will comply with the applicable provisions of sections 301, 302, 303,
306 and 307 of this Act'' (emphasis added). The plain language of
section 401(a) therefore directs authorities to certify that the
discharge resulting from the proposed federally licensed or permitted
project will comply with the CWA. Section 401(d) uses different
language and allows the certifying authority to include conditions ``to
assure that any applicant \26\ for a Federal license or permit will
comply'' (emphasis added) with applicable provisions of the CWA and
other appropriate requirements of state or tribal law. The use of this
different term in section 401(d) creates ambiguity and has been
interpreted as broadening the scope of section 401(a) beyond
consideration of water quality impacts from the ``discharge'' which
triggers the certification requirement, to allow certification
conditions that address water quality impacts from any aspect of the
construction or operation of the activity as a whole. See PUD No. 1,
511 U.S. at 712.
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    \26\ As a matter of practice, the Corps seeks state
certification for ``its own discharges of dredged or fill
material'', ``[a]lthough the Corps does not process and issue
permits for its own activities.'' 33 CFR 336.1(a)(1).

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    The ordinary meaning of the word ``applicant'' is ``[o]ne who
applies, as for a job or admission.'' See Webster's II, New Riverside
University Dictionary (1994). In section 401(d), this term is used to
describe the person or entity that applied for the federal license or
permit that requires a certification. The use of this term in section
401(d) is consistent with the text of the CWA, which uses the term
``applicant'' throughout to describe an individual or entity that has
applied for a grant, a permit, or some other authorization.\27\
Importantly, the term is also used in section 401(a) to identify the
person responsible for obtaining the certification: ``Any applicant for
a Federal license or permit to conduct any activity including, but not
limited to, the construction or operation of facilities, which may
result in any discharge into the navigable waters, shall provide the
licensing or permitting agency a certification from the State . . . .''
Broadly interpreting the use of ``applicant'' in section 401(d) to
authorize certification conditions that are unrelated to the discharge
would expand section 401 beyond the scope of federal regulatory
authority integrated throughout the core regulatory provisions of the
modern CWA--the ability to regulate discharges to waters of the United
States. The Agency is not aware of any other instance that the term
``applicant'' (or permittee or owner or operator) as used in the CWA
has been interpreted to significantly expand the jurisdictional scope
or meaning of the statute and believes a better interpretation would be
to align its meaning with its plain language roots.
---------------------------------------------------------------------------

    \27\ See e.g., 33 U.S.C. 1311 (``An application for an
alternative requirement under this subsection shall not stay the
applicant's obligation to comply with the effluent limitation
guideline or categorical pretreatment standard which is the subject
of the application.''); id. at 1344 (``Not later than the fifteenth
day after the date an applicant submits all the information required
to complete an application for a permit under this subsection, the
Secretary shall publish the notice required by this subsection.'')
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    The Agency therefore proposes to interpret the use of the term
``applicant'' in section 401(d), consistent with its use in section
401(a) and other areas of the CWA, as identifying the person or entity
responsible for obtaining and complying with the certification and any
associated conditions. Throughout the CWA, the term ``applicant'' is
used to identify the person or entity responsible for compliance with
the federal regulatory provisions of the CWA, all of which remain
focused on controlling discharges of pollutants to waters of the United
States.\28\ The legislative history of section 401, discussed below,
provides additional support for this interpretation.
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    \28\ For example, section 404 provides that after an applicant
requests a permit, the Corps ``may issue [a] permit[ ], after notice
and opportunity for public hearings for the discharge of dredged or
fill material into the navigable waters at specified disposal
sites.'' 33 U.S.C. 1344(a).
---------------------------------------------------------------------------

    Section 401 was updated as part of the 1972 CWA amendments to
reflect the restructuring of the Act, as described in section II.F.1 in
this preamble. Two important phrases were modified between the 1970 and
the 1972 versions of section 401 that help inform what Congress
intended with the 1972 amendments. First, the 1970 version provided
that an authority must certify ``that such activity . . . will not
violate water quality standards.'' Public Law 91-224 Sec.  21(b)(1)
(emphasis added). The 1972 version was modified to require an authority
to certify ``that any such discharge shall comply with the applicable
provisions of [the CWA].'' 33 U.S.C. 1341(a) (emphasis added). On its
face, this modification makes the 1972 version of section 401
consistent with the overall framework of the amended statutory regime,
which focuses on eliminating discharges and attaining water quality
standards.
    Second, the 1972 version included section 401(d) for the first
time, which authorizes conditions to be imposed on a certification ``to
assure that any applicant for a Federal license or permit will comply
with any applicable effluent limitations and other limitations, under
section 301 or 302 of this Act, standard of performance under section
306 of this Act, or prohibition, effluent standard, or pretreatment
standard under section 307 of this Act, and with any other appropriate
requirement of State law set forth in such certification . . . .''Id.
at 1341(d). This new section also requires such conditions to be
included in the federal license or permit.
    Together, these provisions: Focus section 401 on discharges that
may affect water quality; enumerate newly-created federal regulatory
programs with which section 401 mandates compliance; and require that
water-quality related certification conditions be included in federal
licenses and permits and thereby become federally enforceable. The
legislative history describing these changes supports a conclusion that
they were made intentionally and with the purpose of making the new
section 401 consistent with the new framework of the Act. Indeed, the
1971 Senate Report provides that section 401 was ``amended to assure
consistency with the bill's changed emphasis from water quality
standards to effluent limitations based on the elimination of any
discharge of pollutants.'' S. Rep. No. 92-414, at 69 (1971).
    The EPA previously analyzed the modifications made to section 401
between the 1970 and 1972 Acts. See Memorandum from Catherine A. Winer,
Attorney, EPA Office of General Counsel, to David K. Sabock, North
Carolina Department of Natural Resources (November 12, 1985).\29\ In
its analysis, the EPA characterized the legislative history quoted
above as ``not very explicit,'' and characterized the new section 401
language as ``not altogether clear.'' Id. Based on this analysis, the
EPA found at that time that ``the overall purpose of section 401 is
clearly `to assure that Federal licensing or permitting agencies cannot
override water quality requirements' '' and that ``section 401 may
reasonably be read as retaining its original scope, that is, allowing
state certifications to address any water quality standard violation
resulting from an activity for which a certification is required,
whether or not the violation is directly caused by a `discharge' in the
narrow sense.'' Id. (citing S. Rep. No. 92-414, at 69 (1971)).
---------------------------------------------------------------------------

    \29\ Available at https://www.epa.gov/sites/production/files/2015-01/documents/standards-marinas-memo.pdf.
---------------------------------------------------------------------------

    The EPA has now performed a holistic analysis of the text and
structure of the CWA, the language of section 401, and the amendments
made between 1970 and 1972. Based on this review, the EPA now proposes
to adopt the reasonable interpretation that the 1972 version of section
401 made specific changes to ensure that discharges were controlled and
in compliance with the modern CWA regulatory programs, and appropriate
requirements of state law implementing the same. For the reasons noted
above in section II.F.1 in this preamble, identifying and regulating
discharges, as opposed to managing ambient water quality, promotes
accountability and enforcement of the Act in a way that the 1970 and
earlier versions did not. The EPA also observes that, had Congress
intended the 1972 amendments to retain the original scope concerning
the ``activity,'' it could have easily crafted section 401(d) to
authorize certification conditions to assure that ``the activity''
would comply with the specified CWA provisions, but it did not. Instead
Congress used the term ``applicant'' which, based upon its plain
ordinary meaning, identifies the person seeking the certification and
the related federal

license or permit. When Congress enacted the 1972 CWA amendments, it
used the term ``discharge'' to frame the scope of the certification
requirement under the Act. As a result, the Agency now considers a more
natural interpretation of the 1972 amendments to be that Congress
rejected the idea that the scope of a certifying authority's review or
its conditions should be defined by the term ``activity.'' Congress
specifically did not carry forward the term ``activity'' in the
operative phrase in section 401(a) and did not incorporate it into the
new provision authorizing certification conditions in section 401(d).
Under basic canons of statutory construction, the EPA begins with the
presumption that Congress chose its words intentionally. See, e.g.,
Stone v. INS, 514 U.S. 386, 397 (1995) (``When Congress acts to amend a
statute, we presume it intends its amendment to have real and
substantial effect.''). This is also consistent with the dissent in PUD
No. 1, wherein Justice Thomas concluded that ``[i]t is reasonable to
infer that the conditions a State is permitted to impose on
certification must relate to the very purpose the certification process
is designed to serve. Thus, while Sec.  401(d) permits a State to place
conditions on a certification to ensure compliance of the
`applicant'[,] those conditions must still be related to discharges.''
PUD No. 1, 511 U.S. at 726-27 (Thomas, J., dissenting). The EPA
proposes to conclude that this interpretation is a reasonable and
appropriate reading of the statute and related legal authorities and
seeks public comment on this proposed interpretation.
    As described in detail in section II.F.4.a.i in this preamble, the
Supreme Court in PUD No. 1 considered the scope of a state's authority
to condition a section 401 certification and concluded that, once the
401(a) ``discharge to navigable water'' triggers the requirement for
certification, section 401(d) authorizes a certifying authority to
impose conditions on ``the applicant,'' meaning the activity as a whole
and not just the discharge. In its discussion of the CWA, the Supreme
Court relied on its own interpretation of the scope of section 401 and
did not analyze section 401 at ``Chevron step one'' or rely on ``the
unambiguous terms'' of the CWA to support its reading of section 401.
Brand X, 545 U.S. at 982. Instead, the Court ``reasonably read''
section 401(d) ``as authorizing additional conditions and limitations
on the activity as a whole once the threshold condition, the existence
of a discharge, is satisfied.'' PUD No. 1, 511 U.S. at 712 (emphasis
added).
    To support what it considered to be a reasonable reading of section
401(d), the Court looked at the EPA's certification regulations at 40
CFR 121.2(a)(3) and related guidance at that time, but did not have
before it the EPA's interpretation of how section 401(a) and 401(d)
could be harmonized. Id. In fact, the Court either was not aware of or
did not mention that the EPA regulations in place at that time predated
the 1972 CWA amendments and therefore contained outdated terminology
implementing what was functionally a different statute. As described
above, the EPA's existing certification regulations are consistent with
the text of the pre-1972 CWA, and they require a state to certify that
the ``activity'' will comply with the Act. The 1972 CWA amendments
changed this language to require a state to certify that the
``discharge'' will comply with the Act.
    Based in part on what the EPA now recognizes was infirm footing,
the Court found that ``EPA's conclusion that activities--not merely
discharges--must comply with state water quality standards is a
reasonable interpretation of Sec.  401 and is entitled to deference.''
Id. (emphasis added). As amicus curiae, the federal government did not
seek Chevron ``deference for the EPA's regulation in [the PUD No. 1
case]'' or for EPA's interpretation of section 401. Id. at 729 (Thomas,
J., dissenting). In fact, the EPA's amicus brief did not analyze or
interpret the different language in sections 401(a) and 401(d) and
instead asserted that it was unnecessary to harmonize the provisions to
resolve the dispute. See Brief for the United States as Amicus Curiae
Supporting Affirmance, at 12 n. 2. The EPA's amicus brief asked the
Court to analyze the two undisputed discharges from the proposed
federally licensed project and determine whether they would cause
violations of the state's water quality standards.
    Given the circumstances of the PUD No. 1 litigation, and the fact
that the Supreme Court did not analyze section 401 under Chevron Step 1
or rely on unambiguous terms in the CWA to support its own reasonable
reading of the statute, PUD No. 1 does not foreclose the Agency's
proposed interpretation of section 401 in this document. See Brand X,
545 U.S. at 982-83. The Supreme Court's ``choice of one reasonable
reading'' of section 401 does not prevent the EPA ``from later adopting
a different reasonable interpretation.'' \30\ Eurodif S.A., 555 U.S. at
315. An agency may engage in ``a formal adjudication or notice-and-
comment rulemaking'' to articulate its interpretation of an ambiguous
statute. Christensen v. Harris County, 529 U.S. 576, 587 (2000). When
it does, courts apply ``Chevron-style'' deference to the agency's
interpretation. Id. That is exactly what the EPA is doing in this
proposal. EPA has for the first time, holistically interpreted the text
of section 401(a) and (d) to support this proposed update to the EPA's
existing certification regulations while ensuring consistency with the
plain language of the 1972 CWA. The Agency solicits comment on its
proposed interpretation of the CWA and the prevailing case law as
discussed above in section II.F.1 and II.F.4 in this preamble.
---------------------------------------------------------------------------

