121.16(b) (2019). If the Federal agency reviews for timeliness and
determines that the reasonable period of time has passed without the
certifying authority acting on the request for certification, then the
Federal agency may determine that a constructive waiver has occurred.
40 CFR 121.9(b). Similar to the approach in the 2020 Rule, the Agency
is finalizing regulatory text describing how the Federal agency must
communicate its waiver determination to the project proponent and
certifying authority. See id. Specifically, if a Federal agency
determines that the certification decision was not issued within the
reasonable period of time, the Federal agency shall promptly notify the
certifying authority and project proponent in writing that a waiver has
occurred. Id. Similar to the 2020 Rule, see Sec.  121.9(b) of the 2020
Rule, the Agency is also finalizing regulatory text that clarifies that
such notification from the Federal agency satisfies the project
proponent's requirement to obtain certification. 40 CFR 121.9(b). The
Agency made minor revisions to the text proposed at Sec.  121.9(c) to
clarify that a waiver only satisfies the project proponent's obligation
to obtain a certification and does not satisfy any other obligations
under section 401 (e.g., need to provide the Federal agency
supplemental information pursuant to Sec.  121.12). However, as
discussed in more detail below, the Agency is declining to finalize
regulatory text on the process that Federal agencies and certifying
authorities must follow for non-compliance with other facial
requirements of CWA section 401 including potential consequences and
remedy procedures. This is consistent with the Agency's approach to
Federal agency review prior to the 2020 Rule and avoids unnecessarily
encumbering the certification process with additional procedures.
    Many commenters agreed with the proposal's characterization of
constructive waiver as a ``severe consequence.'' Some commenters
expressed support for the position in the proposal that constructive
waiver may only occur when the certifying authority fails or refuses to
act (i.e., to grant, grant with conditions, deny, or expressly waive)
within the reasonable period of time. A few commenters stated that
procedural technicalities should not be a basis for an involuntary or
implicit waiver of certification.
    EPA agrees with commenters that a constructive waiver occurs only
where a certifying authority fails to act on a request for
certification (i.e., grant, deny, expressly waive) within the
reasonable period of time. The Agency recognizes that a constructive
waiver is a severe consequence; as discussed in section IV.F in this
preamble, a waiver means that a Federal license or permit which could
adversely impact the certifying authority's water quality (i.e., cause
noncompliance with water quality requirements) may proceed without any
input from the certifying authority. EPA encourages Federal agencies,
project proponents, and certifying authorities to communicate early and
often to prevent inadvertent waivers due to passage of time. For
example, a Federal agency could set up an MOA or other agreement with
certifying authorities to establish notification protocols prior to
finding a waiver of certification (e.g., where a certifying authority
has not acted by 30 days prior to the end of the reasonable period of
time, the Federal agency will notify the certifying

authority that a waiver will occur if it does not receive a
certification decision or a request to extend the reasonable period of
time in that 30 day period).\86\
---------------------------------------------------------------------------

    \86\ Nothing in section 401 precludes a Federal licensing or
permitting agency from considering input provided by a state or
authorized Tribe in a late certification decision. But that
consideration would occur outside the context of section 401 and
would be akin to consideration of input provided by the state or
Tribe in any other context (e.g., a public comment period). For
example, if a certifying authority included conditions in a late
certification, nothing in section 401 precludes the Federal
licensing or permitting agency from considering including similar
conditions in its Federal license or permit, even though section 401
would not compel the Federal agency to do so.
---------------------------------------------------------------------------

    A couple of commenters suggested that EPA require the Federal
agency to extend the reasonable period of time in instances where the
certifying authority failed to act and extending the reasonable period
of time would not exceed the one-year statutory time period from
receipt of the request for certification. These commenters asserted
that allowing constructive waiver before one year would be inconsistent
with cooperative federalism principles, and one of these commenters
asserted that section 401(a)(1) prohibited a finding of a constructive
waiver until after one year. Conversely, one commenter expressed
concern over the proposal's preamble language encouraging Federal
agencies to extend the reasonable period of time where a certifying
authority inadvertently waives certification, asserting that section
401 clearly provides that if a reasonable period of time is established
and the certifying authority does not act within that reasonable period
of time then waiver has occurred, and EPA cannot create a regulatory
override over clear statutory language.
    Aside from providing that a waiver occurs if the certifying
authority does not act within the reasonable period of time, the
statute does not provide direction on what should occur if a certifying
authority fails to meet the other statutory requirements in section
401. As discussed earlier, the legislative history indicates that
Congress added the waiver provision to prevent ``sheer inactivity'' by
a certifying authority from holding up the licensing or permitting
process. See H.R. Rep. No. 91-940, at 54-55 (March 24, 1970) (Conf.
Report). Consistent with the statutory language and legislative
history, EPA believes that Congress intended such an extreme outcome
only in situations where certifying authorities fail or refuse to make
a decision, and not where a certifying authority, otherwise attempting
to make a timely decision, fails to comply with other requirements of
section 401. Case law also provides support for the Federal agency
allowing the certifying authority to either demonstrate that its
decision meets section 401's requirements or remedy the situation, as
opposed to the Federal agency having authority to deem any failure an
automatic waiver of certification. See City of Tacoma, 460 F.3d at 68-
69 (``FERC should seek an affirmation from Ecology that it complied
with state law notice requirements when it issued its water quality
certification or, if it did not, that it has done so in response to
this decision.'').
    The Agency is declining to define the process that a Federal agency
and certifying authority must follow if the Federal agency's review
reveals that the wrong certifying authority issued the certification
decision, or the Federal agency was unable to obtain confirmation that
the certifying authority complied with its public notice procedures.
Most commenters providing input on this topic expressed support for
proposed Sec.  121.9(b) that if the Federal licensing or permitting
agency determines that certain statutory requirements (e.g., public
notice) have not been met, it must provide the certifying authority
with an opportunity to remedy the situation. However, a few commenters
expressed concern with the proposed automatic extensions for certifying
authorities that failed to comply with public notice procedures,
suggesting that it might incentivize certifying authorities to ignore
procedures and improperly extend the time for certification. Upon
further reconsideration, the Agency is declining to include regulatory
text addressing the potential consequences and remedies to deficient
certification decisions, aside from failure or refusal to act within
the reasonable period of time. As discussed in further detail below,
this restores the Agency's pre-2020 Rule approach to Federal agency
review and avoids unnecessarily encumbering the certification process
with more procedure.
    The Agency proposed at Sec.  121.9(b) that if a Federal agency
determines that a section 401 certification decision does not clearly
indicate whether it is a grant, grant with conditions, denial, or
express waiver, the Federal agency must notify the certifying authority
of the deficiency and provide the certifying authority with an
opportunity to remedy it. As discussed above, the Agency is not
finalizing regulatory text regarding Federal agency review of the
nature of the certification decision, so the proposed text regarding
next steps is no longer needed.
    The Agency did not propose any regulatory text explicitly
discussing the consequences or next steps where Federal agency review
reveals that the wrong certifying authority provided the certification
decision. However, the proposed rule preamble provided that if Federal
agency discovers that the wrong certifying authority issued the
certification, then the Federal agency should notify the project
proponent that it must seek certification from the appropriate
certifying authority before the Federal license or permit may be
issued. The Agency is not including regulatory text regarding next
steps for this aspect of Federal agency review, but continues to
encourage the Federal agency to promptly notify the project proponent
where the Federal agency determines that the certification decision was
not issued by the appropriate certifying authority. As noted above,
section 401 requires a project proponent to seek certification from the
jurisdiction in which the discharge originates or will originate. 33
U.S.C. 1341(a)(1). Therefore, it is incumbent on the project proponent
to identify and obtain certification (or waiver) from the proper
certifying authority--the entity responsible for certifying compliance
with applicable water quality requirements where the discharge
originates or will originate--before it can obtain a Federal license or
permit. See 40 CFR 121.1(b).
    The Agency is not finalizing the process proposed at Sec.  121.9(b)
for the Federal agency to follow if it is unable to obtain confirmation
from the certifying authority that the certifying authority complied
with its public notice procedures. The Agency proposed that the Federal
agency must notify the certifying authority if it determined that the
certifying authority did not provide public notice on the request for
certification and provide the certifying authority with an opportunity
to remedy the noted deficiency. 87 FR 35357. The proposal further
provided that, if necessary, the Federal agency must extend the
reasonable period of time to provide the certifying authority with an
opportunity to remedy the deficiency, but the reasonable period of time
may not exceed one year from the receipt of the certification request.
Id.
    Most commenters providing input on this aspect of the proposed rule
expressed support for Federal agencies extending the reasonable period
of time to allow for correction of deficiencies up to the statutory
one-year limit. A few commenters suggested that the final rule should
allow certifying authorities to

