufficiency of that information.
    A few commenters supported the proposed requirement that federal 
agencies substantively review water quality certifications and asserted 
that such reviews would bring clarity and certainty to the water 
quality certification process. These commenters also supported the 
proposed authority for federal agencies to determine that constructive 
waiver occurred for certifications, conditions, and denials that failed 
to comply with procedural requirements of the rule. Some commenters 
stated that allowing federal agencies to review and reject 
certifications, conditions, and denials would violate the rights of 
States and Tribes. Some commenters stated that section 401(a)(1), which 
provides that ``[n]o license or permit shall be granted if 
certification has been denied,'' prohibits the federal government from 
vetoing denials. Some commenters stated that the EPA did not provide 
any legal support from the CWA or case law for its proposed approach of 
allowing federal review of certifications, conditions, and denials.
    The Agency has made modifications in the final rule text to clarify 
that federal agency review of certifications, conditions, and denials 
is procedural in nature and does not extend to substantive evaluations. 
The EPA's final regulatory text at sections 121.8 (Effect of denial of 
certification), 121.9 (Waiver), and 121.10 (Incorporation of 
certification conditions into the license or permit) contemplate that 
the federal licensing or permitting agency will review certifications 
only to ensure that certifying authorities have included certain 
required elements and completed certain procedural aspects of a section 
401 certification. Under the final rule, federal agencies are required 
to determine whether certification denials include the three elements 
listed in section 121.7(e). If certification denials do not include 
these three elements, the certifying authority has ``fail[ed] or 
refuse[d] to act'' (as explained in section III.G.2.d of this notice) 
and therefore has waived certification. Similarly, federal agencies are 
required to determine whether certification conditions include the two 
elements listed in section 121.7(d) of the final rule. If the 
certification conditions do not satisfy the requirements by listing 
these two elements, the certifying authority has ``fail[ed] or 
refuse[d] to act'' and will waive that deficient certification 
condition.
    In delineating such a role for federal licensing or permitting 
agencies, the EPA has interpreted the statute reasonably and 
appropriately. In City of Tacoma, Washington v. FERC, the Court of 
Appeals for the D.C. Circuit noted that ``[i]f the question regarding 
the state's section 401 certification is not the application of state 
water quality standards but compliance with the terms of section 401, 
then [the federal agency] must address it. This conclusion is evident 
from the plain language of section 401: `No license or permit shall be 
granted until the certification required by this section has been 
obtained or has been waived.' '' 460 F.3d at 67-68 (citing 33 U.S.C.

[[Page 42268]]

1341(a)(1)) (emphasis in original). The court went on to explain that 
even though the federal agency did not need to ``inquire into every 
nuance of the state law proceeding . . . it [did] require [the federal 
agency] at least to confirm that the state has facially satisfied the 
express requirements of section 401.'' Id. at 68; see also Hoopa Valley 
Tribe v. FERC, 913 F.3d 1099, 1105 (D.C. Cir. 2019) (``had FERC 
properly interpreted Section 401 and found waiver when it first 
manifested more than a decade ago, decommissioning of the Project might 
very well be underway''); Airport Communities Coalition v. Graves, 280 
F. Supp.2d 1207, 1217 (W.D. Wash. 2003) (holding that the Army Corps 
had discretion not to incorporate untimely certification conditions).
    Some commenters stated that allowing federal review of water 
quality certifications would ignore the fact that the States and Tribes 
are the experts on their water resources and know what is necessary to 
assure that the water quality standards passed under State and Tribal 
law are met. Another commenter requested clarification about whether 
the EPA would provide any assistance or guidance to federal agencies as 
they review certification denials and asked for clarification about how 
the EPA would ensure consistency and reliability across such decisions.
    As discussed below, the final rule does not require the federal 
agency to make a substantive inquiry into the sufficiency of the 
information provided in support of a certification, condition, or a 
denial. Rather, the final rule requires only that the federal agency 
confirm that the certifying authority has complied with procedural 
requirements of the Act and these regulations and has included the 
required information in a certification, condition, or denial. Although 
this limited review function may be new to some federal agencies, it is 
consistent with the EPA's own longstanding practice under its NPDES 
regulations implementing section 401 that allow the EPA to make such 
determinations under certain circumstances. See 40 CFR 124.53(e). Under 
the final rule, if a certification, condition or denial meets the 
procedural requirements of section 401 and this final rule, the federal 
agency must implement the certifying authority's action, irrespective 
of whether the federal agency may disagree with aspects of the 
certifying authority's substantive determination.
ii. Federal Agency Review of Scope
    The proposed rule would have required federal licensing and 
permitting agencies to review and determine whether certifications, 
conditions, and denials are within the ``scope of certification,'' as 
articulated in this final rule. The final rule does not include this 
additional substantive federal agency review requirement.
    A number of commenters supported the proposed language that would 
allow a federal agency to set aside certification conditions or denials 
that are not within the ``scope of certification.'' Some of these 
commenters agreed that conditions should not be included in licenses or 
permits if they do not meet the definition of ``water quality 
requirements'' under the final rule. One of these commenters stated 
that federal agency review of certifications would allow issues of 
scope to be resolved expeditiously by the federal agency through the 
federal licensing or permitting process, rather than by forcing the 
applicant to challenge the certification decision through a separate 
administrative or judicial appeal process, which could take months or 
years to resolve. The commenter also asserted that the proposal would 
allow the federal agency to protect the integrity of its licensing or 
permitting process by rejecting conditions that exceed the scope of 
section 401 even if the applicant chooses not to challenge the 
conditions. Another commenter asserted that the federal agency has an 
obligation to determine that a certification decision ``complies with 
the terms of section 401,'' and that this obligation is supported by 
case law. The commenter maintained that this obligation logically also 
includes the obligation to confirm that certification conditions are 
within the scope of section 401.
    Other commenters asserted that the proposed approach would conflict 
with sections 401(a) and (d) because, they assert, that under section 
401(a) a federal license or permit may not issue if certification is 
denied, and under section 401(d), federal agencies have no authority to 
review or veto State or Tribal conditions or certifications. These 
commenters stated that the proposed provision would improperly 
circumvent judicial review. Some commenters stated that the proposed 
rule's federal agency review provision is in contravention of the 
legislative intent. Some commenters stated that judicial precedent 
prohibits the EPA from authorizing federal agencies to review the scope 
or grounds for State and Tribal decisions on water quality 
certifications. One commenter stated that the authority of federal 
agencies to review State section 401 certifications is narrow and 
limited to ensuring that the State complies with the specific 
procedural requirements set forth in section 401, citing City of 
Tacoma, Wash. v. FERC, 460 F.3d 53 (D.C. Cir. 2006); Alcoa Power 
Generating Inc. v. FERC, 643 F.3d 963 (D.C. Cir. 2011); Keating v. 
FERC, 927 F.2d 616 (D.C. Cir. 1991). A few commenters stated that a 
federal agency's scope of review would lead to more confusion and 
litigation and would make the certification process more time 
consuming.
    The Agency has considered this diverse range of opinions. For the 
reasons explained above, 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. But the final rule does not 
authorize federal agencies to substantively review certifications or 
conditions to determine whether they are within the scope of 
certification. The EPA disagrees with commenters who assert that 
section 401(d) unambiguously requires one approach or another. As 
described throughout the proposed and final rule preambles, there are 
widely varying views and interpretations of section 401, and relevant 
court decisions reflect these disparate views and interpretations. The 
final rule provides a framework for section 401 water quality 
certifications that is reasonable, is supported by the language of the 
CWA, and will provide greater clarity and regulatory certainty.
    One commenter stated that none of the cases cited by the EPA in the 
proposed rule suggested that federal agencies have authority to review 
the substance of State-imposed section 401 conditions to determine 
whether they comply with the EPA's view of the appropriate scope of the 
statute. The same commenter stated that the proposal's rationale that 
federal agencies have struggled to enforce State certification 
conditions misses the point and that enforcement of certification 
conditions may also be initiated by the appropriate States through 
State law, citing Delaware Riverkeeper Network v. Secretary of Penn. 
Dep't of Envt'l Protection, 833 F.3d 360 (3d Cir. 2016). One commenter 
stated that EPA Office of General Counsel opinions have previously 
``interpreted [401(d)] broadly to preclude federal agency review of 
state certifications,'' citing Roosevelt Campobello Inter. Park v. U.S. 
EPA, 684 F.2d 1041, 1056 (1st Cir. 1982) (citing opinions of the EPA 
Office of General Counsel on the issue). Some commenters also stated 
that to review a condition to determine whether it falls

[[Page 42269]]

substantively within the scope of water quality requirements would 
create a substantial burden on federal agencies making these types of 
determinations.
    Some commenters stated that the proper place for water quality 
certifications and their conditions to be challenged is in court, 
particularly State court. Some commenters stated that State courts are 
the appropriate venue to challenge water quality certifications because 
those certifications are issued under State law and State courts know 
how best to interpret State law. Some commenters stated that the 
legislative history for the 1972 amendments to the CWA repeatedly shows 
that Congress intended conflicts regarding the scope of section 401 to 
be resolved by State courts, not federal agencies.
    For the reasons articulated in the proposed and final rule 
preambles, the EPA disagrees with the proposition that relevant case 
law precludes any federal review of certification conditions. The EPA 
also disagrees with one commenter's assertion that, as a general 
matter, States may independently enforce certification conditions 
through State law. See section III.K.2.a of this notice for further 
discussion on the enforcement of certification conditions within 
federal licenses or permits. Although the proposed requirement was 
consistent with the principle that federal agencies have the authority 
to reject certifications or conditions that are inconsistent with the 
requirements and limitations of section 401 itself (see City of Tacoma, 
Wash. v. FERC), the final rule reflects the EPA's conclusion that 
courts of competent jurisdiction are better suited to evaluate the 
underlying State or Tribal law to determine whether a specific 
certification condition or the basis for a denial is within the scope 
of certification. The EPA also acknowledges that existing lower court 
case law on this topic is mixed, and that requiring federal agencies to 
conduct a substantive review to determine whether conditions or denials 
are within the scope of certification could create new litigation risk 
(including litigation-related staffing and cost burdens) for those 
federal agencies and further complexity and uncertainty concerning the 
appropriate path for remedying a substantively unlawful certification 
condition or denial. The final rule's scope of certification, requiring 
that ``conditions'' be within that scope, and requiring certifying 
authorities to provide specific information in support of a condition 
or a denial, will help provide reviewing courts with the information 
and tools necessary to conduct a proper evaluation of certification 
conditions and denials.
iii. Remedying Deficient Conditions and Denials
    The proposed rule would have allowed federal agencies to provide 
certifying authorities with the opportunity to remedy deficient 
conditions and denials. However, in response to public comments and to 
increase clarity in the final rule, the Agency is not finalizing these 
provisions.
    Commenters expressed a variety of viewpoints about whether federal 
agencies can or should provide certifying authorities with the 
opportunity to remedy deficient conditions and denials. One commenter 
did not support providing certifying authorities with the opportunity 
to remedy conditions that are not related to water quality, while other 
commenters asserted that the ability to remedy deficient conditions 
should be mandatory rather than discretionary. Some commenters 
expressed concern regarding timeframes for federal review, notification 
to States and Tribes, and opportunity for States and Tribes to remedy 
water quality certifications and suggested that the opportunity to cure 
a deficient condition could effectively shorten the reasonable period 
of time. Commenters also requested that certifying authorities should 
be able to remedy deficient conditions regardless of whether the 
reasonable period of time has expired, or at least up until the one-
year maximum reasonable period of time specified in the CWA. Some 
commenters expressed concern that the proposal did not provide an 
administrative appeal process for a certifying authority to dispute 
that conditions and denials are in fact ``deficient.''
    The Agency has considered these comments and determined not to 
include in the final rule an express allowance for certifying 
authorities to remedy deficient conditions after the certification 
action is taken. The Agency recognizes and agrees with many of the 
implementation and process-related concerns raised by commenters, 
including concerns that there may not be sufficient time to remedy 
deficient conditions during the established reasonable period of time. 
The EPA disagrees with the commenters who asserted that the certifying 
authority must be given an opportunity to remedy deficient conditions 
even after the reasonable period of time has expired. The final rule 
contains additional clarification on procedural and substantive 
requirements. These clarifications should provide certifying 
authorities with the information and tools necessary to act on 
certification requests consistent with section 401 and within the scope 
of certification provided in this final rule, reducing the need to 
remedy deficient conditions or denials. The EPA has concluded in the 
final rule that if a federal licensing or permitting agency wishes to 
create procedures whereby certifying authorities may remedy deficient 
conditions or denials, it may do so in its own water quality 
certification regulations. Such procedures may not be used to exceed 
the one-year statutory limit on the reasonable period of time. The 
approach in the final rule provides sufficient flexibility to those 
federal agencies should they wish to update their water quality 
certification regulations to provide additional procedures for 
remedying deficient certification conditions or denials.