    \30\ The EPA is not proposing to modify or alter the Agency's
longstanding interpretation of the Act that was confirmed by the
Court in PUD No. 1 that ``a water quality standard must `consist of
the designated uses of the navigable waters involved and the water
quality criteria for such waters based upon such uses' '' and that
``a project that does not comply with the designated use of the
water does not comply with the applicable water quality standards.''
511 U.S. at 714-15 (emphasis in original).
---------------------------------------------------------------------------

    The Agency also solicits comment on an alternate interpretation of
the text of section 401(d) suggested by language in the PUD No. 1
majority opinion. At page 712, the Court observes that, ``[a]lthough
401(d) authorizes the State to place restrictions on the activity as a
whole, that authority is not unbounded.'' (emphasis added). The Court
does not define the precise limits of State authority under section
401(d). However, the Court goes on to say that ``[t]he State can only
ensure that the project complies with `any applicable effluent
limitations and other limitations, under [33 U.S.C. 1311, 1312]' or
certain other provisions of the Act, `and with any other appropriate
requirement of State law.' 33 U.S.C. 1341(d).'' In the previous
discussion, we explained why the most reasonable interpretation of the
``bounds'' set by the statutory text is that it limits the imposition
of effluent limitations, limitations, and other certification
conditions to ``the discharge,'' and not ``the activity as a whole.''
However, EPA is also seeking comment on an alternate interpretation of
the text that would allow imposition of effluent limitations and other
similar conditions that address the water quality-related effects of
``the activity as a whole,'' and not just ``the discharge,'' provided
such effluent limitations and other conditions are based on ``water
quality requirements'' as defined in this proposal.

iii. Discharges From Point Sources to Waters of the United States
    Based on the text, structure and purpose of the Act, the history of
the 1972 CWA amendments, and supporting case law, the EPA proposes to
conclude that a certifying authority's review and action under section
401 is limited to water quality impacts to waters of the United States
resulting from a potential point source discharge associated with a
proposed federally licensed or permitted project. The text of section
401(a) clearly specifies that certification is required to ``conduct
any activity . . . which may result in any discharge into the navigable
waters'' (emphasis added). Prior interpretations extending section 401
applicability beyond such waters conflict with and would render
meaningless the plain language of the statute. And although the statute
does not define with specificity the meaning of the unqualified term
discharge, interpreting section 401 to cover all discharges without
qualification would undercut the bedrock structure of the CWA
regulatory programs which are focused on addressing point source
discharges to waters of the United States. CWA section 502(14) defines
point source as ``any discernible, confined and discrete conveyance,
including but not limited to any pipe, ditch, channel, tunnel, conduit,
well, discrete fissure, container, rolling stock, concentrated animal
feeding operation, or vessel or other floating craft, from which
pollutants are or may be discharged.'' \31\
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    \31\ In the section 404 context, point source includes
bulldozers, mechanized land clearing equipment, dredging equipment,
and the like. See, e.g., Avoyelles Sportsman's League, Inc. v.
March, 715 F.2d 897, 922 (5th Cir. 1983).
---------------------------------------------------------------------------

    As described in section II.F.1 in this preamble, the CWA is
structured such that the federal government provides assistance,
technical support, and grant money to assist states in managing all of
the nation's waters. By contrast, the federal regulatory provisions,
including CWA sections 402 and 404, apply only to point source
discharges to waters of the United States. 33 U.S.C. 1362(7). Section
401 is the first section of Title IV of the CWA, titled Permits and
Licenses, and it requires water quality-related certification
conditions to be legally binding and federally enforceable conditions
of federal licenses and permits. Id. at 1341(d). Similar to the section
402 and 404 permit programs, section 401 is a core regulatory provision
of the CWA. Accordingly, the scope of its application is most
appropriately interpreted, consistent with the other federal regulatory
programs, as addressing point source discharges to waters of the United
States.
    The EPA is not aware of any court decisions that have directly
addressed the scope of waters covered by section 401; however, in
Oregon Natural Desert Association v. Dombeck, the Ninth Circuit relied
on the text and structure of section 401 to interpret the meaning of
``discharge.'' In that case, a citizen's organization challenged a
decision by the U.S. Forest Service to issue a permit to graze cattle
on federal lands without first obtaining a section 401 certification
from the state of Oregon. 172 F.3d 1092. The government argued that a
certification was not needed because the ``unqualified'' term
``discharge''--as used in CWA section 401--is ``limited to point
sources but includes both polluting and nonpolluting releases.'' Id. at
1096. Finding that the 1972 amendments to the CWA ``overhauled the
regulation of water quality,'' the court said that ``[d]irect federal
regulation [under the CWA] now focuses on reducing the level of
effluent that flows from point sources.'' Id. The court stated that the
word ``discharge'' as used consistently in the CWA refers to the
release of effluent from a point source. Id. at 1098. The court found
that cattle--even if they wade in a stream--are not point sources. Id.
at 1098-99. Accordingly, the court held that certification under
section 401 was not required. Id. at 1099.
    The EPA previously suggested that the scope of section 401 may
extend to non-point discharges to non-waters of the United States once
the requirement for the section 401 certification is triggered.
Specifically, in the EPA's now-withdrawn 2010 Interim Handbook the
Agency included the following paragraphs,

    The scope of waters of the U.S. protected under the CWA includes
traditionally navigable waters and also extends to include
territorial seas, tributaries to navigable waters, adjacent
wetlands, and other waters. Since Sec.  401 certification only
applies where there may be a discharge into waters of the U.S., how
states or tribes designate their own waters does not determine
whether Sec.  401 certification is required. Note, however, that
once Sec.  401 has been triggered due to a potential discharge into
a water of the U.S., additional waters may become a consideration in
the certification decision if it is an aquatic resource addressed by
``other appropriate provisions of state [or tribal] law.''
     * * *
    Section 401 applies to any federal permit or license for an
activity that may discharge into a water of the U.S. The Ninth
Circuit Court of Appeals ruled that the discharge must be from a
point source, and agencies in other jurisdictions have generally
adopted the requirement. Once these thresholds are met, the scope of
analysis and potential conditions can be quite broad. As the U.S.
Supreme Court has held, once Sec.  401 is triggered, the certifying
state or tribe may consider and impose conditions on the project
activity in general, and not merely on the discharge, if necessary
to assure compliance with the CWA and with any other appropriate
requirement of state or tribal law.

EPA, Clean Water Act Section 401 Water Quality Certification: A Water
Quality Protection Tool for States and Tribes, 5, 26 (2010) (citations
omitted). To support the first referenced paragraph on the scope of
waters, the Interim Handbook cited to section 401(d), presumably
referring to the use of the term ``applicant'' rather than
``discharge'' used in section 401(a).\32\ To support the second
paragraph on the scope of discharges, the Interim Handbook cited to the
PUD No. 1 and S.D. Warren Co. Supreme Court decisions. It appears that
both paragraphs from the Agency's 2010 Interim Handbook relied on the
PUD No. 1 Court's interpretation of the ambiguity created by the
different language in sections 401(a) and 401(d).\33\
---------------------------------------------------------------------------

    \32\ Interim Handbook, at 5 n. 23. Tellingly, footnote 23 of the
Interim Handbook also states, ``Note that the Corps may consider a
401 certification as administratively denied where the certification
contains conditions that require the Corps to take an action outside
its statutory authority or are otherwise unacceptable. See, e.g.,
RGL 92-04, `Section 401 Water Quality Certification and Coastal Zone
Management Act Conditions for Nationwide Permits.'' In other words,
in this footnote the EPA was advising states that, while section
401(d) could perhaps be interpreted to expand the scope of federal
regulatory and enforcement authority beyond navigable waters (but
without citation to any case law to support that proposition), the
Army Corps of Engineers may reject a certification in its entirety
that is outside the statutory authority provided by the CWA.
    \33\ The S.D. Warren decision did not analyze or adopt the PUD
No. 1 Court's analysis of section 401(a) and 401(d).
---------------------------------------------------------------------------

    For many of the same reasons that the Agency proposes to avoid
interpreting the word ``applicant'' in section 401(d) as broadening the
scope of certification beyond the discharge itself, the Agency also
proposes to decline to interpret section 401(d) as broadening the scope
of waters and the types of discharges to which the CWA federal
regulatory programs apply. Were the Agency to interpret the use in
section 401(d) of the term ``applicant'' instead of the term
``discharge'' as authorizing the federal government to implement and
enforce CWA conditions on non-waters of the United States, that single
word (``applicant'') would effectively broaden the scope of the federal
regulatory programs enacted by the 1972 CWA

amendments beyond the limits that Congress intended. Such an
interpretation could permit the application of the CWA's regulatory
programs, including section 401 certification conditions that are
enforced by federal agencies, to land and water resources more
appropriately subject to traditional state land use planning authority.
See, e.g., SWANCC, 531 U.S. at 172-73.
    As described in section II.F.4.a.i in this preamble and pursuant to
its authority to reasonably interpret ambiguous statutes to fill gaps
left by Congress, the EPA is proposing to interpret section 401
differently than the Supreme Court did in PUD No. 1. The Court's prior
interpretation of sections 401(a) and 401(d) was not based on the plain
unambiguous text of the statute, but rather was based on the Court's
own reasonable interpretation (see section II.F.4.a.i in this
preamble). The EPA's proposed interpretation is also based on a
reasonable interpretation of the text, structure and legislative
history of section 401 and the Agency's current proposal is not
foreclosed by the Court's prior interpretation. See Brand X, 545 U.S.
at 982.
    For the reasons above, the EPA proposes to conclude that section
401 is a regulatory provision that creates federally enforceable
requirements and its application must therefore be limited to point
source discharges to waters of the United States. This proposed
interpretation is consistent with the text and structure of the CWA as
well as the principal purpose of this rulemaking, i.e., to ensure that
the EPA's regulations (including those defining a section 401
certification's scope) are consistent with the current CWA. The Agency
solicits comment on this revised interpretation of the CWA and
associated case law discussed in this section.
b. Timeline for Section 401 Certification Analysis
    Based on the language of the CWA and relevant case law, the EPA
proposes to conclude that a certifying authority must act on a section
401 certification within a reasonable period of time, which shall not
exceed one year and that there is no tolling provision to stop the
clock at any time. The Agency requests comment on this plain language
interpretation of the statute.
    The text of section 401 expressly states that a certifying
authority must act on a section 401 certification request within a
reasonable period of time, which shall not exceed one year. 33 U.S.C.
1341(a)(1). Importantly, the CWA does not guarantee that a certifying
authority may take a full year to act on a section 401 certification
request. The certifying authority may be subject to a shorter period of
time, provided it is reasonable. See Hoopa Valley Tribe v. FERC, 913
F.3d 1099, 1104 (D.C. Cir. 2019) (``Thus, while a full year is the
absolute maximum, it does not preclude a finding of waiver prior to the
passage of a full year. Indeed, the [EPA]--the agency charged with
administering the CWA--generally finds a state's waiver after only six
months. See 40 CFR 121.16.''). The CWA's legislative history indicates
that inclusion of a maximum period of time was to ``insure that sheer
inactivity by the [certifying agency] will not frustrate the Federal
application.'' H.R. Rep. No. 92-911, at 122 (1972).
    The timeline for action on a section 401 certification begins upon
receipt of a certification request. Id. The CWA does not specify any
legal requirements for what constitutes a request or otherwise define
the term. The EPA has long recommended that a project proponent
requiring federal licenses or permits subject to section 401
certification hold early discussions with both the certifying authority
and the federal agency, to better understand the certification process
and potential data needs.
    The CWA does not contain provisions for pausing or delaying the
timeline for any reason, including to request or receive additional
information from a project proponent. If the certifying authority has
not acted on a request for certification within the reasonable time
period, the certification requirement will be waived by the federal
licensing and permitting agencies. For further discussion, see section
III.F in this preamble. The proposed revisions to the EPA's regulations
in this proposal are intended to provide greater clarity and certainty
and address some of the delays and confusion associated with the timing
elements of the section 401 certification process.

