[Federal Register Volume 81, Number 237 (Friday, December 9, 2016)]
[Rules and Regulations]
[Pages 89320-89352]
[FR Doc No: 2016-28426]

Vol. 81

Friday,

No. 237

December 9, 2016

Part IV

 Environmental Protection Agency

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 40 CFR Parts 122

 National Pollutant Discharge Elimination System (NPDES) Municipal
Separate Storm Sewer System General Permit Remand Rule; Final Rule

Federal Register / Vol. 81 , No. 237 / Friday, December 9, 2016 /
Rules and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 122

[EPA-HQ-OW-2015-0671; FRL-9955-11-OW]
RIN 2040-AF57

National Pollutant Discharge Elimination System (NPDES) Municipal
Separate Storm Sewer System General Permit Remand Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is revising the
regulations governing regulated small municipal separate storm sewer
system (MS4) permits to respond to a remand from the United States
Court of Appeals for the Ninth Circuit in Environmental Defense Center,
et al. v. EPA, 344 F.3d 832 (9th Cir. 2003). In that decision, the
court determined that the regulations for providing coverage under
small MS4 general permits did not provide for adequate public notice
and opportunity to request a hearing. Additionally, the court found
that EPA failed to require permitting authority review of the best
management practices (BMPs) to be used at a particular MS4 to ensure
that the small MS4 permittee reduces pollutants in the discharge from
their systems to the ``maximum extent practicable'' (MEP), the standard
established by the Clean Water Act (CWA) for such permits. The final
rule establishes two alternative approaches a permitting authority can
use to issue National Pollutant Discharge Elimination (NPDES) general
permits for small MS4s and meet the requirements of the court remand.
The first option is to establish all necessary permit terms and
conditions to require the MS4 operator to reduce the discharge of
pollutants from its MS4 to the MEP, to protect water quality, and to
satisfy the appropriate water quality requirements of the Clean Water
Act (``MS4 permit standard'') upfront in one comprehensive permit. The
second option allows the permitting authority to establish the
necessary permit terms and conditions in two steps: A first step to
issue a base general permit that contains terms and conditions
applicable to all small MS4s covered by the permit and a second step to
establish necessary permit terms and conditions for individual MS4s
that are not in the base general permit. Public notice and comment and
opportunity to request a hearing would be necessary for both steps of
this two-step general permit. This final rule does not establish any
new substantive requirements for small MS4 permits.

DATES: This final rule is effective on January 9, 2017.

ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OW-2015-0671. All documents in the docket are listed on the
http://www.regulations.gov Web site. Although listed in the index, some
information is not publicly available, e.g., confidential business
information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, is
not placed on the Internet and will be publicly available only in hard
copy form. Publicly available docket materials are available
electronically through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Greg Schaner, Office of Wastewater
Management, Water Permits Division (4203M), Environmental Protection
Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone
number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>Refer also
to EPA's Web site for further information related to the final rule at
https://www.epa.gov/npdes/stormwater-rules-and-notices#proposed.

SUPPLEMENTARY INFORMATION: The Federal Register published EPA's
proposed rule on January 6, 2016 (81 FR 415).

Table of Contents

I. General Information
    A. Does this action apply to me?
    B. What action is the Agency taking?
    C. What is the Agency's authority for taking this action?
    D. What are the incremental costs of this action?
II. Background
    A. Statutory and Regulatory Overview
    B. MS4 Permitting Requirements
    C. Judicial Review of the Phase II Rule and Partial Remand
III. Summary of the Proposed Rule and Comments Received
    A. Scope of the Proposed Rule
    B. Description of Options Proposed
    C. General Summary of Comments Received
IV. Summary of the Final Rule
    A. Selection of the ``Permitting Authority Choice'' Approach
    B. Description of the Two Permitting Alternatives Under the
Permitting Authority Choice Approach
    C. Summary of Regulatory Changes To Adopt the Permitting
Authority Choice Approach
    D. Commonalities Among the Two Types of General Permits
    E. Role of the NOI Under the Permitting Authority Choice
Approach
    F. Permitting Authority Flexibility To Choose Most Suitable
Approach
    G. Why EPA Did Not Choose Proposed Option 1 or 2 as Stand-Alone
Options
V. How the Two General Permit Options Work
    A. Comprehensive General Permit Approach
    B. Two-Step General Permit Approach
    C. Permittee Publication of Public Notice
VI. Requirements for Permit Terms and Conditions
    A. Permitting Authority as the Ultimate Decision-Maker
    B. ``Clear, Specific, and Measurable'' Permit Requirements
    C. Narrative, Numeric, and Other Forms of Permit Requirements
    D. Considerations in Developing Requirements for Successive
Permits
    E. Relationship Between the Storm Water Management Program
Document (SWMP) and Required Permit Terms and Conditions
    F. Explaining How the Permit Terms and Conditions Meet the MS4
Permit Standard
    G. Minimum Federal Permit Requirements
    H. Comments Beyond the Scope of This Rulemaking
VII. Revisions to Other Parts of Sec.  122.34
    A. Compliance Timeline for New MS4 Permittees
    B. Revisions to Evaluation and Assessment Provisions
    C. Establishing Water Quality-Based Requirements
    D. Establishing Water Quality-Based Terms and Conditions Under
the Two Types of General Permits
    E. Restructuring, Consolidating, Conforming, and Other Editorial
Revisions
VIII. Final Rule Implementation
    A. When the Final Rule Must Be Implemented
    B. Status of 2004 Guidance Memorandum
IX. Consistency With the NPDES Electronic Reporting Rule
X. Statutory and Executive Orders Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations

    K. Congressional Review Act

I. General Information

A. Does this action apply to me?

    Entities regulated [or affected] by this rule include:

----------------------------------------------------------------------------------------------------------------
                                                                                North American
                                                                                industry
                          Category                              Examples of regulated entities    classification
                                                                                system  (NAICS)
                                                                                code
----------------------------------------------------------------------------------------------------------------
Federal and state government................................  EPA or state NPDES stormwater               924110
                                                               permitting authorities;
                                                               operators of small municipal
                                                               separate storm sewer systems.
Local governments...........................................  Operators of small municipal                924110
                                                               separate storm sewer systems.
----------------------------------------------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated or otherwise affected by this action.
Other types of entities not listed in the table could also be
regulated. To determine whether your entity is regulated by this
action, you should carefully examine the applicability criteria found
in 40 CFR 122.32, and the discussion in the preamble. If you have
questions regarding the applicability of this action to a particular
entity, consult the person listed in the FOR FURTHER INFORMATION
CONTACT section.

B. What action is the Agency taking?

    EPA is issuing a final rule to revise its regulations governing the
way in which small municipal separate storm sewer systems (MS4s) obtain
coverage under National Pollutant Discharge Elimination System (NPDES)
general permits and how required permit conditions are established. The
rule results from a decision by the U.S. Court of Appeals for the Ninth
Circuit in Environmental Defense Center, et al. v. EPA, at 344 F.3d 832
(9th Cir. 2003) (``EDC decision''), which found that EPA regulations
for obtaining coverage under a small MS4 general permit did not provide
for adequate public notice, the opportunity to request a hearing, or
permitting authority review to determine whether the best management
practices (BMPs) selected by each MS4 in its stormwater management
program (SWMP) meets the CWA requirements including the requirement to
``reduce pollutants to the maximum extent practicable.'' The Federal
Register published EPA's proposed rule on January 6, 2016 (81 FR 415).
EPA proposed and solicited public comment on three options for
addressing the remand. One option (called the ``Traditional General
Permit Approach'') would require the permitting authority to establish
within the general permit all requirements necessary for the regulated
small MS4s to meet the applicable permit standard (to reduce pollutants
to the maximum extent practicable (MEP), to protect water quality, and
to satisfy the appropriate water quality requirements of the CWA),
which would be subject to public notice and comment and an opportunity
to request a hearing. The second proposed option (called the
``Procedural Approach'') would require the permitting authority to
incorporate an additional review and public comment step into the
existing Phase II regulatory framework for permitting small MS4s
through general permits. More specifically, once an MS4 operator
submitted its Notice of Intent (NOI) requesting coverage under the
general permit, an additional step would take place in which the
permitting authority would review, and the public would be given an
opportunity to comment and request a hearing on, the merits of the
MS4's proposed BMPs and measurable goals for complying with the
requirement to reduce discharges to the MEP, to protect water quality,
and to satisfy the appropriate water quality requirements of the CWA. A
third proposed option (called the ``State Choice Approach'') would
enable the permitting authority to choose between the Traditional
General Permit and Procedural Approaches, or to implement a combination
of these approaches in issuing and authorizing coverage under a general
permit. Today, EPA is issuing a rule that promulgates the ``State
Choice Approach'' and has renamed it as the ``Permitting Authority
Choice Approach.''

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

    The authority for this rule is the Federal Water Pollution Control
Act, 33 U.S.C. 1251 et seq., including sections 402 and 501.

D. What are the incremental costs of this action?

    The Economic Analysis estimates the incremental costs to implement
the final rule. EPA assumed that all other costs accrued as a result of
the existing small MS4 program, which were accounted for in the
Economic Analysis accompanying the 1999 final Phase II MS4 regulations,
remain the same and are not germane to the Economic Analysis, unless
the rule change would affect the baseline program costs. In this
respect, EPA focused only on new costs that may be imposed as a result
of implementing the final rule. It is, therefore, unnecessary to
reevaluate the total program costs of the Phase II rule, since those
costs were part of the original economic analysis conducted for the
1999 Phase II rule (see 64 FR 68722, December 8, 1999). For further
information, refer to the Economic Analysis that is included in the
rule docket.
    EPA estimates the annualized cost of the final rule to be between
$558,025 and $604,770, depending on the assumed discount rate. This can
be thought of as the annual budgeted amounts each permitting authority
would need to make available each year in order to be able to cover the
increase in permitting authority efforts that would result every 5
years. The total net present value of the compliance cost ranges from
$5.5 million to $8.4 million, depending on the assumed discount rate.
These estimates are all below the threshold level established by
statute and various executive orders for determining that a rule has an
economically significant or substantial impact on affected entities.
See further discussion in Section X of this preamble.
    The Economic Analysis assumes that permitting authorities are the
only entities that are expected to be impacted from this rule because
the requirements modified by the rule focus only on the administrative
manner in which general

permits are issued and how coverage under those permits is granted. EPA
emphasizes that this final rule does not change the stringency of the
underlying requirements in the statute or Phase II regulations to which
small MS4 permittees are subject, nor does it establish new substantive
requirements for MS4 permittees. Therefore, the Economic Analysis does
not attribute new costs to regulated small MS4s beyond what they are
already subject to under the statute and Phase II regulations. EPA
acknowledges that many permitting authorities consider permitting a
cost-neutral function, therefore some may increase permit fees to cover
the increased costs associated with this rule.
    EPA used conservative assumptions about impacts on state workloads,
meaning that the actual economic costs of complying with the final rule
and implementing any new procedural changes are most likely lower than
what is actually presented. EPA considers the cost assumptions to be
conservative because as more permitting authorities issue general
permits consistent with the new rule, other permitting authorities can
use and build on those examples, reducing the amount of time it takes
to draft the permit requirements, and permitting authorities will
likely learn from experience as they move forward how to work more
efficiently to issue and administer their general permits. EPA has
issued guidance to permitting authorities on how to write better MS4
permits (MS4 Permit Improvement Guide (EPA, 2010); Compendium of MS4
Permitting Approaches--Part 2: Post Construction Standards (EPA, 2016);
Compendium of MS4 Permitting Approaches--Part 3: Water Quality-Based
Requirements (EPA, 2016)), and additional examples of permit provisions
that are written in a ``clear, specific, and measurable'' manner for
the six minimum control measures are included in the preamble to this
rule. EPA also anticipates issuing further guidance once the rule is
promulgated to assist permitting authorities in implementing the new
rule requirements, which will in turn hopefully make permit writing
more efficient. These gained efficiencies were not, however, accounted
for in the option-specific cost assumptions.

