Amendment to Requirements for National Pollutant Discharge Elimination System (NPDES) Permits for Storm Water Discharges Under Section 402(p)(6) of the Clean Water Act

SUMMARY: Today, EPA is withdrawing the storm water phase II direct

final rule published on April 7, 1995 (60 FR 17950) and promulgating a

final rule in its place based on an identical proposal published that

same day (60 FR 17958). By today's action, EPA is promulgating changes

to the National Pollutant Discharge Elimination System (NPDES) storm

water permit application regulations under the Clean Water Act (CWA)

for phase II dischargers. Phase II dischargers generally include all

point source discharges of storm water from commercial, retail and

institutional facilities and from municipal separate storm sewer

systems serving populations of less than 100,000.

Today's rule establishes a sequential application process in two

tiers for all phase II storm water discharges. The first tier provides

the NPDES permitting authority flexibility to require permits for those

phase II dischargers that are determined to be contributing to a water

quality impairment or are a significant contributor of pollutants to

waters of the United States. (``Permitting authority'' refers to EPA or

States and Indian Tribes with approved NPDES programs.) EPA expects

this group to be small because most of these types of dischargers have

already been included under phase I of the storm water program. The

second tier includes all other phase II dischargers. This larger group

will be required to apply for permits by the end of six years, but only

if the phase II regulatory program in place at that time requires

permits. As discussed in more detail below, EPA is open to, and

committed to, exploring a number of non-permit control strategies for

the phase II program that will allow efficient and effective targeting

of real environmental problems. As part of this commitment, EPA has

initiated a process to include stakeholders in the development of a

supplemental phase II rule under the Federal Advisory Committee Act

(FACA). This rule will be finalized by March 1, 1999 and will determine

the nature and extent of requirements, if any, that will apply to the

various types of phase II facilities prior to the end of the six-year

application period defined by today's rule.

DATES: The direct final rule published on April 7, 1995 at 60 FR 17950

and corrected on April 18, 1995 at 60 FR 19464 is withdrawn and this

final rule is effective on August 7, 1995. In accordance with 40 CFR

23.2, EPA is explicitly providing that this rule shall be considered

final for purposes of judicial review at 1 p.m. (Eastern time) on

August 7, 1995.

ADDRESSES: The docket for this rulemaking is available for public

inspection at EPA's Water Docket, Room L-102, 401 M Street, SW,

Washington, DC 20460. For access to the docket materials, call (202)

260-3027 between 9 a.m. and 3:30 p.m. (Eastern time) for an

appointment. Please indicate that the docket to be accessed is for the

April 7, 1995 Federal Register notice on the storm water phase II

regulations. As provided in 40 CFR part 2, a reasonable fee may be

charged for copying services.

FOR FURTHER INFORMATION CONTACT: Nancy Cunningham, Office of Wastewater

Management, Permits Division (4203), Environmental Protection Agency,

401 M Street, SW, Washington, DC 20460, (202) 260-9535.

SUPPLEMENTARY INFORMATION:

I. Overview of Today's Action

Today, EPA is promulgating the phase II storm water application

regulations as proposed on April 7, 1995 (60 FR 17958). EPA also is

withdrawing the direct final rule published on that same date (60 FR

17950); corrected at 60 FR 19464, April 18, 1995. The direct final and

proposed rules contained identical requirements. By today's rule, EPA

promulgates changes to the NPDES storm water permit application

regulations under the CWA to establish a common sense approach for all

phase II storm water dischargers. Phase II storm water dischargers

include those storm water discharges not addressed under phase I of the

storm water program.\1\. Generally, phase II dischargers are point

source discharges of storm water from commercial, retail, light

industrial and institutional facilities, construction activities under

five acres, and from municipal separate storm sewer systems serving

populations of less than 100,000.

\1\ Phase I dischargers include: dischargers issued a permit

before February 4, 1987; discharges associated with industrial

activity; discharges from a municipal separate storm sewer system

serving a population of 100,000 or more; and discharges that the

permitting authority determines to be contributing to a violation of

a water quality standard or a significant contributor of pollutants

to the waters of the United States.