III. Proposed Rule

    This proposed rule is intended to make the Agency's regulations
consistent with the current text of CWA section 401, increase
efficiencies, and clarify aspects of CWA section 401 that have been
unclear or subject to differing legal interpretations in the past. The
Agency proposes these revisions to replace the entirety of the existing
certification regulations at 40 CFR part 121. The following sections
explain the Agency's rationale for the proposed rule and provides
detailed explanation and analysis for the substantive changes that the
Agency is proposing.
    The EPA's existing certification regulations were issued almost 50
years ago in 1971, when the Agency was newly formed and the CWA had not
yet been amended to include the material revisions to section 401.\34\
In modernizing 40 CFR part 121, this proposal recognizes and responds
to the changes to the CWA that occurred after the current regulations
were finalized, especially the 1972 and 1977 amendments to the CWA.
---------------------------------------------------------------------------

    \34\ See 36 FR 22487, Nov. 25, 1971, redesignated at 37 FR
21441, Oct. 11, 1972, further redesignated at 44 FR 32899, June 7,
1979; Reorganization Plan No. 3 of 1970 (creating the EPA), 84 Stat.
2086, effective Dec. 2, 1970.
---------------------------------------------------------------------------

    Updating the existing certification regulations to clarify
expectations, timelines, and deliverables also increases efficiencies.
Some aspects of the existing regulations have been implemented
differently by different authorities, likely because the scope and
timing of review are not clearly addressed by the EPA's existing
certification regulations. While the EPA recognizes that states and
tribes have broad authority to implement state and tribal law to
protect their water quality, see 33 U.S.C. 1251(b), section 401 is a
federal regulatory program that contains explicit limitations on when
and how states and tribes may exercise this particular authority.
Modernizing and clarifying the EPA's regulations will help states,
tribes, federal agencies, and project proponents know what is required
and what to expect during a section 401 certification process, thereby
reducing regulatory uncertainty. The Agency requests comment on all
aspects of this effort to modernize and clarify its section 401
regulations, including any specific suggestions on how any of the
proposed definitions or other requirements might be modified to
implement Congress' intent in enacting section 401.
    The EPA's existing certification regulations at 40 CFR part 121 do
not fully address the public notice requirements called for under CWA
1341(a)(1). The EPA solicits comment on whether the Agency should
include additional procedures in its final regulations to ensure that
the public is appropriately informed of proposed federally licensed or
permitted projects, potential discharges, and related water quality
effects. At a minimum, such procedures could include public notice and
hearing opportunities, but they could also include mechanisms to ensure
that the certifying authority is in a position to appropriately inform
the public, as required by section 401(a)(1). Such mechanisms could
focus on how and when the certifying authority is notified of potential
certification requests and what information may be

necessary for the certifying authority to act on a request. If the EPA
were to include such additional procedures in its final regulations,
they could be the same as or similar to the procedures currently
proposed to apply when EPA is the certifying authority (see proposed
sections 121.12 and 121.13). The Agency also solicits comment on
whether it would be appropriate or necessary to require certifying
authorities to submit their section 401 procedures and regulations to
the EPA for informational purposes.

A. When Section 401 Certification is Required

    The EPA proposes that the requirement for a section 401
certification is triggered based on the potential for any federally
licensed or permitted activity to result in a discharge from a point
source into waters of the United States.\35\ This proposal is
consistent with the Agency's longstanding interpretation and is not
intended to alter the scope of applicability established in the CWA.
Consistent with section 401(a)(1), the EPA is proposing that:
---------------------------------------------------------------------------

    \35\ State or tribal implementation of a license or permit
program in lieu of the federal program, such as a CWA section 402
permit issued by an authorized state, does not federalize the
resulting permits or licenses and therefore does not trigger section
401 certification. This is supported by the legislative history of
CWA section 401 which noted that ``since permits granted by States
under section 402 are not Federal permits--but State permits--the
certification procedures are not applicable.'' H.R. Rep. No. 92-911,
at 127 (1972). The legislative history of the CWA amendments of
1977, discussing state assumption of section 404, also noted that
``[t]he conferees wish to emphasize that such a State program is one
which is established under State law and which functions in lieu of
the Federal program. It is not a delegation of Federal authority.''
H.R. Rep. No. 95-830, at 104 (1977).

    Any applicant for a license or permit to conduct any activity
which may result in a discharge shall provide the Federal agency a
certification from the certifying authority in accordance with this
---------------------------------------------------------------------------
part.

    Based on the text of the statute, the EPA proposes that section 401
is triggered by the potential for a discharge to occur, rather than an
actual discharge. This is different from other parts of the Act \36\
and is intended to provide certifying authorities with a broad
opportunity to review proposed federally licensed or permitted projects
that may result in a discharge to waters of the United States within
their borders. This proposal does not identify a process for certifying
authorities or project proponents to determine whether a federally
licensed or permitted project has a potential or actual discharge.
However, the EPA observes that if a certifying authority or project
proponent determines after the certification process is triggered that
there is no actual discharge from the proposed federally licensed or
permitted project and no potential for a discharge, there is no longer
a need to request certification. The EPA requests certifying
authorities and project proponents to submit comment on prior
experiences with undertaking the certification process and later
determining that the proposed federally licensed or permitted project
would not result in an actual discharge. The EPA also requests comment
on whether there are specific procedures that could be helpful in
determining whether a proposed federally licensed or permitted project
will result in an actual discharge. Finally, the EPA requests comment
on how project proponents may establish for regulatory purposes that
there is no potential discharge and therefore no requirement to pursue
a section 401 certification. This request is intended to solicit
mechanisms for project proponents to generate a record for themselves
that no 401 certification was required; this is not intended to propose
a process for project proponents to seek or require concurrence from
the certifying authority.
---------------------------------------------------------------------------

    \36\ See e.g., National Pork Producers Council v. EPA, 635 F.3d
738, 751 (5th Cir. 2011); Waterkeeper Alliance, Inc. v. EPA, 399
F.3d 486, 505 (2d Cir. 2005) (Interpreting section 402 in the
context of CAFOs, courts said the CWA gives EPA jurisdiction to
require permits for only actual discharges).
---------------------------------------------------------------------------

    The EPA also proposes that section 401 is triggered by a potential
discharge into a water of the United States. 33 U.S.C. 1341(a)(1),
1362(7). Potential discharges into state or tribal waters that are not
waters of the United States do not trigger the requirement to obtain
section 401 certification. Id. at 1342(a)(1). This interpretation flows
from the plain text of the statute, is supported by the legislative
history, and is consistent with other CWA regulatory program
requirements that are triggered by discharges into waters of the United
States, not state or tribal waters. Id.; see also H.R. Rep. No. 92-911,
at 124 (1972) (``It should be clearly noted that the certifications
required by section 401 are for activities which may result in any
discharge into navigable waters.'') (emphasis added); see also section
II.F.6.a.iii for discussion on discharges to waters of the United
States.
    Unlike other CWA regulatory programs, however, the EPA proposes
that section 401 be triggered by any unqualified discharge, rather than
by a discharge of pollutants. This interpretation is consistent with
the text of the statute and with U.S. Supreme Court precedent. In S.D.
Warren, the Court considered whether discharges from a dam were
sufficient to trigger section 401, even if those discharges did not add
pollutants to waters of the United States. Because section 401 uses the
term discharge but the Act does not specifically define the term,\37\
the Court applied its ordinary dictionary meaning, ``flowing or issuing
out.'' S.D. Warren Co. v. Maine Bd. of Envtl. Prot. et al., 547 U.S.
370, 376 (2006). The Court concluded that Congress intended this term
to be broader than the term discharge of pollutants that is used in
other provisions of the Act, like section 402. See e.g., 33 U.S.C.
1342, 1344; S.D. Warren Co., 547 U.S. at 380-81. For further discussion
on S.D. Warren see section II.F.4.a.ii and for further discussion on
discharges see section II.F.6.a.ii-iii in this preamble. The Court held
that discharges from the dam trigger section 401 because ``reading
Sec.  401 to give `discharge' its common and ordinary meaning preserves
the state authority apparently intended.'' S.D. Warren Co., 547 U.S. at
387. The EPA's interpretation in support of this proposal is therefore
consistent with the Court's conclusion.
---------------------------------------------------------------------------

    \37\ The Act provides, ``The term `discharge' when used without
qualification includes a discharge of a pollutant, and a discharge
of pollutants.'' 33 U.S.C. 1362(16)
---------------------------------------------------------------------------

    Finally, the EPA proposes that to trigger section 401, a discharge
must be from a point source. This is consistent with case law from the
Ninth Circuit, which concluded that the word ``discharge'' as used
consistently throughout the CWA refers to the release of effluent from
a point source, and that use is also appropriate for section 401.
Oregon Natural Desert Association v. Dombeck, 172 F.3d 1092, 1099.
Because this proposed interpretation is consistent with the structure
of the Act and with the other CWA regulatory programs (see section II.F
above), the EPA adopted the Ninth Circuit's interpretation and has
consistently implemented that interpretation of section 401.\38\
---------------------------------------------------------------------------

    \38\ See, e.g., Briefs of the United States in ONDA v. Dombeck,
Nos. 97-3506, 97-35112, 97-35115 (9th Cir. 1997) and ONDA v. USFS,
No. 08-35205 (9th Cir. 2008).
---------------------------------------------------------------------------

    The CWA does not list specific federal licenses and permits that
are subject to section 401 certification requirements, instead
providing that section 401 applies when any activity that requires a
federal license or permit may result in a discharge into waters of the
United States. The most common examples of licenses or permits that may
be subject to section 401 certification are CWA section 402 NPDES
permits in states where the EPA administers the permitting program, CWA
section 404

permits for the discharge of dredged or fill material, RHA sections 9
and 10 permits issued by the Corps, and hydropower and interstate
natural gas pipeline licenses issued by FERC. The Agency is not
proposing to further define this list but requests comment identifying
other federal licenses or permits that may trigger the section 401
certification requirement.