II. Background

A. Statutory and Regulatory Overview

    Stormwater discharges are a significant cause of water quality
impairment because they can contain a variety of pollutants such as
sediment, nutrients, chlorides, pathogens, metals, and trash that are
mobilized and ultimately discharged to storm sewers or directly to
water bodies. Furthermore, the increased volume and velocity of
stormwater discharges that result from the creation of impervious cover
can alter streams and rivers by causing scouring and erosion. These
surface water impacts can threaten public health and safety due to the
increased risk of flooding and increased level of pollutants; can lead
to economic losses to property and fishing industries; can increase
drinking water treatment costs; and can decrease opportunities for
recreation, swimming, and wildlife uses.
    Stormwater discharges are subject to regulation under section
402(p) of the CWA. Under this provision, Congress required the
following stormwater discharges initially to be subject to NPDES
permitting requirements: Stormwater discharges for which NPDES permits
were issued prior to February 4, 1987; discharges ``associated with
industrial activity''; discharges from MS4s serving populations of
100,000 or more; and any stormwater discharge determined by EPA or a
state to ``contribute . . . to a violation of a water quality standard
or to be a significant contributor of pollutants to waters of the
United States.'' Congress further directed EPA to study other
stormwater discharges and determine which needed additional controls.
With respect to MS4s, section 402(p)(3)(B) provides that NPDES permits
may be issued on a system-wide or jurisdiction-wide basis, and requires
that MS4 NPDES permits ``include a requirement to effectively prohibit
non-stormwater discharges into the storm sewers'' and require
``controls to reduce the discharge of pollutants to the maximum extent
practicable . . . and such other provisions as the Administrator or the
State determines appropriate for the control of such pollutants.''
    EPA developed the stormwater regulations under section 402(p) of
the CWA in two phases, as directed by the statute. In the first phase,
under section 402(p)(4) of the CWA, EPA promulgated regulations
establishing application and other NPDES permit requirements for
stormwater discharges from medium (serving populations of 100,000 to
250,000) and large (serving populations of 250,000 or more) MS4s, and
stormwater discharges associated with industrial activity. EPA
published the final Phase I rule on November 16, 1990 (55 FR 47990).
The Phase I rule, among other things, defined ``municipal separate
storm sewer'' as publicly-owned conveyances or systems of conveyances
that discharge to waters of the U.S. and are designed or used for
collecting or conveying stormwater, are not combined sewers, and are
not part of a publicly-owned treatment works at Sec.  122.26(b)(8). EPA
included construction sites disturbing five acres or more in the
definition of ``stormwater discharges associated with industrial
activity'' at Sec.  122.26(b)(14)(x).
    In the second phase, section 402(p)(5) and (6) of the CWA required
EPA to conduct a study to identify other stormwater discharges that
needed further controls ``to protect water quality,'' report to
Congress on the results of the study, and to designate for regulation
additional categories of stormwater discharges not regulated in Phase I
on the basis of the study and in consultation with state and local
officials. EPA promulgated the Phase II rule on December 8, 1999,
designating discharges from certain small MS4s and from small
construction sites (disturbing equal to or greater than one acre and
less than five acres) and requiring NPDES permits for these discharges
(64 FR 68722, December 8, 1999). A regulated small MS4 is generally
defined as any MS4 that is not already covered by the Phase I program
and that is located within the urbanized area boundary as determined by
the latest U.S. Decennial Census. Separate storm sewer systems such as
those serving military bases, universities, large hospitals or prison
complexes, and highways are also included in the definition of ``small
MS4.'' See Sec.  122.26(b)(16). In addition, the Phase II rule includes
authority for EPA (or states authorized to administer the NPDES
program) to require NPDES permits for currently unregulated stormwater
discharges through a designation process. See Sec.  122.26(a)(9)(i)(C)
and (D). Other small MS4s located outside of an urbanized area may be
designated as a regulated small MS4 if the NPDES permitting authority
determines that its discharges cause, or have the potential to cause,
an adverse impact on water quality. See Sec. Sec.  122.32(a)(2) and
123.35(b)(3).

B. MS4 Permitting Requirements

    The Phase I regulations are primarily comprised of requirements
that must be addressed in applications for individual permits from
large and medium MS4s. The regulations at Sec.  122.26(d)(2)(iv)
require these MS4s to develop a proposed stormwater management program
(SWMP), which is considered by EPA or the authorized state permitting
authority when establishing permit conditions to reduce pollutants to
the ``maximum extent practicable'' (MEP).

    Like the Phase I rule, the Phase II rule requires regulated small
MS4s to develop and implement SWMPs. The regulations at Sec.  122.34(a)
requires that SWMPs be designed to reduce pollutants discharged from
the MS4 ``to the maximum extent practicable (MEP), to protect water
quality, and to satisfy the appropriate water quality requirements of
the Clean Water Act,'' and requires that the SWMPs include six
``minimum control measures.'' The minimum control measures are: Public
education and outreach, public participation and involvement, illicit
discharge detection and elimination, construction site runoff control,
post construction runoff control, pollution prevention and good
housekeeping. See Sec.  122.34(b). Under the Phase II rule, a regulated
small MS4 may seek coverage under an available general permit or may
apply for an individual permit. To be authorized to discharge under a
general permit, the rule requires submission of a Notice of Intent
(NOI) to be covered by the general permit containing a description of
the best management practices (BMPs) to be implemented and the
measurable goals for each of the BMPs, including timing and frequency,
as appropriate. See Sec. Sec.  122.33(a)(1), 122.34(d)(1).
    EPA anticipated that under the first two or three permit cycles,
whether required in individual permits or in general permits, BMP-based
controls implementing the six minimum control measures would, if
properly implemented, ``be sufficiently stringent to protect water
quality, including water quality standards, so that additional, more
stringent and/or more prescriptive water quality based effluent
limitations will be unnecessary.'' (64 FR 68753, December 8, 1999). In
the final Phase II rule preamble, EPA also stated that it ``has
intentionally not provided a precise definition of MEP to allow maximum
flexibility in MS4 permitting. MS4s need the flexibility to optimize
reductions in storm water pollutants on a location-by-location basis. .
. . Therefore, each permittee will determine appropriate BMPs to
satisfy each of the six minimum control measures through an evaluative
process.'' (64 FR 68754, December 8, 1999).
    The agency described the approach to meet the MS4 permit standard
in the preamble to the Phase II rule as an ``iterative process'' of
developing, implementing, and improving stormwater control measures
contained in SWMPs. As EPA further stated in the preamble to the Phase
II rule, ``MEP should continually adapt to current conditions and BMP
effectiveness and should strive to attain water quality standards.
Successive iterations of the mix of BMPs and measurable goals will be
driven by the objective of assuring maintenance of water quality
standards. . . . If, after implementing the six minimum control
measures there is still water quality impairment associated with
discharges from the MS4, after successive permit terms the permittee
will need to expand or better tailor its BMPs within the scope of the
six minimum control measures for each subsequent permit.'' (64 FR
68754, December 8, 1999).

C. Judicial Review of the Phase II Rule and Partial Remand

    The Phase II rule was challenged in petitions for review filed by
environmental groups, municipal organizations, and industry groups,
resulting in a partial remand of the rule. Environmental Defense Center
v. U.S. Environmental Protection Agency, 344 F.3d. 832 (9th Cir. 2003)
(EDC). The court remanded the Phase II rule's provisions for small MS4
general permits because they lacked procedures for permitting authority
review and public notice and the opportunity to request a hearing on
NOIs submitted under general MS4 permits.
    In reviewing how the Phase II rule provided for general permit
coverage for small MS4s, the court found that the way in which NOIs
function under the rule was not the same as in other NPDES general
permits. Other general permits contain within the body of the general
permit the specific effluent limitations and conditions applicable to
the class of dischargers for which the permit is available. In this
situation, authorization to discharge under a general permit is
obtained by filing an NOI in which the discharger agrees to comply with
the terms of the general permit and in which the operator provides some
basic information (e.g., site location, receiving waters) to help
determine eligibility. In contrast, the court held that under the Phase
II rule, because the NOI submitted by the MS4 contains the information
describing what the MS4 will do to reduce pollutants to the MEP, it is
the ``functional equivalent'' of an individual permit application. See
EDC, 344 F.3d. at 857. Because the CWA requires public notice and the
opportunity to request a public hearing for all permit applications,
the court held that failure to require public notice and the
opportunity for a public hearing for NOIs under the Phase II rule is
contrary to the Act. See EDC, 344 F.3d. at 858.
    Similarly, the court found the Phase II rule allows the MS4 to
identify the BMPs that it will undertake in its SWMP without any
permitting authority review. The court held that the lack of review
``to ensure that the measures that any given operator of a small MS4
has decided to undertake will in fact reduce discharges of pollutants
to the maximum extent practicable'' also does not comport with CWA
requirements. The court stated, ``That the Rule allows a permitting
authority to review an NOI is not enough; every permit must comply with
the standards articulated by the Clean Water Act, and unless every NOI
issued under general permit is reviewed, there is no way to ensure that
such compliance has been achieved.'' See EDC, 344 F.3d. at 855 n.32.
The court therefore vacated and remanded ``those portions of the Phase
II Rule that address these procedural issues . . . so that EPA may take
appropriate action to comply with Clean Water Act.'' See EDC, 344 F.3d.
at 858.

III. Summary of the Proposed Rule and Comments Received

A. Scope of the Proposed Rule

    EPA proposed revisions to the Phase II MS4 NPDES permitting
requirements on January 6, 2016 (81 FR 415) to respond to the Ninth
Circuit's remand in Environmental Defense Center v. U.S. Environmental
Protection Agency, 344 F.3d. 832 (9th Cir. 2003). To address the
remand, the regulations must ensure that permitting authorities
determine what permit requirements are needed to reduce pollutants from
each permitted small MS4 ``to the maximum extent practicable (MEP), to
protect water quality, and to satisfy the appropriate water quality
requirements of the Clean Water Act'' (referred to hereinafter as the
``MS4 permit standard''). The rule must also require NPDES permitting
authorities to provide the public with the opportunity to review,
submit comments, and request a public hearing on these permit
requirements. EPA did not propose modifications to any of the
substantive requirements that were promulgated in the Phase II rule
(nor did EPA reopen or seek comment on any aspect of the Phase I rule,
which was described in the preamble of the proposed rule for
informational purposes only).
    In the remand decision, the court established in broad and clear
terms what is needed for general permits that cover regulated small
MS4s and therefore provided EPA with what minimum attributes should be
part of any revisions to the Phase II regulations. The court stated
that ``every permit must comply with the standards articulated by the
Clean Water Act, and

unless every NOI issued under a general permit is reviewed, there is no
way to ensure that such compliance has been achieved.'' See EDC, 344
F.3d at 855, n. 32. In the court's view, the NOI served as the document
that established how the MEP standard would be met: ``Because a Phase
II NOI establishes what the discharger will do to reduce discharges to
the `maximum extent practicable,' the Phase II NOI crosses the
threshold from being an item of procedural correspondence to being a
substantive component of a regulatory scheme.'' See EDC, 344 F.3d at
853. Since review of the NOI by the permitting authority was not
specified in the regulation, and Sec.  122.34(a) stated that compliance
with the storm water management program developed by the permittee
constituted compliance with the MEP standard, the court also expressed
concern that the regulation put the MS4 in charge of establishing its
own requirements. ``[U]nder the Phase II Rule nothing prevents the
operator of a small MS4 from misunderstanding or misrepresenting its
own stormwater situation and proposing a set of minimum measures for
itself that would reduce discharges by far less than the maximum extent
practicable.'' See EDC, 344 F.3d at 855. Further, the court found that
the failure to require public notice or opportunity to submit comments
or request a public hearing for each NOI violated requirements
applicable to all CWA permits in accordance with section 402(b)(3). See
EDC, 344 F.3d at 857.

