[Federal Register Volume 85, Number 134 (Monday, July 13, 2020)]
[Rules and Regulations]
[Pages 42210-42287]
[FR Doc No: 2020-12081]

Vol. 85

Monday,

No. 134

July 13, 2020

Part IV

Environmental Protection Agency

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40 CFR Part 121

Clean Water Act Section 401 Certification Rule; Final Rule

Federal Register / Vol. 85, No. 134 / Monday, July 13, 2020 / Rules
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 121

[EPA-HQ-OW-2019-0405; FRL-10009-80-OW]
RIN 2040-AF86

Clean Water Act Section 401 Certification Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is publishing this
final rule to update and clarify the substantive and procedural
requirements for water quality certification under Clean Water Act (CWA
or the Act) section 401. CWA section 401 is a direct grant of authority
to States (and Tribes that have been approved for ``treatment as a
State'' status) to review for compliance with appropriate federal,
State, and Tribal water quality requirements any discharge into a water
of the United States that may result from a proposed activity that
requires a federal license or permit. This final rule is intended to
increase the predictability and timeliness of CWA section 401
certification actions by clarifying timeframes for certification, the
scope of certification review and conditions, and related certification
requirements and procedures.

DATES: This rule is effective on September 11, 2020.

ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OW-2019-0405, at https://www.regulations.gov. All
documents in the docket are listed and available at https://www.regulations.gov. Although listed in the index, some information is
not publicly available, e.g. Confidential Business Information or other
information whose disclosure is restricted by statute. Certain other
materials, such as copyrighted material, is not placed on the internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available electronically through https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Lauren Kasparek, Oceans, Wetlands, and
Communities Division, Office of Water (4504-T), Environmental
Protection Agency, 1200 Pennsylvania Avenue NW, Washington, DC 20460;
telephone number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Table of Contents

I. General Information
    A. How can I get copies of this document and related
information?
    B. What action is the Agency taking?
    C. Under what legal authority is this final rule issued?
II. Background
    A. Executive Summary
    B. Executive Order 13868: Promoting Energy Infrastructure and
Economic Growth
    C. Summary of Stakeholder Engagement
    D. Guidance Document
    E. Effect on Existing Federal, State, and Tribal Laws
    F. Legal Background
    1. The Clean Water Act
    2. The EPA's Role in Implementing Section 401
    3. The EPA's 1971 Certification Regulations
    4. Judicial Interpretations of Section 401
    5. Administrative Law Principles
    6. Response to Comments on the Legal Background
    G. Legal Construct for the Final Rule
    1. Scope of Certification
    2. Timeline for Section 401 Certification Analysis
III. Final Rule
    A. When Section 401 Certification is Required
    B. Pre-filing Meeting Request
    C. Certification Request/Receipt
    D. Certification Actions
    E. Appropriate Scope for Section 401 Certification Review
    F. Timeframe for Certification Analysis and Decision
    G. Contents and Effects of Certification
    H. Certification by the Administrator
    I. Determination of Effect on Neighboring Jurisdictions
    J. The EPA's Role in Review and Advice
    K. Enforcement
    L. Modifications
    M. General Licenses and Permits
IV. Economic Analysis
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review;
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Unfunded Mandates Reform Act
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act
    K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    L. Congressional Review Act

I. General Information

A. How can I get copies of this document and related information?

    1. Docket. An official public docket for this action has been
established under Docket ID No. EPA-HQ-OW-2019-0405. The official
public docket consists of the documents specifically referenced in this
action, and other information related to this action. The official
public docket is the collection of materials that is available for
public viewing at the OW Docket, EPA West, Room 3334, 1301 Constitution
Ave. NW, Washington, DC 20004. This Docket Facility is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The
OW Docket telephone number is<PHONE_NUMBER>. A reasonable fee will be
charged for copies.
    2. Electronic Access. You may access this Federal Register document
electronically under the ``Federal Register'' listings at https://www.regulations.gov. An electronic version of the public docket is
available through the EPA's electronic public docket and comment
system, the EPA Dockets. You may access the EPA Dockets at https://www.regulations.gov to view submitted public comments, access the index
listing of the contents of the official public docket, and access those
documents in the public docket that are available electronically. For
additional information about the EPA's public docket, visit the EPA
Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
Although not all docket materials may be available electronically, you
may still access any of the publicly available docket materials through
the Docket Facility.

B. What action is the Agency taking?

    In this notice, the Agency is publishing a final rule updating the
water quality certification regulations in 40 CFR 121.

C. Under what legal authority is this final rule issued?

    The authority for this action is the Federal Water Pollution
Control Act, 33 U.S.C. 1251 et seq., including sections 304(h), 401,
and 501(a).

II. Background

A. Executive Summary

    Congress enacted section 401 of the CWA to provide States and
authorized Tribes with an important tool to help

protect the water quality of federally regulated waters within their
borders in collaboration with federal agencies. Under section 401, a
federal agency may not issue a license or permit to conduct any
activity that may result in any discharge into waters of the United
States,\1\ unless the State or authorized Tribe where the discharge
would originate either issues a section 401 water quality certification
finding compliance with applicable water quality requirements or
certification is waived. As described in greater detail below, section
401 envisions a robust State and Tribal role in the federal licensing
or permitting proceedings, including those in which local authority may
otherwise be preempted by federal law. Section 401 also places
important limitations on how that role may be implemented to maintain
an efficient process, consistent with the overall cooperative
federalism construct established by the CWA, as explained below in
section II.F.1 of this notice.
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    \1\ The CWA, including section 401, uses ``navigable waters,''
defined as ``waters of the United States, including territorial
seas.'' 33 U.S.C. 1362(7). This final rule uses ``waters of the
United States'' throughout. In January 2020, the EPA revised the
definition of waters of the United States and expects the final
definition of the term to control in all CWA contexts. See 85 FR
22250 (April 21, 2020).
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    Section 401 provides that a State or authorized Tribe must act on a
section 401 certification request ``within a reasonable period of time
(which shall not exceed one year)''.\2\ Section 401 does not guarantee
a State or Tribe a full year to act on a certification request, as the
statute only grants as much time as is reasonable. 33 U.S.C.
1341(a)(1). The CWA provides that the timeline for action on a section
401 certification begins ``after receipt'' of a certification request.
Id. If a State or Tribe does not grant, grant with conditions, deny, or
expressly waive the section 401 certification within a reasonable time
period, section 401 states that the ``the certification requirements of
this subsection shall be waived with respect to such Federal
application.'' Id. If the certification requirement has been waived and
the federal license or permit is issued, any subsequent action by a
State or Tribe to grant, grant with conditions, or deny section 401
certification has no legal force or effect.
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    \2\ In some circumstances, the EPA can act as the certifying
authority. See section III.H of this notice for further discussion.
``If the State, interstate agency, or Administrator, as the case may
be, fails or refuses to act on a request for certification, within a
reasonable period of time (which shall not exceed one year) after
receipt of such request, the certification requirements of this
subsection shall be waived with respect to such Federal
application.'' 33 U.S.C. 1341(a)(1); see also Hoopa Valley Tribe v.
FERC, 913 F.3d 1099 (D.C. Cir. 2019).
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    Section 401 authorizes States and Tribes to certify that a
discharge into waters of the United States that may result from a
proposed activity will comply with certain enumerated sections of the
CWA, including the effluent limitations and standards of performance
for new and existing discharge sources (sections 301, 302, and 306 of
the CWA), water quality standards and implementation plans (section
303), and toxic pretreatment effluent standards (section 307). When
granting a section 401 certification, States and Tribes are directed by
CWA section 401(d) to include conditions, including ``effluent
limitations and other limitations, and monitoring requirements'' that
are necessary to assure that the applicant for a federal license or
permit will comply with applicable provisions of CWA sections 301, 302,
306, and 307, and with ``any other appropriate requirement of State
law.''
    As the Agency charged with administering the CWA,\3\ as well as a
certifying authority in certain instances, the EPA is responsible for
developing a common regulatory framework for certifying authorities to
follow when completing section 401 certifications. See 33 U.S.C.
1251(d), 1361(a). In 1971, the EPA promulgated regulations for
implementing the certification provisions pursuant to section 21(b) of
the Federal Water Pollution Control Act of 1948 (FWPCA), but the EPA
has never updated those regulations to reflect the 1972 amendments to
the FWPCA (commonly known as the Clean Water Act or CWA), which created
section 401, despite the fact that there were changes to the relevant
statutory text. Since the 1972 CWA amendments, the EPA issued two
guidance documents and participated as amicus curiae in court cases
concerning CWA section 401, but the Agency has not updated its
regulations to comport with the 1972 amendments and has not, to date,
established robust internal procedures for implementing its roles under
section 401. Over the last several years, litigation over the section
401 certifications for several high-profile infrastructure projects
have highlighted the need for the EPA to update its regulations to
provide a common framework for consistency with CWA section 401 and to
give project proponents, certifying authorities, and federal licensing
and permitting agencies additional clarity and regulatory certainty.
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    \3\ The EPA co-administers section 404 with the Army Corps of
Engineers (the Corps).
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    On April 10, 2019, the President issued Executive Order 13868,
entitled Promoting Energy Infrastructure and Economic Growth (the
Executive Order or Order), which directed the EPA to engage with
States, Tribes, and federal agencies and update the Agency's outdated
guidance and regulations, including the 1971 certification framework.
Pursuant to the Executive Order, on August 8, 2019, the EPA signed the
proposed rule ``Updating Regulations on Water Quality Certifications,''
and the proposal was published on August 22, 2019. 84 FR 44080. The 60-
day public comment period for the proposal closed on October 21, 2019.
Consistent with Executive Order 13868 and the 1972 CWA amendments, this
final rule provides an updated common framework that is consistent with
the Act and which seeks to increase predictability and timeliness.
    The following sections provide an overview of section 401, relevant
court cases, outreach, and other actions that inform today's rule, as
well as provides responses to salient comments received on these
topics.

B. Executive Order 13868: Promoting Energy Infrastructure and Economic
Growth

    The policy objective of the Executive Order is to encourage greater
investment in energy infrastructure in the United States by promoting
efficient federal licensing and permitting processes and reducing
regulatory uncertainty. The Executive Order identified the EPA's
outdated section 401 federal guidance and regulations as one source of
confusion and uncertainty hindering the development of energy
infrastructure.
    Several commenters on the proposed rule argued that the EPA failed
to demonstrate that the rule would meet the objectives of the Executive
Order and the CWA, and they maintained that Presidential policy
objectives cannot override the CWA's plain language and Supreme Court
jurisprudence. One commenter stated that the EPA's actions under this
Executive Order were driven by political considerations and the desire
to undertake the rulemaking process as expeditiously as possible to
meet the President's purportedly unlawful directions as stated in the
Executive Order.
    Other commenters asserted that the proposed rule is consistent with
the Executive Order. These commenters appreciated the administration's
recognition of the importance of energy infrastructure projects; the

administration's recognition of the economic impact the section 401
process has had on some important energy infrastructure projects; and
the EPA's review of the section 401 process. Such commenters supported
the Executive Order's goal of promoting economic growth and supported
the proposed rule's attempts to protect interstate and foreign commerce
from unconstitutional discrimination and unreasonable burdens and to
clearly define the steps and timing for section 401 certifications.
    As discussed throughout this final rule preamble, the Agency has
determined that the final rule implements the fundamental statutory
objectives of the CWA, while also complying with the Executive Order.
The Agency disagrees with commenters who asserted that the rulemaking
process was inappropriately initiated or inappropriately directed by
the Executive Order. As noted above, the EPA's 1971 certification
regulations \4\ (36 FR 22487, Nov. 25, 1971; redesignated at 37 FR
21441, October 11, 1972; further redesignated at 44 FR 32899, June 7,
1979) had not been updated since they were promulgated in 1971,
pursuant to section 21(b) of the FWPCA. Additionally, at the time the
Executive Order was issued, the EPA's only guidance to the public on
section 401 implementation was an interim handbook (now rescinded)
entitled Clean Water Act Section 401 Water Quality Certification: A
Water Quality Protection Tool for States and Tribes (``Interim
Handbook''), which had not been updated since its release in 2010 and
therefore did not reflect the current case law interpreting CWA section
401.
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    \4\ These regulations were redesignated in 1972 and 1979 under
the CWA, but no substantive change to the regulatory text has been
made since 1971 notwithstanding changes to the relevant statutory
text in the 1972 CWA. Therefore, throughout this final rule
preamble, the Agency refers to these regulatory provisions as the
``1971 certification regulations.''
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    The Executive Order directed the EPA to review CWA section 401 and
the EPA's 1971 certification regulations and interim guidance, issue
new guidance to States, Tribes, and federal agencies within 60 days of
the Order, and propose (as appropriate and consistent with law) new
section 401 regulations within 120 days of the Order. The Executive
Order also directed the EPA to consult with States, Tribes, and
relevant federal agencies while reviewing its existing guidance and
regulations to identify areas that would benefit from greater clarity.
    As part of this review, the Executive Order directed the EPA to
take into account the federalism considerations underlying section 401
and to consider the appropriate scope of water quality reviews and
conditions, the scope of information needed to act on a certification
request in a reasonable period of time, and expectations for reasonable
certification review times. Section 3.a. of Executive Order 13868,
Promoting Energy Infrastructure and Economic Growth. Following the
release of the EPA's new guidance document, the Executive Order
directed the EPA to lead an interagency review of all existing federal
regulations and guidance pertaining to section 401 to ensure
consistency with the EPA's new guidance and rulemaking efforts. The
Executive Order directs all federal agencies to update their existing
section 401 guidance within 90 days after publication of the EPA's new
guidance. Additionally, the Executive Order directs other federal
agencies to initiate rulemaking, if necessary, within 90 days of the
completion of the EPA's rulemaking, to ensure that their own CWA
section 401 regulations are consistent with the EPA's new rules and
with the Executive Order's policy goals. Although the Executive Order
focuses on section 401's impact on the energy sector, section 401
applies broadly to any proposed federally licensed or permitted
activity that may result in any discharge into a water of the United
States. Therefore, updates to the EPA's 1971 certification regulations
and guidance are relevant to all water quality certifications, not just
those related to energy sector projects.
    Additional information on the EPA's State and Tribal engagement is
provided in section II.C of this notice, and additional information on
the EPA's updated guidance document is provided in section II.D of this
notice.