B. Certification Request/Receipt

    Under this proposal, to initiate an action under section 401, a
project proponent must submit a certification request to a certifying
authority. The statute limits the time for a certifying authority to
act on a request as follows:

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

33 U.S.C. 1341(a)(1) (emphasis added). Although the plain language of
the Act requires the reasonable period of time to begin upon receipt of
a certification request, the statute does not define those terms.
Because they are not defined and their precise meaning is ambiguous,
these terms are susceptible to different interpretations, which have
resulted in inefficiencies in the certification process, individual
certification decisions that have extended beyond the statutory
reasonable period of time, and regulatory uncertainty and litigation.
See section II.F in this preamble. Given the number of certification
requests submitted each year \39\ and the statutory requirement that
those requests be acted on within a reasonable period of time not to
exceed one year, it is important that the certifying authorities,
project proponents, and federal agencies have a clear understanding of
what the terms ``request'' and ``receipt'' mean.
---------------------------------------------------------------------------

    \39\ See Economic Analysis for the Proposed Clean Water Act
Section 401 Rulemaking at XX.
---------------------------------------------------------------------------

    The CWA does not address (and therefore is ambiguous regarding)
whether a certification request must be in writing, must be signed and
dated, or if it must contain specific kinds of information. The EPA's
prior section 401 guidance (the now-withdrawn 2010 Interim Handbook)
indicated that the timeline for action begins upon receipt of a
``complete application,'' as determined by the certifying authority,
even though section 401 does not use the term ``complete application''
or prescribe what an ``application'' would require. The reference by
the EPA to a ``complete application'' without explaining what an
``application'' must include has led to subjective determinations about
the sufficiency of certification request submittals. This in turn has
caused uncertainty about when the statutory reasonable period of time
begins to run. Certification request requirements vary from state to
state (e.g., location maps and topographical maps versus latitude/
longitude or GPS locations). For example, some states have open-ended
and broad submittal requirements (e.g., ``all information concerning
water resource impacts'') which create the potential for certifying
authorities to conclude (sometimes repeatedly) that a submittal is
incomplete. Additionally, if a certifying authority requires additional
information to be submitted before it will review and act on a
certification request, it may be unclear whether the certifying
authority considers the request to be ``complete'' and whether the
statutory clock has started to run. Further, differences in the
contents of a request or required supporting materials can create
special challenges for project proponents and federal agencies working
on large interstate projects that require certification from multiple
states.
    The CWA also does not define the term ``receipt,'' which has led to
different states, tribes, and project proponents, as well as different
courts, using different definitions. ``Receipt of the request'' has
been used alternately to mean receipt by the certifying authority of
the request in whatever form it was submitted by the project proponent,
or receipt of a ``complete application'' as determined by the
certifying authority (see section II.F in this preamble). The statute
also does not specify how requests are to be ``received'' by the
certifying authority--whether by mail, by electronic submission, or
some other means.
    As the Agency charged with administering the CWA, the EPA is
authorized to interpret through rulemaking undefined terms, including
those associated with CWA section 401 certifications. See Chevron,
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837,
844 (1984). To address the particular challenges identified above, the
EPA is proposing to define ``certification request'' and ``receipt,''
which Congress left undefined and ambiguous. By establishing uniform
definitions for ``certification request'' and ``receipt,'' EPA hopes to
eliminate confusion about when the statutory reasonable period of time
begins and ends. See id. at 843.
    Consistent with the text of the CWA, the EPA is proposing that the
statutory timeline for certification review starts upon receipt by the
certifying authority of a ``certification request,'' rather than the
receipt of a ``complete application'' or ``complete request'' as
determined by the certifying authority. To increase consistency, the
EPA's proposed definition of ``certification request'' includes an
enumerated list of documents and information that must be included in a
certification request:

    Certification request means a written, signed, and dated
communication from a project proponent to the appropriate certifying
authority that:
    1. Identifies the project proponent(s) and a point of contact;
    2. identifies the proposed project;
    3. identifies the applicable federal license or permit;
    4. identifies the location and type of any discharge that may
result from the proposed project and the location of receiving
waters;
    5. includes a description of any methods and means proposed to
monitor the discharge and the equipment or measures planned to treat
or control the discharge;
    6. includes a list of all other federal, interstate, tribal,
state, territorial, or local agency authorizations required for the
proposed project, including all approvals or denials already
received; and
    7. contains the following statement: `The project proponent
hereby requests that the certifying authority review and take action
on this CWA section 401 certification request within the applicable
reasonable timeframe.'

    The EPA anticipates that a certification request that contains each
of these components will provide the certifying authority with
sufficient notice and information to allow it to begin to evaluate and
act on the request in a timely manner. The EPA solicits comment on
whether this list of documents and information is appropriately
inclusive, whether it is specific enough to inform project proponents
of the submittal requirements, and whether it is clear enough to avoid
subjective determinations by a certifying authority of whether
submittal requirements have been satisfied. The EPA acknowledges that
not all proposed projects may be subject to monitoring or treatment for
a discharge (e.g., section 404 dredge or fill permits rarely allow for
a treatment option). The EPA solicits comment on whether the fourth and
fifth items proposed to be required in a certification request are
sufficiently broad to capture all potential federal licenses or
permits. The EPA also acknowledges that some certifying authorities may
charge a fee to process certification requests. The Agency solicits
comment on whether it should

include ``any applicable fees'' in the definition of certification
request. Pre-proposal recommendations to the EPA also requested that
the Agency require project proponents to include existing documentation
or reports showing prior contamination at the proposed federally
licensed or permitted project site. The EPA solicits comment on whether
this would be an appropriate requirement for all certification
requests, or whether this information is best requested on a case-by-
case basis by the certifying authority. Additionally, the EPA solicits
comment on whether such documentation or reports would be appropriate
if the permit or license is being reissued or amended, or only for
initial license or permit processes.
    The EPA intends that the term ``certification request'' means only
written requests for certification. In addition, EPA intends that any
written request for certification include the specific information
identified in the definition. Providing this new definition is intended
to ensure that the certifying authority and the project proponent
understand what is required to start the statutory reasonable time
period. The proposed requirement that a request include the following
statement--``The project proponent hereby requests that the certifying
authority review and take action on this CWA section 401 certification
request within the applicable reasonable timeframe.''--is intended to
remove any potential ambiguity on the part of the certifying authority
about whether the written request before it is, in fact, a ``request
for certification'' that triggers the statutory timeline. The EPA also
solicits comment on whether the Agency should generate a standard form
that all project proponents can use to submit certification requests. A
standard form could help project proponents provide all necessary
information and help certifying authorities quickly identify all
components of the certification request. If the EPA promulgated a
standard form, it could include all seven items included in the
proposed definition of certification request.
    This proposal requires a project proponent to identify the location
of a discharge in the certification request. To meet this requirement,
the EPA recommends that the project proponent provide locational
information about the extent of the project footprint and discharge
locations, as shown on design drawings and plans. Project proponents
should consider, but are not limited to, using the following formats:

(1) ArcGIS File Geodatabase with accompanying Feature Classes
(2) ArcGIS Shapefile
(3) DXF or DWG (CAD files) projected to WGS 84 Decimal Degrees
(4) KMZ/KML (Google Earth)

Alternatively, the project proponent might consider identifying
discharge locations on readable maps. The EPA solicits comment on
whether the location of all potential discharges from proposed
federally licensed or permitted projects can be identified with such
specificity or if other methods may be more appropriate for different
types of activities.

    Many states and tribes have established their own requirements for
section 401 certification request submittals, which may be different
from or more extensive than the proposed ``certification request''
requirements listed above. The EPA recommends that, following
establishment of final EPA regulations defining ``certification
request'' and ``receipt,'' certifying authorities update their existing
section 401 certification regulations to ensure consistency with the
EPA's regulations. Additionally, the EPA encourages certifying
authorities to work with neighboring jurisdictions to develop
regulations that are consistent from state to state. This may be
particularly useful for interstate projects, like pipelines and
transmission lines, requiring certification in more than one state.
    In some cases, federal agencies may be project proponents for
purposes of section 401, for both individual projects and activities
and for general federal licenses or permits (e.g., Corps general
permits). The Agency requests comment on whether federal agencies
should be subject to the same ``certification request'' submittal
requirements as proposed, or if they require different considerations
and procedures than section 401 certification requests by other non-
federal agency project proponents. Specifically, the Agency requests
comments on an alternative approach for federal agencies that issue
general federal license or permits whereby ``certification request for
a general permit or license'' would mean a written, signed, and dated
communication from a Federal agency to the appropriate certifying
authority that:
    (1) Identifies the Federal agency and a point of contact;
    (2) identifies the proposed categories of activities to be
authorized by general permit for which general certification is
requested;
    (3) includes the proposed general permit;
    (4) estimates the number of discharges expected to be authorized by
the proposed general permit or license each year;
    (5) includes a general description of the methods and means used or
proposed to monitor the discharge and the equipment or measures
employed or planned for the treatment or control of the discharge;
    (6) identifies the reasonable period of time for the certification
request; and
    (7) contains the following statement: `The federal agency hereby
requests that the certifying authority review and take action on this
CWA 401 certification request within the applicable reasonable period
of time.'
    The statutory reasonable period of time for a certifying authority
to act on a certification request begins upon ``receipt of such
request.'' The EPA is proposing to define the term ``receipt'' as
follows:

    Receipt means the date that a certification request is
documented as received by a certifying authority in accordance with
applicable submission procedures.

    The EPA understands that some certifying authorities have
established general procedures for project proponents to follow when
seeking state or tribal licenses or permits and encourages the use of
consistent procedures for all submittals, including section 401
certification requests. The proposed requirement that certification
requests be documented as received ``in accordance with applicable
submission procedures'' is intended to recognize that some certifying
authorities may require hard copy paper submittals and some may require
or allow electronic submittals. If the certifying authority accepts
hard copy paper submittals, EPA recommends that the project proponents
submitting a hard copy request send the request via certified mail (or
similar means) to confirm receipt of the section 401 certification
request. If the certifying authority allows for electronic submittals,
EPA recommends that the project proponent set up an electronic process
to confirm receipt of the request. The EPA recommends that project
proponents retain a copy of any written or electronic confirmation of
submission or receipt for their records. The Agency solicits comment on
whether these new definitions will provide sufficient clarity and
regulatory certainty or if additional procedures or requirements may be
necessary, and if so, what those procedures or requirements might be.

C. Certification Actions

    Consistent with the text of the CWA, the EPA proposes that a
certifying authority may take four potential

actions pursuant to its section 401 authority: It may grant
certification, grant with conditions, deny, or waive its opportunity to
provide a certification. These actions are reflected in Sec.  121.5 of
the proposed regulatory text.
    Granting a section 401 certification demonstrates that the
authority has concluded that the discharge to waters of the United
States from the proposed activity will be consistent with the listed
CWA provisions and appropriate state or tribal water quality
requirements (as defined at Sec.  121.1(p) of this proposal). Granting
certification allows the federal agency to proceed with processing the
application for the license or permit.
    If the certifying authority determines that the discharge from a
proposed activity would be consistent with applicable water quality
requirements only if certain conditions are met, the authority may
include such conditions in its certification. Any conditions must be
necessary to assure compliance with water quality requirements. The EPA
proposes that water quality related conditions that meet the
requirements in this proposed rule and that are placed on a section 401
certification must become conditions of the resulting federal license
or permit if it is issued. 33 U.S.C. 1341(d).
    A certifying authority may choose to deny certification if it is
unable to certify that the proposed activity would be consistent with
applicable water quality requirements. If a certification is denied,
the federal agency may not issue a license or permit for the proposed
activity. Id. at 1341(a).
    Finally, a certifying authority may waive the requirement for a
certification in two different ways. First, the certifying authority
may waive expressly by issuing a statement that it is waiving the
requirement. Second, the certifying authority may implicitly waive by
failing or refusing to act in accordance with section 401. Id. As
discussed throughout this preamble, a certifying authority has a
reasonable period of time, not to exceed one year, to complete its
section 401 certification analysis. If the authority fails or refuses
to act within that reasonable period, the certification requirement
will be deemed waived by the federal licensing or permitting agency.
Id. Where section 401 certification has been waived--expressly or
implicitly--the federal agency may issue the license or permit. Id.
This proposal is consistent with the Agency's longstanding
interpretation of what actions may be taken in response to a
certification request. The EPA solicits comment on this interpretation
and continued approach in this proposed rule.