H. Certification by the Administrator

1. What is the Agency finalizing?
    In the final rule, the Agency is establishing specific procedures 
regarding public notice and requests for additional information that 
apply only when the EPA is the certifying authority. As discussed in 
section III.B of this notice, the Agency proposed to require pre-filing 
meeting procedures only when the EPA is the certifying authority, but 
the final rule expands the requirement for pre-filing meeting requests 
to all project proponents, including federal agencies when they seek 
certification for general licenses or permits, regardless of the 
certifying authority. The rationale for expanding this practice to all 
section 401 certifying authorities as a best practice for all 
certification actions is more fully explained in section III.B of this 
notice.
2. Summary of Final Rule Rationale and Public Comments
    Section 401(a)(1) of the CWA provides that ``[i]n any case where a 
State or interstate agency has no authority to give such a 
certification, such certification shall be from the Administrator.'' 33 
U.S.C. 1341(a)(1). Currently, all States have authority to implement 
section 401 certification programs. However, the EPA acts as the 
certifying authority in two scenarios: (1) On behalf of federally 
recognized Indian Tribes that have not received TAS for section 401, 
and (2) on lands of exclusive federal jurisdiction, such as Denali 
National Park. When acting as a certifying authority, the EPA is 
subject to the same timeframes and section 401 certification 
requirements as other

[[Page 42270]]

certifying authorities. This section outlines additional procedures 
that apply only when the EPA is the certifying authority.
    The first scenario arises when Tribes do not obtain TAS 
authorization for section 401 certifications. As discussed in section 
II.F.1 of this notice, Tribes may obtain TAS authorization for purposes 
of issuing CWA section 401 certifications. If a Tribe does not obtain 
TAS for section 401 certifications, the EPA is responsible to act as 
the certifying authority for projects resulting in a potential 
discharge into waters of the United States on Tribal land.
    The second scenario arises when the federal government has 
exclusive federal jurisdiction over land. The federal government may 
obtain exclusive federal jurisdiction in multiple ways, including where 
the federal government purchases land with State consent to 
jurisdiction, consistent with article 1, section 8, clause 17 of the 
U.S. Constitution; where a State chooses to cede jurisdiction to the 
federal government; and where the federal government reserved 
jurisdiction upon granting statehood. See Collins v. Yosemite Park Co., 
304 U.S. 518, 529-30 (1938); James v. Dravo Contracting Co., 302 U.S. 
134, 141-42 (1937); Surplus Trading Company v. Cook, 281 U.S. 647, 650-
52 (1930); Fort Leavenworth Railroad Company v. Lowe, 114 U.S. 525, 527 
(1895). For example, the federal government retained exclusive 
jurisdiction over Denali National Park in Alaska's Statehood Act. 
Alaska Statehood Act, Public Law 85-508, 72 Stat. 339 (1958).
    The EPA's 1971 certification regulations identified circumstances 
where the Administrator certifies instead of a State, Tribe, or 
interstate authority, and limited the Administrator's certification to 
certifying that a potential discharge ``will not violate applicable 
water quality standards.'' 40 CFR 121.21. However, this language 
reflects the language of section 21(b) of the FWPCA (1970) and is not 
consistent with the statutory language of section 401(a), which 
requires authorities to certify that the potential discharge will 
comply with the applicable provisions of CWA sections 301, 302, 303, 
306, and 307. In this final rule, the Agency is modernizing and 
clarifying its regulations by finalizing the following text in section 
121.13(a):

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

    In circumstances where the EPA is the certifying authority and the 
water body impacted by the proposed discharge does not have any 
applicable water quality standards, the EPA's 1971 certification 
regulations provided the EPA with an advisory role. 40 CFR 121.24. The 
statute does not explicitly provide for this advisory role, and 
therefore, this final rule does not include a similar provision. 
However, the Agency believes that the technical advisory role provided 
in section 401(b) and discussed in section III.J of this notice is 
sufficient to authorize the EPA to play an advisory role in such 
circumstances. As a result, omitting this text in the final rule is 
unlikely to change the Agency's existing practice. 33 U.S.C. 1341(b).
    Commenters provided feedback on a few general aspects of this 
topic. Several commenters expressed the importance of the 
Administrator's certification authority where a Tribe or interstate 
authority lacks such authority. Some of these commenters stressed that 
the EPA has a trust obligation to protect water quality for those 
Tribes that lack TAS and a responsibility to provide Tribes with an 
opportunity for meaningful input. One commenter stated that the EPA had 
not provided a list or map of the geographic areas in which it intends 
to assert certification authority and requested that the EPA explicitly 
identify all lands within its jurisdiction and the basis for EPA's 
jurisdictional assertion.
    The EPA has a statutory obligation to act as a certifying 
authority, pursuant to CWA section 401(a)(1). Separately, pursuant to 
the Agency's 1984 Indian Policy (EPA Policy for the Administration of 
Environmental Programs on Indian Reservations, see https://www.epa.gov/tribal/epa-policy-administration-environmental-programs-indian-reservations-1984-indian-policy), the EPA has a responsibility to 
coordinate with Tribes when making decisions and managing environmental 
programs that affect reservation lands. The EPA takes these obligations 
and responsibilities seriously. Consistent with the CWA, the final rule 
directs the EPA to act as the certifying authority on behalf of Tribes 
that do not have TAS for CWA section 401. Under the final rule, the EPA 
does this by determining whether the potential discharge from a 
proposed project will comply with water quality requirements, as 
defined and explained in section III.E.2.b of this notice. As provided 
in section 401(a)(1) and in section 121.7(f) of the final rule, if 
there are no water quality requirements applicable to the waters 
receiving the discharge from the proposed project, the EPA will grant 
certification. The Agency will continue to comply with the EPA Policy 
on Consultation and Coordination with Indian Tribes when certifying on 
behalf of Tribes and disagrees with commenters who suggested that this 
rule would preclude Tribes from contributing meaningful input.
    The EPA does not maintain a national map of lands for which the 
Agency serves as the certifying authority, as such borders may on 
occasion change as Tribes continue to annex and cede lands. Rather, it 
is the duty of the project proponent to determine the appropriate 
certifying authority when seeking a section 401 certification. The EPA 
acknowledges that there may be potential for jurisdictional overlap 
between certifying authorities at certain project sites (e.g., at the 
boundaries of Tribal lands), and the Agency believes that the 
requirement for project proponents to request a pre-filing meeting with 
certifying authorities will provide an opportunity for clarifying 
discussions about which agency or organization is the proper certifying 
authority.
    Some commenters expressed confusion about whether the ``EPA as the 
certifying authority requirements'' in the proposed rule applied to 
just the EPA, or to all certifying authorities, and one commenter 
asserted that subpart D of the proposed regulatory text should not use 
the term ``certifying authority'' to define those instances in which 
the EPA is taking action. The Agency disagrees that using the term 
``certifying authority'' in subpart D of the proposed regulatory text 
is unclear, as subpart D of the proposed rule is titled ``Certification 
by the Administrator'' and section 121.11(c) of the proposed rule 
explained that for purposes of this subpart the Administrator is the 
certifying authority. However, to avoid any potential for confusion, 
the EPA has replaced the word ``certifying authority'' with ``the 
Administrator'' throughout subpart D of the final rule. As noted above, 
when the EPA is the certifying authority, it must comply with all of 
the requirements in the final rule, not just subpart D.
    This final rule includes two sets of procedural requirements that 
would apply only when the Administrator is the certifying authority: 
(1) Clarified public notice procedures, and (2) specific timelines and 
requirements for the EPA to request additional information to support a 
certification request. These requirements are discussed below and are 
included in final rule sections 121.15 and 121.14.

[[Page 42271]]

    The EPA also proposed a third set of procedural requirements that 
would have applied only when the Administrator is the certifying 
authority: Pre-filing meeting request requirements. As explained in 
section III.B of this notice, the EPA is finalizing a requirement that 
all project proponents, including federal agencies when they seek 
certification for general licenses or permits, submit a pre-filing 
meeting request to the certifying authority, regardless of whether the 
Administrator is the certifying authority. This requirement is now in 
section 121.4 of final rule subpart B, rather than in subpart D.
    Some commenters recommended extending all three of these sets of 
proposed requirements to all certifying authorities. Other commenters 
recommended that none of the proposed requirements should apply to all 
certifying authorities. The EPA has considered the conflicting 
perspectives in these comments and has concluded in this final rule 
that only the pre-filing meeting request requirements will apply to all 
certifying authorities, as described in section III.B of this notice.
a. Public Notice Procedure
    Section 401 requires a certifying authority to provide procedures 
for public notice, and a public hearing where necessary, on a 
certification request. Some courts have held that this includes a 
requirement for public notice itself. City of Tacoma, 460 F.3d at 68. 
The 1971 certification regulations at 40 CFR part 121.23 described the 
EPA's procedures for public notice after receiving a request for 
certification. The EPA is updating its regulations to provide greater 
clarity to project proponents, federal agencies, and other interested 
parties concerning the EPA's procedures for public notice when the 
Administrator is the certifying authority.
    Under the final rule, when the Administrator is the certifying 
authority, the Agency will provide appropriate public notice, within 20 
days of receipt of a certification request, to parties known to be 
interested. If the EPA in its discretion determines that a public 
hearing is appropriate or necessary, the Agency will, to the extent 
practicable, give all interested and affected parties the opportunity 
to present evidence or testimony at a public hearing.
    One commenter stated that the public should be kept informed of the 
section 401 process and proposed project plans, especially for large 
projects. Another commenter suggested that public participation 
requirements in the section 401 certification review process should be 
expanded, which they maintained would lead to better identification of 
projects that should be denied certification because of adverse effects 
on water quality. A few commenters disagreed with the proposition that 
public notice should be limited to parties known to be interested and 
asserted that notice should be provided to the general public. One 
commenter suggested that the public should receive a minimum of 30-
days' notice prior to a hearing, or another timeframe tied to the date 
when information is made available for public review.
    The EPA appreciates the public commenters who provided feedback on 
the public notice process for when the EPA is the certifying authority. 
The public notice and hearing process in the final rule will ensure 
that the Agency keeps the public informed about the section 401 
certification process and proposed project plans. The proposed rule 
included a list of potentially interested parties, such as Tribal, 
State, county, and municipal authorities, heads of State agencies 
responsible for water quality, adjacent property owners, and 
conservation organizations. To avoid artificially or unintentionally 
narrowing the universe of potentially interested parties, this list is 
not included in the final rule. The procedures in the final rule, 
including providing notice to interested parties, will provide 
sufficient public notice, as required in section 401, and will provide 
the public with an opportunity to inform the EPA's certification 
decision through public comments. Under the final rule, the Agency may 
also, at its discretion, determine whether a public hearing is 
appropriate and necessary. In such cases, all interested and affected 
parties would be given the opportunity to present evidence or testimony 
at a public hearing. The Agency is not prescribing a single timeframe 
for the length of public notice under the final rule. The appropriate 
timeframe for notice and comment is more appropriately determined on a 
case-by-case basis, considering project-specific characteristics as 
well as the length of the established reasonable period of time. In 
general, the EPA anticipates that public notices will provide for 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 and the reasonable period of time. The public hearing may 
be conducted in-person, or remotely (through telephone, online, or 
other virtual platforms), as deemed appropriate by the Agency.
b. Requests for Additional Information
    The definition of a certification request in this final rule 
identifies the information that project proponents are required to 
provide to certifying authorities when they submit a certification 
request. However, in some cases, the EPA may conclude that additional 
information is necessary to determine that the potential discharge will 
comply with water quality requirements (as defined at section 121.1(n) 
of the final rule). Section 401 does not expressly address the issue of 
whether and under what circumstances a certifying authority may request 
additional information to review and act on a certification request. 
The EPA concluded that it is reasonable and consistent with the CWA's 
statutory framework that when the Administrator is the certifying 
authority, the Agency be afforded the opportunity to seek additional 
information necessary to do its job. However, consistent with the 
statute's firm timeline to act on a certification request, it is also 
reasonable to assume that Congress intended some appropriate limits be 
placed on the timing and nature of such requests. This final rule fills 
the statutory gap and provides a structure for the Administrator as the 
certifying authority to request additional information and for project 
proponents to timely respond. Consistent with the proposal, this final 
rule includes procedural requirements and timeframes for action that 
will provide transparency and regulatory certainty for the Agency and 
project proponents. However, in response to public comments and to 
increase clarity, the Agency has provided enhancements to the final 
rule text.
    Some commenters stated that the procedures proposed for when the 
EPA is the certifying authority would inhibit the EPA from seeking 
additional information on water quality effects relevant to making a 
certification decision. Some of these commenters stated that this would 
lead to unnecessary denials of certification where, had better 
information been developed, a certification may have been granted. The 
Agency disagrees with the suggestion that the procedures proposed for 
when the EPA is the certifying authority would lead to certification 
decisions based on incomplete information. Consistent with the 
proposal, the EPA must request information within 30 days of receipt. 
The final rule includes additional

[[Page 42272]]

clarifications that if the EPA finds it necessary to request additional 
information, then the EPA must make an initial request within 30 days 
of receipt. Nothing in the regulation precludes the EPA from making 
additional information requests at a later point in the process after 
an initial request is made, so long as that information can be 
developed by the project proponent and considered by the EPA within the 
reasonable period of time. This final rule acknowledges that certifying 
authorities like the EPA need relevant information as early as possible 
to review and act on section 401 certification requests within the 
reasonable period of time. As discussed in section III.B of this 
notice, the pre-filing meeting request requirement under this final 
rule is intended to ensure that the EPA has an opportunity to engage 
with the project proponent early, learn about the proposed project, and 
consider what, if any, additional information might be needed from the 
project proponent.
    Under the final rule, if the Agency needs additional information, 
an initial request for information must be made to the project 
proponent within 30 days after the receipt of a certification request. 
Additional information may include, for example, more detail about the 
contents of the potential discharge from the proposed project or 
specific information about treatment or waste management plans or 
additional details about discharges associated with the operation of 
the facility. The final rule does not preclude the Agency from making 
additional requests for information, but such requests for information 
must still comply with the requirements outlined below in this section 
of the final rule preamble.
    The EPA is finalizing a provision that when the Administrator is 
the certifying authority, the Agency can request only additional 
information that is within the scope of certification and is directly 
related to a potential discharge from the proposed project and its 
potential effect on the receiving waters. Some commenters supported the 
proposal to limit additional information requests to information within 
the scope of the section 401 certification, while other commenters 
disagreed with the limitation. The Agency considered these and other 
comments and is finalizing this provision with minor modifications to 
provide clarity and certainty when the EPA is the certifying authority.
    Several commenters stated that the proposal would not distinguish 
between complex and simple projects and noted that the type of 
information needed to develop a certification for a complex project, 
such as a 30- or 50-year FERC license, would not be the same as that 
needed for a shorter-term or simpler project. The EPA agrees with 
commenters that information needs may differ depending on the 
complexity of the proposed project and other project-specific factors. 
The final rule provides sufficient flexibility for the Administrator to 
request project-specific information to help inform the certification 
decision. To ensure that the Agency's action remains within the scope 
of certification, the EPA has determined that any additional 
information requested must be within the scope of certification and 
must be directly related to the discharge from the proposed project and 
its potential effect on receiving waters. In addition to ensuring that 
the Agency acts within the scope of certification, limiting the type of 
information that the EPA may request as the certifying authority 
eliminates unnecessary and burdensome requests. Doing so also limits 
EPA review of information irrelevant to the Agency's decision-making 
process.
    The EPA is also finalizing a provision that when the Administrator 
is serving as the certifying authority, the Agency can request only 
additional information that can be collected or generated within the 
established reasonable period of time. Some commenters disagreed with 
this provision, and one commenter asserted that this provision would 
contravene the CWA and the statute's emphasis on protecting human 
health and the environment. Several commenters stated that the proposal 
defers to a project proponent to determine what information may 
reasonably be developed during the ``reasonable period of time,'' 
because the project proponent could claim that it would take too long 
to collect or generate the information.
    The Agency disagrees with commenters that suggested that this 
provision defers to project proponents to determine what information 
may be developed during the reasonable period of time. In most cases, 
it should be objectively known whether certain information can be 
generated or collected within the reasonable period of time. For 
example, a multi-year study cannot be conducted within a 12-month 
reasonable period of time. Similarly, a 180-day study cannot be 
conducted within a 60-day reasonable period of time. In the event of 
disputes between the EPA and the project proponent about whether 
certain new information can be collected or generated within the 
reasonable period of time, the EPA will engage directly and in good 
faith with the project proponent to resolve the dispute.
    This final rule is also intended to address issues that have caused 
delays in certifications and project development and that have resulted 
in protracted litigation. Although these provisions apply only when the 
EPA is the certifying authority, they may serve as models for other 
certifying authorities. For example, the Agency is aware that some 
certifying authorities have requested ``additional information'' in the 
form of multi-year environmental investigations and studies, including 
completion of a NEPA review, before the authority would even begin 
review of the certification request.\62\ Consistent with the plain 
language of section 401, under this final rule, when the Administrator 
is acting as the certifying authority, such requests from the EPA would 
not be authorized because they would extend the statutory reasonable 
period of time, which is not to exceed one year. This final rule 
provides clarity that, while additional information requests may be a 
necessary part of the certification process, such requests may not 
result in extending the period of time beyond which the CWA requires 
the Agency to act.
---------------------------------------------------------------------------

