[Federal Register: June 13, 2008 (Volume 73, Number 115)]
[Rules and Regulations]
[Page 33697-33708]
[DOCID:fr13jn08-16]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 122

[EPA-HQ-OW-2006-0141; FRL-8579-3]
RIN 2040-AE86

National Pollutant Discharge Elimination System (NPDES) Water
Transfers Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is issuing a regulation to clarify that water transfers
are not subject to regulation under the National Pollutant Discharge
Elimination System (NPDES) permitting program. This rule defines water
transfers as an activity that conveys or connects waters of the United
States without subjecting the transferred water to intervening
industrial, municipal, or commercial use. This rule focuses exclusively
on water transfers and does not affect any other activity that may be
subject to NPDES permitting requirements.
    This rule is consistent with EPA's June 7, 2006, proposed rule,
which was based on an August 5, 2005, interpretive memorandum entitled
``Agency Interpretation on Applicability of Section 402 of the Clean
Water Act to Water Transfers.''

DATES: This final rule is effective on August 12, 2008. For judicial
review purposes, this action is considered issued as of 1 p.m. eastern
daylight time (e.d.t.) on June 27, 2008, as provided in 40 CFR 23.2.
Under section 509(b)(1) of the Clean Water Act, judicial review of the
Administrator's action can only be had by filing a petition for review
in the United States Court of Appeals within 120 days after the
decision is considered issued for purposes of judicial review.

ADDRESSES: The administrative record is available for inspection and
copying at the Water Docket, located at the EPA Docket Center (EPA/DC),
EPA West 1301 Constitution Ave., Room 3334, NW., Washington DC 20460.
The administrative record is also available via EPA Dockets (Edocket)
at http://www.regulations.gov under docket number EPA-HQ-OW-2006-0141.
The rule and key supporting documents are also electronically available
on the Internet at http://www.epa.gov/npdes/agriculture.

FOR FURTHER INFORMATION CONTACT: For additional information contact
Virginia Garelick, Water Permits Division, Office of Wastewater
Management (4203M), Environmental Protection Agency, 1200 Pennsylvania
Ave., NW., Washington, DC 20460; telephone number:<PHONE_NUMBER>; fax:
202-564-6384; e-mail address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information
    A. Does This Action Apply to Me?
    B. How Can I Get Copies of This Document and Other Related
Information?
    C. Under What Legal Authority Is This Final Rule Issued?
    D. What is the Comment Response Document?
II. Background and Definition of Water Transfers
III. Rationale for the Final Rule
    A. Legal Framework
    B. Statutory Language and Structure
    C. Legislative History
IV. Public Comment
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
    K. Congressional Review Act

I. General Information

A. Does This Action Apply to Me?

    This action applies to those involved in the transfer of waters of
the United States. The following table provides a list of standard
industrial codes for operations potentially covered under this rule.

          Table 1.--Entities Potentially Regulated by This Rule
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                                                        Examples of
           Category                   NAICS         potentially affected
                                                          entities
------------------------------------------------------------------------
Resource management parties     924110             Government
 (includes state departments     Administration     establishments
 of fish and wildlife, state     of Air and Water   primarily engaged in
 departments of pesticide        Resource and       the administration,
 regulation, state               Solid Waste        regulation, and
 environmental agencies, and     Management         enforcement of water
 universities).                  Programs.          resource programs;
                                                    the administration
                                                    and regulation of
                                                    water pollution
                                                    control and
                                                    prevention programs;
                                                    the administration
                                                    and regulation of
                                                    flood control
                                                    programs; the
                                                    administration and
                                                    regulation of
                                                    drainage development
                                                    and water resource
                                                    consumption
                                                    programs; and
                                                    coordination of
                                                    these activities at
                                                    intergovernmental
                                                    levels.

                                924120             Government
                                 Administration     establishments
                                 of Conservation    primarily engaged in
                                 Programs.          the administration,
                                                    regulation,
                                                    supervision and
                                                    control of land use,
                                                    including
                                                    recreational areas;
                                                    conservation and
                                                    preservation of
                                                    natural resources;
                                                    erosion control;
                                                    geological survey
                                                    program
                                                    administration;
                                                    weather forecasting
                                                    program
                                                    administration; and
                                                    the administration
                                                    and protection of
                                                    publicly and
                                                    privately owned
                                                    forest lands.
                                                    Government
                                                    establishments
                                                    responsible for
                                                    planning,
                                                    management,
                                                    regulation and
                                                    conservation of
                                                    game, fish, and
                                                    wildlife
                                                    populations,
                                                    including wildlife
                                                    management areas and
                                                    field stations; and
                                                    other administrative
                                                    matters relating to
                                                    the protection of
                                                    fish, game, and
                                                    wildlife are
                                                    included in this
                                                    industry.
                                237110 Water and   This category
                                 Sewer Line and     includes entities
                                 Related            primarily engaged in
                                 Structures         the construction of
                                 Construction.      water and sewer
                                237990 Other        lines, mains,
                                 Heavy and Civil    pumping stations,
                                 Engineering        treatment plants and
                                 Construction.      storage tanks.
                                                   This category
                                                    includes dam
                                                    Construction and
                                                    management, flood
                                                    control structure
                                                    construction,
                                                    drainage canal and
                                                    ditch construction,
                                                    flood control
                                                    project
                                                    construction, and
                                                    spillway,
                                                    floodwater,
                                                    construction.
Public Water Supply...........  221310 Water       This category
                                 Supply.            includes entities
                                                    engaged in operating
                                                    water treatment
                                                    plants and/or
                                                    operating water
                                                    supply systems. The
                                                    water supply system
                                                    may include pumping
                                                    stations, aqueducts,
                                                    and/or distribution
                                                    mains. The water may
                                                    be used for
                                                    drinking,
                                                    irrigation, or other
                                                    uses.
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
action. This table lists the types of entities that EPA is now aware
could potentially be affected by this action. Other types of entities
not listed in the table could also be affected. To determine whether
your facility is affected by this action, you should carefully examine
the applicability criteria in 40 CFR 122.3. If you have questions
regarding the applicability of this action to a particular entity,
consult the person listed in the preceding FOR FURTHER INFORMATION
CONTACT section.

B. How Can I Get Copies of This Document and Other Related Information?

    1. Docket. EPA has established an official public docket for this
action under Docket ID No. EPA-HQ-OW-2006-0041. The official public
docket consists of the documents specifically referenced in this
action, any public comments received, and other information related to
this action. Although listed in the index, some information, such as
copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in http://www.regulations.gov or in hard copy at the Water Docket in
the EPA Docket Center, EPA West, 1301 Constitution Ave., NW.,
Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30
p.m., Monday through Friday, excluding legal holidays. The telephone
number for the Public Reading Room is<PHONE_NUMBER>, and the telephone
number for the Water Docket is<PHONE_NUMBER>.
    2. Electronic Access. You may access this Federal Register document
electronically through the EPA Web site under the Federal Register
listings at http://www.regulations.gov.

C. Under What Legal Authority Is This Final Rule Issued?

    This final rule is issued under the authority of sections 402 and
501 of the Clean Water Act., 33 U.S.C. 1342 and 1361.

D. What Is the Comment Response Document?

    EPA received a large number of comments on the proposed rule,
including thousands of form letters. EPA evaluated all of the comments
submitted and prepared a Comment Response Document containing both the
comments received and the Agency's responses to those comments. The
Comment Response Document complements and supplements this preamble by
providing more detailed explanations of EPA's final action. The Comment
Response Document is available at the Water Docket.