C. Summary of Stakeholder Engagement

    On June 11, 2018, the Agency published its 2018 Spring Unified
Agenda of Regulatory and Deregulatory Actions \5\ announcing that the
Agency was considering, as a long-term action, the issuance of a notice
soliciting public comment on whether the section 401 certification
process would benefit from a rulemaking to promote nationwide
consistency and regulatory certainty for States, authorized Tribes, and
stakeholders. The Agency's stakeholder outreach and engagement efforts
since that announcement are summarized below.
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    \5\ Available at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201804&RIN=2040-AF86.
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    On August 6, 2018, the Agency sent a letter to the Environmental
Council of the States, the Association of Clean Water Administrators,
the Association of State Wetland Managers, the National Tribal Water
Council, and the National Tribal Caucus identifying the Agency's
interest in engaging in potential clarifications to the section 401
process. The Agency discussed section 401 during several association
meetings and calls and received correspondence from several
stakeholders between Fall 2018 and Spring 2019. Early stakeholder
feedback received prior to the issuance of the Executive Order, the
August 6, 2018 letter described above, and the Agency's presentations
given between Fall 2018 and Spring 2019, may be found in the pre-
proposal recommendations docket (Docket ID No. EPA-HQ-OW-2018-0855).
    Following release of the Executive Order, the EPA continued its
effort to engage with States and Tribes on how to increase clarity in
the section 401 certification process, including creating a new website
to provide information on section 401 and notifying State environmental
commissioners and Tribal environmental directors of a two-part webinar
series for States and Tribes. See www.epa.gov/cwa-401. The first
webinar was held on April 17, 2019, and discussed the Executive Order
and the EPA's next steps, and solicited feedback from States and Tribes
consistent with the Executive Order. Shortly thereafter, the EPA
initiated formal consultation efforts under Executive Order 13132 on
Federalism with States and Executive Order 13175 on Consultation and
Coordination with Indian Tribal Governments regarding provisions that
require clarification within section 401 of the CWA and related federal
regulations and guidance. The Agency held an initial federalism
consultation meeting on April 23, 2019, and sent notification of the
consultation period to States and Tribes on April 24, 2019.
Consultation ran through May 24, 2019, and the EPA opened a docket for
pre-proposal recommendations during this time period (Docket ID No.
EPA-HQ-OW-2018-0855). On May 7, 2019, and May 15, 2019, the EPA held
Tribal informational webinars, and on May 8, 2019, the EPA held an
informational webinar for both States and Tribes. See sections V.F and
V.G of this notice for further details on the Agency's federalism and
Tribal consultations. Questions and recommendations from the webinar
attendees are available in the pre-proposal docket (Docket ID No. EPA-
HQ-OW-2018-0855).
    During the consultation period, the EPA participated in phone calls
and in-person meetings with inter-

governmental and Tribal associations, including the National Governors
Association and National Tribal Water Council. The EPA also attended
the EPA Region 9 Regional Tribal Operations Committee meeting on May
22, 2019, to solicit recommendations for the rulemaking effort. The EPA
engaged with federal agencies that issue licenses or permits subject to
section 401, including the United States Department of Agriculture, the
Federal Energy Regulatory Commission (FERC), the U.S. Army Corps of
Engineers (Corps), the Alcohol and Tobacco Tax and Trade Bureau, the
Nuclear Regulatory Commission, and the Bureau of Reclamation through
several meetings and phone calls to gain additional feedback from
federal partners.
    At the webinars and meetings, the EPA provided a presentation and
sought input on aspects of section 401 and the 1971 certification
regulations that may benefit from clarification or require updating,
including timeframe, scope of certification review, and coordination
among certifying authorities, federal licensing or permitting agencies,
and project proponents. The EPA also requested input on issues and
process improvements for the Agency's consideration. Participant
recommendations from webinars, meetings, and the docket represent a
diverse range of interests, positions, and suggestions. Several themes
emerged throughout this process, including support for ongoing State
and Tribal engagement, support for retention of State and Tribal
authority, and suggestions for process improvements for CWA section 401
water quality certifications. The EPA considered all of this
information and stakeholder input during development of the proposed
rule, including all recommendations submitted to the pre-proposal
docket and feedback received prior to the initiation of, during, and
after the formal consultation period.
    On August 8, 2019, the EPA signed the proposed rule, ``Updating
Regulations on Water Quality Certifications,'' and the proposal was
published on August 22, 2019. 84 FR 44080. The 60-day public comment
period for the proposal closed on October 21, 2019. After signing the
proposed rule, the EPA conducted a variety of stakeholder outreach
engagements on the contents of the proposed rule. For example, on
August 20, 2019, the EPA held a public webcast to present key elements
of the proposed rule (see https://www.youtube.com/watch?v=eBI7Mj5ucyM&feature=youtu.be). The EPA also held a public
hearing in Salt Lake City, Utah, on September 5 and 6, 2019, to hear
feedback from individuals from regulated industry sectors,
environmental and conservation organizations, State agencies, Tribal
governments, and private citizens. The EPA continued its engagement
throughout the public comment period with States and Tribes through in-
person meetings with representatives in Salt Lake City, Utah, and
Chicago, Illinois. During these meetings, the Agency provided an
overview of the proposed rule, responded to clarifying questions from
participants, discussed implementation considerations, and heard
comments reflecting a range of positions on the proposal and varying
interpretations of CWA section 401. A transcript of the public hearing
and related materials and summaries of the State and Tribal meetings
can be found in the docket for the final rule. At the request of
individual Tribes, the EPA also held staff-level and leader-to-leader
meetings with those Tribes.
    A few commenters commended the EPA for its outreach efforts during
the rule development process. Other commenters asserted that the EPA
held an abbreviated public engagement process. Some commenters asserted
that the EPA's consultation efforts with States, Tribes and local
governments during the rulemaking process were inadequate. The Agency
disagrees with commenters that its consultation with States or Tribes
was inadequate. As discussed in section II.C, section V.F, and section
V.G of this notice, the Agency consulted with States, Tribes, and local
governments throughout the rulemaking process. See also the Agency's
response to comments document in the docket for this final rule for
further response on the Agency's outreach efforts.
    In developing the final rule, the EPA reviewed and considered more
than 125,000 comments on the proposed rule from a broad spectrum of
interested parties. Commenters provided a wide range of feedback on
various aspects of the proposal, including the legal basis for the
proposed rule and the Agency's proposed definitions and certification
procedures. Commenters also explained their views on how the proposal
may impact project proponents, certifying authorities, and federal
licensing and permitting agencies. The Agency summarizes the most
salient public comments received on the proposed rule and provides
responses in the applicable sections of this final rule preamble. A
separate response to comments document is also available in the docket
for the final rule at Docket ID No. EPA-HQ-OW-2019-0405.

D. Guidance Document

    Pursuant to the Executive Order, the Agency released updated
section 401 guidance on June 7, 2019 (``the 2019 Guidance''), available
at https://www.epa.gov/cwa-401/clean-water-act-section-401-guidance-federal-agencies-states-and-authorized-tribes. Coincident with the
release of the 2019 Guidance, the EPA rescinded the 2010 Interim
Handbook on section 401 water quality certification. The Interim
Handbook had not been updated or revised since its release in 2010, had
never been finalized, and did not reflect current case law interpreting
CWA section 401.
    The 2019 Guidance provided information and recommendations for
implementing the substantive and procedural requirements of section
401, consistent with the areas of focus in the Executive Order. More
specifically, the 2019 Guidance focused on aspects of the certification
process, including the timeline for review and decision-making and the
appropriate scope of review and conditions. Additionally, the 2019
Guidance provided recommendations for how federal licensing and
permitting agencies, States, and Tribes can better coordinate to
improve the section 401 certification process. The emphasis on early
coordination and collaboration to increase process efficiency aligns
with other agency directives under Executive Order 13807, Establishing
Discipline and Accountability in the Environmental Review and
Permitting Process for Infrastructure Projects, which established the
``One Federal Decision'' policy. For major infrastructure projects,
Executive Order 13807 directs federal agencies to use a single,
coordinated process for compliance with the National Environmental
Policy Act (NEPA), 42 U.S.C. 4321 et seq., and emphasizes advance
coordination to streamline federal permitting actions.
    Some commenters asserted the 2019 Guidance is inconsistent with 50
years of practice and that it created confusion and uncertainty. Other
commenters disagreed with the 2019 Guidance's limitations on timing of
section 401 certifications and the scope of information that States may
require to fully evaluate section 401 certification requests. Several
commenters stated that the 2019 Guidance was inappropriately issued
prior to rulemaking and should be withdrawn, and they asserted that
either the Interim Handbook should be reinstated or the 2019 Guidance
should be modified. Some commenters suggested that the issuance of the
2019 Guidance before rule finalization indicates that the EPA has

predetermined the outcome of the rulemaking process, contrary to the
Administrative Procedure Act (APA), and therefore that the guidance
should be rescinded or superseded by new guidance consistent with the
final rule.
    The Agency disagrees with commenters who asserted the 2019 Guidance
was unnecessary. As discussed above and as outlined in the Executive
Order, the Interim Handbook created regulatory uncertainty and
confusion because it no longer reflected the current case law
interpreting CWA section 401, nor had it been updated or finalized. The
2019 Guidance was intended only to facilitate consistent implementation
of section 401 and the 1971 certification regulations during this
rulemaking process, and the Agency disagrees with commenters who
suggested the 2019 Guidance reflected a predetermined outcome of this
rulemaking process. The 2019 Guidance addressed the appropriate
timeline for a State's or Tribe's review and section 401 certification
decision-making and the appropriate scope of a State's or Tribe's
certification review and conditions based on the EPA's 1971
certification regulations. The final rule, on the other hand, is based
on the Agency's holistic review of the 1972 statutory language,
addresses a number of additional topics, and reflects and responds to
public comments.
    Some commenters said the 2019 Guidance should be retained but
updated once the proposed rule is finalized. Other commenters stated
the 2019 Guidance should be withdrawn once the proposed rule is
finalized. One commenter asserted that additional guidance may be
appropriate, but that the need for guidance depends on the degree of
clarity in the final rule.
    Coincident with issuing this final rule, the EPA is rescinding the
2019 Guidance. The EPA continues to support and encourage the extent of
coordination recommended in the 2019 Guidance, including
recommendations for project proponents, certifying authorities, and
federal licensing and permitting authorities to engage in substantive
discussions as early as possible, and for all parties to operate in
good faith throughout the certification process. However, the EPA has
concluded that retaining the 2019 Guidance after issuing this final
rule could cause confusion. The Agency has determined that the final
rule provides sufficient additional specificity and clarity on the
issues discussed in the 2019 Guidance to both meet the expectations of
the Executive Order and render the 2019 Guidance unnecessary. The EPA
retains the option to develop new guidance to facilitate implementation
of this final rule should the need arise.