    \62\ Some stakeholders have suggested that it may be challenging 
for a state to act on a certification request without the benefit of 
review under NEPA or a similar state authority. See, e.g., Cal. Pub. 
Res. Code Section 21000 et seq.; Wash. Rev. Code Section 43.21C.150. 
Consistent with the EPA's 2019 Guidance, the EPA recommends that 
certifying authorities do not need to delay action on a 
certification request until a NEPA review is complete. The 
environmental review required by NEPA has a broader scope than that 
required by section 401. For example, the NEPA review evaluates 
potential impacts to all environmental media, as well as potential 
impacts from alternative proposals that may not be the subject of a 
federal license or permit application. By comparison, a section 401 
certification review is far more narrow and is focused on assessing 
potential water quality impacts from the proposed federally licensed 
or permitted project. Additionally, many NEPA reviews have taken 
more than one year to complete. Waiting for a NEPA process to 
conclude may result in waiver of the certification requirement for 
failure to act within a reasonable period of time. To the extent 
that State or Tribal implementing regulations may have required a 
NEPA review to be completed as part of a section 401 certification 
review, the EPA encourages certifying authorities to update those 
regulations to incorporate deadlines consistent with the reasonable 
period of time established under the CWA, or to decouple the NEPA 
review from the section 401 process, so as to ensure timely action 
on section 401 certification requests and to avoid waiver by the 
certifying authority.
---------------------------------------------------------------------------

    Under this final rule, when the Administrator is acting as the 
certifying authority, in any request for additional information, the 
EPA must include a deadline for the project proponent to respond. The 
deadline must allow sufficient time for the Agency to review

[[Page 42273]]

the additional information once it is received, and to act on the 
certification request within the established reasonable period of time.
    Many commenters asserted that the proposed rule would not require 
project proponents to timely respond to requests for additional 
information. Some commenters requested that the EPA clearly state that 
failure by the project proponent to complete a section 401 
certification request or provide requested additional information 
within a specified time period should be grounds for denial of 
certification.
    The Agency disagrees with the suggestion that the project proponent 
would not be required to timely respond to requests for additional 
information. Under the final rule, when the Administrator is the 
certifying authority, project proponents must submit requested 
information by the EPA's deadline. The Agency has clarified in section 
121.14(e) that a project proponent's failure to provide additional 
information does not prevent the Administrator from taking action on a 
certification request. If the project proponent fails to submit the 
requested information, the Agency may conclude that it does not have 
sufficient information to certify that a potential discharge will 
comply with applicable water quality requirements and may therefore 
deny the certification request. The EPA may also use its expertise to 
evaluate the potential risk associated with the remaining information 
or data gap and to consider granting certification within the 
reasonable period of time with conditions to address those potential 
risks. The EPA expects that when the Administrator is the certifying 
authority, these procedures will provide clarity and regulatory 
certainty to the EPA and project proponents. The EPA notes that States 
and Tribes may choose to adopt similar provisions to ensure that all 
certifying authorities are working effectively and in good faith to act 
on certification requests within the reasonable period of time, and 
that denials based on a lack of information are not done simply for 
administrative purposes but because additional information is needed to 
assure that the discharge from the proposed project will comply with 
water quality requirements and the lack of information cannot be 
addressed by appropriate certification conditions. The EPA further 
notes that under the proposal and this final rule, certifying 
authorities are not obligated to act on incomplete certification 
requests. If a certification request is not complete as required by 
this final rule, the reasonable period of time does not begin.

I. Determination of Effect on Neighboring Jurisdictions

1. What is the Agency finalizing?
    Consistent with the proposal, under the final rule, if the EPA in 
its discretion determines that a neighboring jurisdiction may be 
affected by a discharge from a federally licensed or permitted project, 
the EPA must notify the affected jurisdiction, the certifying 
authority, and the federal agency within 30 days of receiving the 
notice of the certification from the federal agency. The final rule 
includes certain enhancements to the proposed rule to increase clarity 
and regulatory certainty, as explained below in this section of the 
final rule preamble.
2. Summary of Final Rule Rationale and Public Comment
    Section 401(a)(2) requires federal agencies to immediately notify 
the EPA when a certification is issued by a certifying authority for a 
federal licensing or permitting application. Section 401(a)(2) also 
provides a mechanism for the EPA to notify States and authorized Tribes 
where the EPA has determined the discharge from a proposed federally 
licensed or permitted project subject to section 401 may affect the 
quality of their waters. The EPA's 1971 certification regulations 
established procedural requirements for this process but required 
updating to align with CWA section 401 and to establish additional 
clarity. The EPA recognizes that federal agencies may have different 
processes to satisfy this requirement and will continue to work with 
these agencies to ensure that the Agency is notified of all 
certifications. The final rule does not contain a standardized process 
for federal agencies to immediately notify the EPA when certifications 
are issued. The EPA expects federal agencies to develop notification 
processes as they update their certification regulations in accordance 
with the Executive Order. The final rule provides flexibility for 
federal agencies to develop processes and procedures that work best 
within their licensing or permitting programs. Additionally, the Agency 
has made minor, non-substantive modifications to the regulatory text at 
section 121.12(a) to clarify that the federal agency's statutory 
obligation to notify the EPA is triggered when the federal agency 
receives a federal license or permit application and the related 
certification. The text of section 401(a)(2) provides that the federal 
agency must ``immediately'' notify the EPA of such application and 
certification. To aid in clarity and implementation, the Agency 
reasonably interprets ``immediately'' to mean within five days of the 
Federal agency's receiving notice of the certification. 33 U.S.C. 
1341(a)(2). The EPA believes that, in the context of section 401(a)(2), 
five days is a reasonable interpretation of the statutory term 
``immediately.'' The federal agency needs some amount of time to 
process receipt of the license application and certification from the 
project proponent or certifying authority, review the received 
materials (which might be substantial), and then transmit notice to the 
appropriate EPA office. Allowing for five days is a prompt yet 
reasonable period of time to complete this process. Moreover, unlike 
emergency response or notifications provisions in environmental 
statutes, the provisions in CWA 401 governing certifications do not 
appear to require an emergency response that might--in other contexts--
justify interpreting ``immediately'' to require a shorter period of 
time to act. As provided in section 121.9(c) of the final rule, the 
federal agency must provide a separate written notification of any 
waiver determination; this notification need not occur prior to 
transmitting the certification to EPA under section 121.12(a) of the 
final rule.
    This final rule affirms the EPA's interpretation that section 
401(a)(2) establishes authority for the Agency to determine in its 
discretion whether the discharge from a certified project may affect 
the water quality in a neighboring jurisdiction. One public commenter 
agreed with the EPA's interpretation and discretion concerning the 
determination whether a project may affect downstream States under CWA 
section 401(a)(2). Other commenters stated that even if the EPA's 
discretion is supported by the language of the CWA, the unbounded scope 
of the discretion is not consistent with the statute and would not 
provide accountability to neighboring States, the project proponent, or 
the public without additional clarification. Some commenters stated 
that the EPA should provide notice to neighboring jurisdictions in 
every instance, thereby allowing neighboring jurisdictions who are best 
situated to understand their own water quality concerns to make a 
determination as to whether there would be an effect on water quality. 
Some commenters stated that the rule should set forth specific factors 
that the EPA would consider in making a determination or that the EPA's

[[Page 42274]]

determination should be made in consultation with neighboring 
jurisdictions. Other commenters requested that the EPA develop 
regulations or guidance that would explain when the EPA would exercise 
its authority to notify downstream jurisdictions.
    The EPA appreciates these comments and recognizes the desire for 
more prescriptive and specific provisions concerning the determination 
of potential effects on neighboring jurisdictions. As a general matter, 
the EPA intends to use its technical expertise from administering the 
CWA over nearly fifty years to evaluate whether a certified project may 
affect a neighboring jurisdiction. At this time, the EPA is not 
establishing specific provisions in the final rule, but the EPA may in 
the future take action to further clarify this provision via either 
additional rulemaking or guidance.
    The final rule modifies the EPA's 1971 certification regulations to 
mirror the CWA in describing the EPA's procedural duties regarding 
neighboring jurisdictions. The statute provides that, following notice 
of a section 401 certification, the Administrator shall within 30 days 
notify a potentially affected downstream State or authorized Tribe 
``[w]henever such a discharge may affect, as determined by the 
Administrator, the quality of the waters of any other State.'' 33 
U.S.C. 1341(a)(2) (emphasis added). Because the EPA's duty to notify is 
triggered only when the EPA has made a determination that a discharge 
``may affect'' a downstream State or Tribe, the section 401(a)(2) 
notification requirement is contingent. It is not a duty that applies 
to the EPA with respect to all certifications, rather it applies 
where--exercising its discretion--the EPA has determined that the 
certified discharge ``may affect'' a neighboring jurisdiction's waters. 
This provision is being finalized with minor modifications to increase 
clarity regarding the EPA's discretionary determination. The Agency has 
made minor, non-substantive modifications to the regulatory text at 
section 121.12(b) to clarify that the 30-day review period is triggered 
after the Administrator receives notice from the federal agency.
    The EPA is also clarifying the section 401(a)(2) notification 
process in this final rule, as such procedures were not described in 
sufficient detail in the 1971 certification regulations. If, as 
described above, the EPA determines that a neighboring jurisdiction may 
be affected by a certified discharge from a federally licensed or 
permitted project, the EPA must notify the affected jurisdiction, 
certifying authority, federal agency, and project proponent within 30 
days of receiving the notice that certification was issued for a 
proposed project. If the Agency does not provide the required 
notification within 30 days of receiving notification from a federal 
agency, the federal agency may resume processing the federal license or 
permit. The EPA need not wait the full 30 days, but may notify the 
federal agency at any time so that it may continue processing the 
license or permit.
    Some public commenters requested changes to the proposed 
procedures, such as different timelines for neighboring jurisdictions 
to make a decision. One commenter requested that timelines be flexible 
and incorporate the same factors that the federal agencies would 
consider for determining the reasonable period of time. Other 
commenters stated that neighboring jurisdictions should be able to 
request additional information to make a determination. The EPA is 
finalizing notification procedures substantively as proposed, because 
they are consistent with the text of section 401(a)(2).
    The final rule also provides a predictable framework for 
determinations by neighboring jurisdictions. The final rule requires 
that the EPA's notification to neighboring jurisdictions be in writing, 
dated, and state that the neighboring jurisdiction has 60 days to 
notify the EPA and the federal agency, in writing, whether or not the 
discharge will violate any of its water quality requirements (as 
defined at section 121.1(n) of the final rule) and whether the 
jurisdiction will object to the issuance of the federal license or 
permit and request a public hearing from the federal agency. The final 
rule also requires that, if the neighboring jurisdiction requests a 
hearing, the federal agency must forward the hearing notice to the EPA 
at least 30 days before the hearing takes place. The public hearing may 
be conducted in-person or remotely through telephone, online, or other 
virtual platforms, as deemed appropriate by the Agency. Under the final 
rule, the EPA must provide its recommendations on the federal license 
or permit at the hearing. After considering the EPA's and the 
neighboring jurisdiction's input, the federal agency is required to 
condition the license or permit as necessary to assure that the 
discharge from the certified project will comply with the neighboring 
jurisdiction's water quality requirements, as the term is defined in 
the final rule. Consistent with section 401(a)(2), under the final 
rule, if additional conditions cannot assure that the discharge from 
the certified project will comply with the neighboring jurisdiction's 
water quality requirements, the federal agency cannot issue the license 
or permit. The final rule further clarifies that the federal agency may 
not issue the license or permit pending the conclusion of the 
determination of effects on a neighboring jurisdiction.
    One commenter asserted that the EPA should consider all Tribes as 
neighboring jurisdictions for purposes of section 401(a)(2), 
irrespective of whether they have TAS. The commenter argued that 
limiting the application of the neighboring jurisdiction provision to 
those Tribes with TAS would subject Tribes without TAS to a lesser 
standard of review and ultimately resource protection. The Agency has 
determined that only States or authorized Tribes are considered to be 
``neighboring jurisdictions'' under the final rule. As explained in 
section II.F.1 of this notice, section 518 of the CWA authorizes the 
EPA to treat eligible Tribes with reservations ``as a State'' within 
the meaning of that provision, but the CWA does not authorize the EPA 
to treat all Tribes in that manner. 33 U.S.C. 1377(e).\63\
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    \63\ This final rule does not change the regulations under which 
federally recognized Indian Tribes obtain authorization to be 
treated in the same manner as states. 40 CFR 131.4(c) expressly 
states that where the EPA determines that a Tribe is eligible for 
TAS for purposes of water quality standards, the Tribe is likewise 
eligible to the same extent as a State for purposes of section 401 
certifications. The regulations also establish criteria, application 
requirements, and application processing procedures for Tribes to 
obtain TAS authorization for purposes of CWA water quality 
standards. See 40 CFR 131.8.
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J. The EPA's Role in Review and Advice