II. Background and Definition of Water Transfers

    Water transfers occur routinely and in many different contexts
across the United States. Typically, water transfers route water
through tunnels, channels, and/or natural stream water features, and
either pump or passively direct it for uses such as providing public
water supply, irrigation, power generation, flood control, and
environmental restoration. Water transfers can be relatively simple,
moving a small quantity of water a short distance, or very complex,
transporting substantial quantities of water over long distances,
across both State and basin boundaries. Water transfers may be of
varying complexities and sizes; there may be multiple reservoirs,
canals, or pumps over the course of the transfer, or the route may be a
more direct connection between the donor and the receiving waterbody.
There are thousands of water transfers currently in place in the United
States, including sixteen major diversion projects in the western
States alone. Examples include the Colorado-Big Thompson Project in
Colorado and the Central Valley Project in California.
    Water transfers are administered by various federal, State, and
local agencies and other entities. The Bureau of Reclamation
administers significant transfers in western States to provide
approximately 140,000 farmers with irrigation water. With the use of
water transfers, the Army Corps of Engineers keeps thousands of acres
of agricultural and urban land in southern Florida from flooding in
former areas of Everglades wetlands. Many large cities in the west and
the east would not have adequate sources of water for their citizens
were it not for the continuous redirection of water from outside
basins. For example, both the cities of New York and Los Angeles depend
on water transfers from distant watersheds to meet their

municipal demand. In short, numerous States, localities, and residents
are dependent upon water transfers, and these transfers are an integral
component of U.S. infrastructure.
    The question of whether or not an NPDES permit is required for
water transfers arises because activities that result in the movement
of waters of the U.S., such as trans-basin transfers of water to serve
municipal, agricultural, and commercial needs, typically move
pollutants from one waterbody (donor water) to another (receiving
water). Although there have been a few isolated instances where
entities responsible for water transfers have been issued NPDES
permits, Pennsylvania is the only NPDES permitting authority that
regularly issues NPDES permits for water transfers. Pennsylvania began
issuing permits for water transfers in 1986, in response to a State
court decision mandating the issuance of such permits. See DELAWARE
Unlimited v. DER, 508 A.2d 348 (Pa. Cmwlth, 1986). In addition, some
Courts of Appeals have required NPDES permits for specific water
transfers associated with the expansion of a ski resort and the supply
of drinking water. See, e.g., Dubois v. U.S. Dep't of Agriculture, 102
F.3d 1273 (1st Cir. 1996); Catskill Mountains Chapter of Trout
Unlimited, Inc. v. City of New York, 273 F.3d 481 (2nd Cir 2001),
aff'd, Catskill Mountains Chapter of Trout Unlimited, Inc. v. City of
New York, 451 F.3d 77 (2nd Cir 2006). Otherwise, however, water
transfers have not been regulated under section 402 of the Clean Water
Act (CWA or the Act).
    The Supreme Court recently addressed the issue of whether an NPDES
permit is necessary for the mere transfer of water in South Fla. Water
Mgmt. Dist. v. Miccosukee Tribe of Indians, 541 U.S. 95 (2004). The
Supreme Court in Miccosukee vacated a decision by the 11th Circuit,
which had held that a Clean Water Act permit was required for
transferring water from one navigable water into another, a Water
Conservation Area in the Florida Everglades. The Court remanded the
case for further fact-finding as to whether the two waters in question
were ``meaningfully distinct.'' \1\ If they were not, an NPDES permit
would not be required. The Court declined to resolve the question of
whether water transfers require NPDES permits when the waterbodies at
issue are meaningfully distinct. The Court noted that some legal
arguments made by the parties regarding this question had not been
raised in the lower court proceedings and noted that these arguments
would be open to the parties on remand. Id. at 109.
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    \1\ At the time of this rulemaking, the District Court has
stayed its proceedings until resolution of a similar case in the
same District Court, Friends of the Everglades v. South Florida
Water Management District.
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    On August 5, 2005, EPA issued a legal memorandum entitled ``Agency
Interpretation on Applicability of section 402 of the Clean Water Act
to Water Transfers'' (``interpretive memorandum''). The principal legal
question addressed in the interpretive memorandum was whether the
movement of pollutants from one water of the U.S. to another by a water
transfer is the ``addition'' of a pollutant potentially subjecting the
activity to the permitting requirement under section 402 of the Act.
Based on the statute as a whole and consistent with the Agency's
longstanding practice, the interpretive memorandum concluded that
Congress generally expected water transfers would be subject to
oversight by water resource management agencies and State non-NPDES
authorities, rather than the permitting program under section 402 of
the CWA.
    On June 7, 2006, EPA proposed regulations based on the analysis
contained in the interpretive memorandum to expressly state that water
transfers are not subject to regulation under section 402 of the CWA.
The Agency proposed to define water transfers as ``an activity that
conveys waters of the United States to another water of the United
States without subjecting the water to intervening industrial,
municipal, or commercial use.'' The Act reserves the ability of States
to regulate water transfers under State law and this proposed
rulemaking was not intended to interfere with this State prerogative.
See CWA section 510.
    EPA is issuing a final regulation that is nearly identical to the
proposed rule. (Minor changes have been made for clarity.) Through
today's rule, the Agency concludes that water transfers, as defined by
the rule, do not require NPDES permits because they do not result in
the ``addition'' of a pollutant. Consistent with the proposed rule, EPA
defines water transfers in the following manner: ``Water transfer means
an activity that conveys or connects waters of the United States
without subjecting the transferred water to intervening industrial,
municipal, or commercial use.'' In order to constitute a ``water
transfer'' under this rule, and, therefore, be exempt from the
requirement to obtain an NPDES permit, the water being conveyed must be
a water of the U.S.\2\ prior to being discharged to the receiving
waterbody. If the water that is being conveyed is not a water of the
U.S. prior to being discharged to the receiving body, then that
activity does not constitute a water transfer under today's rule.
Additionally, the water must be conveyed from one water of the U.S. to
another water of the U.S. Conveyances that remain within the same water
of the U.S., therefore, do not constitute water transfers under this
rule, although movements of water within a single water body are also
not subject to NPDES permitting requirements. As the rule makes clear,
in order to be a water transfer under the rule, the water must be
conveyed without being subjected to an intervening industrial,
municipal, or commercial use.
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    \2\ Waters of the U.S. are defined for purposes of the NPDES
program in 40 CFR 122.2 and this rulemaking does not seek to address
what is within the scope of that term.
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    Consider water that is being moved from Reservoir A to Reservoir B
in a different watershed. In order to get from Reservoir A to Reservoir
B, the water must first be released through a dam. The water then
travels down River A, which is considered a water of the U.S. Next, the
water is conveyed from River A to River B through a tunnel. Finally,
the water travels down River B, also a water of the U.S., and flows
into Reservoir B. There are several points in this example where water
is conveyed from one body to another, but not all of those points would
themselves constitute a ``water transfer'' because they are not the
conveyance of ``waters of the United States to another water of the
United States.'' The first example is the release from Reservoir A to
River A. This does not constitute a water transfer under EPA's
definition because the water on both sides of the dam is part of the
same water of the U.S.\3\ The next movement is the release from River A
into River B, through a tunnel. This release constitutes a water
transfer under the scope of this rule because it conveys water from one
water of the U.S. to another water of the U.S. without subjecting the
water to an intervening industrial, municipal or

commercial use. Therefore, unless this conveyance itself introduces
pollutants into the water being conveyed, the release will not require
an NPDES permit under today's rule. River B's subsequent flow into
Reservoir B, which is formed by a dam on Reservoir B, does not
constitute a water transfer because it is merely movement within the
same water of the U.S., and, as discussed above, would not require an
NPDES permit for such movement.
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    \3\ It should be noted, however, that this release would still
not require an NPDES permit because EPA and the Federal courts have
determined that a discharge from a dam does not result in an
``addition'' of a pollutant unless the dam itself discharges a
pollutant such as grease into the water passing through the dam. See
National Wildlife Fed'n v. Gorsuch, 693 F.2d 156 (D.C. Cir. 1982);
National Wildlife Fed'n v. Consumers Power Company, 862 F.2d 580
(6th Cir. 1988). Cf. S.D. Warren Co. v. Maine Board of Environmental
Protection, 126 S.Ct. 1843 (2006) (Certification under CWA section
401 may be needed in some instances).
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    The remainder of the preamble to this final rule is organized as
follows. Section III discusses the rationale for the final rule based
on the language, structure, and legislative history of the Clean Water
Act. Section IV summarizes and responds to the major comments received
in response to the scope of the proposed rule. Section V reviews
statutory provisions and various executive orders.

III. Rationale for the Final Rule

    On June 7, 2006, EPA published a proposed rule that would exclude
from NPDES permit requirements discharges from water transfers that do
not subject the water to an intervening industrial, municipal, or
commercial use, so long as pollutants are not introduced by the water
transfer activity itself. This proposal, like EPA's August 5, 2005,
interpretive memorandum, explained that no one provision of the Act
expressly addresses whether water transfers are subject to the NPDES
program but described the indicia of Congressional intent that water
transfers not be so regulated. Therefore, today's rule appropriately
defers to congressional concerns that the statute not unnecessarily
burden water quantity management activities and excludes water
transfers from the NPDES program. This section will review the legal
framework for evaluating EPA's interpretation of the CWA, explain the
Agency's interpretation of the CWA, including a brief survey of prior
litigation over the relevant statutory terms, and outline the relevant
legislative history.