B. Description of Options Proposed

    EPA proposed for comment the following three options to address the
regulatory shortcomings found in the remand decision.
1. Option 1 (``Traditional General Permit Approach'')
    Under the proposed Traditional General Permit Approach, the
permitting authority must establish in any small MS4 general permit the
full set of requirements that are deemed necessary to meet the MS4
permit standard (``reduce pollutants to the maximum extent practicable,
protect water quality and satisfy the appropriate water quality
requirements of the Clean Water Act''), and the administrative record
would include an explanation of the rationale for its determination.
(This approach contrasts with the original regulations, which appeared
to the court to provide the permittee with the ability to establish its
own requirements.) Once the permit is issued, and the terms and
conditions in the permit are fixed for the term of the permit, neither
the development of a SWMP document nor the submittal of an NOI for
coverage would represent new permit requirements. Thus, because the
permit contains all of the requirements that will be used to assess
permittee compliance, the permitting authority would no longer need to
rely on the MS4's NOI as the mechanism for ascertaining what will occur
during the permit term. Under this approach, the function of the NOI
would be more similar to that of any other general permit NOI, and more
specifically other stormwater general permits, whereby the NOI is used
to establish certain minimum facts about the discharger, including the
operator's contact details, the discharge location(s), and confirmation
that the operator is eligible for permit coverage and has agreed to
comply with the terms of the permit. By removing the possibility that
effluent limits could be proposed in the NOI (and for that matter in
the SWMP) and made part of the permit once permit coverage is provided,
the NOI would no longer look and function like an individual permit
application, as the court found with respect to MS4 NOIs under the
Phase II regulations currently in effect. Therefore, it would not be
necessary to carry out the type of additional permitting authority
review and public participation procedures contemplated by the Ninth
Circuit court in the remand decision. These requirements would be met
during the process of issuing the general permit.
2. Option 2 (``Procedural Approach'')
    Under the proposed Procedural Approach, the permitting authority
would establish applicable permit requirements to meet the MS4 permit
standard by going through a second permitting step following the
issuance of the general permit (referred to as the ``base general
permit''), similar to the procedures used to issue individual NPDES
permits. Eligible MS4 operators would be required to submit NOIs with
the same information that has always been required under the Phase II
regulations, that is, a description of the BMPs to be implemented by
the MS4 operator during the permit term, and the measurable goals
associated with each BMP. Following the receipt of the NOI, the
permitting authority would review the NOI to assess whether the
proposed BMPs and measurable goals meet the MS4 permit standard. If
not, the permitting authority would request supplemental information or
revisions as necessary to ensure that the submission satisfies the
regulatory requirements. Once satisfied with the submission, the
permitting authority would be required to propose incorporating the
BMPs and measurable goals in the NOI as permit requirements and to
provide public notice of the NOI and an opportunity to submit comments
and to request a hearing in accordance with Sec. Sec.  124.10 through
124.13. After consideration of comments received and a hearing, if
held, the permitting authority would provide notice of its decision to
authorize coverage under the general permit, along with any MS4-
specific requirements established during this second process. Upon
completion of this process, the MS4 would be required to comply with
the requirements set forth in the base general permit and the
additional terms and conditions established through the second-step
process.
3. Option 3 (``State Choice Approach'')
    The proposed rule also requested comment on a State Choice
Approach, which would allow permitting authorities to choose either the
Traditional General Permit Approach or the Procedural Approach, or some
combination of the two as would best suit their needs and
circumstances. As described in the proposed rule, the permitting
authority could, for example, choose to use Option 1 for small MS4s
that have fully established programs and uniform core requirements, and
Option 2 for MS4s that it finds would benefit from the additional
flexibility to address unique circumstances, such as those encountered
by non-traditional MS4s (e.g., state departments of transportation,
public universities, military bases). Alternatively, a state could
apply a hybrid of the two approaches within one permit by defining some
elements within the general permit, which, consistent with the Option 1
approach, are deemed to meet the MS4 permit standard, and establishing
additional permit requirements through the Option 2 procedural approach
for each MS4 seeking coverage under the General Permit. Under a hybrid
approach, any requirements established in the general permit that fully
articulate what is required to meet the MS4 permit standard would
require no further permitting authority review and public notice
proceedings; however, for any terms and conditions established for
individual MS4s based in part on information submitted with the NOI
would need to follow the Option 2 approach for incorporating these
requirements into the permit as enforceable requirements.

C. General Summary of Comments Received

    EPA received about 70 unique comments on the proposed rule from the
MS4 community, states, environmental groups, industry associations, and
engineering firms. Most commenters favored Option 3--the ``State
Choice'' option. While several expressed support for their states using
the Traditional General Permit or Procedural Approach, a number of
these same commenters acknowledged that these approaches would likely
not work in all situations if EPA were to adopt either one as the sole
option under the final rule. EPA notes that while most of the
environmental organization commenters expressed support for a hybrid
option, which technically falls under the State Choice option, they
also strongly recommended mandating that the Traditional General Permit
Approach be used for permit requirements related to the six minimum
control measures and that the Procedural Approach be used for water
quality-based requirements, such as requirements for implementing total
maximum daily loads (TMDLs).
    A common reason given for supporting the State Choice approach
included the flexibility it would give authorized states to use
different options to address different situations and that it would
minimize disruption to existing programs. Several states that now use a
traditional general permit approach or a procedural approach stressed
the importance of providing choices for other states. EPA notes that no
commenter expressly opposed the State Choice approach. EPA discusses
these comments in the context of its decision to adopt the State Choice
approach in the final rule in Section IV of the preamble below.
    EPA received a significant number of comments concerning its
proposed changes to the way in which permit terms and conditions must
be expressed, particularly with respect to the proposed deletion of the
word ``narrative'' in Sec.  122.34(a). These comments focused on the
concern that EPA was moving away from support of the use of BMPs to
comply with stormwater permits and from the longstanding ``iterative
approach'' to meeting MS4 permit requirements. EPA discusses these
comments and the changes made in response to these comments in the
final rule in Section V of the preamble.
    In addition to responding to major comments in the preamble, EPA
has prepared a Response to Comment document, which can be found in the
docket for this rulemaking.

IV. Summary of the Final Rule

A. Selection of the ``Permitting Authority Choice'' Approach

    EPA is selecting proposed Option 3 (the ``State Choice Approach'')
for the final rule, described in Section III.B.3. The new name for this
option better captures the universe of entities that will implement the
rule, i.e., any NPDES permitting authority including EPA Regions and
authorized states. Under this approach, the NPDES permitting authority
may choose between two alternative means of establishing permit
requirements in general permits for small MS4s. The final rule amends
Sec.  122.28(d) to require permitting authorities to choose one of
these two types of general permits whenever issuing a small MS4 general
permit. Permitting authorities are required to select either the
``Comprehensive General Permit'' or ``Two-Step General Permit''. The
``Comprehensive General Permit'' is essentially the ``Traditional
General Permit'', or ``Option 1'', from the proposed rule. The ``Two-
Step General Permit'' encompasses both the ``Procedural Approach'', or
``Option 2'' and the ``hybrid approach'' that was described as part of
``Option 3'' from the proposed rule. The Two-Step General Permit allows
the permitting authority to establish some requirements in the general
permit and others applicable to individual MS4s through a second
proposal and public comment process.

B. Description of the Two Permitting Alternatives Under the Permitting
Authority Choice Approach

    As described in Section IV.A, the Permitting Authority Choice
Approach requires permitting authorities to choose between two
alternative approaches to issue general permits for small MS4s. These
two types of general permits are described briefly as follows:
     Comprehensive General Permit--For this type of general
permit, the permitting authority issues a small MS4 general permit that
includes the full set of requirements necessary to meet the MS4 permit
standard of ``reducing pollutant discharges from the MS4 to the maximum
extent practicable (MEP), to protect water quality, and to satisfy the
appropriate water quality requirements of the CWA.'' Under the
Comprehensive General Permit, all requirements are contained within the
general permit, and no additional requirements are established after
permit issuance, as is the case with the ``Two-Step General Permit''
described below. For this reason, to provide coverage to eligible small
MS4s, the permitting authority can use a traditional general permit NOI
as described in Sec.  122.28(b)(2)(ii), and does not need to require
additional information from each operator concerning how they will
comply with the permit, for instance the BMPs that will be implemented
and the measurable goals for each control measure, as a prerequisite to
authorizing the discharge. See further discussion of the role of the
NOI in Section IV.E.
     Two-Step General Permit (combination of the proposed
Procedural and Hybrid Approaches)-- For the Two-Step General Permit,
after issuing a base general permit, the permitting authority
establishes through the completion of a second permitting step
additional permit terms and conditions that are necessary to meet the
MS4 permit standard for each MS4 seeking authorization to discharge
under the general permit. These additional terms and conditions
supplement the requirements of the general permit for individual MS4
permittees. It is in the second permitting step where the permitting
authority satisfies its obligation to review the NOI for adequacy,
determine what additional requirements are needed for the MS4 to meet
the MS4 permit standard, and provide public notice and an opportunity
for the public to submit comments and to request a hearing. See
discussion of the second permitting step in Section V.B. Upon
completion of this process, the MS4 permittee is authorized to
discharge subject to the terms of the general permit and the additional
requirements that apply individually to that MS4.
    The Two-Step General Permit encompasses the ``hybrid'' approach
described in the proposed rule (see Section VI.C), where the permitting
authority includes specific permit terms and conditions within the base
general permit, but also establishes additional requirements to meet
the MS4 permit standard through a second permitting step. For the final
rule, EPA intentionally used rule language that would enable permitting
authorities to use a Two-Step General Permit to implement a hybrid
approach by referring to both ``required permit terms and conditions in
the general permit applicable to all eligible small MS4s'' and
``additional terms and conditions to satisfy one or more of the permit
requirements in Sec.  122.34 for individual small MS4 operators.'' See
Sec.  122.28(d)(2).
    The final rule requires that the permitting authority indicate
which

type of general permit it is using for any small MS4 general permit.
This statement or explanation may be included in the general permit
itself or in the permit fact sheet. EPA notes that the permitting
authority may choose to change the permitting approach for subsequent
permits. Questions concerning when the final rule change takes effect
are discussed in Section VIII.A.

C. Summary of Regulatory Changes To Adopt the Permitting Authority
Choice Approach

    The final rule implements the Permitting Authority Choice option in
several different sections of the NPDES regulations. Below is a brief
summary of the most significant changes and where they can be found in
the final rule:
     Permitting Authority Choice Approach (Sec.  122.28(d)):
The final rule adds a new paragraph (d) to Sec.  122.28 that requires
the permitting authority to select between two alternative general
permits. This section describes both types of general permits (the
``Comprehensive General Permit'' and the ``Two-Step General Permit'')
and the minimum requirements associated with each. EPA chose to include
the Permitting Authority Choice in a different section of the
regulations than was proposed. EPA determined upon further
consideration that rather than including all of the requirements within
the application and NOI section of the Phase II regulations now at
Sec.  122.33, the two alternatives comprising the Permitting Authority
Choice Approach fit better within the general permit regulations as a
unique set of requirements affecting general permits for regulated
small MS4s.
     Changes to the NOI requirements (Sec.  122.33): The final
rule includes modifications to the requirements for what must be
included in NOIs submitted for coverage under small MS4 general
permits. The required contents of the NOI vary depending on the type of
general permit used. For permitting authorities choosing a
Comprehensive General Permit, the final rule enables the permitting
authority to reduce the information required in NOIs to the minimum
information required for any general permit NOI in Sec.
122.28(b)(2)(ii). See Sec.  122.33(b)(1)(i). For permitting authorities
choosing the Two-Step General Permit, the final rule provides the
permitting authority with the ability to determine what information it
deems necessary to establish individual requirements for MS4 operators
that meet the MS4 permit standard. See Sec.  122.33(b)(1)(ii), and
additional discussion of these and other changes to Sec.  122.33 in
Section V.D.1.
     Clarifications to the requirements for small MS4 permits
(Sec.  122.34): Regardless of the permitting approach chosen by the
NPDES authority, the terms and conditions of the resulting general
permits must adhere to the requirements of Sec.  122.34. The final rule
retains modifications from the proposed rule that clarify that it is
the permitting authority's responsibility, and not that of the small
MS4 permittee, to establish permit terms and conditions that meet the
MS4 regulatory standard and to delineate the requirements for
implementing the six minimum control measures, other terms and
conditions deemed necessary by the permitting authority to protect
water quality, as well as any other requirement. The final rule also
emphasizes that permit requirements must be expressed in ``clear,
specific, and measurable'' terms. These modifications do not alter the
existing, substantive requirements of the six minimum control measures
in Sec.  122.34(b). See further discussion of these changes in Section
VI.