E. Effect on Existing Federal, State, and Tribal Laws

    According to the Executive Order, the EPA is to lead an interagency
effort to review and examine existing federal guidance and regulations
``for consistency with EPA guidance and rulemaking.'' Section 3.d. of
the Executive Order provides that, within 90 days after the EPA issues
its final section 401 regulations, ``if necessary, the heads of each
401 implementing Agency shall initiate a rulemaking to ensure that
their respective agencies' regulations are consistent with'' the EPA's
final section 401 regulations and ``the policies set forth in section 2
of [the Executive Order].'' Pursuant to the Executive Order, the other
federal agencies that issue licenses or permits subject to the
certification requirements of section 401 are expected to ensure that
any regulations governing their own processing, disposition, and
enforcement of section 401 certifications are consistent with the EPA's
final regulations and the policies articulated in section 2 of the
Executive Order. The EPA engaged with other section 401 implementing
agencies before and after the proposed rule was issued, and the EPA
considered federal agency feedback in developing the proposal and this
final rule. This final rule preamble includes suggested recommendations
for federal agencies as they update or draft their section 401
implementing regulations. For instance, section III.F.2.a of this
notice encourages federal agencies to establish in their regulations a
minimum reasonable period of time for State and Tribal action to
provide notice and regulatory certainty to project proponents and
certifying authorities about applicable deadlines. However, these are
only recommendations and the federal agencies themselves must determine
how to update their own regulations to ensure consistency with this
final rule and efficient administration of their license and permit
programs. For its part, the EPA plans to review its National Pollutant
Discharge Elimination System (NPDES) regulations to ensure its own
permitting program certification regulations are consistent with this
final rule.
    In addition to conforming changes that federal agencies may make to
federal regulations that implement section 401, it is likely that
States and Tribes will want to evaluate their existing certification
statutes or regulations to ensure consistency with the EPA's final
rule.
    Certain commenters stated that the proposed rule would not be
consistent with existing State law, such as State statutes or
regulations regarding notice and comment, completeness, impact and
degradation avoidance, and mitigation. Many of these commenters were
particularly concerned that existing State-enacted procedures require
more information and time for State certification review and action
than provided by the proposed rule. A few commenters challenged the
EPA's authority to dictate State procedures and stated that the EPA
should provide flexibility for State regulatory procedures in this
rulemaking. Several commenters maintained that the proposed rule would
require statutory and regulatory changes on the State level and
encouraged the EPA to give States sufficient time to adapt by providing
an extended effective date for the new rule. One commenter asserted
that if States were not provided additional time to assess the new
rule's impact on their State laws and regulations, the new rule could
require the States to either violate their own laws or deny more
section 401 certifications, which could result in litigation and
further delay for projects subject to section 401.
    Several commenters asserted that the proposed rule would make State
and Tribal section 401 programs less efficient and would lead to
national inconsistency. Several commenters asserted that the EPA's
interpretation of the CWA and case law will result in legal challenges
to the final rule, which would in turn lead to confusion and delays in
its implementation contrary to the intent of the Executive Order.
Several commenters also indicated that because States may need to
change their statutes and regulations in response to the final rule,
litigation will ensue over those State changes resulting in further
regulatory uncertainty, defeating the intent of the proposal to make
the section 401 process more efficient.
    The EPA has considered and appreciates the concerns raised by these
commenters and is mindful that the lack of clear federal guidance and
implementation of CWA section 401 following enactment of the 1972 CWA
amendments has resulted in a patchwork of State and Tribal programs
with different timing, request, and review requirements for water
quality certifications. However, the EPA's decades-long delay in
promulgating section 401 implementing regulations does not undercut the
EPA's authority and obligation to promulgate

implementing regulations for this important CWA program. The EPA's
delay in promulgating regulations also does not change the 1972 CWA
amendment's statutory language or underlying congressional intent, nor
does it allow for States or Tribes to implement water quality
certification programs that exceed the authority granted by Congress.
    The EPA acknowledges that some States and Tribes may update their
regulations to be consistent with the procedural and substantive
elements of this final rule. Regulatory consistency across federal,
State, and Tribal governments with respect to issues like timing,
waiver, and scope of section 401 reviews and conditions would help
ensure that section 401 is implemented nationally in an efficient,
effective, and transparent manner. Although such updates may have an
initial burden on certifying authorities, they will ultimately result
in more efficient certification and federal permitting processes. The
Agency will face a similar task in updating its own NPDES regulations
after this final rule is published, but will similarly benefit from
more efficient, effective and transparent certification processes under
updated regulations. Making the rule effective 30 days after
publication in the Federal Register would be consistent with applicable
law; however, the Agency is establishing the effective date 60 days
after publication of the final rule in the Federal Register. This
additional time will allow EPA to develop implementation materials for
States, Tribes and federal agencies, as necessary or appropriate. The
Agency stands ready to provide technical assistance to States, Tribes,
and federal agencies seeking to update their certification procedures,
guidance or regulations.
    By promulgating these long-overdue regulations, it is not the EPA's
intent that States or Tribes violate either federal, State, or Tribal
law pending completion of updates to applicable State or Tribal law.
The Agency is aware that most if not all States have emergency
rulemaking authorities that may help avoid such outcomes. Furthermore,
as States and Tribes enact conforming changes to their existing laws,
pursuant to section 401(b), the EPA remains ready and willing to
provide any necessary technical assistance.
    A few commenters supporting the proposed rule acknowledged the
EPA's desire to preserve State sovereignty and principles of
cooperative federalism while at the same time creating greater national
consistency in both federal and State regulations implementing section
401. One commenter observed that the proposed rule would make the
regulations consistent with the intent of the 1972 CWA amendments while
allowing the States to retain their primary roles in the section 401
water quality certification process. Some commenters stated the current
regulations have allowed States to impose conditions beyond the
appropriate scope set forth in the statute, leading to lengthy delays
in the certification process and resulting in a certification process
that is ill-defined, confusing in scope, and lacking clear deadlines. A
number of commenters asserted that the proposed rule would promote
regulatory certainty, help streamline the federal permitting process
for critical infrastructure development, enhance the ability of project
proponents to plan for construction, and facilitate early and
constructive engagement between project proponents, States or
authorized Tribes, and federal agencies to ensure that proposed
projects will be protective of local water quality.
    The EPA acknowledges that although many certifications reflect an
appropriately limited interpretation of the purpose and scope of
section 401 and are issued without controversy, some certifying
authorities have implemented water quality certification programs that
exceed the boundaries set by Congress in section 401. After considering
all of the comments received, the Agency has made several changes,
described further below, to provide greater clarity and regulatory
certainty in the final rule.

F. Legal Background

    This final rule concludes the EPA's first comprehensive effort to
promulgate federal rules governing the implementation of CWA section
401. The Agency's 1971 water quality certification regulations pre-
dated the 1972 CWA amendments. This final rule therefore provides the
EPA's first holistic analysis of the statutory text, legislative
history,\6\ and relevant case law informing the implementation of the
CWA section 401 program by the Agency and its federal, State, and
Tribal partners. The final rule, while focused on the relevant
statutory provisions and case law interpreting those provisions, is
informed by the Agency's expertise developed over nearly 50 years of
implementing the CWA and policy considerations where necessary to
address certain ambiguities in the statutory text. The following
sections describe the basic operational construct and history of the
1972 CWA amendments, how section 401 fits within that construct, and
certain core administrative and legal principles that provide the
foundation for this final rule.
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    \6\ The EPA observes that some legislative history related to
section 401 is internally inconsistent. When interpreting section
401 for purposes of this rulemaking, the Agency has generally
accorded such inconsistent and ambiguous legislative history less
weight.
---------------------------------------------------------------------------

1. The Clean Water Act
    Congress amended the CWA \7\ in 1972 to address longstanding
concerns regarding the quality of the nation's waters and the federal
government's ability to address those concerns under existing law.
Prior to 1972, responsibility for controlling and redressing water
pollution in the nation's waters largely fell to the Corps under the
Rivers and Harbors Act of 1899 (RHA). While much of that statute
focused on restricting obstructions to navigation on the nation's major
waterways, section 13 of the RHA made it unlawful to discharge refuse
``into any navigable water of the United States, or into any tributary
of any navigable water from which the same shall float or be washed
into such navigable water.'' \8\ 33 U.S.C. 407. Congress had also
enacted the Water Pollution Control Act of 1948, Public Law 80-845, 62
Stat. 1155 (June 30, 1948), to address interstate water pollution, and
subsequently amended that statute in 1956 (giving the statute its
current formal name), in 1961, and in 1965. The early versions of the
CWA promoted the development of pollution abatement programs, required
States to develop water quality standards, and authorized the federal
government to bring enforcement actions to abate water pollution.
---------------------------------------------------------------------------

    \7\ The FWPCA has been commonly referred to as the CWA following
the 1977 amendments to the FWPCA. Public Law 95-217, 91 Stat. 1566
(1977). For ease of reference, the Agency will generally refer to
the FWPCA in this notice as the CWA or the Act.
    \8\ The term ``navigable water of the United States'' is a term
of art used to refer to a water subject to federal jurisdiction
under the RHA. See, e.g., 33 CFR 329.1. The term is not synonymous
with the phrase ``waters of the United States'' under the CWA, see
id., and the general term ``navigable waters'' has different
meanings depending on the context of the statute in which it is
used. See, e.g., PPL Montana, LLC v. Montana, 132 S. Ct. 1215, 1228
(2012).
---------------------------------------------------------------------------

    These earlier statutory frameworks, however, proved challenging for
regulators, who often worked backwards from an overly-polluted waterway
to determine which dischargers and which sources of pollution may be
responsible. See EPA v. State Water Resources Control Bd., 426 U.S.
200, 204 (1976). In fact, Congress determined that the prior

statutes were inadequate to address the decline in the quality of the
nation's waters, see City of Milwaukee v. Illinois, 451 U.S. 304, 310
(1981), so Congress performed a ``total restructuring'' and ``complete
rewriting'' of the existing statutory framework of the Act in 1972, id.
at 317 (quoting legislative history of 1972 amendments). That
restructuring resulted in the enactment of a comprehensive scheme
designed to prevent, reduce, and eliminate pollution in the nation's
waters generally, and to regulate the discharge of pollutants into
waters of the United States specifically. See, e.g., S.D. Warren Co. v.
Maine Bd. of Envtl. Prot., 547 U.S. 370, 385 (2006) (``[T]he Act does
not stop at controlling the `addition of pollutants,' but deals with
`pollution' generally[.]'').
    The objective of the new statutory scheme was ``to restore and
maintain the chemical, physical, and biological integrity of the
Nation's waters.'' 33 U.S.C. 1251(a). In order to meet that objective,
Congress declared two national goals: (1) ``that the discharge of
pollutants into the navigable waters be eliminated by 1985;'' and (2)
``that wherever attainable, an interim goal of water quality which
provides for the protection and propagation of fish, shellfish, and
wildlife and provides for recreation in and on the water be achieved by
July 1, 1983 . . . .'' Id. at 1251(a)(1)-(2).
    Congress established several key policies that direct the work of
the Agency to effectuate those goals. For example, Congress declared as
a national policy ``that the discharge of toxic pollutants in toxic
amounts be prohibited; . . . that Federal financial assistance be
provided to construct publicly owned waste treatment works; . . . that
areawide waste treatment management planning processes be developed and
implemented to assure adequate control of sources of pollutants in each
State; . . . [and] that programs for the control of nonpoint sources of
pollution be developed and implemented in an expeditious manner so as
to enable the goals of this Act to be met through the control of both
point and nonpoint sources of pollution.'' Id. at 1251(a)(3)-(7).
    Congress provided a major role for the States in implementing the
CWA, balancing the traditional power of States to regulate land and
water resources within their borders with the need for a national water
quality regulation. For example, the statute highlighted ``the policy
of the Congress to recognize, preserve, and protect the primary
responsibilities and rights of States to prevent, reduce, and eliminate
pollution'' and ``to plan the development and use . . . of land and
water resources . . . .'' Id. at 1251(b). Congress also declared as a
national policy that States manage the major construction grant program
and implement the core permitting programs authorized by the statute,
among other responsibilities. Id. Congress added that ``[e]xcept as
expressly provided in this Act, nothing in this Act shall . . . be
construed as impairing or in any manner affecting any right or
jurisdiction of the States with respect to the waters (including
boundary waters) of such States.'' Id. at 1370.\9\ Congress also
pledged to provide technical support and financial aid to the States
``in connection with the prevention, reduction, and elimination of
pollution.'' Id. at 1251(b).
---------------------------------------------------------------------------

    \9\ 33 U.S.C. 1370 also prohibits states with EPA-approved CWA
programs from adopting any limitations, prohibitions, or standards
that are less stringent than required by the CWA.
---------------------------------------------------------------------------