A. Legal Framework

    Under what is traditionally viewed as Chevron analysis, a court
examining the legality of an agency's interpretation of a statute is to
first ask whether the statute speaks clearly to the precise question at
issue and must give effect to the unambiguously expressed intent of
Congress if such unambiguous intent can be discerned. Chevron U.S.A.
Inc. v. NRDC, 467 U.S. 837, 842-843 (Chevron); National Ass. of
Homebuilders, et al. v. Defenders of Wildlife, et al., 127 S.Ct. 2518,
2534 (2007) (NAHB). To the extent that a statute does not speak clearly
to the specific issue, the Agency interpretation must be upheld if it
is based on a permissible construction of the statute. Chevron, 467
U.S. at 843; NAHB, 127 S.Ct. at 2534. Courts are required to accept an
agency's reasonable interpretation of a statute, even if this
interpretation differs from what the court believes is the ``best''
statutory interpretation. National Cable and Telecommunications Ass'n,
et. al. v. Brand X, et al., 545 U.S. 967, 980 (2005) (Brand X).
    Deference to an agency interpretation of a statute under Chevron is
appropriate where Congress has authorized an agency to make rules
carrying the force of law, and such authorization is apparent where the
agency is empowered to make rules or adjudicate issues or there are
other indications of comparable congressional intent. United States v.
Mead Corp., 533 U.S. 218 (2001). Congress has expressly authorized EPA
to prescribe regulations as are necessary to administer the CWA, and
today's rule has been promulgated to address the question whether water
transfers require NPDES permits. CWA section 501(a); 33 U.S.C. 1361(a);
71 FR 32887 (June 7, 2006).
    As discussed below, EPA has reviewed the language, structure and
legislative history of the CWA and concludes that today's rule, which
clarifies that NPDES permits are not required for transfers of waters
of the United States from one water body to another, is a permissible
construction of the statute. Taken as a whole, the statutory language
and scheme support the conclusion that permits are not required for
water transfers.

B. Statutory Language and Structure

    The Clean Water Act prohibits the discharge of a pollutant by any
person except in compliance with specified statutory sections,
including section 402. CWA section 301(a). The term ``discharge of a
pollutant'' is defined as ``any addition of any pollutant to navigable
waters from any point source.'' CWA section 502(12). The legal question
addressed by today's rule is whether a water transfer as defined in the
new regulation constitutes an ``addition'' within the meaning of
section 502(12).
    The term ``addition'' has been interpreted by courts in a variety
of contexts that are relevant here. Several courts of appeals have
determined that water flowing through dams and hydroelectric facilities
does not constitute an addition of a pollutant under the CWA.
Specifically, the Court of Appeals for the D.C. Circuit agreed with EPA
that the term ``addition'' may reasonably be limited to situations in
which ``the point source itself physically introduces a pollutant into
a water from the outside world.'' National Wildlife Fed'n v. Gorsuch,
693 F.2d 156, 175 (D.C. Cir. 1982) (Gorsuch) (accepting EPA's view that
the requirement for an NPDES permit ``is established when the pollutant
first enters the navigable water, and does not change when the polluted
water later passes through the dam from one body of navigable water
(the reservoir) to another (the downstream river).'') The Court of
Appeals for the Sixth Circuit reached the same conclusion with regard
to a hydropower facilities operating on Lake Michigan. National
Wildlife Fed'n v. Consumers Power Co. 862 F.2d 580, 584 (6th Cir. 1988)
(Consumers Power) (agreeing with the Gorsuch Court's conclusion that
EPA's construction of ``addition'' is a permissible one). Both the
Gorsuch and Consumers Power courts accorded deference to EPA's
interpretation of the CWA, and specifically to its interpretation of
the term ``addition.'' Gorsuch, 693 F.2d at 166-167; Consumers Power,
862 F.2d at 584.
    Three other Courts of Appeals, however, have concluded that where a
water transfer involves distinct waters of the United States, the
transfer constitutes an ``addition'' of pollutants. Dubois v. U.S.
Dept. of Agriculture, et al., 102 F.3d 1273, 1298-1300 (1st Cir. 1996);
Catskill Mountains Chapter of Trout Unlimited, Inc. v. City of New
York, 273 F.3d 481, 491-93 (2nd Cir. 2001) (Catskill I); Miccosukee
Tribe of Indians v. South Florida Water Management District, 280 F.3d
1364 (11th Cir. 2002), vacated by Miccosukee, 541 U.S. at 112.\4\ These
three Courts of Appeals construed the term ``addition''

so as to include transfers of water from one body to another distinct
body (Catskill I, 273 F.3d at 491 (``EPA's position * * * is that for
there to be an `addition,' a `point source must introduce the pollutant
into navigable water from the outside world.' We agree with this view
provided that `outside world' is construed as any place outside the
particular water body to which pollutants are introduced.'') (internal
citations omitted, emphasis added); Catskill II, 451 F.3d at 82-85) or
transfers that cause water to move in a direction it would not
ordinarily flow (DuBois, 102 F.3d at 1297; Catskill I, 273 at 493-94
(explaining DuBois); Miccosukee, 280 F.3d at 1368-69).
---------------------------------------------------------------------------

    \4\ EPA recognizes that the approach adopted by these three
courts is at odds with today's rule. None of these three courts,
however, viewed the question of statutory interpretation through the
lens of Chevron deference. DuBois, 102 F.3d at 1285, n. 15 (Chevron
does not apply because the court ``was not reviewing an agency's
interpretation of the statute that it was directed to enforce.'');
Catskill Mountains Chapter of Trout Unlimited, Inc. v. City of New
York, 451 F.3d 77, 82 (2nd Cir. 2006) (Catskill II) (``The City
concedes that this EPA interpretation is not entitled to Chevron
deference.''); Catskill I, 273 F.3d at 490 (Declining to apply
Chevron deference, but acknowledging that ``[i]f the EPA's position
had been adopted in a rulemaking or other formal proceeding,
deference of the sort applied by the Gorsuch and Consumers Power
courts might be appropriate.''); Miccosukee, 280 F.3d at 1367, n. 4
(``The EPA is no party to this case; we can ascertain no EPA
position applicable to [the water transfer at issue) to which to
give any deference, much less Chevron deference.''). Moreover, the
approaches adopted by the Gorsuch and Consumers Power courts is
compatible with today's rule.
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    In pending litigation, on the other hand, the United States has
taken the position that the Clean Water Act generally does not subject
water transfers to the NPDES program:

    The statute defines ```discharge of a pollutant''' as ``any
addition of any pollutant to navigable waters from any point
source.'' 33 U.S.C. 1362(12). When the statutory definition of
```navigable waters'''--i.e., ``the waters of the United States,''
33 U.S.C. 1362(7)--is inserted in place of ``navigable waters,'' the
statute provides that NPDES applies only to the ``addition of any
pollutant to the waters of the United States.'' Given the broad
definition of ``pollutant,'' transferred (and receiving) water will
always contain intrinsic pollutants, but the pollutants in
transferred water are already in ``the waters of the United States''
before, during, and after the water transfer. Thus, there is no
``addition''; nothing is being added ``to'' ``the waters of the
United States'' by virtue of the water transfer, because the
pollutant at issue is already part of ``the waters of the United
States'' to begin with. Stated differently, when a pollutant is
conveyed along with, and already subsumed entirely within, navigable
waters and the water is not diverted for an intervening use, the
water never loses its status as ``waters of the United States,'' and
thus nothing is added to those waters from the outside world.

    Brief for the United States in Friends of the Everglades v. South
Florida Water Management Dist., No. 07-13829-H (11th Cir.).
    The Agency has concluded that, taken as a whole, the statutory
language and structure of the Clean Water Act indicate that Congress
generally did not intend to subject water transfers to the NPDES
program. Interpreting the term ``addition'' in that context, EPA
concludes that water transfers, as defined by today's rule, do not
constitute an ``addition'' to navigable waters to be regulated under
the NPDES program. Instead, Congress intended to leave primary
oversight of water transfers to state authorities in cooperation with
Federal authorities.
    In interpreting the term ``addition'' in section 502(12) of the
statute, EPA is guided by several principles. ``Addition'' is a general
term, undefined by the statute. Partly for this reason, the courts have
accorded substantial discretion to EPA in interpreting the term in the
context of the ``dams'' cases. Gorsuch, 693 F.2d at 175 (finding the
statute capable of supporting multiple interpretations, the legislative
history unhelpful, and concluding that Congress would have given EPA
discretion to define ``addition'' had it expected the meaning of the
term to be disputed); Consumers Power, 862 F.2d at 584-85 (agreeing
with the analysis in Gorsuch). Moreover, several alternative ways of
interpreting the term ``addition'' have been proposed in the context of
water transfers. As noted above, EPA's longstanding position is that an
NPDES pollutant is ``added'' when it is introduced into a water from
the ``outside world'' by a point source. Gorsuch, 693 F.2d at 174-175.
Under one interpretation, advanced by the 2nd Circuit in Catskill
Mountain, ``the outside world'' means anywhere outside the particular
waterbody receiving the pollutant, and so a permit in that case was
required for movement of pollutants between distinct waterbodies.
Catskill I, 273 F.3d at 491. EPA does not agree with this understanding
of the term ``outside world'' as evinced by its long-standing practice
of generally not requiring NPDES permits for transfers between water
bodies, which it has defended against court challenges asserting that
such transfers do require such permits. Rather, EPA believes that an
addition of a pollutant under the Act occurs when pollutants are
introduced from outside the waters being transferred.
    As noted above, various courts have reached different conclusions
in determining when movement of waters of the United States containing
pollutants constitutes an ``addition'' of a pollutant. To resolve the
confusion created by these conflicting approaches, the Agency has
looked to the statute as a whole for textual and structural indices of
Congressional intent on the question whether water transfers that do
not themselves introduce new pollutants require an NPDES permit.
    Statutory construction principles instruct that the Clean Water Act
should be interpreted by analyzing the statute as a whole. United
States v. Boisdore's Heirs, 49 U.S. 113, 122 (1850). The Supreme Court
has long explained ``in expounding a statute, we must not be guided by
a single sentence or member of a sentence, but look to the provisions
of the whole law, and its object and policy.'' Id. See also, Gustafond
v. Alloyd Co., Inc., 513 U.S. 561, 570 (1995), Smith v. United States,
508 U.S. 223, 233 (1993), United States Nat'l Bank of Or. v.
Independent Ins. Agents of Am., Inc., 508 U.S. 439, 455 (1993). In
general, the ``whole statute'' interpretation analysis means that ``a
statute is passed as a whole and not in parts or sections and is
animated by one general purpose and intent. Consequently, each part or
section should be construed in connection with every other part or
section so as to produce a harmonious whole.'' Norman J. Singer,
Statutes and Statutory Construction vol. 2A Sec.  46:05, 154 (6th ed.,
West Group 2000). As the Second Circuit has explained with regard to
the CWA:

    Although the canons of statutory interpretation provide a court
with numerous avenues for supplementing and narrowing the possible
meaning of ambiguous text, most helpful to our interpretation of the
CWA in this case are two rules. First, when determining which
reasonable meaning should prevail, the text should be placed in the
context of the entire statutory structure [quoting United States v.
Dauray, 215 F.3d 257, 262 (2d Cir. 2000)]. Second, ``absurd results
are to be avoided and internal inconsistencies in the statute must
be dealt with.'' United States v. Turkette, 452 U.S. 576, 580
(1981).

Natural Res. Def. Council v. Muszynski, 268 F.3d 91, 98 (2d Cir. 2001).
See also, Singer, vol. 3B Sec.  77:4, at 256-258.
    A holistic approach to the text of the CWA is needed here in
particular because the heart of this matter is the balance Congress
created between federal and State oversight of activities affecting the
nation's waters. The purpose of the CWA is to protect water quality.
Congress nonetheless recognized that programs already existed at the
State and local levels for managing water quantity, and it recognized
the delicate relationship between the CWA and State and local programs.
Looking at the statute as a whole is necessary to ensure that the
analysis herein is consonant with Congress's overall policies and
objectives in the management and regulation of the nation's water
resources.
    While the statute does not define ``addition,'' sections 101(g),
102(b), 304(f), and 510(2) provide a strong indication that the term
``addition'' should be interpreted in accordance with the text of the
more specific sections of the statute. In light of Congress' clearly
expressed policy not to unnecessarily interfere with water resource
allocation and its discussion of changes in the movement, flow or

circulation of any navigable waters as sources of pollutants that would
not be subject to regulation under section 402, it is reasonable to
interpret ``addition'' as not including the mere transfer of navigable
waters.
    The specific statutory provisions addressing the management of
water resources--coupled with the overall statutory structure--provide
textual support for the conclusion that Congress generally did not
intend for water transfers to be regulated under section 402. The Act
establishes a variety of programs and regulatory initiatives in
addition to the NPDES permitting program. It also recognizes that the
States have primary responsibilities with respect to the ``development
and use (including restoration, preservation, and enhancement) of land
and water resources.'' CWA section 101(b).
    Congress also made clear that the Clean Water Act is to be
construed in a manner that does not unduly interfere with the ability
of States to allocate water within their boundaries, stating:

    It is the policy of Congress that the authority of each State to
allocate quantities of water within its jurisdiction shall not be
superseded, abrogated or otherwise impaired by [the Act]. It is the
further policy of Congress that nothing in this chapter shall be
construed to supersede or abrogate rights to quantities of water
which have been established by any State. Federal agencies shall co-
operate with State and local agencies to develop comprehensive
solutions to prevent, reduce and eliminate pollution in concert with
programs for managing water sources.

CWA section 101(g). While section 101(g) does not prohibit EPA from
taking actions under the CWA that it determines are needed to protect
water quality,\5\ it nonetheless establishes in the text of the Act
Congress's general direction against unnecessary Federal interference
with State allocations of water rights.
---------------------------------------------------------------------------

    \5\ PUD No. 1 of Jefferson County. v. Wash. State Dep't. of
Ecology, 511 U.S. 700, 720 (1994) (``Sections 101(g) and 510(2)
preserve the authority of each State to allocate water quantity as
between users; they do not limit the scope of water pollution
controls that may be imposed on users who have obtained, pursuant to
state law, a water allocation.'').
---------------------------------------------------------------------------

    Water transfers are an essential component of the nation's
infrastructure for delivering water that users are entitled to receive
under State law. Because subjecting water transfers to a federal
permitting scheme could unnecessarily interfere with State decisions on
allocations of water rights, this section provides additional support
for the Agency's interpretation that, absent a clear Congressional
intent to the contrary, it is reasonable to read the statute as not
requiring NPDES permits for water transfers. See United States v. Bass,
404 U.S. 336, 349 (1971) (``unless Congress conveys its purpose
clearly, it will not be deemed to have significantly changed the
federal-state balance.'')
    An additional statutory provision, section 510(2), similarly
provides:

    Except as expressly provided in this Act, nothing in this Act
shall * * * be construed as impairing or in any manner affecting any
right or jurisdiction of the States with respect to the waters
(including boundary waters) of such States.

Like section 101(g), this provision supports the notion that Congress
did not intend administration of the CWA to unduly interfere with water
resource allocation.
    Finally, one section of the Act--304(f)--expressly addresses water
management activities. Mere mention of an activity in section 304(f)
does not mean it is exclusively nonpoint source in nature. See
Miccosukee 541 U.S. at 106 (noting that section 304(f)(2)(F) does not
explicitly exempt nonpoint sources if they also fall within the
definition of point source). Nonetheless, section 304(f) is focused
primarily on addressing pollution sources outside the scope of the
NPDES program. See H.R. Rep. No. 92-911, at 109 (1972), reprinted in
Legislative History of the Water Pollution Control Act Amendments of
1972, Vol. 1 at 796 (Comm. Print 1973) (``[t]his section * * * on * * *
nonpoint sources is among the most important in the 1972 Amendments'')