    The final rule reaffirms the EPA's important role in providing 
advice and technical assistance as requested through the certification 
process. The final rule provision in section 121.16 has been modified 
from the proposal to better align with the text of section 401 and the 
scope of certification in this final rule.
    As described in the proposal, the EPA's 1971 regulations limited 
the provision of technical assistance to concerns regarding ``water 
quality standards.'' To be consistent with the 1972 amendments, the 
final rule replaces this term with the broader ``water quality 
requirements'' which, as defined in the final rule, includes water 
quality standards. The proposed rule included a provision specifically 
authorizing a certifying authority, federal agency, or project 
proponent to request assistance from EPA to evaluate whether a 
certification condition was intended to address water quality effects

[[Page 42275]]

from the discharge. The Agency is not finalizing that provision because 
it concluded that the final rule section 121.16 is broad enough to 
capture all technical advice that may be requested by certifying 
authorities, federal agencies, and project proponents.
    Some commenters expressed concern that the proposed rule's 
description of the EPA's review and advice role goes beyond the 
authority provided in section 401(b). Other commenters supported the 
EPA's providing assistance upon request. Other commenters asked whether 
the EPA would be the ``decision maker'' or a party to litigation 
challenging a certification if a project proponent, certifying 
authority, or federal agency relied on the EPA's technical advice at 
any point during the certification process.
    Under the final rule, federal agencies, certifying authorities, and 
project proponents may seek the EPA's technical expertise at any point 
during the section 401 water quality certification process. The Agency 
disagrees with commenters who asserted that the proposed regulation 
exceeded the authority provided in section 401(b). The Agency is not 
asserting independent or expanded authority in this role, but rather 
will provide assistance upon request. The legislative history for the 
Act provides further support for the Agency's technical role under 
section 401(b). See 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 request of a State, interstate agency or Federal agency.''). Under 
the final rule section 121.16, a certifying authority, federal agency, 
or project proponent may request assistance from the Administrator to 
provide relevant information and assistance regarding the meaning of, 
content of, application of, and methods to comply with water quality 
requirements. This provision of the final rule is not intended to give 
the EPA authority to make certification decisions, or to independently 
review certifications or certification requests. Nor does this 
provision authorize the EPA to interpret a State or Tribal water 
quality standard or designated use in a manner that is inconsistent 
with the State or Tribe's interpretation or implementation of that 
standard. This provision is merely intended to implement a provision of 
the statute that has been in effect since 1972. The provision of 
technical advice to project proponents, certifying authorities, or 
federal agencies is not a final agency action, and it does not render 
the EPA a decision maker for purposes of the certification action or 
subsequent action of the federal agency.

K. Enforcement

1. What is the Agency finalizing?
    Under the final rule, the federal agency issuing the applicable 
federal license or permit is responsible for enforcing certification 
conditions that are incorporated into a federal license or permit. Once 
the certifying authority acts on a certification request, the CWA does 
not provide independent authority for certifying authorities to enforce 
the conditions that are included in a certification under federal law. 
Under the final rule, the EPA is interpreting the CWA to clarify that 
this enforcement role is reserved to the federal agency issuing the 
federal license or permit.
    Consistent with section 401, the final rule also expands the post-
certification inspection function from the 1971 certification 
regulations to all certifying authorities. Under the final rule, 
certifying authorities are provided the opportunity to inspect the 
facility or activity prior to initial operations, in order to determine 
whether the discharge from the certified project will violate the 
certification. After an inspection, the certifying authority is 
required to notify the project proponent and federal agency in writing 
if it determines that the discharge from the certified project will 
violate the certification. The certifying authority is also required to 
specify recommendations concerning measures that may be necessary to 
bring the certified project into compliance with the certification.
2. Summary of Final Rule Rationale and Public Comment
    The CWA expressly notes that all certification conditions ``shall 
become a condition on any Federal license or permit'' subject to 
section 401.33 U.S.C. 1341(d). The EPA's 1971 certification regulations 
did not discuss the federal agency's responsibility to enforce 
certification conditions after they are incorporated into the permit. 
Under the final rule and consistent with the Act, the federal agency is 
responsible for enforcing certification conditions that are 
incorporated into a federal license or permit. In limited 
circumstances, the EPA's 1971 certification regulations required the 
Agency to provide notice of a violation and to allow six months for a 
project proponent to return to compliance before pursuing further 
enforcement. See 40 CFR 121.25. The EPA finds no support for that 
provision in CWA section 401, and such a provision is not included in 
the final rule.
a. Federal Agency Enforcement of Certification Conditions
    The CWA does not provide an independent regulatory enforcement role 
for certifying authorities. The role of the certifying authority is to 
review the proposed project and to either grant certification, grant 
certification with conditions, deny certification, or waive 
certification. Once the certifying authority acts on a certification 
request, section 401 does not provide an additional or ongoing role for 
certifying authorities to enforce certification conditions under 
federal law. Rather, federal agencies typically have enforcement 
authority in accordance with the enabling statutes that provide such 
agencies with permitting and licensing authority.
    Many commenters agreed with the proposal that the enforcement of 
section 401 conditions in a federal license or permit is the sole 
responsibility of the federal agency that issues the license or permit. 
A few commenters asserted that nothing in the CWA provides States with 
the authority to enforce or implement conditions of a section 401 
certification. Another commenter stated that if certification 
conditions were enforceable independent of the federal license or 
permit, there would have been no need for Congress to require 
conditions to become part of the federal license or permit under 
section 401(d). Another commenter requested that the final rule 
unequivocally provide that section 401 certification conditions may be 
enforced only after they are incorporated into the federal license or 
permit and only in the same manner as the other conditions of the 
federal license or permit, and that such conditions may not be 
independently enforced pursuant to the CWA. As reflected in the final 
rule regulatory text, the EPA generally agrees with these commenters.
    Other commenters asserted that the rule should allow States and 
Tribes to independently enforce their section 401 certification 
conditions. Some commenters asserted that providing federal agencies 
with exclusive authority to enforce section 401 certification 
conditions, and limiting State enforcement, is contrary to the language 
of the CWA, legislative history, and case law, citing Deschutes River 
Alliance v. PGE Co., 249 F.Supp.3d 1182 (D. Or. 2017); S.D. Warren, 547 
U.S. at 386. Another commenter

[[Page 42276]]

asserted that the Agency failed to cite any legal authority for 
prohibiting States from enforcing their own certifications. One 
commenter asserted that section 401 does not override State enforcement 
authority under State law, in those States that have provided for it. A 
few commenters referenced the savings clause in section 510 as 
explicitly preserving State authority to enforce State laws and 
requirements and suggested that reservation includes enforcement of 
section 401 certifications.
    The EPA has considered these comments and has concluded that some 
of them reflect a misunderstanding of the proposed rule. The Agency 
recognizes that some States have enacted State laws authorizing State 
enforcement of certifications or certification conditions in State 
court. State enforcement under State authorities may be lawful where 
State authority is not preempted by federal law.\64\ Nothing in this 
final rule prohibits States from exercising their enforcement authority 
under enacted State laws; however, the legality of such enforcement 
actions may be subject to review by a court of competent jurisdiction. 
Therefore, today's rule does not implicate, let alone violate, the 
reservation of state authority contained in section 510 of the Act.
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    \64\ Examples of situations where State authority would be 
preempted by federal law include FERC's sole authority to approve 
the construction of interstate natural gas pipelines and to regulate 
the transportation of natural gas for resale on these interstate 
pipelines under the Natural Gas Act (5 U.S.C. 717 et seq.; see also 
Schneidewind v. ANR Pipeline Co., 485 U.S. 293 (1988); Dominion 
Transmission, Inc. v. Summers, 723 F.3d 238 (D.C. Cir. 2013)) and 
FERC's exclusive authority to license nonfederal hydropower projects 
under the Federal Power Act (16 U.S.C. 797(e), 817(1); see also 
California v. Federal Energy Regulatory Comm'n, 495 U.S. 490 (1990); 
First Iowa Hydro-Electric Cooperative v. FPC, 328 U.S. 152 (1946)).
---------------------------------------------------------------------------

    Rather, the EPA concludes that section 401 of the CWA does not 
authorize States and Tribes to independently enforce section 401 
certification conditions under federal law. The CWA expressly 
authorizes the certifying authority to review the proposed project and 
to either grant certification, grant certification with conditions, 
deny certification, or waive certification. Once the certifying 
authority acts on a certification request, the CWA does not authorize 
certifying authorities to enforce certification conditions under 
federal law; rather, a federal agency may enforce its license or 
permit, including section 401 certification conditions. The EPA has 
reviewed and considered legislative history from the 1972 amendments 
and concludes that, on this point, the legislative history is either 
silent or lacks a definitive statement of congressional intent.\65\ The 
Agency agrees with the commenter who noted that if certification 
conditions were enforceable independent of the federal license or 
permit, there would have been no need for Congress to require 
conditions to be included in the federal license or permit under 
section 401(d).
---------------------------------------------------------------------------

    \65\ Most of the legislative history simply repeats the language 
from section 401 that certification conditions ``will become a 
condition on any Federal license or permit'' (H.R. Rep. No. 92-911, 
at 124 (1972) or that the certification becomes an ``enforceable 
condition on the Federal license or permit'' (S. Rep. No. 92-414, at 
69 (1971)). However, the Senate's consideration of the Conference 
report states that ``If a State establishes more stringent 
limitations and/or time schedules pursuant to Section 303, they 
should be set forth in a certification under Section 401. Of course, 
any more stringent requirements imposed by a State pursuant to this 
section shall be enforced by the Administrator.'' Sen. Consideration 
of Conf. Rep. No. 92-1236 (Exhibit 1), at 171 (1972) (emphasis 
added) As discussed in sections III.H, III.I, and III.J of this 
notice, the text of section 401 provides specific roles for EPA as a 
certifying authority, protecting waters in neighboring 
jurisdictions, and providing technical assistance, but section 401 
does not provide an enforcement role for EPA when it is not the 
federal licensing or permitting agency.
---------------------------------------------------------------------------

    A few commenters asserted that without State enforcement, project 
proponents will be less likely to comply with the State conditions, to 
the detriment of the environment. Some commenters asserted that the 
certifying authority, not the federal agency, often has the technical 
knowledge, organizational structure, and staffing capacity to conduct 
inspections and to enforce section 401 certification conditions. One 
commenter noted that the proposal creates regulatory uncertainty if 
States cannot enforce certifications and conditions. Other commenters 
suggested that enforcement of section 401 certifications should be done 
jointly by federal agencies and certifying authorities. One commenter 
asserted that the proposed rule should be revised to allow federal 
agencies and States to determine their appropriate roles in enforcing 
water quality certifications. Another commenter asserted that federal 
agencies are not precluded from consulting with certifying authorities 
if additional substantive expertise is needed, but argued that it was 
important for project proponents to know to whom they are accountable 
and to eliminate the potential for any conflicting obligations.
    The Agency disagrees with commenters' suggestion that water quality 
will be compromised if States cannot independently enforce 
certifications under federal law. The federal licensing or permitting 
agency remains responsible for exercising its enforcement authority for 
all provisions of the federally issued license or permit, including any 
conditions incorporated from a certification. The Agency also disagrees 
with commenters who requested that the EPA include authority in the 
final rule for States and Tribes to independently enforce or to jointly 
enforce certification conditions. The EPA cannot create via rulemaking 
federal or state enforcement authority that is not expressly authorized 
in the statute. However, the EPA always encourages coordination and 
cooperation between certifying authorities and federal agencies, 
particularly if such coordination can result in greater accountability 
and compliance with certification conditions. This final rule is 
intended to promote efficient permitting processes and regulatory 
certainty by clarifying that section 401 does not provide an additional 
or ongoing role for certifying authorities to enforce certification 
conditions under federal law. This final rule provides clarification on 
who holds project proponents accountable under federal law and 
eliminates any confusion about which entity is responsible for 
enforcing specific certification conditions in the federal license or 
permit. This final rule also eliminates the possibility of inconsistent 
interpretation and enforcement of the certification conditions in the 
federal license or permit, increasing the likelihood that project 
proponents will be able to comply with the certification conditions. 
Additionally, as discussed above, the final rule does not preclude 
States from pursuing enforcement actions where authorized under State 
law and not preempted by other federal statutory provisions. 
Importantly, the Agency agrees that federal agencies are not precluded 
from consulting with certifying authorities or the EPA when exercising 
their enforcement authority under CWA section 401.
    The Agency received feedback during stakeholder outreach, both pre-
proposal and post-proposal, expressing concern that federal agencies 
may not consistently or sufficiently enforce certification conditions 
incorporated into their federal licenses or permits. The Agency has 
also received feedback from other federal agencies noting the potential 
challenge with enforcing certain certification conditions, particularly 
those that are ill-defined, that lack clarity, or that are beyond the 
scope of certification as outlined in section III.E of this notice. The 
Agency anticipates the clarity provided in this final rule with respect 
to the scope of a certification, the scope of the conditions

[[Page 42277]]

of a certification (see section III.E.2.c of this notice), and the 
requirements for a certification with conditions (see section III.G.2.b 
of this notice) will provide federal agencies with sufficient 
information to enable them to effectively enforce certification 
conditions.
    Enforcement plays an essential role in maintaining robust 
compliance with the CWA, and a critical part of any strong enforcement 
program is the appropriate use of enforcement discretion. See, e.g., 
Heckler v. Chaney, 470 U.S. 821, 831 (1985). Enforcement programs 
exercise discretion and make careful and informed choices about where 
to conduct investigations, identifying the most serious violations and 
reserving limited enforcement resources for the cases that can make the 
most difference. See Sierra Club v. Whitman, 268 F.3d 898, 902-03 (9th 
Cir. 2001). It is important for enforcement programs to retain their 
enforcement discretion because federal agencies are in the best 
position to (1) determine whether a particular action is likely to 
succeed, (2) assess whether the action fits agency policies, and (3) 
determine whether there are enough agency resources to undertake and 
effectively prosecute the action, taking account of all other agency 
constraints and priorities. See Heckler, 470 U.S. at 831.
    A couple of commenters asserted that section 401 is not included in 
the CWA enforcement provision, CWA section 309, and that the CWA 
citizen suit provision, CWA section 505, does not authorize a citizen 
suit to enforce certification conditions. One commenter noted that 
although Dombeck held that a citizen suit could be used to challenge 
the issuance of a permit without a certification, the court did not 
make reference to the enforcement of certification conditions. A few 
other commenters asserted that enforcement of section 401 certification 
conditions is authorized under the CWA citizen suit provision, citing 
CWA section 505, Oregon Natural Desert Ass'n v. Dombeck, 172 F.3d 1092 
(9th Cir. 1998), and Deschutes River Alliance v. PGE Co., 249 F.Supp.3d 
1182 (D. Or. 2017).
    The EPA considered these public comments and the varying 
interpretations described above and is declining to adopt a particular 
interpretation in this final rule. The EPA did not propose an 
interpretation of the CWA section 505 citizen suit provision and did 
not solicit comment on its applicability to section 401 certifications 
or certification conditions, and EPA is therefore declining to finalize 
an interpretation of these provisions in this final rule.
    Section 401(a)(4) and the EPA's 1971 certification regulations at 
40 CFR part 121.26 through 121.28 describe circumstances in which the 
certifying authority may inspect a facility that has received 
certification prior to operation \66\ and may notify the federal agency 
so that the agency may determine whether the facility will violate 
applicable water quality requirements. 33 U.S.C. 1341(a)(4). The Agency 
is updating these regulations to reflect the scope of certification 
review under the modern CWA. See section 121.11 of the final rule and 
section III.E of this notice. The Agency has made minor, non-
substantive modifications to section 121.11(a) from proposal to match 
the language of section 121.11(b) and section 401(a)(4). Additionally, 
consistent with section 401, the EPA is expanding this inspection 
function to all certifying authorities and is clarifying the process by 
which certifying authorities should notify the federal agency and 
project proponent of any concerns arising from inspections.
---------------------------------------------------------------------------