correct errors even after the reasonable period of time has ended,
including one commenter who suggested it should extend beyond the one-
year timeframe. Conversely, one commenter urged EPA to reconsider
requiring automatic extensions of the reasonable period of time as
necessary to allow the certifying authority with an opportunity to
remedy any deficiency. The commenter explained that it does not oppose
small extensions of time for certifying authorities to provide
additional detail or make minor changes necessary to satisfy the
elements. However, the commenter expressed concern that certifying
authorities may abuse this extension process by submitting purposely
incomplete decisions. According to the commenter, if a certifying
authority submits a clearly deficient certification decision, the
certifying authority should not be entitled to more time; instead, the
certification should be waived. Another commenter suggested that
corrections should be made within the reasonable period of time and be
limited to ``errors made in good faith.'' This commenter cautioned that
this provision should not allow or incentivize certifying authorities
to ignore procedures or take more time.
    The Agency is declining to define any specific process to remedy
any deficiencies identified through Federal agency review. As an
initial matter, the Agency did not provide a regulatory process for
Federal agency review prior to the 2020 Rule (aside from failure or
refusal to act within the reasonable period of time). Rather, prior EPA
guidance merely acknowledged that the Federal licensing or permitting
agency may review the procedural requirements of a certification
decision. See 2010 Handbook at 32 (rescinded in 2019, see supra) (``For
example, the federal permitting or licensing authority may review the
procedural requirements of [section] 401 certification, including
whether the proper state or tribe has certified, whether the state or
tribe complied with applicable public notice requirements, and whether
the certification decision was timely.'') (citing American Rivers, 129
F.3d at 110-111; City of Tacoma v. FERC, 460 F.3d 53, 68 (D.C. Cir.
2006)). The Agency is not aware of any issues, procedural or otherwise,
with Federal agencies and certifying authorities managing this process
pre-2020 Rule. Because this final rule returns the Agency to its pre-
2020 Rule posture on Federal agency review, the Agency is accordingly
declining to define a process to address deficiencies identified
through Federal agency review. The Agency expects this will provide
certifying authorities and Federal agencies with the flexibility to
address such procedural deficiencies in accordance with pre-2020 Rule
practices.
    The Agency emphasizes that other aspects of this final rule should
prevent the need for specific EPA-mandated process to remedy
deficiencies identified through Federal agency review. First, as
discussed in section IV.D of this preamble, certifying authorities have
an active role in setting the reasonable period of time with the
Federal agency. See 40 CFR 121.6(b). This approach provides certifying
authorities with an opportunity to ensure the length of the reasonable
period of time considers their specific timing needs and concerns.
Second, the final rule provides certifying authorities and Federal
agencies with the ability to extend the reasonable period of time as
needed, or automatically in limited cases. See 40 CFR 121.6(d) and (e).
Together, these components of the final rule should provide certifying
authorities with ample opportunities to ensure they have the
appropriate amount of time to act on a request for certification and
comply with the facial components of section 401. EPA notes that its
proposed automatic extensions for curing deficiencies (at proposed
Sec.  121.9(b)) would have applied only for failure to indicate the
nature of the decision and failure to provide public notice. In this
final rule, EPA has removed Federal agency review of the nature of the
decision and expressly limited review of public notice to simply
verifying that the certifying authority confirmed that it complied with
its public notice procedures. Additionally, as discussed in section
IV.F of this preamble, the Agency encourages certifying authorities to
include an indication that they complied with their public notice
procedures established in all certification decisions. This serves two
purposes. First, it ensures the certifying authority remains cognizant
of satisfying all statutory requirements in section 401, including the
need to establish and comply with public notice procedures. Second, it
clearly communicates the certifying authority's compliance with this
requirement of section 401 so that in the event the Federal agency
chooses to review for such compliance it may easily determine that the
certifying authority confirmed compliance with its public notice
procedures.
3. Implementation
    As discussed throughout this preamble, EPA emphasizes the
importance of communication between certifying authorities, Federal
agencies, and project proponents early and often through the
certification process. Consistent communication can ensure that
stakeholders develop a common understanding around timing and
information needs to complete the certification process and comply with
the facial requirements of section 401. Ideally, such communication
minimizes the need for Federal agency review. However, in the event a
Federal agency reviews a certifying authority's action, it is limited
to reviewing whether the action complies with the requirements of
section 401 as explicitly defined at final rule Sec.  121.8. Federal
agency review does not require, nor allow, a Federal agency to review
the substance of a certification decision or specific certification
condition (e.g., determine whether the certification or its conditions
is within the scope of section 401).
    In the proposal, EPA requested comment on whether the Agency should
develop procedures regarding how a certifying authority should respond
to a Federal agency's notice regarding deficiencies in its
certification decision. Several commenters provided various
recommendations on the procedural aspects of the Federal agency review
process, including recommending that the final rule should require the
Federal agency to immediately notify the certifying authority after a
deficiency was identified, recommending that Federal agencies develop
procedures providing how a certifying authority should respond to a
Federal agency's notice regarding deficiencies, and suggesting that the
final rule include a requirement that the Federal agency notify the
certifying authority that the certification has been received within
the reasonable period of time, and the certification conditions have
been incorporated into the relevant Federal license or permit.
    Under this final rule, if the Federal agency determines that the
certifying authority did not act on a request for certification within
the reasonable period of time, then the final rule requires the Federal
agency to promptly notify the certifying authority and project
proponent in writing that the certification requirement has been
waived. 40 CFR 121.9(b). This final rule does not require a Federal
agency to notify the certifying authority an impending deadline to act
on a certification request prior to finding

waiver for failing or refusing to act. Certifying authorities are
ultimately responsible for managing resources and ensuring that they
act on a request for certification within the reasonable period of
time. However, the Agency encourages Federal agencies to reach out to
certifying authorities to remind them of impending deadlines to act
prior to finding constructive waiver, or setting up MOAs or other
agreements to establish notification protocols prior to finding a
waiver of certification.
    EPA encourages Federal agencies to promptly notify certifying
authorities if they are seeking confirmation of certifying authority
compliance with public notice procedures, and to promptly notify
project proponents if they determine the certification decision was not
issued by the appropriate certifying authority. In either event, the
final rule does not define the contents of such notification, but EPA
encourages Federal agencies to provide notification in writing so the
certifying authority and/or project proponent can respond accordingly.
    EPA does not find it necessary to impose a regulatory requirement
for the Federal agency to notify the certifying authority that the
certification has been received within the reasonable period of time,
and that the certification conditions have been incorporated into the
relevant Federal license or permit. As discussed above, Federal agency
review is not a mandatory requirement under this final rule. The
certifying authority should know whether it has issued its decision in
the reasonable period of time due to its involvement in setting the
reasonable period of time. As long as the certifying authority provides
its certification decision within the reasonable period of time, the
Federal licensing or permitting agency is required to incorporate any
certification conditions into its license or permit. See 33 U.S.C
1341(d).

H. EPA's Roles Under Section 401

1. What is the Agency finalizing?
    Under section 401, EPA serves three different roles. First, EPA
acts as the certifying authority on behalf of states or Tribes that do
not have ``authority to give such certification.'' 33 U.S.C.
1341(a)(1). Second, EPA is also responsible for providing technical
assistance upon request from Federal agencies, certifying authorities,
or Federal license or permit applicants. Id. at 1341(b). Lastly, EPA is
responsible for notifying other states or authorized Tribes that may be
affected by a discharge from a federally licensed or permitted
activity, and where required, for providing an evaluation and
recommendations on such notified state or authorized Tribe's
objections. Id. at 1341(a)(2). This section focuses on EPA's role as a
certifying authority and in providing technical assistance. The
Agency's third role under section 401(a)(2), or the neighboring
jurisdictions process, is discussed in section IV.K in this preamble.
    Consistent with the proposal, the Agency is finalizing revisions to
the regulatory text at Sec. Sec.  121.16 and 121.17 to clarify EPA's
process when it acts as the certifying authority, such as updating its
public notice and hearing provisions. More specifically, the Agency is
finalizing that when EPA is the certifying authority, it must provide
public notice within 20 days of the date the request for certification
is received. 40 CFR 121.17(a). The final rule also states that when EPA
acts as the certifying authority, it is subject to the same
requirements as other certifying authorities. EPA is also finalizing
the regulatory text on EPA's technical assistance role at Sec.  121.18
which reflects the statutory text at section 401(b) more directly.
2. Summary of Final Rule Rationale and Public Comment
a. EPA's Role as a Certifying Authority
    EPA is finalizing revisions to the part 121 regulations to provide
greater clarity about EPA's process when it acts as the certifying
authority. Pursuant to section 401 of the CWA, EPA acts as the
certifying authority on behalf of states or Tribes that do not have
``authority to give such certification.'' 33 U.S.C. 1341(a)(1). The
1971 Rule required EPA to provide certification in two scenarios:
first, where EPA promulgated standards pursuant to section 10(c)(2) of
the 1970 Water Quality Improvement Act; and second, where water quality
standards had been established, but no state or interstate agency had
authority to provide certification. 40 CFR 121.21 (2019). As discussed
in section III in this preamble, the 1971 Rule was promulgated prior to
the enactment of the 1972 CWA amendments; as a result, the language in
the 1971 Rule regarding EPA as a certifying authority did not reflect
the amended text of section 401. In the 2020 Rule, EPA updated this
provision with new regulatory text that indicated that EPA provides
certification consistent with the 1972 statutory text and noted that
EPA was required to comply with part 121 when it acted as a certifying
authority. 40 CFR 121.13 (2020).
    EPA is finalizing minor, conforming modifications to Sec.
121.13(a) and (b) of the 2020 Rule. Specifically, consistent with the
language in section 401(a)(1), the Agency is reaffirming that EPA is
required to provide certification or waiver where no state, Tribe, or
interstate agency has the authority to provide certification. 40 CFR
121.16(a). The Agency is also reaffirming that, when it acts as a
certifying authority, EPA must comply with both section 401 and the
requirements in part 121. See 40 CFR 121.16(b).
    Currently, EPA acts as the certifying authority in two scenarios:
(1) on behalf of Tribes without ``treatment in a similar manner as a
state'' (TAS) and (2) on lands of exclusive Federal jurisdiction in
relevant respects. In the first scenario, if a Tribe does not obtain
TAS for section 401, EPA acts as the certifying authority for any
federally licensed or permitted activity that may result in any
discharge that originates in Indian country lands. As discussed in
section IV.L in this preamble, a Tribe may obtain TAS for section 401
for the purpose of issuing water quality certifications. When EPA
certifies on behalf of Tribes without TAS, its actions as a certifying
authority are informed by its Tribal policies and the Federal trust
responsibility to federally recognized Tribes. EPA's 1984 Indian
Policy, recently reaffirmed by EPA Administrator Regan, recognizes the
importance of coordinating and working with Tribes when EPA makes
decisions and manages environmental programs that affect Indian
country. See EPA Policy for the Administration of Environmental
Programs on Indian Reservations (November 8, 1984), available at
https://www.epa.gov/sites/default/files/2015-04/documents/indian-policy-84.pdf; see also Memorandum from Michael S. Regan to All EPA
Employees, Reaffirmation of the U.S. Environmental Protection Agency's
Indian Policy (September 30, 2021), available at https://www.epa.gov/system/files/documents/2021-09/oita-21-000-6427.pdf. This includes
coordinating and working with Tribes on whose behalf EPA reviews and
acts upon requests for certification on federally licensed or permitted
projects.
    In the second scenario, EPA acts as the certifying authority in
situations where any discharge from any activity subject to section 401
certification originates where the Federal Government has exclusive
jurisdiction in relevant respects. Some commenters said they had
concerns with EPA acting as the certifying authority for all national
parks. One commenter more broadly argued that section 401 does not
authorize EPA to issue certifications for lands subject to exclusive
Federal