(emphasis added)). This section directed EPA to issue guidelines for
identifying and evaluating the nature and extent of nonpoint sources of
pollution,\6\ as well as processes, procedures and methods to control
pollution from, among other things, ``changes in the movement, flow or
circulation of any navigable waters or ground waters, including changes
caused by the construction of dams, levees, channels, causeways, or
flow diversion facilities.'' CWA 304(f)(2)(F) (emphasis added).
---------------------------------------------------------------------------

    \6\ Sources not regulated under sections 402 or 404 are
generically referred to as ``nonpoint sources.'' See Consumers
Power, 862 F.2d at 582 (```nonpoint source' is shorthand for and
`includes all water quality problems not subject to section 402''')
(quoting Gorsuch, 693 F.2d at,166) (internal quotation marks
omitted).
---------------------------------------------------------------------------

    While section 304(f) does not exclusively address nonpoint sources
of pollution, it nonetheless ``concerns nonpoint sources'' (Miccosukee,
541 U.S. at 106) and reflects an understanding by Congress that water
movement could result in pollution, and that such pollution would be
managed by States under their nonpoint source program authorities,
rather than the NPDES program. Today's rule accords with the direction
to EPA and other federal agencies in section 101(g) to work with State
and local agencies to develop ``comprehensive solutions'' to water
pollution problems ``in concert with programs for managing water
resources.''
    The text of these sections of the Act together demonstrate that
Congress was aware that there might be pollution associated with water
management activities, but chose to defer to comprehensive solutions
developed by State and local agencies for controlling such pollution.
Because the NPDES program focuses on discharges from point sources of
pollutants, it is not the kind of comprehensive program that Congress
believed was best suited to addressing pollution, which is the term
used for the nonpoint source program. It is this type of non-point
source pollution that may be associated with water transfers.
    In several important ways, water transfers are unlike the types of
discharges that were the primary focus of Congressional attention in
1972. Discharges of pollutants covered by section 402 are subject to
``effluent'' limitations. Water transfers, however, are not like
effluent from an industrial, commercial or municipal operation. Rather
than discharge effluent, water transfers convey one water of the U.S.
into another. Additionally, the operators of water control facilities
are generally not responsible for the presence of pollutants in the
waters they transport. Rather, those pollutants often enter ``the
waters of the United States'' through point and nonpoint sources
unassociated with those facilities and beyond control of the project
operators. Congress generally intended that pollutants be controlled at
the source whenever possible. See S. Rep. No. 92-414, p. 77 (1972)
(justifying the broad definition of navigable waters because it is
``essential that discharge of pollutants be controlled at the
source'').\7\ The pollution from transferred waters is more sensibly
addressed through water resource planning and land use regulations,
which attack the problem at its source. See, e.g., CWA section 102(b)
(reservoir planning); CWA section 208(b)(2)(F) (land use planning to

reduce agricultural nonpoint sources of pollution); CWA section 319
(nonpoint source management programs); and CWA section 401 (state
certification of federally licensed projects). Congress acknowledged
this when it directed Federal agencies to co-operate with State and
local agencies to develop comprehensive solutions to prevent, reduce,
and eliminate pollution in concert with programs for managing water
sources.
---------------------------------------------------------------------------

    \7\ Recognition of a general intent to control pollutants at the
source does not mean that dischargers are responsible only for
pollutants that they generate; rather, point sources need only
convey pollutants into navigable waters to be subject to the Act.
See Miccosukee at 105. Municipal separate storm sewer systems, for
example, are clearly subject to regulation under the Act. CWA
section 402(p).
---------------------------------------------------------------------------

    The Agency, therefore, concludes that, taken as a whole, the
statutory language and structure of the Clean Water Act indicate that
Congress generally did not intend to subject water transfers to the
NPDES program. Interpreting the term ``addition'' in that context, EPA
concludes that water transfers, as defined by today's rule, do not
constitute an ``addition'' to navigable waters to be regulated under
the NPDES program. Rather, Congress intended to leave primary oversight
of water transfers to state authorities in cooperation with Federal
authorities.

C. Legislative History

    The legislative history of the Clean Water Act also supports the
conclusion that Congress generally did not intend to subject water
transfers to the NPDES program. First, the legislative history of
section 101(g) reveals that ``[i]t is the purpose of this [provision]
to insure that State [water] allocation systems are not subverted.'' 3
Congressional Research Serv., U.S. Library of Congress, Serial No. 95-
14, A Legislative History of the Clean Water Act of 1977, at 532
(1978); see PUD No. 1 of Jefferson County v. Washington Dep't of
Ecology, 511 U.S. 700, 721 (1994).
    Notably, the legislative history of the Act discusses water flow
management activities in the context of the nonpoint source program
only. In discussing section 304(f), the House Committee Report
specifically mentioned water flow management as an area where EPA would
provide technical guidance to States for their nonpoint source
programs, rather than an area to be regulated under section 402.

    This section and the information on such nonpoint sources is
among the most important in the 1972 Amendments. * * * The
Committee, therefore, expects the Administrator to be most diligent
in gathering and distribution of the guidelines for the
identification of nonpoint sources and the information on processes,
procedures, and methods for control of pollution from such nonpoint
sources as * * * natural and manmade changes in the normal flow of
surface and ground waters.

H.R. Rep. No. 92-911, at 109 (1972) (emphasis added).

    In the legislative history of section 208 of the Act, the House
Committee report noted that in some States, water resource management
agencies allocating stream flows are required to consider water quality
impacts. The Report stated:

    [I]n some States water resource development agencies are
responsible for allocation of stream flow and are required to give
full consideration to the effects on water quality. To avoid
duplication, the Committee believes that a State which has an
approved program for the handling of permits under section 402, and
which has a program for water resource allocation should continue to
exercise the primary responsibility in both of these areas and thus
provide a balanced management control system.

H.R. Rep. No. 92-911, at 96 (1972).

    Thus, Congress recognized that the new section 402 permitting
program was not the only viable approach for addressing water quality
issues associated with State water resource management. The legislative
history makes clear that Congress generally did not intend a wholesale
transfer of responsibility for water quality away from water resource
agencies to the NPDES authority. Rather, Congress encouraged States to
obtain approval of authority to administer the NPDES program under
section 402(b) so that the NPDES program could work in concert with
water resource agencies' oversight of water management activities to
ensure a ``balanced management control system.'' Id.
    In sum, the language, structure, and legislative history of the
statute all support the conclusion that Congress generally did not
intend to subject water transfers to the NPDES program. Water transfers
are an integral part of water resource management; they embody how
States and resource agencies manage the nation's water resources and
balance competing needs for water. Water transfers also physically
implement State regimes for allocating water rights, many of which
existed long before enactment of the Clean Water Act. Congress was
aware of those regimes, and did not want to impair the ability of these
agencies to carry them out. EPA's conclusion that the NPDES program
does not apply to water transfers respects Congressional intent,
comports with the structure of the Clean Water Act, and gives meaning
to sections 101(g) and 304(f) of the Act.
    Based on these reasons, today's rule is within EPA's authority and
consistent with the CWA.

IV. Public Comment

    EPA received many comments from the public and a number of states
stating that the Agency does not have authority to exclude from the
requirement to obtain NPDES permits, a specific class of dischargers
(in this case, water transfers). These commenters were concerned that
the proposed rule could jeopardize the NPDES and water quality
standards (WQS) programs. In particular, they feared that point source
regulation of discharges from impoundments used to settle mining wastes
might fall outside the scope of section 402 if the proposed rule were
finalized. In response to these comments, the Agency believes that
impoundments used to settle mining process water or waste water would
generally constitute ``waste treatment systems'' designed to meet the
requirements of the CWA and would be excluded from the definition of
``waters of the United States.'' See 40 CFR 122.2 (definition of
``Waters of the United States''). The addition of pollutants from a
waste treatment system to a water of the United States triggers the
permitting requirement, and today's rule therefore does not affect the
permitting of such facilities.
    Some commenters argued that the proposed rule is inconsistent with
section 404 of the CWA (permits for dredged or fill material). They
stated that dredged material is listed as a pollutant under section 502
of the CWA and that the proposed rule implies that dredged material
never requires a permit unless the dredged material originates from a
waterbody that is not a water of the U.S. EPA believes that today's
final rule will not have an effect on the 404 program. The statutory
definition of ``pollutant'' includes ``dredged spoil,'' which by its
very nature comes from a waterbody. 33 U.S.C. 1362(6); 40 CFR 232.2;
United States v. Hubenka, 438 F.3d 1026, 1035 (10th Cir. 2006); United
States v. Deaton, 209 F.3d 331, 335-336 (4th Cir. 2000); Borden Ranch
Partnership v. United States, 261 F.3d 810, 814 (9th Cir. 2001).
Because Congress explicitly forbade discharges of dredged material
except as in compliance with the provisions cited in CWA section 301,
today's rule has no effect on the 404 permit program, under which
discharges of dredged or fill material may be authorized by a permit.
33 U.S.C. 1344.
    As explained above, EPA disagrees that Congress generally intended