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Today's rulemaking will promote the public interest by relieving

most phase II dischargers of the immediate requirement to apply for

permits. Consequently, this rule relieves most phase II dischargers

from citizen suit liability for failure to have an NPDES permit over

the next six years. If a phase II discharger complies with the

application deadlines established by today's rule, the facility will

not be subject to enforcement action for discharge without a permit or

for failure to submit a permit application.

Under today's rule, application deadlines are in two tiers. The

first tier allows the permitting authority to focus current efforts on

those facilities that will produce the greatest environmental benefit.

The first tier is for those phase II dischargers that the NPDES

permitting authority determines are contributing to a water quality

impairment or are a significant contributor of pollutants to waters of

the U.S. Those dischargers that have been so designated are required to

obtain a permit and must submit permit applications to the permitting

authority within 180 days of being notified that such an application is

required. The permitting authority has the flexibility to extend this

deadline. Under the second tier, all remaining phase II facilities must

apply for permits by August 7, 2001, but only if the phase II

regulatory program in place at that time requires permits. EPA is

actively exploring alternative control strategies with broad

stakeholder involvement. EPA is also establishing application

requirements for phase II dischargers, as well as making other

conforming changes to other portions of the NPDES regulations in

today's rule.

EPA is subject to a court order to propose supplemental rules for

phase II sources by September 1, 1997, and finalize them by March 1,

1999. Natural Resources Defense Council, Inc. v. Browner, Civ. No. 95-

634 PLF (D.D.C., April 6, 1995). However, if the CWA is amended prior

to these dates to address some of these storm water issues, EPA will,

of course, move to expeditiously implement the statutory changes.

II. Background

EPA provided an extensive discussion of the statutory and

regulatory background of the storm water program in the direct final

rule published in the April 7, 1995, Federal Register notice (60 FR

17950). For the sake of brevity, EPA refers the reader to that notice

and

[[Page 40231]]

only briefly repeats the background necessary to explain the need for

today's final rule.

As explained in CWA section 101, Congress enacted the CWA ``to

restore and maintain the chemical, physical, and biological integrity

of the Nation's waters'' through reduction and eventual elimination of

the discharge of pollutants into those waters. CWA section 301

prohibits the discharge of pollutants from a point source except in

compliance with certain other sections of the Act. One of those

sections, section 402, established the National Pollutant Discharge

Elimination System (NPDES), the permitting program for control of point

source discharges including storm water.

In the 1987 amendments to the CWA, Congress enacted section 402(p).

Section 402(p)(1) relieved certain storm water dischargers (commonly

referred to as phase II dischargers) from the requirement to obtain a

permit until October 1, 1992. Section 402(p)(6) provided that EPA was

to publish regulations by October 1, 1992. Congress later extended the

date for the permitting moratorium until October 1, 1994, and the date

for publication of phase II regulations until October 1, 1993. See

Water Resources Development Act of 1992, Public Law No. 102-580,

section 364, 106 Stat. 4797, 4862 (1992).

Though the relief from the permit requirement lapsed on October 1,

1994, EPA had not published phase II storm water regulations. On

October 18, 1994, EPA issued guidance explaining that regulations had

not yet been promulgated for the phase II storm water program, and that

the Agency was unable to waive the statutory prohibition against

unpermitted discharges of pollutants to waters of the United States in

the absence of such regulations. EPA is not attempting to extend the

CWA deadlines in today's rule, but rather is establishing the phase II

storm water program under section 402(p)(6). (See Response to Comment

section below for further discussion of this issue.)

III. Regulation Changes

In today's rule, EPA is designating under section 402(p)(6) all

phase II sources as being part of the phase II program. EPA is

establishing permit application deadlines for these dischargers in two

tiers in today's rule. To obtain real environmental results early, the

first tier applies to those phase II dischargers that the NPDES

permitting authority determines are contributing to a water quality

impairment or are a significant contributor of pollutants. Those

dischargers that have been so designated by the permitting authority

are required to obtain a permit and must submit a permit application

within 180 days of being notified that such an application is required.

The permitting authority has the flexibility to extend this deadline.