D. Commonalities Among the Two Types of General Permits

    The two options available to the permitting authority under the
final rule involve different steps and require differing levels of
administrative oversight; however, at a basic level, they share the
same underlying characteristics. Each type of general permit shares in
common that through the permitting process, the permitting authority
must determine which requirements a small MS4 must meet in order to
satisfy the MS4 permit standard. Both types of general permits also
require that the specific actions that comprise what is necessary to
meet the MS4 permit standard be established through the permitting
process. The key distinction between the two types of permits is that
they establish permit terms and conditions at different points in time
during the permitting process. For Comprehensive General Permits, the
determination as to what requirements are needed to satisfy the MS4
permit standard is made as part of the issuance of the general permit.
By contrast, for Two-Step General Permits, the permitting authority
makes this determination both in the process of issuing the general
permit and in the process of establishing additional permit
requirements applicable on an individual basis to each MS4 covered
under the general permit, based on information in the NOI.
    The final rule also places both types of general permits on a level
playing field with respect to the requirements that must be addressed
in any general permit issued to a small MS4. Regardless of which type
of general permit is used to establish permit terms and conditions,
every small MS4 general permit must include requirements that address
the minimum control measures (Sec.  122.34(b)), water quality-based
requirements where needed (Sec.  122.34(c)), and evaluation and
assessment requirements (Sec.  122.34(d)). The final rule clarifies
that all such terms and conditions must be expressed in terms that are
``clear, specific, and measurable.'' The important attribute here is
that permit requirements must be enforceable, and must provide a set of
performance expectations and schedules that are readily understood by
the permittee, the public, and the permitting authority alike. For both
types of general permits, requirements may be expressed in narrative or
numeric form, as long as they are clear, specific, and measurable. This
requirement for clear, specific, and measurable requirements applies to
any permit term or condition established under Sec.  122.34, including
requirements addressing the minimum control measures, any water
quality-based requirements, and the evaluation, recordkeeping, and
reporting requirements. Section VII of this preamble contains a
detailed discussion about establishing permit terms and conditions.
    Importantly, the final rule also ensures that the process for
issuing both types of general permit addresses the deficiencies found
by the Ninth Circuit to exist in the Phase II regulations. While the
court's opinion focused on the role of the NOI in the Phase II rule for
MS4 general permits, the court made it clear that under the CWA, the
permitting authority must determine which MS4 permit requirements are
adequate to meet the MS4 permit standard, and that the public must have
the opportunity to review and comment on those permit requirements and
to request a hearing. All of these core CWA requirements are present in
the final rule. For Comprehensive General Permits, once the permit is
issued it has gone through permitting authority review, public notice
and comment, and the opportunity to request a hearing. Permitting
authority review and public comment and opportunity for a hearing
occurs in the process of drafting permit conditions and soliciting
comment on the draft general permit. Permitting authority determination
of what an MS4 must do to meet the MS4 permit standard occurs in the
process of issuing

the final permit after consideration of comments. By comparison, for
Two-Step General Permits, permitting authority review, public notice
and comment, and the opportunity to request a hearing occur first on
the draft general permit and again on the additional terms and
conditions applicable to each MS4 authorized to discharge under the
general permit. Under the Two-Step process, the CWA requirements for
permitting authority review and public comment and opportunity for
hearing are only fully addressed after the completion of the discharge
authorization process for each individual small MS4 operator seeking
coverage under the general permit. To ensure that these CWA
requirements are met, the final rule supplements the administrative
steps necessary to issue the base general permit with procedures that
ensure that any decision to authorize an individual MS4 to discharge
based on information included in the NOI is subject to review by the
permitting authority, and the public has the opportunity to review and
submit comments, and to request a hearing on the terms and conditions
that will be incorporated as enforceable permit terms.

E. Role of the NOI Under the Permitting Authority Choice Approach

    The two permitting options available under the final rule include
important changes in the relationship between the MS4 operator's NOI
and the general permit. Under the 1999 Phase II regulations, any MS4
operator seeking coverage under a small MS4 general permit has been
required to submit information in the NOI describing, at a minimum, the
BMPs that would be implemented for each minimum control measure during
the permit term, and the measurable goals associated with each BMP.
These NOIs differ significantly from the typical general permit NOI,
which is required to include far less information, and ``represents no
more than a formal acceptance of [permit] terms elaborated elsewhere''
in the general permit. See EDC, 344 F. 3d. at 852. Under the NPDES
regulations at Sec.  122.28(b)(2)(ii), the NOI is a procedural
mechanism to document operator eligibility, to certify that the
information submitted by the operator is accurate and truthful, and to
confirm the operator's intention to be covered by the terms and
conditions of the general permit.
    The Ninth Circuit court, in its remand decision, likened the NOI
under the remanded regulations to being ``functionally equivalent to a
detailed application for an individualized permit,'' since the MS4
operator was in essence proposing to the permitting authority what it
intended to accomplish to satisfy the MS4 permit standard. The court
found it to differ markedly from the NOI utilized for most general
permits, that is, limited to ``an item of procedural correspondence.''
344 F. 3d. at 853. The similarity in the court's view between the NOI
under the Phase II regulations and an individual permit application,
combined with the failure of the regulations to require permitting
authority review or to provide the opportunity for the public to
comment and request a hearing on the NOI, were key factors in the Ninth
Circuit finding that the regulations had violated the CWA.
    The final rule modifies the way in which the NOI functions in
important respects so that it addresses the problems found by the Ninth
Circuit. For a Comprehensive General Permit, because the permit
contains all of the requirements that will be used to assess permittee
compliance, the permitting authority no longer needs to rely on the
MS4's NOI as the mechanism for ascertaining what will occur during the
permit term. In this way, the function of the NOI is the same as that
of any other general permit NOI, and more specifically other stormwater
general permits, where the NOI is used to establish certain minimum
facts about the discharger, including the operator's contact details,
the discharge location(s), and confirmation that the operator is
eligible for permit coverage and has agreed to comply with the terms of
the permit. It is for this reason, therefore, that the final rule
establishes no additional requirements for the information required to
be included in NOIs beyond what is already required for other general
permits in Sec.  122.28(b)(2)(ii). See Sec.  122.33(b)(1) in the final
rule. By removing the possibility that permit requirements could be
proposed in the NOI (or in the SWMP) and made part of the permit once
permit coverage is provided under the Comprehensive General Permit
approach, the NOI will no longer look and function like an individual
permit application, as the court found with respect to MS4 NOIs under
the original Phase II regulations. Similarly, because the NOI no longer
bears the similarity of an individual permit application, it is no
longer necessary to carry out the type of additional permitting
authority review and public participation steps contemplated by the
Ninth Circuit.
    By contrast, for coverage under a Two-Step General Permit, the NOI
needs to include information to assist the permitting authority in
developing the additional permit requirements for each permittee. For
this NOI, the permitting authority requires more detailed information
from the MS4 operator so that it can determine what additional permit
terms and conditions are necessary in order to satisfy the MS4 permit
standard. The NOI in the Two-Step General Permit is likely to include
much of the same information that has been required of MS4 operators
under the regulations since they were promulgated in 1999. The major
difference now is that the permitting authority reviews the NOI
materials to determine what additional permit terms and conditions are
necessary for the individual MS4 to meet the MS4 permit standard, and
to provide an opportunity for the public to comment and request a
hearing on this determination.
    The proposed rule would have required the full set of information
required for individual permit applications in Sec.  122.33(b)(2)(i),
including the proposed BMPs to be implemented for the minimum control
measures, measurable goals for each BMP (as required by Sec.  122.34(d)
of the original regulations), the persons responsible for implementing
the stormwater management program, the square mileage served by the
MS4, and any other information deemed necessary. In the final rule, EPA
is taking a slightly different approach and giving the permitting
authority the flexibility to determine what information it needs to
request in its Two-Step General Permit NOI rather than requiring by
default that all of the individual permit application information be
submitted. This will give the permitting authority the ability to
request what information it needs to establish the necessary additional
terms and conditions for each individual MS4 to meet the MS4 permit
standard. If the permitting authority needs information from all of its
MS4s on the BMPs and measurable goals they propose for the permit term
in order to establish suitable permit requirements, then it has the
discretion to require this information. See Sec. Sec.  122.28(d)(2)(i)
and 122.33(b)(1)(ii), which states that the information requested by
the permitting authority ``may include, but is not limited to, the
information required under Sec.  122.33(b)(2)(i).''
    Alternatively, under the final rule, if the general permit terms
and conditions already define what is required to meet the MS4 permit
standard for several of the minimum control measures then the
permitting authority could decide that it is no longer necessary to
require the submittal of information on the BMPs and measurable goals
associated with

those minimum control measures. As noted by a commenter, requiring
information from MS4s related to permit terms and conditions that have
already been established is likely to be redundant and represent an
unnecessary burden. At the same time, the permitting authority must be
able to obtain sufficient information to establish clear, specific, and
measurable permit terms and conditions. Under the final rule, there is
no minimum requirement with respect to what information is needed. In
short, the permitting authority must request the information it needs
to be able to make an informed decision when establishing clear,
specific, and measurable permit terms and conditions for the permittee
to ensure that it will meet the MS4 permit standard. The final rule
enables the permitting authority to determine what the right amount of
information is needed to meet this requirement.

F. Permitting Authority Flexibility To Choose the Most Suitable
Approach

    The final rule provides permitting authorities with full discretion
to choose which option is best suited for its permitting needs and
specific circumstances. While there are significant considerations,
advantages, and disadvantages to selecting either of the two permitting
approaches, EPA is leaving the decision of which method to adopt for
each general permit up to the permitting authority. In providing full
discretion to the permitting authority to choose which approach to use,
EPA agreed with commenters that recommended against adopting conditions
or constraints on the selection of either of the two options. EPA also
expects that the decision as to which approach to adopt for any given
small MS4 general permit may change from one permit term to the next.
Therefore, if the permitting authority elects to issue its next general
permit by implementing the ``Comprehensive General Permit Approach''
there is nothing preventing the permitting authority from switching
approaches to the ``Two-Step General Permit Approach'' in subsequent
permit terms, or vice versa.
    EPA requested comment on whether the agency should constrain the
permitting authority's discretion under Option 3 by requiring the use
of the ``Traditional General Permit Approach'' (now the ``Comprehensive
General Permit'') for some types of permit terms and conditions, while
allowing the ``Procedural Approach (now the ``Two-Step General
Permit'') to be used for other requirements. Several commenters
recommended that EPA require permitting authorities to use the proposed
``Traditional General Permit Approach'' to establish permit
requirements for the minimum control measures in Sec.  122.34(b) and to
allow the use of the proposed ``Procedural Approach'' for the
establishment of water quality-based effluent limits, such as those
implementing total maximum daily loads (TMDLs). EPA refers to this
approach below as a ``fixed hybrid approach.'' Other commenters were
opposed to a fixed hybrid approach and urged EPA to provide permitting
authorities with maximum discretion to choose which option works best
without stipulating which option must be used for specific types of
permit requirements.
    After consideration of these comments, EPA has determined that it
is unnecessary to mandate which permitting approach is used for
specific types of requirements. Primarily, EPA does not wish to
prejudge what approach permitting authorities use to arrive at clear,
specific, and measurable requirements that result in achieving the MS4
permit standard. As an overall matter, EPA views both of the approaches
in the final rule as equally valid ways of establishing the required
permit terms and conditions and meeting the remand requirements.
    Having said this, however, EPA recognizes that some types of
requirements are more easily established through the general permit
than others. For instance, clear, specific, and measurable permit
requirements that address the minimum control measures, due to their
broad applicability to all MS4s, may be easier to develop and include
within the general permit, than requirements addressing TMDLs. EPA's
MS4 Permit Improvement Guide (EPA, 2010) and the MS4 permit compendia
\1\ provide a number of ready examples for how permits may establish
clear, specific, and measurable requirements that implement the six
minimum control measures. On the other hand, the necessarily site- and
watershed-specific nature of TMDLs, combined with the fact that
effective implementation of TMDLs is enhanced through involvement of
the public at the local level, makes these types of requirements more
amenable to being developed through the procedural requirements of the
second permitting step within the Two-Step General Permit. To
illustrate this point, a number of states have already adopted
approaches that enable the MS4s to first develop and propose something
like a TMDL implementation plan, followed by a step where the state
permitting authority reviews and approves the plan to make it an
enforceable part of the permit. See related examples in EPA's
Compendium of MS4 Permitting Approaches--Part 3: Water Quality-Based
Requirements (EPA, 2016).\2\ In this situation, under the final rule,
the permitting authority would establish the MS4's TMDL implementation
requirements as part of the second step of the general permit and
follow the procedures applicable to the Two-Step General Permit in
Sec.  122.28(d)(2).
---------------------------------------------------------------------------