jurisdiction and that it would be contrary to the statutory language
and intent for EPA to act as a certifying authority over such lands.
This commenter asserted that this approach would remove authority from
states to protect water quality under section 401 in large areas within
their borders.
    As an initial matter, EPA wishes to emphasize that not all Federal
lands or national parks are lands of exclusive Federal jurisdiction.
Rather, exclusive Federal jurisdiction is established only under
limited circumstances pursuant to the Enclave Clause of the U.S.
Constitution, article 1, section 8, clause 17. These circumstances
include (1) where the Federal Government purchases land with state
consent to jurisdiction, consistent with article 1, section 8, clause
17 of the U.S. Constitution; (2) where a state chooses to cede
jurisdiction to the Federal Government; and (3) where the Federal
Government reserved jurisdiction upon granting statehood. See Paul v.
United States, 371 U.S. 245, 263-65 (1963); 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 Company v. Cook, 281 U.S. 647,
650-52 (1930); Fort Leavenworth Railroad Company v. Lowe, 114 U.S. 525,
527 (1895).
    EPA disagrees with the commenter asserting that section 401 does
not authorize EPA to issue certifications for lands subject to
exclusive Federal jurisdiction in relevant respects and that it would
be contrary to the statutory language and intent for EPA to act as a
certifying authority over such lands. Section 401(a)(1) specifically
anticipates circumstances in which no state or interstate agency has
authority to provide certification, directing that ``[i]n any such case
where a State or interstate agency has no authority to give such a
certification, such certification shall be from the Administrator.'' 33
U.S.C. 1341(a)(1) (emphasis added). Lands of exclusive Federal
jurisdiction in relevant respects present a case where states lack
authority for certification pursuant to section 401, as states lack
legislative jurisdiction in these areas absent specific congressional
action. See Paul, 371 U.S. at 263 (finding precedent establishes ``that
the grant of `exclusive' legislative power to Congress over enclaves
that meet the requirements of Art. I, s 8, cl. 17, by its own weight,
bars state regulation without specific congressional action.''). In
section 401, Congress did not take specific action to grant authority
to states to issue certification over lands of exclusive jurisdiction.
On the contrary, Congress provided in section 401(a)(1) that the EPA
Administrator shall issue certification ``in any such case'' where no
state or interstate agency has authority to give certification, and
otherwise recognized the Administrator as a certifying authority. In
addition to the statutory text, the legislative history further
supports that Congress did not grant authority to states to issue
certification where states otherwise lack authority, such as lands of
exclusive Federal jurisdiction in relevant respects. See 116 Cong. Rep.
9316, 9328 (March 25, 1970) (statement of Rep. Harsha) (emphasis added)
(``Another area of great complexity is that covered by section 21--
certification by the States to Federal agencies in cases where
application has been made for Federal licenses or permits. That
certification must come from the States unless, of course, the waters
involved are under the direct supervision of the Federal Government or
there is no State certifying authority.''). As a result, EPA finds that
section 401 directs the Administrator to issue certification in lands
of exclusive Federal jurisdiction in relevant respects. The Agency
further disagrees that the Administrator issuing certification for
lands of exclusive Federal jurisdiction in relevant respects removes
authority from states, as states under section 401 and the U.S.
Constitution do not have a jurisdictional basis providing authority to
issue certification for lands of exclusive Federal jurisdiction in
relevant respects.
    Under this final rule, consistent with the 2020 Rule, when EPA acts
as the certifying authority, it is subject to the same requirements as
other certifying authorities (e.g., reasonable period of time to act on
a request for certification) under section 401 and 40 CFR part 121. In
contrast to the 2020 Rule, this final rule does not retain the request
for additional information provisions included in Sec.  121.14 of the
2020 Rule when EPA is the certifying authority. EPA proposed to remove
Sec.  121.14 of the 2020 Rule which introduced limits on EPA's ability,
as a certifying authority, to request additional information from a
project proponent once the reasonable period of time began. See 87 FR
35359 (June 9, 2022). These provisions included a requirement that EPA
must initially request additional information within 30 days of
receiving a request for certification and limitations on the type and
scope of additional information EPA may request. 40 CFR 121.14(a)
through (c) (2020). Additionally, the 2020 Rule required EPA to provide
the project proponent with a deadline to respond to requests for
additional information and acknowledged that a project proponent's
failure to provide additional information would neither extend the
reasonable period of time, nor prevent EPA from acting on the request
for certification. Id. at Sec.  121.14(d) and (e).
    Consistent with the proposal, EPA is removing Sec.  121.14 of the
2020 Rule in its entirety because it finds these provisions not
conducive to an efficient certification process for several reasons.
The preamble to the 2020 Rule stated that it was ``reasonable to assume
that Congress intended some appropriate limits be placed on the timing
and nature of such requests [for additional information]'' because of
the overarching statutory timeline. 85 FR 42271 (July 13, 2020). Yet,
neither the 2020 Rule preamble nor its regulatory text articulated how
a 30-day limitation on EPA's initial request for additional information
is compelled or even consistent with the statutory limitation that a
certifying authority must act within a reasonable period of time.
Although it is ideal for EPA to have relevant information to inform its
analysis early in the reasonable period of time, various questions or
needs may arise later in the review process that are critical to EPA
acting on a request for certification. There is nothing in the
statutory language that compels or even suggests that EPA should have a
limited ability to use the reasonable period of time to request
additional information to evaluate a request for certification and make
a fully informed decision. If the Agency is limited in its ability to
request additional information to inform its decision, it may need to
deny a request for certification instead of utilizing the additional
information to possibly grant certification. Such an outcome would
unnecessarily impede the Federal license or permitting process.
    The 2020 Rule also unnecessarily injected ambiguity into the
certification process. Section 121.14(b) of the 2020 Rule limited
requests for additional information to that which is ``directly related
to the discharge,'' while Sec.  121.14(c) of the 2020 Rule limited
requests only to information than can be ``collected or generated
within the reasonable period of time.'' Yet neither the phrase
``directly related to the discharge'' nor ``collected or generated
within the reasonable period of time'' was defined nor explained in the
preamble or regulatory text to the 2020 Rule which introduced
uncertainty into what kind of information EPA could actually request.
For example, how would the Agency determine if the information was
directly related to the discharge or that the information could

be collected or generated within the reasonable period of time?
Furthermore, the statutory language and this final rule already place a
number of limitations on all certifying authority decisions. As
finalized in Sec.  121.7(b), all certifying authorities, including EPA,
must act within the reasonable period of time and within the scope of
certification. EPA finds that these regulatory requirements are
sufficient to ensure the Agency will act on requests for certification
in a timely and appropriate manner. Consistent with the Agency's
removal of the limitations on EPA's ability to request additional
information, EPA is also finalizing the removal of the provisions at
Sec.  121.14(d) and (e) of the 2020 Rule, which discussed how EPA and
project proponents must respond to requests for additional information
or lack thereof.
    Consistent with the proposal, Sec.  121.17 provides that when EPA
acts as the certifying authority, it ``shall provide public notice of
the request for certification.'' 40 CFR 121.17(a). The Agency revised
proposed Sec.  121.17 to clarify that EPA will provide public notice on
the request for certification itself, as opposed to merely providing
public notice on the receipt of the request for certification. As
proposed, this final rule does not limit or specify the particular
manner(s) in which the public notice will occur to support broader
public participation. The Agency is also finalizing as proposed that if
a public hearing is determined appropriate when EPA acts as the
certifying authority, the hearing should be scheduled ``at an
appropriate time and place and, to the extent practicable, give all
interested and potentially affected parties the opportunity to present
evidence or testimony in person or by other means.'' 40 CFR 121.17(b).
    The statutory language of section 401(a)(1) requires states and
interstate agencies to establish procedures for public notice and
hearings. The 1971 Rule stated that EPA could provide public notice
either by mailing notice to state and local authorities, state agencies
responsible for water quality improvement, and ``other parties known to
be interested in the matter'' (including adjacent property owners and
conservation organizations), or, if mailed notice is deemed
``impracticable,'' by publishing notice in a newspaper of general
circulation in the area where the activity is proposed. 40 CFR 121.23
(2019). With regard to hearings, the 1971 Rule provided that the
Regional Administrator with oversight for the area of the proposed
project has discretion to determine that a hearing is ``necessary or
appropriate,'' and that ``[a]ll interested and affected parties'' would
have reasonable opportunity to present evidence and testimony at such
hearings. Id. EPA updated this provision in the 2020 Rule to expand the
scope of possible parties that may receive notice to avoid
unintentionally narrowing the list of potentially interested parties.
85 FR 42271. Additionally, under the 2020 Rule, EPA placed a timeframe
on when the Agency had to provide public notice following receipt of a
certification request and retained discretion to provide for a public
hearing as necessary or appropriate. Id; see 40 CFR 121.15 (2020).
    EPA is finalizing Sec.  121.17 as proposed, with minor, non-
substantive revisions, to facilitate participation by the broadest
number of potentially interested stakeholders and clarify that
following such public notice, the Administrator shall provide an
opportunity for public comment. Consistent with the Federal
Government's commitment to empower communities, protect public health
and the environment, and advance environmental justice in Executive
Orders 14096, 14008, 13990, and 12898, the final rule allows for
outreach designed to reach all potentially interested stakeholders,
including communities with environmental justice concerns. The Agency
encourages doing so by using all appropriate communication and outreach
means and methods (e.g., through local newspapers, online or electronic
media, or other appropriate media). This approach will allow EPA
greater flexibility to address on a case-by-case basis specific issues
regarding notice, such as broadband access issues and requirements for
regional publications, to provide notice in the most appropriate way to
allow for broad participation. Additionally, EPA is not providing an
exhaustive list or examples of potentially interested parties to avoid
unintentionally excluding some interested stakeholders on that list.
EPA generally believes those stakeholders to whom it is appropriate to
provide public notice may include state, Tribal, county, and municipal
authorities, heads of state agencies responsible for water quality,
adjacent property owners, and conservation organizations.
    EPA is also finalizing as proposed to provide public notice within
20 days following the date the request for certification is received.
The 1971 Rule did not set a time frame for EPA's public notice after
receiving a request for certification. In contrast, the 2020 Rule
stated that EPA would provide public notice 20 days from receipt of a
certification request. In EPA's view, continuing to provide a timeframe
for EPA's issuance of public notice after receiving a request for
certification will contribute to better accountability, transparency,
and certainty with respect to EPA's handling of requests for
certification. Generally, EPA finds it will be able to provide public
notice within the final rule's timeframe. EPA finalized an identical
timeframe under the 2020 Rule, which it has been able to meet without
difficulty in most instances.
    EPA is also finalizing as proposed that once the Administrator
provides public notice on a request for certification, the
Administrator must provide an opportunity for public comment. EPA is
not defining the length of the public comment period. Rather, EPA's
view is that the appropriate timeframe for comment is more
appropriately determined on a case-by-case basis, considering project-
specific characteristics. In general, EPA anticipates a 30-day comment
period; however, comment periods as short as 15 days or as long as 60
days may be warranted in some cases, based on the nature of the
project.
    EPA may also hold a public hearing after it provides public notice
on a request for certification. EPA is finalizing the public hearing
provision at Sec.  121.17(b) as proposed, with minor revisions to
remove superfluous language. For context, the 1971 Rule provided that
the Regional Administrator may hold a public hearing at their
discretion. 40 CFR 121.23 (2019). Although ``[a]ll interested and
affected parties'' have the opportunity to present evidence and
testimony at a public hearing, the scope of the hearing is limited to
the question of ``whether to grant or deny certification.'' Id. The
2020 Rule carried forward the position that the Agency has discretion
to determine whether a public hearing is necessary or appropriate;
however, the 2020 Rule removed the limitation on the subject matter of
the public hearing. Consistent with the 2020 Rule, under Sec.
121.17(b) of this final rule, stakeholder input at public hearings may
cover any relevant subject matter on the proposed project to best
inform EPA as it makes its certification decision.
    Commenters generally supported EPA's clarifications around the
process when it acts as the certifying authority, including the public
notice and hearing provision updates and procedural revisions. These
commenters said the revisions will help EPA act on requests in a timely
manner. EPA agrees that clarifications in the final rule regarding