water transfers to obtain NPDES permits. EPA believes that this action
will add clarity to an area in which judicial decisions have created
uncertainty, and for reasons previously described in section III of
this preamble, concludes that Congress generally intended to leave the

oversight of water transfers to authorities other than the NPDES
program. Congress made clear that the CWA is to be construed in a
manner that does not unduly interfere with the ability of States to
allocate water within their boundaries. Specific statutory provisions
in the CWA addressing the management of water resources denote that
Congress generally did not intend for water transfers to be regulated
under section 402 of the CWA. Rather, sections 101(b), 208, and 304(f),
in particular, establish a variety of programs and regulatory
initiatives that more appropriately address water transfers. EPA's
conclusion that the NPDES program does not apply to water transfers
respects Congressional intent and comports with the structure of the
CWA.

Definition of a Water Transfer

    In the proposed rule, EPA specifically requested comment on whether
the proposed definition of a water transfer properly achieves the
Agency's objective. Many commenters supported the Agency's proposed
definition, either generally or explicitly. On the other hand, some
commenters found the proposed definition too narrow and suggested that
the Agency defer to state law. Others found the definition overly broad
and suggested that it may encompass too many activities. These
concerns, among others, are addressed in the following discussions.
    In response to the comment suggesting that the proposed definition
of a water transfer is too narrow and should also include transfers
between waterbodies defined as waters of the State, even where they do
not constitute waters of the United States under the CWA, EPA believes
that making such a change would not be appropriate because the NPDES
program only applies to waters of the U.S. The same commenter also
suggested that EPA defer to state law in defining a water transfer. In
response, the Agency finds that a definition applicable nationwide is
important to provide consistency in the application of this rule.
However, nothing in this rule precludes a State, under State law, from
regulating water transfers that are not subject to section 402 of the
Clean Water Act. States may not exclude from NPDES permit requirements
sources that are point sources under Federal law, including those that
do not meet the definition of a water transfer in today's rule. For
example, a point source that subjects waters of the United States to an
intervening industrial, municipal or commercial use could not be
exempted from NPDES permitting requirements under State law.
    This rule expressly states that ``discharges from a water
transfer'' are not subject to NPDES permitting. The Agency defines a
water transfer as ``an activity that conveys or connects waters of the
United States without subjecting the transferred water to intervening
industrial, municipal, or commercial use.'' A water transfer is an
engineered activity that diverts a water of the U.S. to a second water
of the U.S. Thus, commenters who read the natural convergence of two
rivers as being a water transfer are incorrect, though such natural
convergences also do not require NPDES permits.
    Some commenters sought clarification of certain elements of the
term ``water transfer'' while others suggested changes they believed
would either clarify or improve the scope of the term. Commenters
suggested that EPA change the use of the term ``activity'' to either
``occasion,'' ``instance,'' or ``occurrence,'' such that the definition
would read: ``water transfer means an instance in which waters of the
U.S. are conveyed * * *.'' The commenters' concern is that the term
``activities'' narrows the rule to only human directed or controlled
events rather than any instance in which water supplies are moved. The
Agency disagrees that the change is necessary. By ``activity,'' the
Agency means any system of pumping stations, canals, aqueducts,
tunnels, pipes, or other such conveyances constructed to transport
water from one water of the U.S. to another water of the U.S. Such a
system may consist of a single tunnel or pumping station or it may
require the use of multiple facilities along the course of the transfer
to reach the second water of the U.S.

Intervening Industrial, Municipal, or Commercial Use

    A discharge of a pollutant associated with a water transfer
resulting from an intervening commercial, municipal, or industrial use,
or otherwise introduced to the water by a water transfer facility
itself would require an NPDES permit as any discharge of a pollutant
from a point source into a water of the U.S. would. The most frequent
comment on the proposed definition was that the phrase ``intervening
industrial, municipal, or commercial use'' was unclear or overbroad.\8\
EPA disagrees that this phrase is unclear or overbroad, and provides
clarification and examples of intervening uses below.
---------------------------------------------------------------------------

    \8\ EPA's discussion of intervening uses is not intended to
address or exclude any other activity that is currently subject to
NPDES permitting. For example, this rule does not affect EPA's
longstanding position that, if water is withdrawn from waters of the
U.S. for an intervening industrial, municipal or commercial use, the
reintroduction of the intake water and associated pollutants is an
``addition'' subject to NPDES permitting requirements. Nor does this
rule change EPA's position, upheld by the Supreme Court in
Miccosukee, that the definition of ``discharge of a pollutant'' in
the CWA includes coverage of point sources that do not themselves
generate pollutants. The Supreme Court stated, ``A point source is,
by definition, a `discernible, confined, and discrete conveyance'
section 1362(14) (emphasis added). That definition makes plain that
a point source need not be the original source of the pollutant; it
need only convey the pollutant to `navigable waters,' which are, in
turn, defined as `the waters of the United States.' Section
1362(7).'' Miccosukee, 541 U.S. at 105.
---------------------------------------------------------------------------

    For example, if the water is withdrawn to be used as cooling water,
drinking water, irrigation, or any other use such that it is no longer
a water of the U.S. before being returned to a water of the U.S., the
water has been subjected to an intervening use.\9\ In contrast, a water
pumping station, pipe, canal, or other structure used solely to
facilitate the transfer of the water is not an intervening use.
---------------------------------------------------------------------------

    \9\ Note that return flows from irrigated agriculture are exempt
from the requirement to obtain a NPDES permit under both the Act
itself and 40 CFR 122.3. Today's rule does not affect that
exemption.
---------------------------------------------------------------------------

    The reintroduction of the intake water and associated pollutants
from an intervening use through a point source is an ``addition'' and
has long been subject to NPDES permitting requirements. See, e.g., 40
CFR 122.2 (definition of process wastewater); 40 CFR 125.80 through
125.89 (regulation of cooling towers); 40 CFR 122.45(g) (regulations
governing intake pollutants for technology-based permitting); 40 CFR
Part 132, Appendix F, Procedure 5-D (containing regulations governing
water quality-based permitting for intake pollutants in the Great
Lakes). Moreover, a discharge from a waste treatment system, for
example, to a water of the United States, would not constitute a water
transfer and would require an NPDES permit. See 40 CFR 122.2. In these
situations, the reintroduction of water and that water's associated
pollutants physically introduces pollutants from the outside world and,
therefore, is an ``addition'' subject to NPDES permitting requirements.
The fact that some of the pollutants in the discharge from an
intervening use may have been present in the source water does not
remove the need for a permit, although, under some circumstances,
permittees may receive ``credit'' in their effluent limitations for
such pollutants. See 40 CFR 122.45(g) (regulations governing intake
pollutants for technology-based permitting); 40 CFR Part 132, Appendix
F, Procedure 5-

D (containing regulations governing water quality-based permitting for
intake pollutants in the Great Lakes).
    Similarly, an NPDES permit is normally required if a facility
withdraws water from a water of the U.S., removes preexisting
pollutants to purify the water, and then discharges the removed
pollutants (perhaps in concentrated form) back into the water of the
U.S. while retaining the purified water for use in the facility. An
example of this situation is a drinking water treatment facility which
withdraws water from streams, rivers, and lakes. The withdrawn water
typically contains suspended solids, which are removed to make the
water potable. The removed solids are a waste material from the
treatment process and, if discharged into waters of the U.S., are
subject to NPDES permitting requirements, even though that waste
material originated in the withdrawn water. See, e.g., In re City of
Phoenix, Arizona Squaw Peak & Deer Valley Water Treatment Plants, 9
E.A.D. 515, 2000 WL 1664964 (EPA Envtl. App. Bd. Nov. 1, 2000)
(rejecting, on procedural grounds, challenges to NPDES permits for two
drinking water treatment plants that draw raw water from the Arizona
Canal, remove suspended solids to purify the water, and discharge the
solids back into the Canal); Final NPDES General Permits for Water
Treatment Facility Discharges in the State of Massachusetts and New
Hampshire, 65 FR 69,000 (2000) (NPDES permits for discharges of process
wastewaters from drinking water treatment plants).
    The Clean Water Act also clearly imposes permitting requirements on
publicly owned treatment works, and large and medium municipal separate
storm sewer systems. See CWA sections 402(a), 402(p)(1)-(4). Congress
amended the Clean Water Act in 1987 specifically to add new section
402(p) to better regulate stormwater discharges from point sources.
Water Quality Act of 1987, Public Law 100-4, 101 Stat. 7 (1987). Again,
this interpretation regarding water transfers does not affect EPA's
longstanding regulation of such discharges. These examples are
mentioned to illustrate what is meant by ``intervening industrial,
municipal, or commercial use,'' and are situations not associated with
water transfers.

Hydroelectric Operations

    Some commenters, including State agencies with hydroelectric
resources, utilities, and water districts expressed concern that if
hydroelectric operations incidental to a water transfer were considered
an intervening use, the water transfer would be disqualified from the
exemption. Utilities often take advantage of the change in elevation
over the course of a water transfer by installing hydroelectric
facilities. The California State Water Resources Control Board
highlighted in their comment that the Central Valley Project includes
eleven power plants and that the State Water Project, the Los Angeles
Aqueduct, and the All American Canal also contain hydroelectric power