    \1\ These documents can be found on EPA's Web site at https://www.epa.gov/npdes/stormwater-discharges-municipal-sources#resources.
    \2\ This document will be made available on EPA's Web site at
https://www.epa.gov/npdes/stormwater-discharges-municipal-sources#resources.
---------------------------------------------------------------------------

    EPA anticipates that some permitting authorities may over time
appreciate the benefits of not having to go through a second process
step for individual review and individualized public notices for each
MS4, and may as an alternative choose to establish the required permit
terms and conditions necessary to meet the MS4 permit standard in the
general permit. Under the Two-Step General Permit, the permitting
authority must provide public notice for each MS4's NOI and the
proposed additional permit terms and conditions to be applied to the
MS4, and review and process comments and any requests for a public
hearing before finalizing the permit terms and conditions. By
comparison, there is only one public notice for an opportunity to
comment and request a hearing for a Comprehensive General Permit. Even
if deciding that a Comprehensive General Permit is not the best fit,
some permitting authorities may find it easier over time to move more
requirements into the base general permit so that the number of
permitting provisions subject to the additional individualized review
and public notice is reduced.

G. Why EPA Did Not Choose Proposed Option 1 or 2 as Stand-Alone Options

    By adopting the proposed State Choice Approach (Option 3) (now
called the ``Permit Authority Choice Approach'') for the final rule,
EPA is making a decision to not adopt Option 1 (the ``Traditional
General Permit Approach'') or Option 2 (the ``Procedural Approach'')
from the proposal as the sole approach by which permitting authorities
issue and administer their small MS4 general permits. As stated in
Section V.B., the public comments were heavily in favor of adopting
Option 3, although there were also proponents for finalizing

proposed Option 1 and for finalizing an approach that would require use
of proposed Option 1 for the minimum control measures and proposed
Option 2 for water quality-based requirements. EPA ultimately found
most persuasive the comments arguing in favor of choosing Option 3 to
give permitting authorities flexibility and discretion to determine how
it would develop different permit requirements.
    A major theme among comments favoring Option 3 was the emphasis on
the flexibility it would provide permitting authorities to choose which
approach works best in their state. This flexibility will be important,
according to a number of commenters, to continue to be able to
administer a program that includes local governments with divergent
geography, land resources and uses, and financial and resource
capacities. According to a number of commenters, Option 3 would also
give permitting authorities a range of options for crafting permit
conditions for non-traditional MS4s (e.g., universities, hospitals,
military bases, road and highway systems), which in many cases require
different types of permit provisions than traditional MS4s due to their
lack of regulatory, land use, and/or police powers and more limited
audiences. Other comments focused on the significant burden that would
be placed on states and regulated MS4s if required to adopt one uniform
approach, especially in cases where the permitting authority is already
implementing approaches that are similar to either proposed Option 1 or
2. In some cases, the way in which permitting authorities write and
administer their small MS4 general permits is a direct result of state
case law or concern about the risk of state litigation, and these
states argue forcefully in their comments about the importance of
retaining their approach in light of this history. According to these
comments, those permitting authorities that have chosen one or the
other of Option 1 or 2 should be able to continue implementing that
approach.
    Another related common theme among the comments was an argument
against adopting either proposed Option 1 or Option 2 as a national,
one size fits all approach. These comments emphasized the difficulties
associated with forcing all permit terms and conditions into one
general permit for all MS4 types and all water quality considerations
using the proposed Option 1 approach, and underscored the resource
demands associated with implementing an Option 2 approach. Many of
these commenters concluded that Option 3 would be the best way of
preserving the permitting authority's flexibility to tailor their
approach based on what would work best for each state's circumstances.
    Based on these comments, EPA chose Option 3, the Permitting
Authority Choice option, because both options are valid ways of
addressing the court's remand and there is no reason to compel
permitting authorities to adopt one or the other of the approaches in
proposed Option 1 or Option 2. EPA also appreciates that those state
permitting authorities that are already moving their small MS4
permitting approaches in the direction of either Option 1 or 2 are
doing so for a number of legitimate reasons that relate to these
states' individual circumstances. By enabling permitting authorities to
choose which option works best, EPA is avoiding disrupting already
established state preferences. This is not to say that permitting
authorities will not have to make changes to conform their procedures
to the requirements of the final rule.
    EPA also received comments urging the Agency not to adopt Option 2
as the only permitting choice available to permitting authorities
because of the resource burdens associated with the Option 2 approach,
especially the requirement to individually review and approve terms and
conditions for their small MS4s. EPA does not dispute the fact that
Option 2, which has been finalized as the ``Two-Step General Permit'',
is resource intensive; this approach requires significant
administrative oversight by design. The process of conducting an
individual review of each MS4 operator's NOI, developing a proposal for
comment of unique terms and conditions based on the NOI, and processing
any public comments or requests for public hearings will require
additional resources of the permitting authority if it is not already
implementing this type of approach. Any permitting authority choosing
this approach will need to carefully consider whether it has the
resource capacity to handle the large amount of administrative
oversight and review responsibilities that the Two-Step General Permit
requires. EPA expects that the resource requirements alone will provide
sufficient enough reason for a number of permitting authorities to
choose the Comprehensive General Permit, or to minimize the number of
terms and conditions it develops for individual MS4 to lessen the
administrative burden associated with the Two-Step General Permit.
    EPA understands that a permitting authority's decision to adopt the
Two-Step General Permit will mean that members of the public interested
in commenting on small MS4 permit conditions may end up needing to
review not only the draft general permit but also the public notice
that proposes the additional terms and conditions for each MS4 that
seeks coverage under the general permit. Some commenters considered
this a disadvantage because it would be burdensome for the public as
well. EPA does not see this as sufficient reason for EPA to choose
Option 1 as the only option and deprive permitting authorities of the
flexibility to use a two-step procedure. The Two-Step General Permit
closely resembles, after all, the approach suggested in the EDC remand
decision, which emphasized the need for permitting authority review and
public participation procedures prior to the establishment of
enforceable permit requirements. EPA appreciates the level of interest
and concern there is among the public for ensuring that MS4 discharges
are being adequately controlled and are making improvements in water
quality. EPA notes that any permitting authority that takes on the Two-
Step permitting process will need to be prepared to review and respond
to any comments that it receives in response to the individual public
notices it publishes, and will need to provide a rationale for any
final permit terms and conditions established through the process.
While states currently using a two-step type of procedure report that
they receive few, if any public comments about requirements for
individual MS4s, this will not necessarily hold true for the future.
With this in mind, EPA found it important to clarify in the final rule
that permitting authorities may switch to a Comprehensive General
Permit for the next permit term simply by explaining which option they
will use to provide coverage under the general permit.

V. How the Two General Permit Options Work

A. Comprehensive General Permit Approach

    Permitting authorities opting to issue Comprehensive General
Permits must establish the full set of requirements that are deemed
necessary to meet the MS4 permit standard in Sec.  122.34. (See Sec.
122.28(d)(1), which requires that ``the Director includes all required
permit terms and conditions in the general permit.'') The permit must
therefore include terms and conditions that define what is required to
meet the MS4 permit standard for the minimum control measures (Sec.
122.34(b)),

additional permit terms and conditions based on an approved total
maximum daily load (TMDL) or other appropriate requirements to protect
water quality (Sec.  122.34(c)), and requirements to evaluate and
report on compliance with the permit (Sec.  122.34(d)). As a result,
the Comprehensive General Permit is no different than other general
permits in that all applicable effluent limitations and other
conditions are included within the permit itself, and the NOI is used
primarily to determine whether a specific MS4 is eligible and to secure
coverage for that MS4 under the permit subject to its limits and
conditions.
    While a number of comments expressed support for the proposed
Option 1 approach (now called the ``Comprehensive General Permit'' in
the final rule), there were also comments expressing concern about the
difficulty of putting together a permit that would comprehensively
establish terms and conditions that would be suitable for and
achievable by all eligible MS4s, including both traditional and non-
traditional MS4s. Others questioned the ability of permitting
authorities to write a single permit that would establish uniform
requirements that would contain appropriate requirements for MS4s that
have been regulated since the beginning of the Phase II program as well
as for MS4s brought into the Phase II program by the latest Census, not
to mention a permit that would be able to establish watershed-specific
requirements addressing TMDLs. EPA acknowledges the challenge that
permitting authorities will face in developing and issuing a
Comprehensive General Permit. Synthesizing the collective understanding
of MS4 capabilities across an entire state, and translating this into
effective and achievable permit requirements, will require a greater
effort up front in developing one of these permits. However, as
described in further detail below, there are ways of addressing
challenges such as these, for example, by subcategorizing MS4s by
experience, size, or other factors, and creating different requirements
for each subcategory.
    To assist permitting authorities in developing permit conditions
for a Comprehensive General Permit, EPA has compiled examples of permit
provisions from existing permits that implement the minimum control
measures, which are written in a ``clear, specific, and measurable''
manner. These examples are included in a document entitled Compendium
of MS4 Permitting Approaches--Part 1: Six Minimum Control Measure
Provisions (EPA, 2016). EPA has also included in a separate compendium
examples of permit provisions to consider when addressing approved
TMDLs.\3\ A number of commenters requested that EPA continue to provide
these types of examples to help permitting authorities implement the
final rule. EPA agrees with these comments, and plans to regularly
update these compendia and provide other similar types of technical
assistance.
---------------------------------------------------------------------------

    \3\ See EPA's Compendium of MS4 Permitting Approaches--Part 3:
Water Quality-Based Requirements (EPA, 2016).
---------------------------------------------------------------------------

    There are a variety of permitting approaches that should be
considered to address the concerns raised about developing a
Comprehensive General Permit for the large number and variety of
regulated MS4s, and which address the array of localized or watershed-
based issues. One approach that may work is to issue two different
comprehensive general permits or to subdivide the permitted universe,
establish in the main body of the permit requirements that apply to all
MS4s, and to provide a separate appendix that establishes MS4-specific
terms and conditions, which apply uniquely to different categories of
MS4s. For instance, the state of Washington has issued two MS4 general
permits, one for the eastern part of the state and the other for the
western part of the state. Further, the Western Washington Small MS4
General Permit includes a TMDL appendix, which establishes additional
permit requirements for specific MS4s based on the watershed in which
they are located and the waterbody to which they discharge. These
additional requirements are each translated from the approved TMDL for
that watershed and the specific waterbody. Another approach that
permitting authorities can consider is to establish different
requirements for each minimum control measure for separate sub-
categories of MS4s based on type of MS4 or other factors.\4\ Permits
could also include separate sections for traditional versus non-
traditional MS4s,\5\ or alternatively separate permits may be issued
for these different categories of MS4s, as several states are doing for
departments of transportation MS4s. The main benefit of these different
approaches is that they provide the permitting authority with a way of
dividing up the universe of small MS4s into smaller categories, which
are composed of municipalities with a greater degree of similarity
among them.
---------------------------------------------------------------------------