the process when EPA acts as the certifying authority should support
timely actions and streamline the process. EPA finds that the
provisions at Sec. Sec.  121.16 and 121.17 will provide stakeholders
with greater certainty and predictability around the section 401
certification process where EPA acts as the certifying authority.
b. EPA's Role as a Technical Advisor
    Section 401(b) provides certifying authorities, project proponents,
and Federal agencies with the ability to ask EPA for technical advice
on applicable effluent limitations, or other limitations, standards,
regulations, or requirements, or water quality criteria, and any
methods to comply with such limitations, standards, regulations,
requirements, or criteria. See also H.R. Rep. No. 92-911, at 124 (1972)
(``The Administrator may perform services of a technical nature, such
as furnishing information or commenting on methods to comply with
limitations, standards, regulations, requirements, or criteria, but
only upon the request of a State, interstate agency, or Federal
agency.''). The 1971 Rule acknowledged this role but limited it to
provision of technical advice on water quality standards. 40 CFR 121.30
(2019). In the 2020 Rule, the Agency modified this provision to expand
the scope of technical advice and assistance EPA might provide to
better align with the statutory text. 85 FR 42274-75.
    Consistent with the scope of section 401(b), EPA is finalizing the
proposed revisions to the regulatory text at Sec.  121.18 to reflect
the statutory text more directly. Under this final rule, EPA shall
provide technical advice, upon request by a Federal agency, certifying
authority, or project proponent, on (1) applicable effluent
limitations, or other limitations, standards (including water quality
standards such as water quality criteria), regulations, or
requirements, and (2) any methods to comply with such limitations,
standards, regulations, or requirements. See 40 CFR 121.18. Federal
agencies, certifying authorities, and project proponents may request
EPA's technical assistance at any point in the certification process.
3. Implementation
    The Agency has made revisions throughout this final rule to clarify
and help in the implementation of EPA's roles under section 401. With
respect to EPA's technical advisor role, EPA does not intend this final
rule to give EPA the authority to make certification decisions for
states and authorized Tribes, or to independently review state or
Tribal certifications or certification requests. See H.R. Rep. 92-911,
at 124 (1972) (``The Committee notes that a similar provision in the
1970 Act has been interpreted to provide authority to the Administrator
to independently review all State certifications. This was not the
Committee's intent. The Administrator may perform services of a
technical nature, such as furnishing information or commenting on
methods to comply with limitations, standards, regulations,
requirements or criteria, but only upon request of a State, interstate
agency or Federal agency.''). Nor does the Agency consider its role
under section 401(b) to include providing monetary or financial support
to certifying authorities in implementing their section 401 programs.
The Agency observes that there are other means for certifying
authorities to seek financial assistance for their water quality
certification programs (e.g., CWA section 106 grants).
    Regarding identifying lands subject to exclusive Federal
jurisdiction, a commenter supported the approach taken in the proposal
to not provide an exclusive list of such areas. While supporting the
approach of not providing an exclusive list, the commenter recommended
the development of guidance to identify areas where EPA acts as a
certifying authority to assist stakeholders and ensure effective
participation in proceedings in these circumstances. While 16 U.S.C.
Chapter 1 identifies multiple national parks as having lands of
exclusive Federal jurisdiction,\87\ EPA does not maintain a map or list
delineating all lands of exclusive Federal jurisdiction. In the
preamble to the 2020 Rule, EPA noted that the number and extent of
lands under exclusive Federal jurisdiction are subject to change and
stated that it is the obligation of the project proponent to determine
the identity of the appropriate certifying authority when seeking
section 401 certification. 85 FR 42270. EPA is maintaining this
position in the final rule. Because such jurisdictional status is
subject to change, EPA is not providing an exclusive list of lands
subject to exclusive Federal jurisdiction. However, EPA is able to
offer technical assistance to stakeholders if questions arise regarding
the appropriate certifying authority on a given federally licensed or
permitted project.
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    \87\ These include lands within Denali National Park, Mount
Rainier National Park, Olympic National Park, Hot Springs National
Park, Hawai'i Volcanoes National Park, Yellowstone National Park,
Yosemite National Park, Sequoia National Park, Crater Lake National
Park, Glacier National Park, Rocky Mountain National Park, Mesa
Verde National Park, Lassen Volcanic National Park, Great Smoky
Mountains National Park, Mammoth Cave National Park, and Isle Royale
National Park.
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    The Agency is also providing further insight on its plans to
incorporate environmental justice into its role as a certifying
authority. As discussed in section III in this preamble, the Agency
intends for this final rule to address essential water quality
protection policies identified in Executive Order 13990, including
environmental justice. In addition to the policy directive from
Executive Order 13990, other executive orders emphasize the importance
of advancing environmental justice in Federal agency actions. See E.O.
12898, 59 FR 7629 (February 11, 1994) (directing agencies to make
environmental justice part of their mission by identifying and
addressing, as appropriate, disproportionately high and adverse human
health or environmental effects of their programs, policies, and
activities on minority and low-income populations in the United
States), E.O. 14008, 85 FR 7619 (January 27, 2021) (expanding on the
policy objectives established in E.O. 12898 and directing Federal
agencies to develop programs, policies, and activities to address the
disproportionately high and adverse human health environmental,
climate-related and other cumulative impacts on vulnerable,
historically marginalized, and overburdened communities, as well as the
accompanying economic challenges of such impacts); E.O. 14096, 88 FR
25251 (Apr. 21, 2023) (expanding on the policy objectives of E.O. 12898
and E.O. 14008 by further embedding environmental justice for all
through a whole-of-government approach to environmental justice and
directing Federal agencies to consider measures to address and prevent
disproportionate and adverse environmental and health impacts on
communities, to actively facilitate meaningful public participation and
just treatment for all people in agency decision-making, to identify
and address gaps in science, data, and research related to
environmental justice, and to increase accountability and transparency
in Federal environmental justice policy).\88\
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    \88\ The Agency also finalized and published the FY 2022-2026
EPA Strategic Plan in March 2022, which includes new environmental
justice strategic goals and emphasis to be embedded in all EPA work.
See https://www.epa.gov/planandbudget/strategicplan.
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    Consistent with these directives and EPA technical guidance, when
EPA acts as a certifying authority, the Agency should consider impacts
on communities with environmental justice concerns who
disproportionately bear the burdens of environmental pollution

and hazards, including Tribal Nations. In considering impacts from a
federally licensed or permitted project, water quality-related impacts
on communities with environmental justice concerns are issues that fall
within the relevant scope of analysis and should inform decision-making
on requests for certification. Specifically, the Agency intends to
consider the extent to which the ``activity'' or any discharge
associated with the activity may cause water quality-related effects
with the potential to impact communities with environmental justice
concerns. Additionally, as discussed above, the Agency finds that
broadening the public notice provision will provide communities seeking
to advance environmental justice with greater opportunities to inform
the certification process.

I. Modifications

1. What is the Agency finalizing?
    The Agency is finalizing the proposed modification provision at
Sec.  121.10 with revisions to further clarify the process based on
public comments. Consistent with the proposed approach, EPA is
finalizing a modification provision that only concerns modifications to
a grant of certification (with or without conditions) and does not
apply to a denial of certification or a waiver of certification. The
Agency has revised the regulatory text of the proposed rule to
explicitly provide in the final rule that the certifying authority is
not required to obtain the Federal agency's agreement on the actual
language of the modification after reaching an agreement to modify the
certification. Based on commenter feedback and recommendations, EPA is
finalizing a provision for modifications to a grant of certification
that balances the certifying authorities' need for flexibility to
protect water quality and the potential reliance interests of project
proponents and Federal agencies once the certifying authority has
issued a grant of certification.
2. Summary of Final Rule Rationale and Public Comment
    Prior to the 2020 Rule, the Agency's longstanding 1971 Rule allowed
certification modifications to occur after a certification was issued,
provided the certifying authority, Federal agency, and the EPA Regional
Administrator agreed to the modification. 40 CFR 121.2(b) (2019). When
the Agency revised the section 401 regulations in 2020, the rule did
not provide a process for modification of certification decisions after
the certifying authority had acted within the reasonable period of
time; instead, the 2020 Rule preamble acknowledged that certification
modifications could occur through other mechanisms (e.g., as provided
in other Federal regulations) and encouraged Federal agencies to
establish procedures in regulation ``to clarify how modifications would
be handled in these specific scenarios.'' 85 FR 42279 (July 13, 2020).
    The Agency acknowledges that the absence of a modification
provision in the 2020 Rule caused significant confusion during
implementation regarding whether and under what circumstances
modifications to certification conditions were allowed. Stakeholders
also expressed significant support for the ability to modify
certification conditions, noting that minor changes may occur in the
project that may not rise to a level that requires a new certification
(e.g., needing to extend the certification's ``expiration'' date to
match a permit extension, or shifting the certified ``work window'' to
reduce the amount of work occurring during high-flow periods), but may
be significant enough to warrant a modification of the certification.
    To introduce more clarity and balance the appropriate amount of
flexibility and certainty for all stakeholders, EPA proposed that a
certifying authority may modify a previously granted certification
(with or without conditions) after reaching an agreement to do so with
the Federal licensing or permitting agency. This final rule is
consistent with the Agency's proposed intent, with minor changes to the
regulatory text to better support implementation. Specifically, the
final rule provides additional clarity regarding the agreement between
the Federal agency and the certifying authority. The Agency also
removed proposed references to revoking or modifying a denial or waiver
of certification and clarified the title of the provision to explicitly
reflect the final provision's focus on modifications to grants of
certification.
    Although this provision addresses a potential modification to a
certification, after the certification modification is complete, EPA
expects the Federal agency to follow the appropriate Federal license or
permit modification process when incorporating any certification
modifications into a previously issued Federal license or permit.
    This final rule remains consistent with the proposal and the
position in the 2020 Rule that CWA section 401 does not provide the
authority for unilateral modifications to a certification decision--
either by the certifying authority or by the Federal licensing or
permitting agency--after the statutory reasonable period of time in
which a certifying authority has to act on a request for certification.
To be clear, the Agency does not intend for modifications to be used to
avoid or extend the reasonable period of time because Sec.  121.10 in
the final rule only applies to previously granted certifications.
a. Returning to a Modification Process
    CWA section 401 does not expressly authorize or prohibit
modifications of certifications. Some commenters recommended that the
final rule not include a provision for certification modifications
because it conflicts with the one-year limit for certifying authority
action. A few commenters argued that Congress defined and precisely
time-limited the ability of certifying authorities to review the
potential impacts of federally licensed or permitted projects. These
commenters argued that the ability to modify or ``reopen'' a
certification decision renders the express time limits Congress imposed
in section 401(a)(1) meaningless. EPA disagrees and concludes that the
best interpretation of section 401 is one that allows for modifications
with reasonable guardrails like the ones in this final rule. This
interpretation is supported by the text of section 401, which envisions
the certifying authority participating in the Federal licensing or
permitting process after the issuance of a certification. See 33 U.S.C.
1341(a)(3)-(4).\89\
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    \89\ See Keating v. FERC, 927 F.2d 616, 621-22 (D.C. Cir.1991)
(summarizing section 401(a)(3)); see also 115 Cong. Rec. 9257, 9268-
9269 (April 16, 1969) (discussing a hypothetical need for a state to
take another look at a previously certified federally licensed or
permitted activity where circumstances change between the issuance
of the construction permit and the issuance of the operation
permit).
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    The Agency does not view modifications as contrary to the text of,
or congressional intent supporting, the reasonable period of time
limitation. First, on its face, the reasonable period of time
limitation only applies to the certifying authority's original action
on the request for certification. See 33 U.S.C. 1341(a)(1) (requiring a
certifying authority to act on a request for certification within a
reasonable period of time not to exceed one year); see also 40 CFR
121.7(a) and (b) (interpreting the term ``to act on a request for
certification'' to mean the certifying authority must make a decision
to grant, grant with conditions, deny, or expressly waive certification
within the reasonable period of time). The statute