    \66\ The Agency notes that operation may include implementation 
of a certified project.
---------------------------------------------------------------------------

    Consistent with section 401, this final rule provides certifying 
authorities the opportunity to inspect the facility or activity prior 
to initial operation in order to determine whether the discharge from 
the certified project will violate the certification. The EPA notes 
that section 401(a)(4) authorizes certifying authorities to ``review 
the manner in which the facility or activity shall be operated . . . '' 
for purposes of assuring that water quality requirements will not be 
violated. 33 U.S.C. 1341(a)(4). The final rule uses the terms 
``inspect'' and ``inspection'' because these are well understood terms 
that provide additional clarity in the final rule. The Agency does not 
expect these terms to change the meaning of section 401(a)(4), as 
implemented through section 121.11 of the final rule. After an 
inspection, the certifying authority is required to notify the project 
proponent and the federal agency responsible for issuing the federal 
license or permit in writing if the discharge from the certified 
project will violate the certification. The certifying authority is 
also required to specify recommendations concerning measures that may 
be necessary to bring the certified project into compliance with the 
certification.
    Some commenters asserted that a certifying authority's compliance 
assurance and enforcement role should not be limited to one pre-
operational inspection and asserted that the certifying authority must 
be allowed to inspect the project both before and during operation in 
order to ensure the project is compliant with any certification 
conditions. One commenter explained that the certifying authority would 
not always be able to determine compliance with all conditions of the 
certification prior to operation. Another commenter asserted that it 
would be unacceptable for the State (rather than the project proponent) 
to identify the measures necessary to correct identified violations of 
certification conditions. Another commenter stated that it is unclear 
whether States have jurisdiction over post-license maintenance and 
repair projects that have an impact on water quality.
    The EPA disagrees with commenters who suggested that the final rule 
should expand the inspection and enforcement authority provided in 
section 401. As finalized, this rule is consistent with the breadth of 
inspection and enforcement authority provided in section 401. This 
provision in the final rule is intended to allow the certifying 
authority the opportunity to inspect the facility or activity to 
determine whether the discharge will violate the certification issued. 
This final rule clarifies that after commencement of operations, 
enforcement of certification conditions incorporated into the federal 
license or permit is reserved to the federal agency that issued the 
federal license or permit under federal law. Accordingly, after 
commencement of operations, all inspections and enforcement will be 
conducted by the federal agencies. As discussed above, federal agencies 
are not precluded from consulting with certifying authorities or the 
EPA when exercising their enforcement authority under section 401.
b. Reasonable Assurance vs. Will Comply
    The proposed rule replaced the language from the existing 
regulations requiring a ``reasonable assurance that the proposed 
activity will not result in a violation of applicable water quality 
standards'' with language requiring ``that a discharge from a Federally 
licensed or permitted activity will comply with water quality 
requirements.'' The Agency received comments expressing concerns about 
this proposed change. According to these commenters, the ``will 
comply'' language could result in States' including certification 
conditions that are difficult or impossible to comply with, resulting 
in greater non-compliance by project proponents. A few commenters 
expressed concern that ``will comply'' would impose a stricter standard 
on States than ``reasonable

[[Page 42278]]

assurance,'' such that they would be unable to develop conditions that 
include adaptive management provisions. These commenters maintained 
that the ``reasonable assurance'' standard currently allows for 
adaptive future decision-making despite present uncertainties. Other 
commenters stated that, in some cases, certifying authorities may be 
unable to demonstrate that a proposed project will be in compliance 
with water quality requirements at all times in the future, potentially 
resulting in more denials. Another commenter stated that the language 
in the final rule should include a ``reasonable assurance'' standard 
that a discharge would meet water quality requirements, rather than the 
``will comply'' standard in the proposal. Several commenters noted that 
sections 401(a)(3) and (a)(4) retained the ``reasonable assurance'' 
language and asserted that Congress inadvertently changed the language 
in (a)(1) and (d). Another commenter argued that the ambiguity 
throughout 401(a) and (d) suggests that the competing provisions cannot 
be harmonized based on a plain language reading of the statute alone.
    The Agency disagrees with the suggestion that the ``reasonable 
assurance'' language should be retained in the final rule. The 
``reasonable assurance'' language in the EPA's 1971 certification 
regulations was an artifact from the pre-1972 version of section 21(b), 
which provided that the certifying authority would certify ``that there 
is reasonable assurance . . . that such activity will be conducted in a 
manner which will not violate applicable water quality standards.'' 
Public Law 91-224, 21(b)(1), 84 Stat. 91 (1970). The Agency 
acknowledges that the inclusion of the phrase ``reasonable assurance'' 
in section 401(a)(3) and (a)(4) creates some ambiguity. The legislative 
history does not explain why Congress retained the term in sections 
401(a)(3) and (a)(4) but not in sections 401(a) and (d).
    Under basic canons of statutory construction, the EPA begins with 
the presumption that Congress chose its words intentionally. See, e.g., 
Stone v. INS, 514 U.S. 386, 397 (1995) (``When Congress acts to amend a 
statute, we presume it intends its amendment to have real and 
substantial effect.''). The Agency presumes that Congress chose to use 
the phrase ``will comply'' in sections 401(a)(1) and (d), while 
retaining the phrase ``reasonable assurance'' in 401(a)(3) and (a)(4). 
As such, the scope under this final rule and the ``will comply'' 
language are consistent with the 1972 CWA amendments to section 
401(a)(1) and (d), which require certifying authorities to conclude 
that a discharge ``will comply'' with water quality requirements (as 
defined in section 121.1(n) of this final rule).
    The Agency disagrees with the suggestion that using ``will comply'' 
will place an impossible standard on certifying authorities. The Agency 
does not intend or believe that the statutory language requires States 
to ensure that a project will maintain strict compliance, in every 
respect, throughout its entire existence. The inclusion of the 
statutory language ``will comply'' does not require certifying 
authorities to provide absolute certainty that applicants for a federal 
license or permit will never violate water quality requirements. 
Indeed, future compliance depends on many factors besides just facility 
design and operation, and it would not be reasonable for an authority 
to certify that no unknown future event could ever result in a 
violation of the certification. The use of the language comparable to 
``will comply'' is not uncommon in CWA regulatory programs. For 
example, CWA section 402 contemplates that an NPDES permits may issue 
only upon a showing that discharge ``will meet'' various enumerated 
provisions. 33 U.S.C. 1342(a). This standard has not precluded States, 
Tribes, or the EPA from routinely issuing NPDES permits for a variety 
of discharges; nor has it resulted in NPDES permits that are impossible 
for permittees to comply with. The Agency concludes that use of the 
statutory language ``will comply'' in the final rule remains loyal to 
the words that Congress chose when it enacted section 401. The Agency 
has no theoretical or empirical basis to conclude that the language in 
the final rule will materially change the way in which certifying 
authorities, including the EPA, process certification requests, so long 
as certifying authorities act in good faith and in accordance with CWA 
section 401.

L. Modifications

1. What is the Agency finalizing?
    The EPA is finalizing the rule as proposed and is removing EPA's 
oversight role for modifications to an existing certification. 
Additionally, the final rule does not authorize or include any 
procedure for certifying authorities to modify certifications after 
issuance. As discussed below, there are other established procedures 
that certifying authorities may rely on to address modifications, 
should the need arise.
2. Summary of Final Rule Rationale and Public Comment
a. The EPA's Role in Modifications
    Section 401 does not provide an express oversight role for the EPA 
with respect to the issuance or modification of section 401 
certifications. The EPA's role under section 401 consists of providing 
a common framework for the program through rulemaking, providing 
technical assistance under section 401(b), ensuring the protection of 
other States' waters under section 401(a)(2), and acting as the 
certifying authority in some circumstances. However, the EPA's 1971 
certification regulations provided the Agency an oversight role in the 
unique context of modifications to existing water quality 
certifications. 40 CFR 121.2(b). The final rule removes this oversight 
role from the regulatory text, as it is inconsistent with the statute.
    The Agency solicited comment generally on the appropriate scope of 
the EPA's oversight role under section 401, and specifically whether 
the EPA should play any role in oversight of State or Tribal 
certifications or modifications, and, if so, what that role should be. 
The Agency received a considerable number of public comments on this 
issue, most of which supported removing the EPA's oversight role for 
modifications to certifications. Some commenters agreed with the 
proposal that there is no statutory basis for section 121.2(b) of the 
1971 certification regulations, nor is there any indication that 
Congress intended for the EPA to have an oversight role for 
modifications to certifications. Another commenter suggested that the 
EPA could follow the process described in the proposed rule section 
121.10 to meet its obligation under section 401(a)(2) regarding 
neighboring States with respect to a modification to a section 401 
certification.
    The EPA agrees with commenters that there is no statutory basis in 
section 401 for the Agency to have an oversight role for modifications 
to certifications. The Agency disagrees with the commenter who asserted 
that it would be appropriate to expand the EPA's authority provided 
under section 401(a)(2) to grant the Agency a more formal oversight 
role. The EPA's role under section 401(a)(2) is plainly limited to (1) 
notifying a State or authorized Tribe if the Agency makes a 
discretionary determination that a discharge from a certified project 
may affect the waters of that jurisdiction, and (2) subsequently 
providing recommendations to the federal agency if the affected 
neighboring jurisdiction

[[Page 42279]]

requests a hearing. See section III.I of this notice.
b. Modifications by Certifying Authorities
    In light of the statute's one-year time limit for a certifying 
authority to act on a section 401 certification, the EPA solicited 
comment on whether and to what extent States or Tribes should be able 
to modify a previously issued certification, either before or after the 
reasonable period of time expires, before or after the license or 
permit is issued, or to correct an aspect of a certification or its 
conditions if remanded or found unlawful by a federal or State court or 
administrative body.
    Certain commenters were in favor of retaining the ability for 
States and Tribes to modify certifications. One commenter asserted that 
other CWA sections, such as sections 402 and 404, also do not 
explicitly allow for modifications, yet the EPA and the Corps assume 
authority to modify permits issued under those sections as long as they 
follow their own processes to do so. However, many commenters suggested 
that certain parameters should be applied to modifications, such as 
restrictions on ``unilateral'' modifications and ``reopener'' clauses. 
The EPA disagrees with commenters who argued in favor of allowing 
modifications to certifications. As described throughout this final 
rule preamble, section 401 certifications are unique in that they are 
not subject to ongoing enforcement by certifying authorities or 
oversight by the EPA, as section 402 and 404 permits may be. Indeed, 
once a certification is issued, the conditions therein are incorporated 
into a different document, a federal license or permit, for 
implementation and enforcement. Allowing certifications to be modified 
after issuance could create significant confusion and regulatory 
uncertainty within those federal license and permit programs.
    Some commenters argued that ``unilateral'' modifications by the 
certifying authority should not be allowed, whereas other commenters 
favored a broad ability for States and Tribes to modify certifications. 
The commenters who disfavored unilateral modifications argued that it 
would effectively void the maximum reasonable period of time of one 
year and would lead to economic uncertainty for the project and 
possibly lengthy and expensive litigation. One commenter stated that 
unilateral modifications should be allowed in certain circumstances, 
such as before the reasonable period of time has expired.
    Some commenters encouraged the EPA to provide clarity on the 
process by which a certification can be modified and the timeframe for 
that modification, so as to help avoid future regulatory uncertainty 
and litigation. A few commenters asked the EPA to clarify the process 
by which federal agencies must respond to any requested revisions to 
certifications beyond the reasonable period of time. As discussed in 
more detail below, the final rule does not authorize certifications to 
be modified after they have been issued. Section 401 does not grant 
States the authority either to unilaterally modify a certification 
after it is issued or to include ``reopener'' clauses in a 
certification. However, other established procedures are available to 
address situations that necessitate a modification after a 
certification has been issued.
    Some commenters distinguished between modifications made within the 
reasonable period of time and those outside of that timeframe. A few of 
these commenters suggested various scenarios in which a modification 
should be allowed, including scenarios in which a court remands a 
certification or condition, the project proponent wants to correct an 
error, or the discharge in the federal license or permit changes. 
Another commenter asserted that State modification of certification 
conditions outside of the one-year review period should not 
automatically become part of the license or permit, citing Airport 
Communities Coalition v. Graves, 280 F. Supp. 2d 1207, 1217 (W.D. Wash. 
2003).
    The EPA has determined that section 401 does not provide authority 
for a certifying authority to unilaterally modify a certification, 
either through certification conditions that purport to authorize the 
certifying authority to reopen the certification in the future or 
through any other mechanism. The Agency also notes that the ability to 
unilaterally modify a certification after issuance is unnecessary, 
because circumstances that may necessitate modifications often will be 
linked to other actions that have established procedures. For example, 
if a federal license or permit is modified or the underlying project is 
changed such that the federal license or permit requires modification, 
it may trigger the requirement for a new certification, depending on 
the federal agency's procedures. See, e.g., 18 CFR 5.23 (requiring 
project proponents to submit a new certification request when the 
project proponent submits an application to FERC to amend an existing 
hydropower license or to amend a pending application for a hydropower 
license). Similarly, if a court vacates or remands a certification or 
condition thereof, the certifying authority may need to modify the 
certification, depending on the specifics of the court's decision, and 
the federal agency may need to modify the license or permit 
accordingly. To reduce uncertainty, federal agencies may establish 
procedures in their regulations to clarify how modifications would be 
handled in these specific scenarios. For example, the EPA's existing 
regulations regarding certification in the NPDES program, located at 40 
CFR 124.55(b), provide procedures for modification in certain 
circumstances (``If there is a change in the State law or regulation 
upon which a certification is based, or if a court of competent 
jurisdiction or appropriate State board or agency stays, vacates, or 
remands a certification, a State which has issued a certification under 
[section] 124.53 may issue a modified certification or notice of waiver 
and forward it to EPA.'').
    Additionally, the need to unilaterally modify a certification to 
address a change in the proposed project should be unnecessary under 
this final rule. As discussed in section III.C of this notice, if 
certain elements of the proposed project change materially after a 
certification is issued, it may be reasonable for the project proponent 
to submit a new certification request. The clock stops after a 
certifying authority issues a certification decision, and therefore the 
Agency disagrees with the suggestion that modifications should be 
allowed to occur after that point but within the reasonable period of 
time.
    The EPA requested comment on whether EPA should expressly prohibit 
certification conditions that may create regulatory uncertainty, 
including conditions that extend the effective date of a certification 
beyond the reasonable period of time and conditions that authorize 
certifications to be reopened. Some commenters opposed certification 
conditions that enable a State or Tribe to ``reopen'' or revisit the 
certification at a specific time or upon certain triggering events. A 
few commenters argued that reopeners could effectively eliminate the 
one-year time limit in the statute and transform section 401's grant of 
State authority into an ongoing regulatory role. Another commenter, 
stating that reopener clauses allowing a State or Tribe to unilaterally 
modify a certification are contrary to law, noted that a regulation 
prohibiting such clauses would be consistent with judicial precedent, 
citing Triska v. Dept of Health & Envtl. Control, 355 SE2d 531, 533-34 
(S.C. 1987). Other commenters maintained that States and Tribes should 
retain their authority to