Under the second tier, all other phase II facilities must apply for

permits by August 7, 2001, but only if the phase II regulatory program

in place at that time requires permits.

EPA also is establishing application requirements for phase II

dischargers, as well as making other conforming changes to other

portions of its NPDES regulations in today's rule. For example, EPA is

providing flexibility to the permitting authority to modify the

specific application requirements for phase II dischargers. Again EPA

believes this is a common sense approach to alleviate unnecessary

burden on phase II dischargers. The specifics of the application

requirements and other conforming changes are explained in the April 7,

1995, notice published at 60 FR 17950. EPA has not changed the

regulatory text in today's final rule from that notice.

IV. Responses to Public Comment

A comprehensive ``response to comment'' document is available in

the administrative record for this rulemaking. Many significant

comments, and EPA's responses, are summarized below.

Many commenters disagreed with EPA's interpretation of section

402(p) of the CWA in which EPA determined that section 402(p) sets a

statutory deadline for the issuance of permits to phase II storm water

dischargers. The commenters argued that 402(p) does not require permits

for all discharges of storm water after October 1, 1994, rather it

prohibits the need for such permits before this date.

EPA disagrees. CWA section 301(a) states that it is illegal to

discharge pollutants to waters of the U.S. except in compliance with

Section 402. The current regulations under section 402 establish a

permit program for point source discharges. In the 1987 amendments to

the CWA, Congress added Section 402(p) to ensure the orderly evolution

of the NPDES storm water program. Section 402(p)(1) did not alter the

basic underlying prohibition in Section 301(a) as it applied to storm

water discharges. Section 402(p)(1) did, however, establish temporary

relief from permitting requirements for certain storm water discharges

for a specified period of time. Section 402(p)(6) provided EPA with the

authority to consider alternative control strategies for the phase II

program. Because EPA had not established alternatives under section

402(p)(6), the existing permitting requirements under section 402

applied to phase II dischargers after October 1, 1994.

The legislative history behind 402(p) supports EPA's position that

when the date lapsed, phase II sources became subject to the pre-

existing statutory requirement to obtain a NPDES permit. The

Congressional Record from October 15, 1986 includes the following

statements from the House of Representatives:

The relief afforded by this provision extends only to October 1,

1992. After that date, all municipal separate storm sewers are

subject to the requirements of 301 and 402.

After October 1, 1992, the permit requirements of the Clean

Water Act are restored for municipal separate storm sewer systems

serving a population of fewer than 100,000.

132 Cong. Rec. H10532 (Oct. 15, 1986)

More recent Congressional actions provide even clearer support for

EPA's interpretation of Section 402(p). The original deadline for

permits for phase II storm water discharges was October 1, 1992. At the

time of this original deadline, the Agency was not ready to issue

regulations for implementation of the phase II program. When Congress

recognized the severe liability problem this would create for phase II

discharges, Congress decided to extend the relief deadline in section

402(p)(1) to October 1, 1994. At the same time, Congress extended the

deadline for phase II regulations in section 402(p)(6) to October 1,

1993, to allow EPA more time to develop phase II regulations. If phase

II dischargers were not subject to enforcement for violations of

section 301(a) until EPA promulgated the phase II regulations, Congress

would not have extended sections 402(p)(1) and 402(p)(6) with differing

deadlines. If Congress had not intended unregulated phase II sources to

be liable for violations of section 301(a) on October 1, 1992, there

would have been no need to amend section 402(p)(1) at all.

In related comments, concern was expressed that if such statutory

deadlines are valid, EPA does not have the authority to extend

statutory permit deadlines. In response, EPA disagrees that this

regulation extends statutory deadlines. The statutory deadline lapsed

on October 1, 1994. EPA recognized that fact, as well as the

consequences thereof, when it issued the October 18, 1994, guidance.

The Agency's authority to act under these circumstances arises from the

clear text of section 402(p)(6). That section directs EPA to issue

regulations which (1) designate storm

[[Page 40232]]

water discharges to be regulated to protect water quality and (2)

establish a comprehensive program to regulate those sources, including,

among other things, expeditious deadlines. In today's rule, EPA relies

on section 402(p)(6) to designate all phase II discharges for

regulation under a comprehensive program which, for most of those

dischargers, does not require permits for 6 years. During the six-year

period, EPA will investigate alternative control strategies for the

phase II program and will develop supplemental regulations through the

FACA process.