D. Appropriate Scope for Section 401 Certification Review

    Section 401 of the CWA provides states and tribes with additional
authority to protect water quality within their jurisdictions that
complements the other regulatory programs and the nonregulatory grant
and planning programs established by the CWA. CWA section 401(a) does
so by authorizing states and tribes to certify that a potential
discharge to waters of the United States that may result from a
proposed activity will comply with applicable provisions of certain
enumerated sections of the CWA, including effluent limitations and
standards of performance for new and existing sources (sections 301,
302, and 306 of the CWA), water quality standards and implementation
plans (section 303), and toxic pretreatment effluent standards (section
307). 33 U.S.C. 1341(a)(1). When granting a section 401 certification,
states and tribes are authorized by CWA section 401(d) to include
conditions, including effluent limitations, other limitations and
monitoring requirements that are necessary to assure that the applicant
for a federal license or permit will comply with appropriate provisions
of CWA sections 301, 302, 306, and 307, and with any other appropriate
requirement of state law. Id. at 1341(d). In addition to the specific
enumerated sections of the CWA referenced throughout section 401, the
focus of section 401(a) on the compliance of ``any such discharge,''
and the substance of the enumerated CWA sections in section 401(d),
e.g., to ensure compliance with ``effluent limitations'' under sections
301 and 302 and any ``effluent standard'' under section 307, underscore
that Congress intended this provision to focus on the protection of
water quality.
    Although the text, structure, and legislative history of the CWA
(including the name of the statute itself--the Clean Water Act) clearly
demonstrate that section 401 of the CWA is intended to focus on
addressing water quality impacts from discharges from federally
licensed or permitted projects, there continues to be some confusion
and uncertainty over the precise scope of a certifying authority's
review under section 401 and the scope of appropriate conditions that
may be included in a certification (see section II.F in this preamble).
This proposal is intended to provide clarity on these issues.
    Section 401 contains several important undefined terms that,
individually and collectively, can be interpreted in varying ways to
place boundaries on the scope of a certifying authority's review and
authority. Discerning the meaning, both individually and in context, of
terms like ``discharge,'' ``activity,'' ``applicant,'' ``other
limitations,'' and ``any other appropriate requirements of State law''
with respect to a state or tribe's certification authority without
clear regulatory guidance, presents a challenge to project proponents,
certifying authorities, federal agencies, and the courts. The challenge
is exacerbated by the fact that nowhere in section 401 did Congress
provide a single, clear, and unambiguous definition of the section's
scope, a gap the Agency is proposing to remedy in this proposal. See
Chevron, 467 U.S. at 843-44.
    The phrase ``any other appropriate requirement of State law'' in
section 401(d) is illustrative of this ambiguity. Congress did not
intend that the scope of a certifying entity's authority to impose
conditions to be unbounded. PUD No. 1 of Jefferson County and City of
Tacoma v. Washington Department of Ecology, 511 U.S. 700, 712 (1994).
Presumably, that is why Congress added the modifier ``appropriate'' in
the phrase ``any other appropriate requirements of State law.'' In this
context, the exact meaning of ``appropriate'' and how it modifies the
preceding term ``any other'' or the following phrase ``requirements of
State law'' are important, but undefined by Congress. The Agency, as
the federal entity charged with administering the CWA, has authority
under Chevron and its progeny to address these ambiguities through
notice and comment rulemaking.
    To provide needed clarity regarding the scope of a certifying
entity's authority to grant and condition a certification, the EPA is
proposing a clear and concise statement of the scope of certification,
as well as clear regulatory definitions for the terms
``certification,'' ``condition,'' ``discharge,'' and ``water quality
requirement.''
    As explained in section II.F.6.a.iii in this preamble, based on the
text and structure of the Act, as well as the history of modifications
between the 1970 version and the 1972 amendments, the EPA has concluded
that section 401 is best interpreted as protecting water quality from
federally licensed or permitted activities with point source discharges
to waters of the United States by requiring compliance with the CWA as
well as EPA-approved state and tribal

CWA regulatory programs. This proposal includes for the first time a
well-defined scope for section 401 certification that reflects the
EPA's holistic interpretation of the statutory language, which is based
on the text and structure of the Act. As the Agency charged with
administering the CWA, the EPA is authorized to interpret by rulemaking
the appropriate scope for a CWA section 401 certification. 33 U.S.C.
1361(a). The EPA proposes to establish the ``scope of certification''
as follows:

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

    The proposed scope of certification is consistent with the plain
language of section 401 and is intended to provide clarity to
certifying authorities, federal agencies, and project proponents about
the extent of environmental review that is expected, the type of
information that may reasonably be needed to review a certification
request, and the scope of conditions that are appropriate for inclusion
in a water quality certification.
    The proposed scope of certification differs from the EPA's existing
regulations, which require a certification to include a statement that,
``there is a reasonable assurance that the activity will be conducted
in a manner which will not violate applicable water quality
standards.'' See 40 CFR 121.2(a)(3). The ``reasonable assurance''
language in the EPA's existing regulations is an artifact from the pre-
1972 version of the statute which provided that the certifying
authority would certify ``that there is reasonable assurance . . . that
such activity will be conducted in a manner which will not violate
applicable water quality standards.'' Public Law 91-224, 21(b)(1), 84
Stat. 91 (1970). The proposed scope could be considered more stringent
than the EPA's existing certification regulations because, consistent
with the 1972 CWA amendments, it requires certifying authorities to
conclude that a discharge ``will comply'' with water quality
requirements (as defined at Sec.  121.1(p) of this proposal), rather
than providing ``reasonable assurance.''
    Section 401 is triggered by a proposed federally licensed or
permitted project that may result in any discharge into waters of the
United States. The term ``discharge'' is not defined in section 401,
and the only definition in the CWA provides that ``the term `discharge'
when used without qualification includes a discharge of a pollutant,
and a discharge of pollutants.'' 33 U.S.C. 1362(16). Consistent with
the analysis above concerning the scope of section 401 and the need to
provide greater clarity, the Agency is proposing to define the term
``discharge'' as follows:

    Discharge for purposes of this part means a discharge from a
point source into navigable waters.

    The Agency solicits comment on whether this definition is
necessary, whether it provides appropriate clarification, or whether
the EPA's proposed regulations would be sufficiently clear without
including this new definition. The Agency also solicits comment on
whether an alternate definition of ``discharge'' may provide greater
clarity and regulatory certainty.
    Section 401(d) requires a certification to ``set forth any effluent
limitations and other limitations, and monitoring requirements
necessary to assure that any applicant for a Federal license or permit
will comply with [enumerated provisions of the CWA], and with any other
appropriate requirement of State law'' and that these requirements
``shall become a condition on any Federal license or permit subject to
the provisions of this section'' (emphasis added). As described in
section II.F.6.a.i in this preamble, the EPA interprets ``appropriate
requirement of state law'' to mean applicable provisions of those EPA-
approved state and tribal CWA regulatory programs (e.g., state water
quality standards, NPDES program provisions). To provide greater
clarity, the EPA proposes to define the term ``water quality
requirements'' as follows:

    Water quality requirements means applicable provisions of 301,
302, 303, 306, and 307 of the Clean Water Act and EPA-approved state
or tribal Clean Water Act regulatory program provisions.

    The term ``water quality requirements'' appears throughout section
401, but it is not defined in the statute. The EPA's interpretation of
this term and the proposed definition are intended to align section 401
program implementation with the text of the statute, which specifically
identifies those provisions of the Act enumerated in the proposed
definition. The term ``EPA-approved state or tribal CWA regulatory
programs'' in the proposed definition is intended to include those
state or tribal provisions of law that are more stringent than federal
law, as authorized in 33 U.S.C. 1370. The legislative history supports
the interpretation in this proposal. See S. Rep. No. 92-414, at 69
(1971) (``In addition, the provision makes clear that any water quality
requirements established under State law, more stringent than those
requirements established under this Act, also shall through
certification become conditions on any Federal license or permit.'').
The CWA provisions that regulate point source discharges to waters of
the United States are the ``regulatory provisions of the CWA.'' When
states or tribes enact CWA regulatory provisions as part of a state or
tribal program, including those designed to implement the section 402
and 404 permit programs and those that are more stringent than federal
requirements, those provisions require EPA approval before they become
effective for CWA purposes. Because the EPA interprets ``appropriate
requirements'' to mean the ``regulatory provisions of the CWA,'' it
follows that those would necessarily be EPA-approved provisions.
    The EPA solicits comment on whether this proposed definition is
clear and specific enough to provide regulatory certainty for
certifying authorities and project proponents. The EPA also solicits
comment on whether additional specificity should be added to the
proposed definition, for example that the term does not include non-
water quality related state or local laws. In an alternate approach,
the EPA may consider defining the term ``appropriate requirement of
State law'' to provide additional clarity concerning the scope of
section 401. Under this alternate approach, the EPA solicits comment on
whether that term should be defined similar to or more broadly or
narrowly than ``EPA-approved state or tribal Clean Water Act regulatory
program provisions'' as proposed in this rulemaking.
    The scope of certification established in this proposal also
informs the scope of conditions that may be included in a
certification. The statute does not define ``condition,'' but several
appellate courts have analyzed the plain language of the CWA and
concluded that the Act ``leaves no room for interpretation'' and that
``state conditions must be'' included in the federal license or permit.
Sierra Club v. U.S. Army Corps of Engineers, 909 F.3d 635, 645 (4th
Cir. 2018) (emphasis in original); see also U.S. Dep't of Interior v.
FERC, 952 F.2d 538, 548 (D.C. Cir. 1992); Am. Rivers, Inc. v. FERC, 129
F.3d 99, 107 (2d Cir. 1997) (recognizing the ``unequivocal'' and
``mandatory'' language of section 1341(d)); Snoqualmie Indian Tribe v.
FERC, 545 F.3d 1207, 1218 (9th Cir. 2008) (collecting cases); FERC, 952
F.2d at 548 (``FERC may not alter or reject conditions imposed by the
states through section 401 certificates.''). The EPA is not proposing
to modify this plain language interpretation of the

CWA concerning the inclusion of certification conditions in federal
licenses and permits. However, the EPA is proposing to define the term
``condition'' to address ambiguity in the statute and provide clarity
and regulatory certainty. See Chevron, 467 U.S. at 843-44.
    Although the structure and content of section 401(d) provide
helpful context for what should be included as conditions in a federal
license or permit, the CWA does not define that operative term. Because
this term is not defined in the statute, its meaning has been
susceptible to different interpretations. For example, the EPA
understands some certifying authorities have included conditions in a
certification that have nothing to do with effluent limitations,
monitoring requirements, water quality, or even the CWA. Such
requirements were perhaps based on other non-water quality related
federal statutory or regulatory programs, concerns about environmental
media other than water, or they might have been related to state laws,
policies, or guidance that make decisions or recommendations unrelated
to the regulation of point source discharges to waters of the United
States. As the Agency charged with administering the CWA, the EPA is
authorized to interpret by rulemaking what the term ``condition'' means
in the context of a CWA section 401 certification. Under the Chevron
doctrine, courts presume ``that when an agency-administered statute is
ambiguous with respect to what it prescribes, Congress has empowered
the agency to resolve the ambiguity.'' Utility Air Regulatory Group v.
EPA, 573 U.S. 302, 315 (2014). Congressional silence is read ``as a
delegation of authority to EPA to select from among reasonable
options.'' EPA v. EME Homer City Generation, 572 U.S. 489, 515 (2014).
    The EPA recognizes that the majority of certification actions
reflect an appropriately limited interpretation of the purpose and
scope of section 401. However, the Agency is also aware that some
certifications have included conditions that may be unrelated to water
quality, including requirements for biking and hiking trails to be
constructed, one-time and recurring payments to state agencies for
improvements or enhancements that are unrelated to the proposed
federally licensed or permitted project, and public access for fishing
and other activities along waters of the United States. The EPA is also
aware of certification conditions that purport to require project
proponents to address pollutants that are not discharged from the
construction or operation of a federally licensed or permitted project.
Using the certification process to yield facility improvements or
payments from project proponents that are unrelated to water quality
impacts from the proposed federally licensed or permitted project is
inconsistent with the authority provided by Congress. During pre-
proposal stakeholder engagement, the EPA also heard from federal
agencies that, because several court decisions have concluded that they
do not have authority to ``review and reject the substance of a state
certification or the conditions contained therein,'' Am. Rivers, Inc.,
129 F.3d at 106, non-water quality conditions are often included in
federal licenses and permits. Once included in the federal license or
permit, federal agencies have found it challenging to implement and
enforce these non-water quality related conditions. The Agency solicits
comment on other examples of certification conditions that may have
been unrelated to water quality.
    This proposal includes three elements designed to address the
issues described above. First, the proposal defines the term
``condition'' as follows:

    Condition means a specific requirement included in a
certification that is within the scope of certification.