is silent regarding subsequent modifications. Second, in imposing the
reasonable period of time limitation, Congress was concerned by the
potential for the certifying authority's ``sheer inactivity'' to delay
the project. See H.R. Rep. 92-911, at 122 (1972). That concern is not
present with modifications to a grant of certification because the
certifying authority will have already acted on the request.
    EPA requested comment on whether it should place a time limit on
when a certifying authority can modify its grant of certification in
relation to the issuance of the Federal license or permit. While a few
commenters argued that a certification should not be modified after the
Federal license or permit is issued, several commenters asserted that
certification modifications may be necessary to account for unforeseen
water quality impacts during the life of the Federal license or permit,
particularly for projects that can last decades. To balance stakeholder
interests, EPA is not imposing such a time limit on when modifications
to a grant of certification can occur in relation to the issuance of
the Federal license or permit. The final rule's modification provision
provides project proponents, certifying authorities, and Federal
agencies with the flexibility to address project changes and avoid the
burden of having to seek a new certification where the certifying
authority and the Federal agency agree.
    EPA also requested comment on whether EPA should identify a list of
scenarios that may warrant certification modification. The preamble to
the proposed rule provided examples of minor changes that may not rise
to the level of requiring a new request for certification, but may be
significant enough to warrant a modification of the granted
certification (e.g., needing to extend the certification's
``expiration'' date to match a permit extension, or shifting the
certified ``work window'' to reduce the amount of work occurring during
high-flow periods). 87 FR 35361 (June 9, 2022). However, EPA did not
propose an exclusive list of scenarios that may warrant modification.
EPA received a wide range of comments on whether to list such
scenarios, with most commenters requesting flexibility to address new
information or project changes without providing specific details about
what they meant by ``new information'' or ``project changes.'' A couple
of commenters recommended that EPA develop a list of scenarios where
modifications are appropriate, whereas a few commenters expressed
support for the modification process precisely because the proposal did
not define all circumstances in which modification is appropriate.
    After reviewing public comment, EPA is not finalizing such a list
because the certifying authority and Federal agency are in the best
position to work together to determine whether a new certification or a
certification modification is appropriate in a given situation.
Although EPA understands the perspective of most commenters that it may
be helpful to have examples of circumstances where a modification to a
certification may be appropriate, EPA is declining to include a non-
exhaustive list in the regulatory text so that certifying authorities
and Federal agencies retain the flexibility to determine their
certification modification needs after considering the local water
quality and project-specific context. Even without a list in the
regulation, EPA still expects that the Federal agency will not
unreasonably withhold its agreement to modifications, especially for
administrative edits, such as correcting typographical errors, changing
a point of contact, or adjusting a certification's expiration date to
reflect an updated license or permit expiration date.
    In contrast to identifying scenarios warranting certification
modifications, a few commenters recommended that EPA develop guidance
regarding scenarios where a new request for certification is necessary,
instead of a certification modification, to provide clarity on the
outer limits of modifications. As noted above, EPA is declining to
finalize any bright line scenarios (e.g., specific new information or
changed circumstances) for when a modification is appropriate versus
when a new certification request is required. The Agency cannot
anticipate all the scenarios in which one path may be appropriate over
the other, nor can the Agency predict how state, territorial, and
Tribal certification modification processes will determine which path
to take. Beyond modifications to existing certifications, there may be
circumstances that warrant the submission of a new request for
certification, such as if certain elements of the activity (e.g., the
location or size of the activity) change materially in a manner that
could impact water quality after a project proponent submits a request
for certification. If the activity changes so materially after the
request for certification as to constitute a different activity, this
may warrant a new request for certification. The 2020 Rule preamble
also recognized this possibility. See 85 FR 42247 (``[I]f certain
elements of the proposed project (e.g., the location of the project or
the nature of any potential discharge that may result) change
materially after a project proponent submits a certification request,
it may be reasonable for the project proponent to submit a new
certification request.'').
b. Limits to Modification of Certification Decisions
    In Sec.  121.10 of the final rule, EPA is finalizing limits to
certification modifications. The Agency made small changes to the
proposed regulatory text to clarify these limits, including an
adjustment of the provision title from ``Modifications'' to
``Modification to a grant of certification'' to clarify that
modifications are limited to grants of certification. 40 CFR 121.10.
Another adjustment was to flip the substance of proposed Sec.
121.10(a) and (b) in the final rule so that the text first identifies
the modification process and then its limitations. Furthermore, the
Agency removed references to modifying denials or waivers of
certification from proposed Sec.  121.10(a) and revised the term
``modify'' in proposed Sec.  121.10(a)(4) to ``change'' in Sec.
121.10(b)(2) of the final rule.
    As noted above, EPA intends that a modification to a grant of
certification means a change to an element or portion of a
certification or its conditions--it does not mean a wholesale change in
the type of certification decision or a reconsideration of the decision
whether to certify (e.g., changing a grant of certification to a denial
of certification). Section 121.10(b) of the final rule makes this clear
by providing that a certifying authority may not--through the final
rule's modification provision--revoke a grant of certification or
change it into a denial or waiver. Constraining certifying authorities
from fundamentally changing their certification action through a
modification process recognizes reliance interests and promotes
regulatory certainty. Further, EPA has concerns that changing the
fundamental nature of the certification action (e.g., change a grant,
denial, or waiver to something entirely different) may be inconsistent
with the congressional admonition to act on a certification request
within the statutory reasonable period of time. In addition, commenters
indicated much greater interest regarding modification to grants of
certification, and very little interest regarding modifications to a
denial or waiver. Commenters also expressed confusion regarding EPA's
proposed language regarding modifications to a denial or waiver.
    While the final rule text does not address modifications to denials
or waivers for the reasons discussed above,

EPA nonetheless concludes for the reasons mentioned above that section
401 does not authorize a certifying authority to ``modify'' a denial or
waiver into a fundamentally different decision such as a grant of
certification. As discussed in the proposed rule preamble, if a
certifying authority has previously waived certification, that waiver
may not be modified because there would be no ``certification'' to
modify. 87 FR 35361-62. Thus, a certifying authority may not ``modify''
a waiver by changing it into a grant, a grant with conditions, or a
denial. And finally, a denial of certification cannot be modified into
a grant (with or without conditions) of certification or a waiver of
certification.\90\
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    \90\ Of course, nothing in section 401 or this final rule would
preclude a project proponent from requesting certification again
after a denial without prejudice and then the certifying authority
could act in a different manner upon the second request if
circumstances have changed. See section IV.F in this preamble.
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    In contrast to this position, some commenters stated that EPA
should allow for certification revocations. A few of these commenters
recommended allowing revocations when done in accordance with the
certifying authority's laws or regulations. One commenter suggested
that EPA change the modification provision to allow for a denial of
certification to be modified or revoked prior to the finalization of a
Federal license or permit denial. Another commenter recommended
allowing a granted certification to be revoked or modified into a
denial of certification when new information is received pertaining to
a project, which may substantively change the scope of work that may
result in a discharge. Another commenter suggested that EPA should add
language to clarify that the certifying authority retains the right to
revoke the certification in circumstances where the project proponent
provided false or misleading information on which the certification
decision was based.
    The Agency recognizes the ongoing need to adapt to new and changing
information about water quality impacts of a project after a
certification decision has been issued, but the Agency is declining to
broaden the final rule's modification provision to be a mechanism to
revoke or reverse a certification decision. As discussed above, while
the statutory language and legislative history appear to countenance a
role for certifying authorities after a certification is issued, EPA
concludes that this role does not include unilateral action to revoke
or reverse the decision.\91\ EPA reiterates that if the activity
changes significantly after a certification decision has been issued
(e.g., material change in the breadth or location of the activity),
this may warrant a new request for certification.
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    \91\ This statement and more broadly Sec.  121.10 of this final
rule are not meant to address certifying authority action on a
request for certification upon remand from a court or administrative
tribunal of the certifying authority's initial action on the
request. Section 121.10 is also not intended to address or govern
court vacatur of certification decisions, or action by a certifying
authority after a court vacatur (although the Agency notes that it
is unclear how a vacated certification decision could be
``modified''). This final rule does not address the situations of
vacatur or remand by a court or administrative tribunal.
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i. Timing of Modifications to a Grant of Certification
    Under this final rule, a certification modification could occur
only if the certifying authority had granted certification (with or
without conditions) within the reasonable period of time. The Agency
maintains this position from the proposal in the final rule because the
reasonable period of time limitation in the statute concerns the
certifying authority's action on a request for certification.
Accordingly, the Agency is finalizing a modification provision where a
modification to an element or a portion of a granted certification
occurs after the reasonable period of time in which the certifying
authority acted. See 87 FR 35361 (``Under this proposed rulemaking, a
certification modification could occur after the reasonable period of
time in which the original certification decision was made.'').
    EPA requested comment on whether the certification modification
process should account for (1) whether there is a Federal license or
permit modification process already in place and (2) the point in time
at which a modification may be made (e.g., if new information
supporting a modification arises either before or after issuance of the
license or permit). The Agency is not including a time limit on when
modifications can occur so that modifications can happen at any time
after the reasonable period of time ends, including prior to and after
the issuance of a Federal license or permit until the expiration of the
license or permit.
    Many commenters supported there being no time limit for
modifications. These commenters expressed the view that modifications
are necessary to reflect changing conditions, scientific understanding
of water quality effects, and changes to the project. Multiple
commenters explained that placing a time limit on modifications may
impede the project proponent's ability to remain in compliance on
projects with unanticipated or unpredictable project scope and schedule
changes and that restarting the certification process because of a
project change during construction could result in significant impacts
to project costs and public safety and would not be efficient,
effective, or predictable. A few commenters highlighted the need for
certification modifications, especially for projects with longer
lifespans, such as large pipelines and hydropower projects with FERC
licenses for 30-50 years. These commenters argued that there should not
be a limit on the period when certification modifications can be
addressed because some projects are ongoing for a long time, during
which time water quality concerns may arise. Conversely, one commenter
argued that EPA should not finalize a modification provision; however,
the commenter recommended that if a modification provision is
finalized, no modifications to certifications should occur after the
Federal license or permit is issued.
    After considering public comment, the Agency is promulgating a
final rule at Sec.  121.10 that provides the opportunity for
certification modification at any point after certification issuance
(until the expiration of the Federal license or permit), provided the
Federal agency and the certifying authority agree in writing prior to
modifying the grant of certification. As commenters noted, changes to
an activity with implications for water quality can occur at any point
in time after a certification is granted. Accordingly, the Agency finds
this approach best reflects the reality that projects change over time
and provides flexibility for project proponents, certifying
authorities, and Federal agencies to adapt to changing circumstances
without needing to reinitiate the certification process.
ii. Agreement for a Modification to a Grant of Certification
    Consistent with the Agency's longstanding approach to certification
modifications, EPA is finalizing the ability for a certifying authority
to modify a grant of certification (with or without conditions)
provided that the Federal agency and certifying authority agree in
writing that the certifying authority may modify the certification.
However, such agreement does not require the certifying authority and
Federal agency to agree to the substance of such a modification.
Although EPA recommends that the modification process be collaborative,
EPA is not