Commenters also raised concern regarding the potential for citizen

suits. As explained above, today's final rule effectively protects most

phase II dischargers from citizen suit liability for failure to have an

NPDES permit for up to six years.

A few commenters criticized EPA for the delay in publishing a

Report to Congress on storm water discharges not covered under phase I.

Further, they did not believe that President Clinton's Clean Water

Initiative adequately addressed procedures and methods to control storm

water discharges to the extent necessary to mitigate impacts on water

quality. The Agency believes that the Storm Water Report to Congress,

which incorporates the President's Initiative, fulfills the

requirements of section 402(p)(5). The Report to Congress cites to data

confirming the continuing threat to surface waters caused, in

significant part, by unregulated storm water discharges. The

Administration's Clean Water Initiative proposed a variety of

procedures and methods through which permitting authorities could most

flexibly address remaining unregulated discharges of storm water to the

extent necessary to mitigate impacts on water quality.

Several commenters questioned whether State and local officials had

been consulted in developing the proposed rule as directed by CWA

section 402(p)(6). In a September 9, 1992, Federal Register notice, EPA

invited public comment on reasonable, alternative approaches for the

phase II storm water program. Prior to publication of the direct final

and proposed rules on April 7, 1995, EPA met with representatives of

key municipal organizations to discuss the content of the rule and to

gather feedback and input. EPA will continue its outreach efforts by

seeking additional public input through FACA subcommittee

participation, and other means, in developing supplemental regulations

for the phase II program.

Commenters expressed their opinion that the proposed rule should be

considered an unfunded mandate as described under the Unfunded Mandate

Reform Act of 1995. That is, the commenters believed that the estimated

cost of the regulation to State, local, or tribal governments, or to

the private sector, will be $100 million or more in any one year. EPA

disagrees. This rulemaking actually reduces the immediate regulatory

burden imposed on phase II facilities. EPA believes that the cost to

phase II dischargers that are immediately designated under tier 1 will

be small due to the extremely few designations that are anticipated.

Furthermore, EPA has the authority to modify permit application

requirements to require less information and alleviate unnecessary

burden on all phase II facilities. Because of these reasons, costs are

expected to be well below $100 million for each of the next six years.

EPA believes that any costs that might be imposed after the sixth year

will still be below $100 million because of the application

flexibility, but in any event, those costs will not exceed existing

costs (multiplied by the rate of inflation) because of the current

statutory requirement that phase II dischargers apply for permits

immediately, absent promulgation of today's rule.

The costs of a ``comprehensive'' phase II program after the sixth

year will be more fully characterized through additional rulemaking as

a result of the FACA process. Under a judicial consent order in Natural

Resources Defense Council, Inc. v. EPA, Civ. No. 95-0634 PLF (D.D.C.

April 6, 1995), EPA is required to propose by September 1, 1997, and

take final action by March 1, 1999, supplemental rules which clarify

the scope of coverage and control mechanisms for the phase II program.

The cost to potential dischargers of this action will be identified in

the subsequent rulemaking and cannot be accurately predicted in today's

final rule. However, EPA does not expect that regulation to cost over

$100 million in any one year.

Commenters questioned EPA's justification to designate all phase II

dischargers to protect water quality. Many commenters argued that

construction sites that disturb less than 5 acres should not be so

designated because they do not present significant water quality

concerns. In response, EPA relies on the Report to Congress to conclude

that unregulated storm water discharges remain a significant threat to

the health of surface water quality. While EPA recognizes that

individual facilities within the total phase II universe may not

represent equal threats, EPA believes that there is sufficient

information concerning water quality problems to designate the entire

class of phase II dischargers as an interim matter pending further

study in the context of the rulemaking described above. EPA will make

more specific designations in the context of that rulemaking. In

response to comments about small construction sites, EPA notes that

these commenters did not present any data to support a conclusion that

small construction presents only negligible water quality concerns. As

explained in the earlier notice, the FACA subcommittee will explore the

appropriate scope of the phase II program.