    To carry out these policies, Congress broadly defined ``pollution''
to mean ``the man-made or man-induced alteration of the chemical,
physical, biological, and radiological integrity of water,'' id. at
1362(19), to parallel the broad objective of the Act ``to restore and
maintain the chemical, physical, and biological integrity of the
Nation's waters.'' Id. at 1251(a). Congress then crafted a non-
regulatory statutory framework to provide technical and financial
assistance to the States to prevent, reduce, and eliminate pollution in
the nation's waters generally. See, e.g., id. at 1256(a) (authorizing
the EPA to issue ``grants to States and to interstate agencies to
assist them in administering programs for the prevention, reduction,
and elimination of pollution''); see also 84 FR 56626, 56632 (Oct. 22,
2019) (discussing non-regulatory program provisions); 85 FR 22250,
22253 (April 21, 2020) (same).
    In addition to the Act's non-regulatory measures to control
pollution of the nation's waters, Congress created a federal regulatory
program designed to address the discharge of pollutants into a subset
of those waters identified as ``the waters of the United States.'' See
33 U.S.C. 1362(7). Section 301 contains the key regulatory mechanism:
``Except as in compliance with this section and sections 302, 306, 307,
318, 402, and 404 of this Act, the discharge of any pollutant by any
person shall be unlawful.'' Id. at 1311(a). A ``discharge of a
pollutant'' is defined to include ``any addition of any pollutant to
navigable waters from any point source,'' such as a pipe, ditch or
other ``discernible, confined and discrete conveyance.'' Id. at
1362(12), (14). The term ``pollutant'' means ``dredged spoil, solid
waste, incinerator residue, sewage, garbage, sewage sludge, munitions,
chemical wastes, biological materials, radioactive materials, heat,
wrecked or discarded equipment, rock, sand, cellar dirt and industrial,
municipal, and agricultural waste discharged into water.'' Id. at
1362(6). Thus, it is unlawful to discharge pollutants into waters of
the United States from a point source unless the discharge is in
compliance with certain enumerated sections of the CWA, including by
obtaining authorizations pursuant to the section 402 NPDES permit
program or the section 404 dredged or fill material permit program. See
id. at 1342, 1344. Congress therefore intended to achieve the Act's
objective ``to restore and maintain the chemical, physical, and
biological integrity of the Nation's waters'' by addressing pollution
of all waters via non-regulatory means and federally regulating the
discharge of pollutants to the subset of waters identified as
``navigable waters.'' \10\
---------------------------------------------------------------------------

    \10\ Fundamental principles of statutory interpretation support
the Agency's recognition of a distinction between ``nation's
waters'' and ``navigable waters.'' As the Supreme Court has
observed, ``[w]e assume that Congress used two terms because it
intended each term to have a particular, nonsuperfluous meaning.''
Bailey v. United States, 516 U.S. 137, 146 (1995) (recognizing the
canon of statutory construction against superfluity). Further, ``the
words of a statute must be read in their context and with a view to
their place in the overall statutory scheme.'' FDA v. Brown &
Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (internal
quotation marks and citation omitted); see also United Savings Ass'n
v. Timbers of Inwood Forest Associates, 484 U.S. 365, 371
(``Statutory construction . . . is a holistic endeavor. A provision
that may seem ambiguous in isolation is often clarified by the
remainder of the statutory scheme--because the same terminology is
used elsewhere in a context that makes its meaning clear[.]'')
(citation omitted). The non-regulatory sections of the CWA reveal
Congress' intent to restore and maintain the integrity of the
nation's waters using federal assistance to support state and local
partnerships to control pollution in the nation's waters in addition
to a federal regulatory prohibition on the discharge of pollutants
into the navigable waters. If Congress intended the terms to be
synonymous, it would have used identical terminology. Instead,
Congress chose to use separate terms, and the Agency is instructed
by the Supreme Court to presume Congress did so intentionally. For
further discussion, see 84 FR at 56632 and 85 FR at 22253.
---------------------------------------------------------------------------

    Within the regulatory programs established by the Act, two
principal components focus on ``achieving maximum `effluent
limitations' on `point sources,' as well as achieving acceptable water
quality standards,'' and the development of the NPDES permitting
program that imposes specific discharge limitations for regulated
entities. EPA v. State Water Resources Control Bd., 426 U.S. at 204.
Together these components provide a framework for the Agency to focus
on

reducing or eliminating discharges while creating accountability for
each regulated entity that discharges into a waterbody, facilitating
greater enforcement and overall achievement of the CWA water quality
goals. Id.; see Oregon Natural Desert Association v. Dombeck, 172 F.3d
1092, 1096 (9th Cir. 1998) (observing that 1972 amendments ``largely
supplanted'' earlier versions of CWA ``by replacing water quality
standards with point source effluent limitations'').
    Under this statutory scheme, the States \11\ are authorized to
assume program authority for issuing section 402 and 404 permits within
their borders, subject to certain limitations. 33 U.S.C. 1342(b),
1344(g). States are also responsible for developing water quality
standards for ``waters of the United States'' within their borders and
reporting on the condition of those waters to the EPA every two years.
Id. at 1313, 1315. States must develop total maximum daily loads
(TMDLs) for waters that are not meeting established CWA water quality
standards and must submit those TMDLs to the EPA for approval. Id. at
1313(d). And, central to this final rule, States under CWA section 401
have authority to grant, grant with conditions, deny, or waive water
quality certifications for every federal license or permit issued
within their borders that may result in a discharge into waters of the
United States. Id. at 1341. These same regulatory authorities can be
assumed by Indian Tribes under section 518 of the CWA, which authorizes
the EPA to treat eligible Tribes with reservations in a similar manner
to States (referred to as ``treatment as States'' or TAS) for a variety
of purposes, including administering the principal CWA regulatory
programs. Id. at 1377(e). In addition, States and Tribes retain
authority to protect and manage the use of those waters that are not
waters of the United States under the CWA. See, e.g., id. at 1251(b),
1251(g), 1370, 1377(a).
---------------------------------------------------------------------------

    \11\ The CWA defines ``state'' as ``a State, the District of
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Commonwealth of the Northern Mariana Islands,
and the Trust Territory of the Pacific Islands.'' 33 U.S.C. 1362(3).
---------------------------------------------------------------------------

    In enacting section 401, Congress recognized that where States and
Tribes do not have direct permitting authority (because they do not
have section 402 or 404 program authorization or where Congress has
preempted a regulatory field, e.g., under the Federal Power Act), they
may still play a valuable role in protecting the water quality of
federally regulated waters within their borders in collaboration with
federal agencies. Under section 401, a federal agency may not issue a
license or permit for an activity that may result in a discharge into
waters of the United States, unless the appropriate authority provides
a section 401 certification or waives its ability to do so. The
authority to certify a federal license or permit lies with the agency
(the certifying authority) that has jurisdiction over the location of
the discharge to the receiving water of the United States. Id. at
1341(a)(1). Examples of federal licenses or permits potentially subject
to section 401 certification include, but are not limited to, CWA
section 402 NPDES permits in States where the EPA administers the
permitting program; CWA section 404 and RHA sections 9 and 10 permits
issued by the Corps; bridge permits issued by the U.S. Coast Guard
(USCG); and hydropower and pipeline licenses issued by the Federal
Energy Regulatory Commission (FERC).
    Under section 401, a certifying authority may grant, grant with
conditions, deny, or waive certification in response to a request from
a project proponent. The certifying authority determines whether the
potential discharge from the proposed activity will comply with the
applicable provisions of sections 301, 302, 303, 306, and 307 of the
CWA and any other appropriate requirement of state law. Id. Certifying
authorities may also add to a certification ``any effluent limitations
and other limitations, and monitoring requirements'' necessary to
assure compliance. Id. at 1341(d). These additional provisions must
become conditions of the federal license or permit should it be issued.
Id. A certifying authority may deny certification if it is unable to
determine that the discharge from the proposed activity will comply
with the applicable sections of the CWA and appropriate requirements of
state law. If a certifying authority denies certification, the federal
license or permit may not be issued. Id. at 1341(a)(1). A certifying
authority may waive certification by ``fail[ing] or refus[ing] to act
on a request for certification, within a reasonable period of time
(which shall not exceed one year) after receipt of such request.'' Id.
    With the exception of section 401, the EPA has promulgated
regulatory programs designed to ensure that the CWA is implemented as
Congress intended in the 1972 CWA.\12\ This includes pursuing the
overall ``objective'' of the CWA to ``restore and maintain the
chemical, physical, and biological integrity of the Nation's waters,''
id. at 1251(a), while implementing the specific ``policy'' directives
from Congress to, among other things, ``recognize, preserve, and
protect the primary responsibilities and rights of States to prevent,
reduce, and eliminate pollution'' and ``to plan the development and use
. . . of land and water resources.'' Id. at 1251(b); see also Webster's
II, New Riverside University Dictionary (1994) (defining ``policy'' as
a ``plan or course of action, as of a government[,] designed to
influence and determine decisions and actions;'' an ``objective'' is
``something worked toward or aspired to: Goal''). The Agency therefore
recognizes a distinction between the specific word choices of Congress,
which reflect the need to develop regulatory programs that aim to
accomplish the goals of the Act while implementing the specific policy
directives of Congress. For further discussion of these principles, see
84 FR 56638-39 and 85 FR at 22269-70.
---------------------------------------------------------------------------

    \12\ As noted in section II.F.3 of this notice, the EPA's 1971
certification regulations were promulgated prior to the 1972 CWA
Amendments and had not been updated to reflect the current statutory
text until this final rule was developed.
---------------------------------------------------------------------------

    Congress' authority to regulate navigable waters, including waters
subject to CWA section 401 water quality certification, derives from
its power to regulate the ``channels of interstate commerce'' under the
Commerce Clause. Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824); see
also United States v. Lopez, 514 U.S. 549, 558-59 (1995) (describing
the ``channels of interstate commerce'' as one of three areas of
congressional authority under the Commerce Clause). The Supreme Court
explained in Solid Waste Agency of Northern Cook County v. U.S. Army
Corps of Engineers (SWANCC) that the term ``navigable'' indicates
``what Congress had in mind as its authority for enacting the Clean
Water Act: Its traditional jurisdiction over waters that were or had
been navigable in fact or which could reasonably be so made.'' 531 U.S.
159, 172 (2001). The Court further explained that nothing in the
legislative history of the Act provides any indication that ``Congress
intended to exert anything more than its commerce power over
navigation.'' Id. at 168 n.3. The Supreme Court, however, has
recognized that Congress intended ``to exercise its powers under the
Commerce Clause to regulate at least some waters that would not be
deemed `navigable' under the classical understanding of that term.''
United States v. Riverside Bayview Homes, 474 U.S. 121, 133 (1985); see
also SWANCC, 531 U.S. at 167.

    The classical understanding of the term navigable was first
articulated by the Supreme Court in The Daniel Ball:

    Those rivers must be regarded as public navigable rivers in law
which are navigable in fact. And they are navigable in fact when
they are used, or are susceptible of being used, in their ordinary
condition, as highways of commerce, over which trade and travel are
or may be conducted in the customary modes of trade and travel on
water. And they constitute navigable waters of the United States
within the meaning of the Acts of Congress, in contradistinction
from the navigable waters of the States, when they form in their
ordinary condition by themselves, or by uniting with other waters, a
continued highway over which commerce is or may be carried on with
other States or foreign countries in the customary modes in which
such commerce is conducted by water.