plants.
    Today's rule does not affect the longstanding position of EPA and
the Courts that hydroelectric dams do not generally require NPDES
permits. See Gorsuch, 693 F.2d 156; Consumers Power 862 F.2d 580. EPA
agrees that the transfers described in California are excluded from
NPDES permitting requirements unless, as discussed below, the
hydroelectric facility itself introduces a pollutant such as grease
into the water passing though the dam.

When Water Transfers Introduce Pollutants

    Comments were also submitted regarding pollutants that were added
by the water transfer. Commenters expressed concern that water
transfers may have significant impacts on the environment, including
(1) the introduction of invasive species, toxic blue-green algae,
chemical pollutants, and excess nutrients; (2) increased turbidity; and
(3) alteration of habitat (e.g., warm water into cold water or salt
water into fresh water). In response to these comments, EPA notes that
today's rule does not interfere with any of the states' rights or
authorities to regulate the movement of waters within their borders.
Rather, this rule merely clarifies that NPDES permits are not required
for water transfers. States currently have the ability to address
potential in-stream and/or downstream effects of water transfers
through their WQS and TMDL programs. Nothing in today's rule affects
the ability for states to establish WQS appropriate to individual
waterbodies or waterbody segments.
    The final rule, consistent with the proposed rule, would require
NPDES permits for ``pollutants introduced by the water transfer
activity itself to the water being transferred.'' Water transfers
should be able to be operated and maintained in a manner that ensures
they do not themselves add pollutants to the water being transferred.
However, where water transfers introduce pollutants to water passing
through the structure into the receiving water, NPDES permits are
required. Consumers Power, 862 F.2d at 588; Gorsuch, 693 F.2d at 165,
n. 22.
    In those instances where a water transfer facility does itself
introduce pollutants into the water being transferred, the scope of the
required NPDES permit would only be for those added pollutants. Such a
permit would not require the water transfer facility to address
pollutants that may have been in the donor waterbody and are being
transferred.\10\ Furthermore, EPA expects these additions will probably
be rare. EPA considers the likelihood of such additions to be similar
to the frequency of additions of leaks of oil from the turbines at
hydroelectric dams. In a review of the NPDES permits issued to dams,
EPA was able to identify only a minimal number of permits issued to
address this concern.
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    \10\ Because water transfers simply change the flow, direction
or circulation of navigable waters, they would not themselves cause
the waters being moved to lose their status as waters of the United
States. See Consumers Power, 862 F.2d at 589. Hence, pollutants
moved from the donor water into the receiving water, which are
contained in navigable waters throughout the transfer, would not be
``added'' by the facility and would therefore not be subject to
NPDES permitting requirements. This differs from a situation in
which, for example, an industrial facility takes in water for the
purpose of cooling some part of the facility itself. In such cases,
the water used for cooling loses its status as a water of the United
States when subjected to an intervening industrial use and,
therefore, is subject to NPDES permit requirements for all the
pollutants it contains when it is discharged back into a navigable
water, generally including those that were in the source water
originally. See Consumers Power, 862 F.2d at 589. Likewise,
discharges from a concentrated aquatic animal production facility,
such as excess food provided to animals in net pens (e.g., food that
was added to water but not eaten by the fish) would require a NPDES
permit because the uneaten, waste food would be considered an
``addition'' of a pollutant from the facility.
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Pollutants Incidental to Water Transfers

    Many utilities and water districts commented that it was unclear
whether naturally occurring changes to the water would require a
permit. For example, as water moves through dams or sits in reservoirs
along the transfer, chemical and physical factors such as water
temperature, pH, BOD, and dissolved oxygen may change. The Agency views
these changes the same way it views changes to water quality caused by
water moving through dams (National Wildlife Fed'n v. Gorsuch, 693 F.2d
156 (D.C. Cir. 1982)); they do not constitute an ``addition'' of
pollutant subject to the permitting requirements of section 402 of the
Act.
    EPA would also like to make clear that this rule does not change
the Agency's position regarding the application of pesticides directly
to waters of the United States. See 71 FR 68483; 40 CFR 122.3(h).
Ditches and canals are commonly treated with pesticides to control pest
species such

as algae to facilitate flow, and today's rule has no effect on the
exclusion provided to such activities from NPDES permit requirements
set forth in 40 CFR.122.3(h).

Designation Authority

    In the preamble to the proposed water transfers rule, EPA solicited
public comment on an option that would provide an additional provision
allowing the NPDES authority to designate particular water transfers as
subject to NPDES permit requirements on a case-by-case basis. EPA
received nearly sixty comments from states, municipalities,
environmental groups, water districts, industry and others regarding
EPA's consideration of this ``designation authority'' approach.
Comments addressing EPA's discussion of such designation authority were
mixed regarding their opposition to, or agreement with, this approach.
The following paragraphs provide additional details regarding comments
the Agency received on this option.
    Commenters who opposed the designation option generally believed
that this provision would be legally unsupportable and practically
unworkable. The most frequently cited reason for opposing this approach
was a belief that the Clean Water Act provides no authority to regulate
water transfers on a case-by-case basis. Other commenters were
concerned that designating some water transfers, but not others, as
subject to NPDES permit requirements would result in states treating
water transfers in an inconsistent manner. Several commenters stated
that the existence of an impairment is not an appropriate or relevant
test for determining whether or not an activity should be subject to
the NPDES program. Some commenters also stated that EPA already has
regulations in place with regard to use impairments, at 40 CFR 131.10,
which afford flexibility in responding to unique factual circumstances
where uses may be impacted by pollutants not subject to NPDES
permitting under section 402.
    Other commenters supported inclusion of the designation authority
provision in the final rule. Some of these commenters thought this
approach would be helpful in instances where the transfer involves
interstate waters because NPDES permits would provide a tool to protect
receiving water quality--especially in situations in which water
quality standards differed in the two relevant states. In addition,
several states indicated that being allowed the option of designating
water transfers as requiring an NPDES permit on a case-by-case basis
was important to them and cited the following three reasons for
supporting this approach: (1) The designation option is consistent with
Congress's general direction against unnecessary federal interference
with state allocation of water rights and states' flexibility on
handling water transfers; (2) states would be unable to require NPDES
permits for water transfers on a case-by-case basis in the absence of
the designation option; and (3) some water transfers should be
considered discharges of pollutants, so it is important to retain NPDES
authority in these cases.
    Some commenters suggested additional programs and authorities that
states can use as an alternative to NPDES permitting such as the 401
water quality certification program or a memorandum of understanding or
agreement.
    After considering these comments, EPA has decided not to include a
mechanism in 123.3 for the permitting authority to designate water
transfers on a case-by-case basis as needing an NPDES permit. This
conclusion is consistent with EPA's interpretation of the CWA as not
subjecting water transfers to the permitting requirements of section
402. Moreover, as discussed elsewhere in this preamble, states
currently have the ability to address potential in-stream and/or
downstream effects of water transfers through their WQS and TMDL
programs and pursuant to state authorities preserved by section 510,
and today's final rule does not have an effect on these state programs
and authorities.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993),
this action is a ``significant regulatory action.'' Accordingly, EPA
submitted this action to the Office of Management and Budget (OMB) for
review under EO 12866 and any changes made in response to OMB
recommendations have been documented in the docket for this action.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden
because this final rule generally excludes water transfers from
requiring an NPDES permit. The Office of Management and Budget (OMB)
has previously approved the information collection requirements
contained in the existing regulations 40 CFR 122.21 and 123.25 under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
and has assigned OMB control number 2040-0086, EPA ICR number 0226.18.
    Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR Part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's final rule on
small entities, small entity is defined as: (1) A small business as
defined by the Small Business Administration's (SBA) regulations at 13
CFR 121.201; (2) a small governmental jurisdiction that is a government
of a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently owned and operated
and is not dominant in its field.
    After considering the economic impacts of today's final rule on
small entities, I certify that this action will not have a significant
adverse economic impact on a substantial number of small entities.
Because EPA is simply codifying the Agency's longtime position that
Congress did not generally intend for the NPDES program to regulate the
transfer of one water of the

United States into another water of the United States, this action will
not impose any requirement on small entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of UMRA generally requires EPA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective, or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
    EPA has determined that this rule does not contain a Federal
mandate that may result in expenditures of $100 million or more for
State, local, and tribal governments, in the aggregate, or the private
sector in any one year. EPA is simply codifying the Agency's longtime
position that Congress did not generally intend for the NPDES program