suggesting that Federal agencies and certifying authorities must
collaborate on the specific language of the certification modification,
as discussed more below. Additionally, the certifying authority may
modify only those portions of the certification that the two parties
agreed upon.
    Similar to the 1971 Rule, EPA is finalizing that a modification may
only occur where a Federal agency and certifying authority agree in
writing that the certification may be modified. While the parties must
agree that one or another part of the certification can be modified,
the certifying authority is not required to obtain the Federal agency's
agreement on the specific language of such modification. Simply put,
EPA expects that the certifying authority and the Federal agency's
agreement would identify those portions of the certification decision
that the certifying authority could modify, and then the certifying
authority would be responsible for drafting the modification language.
Because of commenter requests for greater clarity regarding what the
Federal agency gets to review prior to agreeing to a modification, EPA
is finalizing additional text in Sec.  121.10(a) to clarify that the
certifying authority is not required to obtain the Federal agency's
agreement on the language of the modification.
    Some of the commenters who supported the proposed process for
Federal agency and certifying authority agreement to a modification
asserted that the Federal agency should not have a role in determining
the specific language of a modification for various reasons, including
concern that adding a new conferencing and agreement process could lead
to delays and the fact that the Federal agency does not review
certification content during the original certification issuance.
    EPA agrees with these commenters. Congress recognized certifying
authorities as the ``most qualified'' to make decisions about impacts
to their water quality, and not Federal agencies. See 115 Cong. Rec.
29035, 29053 (Oct. 8, 1969) (Mr. Muskie: ``By requiring compliance
certification from the water pollution control agency, [the
certification provision] would assign policing responsibility to those
agencies most qualified to make an environmental decision and not to
those committed to carrying out some other function at minimum
cost.''). The Agency finds that certifying authorities are best
equipped to both determine the language of a certification decision and
the language of any subsequent modification to that decision.
Accordingly, EPA is finalizing a process where the certifying authority
only needs Federal agency agreement over the portions of the
certification to be modified rather than the modified language itself.
The Agency notes that certifying authorities are free to discuss the
substance of a modification with a Federal agency but are not compelled
to do so under this final rule.
    Additionally, EPA requested comment on whether the final rule
should provide project proponents with an explicit role in the
modification process. A few commenters recommended that the project
proponent should have a role in the process, for various reasons:
because section 401 is framed around the role of the applicant, because
the Federal agency and certifying authority may lack the technical
knowledge for the modification; because often the project proponent is
the party initiating the project modification; and because including
the project proponent in the modification decision or at least
providing an opportunity for public notice is a more transparent and
legally defensible approach that considers the project proponent's
reliance interests.
    Consistent with the 1971 Rule, Sec.  121.10 as finalized does not
provide the project proponent with a formal role in the modification
process. However, the Agency does not expect the process described in
Sec.  121.10 to prevent engagement with the project proponent before or
after the certifying authority and Federal agency have agreed that the
certifying authority may modify the previously granted certification.
EPA recommends that certifying authorities engage with the stakeholders
who will be impacted by a modification to the certification; some
certifying authorities may even be required under their regulations to
make any proposed modifications to their certification decisions
available for public notice and comment.
    Unlike the 1971 Rule, the Agency is not finalizing a role for EPA
in the certification modification process where the Agency is neither
the certifying authority nor the Federal licensing or permitting
agency. As noted in the 2020 Rule preamble, the statute does not
expressly provide EPA with a role in the certification modification
process, unlike the Agency's other roles under section 401.\92\ See 85
FR 42278. Additionally, although the 1971 Rule provided the Agency with
an oversight role in the modification process, the preamble to the 1971
Rule did not explain why. See 36 FR 8563-65 (May 8, 1971). The Agency
does not see the need to reintroduce such a role now, especially where
EPA was not involved in the original certification decision and is not
the relevant Federal permitting agency. EPA concludes that it should
not have an oversight role in the certification modification process.
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    \92\ See section IV.H in this preamble discussing EPA's specific
roles identified in section 401, including acting as a certifying
authority on behalf of jurisdictions lacking authority, notifying
other jurisdictions where their water may be affected by a discharge
from another jurisdiction, and providing technical assistance upon
request.
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    The cooperative approach in the final rule does not allow for
unilateral modifications by certifying authorities, which includes
through any ``reopener'' clauses included in a grant of certification.
Reopener clauses purport to authorize a certifying authority to
``reopen'' and modify a certification at a later date. The final rule's
position on unilateral modification is consistent with the position
taken in the 2020 Rule. See 85 FR 42279. The Agency continues to
disagree with commenters who stated that certifying authorities should
be allowed to unilaterally modify or revoke a section 401 certification
decision if they have asserted this ability through a ``reopener''
condition incorporated into the original certification decision.
    Some commenters recommended that EPA allow reopener clauses and
discussed their prevalence in certifications. For example, one
commenter asserted that certifications often include ``reopener'' or
similar conditions and cited to a few state regulations that the
commenter viewed as authorizing reopeners or unilateral modifications.
Another commenter asserted that virtually every condition of one
certifying authority is subject to further modification and provided an
example of one such certification where the certifying authority
reserved the right to add or modify the conditions of certification
under various specified circumstances. Another commenter recommended
that the final rule make clear that certifying authorities can reopen
certification based on a showing of changed circumstances and ongoing
effects of project operations failing to meet water quality standards.
    Other commenters recommended that the final rule prohibit
``reopener'' and similar certification conditions that purport to allow
certifying authorities to unilaterally add or revise certification
requirements after the reasonable period of time ends or after the
issuance of the Federal license or permit. A few commenters asserted
that reopener conditions are plainly inconsistent with section 401
because they allow certifying authorities to make certification
decisions after the

maximum one-year period allowed by the statute and after the Federal
license or permit had been issued. The commenters continued that
reopeners transform section 401's limited grant of authority to states
to certify Federal license and permit applications into an ongoing
regulatory role. Another commenter asserted that ``reopeners'' are
contrary to the express and prescriptive provisions for post-
certification authority that Congress provided in CWA section 401(a)(3)
and 401(a)(4).
    As discussed above, EPA's final rule does not authorize certifying
authorities to unilaterally (i.e., without Federal agency agreement)
``reopen'' or modify a certification decision. This holds true
regardless of whether a certifying authority has inserted language into
its grant of certification asserting this extra power.\93\ EPA is the
Federal agency tasked with administering and interpreting the CWA, see
33 U.S.C. 1351(d), 1361(a), including section 401, see Ala. Rivers
Alliance v. FERC, 325 F.3d 290, 296-97 (D.C. Cir. 2003); NYSDEC, 884
F.3d at 453, n.33, and EPA's interpretation supersedes any contrary
interpretation taken by a certifying authority. Certifying authorities
cannot bootstrap themselves greater authority to modify a certification
beyond what is authorized in this final rule at Sec.  121.10. However,
EPA wishes to emphasize the distinction between reopener clauses and
adaptive management conditions, the latter of which are permissible
under the final rule. See section IV.F of this preamble for further
discussion of adaptive management conditions.
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    \93\ This statement is not meant to address a certifying
authority's action on a state or tribally- issued license or permit,
which sometimes concurrently acts as the state or Tribe's section
401 certification decision. Such matters are outside the scope of
this rulemaking.
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c. Changes to the NPDES Regulations for Certification Modifications
    EPA is also finalizing deletion of 40 CFR 124.55(b), which
described the circumstances under which a modification may be made to a
certification on an EPA-issued NPDES permit. The approach to
modifications in Sec.  124.55(b) differed from the approach EPA is
finalizing at Sec.  121.10. First, it addressed a subset of situations
in which a modification would be permissible (i.e., a change in state
law or a stay, vacatur, or remand of a certification), while staying
silent regarding whether modifications would be appropriate in other
situations. Second, it suggested that in the identified situations,
such as a change in state law or regulation, a previously issued grant
of certification could be converted to a waiver, while this final rule
takes the general position that a certifying authority cannot change a
grant of certification into a fundamentally different certification
action through a modification pursuant to Sec.  121.10. Third, it did
not require EPA as the Federal permitting agency to agree to the
modification. Forth, it arguably suggested that in the identified
situations, a modification was more appropriate than a new request for
certification, an issue that EPA intentionally does not address in this
final rule. Finally, it expressly precluded EPA from incorporating
modified conditions into the NPDES permit except in one narrow
circumstance: to delete a NPDES permit condition based on a condition
in a certification invalidated by a state court or board, and only upon
the request of the permittee. However, as discussed supra at section
IV.G of this preamble, section 401(d) requires a Federal permitting
agency to incorporate certification conditions into the Federal permit
as conditions of that permit. EPA sees no reason why this fundamental
principal should not apply to conditions of a modified certification.
For this reason, EPA expects Federal agencies will agree to allow a
modification only when the agency is willing to modify its license or
permit or otherwise incorporate the modified certification conditions
into its license or permit. EPA is finalizing deletion of Sec.
124.55(b) because of these differences in approach between this final
rule and Sec.  124.55(b). As a result of the deletion of Sec.
124.55(b), all certification modifications, including those for EPA-
issued NPDES permits, must follow the approach finalized at Sec.
121.10. A corresponding technical edit was made to 40 CFR
122.62(a)(3)(iii) to remove the reference to Sec.  124.55(b).
    EPA requested comment on whether the final rule should allow a
certifying authority to unilaterally modify a certification in the
circumstances identified in former Sec.  124.55(b) such as a change in
state law or regulation upon which a certification is based, or if a
court of competent jurisdiction or appropriate state board or agency
stays, remands, or vacates a certification after Federal license or
permit issuance. A few commenters recommended retaining 40 CFR
124.55(b) instead of the proposed Sec.  121.10. To support their
recommendation to retain 40 CFR 124.55(b), one commenter stated that
EPA failed to describe any confusion, regulatory uncertainty, or other
problems attributed to the certification modification provisions in the
NPDES program.
    In response to these commenters, EPA notes that the modification
provision previously located at 40 CFR 124.55(b) only applied to
modifications to certifications for NPDES permits issued by EPA and did
not extend to licenses and permits issued by other Federal agencies.
Therefore, retaining 40 CFR 124.55(b) instead of the provision proposed
at 40 CFR 121.10 would not have provided additional clarity for
stakeholders interested in modifying a certification for those licenses
and permits issued by other Federal agencies. Furthermore, EPA intends
for Sec.  121.10 to apply to all certification modifications, including
those on certifications for EPA-issued NPDES permits. Finally, EPA was
concerned that leaving Sec.  124.55(b) in place could introduce
stakeholder confusion when read with final rule Sec.  121.10 because it
may have wrongly indicated that the circumstances in Sec.  124.55(b)
are the only circumstances in which EPA might agree to modify a
certification on an EPA-issued NPDES permit, and as discussed above,
Sec.  124.55(b) conflicted with several key features of this final
rule's approach to modifications. However, nothing in this final rule
prohibits EPA in its capacity as a Federal permitting agency to
continue to agree to modifications to certifications in the types of
circumstances previously prescribed in 40 CFR 124.55(b), as long as
such modifications are consistent with Sec.  121.10 of the final rule.
The final rule is broadening the circumstances under which the Agency
might agree with a certifying authority that a modification is
appropriate for a certification of an EPA-issued NPDES permit.
    EPA does not expect to develop an exhaustive list of circumstances
under which EPA (when acting as the Federal permitting agency) expects
to agree to a modification to a grant of certification by a certifying
authority; however, EPA will work with certifying authorities where
unanticipated water quality impacts, shifting project design plans, and
new information warrant a modification to a grant of certification (and
subsequently a modification to an EPA-issued NPDES permit). The Agency
may develop guidance in the future regarding Agency agreements to
modifications of grants of certification for NPDES permits issued by
EPA.
3. Implementation
    As previously discussed, the Agency is finalizing a process for
modifying a grant of certification that requires the certifying
authority and Federal agency