[[Page 42280]]

modify certifications whenever circumstances warrant, and that no 
federal agency should have authority over conditions issued by a State 
or Tribe or future modifications to those conditions. A few commenters 
noted that the broad authority granted in section 401(d) of the CWA 
also provides authority for a State or Tribe to include a ``reopener'' 
clause to ensure that their waters are protected, especially given the 
long timeframes for some projects.
    The EPA has considered these comments and concludes that reopener 
clauses are inconsistent with section 401. The final rule does not 
include an explicit prohibition on reopener clauses because the EPA has 
concluded that such conditions are already proscribed by section 
121.6(e) of the final rule. By including a reopener condition in a 
certification, the certifying authority intends to take an action to 
reconsider or otherwise modify a previously issued certification at 
some unknown point in the future. As described in section III.F above, 
the reasonable period of time to act on a certification request begins 
when a certifying authority receives the request, and ends when the 
certifying authority takes action to grant, grant with conditions, 
deny, or waive. The reasonable period of time does not continue to run 
after a certification decision is issued. A reopener condition, if 
allowed under this final rule, would effectively extend the established 
reasonable period of time into the future, potentially indefinitely. 
The Agency acknowledges that projects may change after a certification 
is issued; but, as discussed above, there are other procedures in this 
final rule and in other federal agency regulations that can address 
project changes that would necessitate a new or modified certification 
or federal license or permit. Reopener conditions are not authorized 
under this final rule because such actions by the certifying authority 
would modify the reasonable period of time, contrary to section 
121.6(e) of the final rule.
    As discussed above, section 401 does not provide certifying 
authorities with the authority to modify certifications after they are 
issued. The Agency disagrees with commenters who assert that section 
401(d) provides certifying authorities with authority to include 
reopener clauses as a condition on a federal license or permit. As a 
general matter, administrative agencies possess the inherent authority 
to reconsider prior decisions; \67\ however, section 401 provides 
express statutory language (e.g., specifying the time period in which a 
certifying authority must act on a certification request or waive its 
right to act; requiring certification conditions to be incorporated 
into a separate federal permit) that displaces the general principle, 
and thus Congress has precluded the certifying authority from 
reconsidering or modifying a certification. For the reasons explained 
above, unilateral modifications, including certification conditions 
that would reopen the certification in the future, are not authorized 
in section 401.
---------------------------------------------------------------------------

    \67\ See e.g., Motor Vehicle Mfrs. Ass'n v. State Farm Mut. 
Auto. Ins. Co., 463 U.S. 29, 42 (1983); FCC v. Fox Television 
Studios, 556 U.S. 502, 514-15 (2009); Belville Mining Co. v. United 
States, 999 F.2d 989, 997 (6th Cir. 1993).
---------------------------------------------------------------------------

    The Agency also disagrees with commenters that assert that the 
federal agency should not have authority over certification conditions 
or modifications. As discussed in section III.G.2.b of this notice, 
consistent with section 401(d), certification conditions that meet the 
requirements of final rule section 121.7(d) shall be incorporated into 
the federal license or permit. Accordingly, the federal agency is the 
appropriate party to address any modifications to the license or 
permit, including those certification conditions incorporated into the 
license or permit.

M. General Licenses and Permits

1. What is the Agency finalizing?
    In response to comments received, the Agency is finalizing several 
provisions specific for certifications for the issuance of general 
licenses or permits. Section 121.5(c) of the final rule specifically 
defines elements of a ``certification request'' that must be submitted 
for the issuance of general licenses or permits. The Agency is also 
including additional provisions in section 121.7 of the final rule to 
address certification conditions and denials for general licenses and 
permits.
    This final rule preamble also reaffirms that a federal agency 
seeking certification for a general license or permit must comply with 
all provisions of this final rule, including the pre-filing meeting 
request requirement in section 121.4. This final rule preamble also 
clarifies a federal agency's obligation under section 401(a)(2) to 
notify the EPA when it receives certification for a general license or 
permit.
2. Summary of Final Rule Rationale and Public Comment
    The majority of certifications are issued for projects that require 
an individual federal license or permit. However, certifications are 
also required prior to the issuance or establishment of a general 
license or permit. General licenses and permits are vital to the 
effective operation of several federal programs such as the CWA section 
402 and section 404 programs, producing efficiencies that save time and 
money for project proponents and regulators. General licenses and 
permits provide streamlined procedures for project proponents by 
authorizing categories of discharges or simplified review procedures 
when the discharges comply with specified requirements. Federal 
licensing and permitting agencies must obtain a section 401 
certification when issuing general licenses or permits, and the final 
rule accounts for the potential variation of future projects or 
activities that may be covered under the general license or permit. The 
final rule provides slightly modified requirements to account for 
differences between individual and general licenses and permits in the 
water quality certification context.
a. Certification Request for a General License or Permit
    The Agency took comment on whether federal agencies seeking 
certification for a general license or permit should be subject to the 
same or different ``certification request'' submittal requirements as 
other project proponents seeking certification for an individual 
license or permit. A few commenters stated that federal agencies should 
follow the same procedures as other project proponents for submitting 
certification requests. Another commenter encouraged the EPA to revise 
the elements of a certification request to provide flexibility for 
general licenses or permits, because the type, means, and methods used 
to monitor the future discharges that may be authorized in the future 
may not be known. The final rule includes specific requirements for 
certification requests for the issuance of general licenses or permits.
    Where a federal agency is seeking to issue a general license or 
permit, the EPA expects the federal agency to follow the requirements 
of section 121.5(c) of the final rule. Section 121.5(c) of the final 
rule includes a list of documents and information required for 
``certification request for issuance of a general license or permit,'' 
similar to the list that was included in the proposed rule as an 
alternative approach:

    1. Identify the project proponent(s) and a point of contact;
    2. identify the proposed categories of activities to be 
authorized by the general license or permit for which certification 
is requested;

[[Page 42281]]

    3. include the draft or proposed general license or permit;
    4. estimate the number of discharges expected to be authorized 
by the proposed general license or permit each year;
    5. include documentation that a pre-filing meeting request was 
submitted to the certifying authority at least 30 days prior to 
submitting the certification request;
    6. contain the following statement: `The project proponent 
hereby certifies that all information contained herein is true, 
accurate, and complete to the best of my knowledge and belief'; and
    7. contain the following statement: `The project proponent 
hereby requests that the certifying authority review and take action 
on this CWA 401 certification request within the applicable 
reasonable period of time.'

    The list in section 121.5(c) is similar to the list in section 
121.5(b) of the final rule, including the two new requirements (a 
statement that all information contained in the request is true, 
accurate, and complete to the best of the project proponent's 
knowledge, and documentation that a pre-filing meeting request was 
submitted to the certifying authority at least 30 days prior to 
submitting the certification request), but with some differences to 
account for the distinctions between issuing a general license or 
permit and issuing a license or permit for a specific project, with 
respect to the available information at the time of certification. The 
Agency has made these changes regarding how general licenses and 
permits are handled under this final rule to improve clarity and for 
consistent administration of section 401 for all general licenses and 
permits.
b. Information Requirements for General License or Permit Certification 
Conditions and Denials
    Consistent with commenters and other federal agency concerns 
regarding the need to account for the differences between individual 
and general license and permits, the final rule contains additional 
language in sections 121.7(d) and 121.7(e) to ensure that the rule can 
be consistently and appropriately applied to certifications issued for 
the issuance of general licenses and permits. Section 121.7(d)(1) of 
the final rule provides the information requirements for certification 
conditions that apply when a project proponent has requested 
certification for an individual license or permit that may result in a 
specific discharge or set of discharges into waters of the United 
States. See section III.C of this notice. The final rule includes a new 
section 121.7(d)(2), which provides slightly different information 
requirements for certification conditions for issuance of general 
licenses and permits. Certifications for issuance of general permits 
and licenses must include the information requirements in section 
121.7(d)(2) of the final rule.
    For each certification condition on issuance of a general license 
or permit, section 121.7(d)(2) of the final rule requires:
    (i) A statement explaining why the condition is necessary to assure 
that any discharge authorized under the general license or permit will 
comply with water quality requirements; and
    (ii) A citation to federal, state, or tribal law that authorizes 
the condition.
    Similarly, section 121.7(e)(1) of the final rule provides the 
information requirements for certification denials that apply when a 
project proponent has requested certification for an individual license 
or permit that may result in a specific discharge or set of discharges 
into waters of the United States. See section III.G.2.c of this notice. 
The final rule also includes a new section 121.7(e)(2), which provides 
slightly different information requirements for denials for general 
licenses and permits. For each certification denial for issuance of a 
general license or permit, section 121.7(e)(2) of the final rule 
requires:

    (i) The specific water quality requirements with which 
discharges that could be authorized by the general license or permit 
will not comply;
    (ii) A statement explaining why discharges that could be 
authorized by the general license or permit will not comply with the 
identified water quality requirements; and
    (iii) If the denial is due to insufficient information, the 
denial must describe the types of water quality data or information, 
if any, that would be needed to assure that the range of discharges 
from potential projects will comply with water quality requirements.

    Although these are both new provisions in the final rule, the 
substance of these information requirements is very similar to the 
information requirements for certification conditions and denials for 
individual licenses and permits that were included in the proposed 
rule. The EPA made only slight changes to these proposed provisions to 
facilitate their application in the general licensing and permitting 
context. Certification denials for a general license or permit must 
contain the information in section 121.7(e)(2) of the final rule.
c. Other Provisions of the Final Rule Also Apply to Certifications for 
General Licenses or Permits
    As mentioned in sections III.B and III.I of this notice, the EPA 
expects that all of the procedural and substantive requirements in this 
final rule will apply to entities seeking certification for a general 
license or permit. As discussed in section III.I of this notice, 
section 401(a)(2) provides a mechanism for the EPA to notify a State or 
an authorized Tribe where the EPA has determined that the discharge 
from a certified project may affect the quality of that State's or 
Tribe's waters. The Act requires federal agencies to notify the EPA of 
certifications and associated federal licensing or permitting 
applications. 33 U.S.C. 1341(a)(2). This statutory obligation extends 
to any circumstance where a federal agency receives a certification, 
including where the federal agency receives certification for issuance 
of a general license or permit.
    The EPA is finalizing a pre-filing meeting requirement that 
requires all project proponents, including federal agencies when they 
seek certification for general licenses or permits, to request a 
meeting with a certifying authority at least 30 days prior to 
submitting a certification request, as discussed in section III.B of 
this notice.

IV. Economic Analysis

    Pursuant to Executive Orders 12866 and 13563, the Agency conducted 
an economic analysis to better understand the potential effects of this 
final rule on certifying authorities and project proponents. While the 
economic analysis is informative in the rulemaking context, the EPA is 
not relying on the analysis as a basis for this final rule. See, e.g., 
Nat'l. Assn. of Homebuilders v. EPA, 682 F.3d 1032, 1039-40 (D.C. Cir. 
2012). The analysis is contained and described more fully in the 
document Economic Analysis for the Clean Water Act Section 401 
Certification Rule (``the Economic Analysis''). A copy of this document 
is available in the docket for this action.
    Section 401 certification decisions have varying effects on 
certifying authorities and project proponents. The Agency has limited 
data regarding the number of certification requests submitted and the 
outcome of those certifications. To make the best use of limited 
information to assess the potential impacts of this final rule on 
project proponents and certifying authorities, the Economic Analysis 
provides a qualitative analysis of the section 401 certification 
process under the 1971 certification regulations and under the final 
rule. In particular, the Economic Analysis focuses on the revisions to 
the time period for review, the scope of review, and the pre-filing 
meeting request requirement.
    This final rule will help certifying authorities, federal agencies, 
and project

[[Page 42282]]

proponents understand what is required and expected during the section 
401 certification process, thereby increasing transparency and reducing 
regulatory uncertainty. The EPA concludes that improved clarity 
concerning the time period for review and the scope of review may make 
the certification process more efficient for project proponents and 
certifying authorities.

V. Statutory and Executive Order Reviews

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

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

    This action is a significant regulatory action that was submitted 
to the Office of Management and Budget (OMB) for review. Any changes 
made in response to OMB recommendations have been documented in the 
docket for this action. In addition, the Agency prepared an analysis of 
potential costs and benefits associated with this action. This analysis 
is contained in the Economic Analysis, which is available in the docket 
and is briefly summarized in Section IV of this notice. While economic 
analyses are informative in the rulemaking context, the Agency is not 
relying on the economic analysis performed pursuant to Executive Orders 
12866 and 13563 and related procedural requirements as a basis for this 
final rule.