    77 U.S. (10 Wall.) 557, 563 (1871). Over the years, this
traditional test has been expanded to include waters that had been used
in the past for interstate commerce, see Economy Light & Power Co. v.
United States, 256 U.S. 113, 123 (1921), and waters that are
susceptible for use with reasonable improvement, see United States v.
Appalachian Elec. Power Co., 311 U.S. 377, 407-10 (1940).
    By the time the 1972 CWA amendments were enacted, the Supreme Court
had held that Congress' authority over the channels of interstate
commerce was not limited to regulation of the channels themselves but
could extend to activities necessary to protect the channels. See
Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S. 508, 523
(1941) (``Congress may exercise its control over the non-navigable
stretches of a river in order to preserve or promote commerce on the
navigable portions.''). The Supreme Court also had clarified that
Congress could regulate waterways that formed a part of a channel of
interstate commerce, even if they are not themselves navigable or do
not cross State boundaries. See Utah v. United States, 403 U.S. 9, 11
(1971). Congress therefore intended to assert federal regulatory
authority over more than just waters traditionally understood as
navigable, while rooting that authority in ``its commerce power over
navigation.'' SWANCC, 531 U.S. at 168 n.3.
    The EPA recognizes and respects the primary responsibilities and
rights of States to regulate their land and water resources, as
reflected in CWA section 101(b). 33 U.S.C. 1251(b), see also id. at
1370. The oft-quoted objective of the CWA to ``restore and maintain the
chemical, physical, and biological integrity of the Nation's waters,''
id. at 1251(a), must be implemented in a manner consistent with
Congress' policy directives. The Supreme Court long ago recognized the
distinction between waters subject to federal authority, traditionally
understood as navigable, and those waters ``subject to the control of
the States.'' The Daniel Ball, 77 U.S. (10 Wall.) 557, 564-65 (1870).
Over a century later, the Supreme Court in SWANCC reaffirmed the
States' ``traditional and primary power over land and water use.'' 531
U.S. at 174. Ensuring that States retain authority over their land and
water resources helps carry out the overall objective of the CWA and
ensures that the Agency is giving full effect and consideration to the
entire structure and function of the Act. See, e.g., Hibbs v. Winn, 542
U.S. 88, 101 (2004) (``A statute should be construed so that effect is
given to all its provisions, so that no part will be inoperative or
superfluous, void or insignificant.'') (citation omitted); see also
Rapanos v. United States, 547 U.S. 715, 755-56 (2006) (Scalia, J.,
plurality) (``[C]lean water is not the only purpose of the statute. So
is the preservation of primary state responsibility for ordinary land-
use decisions. 33 U.S.C. 1251(b).'') (original emphasis).
    In summary, Congress relied on its authority under the Commerce
Clause when it enacted the CWA and intended to assert federal authority
over more than just waters traditionally understood as navigable, but
it limited the exercise of that authority to ``its commerce power over
navigation.'' SWANCC, 531 U.S. at 168 n.3. The Court in SWANCC found
that ``[r]ather than expressing a desire to readjust the federal-state
balance [in a manner that would result in a significant impingement of
the States' traditional and primary power over land and water use],
Congress chose [in the CWA] to `recognize, preserve, and protect the
primary responsibilities and rights of States . . . to plan the
development and use . . . of land and water resources . . .'' Id. at
174 (quoting 33 U.S.C. 1251(b)). The Court found no clear statement
from Congress that it had intended to permit federal encroachment on
traditional State power and construed the CWA to avoid the significant
constitutional questions related to the scope of federal authority
authorized therein. Id. at 173-74. That is because the Supreme Court
has instructed that ``[w]here an administrative interpretation of a
statute invokes the outer limits of Congress' power, we expect a clear
indication that Congress intended that result.'' Id. at 172. The Court
has further stated that this is particularly true ``where the
administrative interpretation alters the federal-state framework by
permitting federal encroachment upon a traditional state power.'' Id.
at 173; see also Will v. Michigan Dept. of State Police, 491 U.S. 58,
65 (1989) (``[I]f Congress intends to alter the `usual constitutional
balance between the States and the Federal Government,' it must make
its intention to do so `unmistakably clear in the language of the
statute.' '') (quoting Atascadero State Hospital v. Scanlon, 473 U.S.
234, 242 (1985)); Gregory v. Ashcroft, 501 U.S. 452, 461 (1991)
(``[The] plain statement rule . . . acknowledg[es] that the States
retain substantial sovereign powers under our constitutional scheme,
powers with which Congress does not readily interfere''). This means
that the executive branch's authority under the CWA, while broad, is
not unlimited, and the waters to which CWA regulatory programs apply
must necessarily respect those limits. For further discussion of these
principles, see 84 FR 56655 and 85 FR at 22264. See section II.F.6 of
this final rule preamble for a summary of public comments and Agency
responses on interstate commerce.
    In some cases, CWA section 401 denials have been challenged on
grounds that the denial improperly interfered with interstate commerce.
See, e.g., Lighthouse Resources, Inc. v. Inslee, No. 3:18-cv-5005,
Complaint at ]] 206-210; ]] 224-248 (W.D. Wash. filed Jan. 8, 2018)
(alleging that State's denial of section 401 certification violated
dormant Commerce Clause and dormant foreign Commerce Clause). In Lake
Carriers Association v. EPA, 652 F.3d 1 (D.C. Cir. 2011), the court of
appeals found that the section 401 statutory scheme of delegation of
authority to States, by itself, does not create an impermissible burden
on interstate commerce; however, the court signaled that certain
actions taken by States pursuant to section 401 could be subject to
dormant Commerce Clause challenges. 652 F.3d at 10 (``If [petitioners]
believe that the certification conditions imposed by any particular
state pose an inordinate burden on their operations, they may challenge
those conditions in that state's courts. If [petitioners] believe that
a particular state's law imposes an unconstitutional burden on
interstate commerce, they may challenge that law in federal (or state)
court.'').
2. The EPA's Role in Implementing Section 401
    The EPA, as the federal agency charged with administering the CWA,
is responsible for developing regulations and guidance to ensure
effective implementation of all CWA programs,

including section 401.\13\ In addition to administering the statute and
promulgating implementing regulations, the Agency has several other
roles under section 401.
---------------------------------------------------------------------------

    \13\ See 33 U.S.C. 1251(d) (``Except as otherwise expressly
provided in this chapter, the Administrator of the Environmental
Protection Agency . . . shall administer this chapter.''); id. at
1361(a); Mayo Found. for Medical Educ. and Res. v. United States,
562 U.S. 44, 45 (2011); Hoopa Valley Tribe v. FERC, 913 F.3d 1099,
1104 (D.C. Cir. 2019); Ala. Rivers Alliance v. FERC, 325 F.3d 290,
296-97 (D.C. Cir. 2003); Cal. Trout v. FERC, 313 F.3d 1131, 1133
(9th Cir. 2002); Am. Rivers, Inc. v. FERC, 129 F. 3d 99, 107 (2d
Cir. 1997).
---------------------------------------------------------------------------

    The EPA acts as the section 401 certification authority under two
circumstances. First, the EPA will certify on behalf of a State or
Tribe where the jurisdiction in which the discharge will originate does
not itself have certification authority. 33 U.S.C. 1341(a)(1). In
practice, this results in the EPA certifying on behalf of the many
Tribes that do not have TAS authority for section 401. Second, the EPA
will act as the certifying authority where the discharge would
originate on lands of exclusive federal jurisdiction.\14\
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    \14\ The federal government may obtain exclusive federal
jurisdiction over lands in multiple ways, including where the
federal government purchases lands consistent with article 1,
section 8, clause 17 of the U.S. Constitution and a state chooses to
cede jurisdiction to the federal government, or where the federal
government reserved jurisdiction upon granting statehood. See
Collins v. Yosemite Park Co., 304 U.S. 518, 529-30 (1938); James v.
Dravo Contracting Co., 302 U.S. 134, 141-42 (1937); Surplus Trading
Co. v. Cook, 281 U.S. 647, 650-52 (1930); Fort Leavenworth Railroad
Co. v. Lowe, 114 U.S. 525, 527 (1895). Examples of lands of
exclusive federal jurisdiction include Denali National Park.
---------------------------------------------------------------------------

    The EPA also notifies neighboring jurisdictions when the
Administrator determines that a discharge may affect the quality of
such jurisdictions' waters. Id. at 1341(a)(2). Although section 401
certification authority lies with the jurisdiction where the discharge
originates, a neighboring jurisdiction whose water quality is
potentially affected by the discharge may have an opportunity to raise
objections to a certification issued for a federal license or permit.
Where the EPA Administrator determines that a discharge subject to
section 401 ``may affect'' the water quality of a neighboring
jurisdiction, the EPA is required to notify that other jurisdiction.
Id. If the neighboring jurisdiction determines that the discharge
``will affect'' the quality of its waters in violation of a water
quality requirement of that jurisdiction, it may notify the EPA and the
federal licensing or permitting agency of its objection to the license
or permit. Id. It may also request a hearing on its objection with the
federal licensing or permitting agency. At such a hearing, section 401
requires the EPA to submit its evaluation and recommendations with
respect to the objection. The federal agency will consider the
jurisdiction's and the EPA's recommendations, and any additional
evidence presented at the hearing, and ``shall condition such license
or permit in such manner as may be necessary to insure compliance with
the applicable water quality requirements'' of the neighboring
jurisdiction. Id. If the conditions cannot ensure compliance, the
federal agency shall not issue the license or permit.
    The EPA also must provide technical assistance for section 401
certifications upon the request of any federal or State agency or
project proponent. Id. at 1341(b). Technical assistance might include
provision of any relevant information on or comment on methods to
comply with applicable effluent limitations, standards, regulations,
requirements, or water quality standards.
    Finally, the EPA is responsible for developing regulations and
guidance to ensure effective implementation of all CWA programs,
including section 401. Legislative history indicates that Congress
created the water quality certification requirement to ``recognize[ ]
the responsibility of Federal agencies to protect water quality
whenever their activities affect public waterways.'' S. Rep. No. 91-
351, at 3 (1969). ``In the past, these [Federal] licenses and permits
have been granted without any assurance that the [water quality]
standards will be met or even considered.'' Id. As an example, the
legislative history discusses the Atomic Energy Commission's failure to
consider the impact of thermal pollution on receiving waters when
evaluating ``site selection, construction, and design or operation of
nuclear powerplants.'' Id.
    The certification requirement first appeared in section 21(b) of
the FWPCA, and it required States to certify that ``such activity will
be conducted in a manner which will not violate applicable water
quality standards.'' Public Law 91-224, 21(b)(1), 84 Stat. 91 (1970)
(emphasis added). As described above, the 1972 amendments restructured
the CWA and created a framework for compliance with effluent
limitations that would be established in discharge permits issued
pursuant to the new federal permitting program. The pre-existing water
quality certification requirement was retained in section 401 of the
1972 amendments but modified to be consistent with the overall
restructuring of the CWA. The new section 401 required a water quality
certification to assure that the ``discharge will comply'' with
effluent limitations and other enumerated regulatory provisions of the
Act. 33 U.S.C. 1341(a) (emphasis added). The 1972 amendments also
established a new section 401(d), which provides that certifications
``shall set forth any effluent limitations and other limitations, and
monitoring requirements necessary to assure'' compliance with the same
enumerated CWA provisions and with ``any other appropriate
requirement'' of State or Tribal law. 33 U.S.C. 1341(d).
    The EPA first promulgated water quality certification regulations
in 1971 to implement section 21(b) of the FWPCA.\15\ Some operative
provisions of the EPA's 1971 certification regulations contain language
from section 21(b) of the FWPCA that Congress changed in the 1972
amendments. For example, the EPA's 1971 certification regulations
directed authorities to certify that ``the activity will be conducted
in a manner which will not violate applicable water quality
standards.'' 40 CFR 121.2(a)(2)-(3) (emphasis added). These outdated
provisions do not reflect the language of section 401 (as discussed
elsewhere in this preamble) and have caused confusion for States,
Tribes, stakeholders, and courts reviewing section 401 certifications.
In section 304(h) of the CWA, Congress commanded the EPA to promulgate
certification guidelines within 180 days of enactment of the 1972
amendments. See 33 U.S.C. 1314(h) (directing EPA to ``promulgate,'' by
April 1973, ``guidelines establishing test procedures for the analysis
of pollutants that shall include the factors which must be provided in
any certification pursuant to section 401 of this Act''). Yet the EPA
has not updated its certification regulations to conform with the 1972
amendments until now. A primary goal for this final rule is to update
and clarify the Agency's regulations to ensure that they are consistent
with the CWA.
---------------------------------------------------------------------------

    \15\ The EPA's 1971 certification regulations were located at 40
CFR part 121. The EPA has also promulgated regulations addressing
how 401 certification applies to the CWA section 402 NPDES program,
found at 40 CFR 124.53, 124.54, 124.55. See 48 FR 14264 (Apr. 1,
1983). This final rule does not address the NPDES regulations, and
the Agency will make any necessary conforming regulatory changes in
a subsequent rulemaking.
---------------------------------------------------------------------------