to agree that a modification is appropriate but does not require
agreement on the substance of the modification. The process is meant to
support a cooperative approach to adapting to changing circumstances or
new information in an efficient and transparent way. As with other
parts of the final rule, EPA is updating the section 401 regulations
regarding modifications to support some of the past practices that
certifying authorities and Federal agencies became familiar with over
50 years prior to the 2020 Rule. This includes a collaborative
modification process like the one in the 1971 Rule. EPA is not aware of
issues with modifications pursued under the 1971 Rule and notes that
many stakeholders requested implementation guidance after the 2020 Rule
omitted a process for modifying certification decisions. Therefore, the
modification provision of the final rule will restore flexibility and
efficiency where certifying authorities and Federal agencies find it
appropriate to update a previously issued grant of certification rather
than restart the section 401 certification process in response to
changed circumstances or new information. However, EPA does not expect
the modification provision to address every issue that may arise after
a certification has been granted.
    Certifying authorities and Federal agencies are encouraged to work
together to address new information or changed water quality conditions
throughout the life of the project such that congressional intent
behind section 401--enabling states to protect their water quality--can
be preserved. In the spirit of cooperative federalism central to
section 401, EPA expects that Federal agencies will not unreasonably
withhold agreement to a modification. The provision at 40 CFR 121.10
also does not preclude Federal agencies from developing a process for
coordinating on certification modifications within the framework
provided in this final rule.
    EPA recommends that certifying authorities maintain clear records
surrounding the development of certification decisions and any
modifications to previously granted certifications, including
justifications for modifying any certification conditions.\94\ EPA
wishes to emphasize that the same scope of section 401 that applies to
a certification decision also applies to any subsequent modification to
a grant of certification. See 40 CFR 121.3(b).
---------------------------------------------------------------------------

    \94\ See discussion in section IV.F.2.d of this preamble
regarding EPA's recommendation that certifying authorities include
in their certification conditions a statement explaining why each of
the included conditions is necessary to assure that the activity
will comply with water quality requirements. See also 40 CFR
121.7(d)(3).
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J. Enforcement and Inspections

1. What is the Agency finalizing?
    This section of the preamble discusses several issues that have
arisen with respect to enforcement of the requirement to obtain CWA
section 401 certifications and enforcement of certification conditions.
EPA did not propose to retain any regulatory text regarding enforcement
of the requirement to obtain section 401 certification or enforcement
of certification conditions.\95\ However, EPA requested comment on
whether it should add regulatory text on its interpretations on the
enforceability of certification conditions by Federal agencies and
certifying authorities; the judicial holdings regarding the application
of the CWA citizen suit provision to certifications and certification
conditions; and the interpretation of the term ``review'' in CWA
section 401(a)(4). EPA is not finalizing any regulatory text on
enforcement, consistent with the proposal. See 87 FR 35363 (June 9,
2022). Nevertheless, in light of the pre-proposal input and public
comments EPA received on this issue, as well as stakeholder concern and
confusion over how the 2020 Rule addressed CWA section 401 enforcement,
EPA will discuss some of the more common concerns that have been
identified regarding enforcement of the requirement to obtain section
401 certification and enforcement of certification conditions. To be
clear, EPA is not offering new interpretations or positions on the
issues discussed below.
---------------------------------------------------------------------------

    \95\ EPA is finalizing regulatory text regarding Federal agency
review of certification decisions. See section IV.G of this preamble
for further discussion.
---------------------------------------------------------------------------

2. Summary of Final Rule Rationale and Public Comment
a. General Enforcement Issues
    Section 401 contains three provisions directly relevant to
enforcement. First, section 401(a)(4) provides certifying authorities
with an opportunity, prior to operation, to inspect a certified
federally licensed or permitted activity or facility that does not
require a Federal operating license to assure its operation will not
violate water quality requirement. 33 U.S.C. 1341(a)(4). If the
certifying authority determines that the operation will violate
applicable water quality requirements, the Federal agency may suspend
the Federal license or permit after a public hearing. Id. Second,
section 401(a)(5) provides that any certified Federal license or permit
may be ``suspended or revoked'' by the Federal agency ``upon the
entering of a judgment under [the CWA] that such facility or activity
has been operated in violation'' of the enumerated sections of the CWA.
Id. at 1341(a)(5). Third, section 401(d) provides that if a grant of
certification includes conditions, those conditions ``shall become a
condition on any Federal license or permit subject to the provisions of
this section.'' Id. at 1341(d).
    Of these three provisions, the 1971 Rule only included regulatory
text on section 401(a)(4), as discussed below in the section on
inspection authority. The 1971 Rule did not contain any regulatory
provisions addressing section 401(a)(5) or section 401(d) (the latter
of which was not added to the statute until the 1972 amendments). The
2020 Rule addressed section 401(d) and section 401(a)(4). Regarding
section 401(d), the 2020 Rule stated that the Federal agency ``shall be
responsible for enforcing certification conditions'' incorporated into
its license or permit. 40 CFR 121.11(c) (2020). Regarding section
401(a)(4), the 2020 Rule allowed the pre-operation inspection under
section 401(a)(4) of all certified projects, regardless of whether they
had received a subsequent Federal operating license or permit. Id. at
Sec.  121.11(a) and (b) (2020). The 2020 Rule preamble also stated that
the ``CWA does not provide an independent regulatory enforcement role
for certifying authorities,'' 85 FR 42275 (July 13, 2020), and declined
to finalize an interpretation regarding CWA section 505 citizen suits
and section 401. Id. at 42277.
    In both pre-proposal input and public comment, stakeholders
generally agreed that Federal agencies could enforce certification
conditions. However, stakeholders expressed concern that the 2020 Rule
prevented states and Tribes from exercising their independent
enforcement authority and relied solely on Federal agencies to enforce
certification conditions. Many commenters raised concerns over Federal
agencies' willingness or capacity to enforce certifications and
certification conditions. For example, some commenters asserted that
Federal agency resource limitations coupled with the large
jurisdictional territories necessitate state and Tribal enforcement,
otherwise the conditions may never be enforced. Conversely, some
commenters asserted that certifying authorities did not have an
enforcement role either under section 401 or any other provision of the
CWA,

including section 505 (the CWA's citizen suit provision). Other
commenters asserted that section 505 provided for citizen suit
enforcement of both failures to obtain section 401 certification and
failure to comply with certification conditions. Many commenters
requested that EPA expressly state in the final rule that states and
Tribes have independent authority under the CWA to enforce
certifications and certification conditions.
    EPA observes that this final rule is generally focused on
interpreting the text of section 401 itself, and not other provisions
of the CWA. Section 401 does not directly address state or Tribal
enforcement authority and the Agency is declining to add regulatory
text on that issue. Consistent with the approach taken in the 2020
Rule, this rulemaking does not include interpretations of other
enforcement-related sections of the CWA, such as section 505. As such,
the Agency is not adding regulatory text to address state or Tribal
enforcement authority with respect to section 505.
    The Agency views section 401 certification conditions that are
incorporated into the Federal license or permit as enforceable by
Federal licensing or permitting agencies. Section 401(d) provides that
if a grant of certification includes any conditions, those conditions
``shall become a condition on any Federal license or permit.'' As a
result, the Federal agency can enforce any such conditions in the same
manner as it can enforce any other conditions of its license or permit.
EPA expressed this interpretation in the 2020 Rule, 85 FR 42275-76, and
a decade prior to that rulemaking. See, e.g., 2010 Handbook at 32
(rescinded in 2019, see supra). EPA also observes that Federal agencies
have considerable discretion in deciding whether and when to enforce
requirements and conditions in their licenses and permits. See Heckler
v. Cheney, 470 U.S. 821, 831 (1985) (discussing why it is important for
agencies to retain enforcement discretion).
    However, as noted above, the 2020 Rule included regulatory text
that explicitly stated that Federal agencies were responsible for
enforcing certification conditions incorporated into its Federal
license or permit. 40 CFR 121.11(c) (2020). EPA proposed to remove this
regulatory provision because it introduced ambiguity into the Agency's
longstanding position that nothing in section 401 precludes states from
enforcing certification conditions when authorized under state law (and
not precluded by other Federal law besides section 401). It has also
led to stakeholder confusion over whether the 2020 Rule prevented
states and Tribes from exercising their independent enforcement
authority and whether the 2020 Rule limited Federal agency discretion
regarding their enforcement of section 401 conditions in their licenses
or permits. Most commenters supported EPA's proposal to remove the 2020
Rule's language at Sec.  121.11(c). However, some commenters disagreed
with EPA's proposed approach, arguing that the enforcement of
certification conditions incorporated into Federal licenses or permits
must lie exclusively with the Federal permitting and licensing
agencies. EPA disagrees. The Agency has consistently taken the view
that nothing in section 401 precludes states from enforcing
certification conditions when so authorized under state law. In the
2020 Rule preamble, the Agency concluded that ``[n]othing in this final
[2020] rule prohibits States from exercising their enforcement
authority under enacted State laws.'' 85 FR 42276. EPA did, however,
consider this authority limited to ``where State authority is not
preempted by federal law.'' Id. A decade prior to the 2020 Rule, EPA
had already recognized that states enforce certification conditions
when authorized to do so under state law. See e.g., 2010 Handbook at
32-33 (rescinded in 2019, see supra) (``Many states and tribes assert
they may enforce 401 certification conditions using their water quality
standards authority.'').
    Some commenters argued that Federal and certifying authority
enforcement will lead to confusion, unnecessary litigation, and
possibly duplicative or inconsistent enforcement actions and
conditions. EPA disagrees that Federal and certifying authority
enforcement will lead to confusion or duplicative actions. After over
50 years of section 401 implementation experience, EPA expects that
certifying authorities and Federal agencies are well-versed in
coordinating enforcement actions. Nevertheless, EPA recommends that
certifying authorities clearly indicate which certification conditions
derive from state or Tribal law.
    With respect to CWA citizen suits and their application to both the
requirement to obtain section 401 certification and the requirement to
comply with certification conditions, some courts have addressed these
issues. First, the Ninth Circuit Court of Appeals held that citizen
suits may be brought to enforce the requirement to obtain
certification. ONDA v. Dombeck, 172 F.3d 1092, 1095 (9th Cir. 1998). In
ONDA, the court rejected the argument that CWA section 505 authorizes
only suits to enforce certification conditions but not the requirement
to obtain a certification. The court pointed to the plain language of
section 505, which cross-references the entirety of section 401 (and
not, for example, only section 401(d), which concerns certification
conditions). Id. Second, a few Federal courts have held that
certification conditions can be enforced through CWA citizen suits. In
Deschutes River Alliance, a U.S. district court considered the issue at
length and ultimately held that CWA section 505 authorizes citizens to
enforce certification conditions. See Deschutes River Alliance v.
Portland Gen. Elec. Co., 249 F. Supp. 3d 1182, 1188 (D. Or. 2017)
(considering the issue with respect to a FERC license); see also Pub.
Emps. for Envtl. Responsibility v. Schroer, No. 3:18-CV-13-TAV-HBG,
2019 WL 11274596, at *8-10 (E.D. Tenn. June 21, 2019) (relying in part
on Deschutes River Alliance and considering the issue with respect to a
section 404 permit issued by the Corps). EPA is not aware of any
Federal court that has considered the issue and reached the opposite
conclusion. Deschutes River Alliance also noted that certifying states
(in addition to the citizen group before the court) are among the
persons that may enforce certification conditions via the CWA citizen
suit provision. 249 F. Supp. 3d at 1191-92. The court reasoned that
section 505 is the only provision of the CWA that could bestow Federal
authority upon states to enforce certification conditions and, given
this, interpreting section 505 to preclude state enforcement of
certification conditions would run ``contrary to the CWA's purpose and
framework.'' Id. at 1191.
b. Certifying Authority Inspection Authority
    As discussed above, section 401(a)(4) identifies one set of
circumstances where the certifying authority may review the manner in
which a facility or activity will operate once the facility or activity
has received certification. 33 U.S.C. 1341(a)(4). The certifying
authority's review is limited to determining if the post-construction
operation of the facility or activity will ensure that applicable
effluent limitations, other limitations, or other applicable water
quality requirements will not be violated. Section 401(a)(4) further
states that when the certifying authority notifies the Federal agency
that the operation or activity will violate effluent limits, other
limits or other water quality requirements, the Federal agency, after
public hearing, may suspend the Federal license or permit.