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

    Pursuant to Executive Order 13771 (82 FR 9339, February 3, 2017), 
this final rule is a deregulatory action. See the Economic Analysis for 
further discussion about the potential effects of this rule.

C. Paperwork Reduction Act

    The information collection activities in this final rule have been 
submitted for approval to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act (PRA). The Information Collection 
Request (ICR) document that the EPA prepared has been assigned EPA ICR 
number 2603.05 (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 collection requirements are not enforceable until they are 
approved by OMB.
    The information collected under this ICR is used by certifying 
authorities for reviewing proposed projects for potential water quality 
impacts from discharges from an activity that requires a federal 
license or permit, and by the EPA to evaluate potential effects on 
downstream or neighboring jurisdictions. Except for when the EPA is the 
certifying authority, information collected under section 401 is not 
directly collected by or managed by the EPA. The primary collection of 
information is performed by States and Tribes acting as certifying 
authorities. Information collected directly by the EPA under section 
401 in support of the section 402 program is already captured under 
existing EPA ICR No. 0229.22 (OMB Control No. 2040-0295).
    The final rule clarifies the information that project proponents 
must provide to request a section 401 certification and introduces a 
pre-filing meeting request requirement for all project proponents. The 
final rule also removes information requirements related to 
certification modifications and section 401(a)(2) procedures for 
neighboring jurisdictions, and provides additional transparency by 
identifying, unambiguously, information necessary to support 
certification actions. The EPA expects this final rule will provide 
greater clarity on section 401 requirements, reduce the overall 
preparation time spent by a project proponent on certification 
requests, and reduce the review time for certifying authorities.
    In the interest of transparency and public understanding, the EPA 
has provided here relevant portions of the burden assessment of the 
final rule. More information about the burden assessment can be found 
in the supporting statement for the ICR.
    Respondents/affected entities: Project proponents, State and Tribal 
reviewers (certifying authorities).
    Respondent's obligation to respond: required to obtain 401 
certification (33 U.S.C. 1341(a)(1)).
    Estimated number of respondents: 97,119 per year.
    Frequency of response: one per federal application.
    Total estimated burden: 931,000 hours (per year). Burden is defined 
at 5 CFR 1320.3(b).
    Total estimated cost: $58 Million (per year), includes $8 Million 
annualized capital or operation & maintenance costs.
    The final rule results in an estimated marginal burden decrease of 
136,000 hours. This marginal decrease is associated with the reduction 
of information requirements in the final rule and a projected decrease 
in certifying authority review times associated with the clearer scope 
of certification in section 121.3 of the final rule. A full description 
of the analysis is available in the supporting statement accompanying 
this information collection request.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for the 
EPA's regulations in 40 CFR are listed in 40 CFR part 9. 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.

D. Regulatory Flexibility Act

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the Regulatory 
Flexibility Act (RFA). In making this determination, the impact of 
concern is any significant adverse economic impact on small entities. 
An agency may certify that a rule will not have a significant economic 
impact on a substantial number of small entities if the rule relieves 
regulatory burden, has no net burden, or otherwise has a positive 
economic effect on the small entities subject to the rule.
    Under section 401, a federal agency may not issue a license or 
permit to conduct any activity that may result in any discharge into 
waters of the United States, unless the State or authorized Tribe where 
the discharge would originate (or the EPA, in certain circumstances 
described above) either (1) issues a section 401 water quality 
certification finding compliance with applicable water quality 
requirements or (2) waives certification. Under section 401 and this 
final rule, the applicant for the federal license or permit (the 
project proponent) is required to request and obtain a water quality 
certification. This action provides project proponents with greater 
clarity and regulatory certainty on the substantive and procedural 
requirements for obtaining a water quality certification. This action 
also provides procedural clarity to certifying authorities and Federal 
licensing and permitting agencies. The Agency anticipates this action 
will result in faster, more efficient and more transparent decision-
making by certifying authorities. As discussed in the Economic Analysis 
accompanying this final rule, the Agency concludes

[[Page 42283]]

that improved clarity concerning the scope and reasonable period of 
time for certification review may make the certification process more 
efficient for project proponents, including small entities, and does 
not expect the cost of the rule to result in a significant economic 
impact on a substantial number of small entities.

E. Unfunded Mandates Reform Act

    This action does not contain an unfunded mandate of $100 million or 
more as described in the Unfunded Mandates Reform Act of 1995 (UMRA), 2 
U.S.C. 1531-1538, and does not contain any regulatory requirements that 
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 Section IV of this notice 
for further discussion on the Economic Analysis.

F. Executive Order 13132: Federalism

    Executive Order 13132, titled ``Federalism'' (64 FR 43255, August 
10, 1999), requires federal agencies to develop an accountable process 
to ensure ``meaningful and timely input by state and local officials in 
the development of regulatory policies that have federalism 
implications.'' The Executive Order defines ``policies that have 
federalism implications'' to include regulations that have 
``substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.'' The 
Agency concludes that the final rule may have federalism implications 
because it may impact how some States have historically implemented 
water quality certification programs. This final rule makes the EPA's 
CWA section 401 regulation consistent with the statutory language, and 
acknowledges that States may modify their practices to be consistent 
with this regulation. The EPA provides the following federalism summary 
impact statement.
    The Agency consulted with State and local government officials, or 
their representative national organizations, during the development of 
this action as required under the terms of Executive Order 13132 to 
permit them to have meaningful and timely input into the proposed 
rule's development. On April 24, 2019, the Agency initiated a 30-day 
Federalism consultation period prior to proposing this rule to allow 
for meaningful input from State and local governments. The kickoff 
Federalism consultation meeting occurred on April 23, 2019; attendees 
included representatives of intergovernmental associations and other 
associations representing State and local governments. Organizations in 
attendance included: National Governors Association, U.S. Conference of 
Mayors, National Conference of State Legislatures, the Environmental 
Council of the States, National League of Cities, Council of State 
Governments, National Association of Counties, National Association of 
Towns and Townships, Association of Clean Water Administrators, Western 
States Water Council, Conference of Western Attorneys General, 
Association of State Wetland Managers, and Western Governors' 
Association. Additionally, one in-person meeting was held with the 
National Governors Association on May 7, 2019. The Agency also held an 
informational webinar for States and Tribes on May 8, 2019. At these 
webinars and meetings, the EPA provided a presentation and sought input 
on areas of section 401 that may require clarification, including 
timeframe, scope of certification review, and coordination among 
project proponents, certifying authorities, and federal licensing or 
permitting agencies. See section II.C of this notice for more 
information on outreach with States prior to Federalism consultation.
    Letters and webinar attendee feedback received by the Agency before 
and during Federalism consultation may be found on the pre-proposal 
recommendations docket (Docket ID No. EPA-HQ-OW-2018-0855, available at 
https://www.regulations.gov/docket?D=EPA-HQ-OW-2018-0855). These 
webinars, meetings, and letters provided a wide and diverse range of 
interests, positions, and recommendations to the Agency. Following 
publication of the proposed rule, the Agency held two additional in-
person meetings with State representatives to answer clarifying 
questions about the proposal and to discuss implementation 
considerations. The Agency has prepared a report summarizing its 
consultation and additional outreach to state and local governments and 
the results of this outreach. A copy of the final report is available 
in the docket (Docket ID No. EPA-HQ-OW-2019-0405) for this final rule. 
Correspondence received from State and local governments and their 
representative national associations during the public comment period 
can be found in Docket ID No. EPA-HQ-OW-2019-0405, available at https://www.regulations.gov/docket?D=EPA-HQ-OW-2019-0405.
    During Federalism consultation and engagement efforts and in the 
State and local government comments on the proposed rule, many States 
expressed concern that the proposed rule would adversely impact State 
authority and States' ability to protect state waters. Commenters 
raised several concerns, including concerns about the federal agency 
review role in the certification process; constraints on the 
certification review process, including the scope, timeframe, and 
information to start the statutory review clock; information 
requirements to act on a certification request; State enforcement role 
in certification; and the potential impact on existing State 
regulations and law.
    The Agency acknowledges that the final rule may change how States 
administer the section 401 program, but has made adjustments in the 
final rule to account for many of the concerns raised by states. The 
Agency has made certain changes in response to comments, including 
comments from States and local governments. The final rule preserves 
the robust State role in the certification process in a manner 
consistent with the CWA. As discussed in section III.G of this notice, 
the final rule does not provide federal agencies with a role in 
substantively reviewing State certification decisions. Additionally, 
the final rule expands the pre-filing meeting requirement to all 
project proponents and allows States, in their discretion, to meet with 
project proponents to discuss information needs and concerns prior to 
starting the reasonable period of time. The final rule notice also 
clarifies that certifying authorities may request additional 
information during the reasonable period of time, and the final rule 
preserves certifying authorities' ability to deny certification 
requests if they have inadequate information to determine whether a 
discharge complies with water quality requirements. The final rule 
definition of ``water quality requirements'' no longer limits other 
appropriate requirements of State law to requirements that are EPA-
approved; rather, the definition captures State or Tribal regulatory 
requirements for point source discharges into waters of the United 
States. The final rule also removes the requirement for certifying 
authorities to provide a statement of whether and to what extent a less 
stringent condition could satisfy applicable water quality 
requirements.
    As required by Section 8(a) of Executive Order 13132, the EPA 
included a certification from its Federalism Official stating that the 
EPA

[[Page 42284]]

had met the Executive Order's requirements in a meaningful and timely 
manner. A copy of this certification is included in the official record 
for this final action.

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

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, Nov. 9, 2000), requires 
agencies to develop an accountable process to ensure ``meaningful and 
timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This action has Tribal 
implications. However, it will neither impose substantial direct 
compliance costs on federally recognized Tribal governments nor preempt 
Tribal law.
    During Tribal consultation and engagement efforts and in Tribal 
comments on the proposed rule, many Tribes expressed concern that the 
proposed rule would adversely impact Tribal waters. The final rule may 
affect how Tribes with treatment in a similar manner as a state (TAS) 
for CWA section 401 administer their section 401 program, but will not 
have an administrative impact on Tribes for whom the EPA certifies on 
their behalf. The Agency has made changes in the final rule in response 
to comments, including comments from Tribes. The final rule maintains 
the ability for Tribes to provide input in the certification process 
and preserves the robust Tribal role in the certification process in a 
manner consistent with the CWA.
    The Agency consulted with Tribal officials at the beginning of rule 
development to permit meaningful and timely input, consistent with the 
EPA Policy on Consultation and Coordination with Indian Tribes. The EPA 
initiated a Tribal consultation and coordination process before 
proposing this rule by sending a ``Notification of Consultation and 
Coordination'' letter dated April 22, 2019, to all 573 Federally 
recognized Tribes. The letter invited Tribal leaders and designated 
consultation representatives to participate in the Tribal consultation 
and coordination process. The Agency held two identical webinars on 
this action for Tribal representatives on May 7 and May 15, 2019. The 
Agency also presented on this action at the Region 9 Regional Tribal 
Operations Committee Spring meeting on May 22, 2019. Additionally, 
Tribes were invited to two webinars for States, Tribes, and local 
governments on April 17, 2019 and May 8, 2019. Tribes and Tribal 
organizations sent 15 pre-proposal recommendation letters to the Agency 
as part of the consultation process. All Tribal and Tribal organization 
letters and webinar feedback may be found on the pre-proposal 
recommendations docket (Docket ID No. EPA-HQ-OW-2018-0855). The Agency 
met with four Tribes at the staff-level.
    The Agency continued engagement with Tribes after the end of the 
formal consultation period. Following the publication of the proposed 
rule, the Agency held two in-person meetings with Tribal 
representatives to answer clarifying questions about the proposal, and 
to discuss implementation considerations and Tribal interest in the 
section 401 water quality certification process. In addition, the 
Agency continued to meet with individual Tribes requesting consultation 
or engagement following publication of the proposed rule, holding 
staff-level meetings with 11 Tribes and leader-to-leader level meetings 
with two Tribes post-proposal. In total, the Agency met with 14 
individual Tribes requesting consultation, holding leader-to-leader 
level consultation meetings with two individual Tribes and staff-level 
meetings with 13 individual Tribes (the Agency met with some Tribes 
more than once). The Agency has prepared a report summarizing the 
consultation and further engagement with Tribal nations. This report, 
Summary Report of Tribal Consultation and Engagement for the Clean 
Water Act Section 401 Certification Rule (Docket ID No. EPA-HQ-OW-2019-
0405), is available in the docket for this final rule.
    As required by section 7(a), the 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.

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

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

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

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

J. National Technology Transfer and Advancement Act

    This action is not subject to the National Technology Transfer and 
Advancement Act of 1995 because the rule does not involve technical 
standards.

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

    This action is not subject to Executive Order 12898 (59 FR 7629, 
February 11, 1994) because there is no significant evidence of 
disproportionately high and adverse human health or environmental 
effects on minority populations, low income populations, and/or 
indigenous populations, as specified in Executive Order 12898.

L. Congressional Review Act

    This action is subject to the CRA, and the EPA will submit a rule 
report to each House of the 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 in 40 CFR Part 121

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

Andrew Wheeler,
Administrator.

    For the reasons set forth in the preamble, EPA is revising 40 CFR 
part 121 as follows:

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

Sec.
Subpart A--General
121.1 Definitions.
Subpart B--Certification Procedures
121.2 When certification is required.
121.3 Scope of certification.
121.4 Pre-filing meeting request.
121.5 Certification request.
121.6 Establishing the reasonable period of time.
121.7 Action on a certification request.
121.8 Effect of denial of certification.
121.9 Waiver.
121.10 Incorporation of certification conditions into the license or 
permit.
121.11 Enforcement and compliance of certification conditions.
Subpart C--Other Jurisdictions
121.12 Determination of effects on neighboring jurisdictions.

[[Page 42285]]

Subpart D--Certification by the Administrator
121.13 When the Administrator certifies.
121.14 Request for additional information.
121.15 Notice and hearing.
Subpart E--Consultations
121.16 Review and advice.

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

Subpart A--General

Sec.  121.1   Definitions.