    As described above, the lack of a statutory definition for the term
``condition,'' despite its central use in section 401(d), creates
ambiguity and uncertainty over the types of conditions that may be
included in a certification. See Chevron, 467 U.S. at 843-44. For
example, does section 401(d) authorize certifying authorities to
include any kind of limitation or requirement in a certification? Or it
is more limited, and if so, how limited?
    As used in section 401(d), the term is most logically read to refer
to those ``effluent limitations and other limitations, and monitoring
requirements necessary to assure'' compliance with certain enumerated
provisions of the CWA and with ``any other appropriate requirements of
State law.'' The statute mandates that these kinds of limitations and
monitoring requirements ``shall become a condition'' on a federal
license or permit subject to section 401. Thus, based on the plain
language of the statute for these limitations or requirements to become
a license or permit ``condition'' through operation of section 401(d),
they must be of a certain character. That is, they must be necessary to
assure compliance with water quality requirements (as defined at Sec.
121.1(p) of this proposal). That is why EPA's proposed definition of
``condition'' would require that it be a limitation or requirement
within the statute's ``scope of certification.'' If it purports to
require something beyond the appropriate scope of section 401, the
limitation or requirement offered by the certifying authority would not
be a ``condition'' as that term is used in section 401(d).
    Providing a clear definition of ``condition'' addresses the
ambiguity in section 401 and provides regulatory certainty to
certifying authorities, project proponents, and federal agencies.
Although this would be a new provision in the EPA's regulations, the
Agency presumes that the majority of certification conditions included
by states and tribes are consistent with the authority granted by
Congress. The EPA expects this proposed definition, however, to provide
much needed clarity to federal agencies and regulatory certainty to
project proponents that have been subjected to delays and project
denials as a result of the lack of regulatory certainty in this area.
    Second, to assure that such ``conditions'' are appropriately
tailored to the scope and authorized by law, this proposal would
require the following information be provided for each condition
included in a certification:

    1. A statement explaining why the condition is necessary to
assure that the discharge from the proposed project will comply with
water quality requirements;
    2. A citation to federal, state, or tribal law that authorizes
the condition; and
    3. A statement of whether and to what extent a less stringent
condition could satisfy applicable water quality requirements.

    The EPA intends this provision to require citation to specific
state or tribal law or CWA provision that authorizes the condition, and
that citations to CWA section 401 or other general authorization or
policy provisions in federal, state or tribal law would be insufficient
to satisfy the proposed requirement. These proposed requirements are
intended to ensure that any limitation or requirement added to a
certification is within the ``scope of certification'' and is, thus, a
true section 401(d) ``condition.''
    These proposed requirements might create new obligations for some
certifying authorities, but the EPA anticipates that the value of
including this information in every certification, in terms of
transparency and regulatory certainty, will far outweigh the minimal
additional administrative burden of including this information in a
certification. Stakeholders in pre-proposal engagement expressed
concern that federal agencies do not enforce the certification
conditions incorporated in

their federal licenses or permits. Providing a citation to the legal
authority underpinning a federally enforceable permit condition is one
way to address these concerns. In fact, federal agencies during pre-
proposal engagement acknowledged that this information will help them
understand how best to implement and enforce certification conditions.
In addition, including this information in each certification will
provide transparency for the overall certification process and allow
the project proponent to understand the legal authority that the
certifying authority is relying on to require the condition. This
information will help the project proponent assess whether the
condition is within the statute's lawful scope and what recourse it
might have to challenge or appeal it. Overall, the EPA believes that
the benefits of providing this information will significantly outweigh
any additional administrative burden that certifying authorities may
incur because of these new requirements. The Agency solicits comment on
the proposed information needed to support each condition, particularly
on the utility of such information for the certification process. In an
alternate approach, the Agency may define the third requirement as ``a
statement of whether and to what extent a more or less stringent
condition could satisfy applicable water quality requirements,'' or
remove the third requirement altogether. The Agency also requests
comment on these alternate approaches.
    Third, this proposal would specifically provide federal agencies
the ability to determine whether certification conditions meet the new
regulatory definition for condition, and whether the state or tribe has
provided the information required for each condition. If a condition
satisfies these requirements, under this proposal it would have to be
included in the federal license or permit; if a condition does not
satisfy these requirements, it may not be included in the federal
license or permit. See section III.J in this preamble for more
discussion on the federal licensing or permitting agency's enforcement
responsibility and discretion. The EPA expects that the proposed
requirements are clear and specific enough that a federal agency would
not need to have water quality expertise to determine if a
certification condition meets the proposed requirements.\40\ The Agency
solicits comment on whether the proposed requirements for conditions
need to be further refined to allow federal agencies other than the EPA
to appropriately determine compliance. Although this review function
may be new to some federal agencies, it is consistent with the EPA's
own longstanding practice under its NPDES regulations implementing
section 401 that allow the EPA to make such determinations under
certain circumstances. See 40 CFR 124.53(e).
---------------------------------------------------------------------------

    \40\ Additionally, section 401 provides that federal agencies
may request EPA advice on ``any relevant information on applicable
effluent limitations, or other limitations, standards, regulations,
or requirements, or water quality criteria'' and compliance methods.
33 U.S.C. 1341(b).
---------------------------------------------------------------------------

    This proposal would require other federal agencies to review and
determine whether certification conditions are within the ``scope''
articulated in the proposed implementing regulations. This is
consistent with the principle that federal agencies have the authority
to reject certifications or conditions that are inconsistent with the
requirements and limitations of section 401 itself. In City of Tacoma,
Washington v. FERC, the Court of Appeals for the D.C. Circuit noted
that ``[i]f the question regarding the state's section 401
certification is not the application of state water quality standards,
but compliance with the terms of section 401, then [the federal agency]
must address it. This conclusion is evident from the plain language of
section 401: `No license or permit shall be granted until the
certification required by this section has been obtained or has been
waived.' '' 460 F.3d 53, 67-68 (D.C. Cir. 2006) (citing 33 U.S.C.
1341(a)(1)). The court went on to explain that even though the federal
licensing or permitting agency did not need to ``inquire into every
nuance of the state law proceeding . . . it [did] require [the federal
agency] to at least confirm that the state has facially satisfied the
express requirements of section 401.'' Id. at 68. This proposal
provides that, if a federal agency determines that a certifying
authority included a condition in a certification that is beyond the
scope of certification, as defined in the proposed regulation, or that
the state has not provided the specific information necessary to
support each condition, that condition may not be included in the
federal license or permit and it does not become federally enforceable.
    As noted above, the EPA is not proposing to modify prior case law
interpreting the plain language of the CWA to require certification
conditions to be included in federal licenses and permits. See, e.g.,
City of Tacoma, 460 F.3d at 67; Am. Rivers Inc., 129 F.3d at 107; FERC,
952 F.2d at 548; Sierra Club, 909 F.3d at 645. The EPA is proposing to
maintain that requirement for conditions that are consistent with
section 401 and necessary to assure compliance with the Act and with
other appropriate requirements of state law. The statute does not
define the term ``condition'' and the EPA proposes to fill the gap left
by Congress and define the term to address ambiguity in the statute and
provide clarity and regulatory certainty. See Chevron, 467 U.S. at 843-
44.
    This proposal would also provide federal agencies an opportunity to
allow a certifying authority to remedy a condition that the federal
agency determines exceeds or conflicts with the scope of section 401
authority under certain circumstances. If a federal agency determines
that a condition does not satisfy the proposed requirements for a
condition and the reasonable period of time has not yet expired, this
proposal would allow the federal agency to notify the certifying
authority and provide an opportunity to remedy the defective condition,
either by modifying the condition to conform to the scope of
certification, or by providing the information required in the proposed
regulation. A federal agency would not be required to provide this
opportunity to the certifying authority, but if it does, this proposal
nonetheless would require the certifying authority to provide the
corrected condition or required information within the original
reasonable period of time, which shall not exceed one year from
receipt. Under this proposal, any federal agency determination on
whether to allow a certifying authority to remedy a deficient condition
would have to occur within the original reasonable period of time.
Under this proposal, if the certifying authority fails to remedy the
deficiencies within the reasonable period of time, the condition would
not be included in the federal license or permit. Deficient conditions
do not invalidate the entire certification, nor do they invalidate the
remaining conditions in the certification. The EPA solicits comment on
whether the regulatory text should clarify that deficient conditions do
not invalidate the entire certification or the remaining conditions.
The EPA also solicits comment on whether the proposed opportunity to
remedy deficient conditions would be helpful and an appropriate use of
federal agency resources, whether it should be mandatory for federal
agencies to provide this opportunity, and whether it is within the
scope of EPA authority to establish through regulation. The EPA also
solicits comment on an alternative

approach where certifying authorities would not have the opportunity to
remedy deficient conditions, even if the reasonable period of time has
not expired.
    The proposed regulations clarify the EPA's interpretation that the
appropriate scope of review under section 401(a) is limited to the
potential water quality impacts caused by the point source discharge
from a proposed federally licensed or permitted project to the waters
of the United States. This is consistent with the statutory language in
sections 401(a) and 401(d) and is supported by the legislative history.
See S. Rep. No. 92-414, at 69 (1971) (providing that authorities must
certify that ``any such discharge will comply with [CWA] Sections 301
and 302'' and that section 401 was ``amended to assure consistency with
the bill's changed emphasis from water quality standards to effluent
limitations based on the elimination of any discharge of pollutants''),
41 (describing CWA section 301 as prohibiting the discharge of any
pollutant except as permitted under CWA sections 301, 302, 306, 307 or
402, and identifying point sources of pollution as the regulatory
target), 46 (describing CWA section 302 to authorize water quality
based effluent limits ``for the affected point sources at a level which
can reasonably be expected to contribute to the attainment or
maintenance of such a standard of water quality''). The scope of
certification also extends to the scope of conditions that are
appropriate for inclusion in a certification--specifically, that these
conditions must be necessary to assure that the discharge from a
proposed federally licensed or permitted project will comply with water
quality requirements, as defined at Sec.  121.1(p) of this proposal.
    The EPA solicits comments on whether the proposed approach
appropriately captures the scope of authority for granting,
conditioning, denying, and waiving a section 401 certification. The EPA
solicits comment on the extent to which project proponents have
received non-water quality related conditions in certifications. The
EPA also solicits comment on whether this proposal regarding the scope
of certification and conditions is an appropriate and useful way to
ensure that federal licenses will not contain non-water quality related
certification decisions and conditions, or if there are other more
useful and appropriate tools or mechanisms the EPA should consider to
address these concerns. In particular, the EPA solicits comment on what
it means for a certification or its conditions to be ``related to water
quality'' and how direct that relationship to water quality must be to
properly define a certification or condition as within the appropriate
scope of section 401.
    In addition, the EPA solicits comment on its interpretation of the
phrase ``any other appropriate requirements of State law'' as limited
to requirements in EPA-approved state and tribal CWA regulatory
programs. In particular, EPA solicits comment on whether EPA should
interpret that phrase more broadly to include any requirement of State
law, any water quality-related requirement of State law (regardless of
whether it is part of an EPA-approved program), or any different
universe of state or tribal requirements (reflecting, or not, CWA
sections or programs) that might be broader or narrower in scope than
this proposal. The EPA also solicits comment on its interpretation of
sections 401(a) and 401(d) as limiting the scope of state and tribal
section 401 review and conditions to impacts from potential
``discharges,'' or whether the state or tribe may also consider a
different and broader universe of impacts, such as impacts from the
licensed project or activity as a whole, or some other universe of
potential impacts to water quality. The EPA also solicits comment on
whether this proposal will facilitate enforcement of certification
conditions by federal agencies, or whether there are other approaches
the Agency should consider beyond requiring a citation to state,
tribal, or federal law or explaining the reason for a condition.
    Pre-proposal recommendations identified concerns with certain types
of conditions that have created regulatory uncertainty for project
proponents, including conditions that extend the effective date of a
certification out beyond the reasonable period of time and conditions
that authorize certifications to be re-opened. To better understand
these concerns, the Agency solicits comment on whether, given the
explicit limitations on conditions in this proposal, it may still be
necessary or appropriate to expressly preclude these or other types of
conditions that may create regulatory uncertainty.
    The EPA is also soliciting comment on an alternate approach that it
is considering taking whereby the Agency would interpret CWA sections
401(a) and 401(d) as providing two different scopes for action on a
certification request. Specifically, section 401(a) could be read to
authorize review of a section 401 certification only on the basis of
determining whether the discharge would comply with the enumerated
sections of the CWA; and section 401(d) could be read to authorize
consideration of ``any other appropriate requirement of State law''
only for purposes of establishing conditions once the certifying
authority has determined to grant certification. Under this alternate
approach, a certification request could be denied only if the
certifying authority cannot certify that the discharge will comply with
applicable provisions of CWA sections 301, 302, 303, 306 and 307. This
proposal would also define the term ``any other appropriate requirement
of State law'' to mean EPA-approved state or tribal CWA regulatory
program provisions (e.g., state water quality standards, NPDES program
provisions). The EPA solicits comment on this alternate interpretation.
The EPA also solicits comment on whether establishing two different
scopes for action under section 401 would clarify the certification
process or if it could cause further confusion or potential delays in
processing certification requests.