Today's rule states that permit applications are required within

180 days from receipt of notice for those phase II discharges that the

NPDES permitting authority determines are contributing to a water

quality impairment or are a significant contributor of pollutants.

Commenters requested and suggested further clarification on both of

these determinations. EPA purposefully did not provide explicit

definitions of these phrases in order to provide flexibility to

permitting authorities. Interpretive flexibility is warranted due to

climatic and geographic differences across the United States. EPA

published guidance for designations under phase I of the storm water

program. Such guidance is also applicable for the phase II program

designations and is included in the record of this rulemaking.

One commenter took issue with the 180-day deadline for permit

applications, particularly for municipal separate storm sewer systems

that are designated under tier 1. The commenter felt that such a short

period of time would not be sufficient to prepare and submit a

municipal application. In response, EPA reminds the commenter that the

Director has the authority to grant permission to submit the

application at a later date. Some municipalities may not need more time

because they may be able to simply reference information already

submitted for an adjacent or nearby large or medium municipality under

phase I. Additionally, the permitting authority is able to modify the

permit application requirements and may require much less information

than what was required for phase I dischargers.

Another commenter asked that the period during which a permitting

authority may designate a facility be limited to one year. EPA is not

limiting the time frame for designations because the permitting

authority will need to account for changing conditions and new

information that becomes available over time.

[[Page 40233]]

Some commenters stated that the ``direct final rule'' is not

specifically provided for in the Administrative Procedure Act (APA) nor

has EPA demonstrated ``good cause'' to issue a ``direct final rule''

under 5 U.S.C. section 553. This comment is no longer relevant because

EPA is withdrawing the direct final rule and instead issuing a final

rule that responds to comments received.

One commenter disputed the assertion that urban storm water runoff

is a cause of real water quality use impairment in the United States.

The commenter also believed that it is inappropriate to base the

implementation of phase II requirements on exceedance of water quality

standards associated with urban storm water runoff. The commenter

believed that water quality criteria were not developed to regulate

many of the chemical constituents in urban storm water runoff. EPA

disagrees. The fact that urban runoff is a real cause of water quality

use impairment is very well supported throughout the literature and is

summarized by EPA in the Water Quality Inventory: Reports to Congress

prepared on a biannual basis under section 305(b) of the CWA. EPA

believes that basing the implementation of phase II requirements on

exceedance of water quality standards is appropriate because attainment

of water quality standards is one of the explicit goals of the NPDES

program. EPA further disagrees that water quality criteria have not

been developed for many of the chemical constituents in urban storm

water. To the contrary, water quality criteria exist for many such

constituents, particularly heavy metals and oil and grease.

A few commenters argued that comments received on the rule are

unrepresentative of the groups affected because small cities and

commercial establishments were unaware of the direct final and proposed

rules. In response, EPA believes that the 60-day comment period was

sufficient for small entities to formulate their comments and/or review

those drafted by their representative associations. Many of the

comments received were from national organizations representing such

small cities and businesses, including, National Association of

Counties, National Association of Convenience Stores, Society of

Independent Gasoline Marketers of America, National Association of

Flood and Stormwater Management Agencies, American Petroleum Institute,

National Association of Home Builders, and American Car Rental

Association.

One commenter disagreed that this rulemaking significantly reduces

the immediate regulatory burden imposed on phase II facilities because

phase II municipalities would have the same burden imposed on phase I

municipalities. In response, EPA points out that today's rule provides

the Director with discretion to modify the application requirements for

phase II dischargers. EPA expects Directors to exercise this discretion

to reduce the application burden to both municipalities and individual

facilities.

Several commenters questioned the types of permits that will be

available to dischargers in 2001. Currently, the permitting authority

has the option of individual or general permits. However, EPA does not

anticipate that permits will be necessary for all phase II dischargers

in 2001. The Agency is committed to promulgate supplemental rules that

further consider the scope of the phase II program as well as

alternative control mechanisms.