    \4\ For example, Colorado's 2016 Small MS4 General Permit
includes a different set of actions and corresponding deadlines for
``new permittees'' and ``renewal permittees.'' See Section H,
https://www.colorado.gov/pacific/sites/default/files/COR090000-PermitCertification.PDF.
    \5\ See California's 2013 Small MS4 General Permit, http://www.waterboards.ca.gov/water_issues/programs/stormwater/docs/phsii2012_5th/order_final.pdf.
---------------------------------------------------------------------------

B. Two-Step General Permit Approach

    Inherent in the Two-Step General Permit approach is the fact that
the general permit requirements are not on their own adequate to meet
the MS4 permit standard in Sec.  122.34. In order to fill in the gaps,
the permitting authority must individually review information submitted
with each eligible MS4 operator's NOI, and propose additional permit
requirements to apply to the MS4 individually that, together with the
base general permit requirements, meet the MS4 permit standard for that
MS4. These proposed additional permit requirements and the information
on which it is based is then subject to public notice and comment, and
the opportunity to request a hearing.
    The first step of the Two-Step General Permit is to develop and
issue the final small MS4 general permit, or ``base general permit.''
The need for the second step arises because the base general permit
does not include all of the terms and conditions necessary to meet the
MS4 permit standard, and therefore has left the development of the
additional requirements to a second process. NOIs for general permits
using this approach must include more information than NOIs for typical
general permits.
    The proposed rule described the steps that would be involved in the
second step of the permitting process in Section VI.B of the preamble
(81 FR 427, January 6, 2016). EPA requested comment on modifying the
applicable parts of the NPDES regulations to enable permitting
authorities to incorporate additional, enforceable elements of the Two-
Step General Permit for individual MS4s following a process that would
require public notice, the opportunity to request a public hearing, and
a final permitting determination. The model that EPA proposed for this
procedure was based on several of the key components of the permitting
framework adopted for Concentrated Animal Feeding Operations (CAFOs) in
Sec.  122.23(h). EPA proposed that the new ``Option 2'' process would
be contained in Sec.  122.33(b)(1), where the NOI requirements for
small MS4 general permits are located. The proposal described the rule
provisions as follows:
     At a minimum, the operator must include in the NOI the
BMPs that it proposes to implement to comply with the permit, the
measurable goals for each BMP, the person or persons responsible for
implementing the SWMP, and any additional information

required in the NOI by the general permit. The Director must review the
NOI to ensure that it includes adequate information to determine if the
proposed BMPs, timelines, and any other actions are adequate to reduce
the discharge of pollutants from the MS4 to the maximum extent
practicable, to protect water quality, and to satisfy the appropriate
water quality requirements of the Clean Water Act. When the Director
finds that additional information is necessary to complete the NOI or
clarify, modify, or supplement previously submitted material, the
Director may request such additional information from the MS4 operator.
     If the Director makes a preliminary determination that the
NOI contains the required information and that the proposed BMPs,
schedules, and any other actions necessary to reduce the discharge of
pollutants from the MS4 to the maximum extent practicable, to protect
water quality, and to satisfy the appropriate water quality
requirements of the Clean Water Act, the permitting authority must
notify the public of its proposal to authorize the MS4 to discharge
under the general permit and, consistent with Sec.  124.10, make
available for public review and comment and opportunity for public
hearing the NOI, and the specific BMPs, milestones, and schedules from
the NOI that the Director proposes to be incorporated into the permit
as enforceable requirements. The process for submitting public comments
and hearing requests, and the hearing process if a hearing is granted,
must follow the procedures applicable to draft permits in Sec. Sec.
124.11 through 124.13. The permitting authority must respond to
significant comments received during the comment period, as provided in
Sec.  124.17, and, if necessary revise the proposed BMPs and/or
timelines to be included as terms of the permit.
     When the Director authorizes coverage for the MS4 to
discharge under the general permit, the specific elements identified in
the NOI are incorporated as terms and conditions of the general permit
for that MS4. The permitting authority must, consistent with Sec.
124.15, notify the MS4 operator and inform the public that coverage has
been authorized and of the elements from the NOI that are incorporated
as terms and conditions of the general permit applicable to the MS4 (81
FR at 427-420, January 6, 2016).
    The final rule matches closely with what was proposed as the steps
necessary to implement Option 2. These steps, which are part of what
was finalized as the ``Two-Step General Permit,'' are described as
follows in Sec.  122.28(d)(2):
    (1) The MS4 operator submits the NOI with the information about its
activities as specified in the general permit.
    (2) The permitting authority reviews the NOI to determine if the
information is complete and to develop proposed additional permit
requirements necessary to meet the MS4 permit standard;
    (3) If the permitting authority makes a preliminary determination
to authorize the small MS4 operator to discharge it must give the
public notice of and opportunity to comment and request a public
hearing on the proposed additional permit terms and conditions, and the
basis for these additional requirements, including the NOI and other
relevant information submitted by the MS4. These procedures must be
carried out in accordance with 40 CFR part 124.
    (4) Upon completion of the procedures in step (3), the permitting
authority may authorize the discharge from the MS4 subject to the
requirements of the base general permit and the final requirements
established in the second step. Using this approach, the permitting
authority may choose to rely fully on the completion of this process to
establish most of required permit terms and conditions for a particular
MS4, or it may rely on a hybrid approach wherein some of the necessary
requirements are established within the base general permit at permit
issuance while the remaining set of requirements are developed during
the process of authorizing individual MS4 discharges in the second
step.
    Where EPA has modified the Two-Step General Permit from the
proposed rule, it is to clarify a point made in the proposed rule. For
instance, EPA makes a clarification in the final rule regarding the
requirements for NOI review in the Two-Step approach. The proposed rule
explained that the purpose of the permitting authority's review is to
determine whether the NOI is complete and whether the operator's
proposed set of BMPs and measurable goals are adequate to meet the MS4
permit standard. The final rule places emphasis on the fact that the
information submitted by the MS4 operator with its NOI is for the
purpose of informing the permitting authority's determination as to
what ``additional terms and conditions necessary to meet the
requirements of Sec.  122.34.'' See Sec.  122.28(d)(2)(ii). What the
operator submits in the NOI is determined by the permitting authority
when establishing the base general permit. The permitting authority may
request descriptions of BMPs to be implemented and measurable goals as
the MS4's proposal for what it considers to be adequate to ``reduce
pollutants to the maximum extent practicable, protect water quality and
satisfy the appropriate water quality requirements of the Clean Water
Act.'' Under the Two-Part General Permit in the final rule, the
permitting authority reviews this information to craft what it
determines are the necessary permit terms and conditions to meet this
MS4 permit standard; these terms and conditions are then subject to the
permitting procedures for public comment and the opportunity to request
a hearing. The specific requirements developed out of this process may
bear a substantial similarity to the operator's proposed BMPs and
measurable goals, but they also may be modified or further refined
based on the permitting authority's own determination as to the
specific requirements that it deems necessary to meet the MS4 permit
standard. For instance, instead of proposing to adopt all of the BMP
details that are submitted by the MS4 operator with the NOI as
enforceable permit requirements, the permitting authority may instead
develop proposed requirements that focus in on the specific actions and
milestones that it believes would represent significant progress during
the permit term. This is a clarification from the proposed rule
description of the NOI review process, which did not clearly articulate
the permitting authority's role in reviewing the operator's BMP and
measurable goal information, or other information requested in the base
general permit (or fact sheet).
    Another clarification made to the proposed Two-Step process relates
to the 40 CFR part 124 procedures to follow during the second step. The
final rule incorporates by reference several specific sections of part
124. These specific references are consistent with the proposed rule's
reference generally to part 124, however, in the final rule EPA focused
in on the specific procedural requirements that ensure that the public
participation aspects of the Two-Step General Permit are consistent
with the NPDES regulations. These part 124 requirements are necessary
because the permitting authority is proposing to add additional terms
and conditions to the general permit applicable to individual MS4
permittees. EPA likens these additional terms and conditions to the
development of a ``draft permit'' under Sec.  124.6, and, as such,
these draft requirements must undergo minimum permitting procedures for
public notice,

comments, and hearings before they are established in final form. The
following procedural requirements are referenced directly:
Public Notice of Permit Actions and Public Comment Period (Sec.
124.10, Excluding (c)(2))
--By incorporating these provisions of Sec.  124.10 for the Two-Part
General Permit, this means that the permitting authority's notice must
adhere to the following minimum public notice requirements for the
draft permit conditions:

     The notice must provide a minimum of 30 days for the
public to provide comment on the draft permit terms and conditions. The
permitting authority must provide notice to the public at least 30 days
prior to holding a public hearing on these draft requirements. See
Sec.  124.10(b).
     The permitting authority must provide public notice to the
MS4 operator who submitted the NOI, to any relevant agencies or other
entities referenced in Sec.  124.10(c)(1), and members of the public on
the permitting authority's mailing list pursuant to Sec.
124.10(c)(1)(ix). The public notice must also be sent in a manner
constituting legal notice to the public under state law (if the permit
program is administered by an approved state), and by using ``any other
method reasonably calculated to give actual notice'' of the draft terms
and conditions being added to the permit. See Sec.  124.10(c)(3) and
(4).
     The public notice must consist of: (1) The name and
address of the office processing the NOI and draft terms and conditions
for the MS4 operator; (2) name, address, and telephone number of a
person from whom interested persons may obtain further information,
including copies of the draft terms and conditions, statement of basis
or fact sheet, and the NOI; (3) a brief description of the comment
procedures required by Sec. Sec.  124.11 and 124.12 and the time and
place of any hearing that will be held, including a statement of
procedures to request a hearing, and any other procedures by which the
public may participate in the final authorization decision; (4) for
EPA-issued permits, the location of the administrative record required
by Sec.  124.9, the times when the record will be open for public
inspection, and a statement that all data submitted by the operator is
available as part of the administrative record; (5) a general
description of the location of each discharge point and the name of the
receiving water; and (6) any additional information considered
``necessary or proper.'' The public notice of a hearing under Sec.
124.12 must include: (1) Reference to the date of previous public
notices relating to the same MS4; (2) date, time, and place of the
hearing; and (3) a brief description of the nature and purpose of the
hearing, including the applicable rules and procedures. See Sec.
124.10(d).
     In addition to the public notice, the permitting authority
must mail a copy of the fact sheet or statement of basis, the NOI, and
the draft terms and conditions to the operator and other agencies and
entities listed in Sec.  124.10(c)(1)(ii) and (iii). See Sec.
124.10(e).
    A cross-reference to Sec.  124.10(c)(2) is not included in the
final rule. Although these requirements apply to general permits, EPA
distinguishes in the Two-Step General Permit between the base general
permit and the terms and conditions that are added through the second
permitting step for individual MS4 permittees. The permitting authority
is required to comply with Sec.  124.10(c)(2) when issuing the general
permit (i.e., the base general permit). However, because the additional
MS4-specific terms and conditions are developed in a manner that is
similar to the way in which terms in an individual permit would be
developed, EPA concluded that the public notice requirements that apply
to individual permits are more appropriate for the second step in the
process of authorizing an MS4 to discharge under a Two-Step General
Permit. For this reason, EPA does not apply the specific requirements
of Sec.  124.10(c)(2) to the proposed additional terms and conditions,
but does apply the other applicable public notice requirements of Sec.
124.10.
Public Comments and Public Hearings (Sec. Sec.  124.11 and 124.17)
    Consistent with Sec.  124.11, during the public comment period for
the draft permit conditions, any member of the public may submit
comments and may request a hearing, if none has already been scheduled.
The permitting authority is required to consider comments received
during the comment period in making the decision to authorize the
discharge. When the permitting authority has made a final determination
to authorize an individual small MS4 to discharge under the general
permit, subject to the additional incorporated requirements, it must
also make available to the public its responses to comments received,
subject to the applicable requirements of Sec.  124.17.
Public Hearings (Sec.  124.12)
    If the permitting authority holds a public hearing on the draft
permit conditions, public notice of the hearing must be provided as
specified in Sec.  124.10 and the hearing must be conducted in
accordance with the requirements of Sec.  124.12.
Obligation To Raise Issues During the Public Comment Period (Sec.
124.13)
    During the public comment period for the draft permit conditions,
commenters are obligated to raise ``all reasonably ascertainable issues
and submit all reasonably available arguments supporting their
position'' as required in Sec.  124.13.
    Upon completion of these procedures, in which permitting authority
review, public notice and comment, and any public hearings take place
in accordance with the appropriate sections of part 124, the permitting
authority may authorize the MS4 to discharge under the terms of the
permit. When authorization occurs, the final terms and conditions that
were the subject of the public comment and hearing process described
above become enforceable permit terms and conditions for that MS4
permittee. No significant changes were made to this step from the
proposed rule. EPA clarifies that the permitting authority may choose
the method by which the permittee is notified of the final decision to
authorize the discharge and the final permit conditions, and by which
the public is informed of the same. EPA oversight of state-issued NPDES
permits must also be taken into account. Under the Two-Step General
Permit, EPA has authority to review all terms and conditions of the
permit, whether established in a base general permit or in the second
step that establishes terms and conditions for individual MS4s. See
Sec.  123.44.