E. Timeframe for Certification Analysis and Decision

    The EPA proposes to reaffirm that CWA section 401 requires
certifying authorities to act on a request for certification within a
reasonable period of time, which shall not exceed one year. By
establishing an absolute outer bound of one year following receipt of a
certification request, Congress signaled that certifying authorities
have the expertise and ability to evaluate potential water quality
impacts from even the most complex proposals within a reasonable period
of time after receipt of a request, and in all cases within one year.
The CWA also provides that if a certifying authority fails or refuses
to act within that reasonable period of time, the certification
requirement is waived; however, the CWA does not define the term
``fails or refuses to act.'' This proposal provides additional clarity
on what is a ``reasonable period,'' how the period of time is
established, and for the first time defines the term ``fails or refuses
to act'' to provide additional clarity and regulatory certainty.
    Section 401 does not include a tolling provision. Therefore, the
period of time to act on a certification request does not pause or stop
for any reason once the certification request has been received. One
recent court decision held that withdrawing and resubmitting the same
section 401 request for the purpose of circumventing the one-year
statutory deadline does not restart the reasonable period of time.
Hoopa Valley Tribe v. FERC, 913 F.3d 1099 (D.C. Cir. 2019) (Hoopa
Valley). The EPA agrees with

the Hoopa Valley court that ``Section 401's text is clear'' that one
year is the absolute maximum time permitted for a certification, and
that the statute ``does not preclude a finding of waiver prior to the
passage of a full year.'' Id. at 1103-04. The court noted that, ``[b]y
shelving water quality certifications, the states usurp FERC's control
over whether and when a federal license will issue. Thus, if allowed,
the withdrawal-and-resubmittal scheme could be used to indefinitely
delay federal licensing proceedings and undermine FERC's jurisdiction
to regulate such matters.'' Id. at 1104. The court further observed
that the legislative history supports its interpretation of the
statute's plain language because, ``Congress intended Section 401 to
curb a state's `dalliance or unreasonable delay.' '' Id. at 1104-05
(emphasis in original).
    The Hoopa Valley case raised another important issue: Perpetual
delay of relicensing efforts (in that case for more than a decade)
delays the implementation and enforcement of water quality requirements
that have been updated and made more stringent in the years or decades
since the last relicensing process.\41\ See id. at 1101. This concern
was also raised in stakeholder recommendations received during the pre-
proposal outreach period. One stakeholder specifically cited the delays
in the Hoopa Valley case as a ``concrete example of how the Sec.  401
certification process was being manipulated by a state certification
agency to delay implementation of effective water quality controls and
enhancement measures'' and that ``allowing the Sec.  401 certification
process to be used to achieve further delays in the re-licensing
process is in turn an abuse of the certification process.'' Letter from
National Tribal Water Council to David P. Ross, Assistant Administrator
of the Office of Water, EPA (Mar. 1, 2019).
---------------------------------------------------------------------------

    \41\ This is a concern shared by the EPA. The Agency has
recently taken steps to promote its own compliance with CWA
deadlines, including acting on state and tribal water quality
standard submittals, because prior delays have created a significant
backlog of state submittals awaiting EPA action. Memorandum from
David P. Ross to Regional Administrators (June 3, 2019). These
delays and backlogs prevent states and tribes from timely
implementing and enforcing updated programs and standards that could
otherwise be improving water quality.
---------------------------------------------------------------------------

    Given the Hoopa Valley court's plain language analysis of the
statute and the potential water quality impacts from allowing
certification decisions to be delayed, and the Agency's agreement with
that analysis, EPA is proposing to amend the Agency's regulations in a
manner consistent with the Hoopa Valley holding as follows:

    The certifying authority is not authorized to request the
project proponent to withdraw a certification request or to take any
other action for the purpose of modifying or restarting the
established reasonable period of time.

    The Agency proposes this clear statement to reflect the plain
language of section 401, which as described above, is supported by
legislative history. The Agency expects this clarification will reduce
delays and help ensure that section 401 certification requests are
processed within the reasonable period of time established by the
federal agency, and at most, within one year from receipt of the
request. The Agency understands that in cases where the certifying
authority and project proponent are working collaboratively and in good
faith, it may be desirable to allow the certification process to extend
beyond the reasonable period of time and beyond the one-year statutory
deadline. The Agency solicits comment on whether there is any legal
basis to allow a federal agency to extend the reasonable period of time
beyond one year from receipt.
    During the pre-proposal recommendation period, stakeholders also
expressed concern about the effect of potentially limited certification
review timeframes on state and tribal resources. The Agency has similar
concerns regarding its own resources. This proposal therefore would
establish a pre-filing meeting process when the EPA is the certifying
authority to ensure that the Agency receives early notification of
anticipated projects and can discuss its information needs with the
project proponent (see section III.G in this preamble). This pre-filing
meeting process is intended to occur before the statutory timeframe
begins. The Agency solicits comment on whether the pre-filing meeting
process would be helpful for other certifying authorities, whether it
is an appropriate mechanism to promote and encourage early coordination
between project proponents and certifying authorities, and if there are
other options that may also be appropriate from a regulatory
perspective. The EPA also solicits comment on whether the Agency has
the authority to propose similar requirements on state and tribal
certifying authorities through this rulemaking. The Agency also heard
concerns from certifying authorities on staffing challenges, agency
priorities, and the need for additional federal funding to support
timely action on certification requests. To better understand these
concerns, the Agency solicits comment from certifying authorities on
the extent to which section 401 programs are funded by states and
tribes and the number of full or part time employees that are assigned
to evaluate and take action on certification requests.
    The EPA recognizes that federal agencies are uniquely positioned to
promote pre-application coordination among federal agencies, certifying
authorities, and project proponents to harmonize project planning
activities and promote timely action on certification requests. For
instance, early coordination between the certifying authority and the
federal agency could decrease duplication of materials that need to be
prepared and submitted by the project proponent. The EPA encourages
federal agencies to notify certifying authorities as early as possible
about potential projects that may require a section 401 certification.
Additionally, the EPA encourages federal agencies to respond timely to
requests from certifying authorities for information concerning the
proposed federal license or permit, and to provide technical and
procedural assistance to certifying authorities and project proponents
upon request and to the extent consistent with agency regulations and
procedures. The Agency solicits comment on the responsibilities of
federal agencies, ways to facilitate technical and procedural
information sharing among federal agencies, project proponents, and
certifying authorities, and ways to provide technical and procedural
assistance to project proponents and certifying authorities.
    The EPA also proposes to reaffirm that the federal agencies
determine the reasonable period of time for a certifying authority to
act on a certification request. Some existing federal agency
regulations specify a reasonable period of time that applies across all
permit types. For instance, FERC's regulations at 18 CFR 5.23(b)(2)
provide that ``[a] certifying agency is deemed to have waived the
certification requirements of section 401(a)(1) of the Clean Water Act
if the certifying agency has not denied or granted certification by one
year after the date the certifying agency received a written request
for certification.'' Similarly, the Corps regulations at 33 CFR
325.2(b)(1)(ii) state that ``[a] waiver may be explicit, or will be
deemed to occur if the certifying agency fails or refuses to act on a
request for certification within sixty days after receipt of such a
request unless the district engineer determines a shorter or longer
period is reasonable for the state to act.'' Executive Order 13868
directed

these agencies to update their existing regulations to promote
consistency across the federal government upon completion of the EPA's
current rulemaking to modernize its certification regulations.
    In setting the reasonable period of time for a certification--
either on a project-by-project basis or categorically through a
rulemaking--the EPA proposes to require federal agencies to consider:

    1. The complexity of the proposed project;
    2. The potential for any discharge; and
    3. The potential need for additional study or evaluation of
water quality effects from the discharge.

    The EPA solicits comment on whether these factors are appropriate
and whether there are other factors that a federal agency should
consider when establishing the reasonable period of time (e.g., permit
type within a federal agency, certifying authority resources and
capacity to review). The EPA also solicits comment on whether the
Agency should establish reasonable periods of time for different
federal permit types on a categorical basis in its final rule. For
example, the EPA could establish that section 401 certifications for
CWA section 404 permits that disturb a certain acreage threshold must
be completed in a prescribed period of time. As another example, the
EPA could establish that for interstate pipelines that will cross a
certain number of states or transport a certain volume of material,
certification must be completed within a specific period of time. The
EPA understands that the federal agencies that implement their own
permitting programs are experts in those areas, however, the Agency
also understands that establishing a clear national framework for
section 401 certifications may help create efficiencies in the process
and therefore provide greater regulatory certainty.
    The Agency is also soliciting comment on an alternate approach that
it is considering taking whereby the EPA would retain the language in
its existing certification regulations that specifies a reasonable
period of time ``shall generally be considered to be 6 months, but in
any event shall not exceed 1 year.'' 40 CFR 121.16(b). In the event the
EPA pursues this alternate approach, the Agency requests comment on
whether six months is an appropriate general rule, if a longer or
shorter period of time would be more appropriate as a general rule, and
whether having such a general rule is appropriate. Such alternate
approach would retain the federal agencies ability to determine the
reasonable period of time but would allow for a default reasonable
period of time in the event that a federal agency fails to establish a
reasonable period of time or prefers to rely on the default.
    This proposal also intends to clarify the process by which federal
agencies and certifying authorities communicate regarding the
reasonable period of time. A clear understanding of the reasonable
period of time will prevent certifying authorities from inadvertently
waiving their opportunity to certify a request and will provide
regulatory certainty to the project proponent. Under this proposal,
upon submittal of the request for certification, the project proponent
would contact the federal agency to provide notice of the certification
request. Within 15 days of receiving a notice of the certification
request from the project proponent, the federal agency would provide,
in writing, the following information to the certifying authority: The
applicable reasonable period of time to act on the request, the date of
receipt, and the date upon which waiver will occur if the certifying
authority fails to act. The EPA understands that this process may
create additional administrative burdens on federal agencies, given the
number of section 401 certification requests that are submitted each
year. However, the Agency expects that the benefit of clarity and
transparency that this additional process will provide for all parties
involved in a section 401 certification process will outweigh any
potential additional burden. The EPA also expects the federal agencies
will quickly routinize this process, using forms, electronic
notifications or other tools to minimize the potential administrative
burden associated with providing written notice of the reasonable
period of time. The EPA solicits comment on whether the proposed
process is the most efficient way to provide clarity and transparency,
or if there are other procedural or administrative mechanisms that may
be more effective. In an alternate approach the EPA could require
federal agencies to post the reasonable period of time notification on
a public website, instead of requiring it be sent to the certifying
authority. The EPA solicits comment on whether this alternate approach
would provide greater efficiency and transparency in the certification
process, or if there are concerns with this approach.
    The EPA also solicits comment on whether, if a federal agency
promulgates reasonable periods of time categorically based on project
type, the notification process in this proposal would still be
necessary. For example, FERC has promulgated regulations for hydropower
projects that require the license or permit applicant to file with FERC
either a copy of the certification, a copy of the request for
certification, including proof of the date that the certifying
authority received the request, or evidence of waiver. 18 CFR
4.34(b)(5)(i). In its permitting processes, FERC allows certifying
authorities to take the full year provided in section 401, and its
regulations clearly state, ``A certifying agency is deemed to have
waived the certification requirements . . . if the certifying agency
has not denied or granted certification by one year after the date the
certifying agency received a written request for certification.'' 18
CFR 4.34(b)(5)(iii). The EPA solicits comment on whether FERC's
hydropower regulations, or other existing federal regulations, provide
clear enough procedure and transparency that the additional notice to
the certifying authority proposed in this rule would be redundant,
unnecessary, or a waste of resources.
    The EPA also proposes to clarify that section 401 does not prohibit
a federal agency from modifying an established reasonable period of
time, provided the modified time period is reasonable and does not
exceed one year from receipt. The EPA does not expect periods of time
to be modified frequently, but this proposal is intended to provide
federal agencies with additional flexibility for unique circumstances
that may reasonably require a longer period of time than was originally
established. In such cases, the modified time period would be
communicated in writing to the certifying authority and the project
proponent to ensure all parties are aware of the change. In all cases,
the reasonable period of time would not exceed one year from the
original receipt of the certification request.
    To ensure that the section 401 certification process does not
unreasonably delay the federal licensing and permitting processes, the
plain language of section 401(a)(1) provides that the requirement to
obtain a certification is waived when a certifying authority ``fails or
refuses to act'' on a request for certification, within a reasonable
period of time (which shall not exceed one year).'' 33 U.S.C.
1341(a)(1). The Act does not define the term ``fails or refuses to
act.'' This term is ambiguous and the lack of a statutory definition
has resulted in different interpretations of when the period of time
for review expires and inefficiencies in the certification process. It
has also resulted in significant regulatory uncertainty and litigation.
See section II.F in this preamble. As the Agency charged with