to regulate the transfer of a water of the United States into another
water of the United States. Thus, today's rule is not subject to the
requirements of sections 202 and 205 of the UMRA. For the same reason,
EPA has determined that this rule contains no regulatory requirements
that might significantly or uniquely affect small governments. Thus,
today's rule is not subject to the requirements of section 203 of UMRA.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
    Under section 6(b) of Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the Federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments, or EPA
consults with State and local officials early in the process of
developing the proposed regulation. Under section 6(c) of Executive
Order 13132, EPA may not issue a regulation that has federalism
implications and that preempts State law, unless the Agency consults
with State and local officials early in the process of developing the
proposed regulation.
    This final rule does not have Federalism implications. It will not
have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. Today's rule does not change the
relationship between the government and the States or change their
roles and responsibilities. Rather, this rule confirms EPA's
longstanding practice consistent with the Agency's understanding that
Congress generally intended for water transfers to be subject to
oversight by water resource management agencies and State non-NPDES
authorities, rather than the permitting program under section 402 of
the CWA. In addition, EPA does not expect this rule to have any impact
on local governments.
    Further, the revised regulations would not alter the basic State-
Federal scheme established in the Clean Water Act under which EPA
authorizes States to carry out the NPDES permitting program. EPA
expects the revised regulations to have little effect on the
relationship between, or the distribution of power and responsibilities
among, the Federal and State governments. Thus, Executive Order 13132
does not apply to this rule.
    In the spirit of Executive Order 13132, and consistent with EPA
policy to promote communications between EPA and State and local
governments, EPA specifically solicited comment on the proposed rule
from State and local officials. EPA received comments from States that
favored and opposed the rule. States that favored the rule were
primarily drier, Western states. These States argued that their State
laws provide adequate and appropriate authority to address the impacts
from water transfers and that permitting would negatively impact State
water rights allocations. This latter point was also raised by water
districts, which are quasi-governmental entities, and by local
governments. States that were opposed to the rule argued that they had
an interest in using their NPDES authority to prevent potential water
quality impairments caused by water transfers and disagreed with EPA's
analysis of the Clean Water Act.

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

    Executive Order 13175, entitled, ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.''
    This final rule does not have tribal implications, as specified in
Executive Order 13175. It will neither impose substantial direct
compliance costs on tribal governments, nor preempt Tribal law. Today's
rule clarifies that Congress did not generally intend for the NPDES
program to regulate the transfer of waters of the United States into
another water of the United States. Nothing in this rule prevents an
Indian Tribe from exercising its own authority to deal with such
matters. Thus, Executive Order 13175 does not apply to this rule.
    In the spirit of Executive Order 13175, and consistent with EPA
policy to promote communications between EPA and tribal governments,
EPA specifically solicited additional comments on the proposed rule
from tribal officials. Comments from tribal

governments were considered in the development of this final rule.
Since the issues identified by tribal governments were not unique to
their concerns, EPA has addressed these issues generally in its
response to comments.

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

    Executive Order 13045: ``Protection of Children From Environmental
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies
to any rule that: (1) Is determined to be ``economically significant''
as defined under E.O. 12866, and (2) concerns an environmental health
or safety risk that EPA has reason to believe may have a
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health or
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.
    This regulation is not subject to Executive Order 13045 because it
is not economically significant as defined under E.O. 12866, and
because the Agency does not have reason to believe that it addresses
environmental health and safety risks that present a disproportionate
risk to children. Today's rule would simply clarify Congress' intent
that water transfers generally be subject to oversight by water
resource management agencies and State non-NPDES authorities, rather
than the permitting program under section 402 of the CWA.

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

    This rule is not a ``significant energy action'' as defined in
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355
(May 22, 2001)) because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy. Further, EPA has
concluded that this rule is not likely to have any adverse energy
effects.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C.
272 note) directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standard bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards. This
rule does not involve technical standards. Therefore, EPA did not
consider the use of any voluntary consensus standards.

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

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
    EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations. Today's rule would
simply clarify Congress' intent that water transfers generally be
subject to oversight by water resource management agencies and State
non-NPDES authorities, rather than the permitting program under section
402 of the CWA.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. section 801 et seq., as
added by the Small Business Regulatory Enforcement Fairness Act of
1996, generally provides that before a rule may take effect, the agency
promulgating the rule must submit a rule report, which includes a copy
of the rule, to each House of the Congress and to the Comptroller
General of the United States. EPA will submit a report containing this
rule and other required information to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States
prior to publication of the rule in the Federal Register. A major rule
cannot take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective August 12, 2008.

List of Subjects in 40 CFR Part 122

    Environmental protection, Administrative practice and procedure,
Confidential business information, Hazardous substances, Reporting and
recordkeeping requirements, Water pollution control.

    Dated: June 9, 2008.
Stephen L. Johnson,
Administrator.

0
For the reasons set forth in the preamble, chapter I of title 40 of the
Code of Federal Regulations is amended as follows:

PART 122--EPA ADMINISTERED PERMIT PROGRAMS: THE NATIONAL POLLUTANT
DISCHARGE ELIMINATION SYSTEM

0
1. The authority citation for part 122 continues to read as follows:

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

0
2. Section 122.3 is amended by adding paragraph (i) to read as follows:

Sec.  122.3  Exclusions.

* * * * *
    (i) Discharges from a water transfer. Water transfer means an
activity that conveys or connects waters of the United States without
subjecting the transferred water to intervening industrial, municipal,
or commercial use. This exclusion does not apply to pollutants
introduced by the water transfer activity itself to the water being
transferred.

[FR Doc. E8-13360 Filed 6-12-08; 8:45 am]

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[Federal Register Volume 83, Number 60 (Wednesday, March 28, 2018)]
[Notices]
[Page 13338]
[FR Doc No: 2018-06255]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Agency Information Collection Activities: Requests for Comments;
Clearance of Renewed Approval of Information Collection: Commercial
Space Transportation Reusable Launch Vehicle and Reentry Licensing
Regulation

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice and request for comments.

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SUMMARY: In accordance with the Paperwork Reduction Act of 1995, FAA
invites public comments about our intention to request the Office of
Management and Budget (OMB) approval to renew an information
collection. The information is used to determine if applicants satisfy
requirements for obtaining a launch license to protect the public from
risks associated with reentry operations from a site not operated by or
situated on a Federal launch range.

DATES: Written comments should be submitted by May 29, 2018.

ADDRESSES: Send comments to the FAA at the following address: Barbara
Hall, Federal Aviation Administration, ASP-110, 10101 Hillwood Parkway,
Fort Worth, TX 76177.

FOR FURTHER INFORMATION CONTACT: Barbara Hall at<PHONE_NUMBER>, or by
email at: [email protected].

SUPPLEMENTARY INFORMATION:
    OMB Control Number: 2120-0643.
    Title: Commercial Space Transportation Reusable Launch Vehicle and
Reentry Licensing Regulation.
    Form Numbers: There are no FAA forms associated with this
collection.
    Type of Review: Renewal of an information collection.
    Background: The data is necessary for a U.S. citizen to apply for
and obtain a reusable launch vehicle (RLV) mission license or a reentry
license for activities by commercial or non-federal entities (that are
not done by or for the U.S. Government) as defined and required by 49
U.S.C., Subtitle IX, Chapter 701, formerly known as the Commercial
Space Launch Act of 1984, as amended. The information is needed in
order to demonstrate to the FAA Office of Commercial Space
Transportation (FAA/AST) that the proposed activity meets applicable
public safety, national security, and foreign policy interests of the
United States.
    Respondents: Approximately 5 applicants.
    Frequency: Information is collected on occasion.
    Estimated Average Burden per Response: 3,900 hours.
    Estimated Total Annual Burden: 19,500 hours.
    Public Comments Invited: You are asked to comment on any aspect of
this information collection, including (a) Whether the proposed
collection of information is necessary for FAA's performance; (b) the
accuracy of the estimated burden; (c) ways for FAA to enhance the
quality, utility and clarity of the information collection; and (d)
ways that the burden could be minimized without reducing the quality of
the collected information. The agency will summarize and/or include
your comments in the request for OMB's clearance of this information
collection.

    Issued in Fort Worth, TX on March 20, 2018.
Barbara L. Hall,
FAA Information Collection Clearance Officer, Performance, Policy, and
Records Management Branch, ASP-110.
[FR Doc. 2018-06255 Filed 3-27-18; 8:45 am]
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