C. Permittee Publication of Public Notice

    A question arose during the development of the proposed rule as to
whether the MS4 could carry out public notice requirements for the
Procedural Approach (now referred to as the ``Two-Step General
Permit''). Several states currently require MS4 permittees to provide
public notice of individual MS4 NOIs (and their proposed SWMPs in many
states), including information on how the public can submit comments to
the state and to request a public hearing. EPA requested comment on
whether permitting authorities that have relied on the MS4 to place
public notices in the past should be able to use this

approach to satisfy their public notice requirements for individual
NOIs under the Two-Part General Permit. EPA did not propose this
approach to be adopted as part of the rulemaking effort, and is not
including in the final rule any specific requirements related to this
practice.
    EPA received several comments in response to this question. State
permitting authorities and one statewide MS4 association voiced their
support for allowing permitting authorities to require MS4 permittees
to publish public notices, and to establish procedures within the final
rule to accommodate this practice. One state suggested that if a
permitting authority is allowed to rely on the MS4 to publish the
public notice of the NOI, such public notice must follow all of the
minimum requirements related to the contents and methods of providing
notice, and any public comments received should be acknowledged and
considered by the state and documented in the final permit decision.
Another commenter recommended that the permitting authority be the only
entity authorized to conduct public notice and comment procedures given
the differences of opinion that may arise during the process, but
suggested that as an alternative EPA could allow states to establish
their own process for these procedures as long as they are consistent
with the regulations.
    Other commenters were opposed to allowing permitting authorities to
rely on the MS4 permittee to carry out applicable public participation
requirements. These commenters emphasized the clear requirement in the
regulations for the permitting authority to conduct these activities,
pointing to the fact that the NOI should be treated no differently than
any permit application. These comments noted that members of the public
wishing to review and potentially submit comments and request a hearing
on NOIs should have a centralized place to refer to for reviewing
public notices of NOIs, and feared that allowing a decentralized
approach where the MS4 handles the public notice would be unlikely to
reach the intended audience. Another point made was that in keeping
with the permitting authority's responsibility to review and determine
the adequacy of each MS4's NOI, the public notice and comment
proceedings that are associated with the NOIs should be managed by the
same entity. These commenters also questioned whether delegating these
responsibilities to the MS4 made sense given the fact that it is the
state that is most familiar with how to meet its own administrative
rules and protocols, and that is best equipped from a technical and
physical capacity standpoint to receive and process comments, many of
which will be submitted electronically, and potentially hold hearings.
Additionally, some commenters worried about the effect of placing more
burden on the municipalities.
    The final rule does not address the issue of whether the permitting
authority may rely on its MS4 permittees to carry out public notice
responsibilities on its behalf in the final rule, but instead
incorporates by reference the existing set of requirements that apply
to all draft permits in Sec.  124.10. As to whether permitting
authorities may rely on the permittee to publish the public notice, it
is EPA's view that they may do so as long as the public notice meets
all of the applicable requirements in Sec.  124.10. The public notice
responsibilities in the NPDES regulations apply to the permitting
authority, therefore these are requirements that it must ensure are
met. The state must conduct any public hearing, consider the comments
received, respond to them, and make decisions as to what changes are
necessary as a result of the comments.

VI. Requirements for Permit Terms and Conditions

    EPA proposed several clarifying changes to the regulatory language
in Sec.  122.34 regarding the expression of permit limits for small
MS4s. First, EPA proposed to clarify that the permitting authority is
responsible for establishing permit requirements that meet the MS4
permit standard. Second, proposed changes would address issues of
clarity in permit terms and the different ways in which permit
requirements can be expressed. Third, the proposal would reinforce the
expectation that the MS4 standard must be independently met for each 5-
year permit term. Each of these categories of regulatory changes is
discussed below. The final rule incorporates these proposed changes,
with some modification to the proposed rule language in response to
comments and for additional clarity.

A. Permitting Authority as the Ultimate Decision-Maker

    To directly address the clear message from the Ninth Circuit remand
that the regulations need to preclude the small MS4 from determining on
its own what actions are sufficient to meet the MS4 standard ``to
reduce pollutants to the maximum extent practicable, protect water
quality and satisfy the appropriate water quality requirements of the
CWA,'' EPA proposed revisions throughout Sec.  122.34 to make it clear
that the permitting authority is responsible for establishing permit
requirements that meet the standard. For this reason, EPA proposed to
shift the focus of the requirements in Sec.  122.34 to the ``NPDES
permitting authority'' rather than the regulated small MS4. Similarly,
the proposed rule modified the guidance provisions to focus on
permitting authorities as well as MS4s. In most cases, this meant
substituting the term ``NPDES permitting authority'' for ``you'' or
``your'' (referring to the regulated small MS4) and referring to the
regulated small MS4 as the ``operator.'' A related change tied to the
remand was the proposed deletion of the sentence ``Implementation of
best management practices consistent with the provisions of the storm
water management program required pursuant to this section and the
provisions of the permit required pursuant to Sec.  122.33 constitutes
compliance with the standard of reducing pollutants to the `maximum
extent practicable.' '' The Ninth Circuit court specifically raised
this sentence as a demonstration that ``nothing in the Phase II
regulations requires that NPDES permitting authorities review these
Minimum Measures to ensure that the measures that any given operator of
a small MS4 has decided to undertake will in fact reduce discharges to
the maximum extent practicable.'' See EDC, 344 F.3d at 832, 854. The
proposal to remove this sentence, combined with the other changes,
would reinforce the fact that the permitting authority is the entity
responsible for establishing the terms and conditions of the permit
necessary to meet the MS4 permit standard. These changes also would
shift the focus of Sec.  122.34 to the development of permit
requirements and away from the identification of what the MS4 should
include in its SWMP.
    EPA received a relatively small number of comments responding to
these proposed changes. Some commenters expressed a preference to
continue to have the MS4 in charge of defining the MS4 standard for
itself or requested that the deleted sentence (``Implementation of best
management practices consistent with the provisions of the stormwater
management plan. . . .'') be retained. Other commenters pointed out
that the proposed changes should apply to all regulated small MS4
permits, regardless of the type of permit (e.g., Traditional General
Permit, Procedural General Permit, or individual), and requested that
EPA clarify this in the final rule.
    The final rule retains the proposed rule changes that emphasize
that it is

the permitting authority with the ultimate authority to determine what
small MS4s must do to meet the MS4 permit standard. These changes
respond to the Ninth Circuit's finding in the EDC decision that the
Phase II rule did not, contrary to the CWA, require the permitting
authority to determine whether the MS4 permittee's proposed program
would in fact meet the MS4 permit standard. Indeed, while the EDC
decision specifically addressed the general permit process, the
underlying rationale for the court's rejection of the general
permitting process--the failure of the rule to ensure that the
permitting authority, not the permittee, determine what is needed to
meet the standard applicable to MS4 permits under the CWA--applies
whether the MS4 permit is a general permit or an individual permit.
Therefore, EPA is amending Sec.  122.34 to apply to any permit issued
to regulated small MS4s (except those small MS4s applying for an
individual permit under Sec.  122.33(b)(2)(ii)).
    These changes, including the deletion of the sentence
``Implementation of best management practices consistent with the
provisions of the storm water management program required pursuant to
this section and the provisions of the permit required pursuant to
Sec.  122.33 constitutes compliance with the standard of reducing
pollutants to the maximum extent practicable,'' more clearly establish
the permit as the enforceable document, not the stormwater management
program or what has been described in the SWMP. (See VI.E of this
preamble for a discussion of the function of the ``SWMP'' under EPA's
small MS4 regulation.)

B. ``Clear, Specific, and Measurable'' Permit Requirements

    EPA also proposed rule revisions related to the expression of
permit terms. Consistent with current EPA guidance, the proposed rule
specified that permit requirements be expressed in ``clear, specific,
and measurable'' terms. The preamble to the proposed rule contained a
detailed discussion about what ``clear, specific, and measurable''
meant and EPA put in the rulemaking docket a draft compendium of
example language from actual permits to further illustrate the meaning
of ``clear specific, and measurable.'' See updated permit compendium in
the final rule docket, MS4 Compendium of Permitting Approaches: Part 1:
Six Minimum Control Measures (EPA, 2016). EPA also included in the
preamble to the proposed rule, examples of permit language that do not
appear to have the type of detail that would be needed.
    In addition to specifying that permit terms and conditions must be
``clear, specific, and measurable,'' the proposed rule text clarified
that effluent limitations may be in the form of BMPs, and provided non-
exclusive examples of how these BMP requirements may appear in the
permit, such as in the form of specific tasks, BMP design requirements,
performance requirements or benchmarks, schedules for implementation
and maintenance, and the frequency of actions. This language was
proposed to substitute for existing language that states: ``Narrative
effluent limitations requiring implementation of best management
practices (BMPs) are generally the most appropriate form of effluent
limitations when designed to satisfy technology requirements . . . and
to protect water quality.''
    EPA also proposed to delete a related guidance paragraph in Sec.
123.34(e)(2). As explained in the proposed rule preamble, the guidance
no longer reflects current practice.\6\ The deletion of this paragraph
is also consistent with EPA guidance developed since 1999 regarding the
types of requirements that are recommended for MS4 permits.\7\
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    \6\ See EPA's Compendium of MS4 Permitting Approaches--Part 3:
Water Quality-Based Requirements (EPA, 2016).
    \7\ See EPA memorandum entitled Revisions to the November 22,
2002 Memorandum ``Establishing Total Maximum Daily Load (TMDL)
Wasteload Allocations (WLAs) for Storm Water Sources and NPDES
Permit Requirements Based on Those WLAs,'' November 26, 2014.
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    EPA received numerous comments on these proposed changes. For the
most part, commenters from all stakeholder groups expressed approval
for the ``clear, specific, and measurable'' language. However, a
variety of commenters read the deletion of ``narrative'' to mean that
numeric effluent limitations (e.g., end-of-pipe pollutant concentration
limitations) would be required in small MS4 permits or that
``narrative'' limits would no longer be acceptable. As stated in the
preamble, EPA did not intend to make substantive changes to Sec.
122.34 beyond what would be required to address the court remand. The
term ``narrative'' was proposed to be deleted to recognize that other
expressions of effluent limitations may be appropriate, not to preclude
the use of narrative effluent limitations. To avoid misinterpretation
of the regulation, however, the final rule instead describes
appropriate requirements as being ``narrative, numeric, or other
requirements.'' EPA intends for the final rule text to more broadly
encompass the various types of controls for stormwater discharges that
could be required of small MS4s.
    Regarding the insertion of ``clear, specific, and measurable'' to
describe permit requirements, most commenters perceived benefits for
permittees, permitting authorities, and the public, particularly
because it will be more clearly stated in the permit what is expected
for compliance. Some commenters observed that ``clear, specific, and
measurable'' terms would enable better enforcement of the MS4 permit
requirements, and would provide a more effective path to improved water
quality. Some small MS4s themselves pointed out that greater certainty
in permit terms could put them into a better position to plan and to
garner local political support and critical funding for their programs.
Other MS4s, however, voiced uncertainty as to how the terms ``clear,
specific, and measurable'' would be implemented and what would actually
be required of them by their permits and concern that their flexibility
would be unduly restricted. Some commenters also suggested that
regulatory provisions associated with the expression of permit limits,
while discussed in the preamble to the proposed rule in the context of
Option 1, should apply regardless of the option chosen. Several groups
requested that ``clear, specific, and measurable'' be changed instead
to ``focused, flexible, and effective.'' Other commenters requested
that ``enforceable'' be added to this phrase. Some groups representing
MS4 permittees and industry expressed concern that ``measurable'' meant
that permits would now contain water quality monitoring requirements or
that ``measurable,'' together with the deletion of ``narrative'' to
describe effluent limitations, meant that EPA was opening the door for
small MS4 permits to now be required to contain numeric effluent
limitations, e.g., end-of-pipe pollutant concentration limits for each
outfall in the system. A concern that ``clear, specific, and
measurable'' would preclude or reduce MS4 flexibility to change program
elements as a program encountered successes or failures (i.e.,
adaptations made during the permit term or to meet MS4-specific
circumstances) was also stated as a disadvantage associated with this
language. In a related vein, several commenters warned against permit
terms that were too specific and left very little discretion to the
MS4. Some commenters requested that the regulatory text indicate that
the expectation that permit requirements be ``clear, specific, and
measurable'' apply