administering the CWA, the EPA is authorized to interpret by rulemaking
what these terms mean in the context of a request for a CWA section 401
certification. See Chevron, 467 U.S. at 843-44.
    The phrase ``fails or refuses to act'' lends itself to at least two
interpretations. One interpretation of the ``fails or refuses to act''
language in section 401 is that a certifying authority took no action,
or refused to take any action, on a section 401 certification request
within the reasonable period of time. Such lack of action would be
understood as triggering a waiver. Alternatively, when read in the
larger context of the section, ``fails or refuses to act'' could also
mean that--while the certifying authority took some action in response
to the request--the action it took was outside the statute's
permissible scope and thus the certifying authority failed or refused
to act in a way Congress intended, and that such failure amounts to a
failure or refusal to act, triggering a waiver. To resolve this
ambiguity, under this proposed definition, if a certifying authority
either takes no action at all within the reasonable period of time, or
acts outside the scope of certification, as defined in this proposal,
the federal agency may determine that waiver has occurred and issue the
federal license or permit. Accordingly, this proposal includes the
following definition:

    Fail or refuse to act means the certifying authority actually or
constructively fails or refuses to grant or deny certification, or
waive the certification requirement, within the scope of
certification and within the reasonable period of time.

    A certifying authority actually fails or refuses to grant or deny
certification when it states its intention unambiguously in writing or
takes no action within the reasonable period of time. A certifying
agency constructively fails or refuses to grant or deny certification
when it acts outside the scope of certification as defined in the
proposed rule.
    The EPA expects that for the majority of circumstances where states
and tribes issue section 401 certifications, this new definition will
have little practical implication because they will have acted on
certification requests within the scope of CWA section 401. However,
the EPA is aware of circumstances where some states have denied
certifications on grounds that are unrelated to water quality
requirements and that are beyond the scope of CWA section 401.\42\ The
EPA's existing certification regulations at 40 CFR part 121 are silent
on this point and thus when a certifying authority acts beyond the
scope of authority granted by Congress in section 401, the project
proponent has two options: (1) Walk away from the proposed federally
licensed or permitted project because certification has been denied, or
(2) challenge the certification denial in court. Under this proposal,
the Agency intends to clarify that a denial based on factors outside
the scope of authority under section 401 amounts to a ``fail[ure] or
refus[al] to act.'' The burden is thus placed on the certifying
authority to act within the proper scope of authority granted by
Congress, or otherwise risk having the certification denial being set
aside by the federal agency. If that were to happen, under this
proposal, a certifying authority that disagrees that its action was
outside the scope of section 401 could consider its options for legal
or administrative review against the federal agency for issuing the
license or permit without considering its certification denial. The EPA
intends that this proposed definition of ``fails or refuses to act''
will encourage certifying authorities to act within the scope of
certification and promote timely and CWA-consistent action on
certification requests. As discussed in section III.D in this preamble,
an entire certification is not considered waived if a certifying
authority grants certification with deficient conditions. In those
circumstances, the deficient conditions are addressed by the federal
agency but the remainder of the certification remains in place.
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    \42\ See Letter from Thomas Berkman, Deputy Commissioner and
General Counsel, New York State Department of Environmental
Conservation, to Georgia Carter, Vice President and General Counsel,
Millennium Pipeline Company, and John Zimmer, Pipeline/LNG Market
Director, TRC Environmental Corp. (Aug. 30, 2017) (denying 401
certification because ``FERC failed to consider or quantify the
effects of downstream [greenhouse gas emissions] in its
environmental review of the Project'').
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    Alternatively, the Agency seeks comment on an approach that would
not define ``fails or refuses to act'' as a separate term. In the event
the Agency pursues that alternate approach, the Agency solicits comment
on other tools or mechanisms to encourage certifying authorities to act
timely and within the scope of certification, consistent with the text
of the CWA as defined in this proposal.
    This proposal also includes a process by which, if a certifying
authority denies certification on grounds outside the scope of
certification, and the reasonable period of time has not yet expired,
the federal agency may provide an opportunity for the certifying
authority to remedy the deficient denial, so long as the remedy occurs
within the original reasonable period of time. This process is intended
to promote actions by certifying authorities that are within the scope
of certification and provide an ability to remedy deficient denials so
long as it is does not extend the reasonable period of time, and
therefore does not delay the federal licensing or permitting process.
The Agency solicits comment on whether the opportunity to remedy
deficient certifications or conditions would be helpful and
appropriate, or if it could create additional delays in the federal
licensing or permitting process. The EPA also solicits comment on an
alternative approach where certifying authorities would not have the
opportunity to remedy deficient denials, even if the reasonable period
of time has not expired. The Agency also solicits comment on whether
there are other mechanisms that may also promote timely and appropriate
action on certification requests.

F. Contents and Effect of a Certification

    The CWA does not define the term ``certification'' or offer a
definitive list of its contents or elements. Accordingly, the EPA under
section 501(a) may reasonably interpret the statute to add content to
that term. See 33 U.S.C. 1251(d); 33 U.S.C. 1361(a); Chevron, 467 U.S.
at 843-44. While the EPA's existing regulations at 40 CFR 121.2(a)
identify certification requirements that might have made sense in 1971,
in this proposal the EPA seeks to update those requirements and also
address more fully the effects of certification decisions. Among other
things, the EPA is proposing that any action on a certification request
be in writing and clearly state whether the certifying authority has
chosen to grant, grant with conditions, or deny certification. The EPA
is also proposing that any express waiver of the certification
requirement by the certifying authority also be in writing.
    In circumstances where certification is granted, with or without
conditions, the EPA is proposing that the written certification include
a statement that the discharge from the proposed federally licensed or
permitted project will comply with applicable water quality
requirements, as defined at Sec.  121.1(p) of this proposal. Where the
certifying authority has granted without conditions, the federal agency
could continue processing the license or permit in accordance with its
implementing regulations. Where the certifying authority is granting
certification with conditions, the federal

agency could continue processing the license or permit and would
include those conditions as terms in the federal license or permit.
Under the proposal, the certification would include specific supporting
information for each condition that will be included in the
certification, including at a minimum: A statement explaining why the
condition is necessary to assure that the discharge resulting from the
proposed federally licensed or permitted project will comply with
applicable water quality requirements; a citation to federal, state, or
tribal law that authorizes the condition; and a statement of whether
and to what extent a less stringent condition could satisfy applicable
water quality requirements. See section III.D in this preamble for
information about the scope of appropriate conditions and for
information about how conditions could be written to ensure
enforceability by federal agencies.
    CWA section 401(a)(1) provides that ``[n]o license or permit shall
be granted if certification has been denied by the State, interstate
agency, or the Administrator, as the case may be.'' 33 U.S.C.
1341(a)(1). In circumstances where certification is denied, the EPA is
proposing that the written notification include the reasons for denial,
including the specific water quality requirements with which the
proposed federally licensed or permitted project will not comply, a
statement explaining why the proposed project will not comply with the
identified water quality requirements, and the specific data,
information, or project modifications, if any, that would be needed for
the certifying authority to determine that the discharge will comply
with water quality requirements. In circumstances where a certifying
authority is unable to certify that a discharge will comply with the
Act, EPA is proposing that the certifying authority may deny
certification or waive the requirement for certification. The EPA notes
that there may be multiple reasons why a certifying authority may be
unable to certify, including a lack of resources for reviewing the
certification request, other more pressing priority work that the
agency must attend to, or because the information provided to the
agency demonstrates that the discharge will not comply with the Act.
Under the former circumstances, waiver may be appropriate and under the
latter circumstance, denial would be appropriate. The statute does not
prevent a project proponent from reapplying for a section 401
certification if the original request is denied, and this proposal
reaffirms the ability of a project proponent to submit a new
certification request. In the event that a denial is issued, the EPA
recommends that the project proponent discuss with the certifying
authority whether project plans could be altered to meet applicable
water quality requirements upon submittal of a new request for
certification.
    Where a federal agency determines that a certifying authority's
denial satisfied the requirements of section 401, the EPA proposes that
the federal agency provide written notification to the certifying
authority and the project proponent that the denial was consistent with
section 401 and that the license or permit will not be granted. A
project proponent may explore its options to challenge a denial in
court, or alternatively, it may submit a new request for certification
that addresses the water quality issues identified in the denial in
addition to the other requirements for a request for certification, as
discussed in section III.B in this preamble.
    Where a federal agency determines that a certifying authority's
denial failed to meet the requirements of section 401, the EPA proposes
that the federal agency provide written notification to the certifying
authority and the project proponent and indicate which provision(s) of
section 401 the certifying authority failed to meet. If the federal
agency receives the certifying authority's certification decision prior
to the end of the reasonable period of time, the federal agency may
provide the certifying authority an opportunity to remedy the
deficiencies within the remaining period of time. In such
circumstances, if the certifying authority does not provide an updated
certification decision by the end of the reasonable period of time,
under the proposal the federal agency would treat the certification in
a similar manner as waiver. The EPA solicits comment on whether this
opportunity to remedy a deficient denial would be helpful and an
appropriate use of federal agency resources, whether it should be
mandatory for federal agencies to provide this opportunity, and whether
it is within the scope of Agency authority to establish through
regulation.
    EPA's proposed regulations at sections 121.6 (Effect of denial of
certification), 121.7 (Waiver), and 121.8 (Incorporation of conditions
in the license or permit) contemplate that the licensing or permitting
agency would review and make appropriate determinations about the
adequacy of certain aspects of a 401 certification. Establishing such a
role for federal licensing or permitting agencies is a reasonable
interpretation of the CWA. In City of Tacoma, Washington v. FERC, the
Court of Appeals for the D.C. Circuit noted that ``[i]f the question
regarding the state's section 401 certification is not the application
of state water quality standards but compliance with the terms of
section 401, then [the federal agency] must address it. This conclusion
is evident from the plain language of section 401: `No license or
permit shall be granted until the certification required by this
section has been obtained or has been waived.' '' 460 F.3d at 67-68
(citing 33 U.S.C. 1341(a)(1)) (emphasis in original). The court went on
to explain that even though the federal agency did not need to
``inquire into every nuance of the state law proceeding . . . it [did]
require [the federal agency] to at least to confirm that the state has
facially satisfied the express requirements of section 401.'' Id. at
68; see also Hoopa Valley Tribe v. FERC, 913 F.3d 1099, 1105 (D.C. Cir.
2019) (``had FERC properly interpreted Section 401 and found waiver
when it first manifested more than a decade ago, decommissioning of the