Many commenters made suggestions for the second tier of the phase

II regulations such as to allow and encourage phase II municipalities

to join phase I municipalities in the same watershed, standardize

procedures across the United States, and delegate construction

permitting to local governments. Such suggestions will be provided to

the FACA subcommittee and will be taken into consideration when

developing the subsequent phase II regulations. Commenters also made

suggestions for representation on the FACA subcommittee. Such

suggestions are being considered in formulating the subcommittee.

Supporting Documentation

A. Executive Order 12866

Under Executive Order 12866, the Agency must determine whether the

regulatory action is ``significant,'' and therefore subject to review

by the Office of Management and Budget (OMB) and the requirements of

the Executive Order. The Order defines ``significant regulatory

action'' as one that is likely to lead to a rule that may:

(1) Have an annual effect on the economy of $100 million or more,

or adversely and materially affecting a sector of the economy,

productivity, competition, jobs, the environment, public health or

safety, or State, local, or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an

action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants,

user fees, or loan programs, or the rights and obligations, of

recipients thereof;

(4) Raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

the Executive Order.

EPA has determined that this rulemaking significantly reduces the

current regulatory burden imposed on phase II facilities. The proposed

rule was submitted to OMB for review. OMB cleared the proposed rule

with minor changes. Review of this final rule was waived by OMB under

the provisions of Executive Order 12866.

B. Executive Order 12875

Under Executive Order 12875, entitled ``Enhancing the

Intergovernmental Partnership'', issued by the President on October 26,

1993, the Agency is required to develop an effective process to allow

elected officials and other representatives of State and Tribal

governments to provide meaningful and timely input in the development

of regulatory proposals.

EPA fully supports this objective and has initiated a consultation

process with both States and Tribes which will be continued through the

development of additional phase II rules. Specifically, EPA has

discussed this action with the representatives of the States, local

governments, the Agency's American Indian Environmental Office (AIEO),

and parts of the regulated community.

The reaction of the States is positive. The States and the

Association of State and Interstate Water Pollution Control

Administrators (ASIWPCA) support the approach that is being taken under

existing law; the States and ASIWPCA also support concurrent changes to

the law. ASIWPCA has submitted a letter to the Agency dated March 3,

1995, which is included in the record for this matter. EPA has

responded to many of ASIWPCA's comments in this preamble.

The reaction of many municipalities is that they prefer a statutory

change now to clarify the issue once and for all. Municipalities'

representatives (National Association of Counties, National League of

Cities, U.S. Conference of Mayors, and the National Association of

Flood and Stormwater Management Agencies) have raised many issues to

the Agency and have submitted a letter dated February 16, 1995, which

is contained in the record for this matter. The municipalities believe

that it is inappropriate for EPA to act now when Congress may act on

this matter, that the action taken by EPA is not in conformance with

the law, and that EPA did not consult with local officials on this

matter. EPA has responded to many of the municipalities' concerns in

this preamble. EPA did consult with various

[[Page 40234]]

representatives of local governments early in the development of this

regulation as well as more comprehensively in February 1995.

This rule was also coordinated with EPA's American Indian

Environment Office (AIEO). The Office of Water will work through the

AIEO to provide for a Tribal representative to participate in the FACA

process.

EPA believes that it has developed an effective process to obtain

input from State, Tribal and local governments before issuing this

rule, as well as receiving comments on the direct final rule and

accompanying proposed rulemaking, and has met the consultation

requirements for States, federally recognized Tribes and localities

under the terms of Executive Order 12875.

C. Paperwork Reduction Act

The Paperwork Reduction Act, 44 U.S.C. 3501 et seq., is intended to

minimize the reporting and record-keeping burden on the regulated

community, as well as to minimize the cost of Federal information

collection and dissemination. In general, the Act requires that

information requests and record-keeping requirements affecting ten or

more non-Federal respondents be approved by the Office of Management

and Budget.

EPA's existing information collection request (ICR) entitled

``Application for NPDES Discharge Permit and Sewage Sludge Management

Permit'' (OMB Number 2040-0086) contains information that responds to

this issue for all storm water discharges, including those facilities

designated into the program under this regulation as causing water

quality problems. The burden of similar water quality designations,

utilized under the phase I storm water program, were accounted for in

the ICR and remain applicable to the designations that may be made

under this rule. EPA will review and revise the estimates contained in

this ICR, as appropriate, in its renewal process.