3. The EPA's 1971 Certification Regulations
    The EPA's 1971 certification regulations required certifying
authorities to act on a certification request within a ``reasonable
period of time.'' 40 CFR 121.16(b). The regulations provided that the
federal licensing or permitting agency

determines what constitutes a ``reasonable period,'' and that the
period shall generally be six months but in any event shall not exceed
one year. Id.
    The 1971 certification regulations also provided that certifying
authorities may waive the certification requirement under two
circumstances: First, when the certifying authority sends written
notification expressly waiving its authority to act on a request for
certification; and second, when the federal licensing or permitting
agency sends written notification to the EPA Regional Administrator
that the certifying authority failed to act on a certification request
within a reasonable period of time after receipt of such a request. Id.
at 121.16(a)-(b). Once waiver occurs, certification is not required,
and the federal license or permit may be issued. 33 U.S.C. 1341(a).
    The 1971 certification regulations established different
requirements that applied when the EPA was the certifying authority,
including specific information that must be included in a certification
request and additional procedures. Under these requirements, the
project proponent was required to submit to the EPA Regional
Administrator the name and address of the project proponent, a
description of the facility or activity and of any related discharge
into waters of the United States, a description of the function and
operation of wastewater treatment equipment, dates on which the
activity and associated discharge would begin and end, and a
description of the methods to be used to monitor the quality and
characteristics of the discharge. 40 CFR 121.22. Once the request was
submitted to the EPA, the Regional Administrator was required to
provide public notice of the request and an opportunity to comment,
specifically stating that ``all interested and affected parties will be
given reasonable opportunity to present evidence and testimony at a
public hearing on the question whether to grant or deny certification
if the Regional Administrator determines that such a hearing is
necessary or appropriate.'' Id. at 121.23. If, after consideration of
relevant information, the Regional Administrator determined that there
is ``reasonable assurance that the proposed activity will not result in
a violation of applicable water quality standards,'' the Regional
Administrator would issue the certification.\16\ Id. at 121.24.
---------------------------------------------------------------------------

    \16\ Use of the terms ``reasonable assurance'' and ``activity''
in this operative provision of the EPA's 1971 certification
regulations was consistent with section 21(b) of the pre-1972
statutory language. However, those terms are not used in the
operative provision of CWA section 401, which replaced the pre-1972
language. See Public Law 91-224, 21(b)(1), 84 Stat. 91 (1970).
---------------------------------------------------------------------------

    The 1971 certification regulations identified a number of
requirements that all certifying authorities must include in a section
401 certification. Id. at 121.2. For example, the regulations provided
that a section 401 certification shall include the name and address of
the project proponent. Id. at 121.2(a)(2). They also provided that the
certification shall include a statement that the certifying authority
examined the application made by the project proponent to the federal
licensing or permitting agency and bases its certification upon an
evaluation of the application materials which are relevant to water
quality considerations or that it examined other information sufficient
to permit the certifying authority to make a statement that there is a
``reasonable assurance that the activity will be conducted in a manner
which will not violate applicable water quality standards.'' Id. at
121.2(a)(2)-(3). Finally, the regulations provided that the
certification shall state ``any conditions which the certifying agency
deems necessary or desirable with respect to the discharge of the
activity,'' and other information that the certifying authority deems
appropriate.\17\ Id. at 121.2(a)(4)-(5).
---------------------------------------------------------------------------

    \17\ The term ``desirable'' is also not used in CWA section 401.
---------------------------------------------------------------------------

    The 1971 certification regulations also established a process for
the EPA to provide notification to neighboring jurisdictions in a
manner that is similar to that provided in CWA section 401(a)(2). Under
the 1971 certification regulations, the Regional Administrator was
required to review the federal license or permit application, the
certification, and any supplemental information provided to the EPA by
the federal licensing or permitting agency, and if the Regional
Administrator determined that there was ``reason to believe that a
discharge may affect the quality of the waters of any State or States
other than the State in which the discharge originates,'' the Regional
Administrator would notify each affected State within thirty days of
receipt of the application materials and certification. Id. at 121.13.
If the documents provided were insufficient to make the determination,
the Regional Administrator could request any supplemental information
``as may be required to make the determination.'' Id. at 121.12. In
cases where the federal licensing or permitting agency held a public
hearing on the objection raised by a neighboring jurisdiction, notice
of such objection was required to be forwarded to the Regional
Administrator by the licensing or permitting agency no later than 30
days prior to the hearing. Id. at 121.15. At the hearing, the Regional
Administrator was required to submit an evaluation and
``recommendations as to whether and under what conditions the license
or permit should be issued.'' Id.
    The 1971 certification regulations established that the Regional
Administrator ``may, and upon request shall'' provide federal licensing
and permitting agencies with information regarding water quality
standards and advise them as to the status of compliance by dischargers
with the conditions and requirements of applicable water quality
standards. Id. at 121.30.
    Finally, the 1971 certification regulations established an
oversight role for the EPA when a certifying authority modified a prior
certification. The regulation provided that a certifying authority
could modify its certification ``in such manner as may be agreed upon
by the certifying agency, the licensing or permitting agency, and the
Regional Administrator.'' Id. at 121.2(b) (emphasis added).
    As noted throughout this final rule preamble, the EPA's 1971
certification regulations were promulgated prior to the 1972 CWA
amendments and in many respects do not reflect the current statutory
language in section 401. In addition, the EPA's 1971 certification
regulations do not address some important procedural and substantive
components of section 401 certification review and action. This final
rule is intended to modernize the EPA's regulations, align them with
the current text and structure of the CWA, and provide additional
regulatory procedures that the Agency believes will help promote
consistent implementation of section 401 and streamline federal license
and permit processes, consistent with the objectives of the Executive
Order.
4. Judicial Interpretations of Section 401
    During the 48 years since its passage, the federal courts on
numerous occasions have interpreted key provisions of section 401. The
United States Supreme Court has twice addressed questions related to
the scope and triggering mechanism of section 401, and lower courts
also have addressed certain elements of section 401 certifications.
This section of the preamble summarizes the U.S. Supreme Court
decisions and major lower court decisions.

a. U.S. Supreme Court Decisions
i. PUD No. 1 of Jefferson County
    In 1994, the Supreme Court reviewed a water quality certification
issued by the State of Washington for a new hydroelectric project on
the Dosewallips River. See PUD No. 1 of Jefferson County v. Washington
Dep't of Ecology, 511 U.S. 700 (1994) (PUD No. 1). This particular
decision, though narrow in its holding, has been read by other courts
as well as the EPA (in past years) and some States and Tribes to
significantly broaden the scope of section 401 beyond its plain
meaning.
    The principal dispute adjudicated in PUD No. 1 was whether a State
or Tribe may require a minimum stream flow as a condition in a
certification issued under section 401. In this case, the project
proponent identified two potential discharges from its proposed
hydroelectric facility: ``the release of dredged and fill material
during construction of the project, and the discharge of water at the
end of the tailrace after the water has been used to generate
electricity.'' 511 U.S. at 711. The project proponent argued that the
minimum stream flow condition was unrelated to these discharges and
therefore beyond the scope of the State's authority under section 401.
Id.
    The Court analyzed sections 401(a) and 401(d); specifically, it
analyzed the use of different terms in those sections of the statute to
inform the scope of a section 401 certification. Section 401(a)
requires the certifying authority to certify that the discharge from a
proposed federally licensed or permitted project will comply with
enumerated CWA provisions, and section 401(d) allows the certifying
authority to include conditions to assure that the applicant will
comply with enumerated CWA provisions and `` `any other appropriate'
state law requirements.'' 511 U.S. at 700. Emphasizing that the text of
section 401(d) ``refers to the compliance of the applicant, not the
discharge,'' the Court concluded that section 401(d) ``is most
reasonably read as authorizing additional conditions and limitations on
the activity as a whole once the threshold condition, the existence of
a discharge, is satisfied.'' Id. at 712.
    The Court then concluded that this interpretation of the statute
was consistent with the EPA's 1971 certification regulations, to which
the Court accorded Chevron deference.\18\ The Court favorably quoted
the EPA's 1971 certification regulations at 40 CFR 121.2(a)(3); quoted
the EPA's guidance titled Wetlands and 401 Certification; and stated
that ``EPA's conclusion that activities--not merely discharges--must
comply with state water quality standards is a reasonable
interpretation of Sec.  401 and is entitled to deference.'' 511 U.S. at
712 (citing, inter alia, Chevron U.S.A. Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984)).
---------------------------------------------------------------------------

    \18\ The Court apparently failed to identify or understand that
the EPA's regulations were promulgated prior to the 1972 CWA
amendments and thus do not interpret the 1972 Act.
---------------------------------------------------------------------------

    The Court was careful to note that a State's authority to condition
a certification ``is not unbounded'' and that States ``can only ensure
that the project complies with `any applicable effluent limitations and
other limitations, under [33 U.S.C. 1311, 1312]' or certain other
provisions of the Act, `and with any other appropriate requirement of
State Law.' '' 511 U.S. at 712. The Court concluded that ``state water
quality standards adopted pursuant to Sec.  303 are among the `other
limitations' with which a State may ensure compliance through the Sec.
401 certification process'' and noted that its view ``is consistent
with EPA's view of the statute,'' again citing the EPA's pre-1972
regulations and subsequent guidance. Id. at 713.
    Although PUD No. 1 has been interpreted broadly by some to expand
State authority under section 401--beyond assessing water quality
impacts from the discharge, so as to allow conditions beyond the
enumerated CWA provisions--the Court did not stray from the bedrock
principles that a section 401 certification must address water quality
and that appropriate conditions include those necessary to assure
compliance with the State's water quality standards. Indeed, referring
to the section 401 language allowing certification conditions based on
``any other appropriate requirements of state law,'' the Court
explicitly declined to speculate ``on what additional state laws, if
any, might be incorporated by this language. But at a minimum,
limitations imposed pursuant to state water quality standards adopted
pursuant to Sec.  303 are appropriate requirements of state law.'' 511
U.S. at 713 (emphasis added).
    On the scope of section 401, the dissenting opinion in PUD No. 1
would have declined to adopt the interpretation suggested by the EPA's
regulations and guidance and instead analyzed the statutory section as
a whole, attempting to harmonize sections 401(a) and (d). The dissent
first noted that, if the majority's conclusion that States can impose
conditions unrelated to discharges is correct, ``Congress' careful
focus on discharges in Sec.  401(a)(1)--the provision that describes
the scope and function of the certification process--was wasted
effort,'' and that the majority's conclusion ``effectively eliminates
the constraints of Sec.  401(a)(1).'' 511 U.S. at 726 (Thomas, J.,
dissenting). The dissent then ``easily reconciled'' the two provisions
by concluding that ``it is reasonable to infer that the conditions a
State is permitted to impose on certification must relate to the very
purpose the certification process is designed to serve. Thus, while
section 401(d) permits a State to place conditions on a certification
to ensure compliance of `the applicant,' those conditions must still be
related to discharges.'' Id. at 726-27. The dissent further noted that
each of the CWA provisions enumerated in section 401 ``describes
discharge-related limitations'' and therefore that the plain language
of section 401(d) supports the conclusion that certification conditions
must address water quality concerns from the discharge, not the
proposed activity as a whole. Id. at 727. Finally, the dissent applied
the principle ejusdem generis in its analysis of statutory construction
and concluded that because ``other appropriate requirements of state
law'' are included in a list of more specific discharge-related CWA
provisions, this ``general reference to `appropriate' requirements of
state law is most reasonably construed to extend only to provisions
that, like the other provisions in the list, impose discharge-related
restrictions.'' Id. at 728.
    The dissent also took issue with the majority's reliance, at least
in part, on the EPA's regulations and its application of Chevron
deference. The dissent noted that the Court had not first identified
ambiguity in the statute and that the federal government had not sought
judicial deference to EPA's regulations. 511 U.S. at 728-29 (Thomas,
J., dissenting). See also Brief for the United States as Amicus Curiae
Supporting Affirmance, PUD No. 1 of Jefferson County v. Washington
Dep't of Ecology, No. 92-1911, (Dec. 1993). The dissent noted that
there was no EPA interpretation directly addressing the relationship
between sections 401(a) and (d), and that the only existing EPA
regulation that addresses the conditions that may appear in section 401
certifications ``speaks exclusively in terms of limiting discharges.''
\19\ Id. (citing 40 CFR 121.2(a)(4)).
---------------------------------------------------------------------------

    \19\ The amicus brief filed by the Solicitor General on behalf
of the EPA in this case did not grapple with the language in 401(a)
and (d) at all, but primarily argued that the proposed project had
two distinct discharges (which were undisputed) and that ``both
discharges could reasonably be said to cause a violation of the
State's water quality standards,'' including the designated uses and
antidegradation components. Brief for the United States as Amicus
Curiae Supporting Affirmance, PUD No. 1 of Jefferson County v.
Washington Dep't of Ecology, No. 92-1911 at 12 n. 2 (Dec. 1993)
(``It is therefore unnecessary to determine in this case whether
Congress intended by the use of the term ``applicant,'' rather than
``discharge, '' in section 401(d) to grant States a broader power to
condition certifications under section 401(d) than to deny them
under section 401(a) and, if so, whether there are limitations on
the States' authority to impose such conditions.'') The amicus brief
also did not inform the Court that the Agency's implementing
regulations included language from the prior version of the Act.

