Clean Water Act Section 401 Certification Rule

Federal RegisterJul 13, 2020

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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.

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?

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.

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

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,

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.

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).

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)”.

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.

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

FERC,

913 F.3d 1099 (D.C. Cir. 2019).

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,

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.

The EPA co-administers section 404 with the Army Corps of Engineers (the Corps).

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

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

(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.

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.”

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

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.

Available at

https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201804&RIN=2040-AF86.

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-

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

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

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,

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.

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

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.”

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.

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.

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

Montana,

132 S. Ct. 1215, 1228 (2012).

These earlier statutory frameworks, however, proved challenging for regulators, who often worked backwards from an overly-polluted waterway to determine which dischargers and which sources of pollution may be responsible.

See EPA

State Water Resources Control Bd.,

426 U.S. 200, 204 (1976). In fact, Congress determined that the prior

statutes were inadequate to address the decline in the quality of the nation's waters,

see City of Milwaukee

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.

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.

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).

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 Keating

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

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

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.

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

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

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.

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

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.

United States,

562 U.S. 44, 45 (2011) (quoting

United States

Mead Corp.,

533 U.S. 218, 226-27 (2001)).

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

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

agency considered the matter in a detailed and reasoned fashion, and the decision involves reconciling conflicting policies.”

Id.

at 865.

For other instructive applications of

Chevron's

interpretative principles, see

Entergy Corp.

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.

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

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

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

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.

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

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.

Inslee

and

Lake Carrier's Association

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

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.

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

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.

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

FCC,

915 F.3d 19 (D.C. Cir. 2019) (

quoting Motor Vehicle Mfrs. Ass'n

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

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

FERC,

913 F.3d 1099 (D.C. Cir. 2019);

New York State Dep't of Envtl. Conservation

FERC

, 884 F.3d 450 (2d Cir. 2018);

Constitution Pipeline Co., LLC

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.

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.

Inslee,

No. 3:18-cv-5005 (W.D. Wash. filed Jan. 8, 2018).

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

Alaska,

451 U.S. 259, 273 (1981), and

General Electric Co.

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

Alaska,

451 U.S. 259 273, (1981), and

General Electric Co.

Gilbert,

429 U.S. 125, 143 (1976), is misplaced because both decisions pre-date

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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.

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

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

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.

art. II, § 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

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deference does not give a federal agency the power to rewrite federal law, and they asserted, citing

INS

Cardozo-Fonseca,

480 U.S. 421 (1987);

Adams Fruit Co.

Barrett,

494 U.S. 638, 649-650 (1990);

Encino Motorcars, LLC.

Navarro,

136 S. Ct. 2117 (2016); and

Kisor

Wilkie,

139 S. Ct. 2400, 2417 (2019), that the proposed rule falls outside the scope of

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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

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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,

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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

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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

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)

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

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,'

§ 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

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