    (a) Administrator means the Administrator of the Environmental 
Protection Agency or an authorized representative.
    (b) Certification means a water quality certification issued in 
accordance with Clean Water Act section 401 and this part.
    (c) Certification request means a written, signed, and dated 
communication that satisfies the requirements of Sec.  121.5(b) or (c).
    (d) Certified project means a proposed project that has received a 
certification or for which the certification requirement has been 
waived.
    (e) Certifying authority means the agency responsible for 
certifying compliance with applicable water quality requirements in 
accordance with Clean Water Act section 401.
    (f) Discharge for purposes of this part means a discharge from a 
point source into a water of the United States.
    (g) Federal agency means any agency of the Federal Government to 
which application is made for a license or permit that is subject to 
Clean Water Act section 401.
    (h) License or permit means any license or permit granted by an 
agency of the Federal Government to conduct any activity which may 
result in a discharge.
    (i) Neighboring jurisdiction means any other state or authorized 
tribe whose water quality the Administrator determines may be affected 
by a discharge for which a certification is granted pursuant to Clean 
Water Act section 401 and this part.
    (j) Project proponent means the applicant for a license or permit 
or the entity seeking certification.
    (k) Proposed project means the activity or facility for which the 
project proponent has applied for a license or permit.
    (l) Reasonable period of time means the time period during which a 
certifying authority may act on a certification request, established in 
accordance with Sec.  121.6 of this part.
    (m) Receipt means the date that a certification request is 
documented as received by a certifying authority in accordance with 
applicable submission procedures.
    (n) Water quality requirements means applicable provisions of 
Sec. Sec.  301, 302, 303, 306, and 307 of the Clean Water Act, and 
state or tribal regulatory requirements for point source discharges 
into waters of the United States.

Subpart B--Certification Procedures

Sec.  121.2   When certification is required.

    Certification is required for any license or permit that authorizes 
an activity that may result in a discharge.

Sec.  121.3   Scope of certification.

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

Sec.  121.4   Pre-filing meeting request.

    (a) At least 30 days prior to submitting a certification request, 
the project proponent shall request a pre-filing meeting with the 
certifying authority.
    (b) The certifying authority is not obligated to grant or respond 
to the pre-filing meeting request.
    (c) If the certifying authority grants the pre-filing meeting 
request, the project proponent and the certifying authority are 
encouraged to discuss the nature of the proposed project and potential 
water quality effects. The project proponent is encouraged to provide a 
list of other required state, interstate, tribal, territorial, and 
federal authorizations and to describe the anticipated timeline for 
construction and operation.
    (d) After receiving the pre-filing meeting request, the certifying 
authority is encouraged to contact the Federal agency and to identify 
points of contact to facilitate information sharing between the 
certifying authority and Federal agency throughout the certification 
process.

Sec.  121.5   Certification request.

    (a) A certification request shall be submitted to the certifying 
authority and to the Federal agency concurrently.
    (b) A certification request for an individual license or permit 
shall:
    (1) Identify the project proponent(s) and a point of contact;
    (2) Identify the proposed project;
    (3) Identify the applicable federal license or permit;
    (4) Identify the location and nature of any potential discharge 
that may result from the proposed project and the location of receiving 
waters;
    (5) Include 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;
    (6) Include a list of all other federal, interstate, tribal, state, 
territorial, or local agency authorizations required for the proposed 
project, including all approvals or denials already received;
    (7) Include documentation that a pre-filing meeting request was 
submitted to the certifying authority at least 30 days prior to 
submitting the certification request;
    (8) Contain the following statement: `The project proponent hereby 
certifies that all information contained herein is true, accurate, and 
complete to the best of my knowledge and belief'; and
    (9) Contain the following statement: `The project proponent hereby 
requests that the certifying authority review and take action on this 
CWA 401 certification request within the applicable reasonable period 
of time.'
    (c) A certification request for issuance of a general license or 
permit shall:
    (1) Identify the project proponent(s) and a point of contact;
    (2) Identify the proposed categories of activities to be authorized 
by the general license or permit for which certification is requested;
    (3) Include the draft or proposed general license or permit;
    (4) Estimate the number of discharges expected to be authorized by 
the proposed general license or permit each year;
    (5) Include documentation that a pre-filing meeting request was 
submitted to the certifying authority at least 30 days prior to 
submitting the certification request;
    (6) Contain the following statement: `The project proponent hereby 
certifies that all information contained herein is true, accurate, and 
complete to the best of my knowledge and belief '; and
    (7) Contain the following statement: `The project proponent hereby 
requests that the certifying authority review and take action on this 
CWA 401 certification request within the applicable reasonable period 
of time.'

Sec.  121.6   Establishing the reasonable period of time.

    (a) The Federal agency shall establish the reasonable period of 
time either categorically or on a case-by-case basis. In either event, 
the reasonable period of time shall not exceed one year from receipt.
    (b) Within 15 days of receiving notice of the certification request 
from the project proponent, the Federal agency shall provide, in 
writing, the following information to the certifying authority:

[[Page 42286]]

    (1) The date of receipt;
    (2) The applicable reasonable period of time to act on the 
certification request; and
    (3) The date upon which waiver will occur if the certifying 
authority fails or refuses to act on the certification request.
    (c) In establishing the reasonable period of time, the Federal 
agency shall consider:
    (1) The complexity of the proposed project;
    (2) The nature of any potential discharge; and
    (3) The potential need for additional study or evaluation of water 
quality effects from the discharge.
    (d) The Federal agency may extend the reasonable period of time at 
the request of a certifying authority or a project proponent, but in no 
case shall the reasonable period of time exceed one year from receipt.
    (1) Any request by a certifying authority or project proponent to 
the Federal agency to extend the reasonable period of time shall be in 
writing.
    (2) If the Federal agency agrees to extend the reasonable period of 
time, the Federal agency shall notify the certifying authority and 
project proponent in writing.
    (e) The certifying authority is not authorized to request the 
project proponent to withdraw a certification request and is not 
authorized to take any action to extend the reasonable period of time 
other than specified in Sec.  121.6(d).

Sec.  121.7   Action on a certification request.

    (a) Any action by the certifying authority to grant, grant with 
conditions, or deny a certification request must be within the scope of 
certification, must be completed within the reasonable period of time, 
and must otherwise be in accordance with section 401 of the Clean Water 
Act. Alternatively, a certifying authority may expressly waive 
certification.
    (b) If the certifying authority determines that a discharge from a 
proposed project will comply with water quality requirements, it may 
issue or waive certification. If the certifying authority cannot 
certify that the discharge from a proposed project will comply with 
water quality requirements, it may deny or waive certification.
    (c) Any grant of certification shall be in writing and shall 
include a statement that the discharge from the proposed project will 
comply with water quality requirements.
    (d) Any grant of certification with conditions shall be in writing 
and shall for each condition include, at a minimum:
    (1) For certification conditions on an individual license or 
permit,
    (i) A statement explaining why the condition is necessary to assure 
that the discharge from the proposed project will comply with water 
quality requirements; and
    (ii) A citation to federal, state, or tribal law that authorizes 
the condition.
    (2) For certification conditions on issuance of a general license 
or permit,
    (i) A statement explaining why the condition is necessary to assure 
that any discharge authorized under the general license or permit will 
comply with water quality requirements; and
    (ii) A citation to federal, state, or tribal law that authorizes 
the condition.
    (e) Any denial of certification shall be in writing and shall 
include:
    (1) For denial of certification for an individual license or 
permit,
    (i) The specific water quality requirements with which the 
discharge will not comply;
    (ii) A statement explaining why the discharge will not comply with 
the identified water quality requirements; and
    (iii) If the denial is due to insufficient information, the denial 
must describe 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.
    (2) For denial of certification for issuance of a general license 
or permit,
    (i) The specific water quality requirements with which discharges 
that could be authorized by the general license or permit will not 
comply;
    (ii) A statement explaining why discharges that could be authorized 
by the general license or permit will not comply with the identified 
water quality requirements; and
    (iii) If the denial is due to insufficient information, the denial 
must describe the types of water quality data or information, if any, 
that would be needed to assure that the range of discharges from 
potential projects will comply with water quality requirements.
    (f) If the certifying authority determines that no water quality 
requirements are applicable to the waters receiving the discharge from 
the proposed project, the certifying authority shall grant 
certification.

Sec.  121.8   Effect of denial of certification.

    (a) A certification denial shall not preclude a project proponent 
from submitting a new certification request, in accordance with the 
substantive and procedural requirements of this part.
    (b) Where a Federal agency determines that a certifying authority's 
denial satisfies the requirements of Sec.  121.7(e), the Federal agency 
must provide written notice of such determination to the certifying 
authority and project proponent, and the license or permit shall not be 
granted.

Sec.  121.9   Waiver.

    (a) The certification requirement for a license or permit shall be 
waived upon:
    (1) Written notification from the certifying authority to the 
project proponent and the Federal agency that the certifying authority 
expressly waives its authority to act on a certification request; or
    (2) The certifying authority's failure or refusal to act on a 
certification request, including:
    (i) Failure or refusal to act on a certification request within the 
reasonable period of time;
    (ii) Failure or refusal to satisfy the requirements of Sec.  
121.7(c);
    (iii) Failure or refusal to satisfy the requirements of Sec.  
121.7(e); or
    (iv) Failure or refusal to comply with other procedural 
requirements of section 401.
    (b) A condition for a license or permit shall be waived upon the 
certifying authority's failure or refusal to satisfy the requirements 
of Sec.  121.7(d).
    (c) If the certifying authority fails or refuses to act, as 
provided in this section, the Federal agency shall provide written 
notice to the Administrator, certifying authority, and project 
proponent that waiver of the certification requirement or condition has 
occurred. This notice must be in writing and include the notice that 
the Federal agency provided to the certifying authority pursuant to 
Sec.  121.6(b).
    (d) A written notice of waiver from the Federal agency shall 
satisfy the project proponent's requirement to obtain certification.
    (e) Upon issuance of a written notice of waiver, the Federal agency 
may issue the license or permit.

Sec.  121.10   Incorporation of certification conditions into the 
license or permit.

    (a) All certification conditions that satisfy the requirements of 
Sec.  121.7(d) shall be incorporated into the license or permit.
    (b) The license or permit must clearly identify any certification 
conditions.

Sec.  121.11   Enforcement of and compliance with certification 
conditions.

    (a) The certifying authority, prior to the initial operation of a 
certified project, shall be afforded the

[[Page 42287]]

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

Subpart C--Other Jurisdictions

Sec.  121.12   Determination of effects on neighboring jurisdictions.

    (a) A Federal agency shall within 5 days notify the Administrator 
when it receives a license or permit application and the related 
certification.
    (b) Within 30 days after the Administrator receives notice in 
accordance with Sec.  121.12(a), the Administrator at his or her 
discretion may determine that the discharge from the certified project 
may affect water quality in a neighboring jurisdiction. In making this 
determination and in accordance with applicable law, the Administrator 
may request copies of the certification and the federal license or 
permit application.
    (c) If the Administrator determines that the discharge from the 
certified project may affect water quality in a neighboring 
jurisdiction, the Administrator, within 30 days after receiving notice 
in accordance with Sec.  121.12(a), shall notify that neighboring 
jurisdiction, the certifying authority, the Federal agency, and the 
project proponent. The federal license or permit may not be issued 
pending the conclusion of the processes in this paragraph.
    (1) Notification from the Administrator shall: Be in writing, be 
dated, and identify the materials provided by the Federal agency. The 
notification shall inform the neighboring jurisdiction that it has 60 
days to notify the Administrator and the Federal agency, in writing, 
whether it has determined that the discharge will violate any of its 
water quality requirements, to object to the issuance of the federal 
license or permit, and to request a public hearing from the Federal 
agency.
    (2) Notification 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.
    (3) If the neighboring jurisdiction requests a hearing in 
accordance with Sec.  121.12(c)(2), the Federal agency shall hold a 
public hearing on the neighboring jurisdiction's objection to the 
license or permit.
    (i) The Federal agency shall provide the hearing notice to the 
Administrator at least 30 days before the hearing takes place.
    (ii) At the hearing, the Administrator shall submit to the Federal 
agency his or her evaluation and recommendation(s) concerning the 
objection.
    (iii) The Federal agency shall: Consider recommendations from the 
neighboring jurisdiction and the Administrator, and any additional 
evidence presented to the Federal agency at the hearing; and determine 
whether additional certification conditions are necessary to assure 
that the discharge from the certified project will comply with the 
neighboring jurisdiction's water quality requirements.
    (iv) If additional certification conditions cannot assure that the 
discharge from the certified project will comply with the neighboring 
jurisdiction's water quality requirements, the Federal agency shall not 
issue the license or permit.

Subpart D--Certification by the Administrator

Sec.  121.13   When the Administrator certifies.

    (a) Certification by the Administrator that the discharge from a 
proposed project will comply with water quality requirements is 
required where no state, tribe, or interstate agency has authority to 
give such a certification.
    (b) In taking action pursuant to this paragraph, the Administrator 
shall comply with the requirements of Clean Water Act section 401 and 
40 CFR part 121.

Sec.  121.14   Request for additional information.

    (a) If necessary, the Administrator may request additional 
information from the project proponent, provided that the initial 
request is made within 30 days of receipt.
    (b) The Administrator shall request only additional information 
that is within the scope of certification and is directly related to 
the discharge from the proposed project and its potential effect on 
receiving waters.
    (c) The Administrator shall request only information that can be 
collected or generated within the reasonable period of time.
    (d) In any request for additional information, the Administrator 
shall include a deadline for the project proponent to respond.
    (1) The project proponent shall comply with the deadline 
established by the Administrator.
    (2) The deadline must allow sufficient time for the Administrator 
to review the additional information and to act on the certification 
request within the reasonable period of time.
    (e) Failure of a project proponent to timely provide the 
Administrator with additional information does not extend the 
reasonable period of time or prevent the Administrator from taking 
action on a certification request.

Sec.  121.15   Notice and hearing.

    (a) Within 20 days of receipt, the Administrator shall provide 
appropriate public notice of receipt, including to parties known to be 
interested in the proposed project or in the receiving waters into 
which the discharge may occur.
    (b) If the Administrator in his or her discretion determines that a 
public hearing is appropriate or necessary, the EPA shall: Schedule 
such hearing at an appropriate time and place; and, to the extent 
practicable, give all interested and affected parties the opportunity 
to present evidence or testimony in person or by other means at the 
hearing.

Subpart E--Consultations

Sec.  121.16   Review and advice.

    The Administrator may, and upon request shall, provide Federal 
agencies, certifying authorities, and project proponents with relevant 
information and assistance regarding the meaning of, content of, 
application of, and methods to comply with water quality requirements.

[FR Doc. 2020-12081 Filed 7-10-20; 8:45 am]
BILLING CODE 6560-50-P