---------------------------------------------------------------------------

    The PUD No. 1 decision addressed two other scope-related elements
of section 401: Whether certification conditions may be designed to
address impacts to designated uses, and whether conditions related to
minimum stream flows are appropriate under section 401. First, the
Court conducted a plain language analysis of the CWA and concluded
that, ``under the literal terms of the statute, a project that does not
comply with a designated use of the water does not comply with the
applicable water quality standards.'' Id. at 715. This means that a
section 401 certification may appropriately include conditions to
require compliance with designated uses, which, pursuant to the CWA,
are a component of a water quality standard. Id. Second, the Court
acknowledged that the Federal Power Act (FPA) empowers FERC ``to issue
licenses for projects `necessary or convenient . . . for the
development, transmission, and utilization of power across, along,
from, or in any of the streams . . . over which Congress has
jurisdiction,' '' and that the FPA ``requires FERC to consider a
project's effect on fish and wildlife.'' Id. at 722. Although the Court
had previously rejected a State's minimum stream flow requirement that
conflicted with a stream flow requirement in a FERC license, the Court
found no similar conflict in this case because FERC had not yet issued
the hydropower license. Id. Given the breadth of federal permits that
CWA section 401 applies to, the Court declined to assert a broad
limitation on stream flow conditions in certifications but concluded
that they may be appropriate if necessary to enforce a State's water
quality standard, including designated uses. Id. at 723.
ii. S.D. Warren
    In 2006, the Court revisited section 401 in connection with the
State of Maine's water quality certification of FERC license renewals
for five hydroelectric dams on the Presumpscot River. S.D. Warren Co.
v. Maine Bd. of Envtl. Prot., 547 U.S. 370 (2006) (S.D. Warren). The
issue presented in S.D. Warren was whether operation of a dam may
result in a ``discharge'' into the waters of the United States,
triggering the need for a section 401 certification, even if the
discharge did not add any pollutants. The Court analyzed the use of
different terms-- ``discharge'' and ``discharge of pollutants''--within
the CWA, how those terms are defined, and how they are used in CWA
sections 401 and 402. The Court noted that section 402 expressly uses
the term ``discharge of pollutants'' and requires permits for such
discharges; and that section 401, by contrast, provides a tool for
States to maintain water quality within their jurisdiction and uses the
term ``discharge,'' which is not independently defined in the Act.\20\
Finding no specific definition of the term ``discharge'' in the
statute, the Court turned to its common dictionary meaning: A ``flowing
or issuing out'' and concluded that the term is ``presumably broader''
than ``discharge of a pollutant.'' Id. at 375-76.
---------------------------------------------------------------------------

    \20\ The Court noted that the Act provides that ``the term
`discharge' when used without qualification incudes a discharge of a
pollutant, and a discharge of pollutants.'' 547 U.S. at 375 (quoting
33 U.S.C. 1362(16)).
---------------------------------------------------------------------------

    The Court held that operating a dam ``does raise a potential for a
discharge'' and, therefore, triggers section 401. 547 U.S. at 373. In
so holding, the Court observed that Congress had defined ``pollution''
under the Act to mean ``the man-made or man-induced alteration of the
chemical, physical, biological, and radiological integrity of water,''
33 U.S.C. 1362(19), and that ``[t]he alteration of water quality as
thus defined is a risk inherent in limiting river flow and releasing
water through turbines.'' 547 U.S. at 385. Such changes in a river
``fall within a State's legitimate legislative business, and the Clean
Water Act provides for a system that respects the State's concerns.''
Id. at 386. The Court concluded by observing that ``[s]tate
certifications under [section] 401 are essential in the scheme to
preserve state authority to address the broad range of pollution.'' Id.
This sentence, when read in isolation, has been interpreted as
broadening the scope of section 401 to allow certifying authorities to
consider potential environmental impacts from a proposed federally
licensed or permitted project that have nothing to do with water
quality. However, the Court followed that sentence with a quote from
Senator Muskie's floor statement during the enactment of section 401:

    No polluter will be able to hide behind a Federal license or
permit as an excuse for a violation of water quality standard[s]. No
polluter will be able to make major investments in facilities under
a Federal license or permit without providing assurance that the
facility will comply with water quality standards. No State water
pollution control agency will be confronted with a fait accompli by
an industry that has built a plant without consideration of water
quality requirements.

    Id. (emphasis added). The Court then stated, ``These are the very
reasons that Congress provided the States with power to enforce `any
other appropriate requirement of State law,' 33 U.S.C. 1341(d), by
imposing conditions on federal licenses for activities that may result
in a discharge.'' Id. (emphasis added). Thus, when read in context, the
Court's statement about a State's authority to address a ``broad range
of pollution'' under section 401 does not suggest that an ``appropriate
requirement of State law'' means anything other than water quality
requirements or that a State's or Tribe's action on a certification
request can be focused on anything other than compliance with
appropriate water quality requirements.
b. Circuit Court Decisions
    Over the years, federal appellate courts have also addressed
important aspects of section 401, including the timing for certifying
authorities to act on a request and the scope of authority of federal
agencies other than the EPA to make determinations on section 401
certifications. This section highlights a few of the most significant
issues concerning section 401 and the most often cited decisions but
does not cover the universe of lower federal court or State court case
law. The Agency intends for this final rule to provide consistency and
certainty where there may currently be conflicting or unclear but
locally binding legal precedent.
    Recent case law has provided insight concerning the timing and
waiver provisions of section 401. In 2018, the Second Circuit addressed
the question of when the statutory review clock begins. N.Y. State
Dep't of Envtl. Conservation v. FERC, 884 F.3d 450, 455-56 (2d Cir.
2018). Considering Millennium Pipeline Company's certification request,
the court disagreed with the State of New York and held that the
statutory time limit is not triggered when a State determines that a
request for certification is ``complete,'' but that the ``plain
language of Section 401 outlines a bright-line rule regarding the
beginning of review,'' and that the clock starts after ``receipt of
such request'' by the certifying authority. Id.

Otherwise, the court noted that States could ``blur this bright-line
into a subjective standard, dictating that applications are complete
only when state agencies decide that they have all the information they
need. The state agencies could thus theoretically request supplemental
information indefinitely.'' Id. at 456. The Agency agrees with this
holding.
    The D.C. Circuit has also recently analyzed the statutory timeline
for review of a certification and has correctly held that, consistent
with the plain language of CWA section 401(a)(1), ``while a full year
is the absolute maximum, [the statute] does not preclude a finding of
waiver prior to the passage of a full year.'' Hoopa Valley Tribe v.
FERC, 913 F.3d 1099, 1104 (D.C. Cir. 2019), cert. denied sub nom. Cal.
Trout v. Hoopa Valley Tribe, 140 S.Ct. 650 (2019). Significantly, the
court observed that the EPA's own regulations--promulgated by ``the
agency charged with administering the CWA''--allowed for waiver after
only six months. Id.
    In Hoopa Valley Tribe, the D.C. Circuit also correctly held that
``the withdrawal-and-resubmission of water quality certification
requests does not trigger new statutory periods of review.'' Id. at
1101. The court found that the project proponent and the certifying
authorities (California and Oregon) had improperly entered into an
agreement whereby the ``very same'' request for State certification of
its relicensing application was automatically withdrawn-and resubmitted
every year by operation of ``the same one-page letter,'' submitted to
the States before the statute's one-year waiver deadline. Id. at 1104.
The court observed that ``[d]etermining the effectiveness of such a
withdrawal-and-resubmission scheme is an undemanding inquiry'' because
the statute's text ``is clear'' that failure or refusal to act on a
request for certification within a reasonable period of time, not to
exceed one year, waives the State's ability to certify.\21\ Id. at
1103. The court found that, pursuant to the unlawful withdrawal-and-
resubmission ``scheme,'' the States had not yet rendered a
certification decision ``more than a decade'' after the initial request
was submitted to the States. Id. at 1104. The court declined to
``resolve the legitimacy'' of an alternative arrangement whereby an
applicant may actually submit a new request in place of the old one.
Id. Nor did it determine ``how different a request must be to
constitute a `new request' such that it restarts the one-year clock.''
Id. On the facts before it, the court found that ``California's and
Oregon's deliberate and contractual idleness'' defied the statute's
one-year limitation and ``usurp[ed] FERC's control over whether and
when a federal license will issue.'' Id.
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    \21\ Two decisions from the Second Circuit recently acknowledged
that project proponents have withdrawn and resubmitted certification
requests to extend the reasonable time period for a state to review.
See N.Y. State Dep't of Envtl. Conservation v. FERC, 884 F.3d at
456; Constitution Pipeline v. N.Y. State Dep't of Envtl.
Conservation, 868 F.3d 87, 94 (2d Cir. 2018). However, in neither
case did the court opine on the legality of such an arrangement.
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    Another important area of case law deals with the scope of
authority and deference provided to federal agencies other than the EPA
in addressing issues arising under section 401. Many other federal
agencies, including FERC and the Corps, routinely issue licenses and
permits that require section 401 certifications and are responsible for
enforcing State certification conditions that are incorporated into
federal licenses and permits. However, because the EPA has been charged
by Congress with administering the CWA, some courts have concluded that
those other federal agencies are not entitled to deference on their
interpretations of section 401. See Ala. Rivers Alliance v. FERC, 325
F.3d 290, 296-97 (D.C. Cir. 2002); Am. Rivers, Inc. v. FERC, 129 F.3d
99, 107 (2d. Cir. 1997). Other courts have concluded that FERC has an
affirmative obligation to determine whether a certifying authority has
complied with requirements related to a section 401 certification. See
City of Tacoma v. FERC, 460 F.3d 53, 67-68 (D.C. Cir. 2006) (FERC had
an obligation to ``obtain some minimal confirmation of such
compliance''); see also Keating v. FERC, 927 F.2d 616, 622-23, 625
(D.C. Cir. 1991) (while a federal agency may not question propriety of
State certification before license has issued, ``FERC must at least
decide whether the state's assertion of revocation satisfies section
401(a)(3)'s predicate requirements'').
    In an important determination of procedural authorities, the Second
Circuit has held that FERC--as the licensing agency--``may determine
whether the proper state has issued the certification or whether a
state has issued a certification within the prescribed period.'' Am.
Rivers, Inc., 129 F.3d at 110-11. This holding is correct; the holding
is consistent with and supported by the implied statutory authority of
a federal agency to establish the ``reasonable period of time (which
shall not exceed one year)'' in the first place. 33 U.S.C. 1341(a)(1).
    Case law also highlights the potential enforcement challenges that
federal agencies face with section 401 certification conditions that
are included in federal licenses and permits. Federal agencies have
been admonished not to ``second guess'' a State's water quality
certification or its conditions, see, e.g., City of Tacoma, 460 F.3d at
67; Am. Rivers Inc., 129 F.3d at 107; U.S. Dept. of Interior v. FERC,
952 F.2d 538, 548 (D.C. Cir. 1992) (``FERC may not alter or reject
conditions imposed by the states through section 401 certificates.''),
even where the federal agency has attempted to impose conditions that
are more stringent than the State's conditions. See Sierra Club v. U.S.
Army Corps of Engineers, 909 F.3d 635, 648 (4th Cir. 2018) (``the plain
language of the Clean Water Act does not authorize the Corps to replace
a state condition with a meaningfully different alternative condition,
even if the Corps reasonably determines that the alternative condition
is more protective of water quality''); see also Lake Carriers' Assoc.
v. EPA, 652 F.3d 1, 6, 12 (D.C. Cir. 2011) (concluding that additional
notice and comment on State certification conditions would have been
futile because ``the petitioners have failed to establish that EPA can
alter or reject state certification conditions. . . .''). But in Lake
Carriers' Assoc., the court also observed, ``[n]otably, the petitioners
never argued that the certifications failed to `compl[y] with the terms
of section 401,' . . . by overstepping traditional bounds of state
authority to regulate interstate commerce'' (citing City of Tacoma, 460
F.3d at 67), and the court concluded that it ``therefore need not
consider whether EPA has authority to reject state conditions under
such circumstances.'' Also, in Snoqualmie Indian Tribe v. FERC, the
Ninth Circuit upheld FERC's inclusion of minimum flow requirements
greater than those specified in the State of Washington's certification
as long as they ``do not conflict with or weaken the protections
provided by the [State] certification.'' 545 F.3d 1207, 1219 (9th Cir.
2008). In that case, FERC had added license conditions increasing the
minimum flows specified in the State's certification in order to
``produce a great amount of mist'' which it determined would ``augment
the Tribe's religious experience,'' one of the water's designated uses.
Id.; see also cases discussed at section III.G of this notice affirming
a role for federal agencies to confirm whether certifications comply
with the requirements of section 401.
    This final rule is intended to provide clarity to certifying
authorities, federal agencies, and project proponents, as it