D. Regulatory Flexibility Act

Under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq.,

EPA must prepare a Regulatory Flexibility Analysis for regulations

having a significant impact on a substantial number of small entities.

The RFA recognizes three kinds of small entities, and defines them as

follows:

(1) Small governmental jurisdictions--any government of a district

with a population of less than 50,000.

(2) Small business--any business which is independently owned and

operated and not dominant in its field, as defined by the Small

Business Administration regulations under the Small Business Act.

(3) Small organization--any not-for-profit enterprise that is

independently owned and operated and not dominant in its field.

EPA has determined that today's rule would not have a significant

impact on a substantial number of small entities, and that a Regulatory

Flexibility Analysis therefore is unnecessary. Through today's action

EPA is benefiting small entities by (1) adopting a common sense

approach to deal with the issue of storm water phase II requirements,

(2) providing the ability for the permitting authority to manage for

results by providing flexibility to deal with storm water phase II

permitting at this time based on water quality violations or

significant contribution of pollutants, and (3) clarifying and reducing

applicable burdens for those facilities currently subject to phase II

requirements. The rule provides additional time for EPA to work with

all stakeholders, including small entities, to develop additional phase

II regulations under a FACA process. The Agency is committed to issue

these supplemental phase II regulations by March 1, 1999; in that

rulemaking EPA will reconsider its Regulatory Flexibility Act analysis.

E. Unfunded Mandates

Under section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA

must prepare a written statement to accompany proposed rules where the

estimated costs to State, local, or tribal governments, or to the

private sector, will be $100 million or more in any one year. Under

section 205, EPA must select the most cost-effective and least

burdensome alternative that achieves the objective of such a rule and

that is consistent with statutory requirements. Section 203 requires

EPA to establish a plan for informing and advising any small

governments that may be significantly and uniquely affected by any

rule.

EPA estimates that the costs to State, local, or tribal

governments, or the private sector, from this rule will be less than

$100 million. This rulemaking significantly reduces the immediate

regulatory burden imposed on phase II facilities. EPA has determined

that an unfunded mandates statement therefore is unnecessary.

Although not required to make a finding under section 206, EPA

concludes that this rule is cost-effective and a significant reduction

in burden for State and local governments. In a September 9, 1992,

Federal Register notice, EPA invited public consideration of and

comment on reasonable alternative approaches for the phase II storm

water program. Today's rule provides for the first step for many of

those alternatives by providing for an orderly process for developing

supplemental regulations. By establishing regulatory relief until

development of those alternative approaches, today's rulemaking itself

provides the most cost-effective and least burdensome alternative to

achieve the objectives of the rule at this stage, consistent with

statutory requirements.

As discussed previously, EPA initiated consultation with

representative organizations of small governments under Executive Order

12875. In doing so, EPA provided notice to potentially affected small

governments to enable them to provide meaningful and timely input. EPA

plans to inform, educate, and advise small governments on compliance

with any requirements that may arise in further development of the

storm water phase II rules.

F. Procedural Requirements and Effective Date

Today's rule is effective on August 7, 1995. Section 553 of the APA

provides that the required publication or service of a substantive rule

shall be made not less than 30 days before its effective date except,

as relevant here, (1) for a substantive rule which grants or recognizes

an exemption or relieves a restriction or (2) when the agency finds and

publishes good cause for foregoing delayed effectiveness. Today's rule

relieves phase II dischargers from the immediate requirement to obtain

a permit. Additionally, the Agency has determined that good cause

exists for making this regulation effective immediately because today's

final rule does not differ from the withdrawn direct final rule which

would have become effective on August 7, 1995.

List of Subjects

40 CFR Part 122

Enviromental protection, Administrative practice and procedure,

Confidential business information, Hazardous substances, Reporting and

recordkeeping requirements, Water pollution control.

[[Page 40235]]

40 CFR Part 124

Administrative practice and procedure, Air pollution control,

Hazardous waste, Indian lands, Reporting and recordkeeping

requirements, Water pollution control, Water supply.