to each BMP and other requirements in the permit, and accompanied by
reporting requirements that related to measurable requirements, rather
than measureable goals as in the current regulation.
    The final rule retains the proposed rule requirement for ``clear,
specific, and measurable'' permit terms and conditions. Accompanying
the promulgation of this requirement, EPA is also publishing an updated
version of its compendium of permit examples from the proposed rule
(i.e., MS4 Compendium of Permitting Approaches: Part 1: Six Minimum
Control Measures (EPA, 2016)), which includes provisions from EPA and
state MS4 general permits that provide examples of clear, specific, and
measurable requirements. EPA also retains the examples provided in the
proposed rule preamble of permit language that would generally not
qualify as clear, specific, and measurable, which is included here,
with minor edits:
     Permit provisions that simply copy the language of the
Phase II regulations verbatim without providing further detail on the
level of effort required or that do not include the minimum actions
that must be carried out during the permit term. For instance, where a
permit includes the language in Sec.  122.34(b)(4)(ii)(B) (i.e.,
requiring ``. . . construction site operators to implement appropriate
erosion and sediment control best management practices'') and does not
provide further details on the minimum set of accepted practices, the
requirement would not provide clear, specific, and measurable
requirements within the intended meaning of the proposed Traditional
General Permit Approach. The same would also be true if the permit just
copies the language from the other minimum control measure provisions
in Sec.  122.34(b) without further detailing the particular actions and
schedules that must be achieved during the permit term.
     Permit requirements that include ``caveat'' language, such
as ``if feasible,'' ``if practicable,'' ``to the maximum extent
practicable,'' and ``as necessary'' or ``as appropriate'' unless
defined. Without defining parameters for such terms (for example,
``infeasible'' means ``not technologically possible or not economically
practicable and achievable in light of best industry practices''), this
type of language creates uncertainty as to what specific actions the
permittee is expected to take, and is therefore difficult to comply
with and assess compliance.
     Permit provisions that preface the requirement with non-
mandatory words, such as ``should'' or ``the permittee is encouraged to
. . . .'' This type of permit language makes it difficult to assess
compliance since it is ultimately left to the judgment of the permittee
as to whether it will comply. EPA notes that the Phase II regulations
include ``guidance'' in places (e.g., Sec.  122.34(b)(1)(ii),
(b)(2)(ii), and (b)(3)(iv)) that suggest practices for adoption by MS4s
and within permits, but does not mandate that they be adopted. This
guidance language is intended for permitting authorities to consider in
establishing their permit requirements. Permitting authorities may find
it helpful to their permittees to include guidance language within
their permits in order to provide suggestions to their permittees, and
it may be included. However, guidance language phrased as suggested
guidelines would not qualify as an enforceable permit requirement under
the final rule.
     Permit requirements that lack a measurable component. For
instance, permit language implementing the construction minimum control
measure that requires inspections ``at a frequency determined by the
permittee'' based on a number of factors. This type of provision
includes no minimum frequency that can be used to measure adequacy and,
therefore, would not constitute a measurable requirement for the
purposes of the rule.
     Provisions that require the development of a plan to
implement one of the minimum control measures, but does not include
details on the minimum contents or requirements for the plan, or the
required outcomes, deadlines, and corresponding milestones. For
example, permit language requiring the MS4 to develop a plan to
implement the public education minimum control measure, which informs
the public about steps they can take to reduce stormwater pollution.
The requirement leaves all of the decisions on what specific actions
will be taken during the permit term to comply with this provision to
the MS4 permittee, thus enabling almost any type of activity, no matter
how minor or insubstantial, to be considered in compliance with the
permit.
    Regarding the suggestion to add ``enforceable,'' in EPA's view,
clear, specific and measurable terms and conditions together define
what makes a permit requirement enforceable. Therefore, adding
``enforceable'' to this list of attributes would not add to the
enforceability of permit terms and conditions. With respect to the
suggestion to replace ``clear, specific, and measurable'' with
``focused, flexible, and effective,'' EPA clarifies that nothing in the
final rule prevents a permitting authority from developing permit
requirements that are focused, flexible, and effective, as long as
those requirements are articulated in clear, specific, and measurable
terms.
    The word ``specific'' also generated a number of comments. EPA
proposed ``specific'' to indicate what activities an MS4 would be
required to undertake to implement the various required elements of the
minimum control measures described in Sec.  122.34(b) or to achieve a
specified level of performance that would constitute compliance with
the permit. Some commenters advocated for more specificity in permits,
while others cautioned against too much specificity. Still others
simply asked for more guidance about how ``specific'' a general permit
would need to be. EPA intends for ``specific'' to mean that a
permitting authority describes in enough in detail that an MS4 can
determine from permit terms and conditions what activity they need to
undertake, when or how often they must undertake it, and whether they
must undertake it in a particular way. It must be clear what does and
does not constitute compliance. As noted in the preamble to the
proposed regulation, a verbatim repetition of the minimum control
measures described in Sec.  122.34(b) does not provide a sufficient
level of specificity.
    At the same time, EPA intends for the permitting authority to
retain discretion in determining how much specificity is needed for
different permit requirements. The level of specificity may change over
time, for example, to reflect a more robust understanding of more
effective stormwater management controls or to meet specific state
needs. There is a wide range of ways to implement a stormwater
management program and the permitting authority will need to determine
how to craft permit terms and conditions that establish clear
expectations that implement the various requirements in Sec.  122.34 in
specific terms, and this can be done while also providing flexibility
to MS4s to choose how they will comply with permit terms. For example,
a requirement to ``Develop a public education program about the effect
of stormwater on water quality'' is not a sufficiently specific permit
requirement. To provide greater specificity, some permitting
authorities have provided a menu of specific public education
activities in the permit, and the MS4 must choose from among them
indicating how they will comply with the permit. For a hypothetical
example, the permit might require that the MS4

undertake four public education activities each year from a list of
activities specified in the permit and include at least one each year
that is directed at students in all public schools within the MS4 area,
using an existing or new curriculum, to explain ways in which
stormwater can harm water quality. In this hypothetical example, the
MS4 has the flexibility to choose from a list of activities the
permitting authority has determined are acceptable and, for the
required activity involving public schools, and to choose a curriculum
that already exists or develop a new one that is tailored to specific
stormwater problems in the community. The specific (clear and
measurable) permit terms are:
    (1) To undertake four education activities per year from a
specified list of allowable activities; and (2) to ensure that at least
one of the activities involves education about stormwater at all public
schools. Compliance would be completion of four activities each year.
One type of activity is specified in the permit, but the MS4 can choose
the audience, the medium, and the specific message for the other three
required activities. Even within the more specific requirement related
to public schools, the permittee would have discretion in determining
the form and content of the curriculum. In this hypothetical example,
the permit contained requirements of varying specificity, but the
boundaries of what constitutes compliance is readily apparent and it is
clear what the MS4 must do and the timeframe for compliance.
    What is not specified in a permit implicitly defines the level of
discretion the MS4 has to meet the terms and conditions of the permit.
EPA recognizes that it can be useful for MS4s to retain the ability to
change specific stormwater control activities during the term of the
permit without the need to seek a permit modification for every change.
In the above hypothetical example, if the MS4 finds that, after the
second year of the permit term that the curriculum it chose was not
effective, it could develop a different one or choose another
curriculum, e.g., one that involves field work rather than just
classroom instruction. The change in curriculum would not require a
permit modification because the permit did not specify the particular
curriculum that must be used. The permit terms in this case also
provide the public with sufficient information to offer comments on the
activities available, their number and frequency, and the degree of
discretion left to the MS4. EPA emphasizes that it is not necessary
that every detail be spelled out in a permit as an enforceable
requirement under the CWA. See further discussion of the considerations
related to permit modifications in Section VI.E.
    In the above hypothetical example, the permitting authority could
have chosen more specific terms. For example, it could have required
that the MS4s undertake activities A and B in the first year,
activities C and D in the second year, and so on. It could have
specified the medium to be used, e.g., television or social media and
each of the audiences that must be addressed in the outreach plan
(e.g., businesses, commercial establishments, developers). EPA notes
that increased specificity does not necessarily mean that the permit is
more stringent. It does, however, decrease the flexibility left to the
MS4 to determine how to meet the permit requirement. Conversely, the
permitting authority in the above hypothetical example could have been
less specific, for instance, by not requiring one activity each year to
be carried out in public schools. Permitting authorities need to
consider what level of specificity is appropriate based on the
particular factors at play in their permit area. The level of
specificity may change over time, and should be evaluated in each
successive permit. There may be differences of opinion about the degree
of specificity needed, but that call would be open for public comment
on the general permit or, if the Two-Part General Permit is used, on
the public notice for the additional terms and conditions applicable to
individual MS4s.
    Another example of how the permit can provide greater specificity
is to include distinct requirements based on type of MS4. For example,
Section <IP_ADDRESS> of the Arkansas general permit states: ``The stormwater
public education and outreach program shall include more than one
mechanism and target at least five different stormwater themes or
messages over the permit term. At a minimum, at least one theme or
message shall be targeted to the land development community. For non-
traditional MS4s, the land development community refers to landscaping
and construction contractors working within its boundaries (emphasis
added). The stormwater public education and outreach program shall
reach at least 50 percent of the population over the permit term.''
Here, the permitting authority further specifies the target audience as
applied to non-traditional MS4s.
    Alternatively, specific permit terms could be established uniformly
for all eligible small MS4s, which would have the benefit of leveling
the playing field among small MS4s. The final rule gives permitting
authorities some discretion to decide how much specificity to include
in the permit and how much flexibility to leave to the MS4 when working
out the details of how it will comply with permit terms. The public
would have an opportunity to provide comments on such preliminary
decisions about the level of specificity in permit terms and conditions
needed during the public comment period on the general permit or on the
second step of a Two-Step General Permit, or in some cases on both.
    EPA also received comments on the term ``measurable.'' In response
to comments, EPA clarifies that ``measurable'' does not necessarily
mean that water quality monitoring must be required in every instance
to assess compliance. Likewise, it does not mean that numeric, end-of-
pipe pollutant concentrations or loadings must be included in permits.
While these examples do represent a type of measurable requirement,
they are not required to be in every MS4 permit. Rather, the term
``measurable'' means that the permit requirement has been articulated
in such a way that compliance with it can be assessed in a