addresses comprehensively and for the first time relevant competing
case law and attempts to clarify the scope of conditions that may be
included in a certification and the federal agencies' role in the
certification process.
5. Administrative Law Principles
    To understand the full context and legal basis for this final rule,
it is useful to review some key governing principles of administrative
law. In general, administrative agencies can exercise only the
authority that has been provided to them by Congress, and courts must
enforce unambiguous terms that clearly express congressional intent.
However, when Congress delegates authority to administrative agencies,
it sometimes enacts ambiguous statutory provisions. To carry out their
congressionally authorized missions, agencies, including the EPA, must
often interpret ambiguous statutory terms. However, they must do so
consistent with congressional intent. In Chevron, U.S.A. v. Natural
Resources Defense Council, Inc., 467 U.S. 837 (1984) (Chevron), the
Supreme Court concluded that courts have a limited role when reviewing
agency interpretations of ambiguous statutory terms. In such cases,
reviewing courts defer to an agency's interpretation of ambiguous terms
if the agency's interpretation is reasonable. Under Chevron, federal
agencies--not federal courts--are charged in the first instance with
resolving statutory ambiguities to implement delegated authority from
Congress.
    The Supreme Court has described the Chevron analysis as a ``two-
step'' process. Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2124
(2016). At step one, the reviewing court determines whether Congress
has ``directly spoken to the precise question at issue.'' Chevron, 467
U.S. at 842. If so, ``that is the end of the matter; for the court, as
well as the agency, must give effect to the unambiguously expressed
intent of Congress.'' Id. at 842-43. If the statute is silent or
ambiguous, the reviewing court proceeds to the second step, in which
the court must defer to the agency's ``reasonable'' interpretation of
the statute. Id. at 844.
    In the field of judicial review of agencies' regulations that
interpret statutes that those agencies administer, Chevron deference
relies on the principle that ``when Congress grants an agency the
authority to administer a statute by issuing regulations with the force
of law, it presumes the agency will use that authority to resolve
ambiguities in the statutory scheme.'' Encino Motorcars, 136 S. Ct. at
2125 (citing Chevron, 467 U.S. at 843-44). Courts thus have applied
Chevron deference to an agency's statutory interpretation ``when it
appears that Congress delegated authority to the agency generally to
make rules carrying the force of law, and that the agency
interpretation claiming deference was promulgated in the exercise of
that authority.'' Mayo Found. for Medical Educ. and Res. v. United
States, 562 U.S. 44, 45 (2011) (quoting United States v. Mead Corp.,
533 U.S. 218, 226-27 (2001)).
    In Chevron, the Supreme Court reviewed the EPA's interpretation of
statutory language from the Clean Air Act Amendments of 1977. Congress
amended the Clean Air Act to impose requirements on States that had not
achieved the national air quality standards promulgated by the EPA.
States that had not attained the established air standards had to
implement a permit program that would regulate ``new or modified major
stationary sources'' of air pollution. Clean Air Act Amendments of
1977, Public Law 95-95, 91 Stat. 685 (1977). The EPA promulgated
regulations defining a ``stationary source'' as the entire plant where
pollutant-producing structures may be located. The EPA, therefore,
treated numerous pollution-producing structures collectively as a
single ``stationary source,'' even if those structures were part of the
same larger facility or complex. See 40 CFR 51.18(j)(1)(i)-(ii) (1983).
Under the EPA's regulation, a facility could modify or construct new
pollution-emitting structures within the facility or complex as long as
the stationary source--the facility as a whole--did not increase its
pollution emissions.
    In 1981, the Natural Resources Defense Council (NRDC) opposed the
EPA's definition of ``stationary source'' and filed a challenge to the
Agency's regulations. The D.C. Circuit agreed with the NRDC and set
aside the EPA's regulations. The D.C. Circuit acknowledged that the
Clean Air Act ``does not explicitly define what Congress envisioned as
a `stationary source,' to which the permit program . . . should
apply,'' and also concluded that Congress had not clearly addressed the
issue in the legislative history. NRDC v. Gorsuch, 685 F.2d 718, 723
(DC Cir. 1982). Without clear text or intent from Congress, the D.C.
Circuit looked to the purposes of the program to guide the court's
interpretation. Id. at 726. According to the court, Congress sought to
improve air quality when it amended the Clean Air Act, and the EPA's
definition of ``stationary source'' merely promoted the maintenance of
current air quality standards.
    In a unanimous decision, the Supreme Court reversed, finding that
the D.C. Circuit had committed a ``basic legal error'' by adopting ``a
static judicial definition of the term `stationary source' when it had
decided that Congress itself had not commanded that decision.''
Chevron, 467 U.S. at 842. The Court explained that it is not the
judiciary's place to establish a controlling interpretation of a
statute delegating authority to an agency, but, rather, that it is the
agency's job to ``fill any gap left, implicitly or explicitly, by
Congress.'' Id. at 843. When Congress expressly delegates to an
administrative agency the authority to interpret a statute through
regulation, courts cannot substitute their own interpretation of the
statute when the agency has provided a reasonable construction of the
statute. See id. at 843-44.
    During the rulemaking process, the EPA had explained that Congress
had not fully addressed the definition of ``source'' in the amendments
to the Clean Air Act or in the legislative history. Id. at 858. The
Supreme Court agreed, concluding that ``the language of [the statute]
simply does not compel any given interpretation of the term `source.'''
Id. at 860. And the legislative history associated with the amendments
was ``silent on the precise issue.'' Id. at 862.
    In its proposed and final rulemaking, the EPA noted that adopting
an individualized equipment definition of ``source'' could
disincentivize the modernization of plants, if industry had to go
through the permitting process to create changes. Id. at 858. The EPA
believed that adopting a plant-wide definition of ``source'' could
result in reduced pollution emissions. Id. Considering the Clean Air
Act's competing objectives of permitting economic growth and reducing
pollution emissions, the Supreme Court stated that ``the plantwide
definition is fully consistent with one of those concerns--the
allowance of reasonable economic growth--and, whether or not we believe
it most effectively implements the other, we must recognize that the
EPA has advanced a reasonable explanation for its conclusion that the
regulations serve the environmental objectives as well.'' Id. at 863.
The Court upheld the EPA's definition of the term ``stationary
source,'' explaining that ``the Administrator's interpretation
represents a reasonable accommodation of manifestly competing interests
and is entitled to deference: The regulatory scheme is technical and
complex, the

agency considered the matter in a detailed and reasoned fashion, and
the decision involves reconciling conflicting policies.'' Id. at
865.\22\
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    \22\ For other instructive applications of Chevron's
interpretative principles, see Entergy Corp. v. Riverkeeper, Inc.
556 U.S. 208, 222-23 (2009) (statutory silence interpreted as
``nothing more than a refusal to tie the agency's hands''); Zuni
Pub. School Dist. v Dep't of Educ. 550 U.S. 81, 89-94 (2007) (court
considered whether agency's interpretation was reasonable in light
of the ``plain language of the statute'' as well as the statute's
``background and basic purposes''); Healthkeepers, Inc. v. Richmond
Ambulance Auth., 642 F.3d 466, 471 (4th Cir. 2011) (``statutory
construction . . . is a holistic endeavor'').
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    In the Brand X decision, the Supreme Court further elaborated on
the Chevron doctrine, upholding agencies' broad power to interpret
ambiguous statutes as against contrary judicial interpretations. Even
if a court has ruled on the interpretation of a statute, the ``court's
prior judicial construction of a statute trumps an agency construction
otherwise entitled to Chevron deference only if the prior court
decision holds that its construction follows from the unambiguous terms
of the statute and thus leaves no room for agency discretion.'' Nat'l
Cable & Telecomm. Ass'n v. Brand X internet Serv., 545 U.S. 967, 982
(2005) (emphasis added). Put another way, Brand X held that ``a court's
choice of one reasonable reading of an ambiguous statute does not
preclude an implementing agency from later adopting a different
reasonable interpretation.'' United States v. Eurodif S.A., 555 U.S.
305, 315 (2009). This principle stems from Chevron itself, which
``established a `presumption that Congress, when it left ambiguity in a
statute meant for implementation by an agency, understood that the
ambiguity would be resolved, first and foremost, by the agency, and
desired the agency (rather than the courts) to possess whatever degree
of discretion the ambiguity allows.' '' Brand X, 545 U.S. at 982
(quoting Smiley v. Citibank, 517 U.S. 735, 740-41 (1996)). As Chevron
itself noted, even the ``initial agency interpretation is not instantly
carved in stone.'' Chevron, 467 U.S. at 863.
    In Brand X, the Federal Communications Commission (FCC or
Commission) interpreted the scope of the Communications Act of 1934,
which subjects providers of ``telecommunications service'' to mandatory
common-carrier regulations. Brand X, 545 U.S. at 977-78. Brand X
internet Services challenged the FCC's interpretation, and the Ninth
Circuit concluded, based on the court's precedent, that the
Commission's construction of the Communications Act was impermissible
Id. at 979-80. The Supreme Court granted certiorari and reversed. The
Supreme Court upheld the FCC's interpretation of the Communications Act
by applying Chevron's two-step analysis. The Court found that the
relevant statutory provisions failed to unambiguously foreclose the
Commission's interpretation, while other provisions were silent. The
FCC had ``discretion to fill the consequent statutory gap,'' and its
construction was reasonable. Id. at 997.
    As the Court noted, the entire ``point of Chevron is to leave the
discretion provided by the ambiguities of a statute with the
implementing agencies.'' 545 U.S. at 981 (quoting Smiley, 517 U.S. at
742). Thus courts cannot rely on judicial precedent to override an
agency's interpretation of an ambiguous statute. Id. at 982. Instead,
as a ``better rule,'' a reviewing court can rely only on precedent that
interprets a statute at ``Chevron step one.'' Id. ``Only a judicial
precedent holding that the statute unambiguously forecloses the
agency's interpretation, and therefore contains no gap for the agency
to fill, displaces a conflicting agency construction.'' Id. at 982-83.
A contrary rule would produce anomalous results, because the
controlling interpretation would then turn on whether a court or the
agency had interpreted the statutory provision first. See id. at 983.
``[W]hether Congress has delegated to an agency the authority to
interpret a statute does not depend on the order in which the judicial
and administrative constructions occur.'' Id. Agencies have the
authority to revise ``unwise judicial constructions of ambiguous
statutes.'' Id.
6. Response to Comments on the Legal Background
    The Agency solicited and received numerous comments on the legal
background for the proposed rule. Among others, these comments included
legal arguments pertaining to the Tenth Amendment, interstate commerce,
cooperative federalism, the APA, and the Agency's rulemaking authority.
The sections below provide the EPA's response to the most salient of
those comments.
a. The Tenth Amendment and the Commerce Clause
    Some commenters asserted the proposed rule would violate the Tenth
Amendment, citing the sovereignty that States have over waters of the
United States. One commenter asserted that jurisdictional power over
waters of the State was reserved for the States and not delegated to
Congress. Another commenter asserted that the proposal would constitute
a ``usurping'' of State authority and overstepping the Tenth Amendment
rights of the States. The EPA disagrees with these commenters. For the
reasons set forth in section II.F.1 of this notice and in the following
paragraph, the Agency considers this final rule to be a careful and
thoughtful clarification of State and Tribal involvement in federal
licensing or permitting proceedings, including those in which State and
Tribal authority may otherwise be preempted by federal law. The final
rule does not ``usurp'' State authority. As discussed, the EPA's final
rule is consistent with section 401, strikes the appropriate balance
Congress intended between federal and State authority, and does not
limit State authority any more than Congress intended under section
401.
    The Agency also received a comment asserting that the proposed rule
would violate the Tenth Amendment because federal agencies cannot
commandeer States to regulate interstate commerce in particular ways,
citing New York v. United States, 505 U.S. 144, 166 (1992). The
commenter noted that in New York, the Supreme Court, in striking down
portions of the Low-Level Radioactive Waste Policy Amendments Act of
1985 that required States to regulate as Congress instructed or to take
title to the waste, found that Congress cannot command States how to
legislate and that Congress must exercise legislative authority only
directly upon individuals. The Agency disagrees with this commenter.
This final rule neither directs the functioning of the States nor
commands States how to legislate or regulate. The final rule merely
affirms and clarifies the scope of the authority that Congress granted
to certifying authorities to review and condition a federal license or
permit within certain reasonable bounds, informed by the text of the
Act, and provides a procedural framework for States, Tribes, and
federal agencies to follow that will promote consistency in 401
certification proceedings.
    In the proposal, the EPA solicited comment on whether the proposed