Dated: July 31, 1995.

Carol M. Browner,

Administrator.

For the reasons set forth in this preamble, parts 122 and 124 of

Title 40 of the Code of Federal Regulations are amended as follows:

PART 122--[AMENDED]

1. The authority citation for part 122 continues to read as

follows:

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

2. Section 122.21 is amended by adding a sentence to the end of

paragraph (c)(1) to read as follows:

Sec. 122.21 Application for a permit (applicable to State programs,

see 123.25).

* * * * *

(c) Time to apply.

(1) * * * New discharges composed entirely of storm water, other

than those dischargers identified by Sec. 122.26(a)(1), shall apply for

and obtain a permit according to the application requirements in

Sec. 122.26(g).

3. Section 122.26(a)(1) is amended as follows:

a. In paragraph (a)(1) the introductory text is amended by revising

the date ``October 1, 1992'' to read ``October 1, 1994'';

b. By adding paragraph (a)(9) as set forth below;

c. By revising the title of paragraph (e) as set forth below;

d. In paragraph (e)(1)(ii), by revising the phrase ``permit

application requirements are reserved'' to read ``permit application

requirements are contained in paragraph (g) of this section''; and

e. By adding paragraph (g) as set forth below.

Sec. 122.26 Storm water discharges (applicable to State NPDES

programs, see Sec. 123.25).

(a) * * *

(9) On and after October 1, 1994, dischargers composed entirely of

storm water, that are not otherwise already required by paragraph

(a)(1) of this section to obtain a permit, shall be required to apply

for and obtain a permit according to the application requirements in

paragraph (g) of this section. The Director may not require a permit

for discharges of storm water as provided in paragraph (a)(2) of this

section or agricultural storm water runoff which is exempted from the

definition of point source at Secs. 122.2 and 122.3.

* * * * *

(e) Application deadlines under paragraph (a)(1). * * *

* * * * *

(g) Application requirements for discharges composed entirely of

storm water under Clean Water Act section 402(p)(6). Any operator of a

point source required to obtain a permit under paragraph (a)(9) of this

section shall submit an application in accordance with the following

requirements.

(1) Application deadlines. The operator shall submit an application

in accordance with the following deadlines:

(i) A discharger which the Director determines to contribute to a

violation of a water quality standard or is a significant contributor

of pollutants to waters of the United States shall apply for a permit

to the Director within 180 days of receipt of notice, unless permission

for a later date is granted by the Director (see 40 CFR 124.52(c)); or

(ii) All other dischargers shall apply to the Director no later

than August 7, 2001.

(2) Application requirements. The operator shall submit an

application in accordance with the following requirements, unless

otherwise modified by the Director:

(i) Individual application for non-municipal discharges. The

requirements contained in paragraph (c)(1) of this section.

(ii) Application requirements for municipal separate storm sewer

discharges. The requirements contained in paragraph (d) of this

section.

(iii) Notice of intent to be covered by a general permit issued by

the Director. The requirements contained in 40 CFR 122.28(b)(2).

PART 124--[AMENDED]

4. The authority citation for part 124 continues to read as

follows:

Authority: Resource Conservation and Recovery Act, 42 U.S.C.

3901 et seq.; Safe Drinking Water Act, 42 U.S.C. 300(f) et seq.;

Clean Water Act, 33 U.S.C. 1251 et seq.; Clean Air Act, 42 U.S.C.

7401 et seq.

5. Section 124.52(c) is amended by revising the parenthetical

statement and the next to the last sentence to read as follows:

Sec. 124.52 Permits required on a case-by-case basis.

* * * * *

(c) * * * (see 40 CFR 122.26 (a)(1)(v), (c)(1)(v), and (g)(1)(i)) *

* * The discharger must apply for a permit under 40 CFR 122.26

(a)(1)(v) and (c)(1)(v) within 60 days of notice or under 40 CFR

122.26(g)(1)(i) within 180 days of notice, unless permission for a

later date is granted by the Regional Administrator. * * *

[FR Doc. 95-19191 Filed 8-4-95; 8:45 am]

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