Id. The Federal license or permit shall remain suspended until there is
reasonable assurance that the facility or activity will not violate CWA
section 301, 302, 303, 306, or 307. Id.
    The 1971 Rule clarified that the ability to ``review the manner in
which the facility or activity shall be operated or conducted'' meant
the right to inspect a facility or activity, and that the inspection is
limited to a situation where there was a Federal construction license
or permit and a subsequent Federal operating license or permit was not
required. The 1971 Rule set forth the procedure regarding inspection
and subsequent inspection findings; however, these regulations only
applied where EPA was the certifying authority. See 40 CFR 121.26
through 121.28 (2019). The 2020 Rule interpreted section 401(a)(4) to
apply to all certifying authorities. It also expanded the ability to
conduct inspections pursuant to section 401(a)(4) to any certified
project where the Federal license or permit and certification were
issued prior to operation, instead of only for projects where there was
a Federal construction license or permit and a subsequent Federal
operating license or permit was not required. 40 CFR 121.11(a) (2020);
85 FR 42277. In pre-proposal input, several stakeholders pressed the
Agency to allow for inspections before, during, and post-operation.
    EPA is removing Sec.  121.11(a) and (b) from the 2020 Rule in this
final rule because the 2020 Rule incorrectly interpreted the limited
applicability of section 401(a)(4) and the statutory language does not
need further clarification. A few commenters recommended that the
Agency add regulatory text regarding section 401(a)(4). However, the
Agency finds that the statute clearly outlines the inspection
authorities available under section 401. On its face, section 401(a)(4)
applies to a limited circumstance where a Federal license or permit and
certification are issued prior to operation of the facility or activity
and a subsequent Federal operating license or permit is not necessary
for the facility or activity to operate. Under these limited
circumstances, the statute is clear that the licensee or permittee must
provide the certifying authority with the ability to ``review'' the
facility or activity to determine whether it will comply with effluent
limitations, other limitations, or other water quality requirements.
EPA interprets the term ``review'' found in section 401(a)(4) as broad
enough to include inspection, but it is not necessarily limited to
inspection. It arguably also includes the right to review preliminary
monitoring reports or other such records that can assist the certifying
authority in determining whether the operation of the facility or
activity will comply with effluent limitations, other limitations, or
other water quality requirements. EPA requested comment on whether it
should articulate this interpretation of section 401(a)(4) in
regulatory text. A few commenters recommended that EPA adopt regulatory
text regarding its proposed interpretation of the term ``review'' found
in section 401(a)(4). After considering public comments, however, EPA
finds it unnecessary to add regulatory text defining the term
``review'' as used in section 401(a)(4).
    EPA emphasizes that section 401(a)(4) does not necessarily limit
the certifying authority's ability to inspect facilities or activities
before or during operation in accordance with the certifying
authority's laws and regulations. The Agency is aware that states and
Tribes may have their own authority to inspect a facility or activity
to determine compliance with conditions set forth in a section 401
certification. Similarly, section 401(a)(4) does not necessarily limit
a Federal agency's ability to inspect a facility during the life of the
license or permit pursuant to that Federal agency's laws and
regulations.

K. Neighboring Jurisdictions

1. What is the Agency finalizing?
    The Agency is finalizing its proposed approach to the section
401(a)(2) process, referred to as the neighboring jurisdictions
process, with some modifications to the regulatory text for clarity.
See 40 CFR part 121, subpart B.
    The Agency is adding text to Sec.  121.12 of the final rule, which
provides the contents of a notification to the Regional Administrator,
to clarify that Federal licensing and permitting agencies notify EPA
upon receipt of a Federal license or permit application \96\ and
certification or waiver by providing written notification to the
``appropriate'' Regional Administrator. EPA is also modifying the
proposed text of Sec.  121.13, which provided that a Federal license or
permit ``may not be issued pending the conclusion of the process
described'' in Sec. Sec.  121.14 and 121.15, to more clearly state that
a Federal license or permit ``shall not be issued pending the
conclusion of the process described'' in Sec.  121.13 (EPA's
determination of effects on neighboring jurisdictions) as well as
Sec. Sec.  121.14 and 121.15.\97\
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    \96\ See section IV.C.2 of the preamble regarding the
expectation that the Federal license or permit application be
complete. See section IV.K.2 of this preamble infra for further
discussion about the contents of the Federal agency's notification
to EPA.
    \97\ See section IV.K.2.d. of this preamble infra for further
discussion of the requirement for the neighboring jurisdictions
process to conclude before issuance of a license or permit by a
Federal agency.
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    For purposes of language consistency and clarity, the Agency
removed ``certified or waived'' from the proposed language of Sec.
121.13(a), which stated that ``[w]ithin 30 days after the Regional
Administrator receives notice in accordance with Sec.  121.12(a), the
Regional Administrator shall determine whether a discharge from the
certified or waived project may affect water quality in a neighboring
jurisdiction.'' The removal of ``certified or waived'' is intended to
remove redundancy, as Sec.  121.12(a) already states that the Federal
agency shall provide written notification to the appropriate Regional
Administrator ``[w]ithin five days of the date that it has received
both the application and either a certification or waiver for a Federal
license or permit,'' and to ensure conformity of the use of ``discharge
from the project'' across subpart B.
    Additionally, EPA is finalizing most of Sec.  121.13(c), which
provides the contents of the Regional Administrator's may affect
notification, as proposed, except the Agency is revising the proposed
language in Sec.  121.13(c)(3) to conform the statement that the Agency
provides to notified neighboring jurisdictions more closely with the
statutory text of section 401(a)(2) and provide greater clarity about
notification needed for an objection. Rather than providing a statement
that the notified neighboring jurisdiction ``has 60 days'' to provide
written notification ``whether it has determined that the discharge
will violate any of its water quality requirements,'' as proposed in
Sec.  121.13(c)(3), the final rule states that the Agency provides a
statement that the notified neighboring jurisdiction ``has 60 days
after such notification'' from the Agency to provide written
notification ``if it has determined that the discharge will violate any
of its water quality requirements.'' 40 CFR 121.13(c)(3). This revision
more closely reflects the statutory text of section 401(a)(2) which
provides that a notified neighboring jurisdiction may object to
issuance of a Federal license or permit ``[i]f, within sixty days after
receipt'' of notification from the Agency it ``determines that such
discharge will affect the quality of its waters so as to violate any
water quality requirements.'' 33 U.S.C. 1341(a)(2). As a result, the
text of Sec.  121.13(c)(3) of the final rule also more clearly conveys
the statutory time

and content requirements of the notification needed for an objection
than the proposed regulatory text.
    EPA is also modifying the proposed text of Sec. Sec.  121.13 and
121.14 to remove language requiring the Administrator and notified
neighboring jurisdiction to provide notification to the certifying
authority during the neighboring jurisdictions process, to more closely
reflect the statutory language in section 401(a)(2), which does not
require such notification to the certifying authority in this process.
    Further, the Agency is modifying the proposed text of Sec. Sec.
121.14 and 121.15 to clarify that references to a ``neighboring
jurisdiction'' in these provisions refer to a ``notified'' neighboring
jurisdiction, meaning a neighboring jurisdiction that has received
notification that the Regional Administrator has determined that a
discharge from the project may affect the neighboring jurisdiction's
water quality. The proposed text of Sec.  121.14(a) referenced notice
being provided to a neighboring jurisdiction ``in accordance with Sec.
121.13(c),'' and the language in Sec. Sec.  121.14 and 121.15 referred
to ``the neighboring jurisdiction'' or ``a neighboring jurisdiction''
without more explicitly stating that the provisions were addressing
``notified'' neighboring jurisdictions. In the final rule, EPA is
revising the internal citation in Sec.  121.14(a) to more appropriately
reference Sec.  121.13(b), the provision in the final rule requiring
the Regional Administrator to provide notification upon determining
that discharge from the project may affect water quality in a
neighboring jurisdiction. Likewise, EPA is revising the ``neighboring
jurisdiction'' references in Sec. Sec.  121.14 and 121.15 to specify
that these refer to a ``notified'' neighboring jurisdiction, to remove
ambiguity and improve clarity in these sections.
    The Agency is also adding language to the provision in Sec.  121.15
to clarify the process for the Federal agency to provide notice of a
hearing on a section 401(a)(2) objection, and provide greater
transparency as to how Federal agencies provide such notification. The
proposed text of Sec.  121.15(b) required the Federal agency conducting
a hearing on an objection from a neighboring jurisdiction to ``provide
public notice at least 30 days in advance of the hearing.'' In the
final rule, Sec.  121.15(b) requires the Federal agency in such
circumstances to ``provide public notice at least 30 days in advance of
the hearing to interested parties, including but not limited to the
neighboring jurisdiction, the certifying authority, the project
proponent, and the Regional Administrator.'' This addition clarifies
that that such notice must go to interested parties to ensure that they
can prepare for and provide their testimony or comments at the public
hearing. It further provides a greater level of transparency regarding
how all Federal licensing or permitting agencies will provide public
notice of a hearing on an objection.
    Additionally, for purposes of improving the efficiency and clarity
of the neighboring jurisdictions process in circumstances where a
notified neighboring jurisdiction seeks to withdraw a previously issued
objection, EPA is adding text in Sec. Sec.  121.14 and 121.15 of the
final rule to allow for withdrawal of an objection in these
circumstances. Specifically, Sec.  121.14(c) of the final rule provides
that ``[t]he notified neighboring jurisdiction may withdraw its
objection prior to the public hearing. If the notified neighboring
jurisdiction withdraws its objection, it shall notify the Regional
Administrator and the Federal agency, in writing, of such withdrawal.''
Consistently, EPA is adding text to Sec.  121.15(a) of the final rule,
providing that the Federal licensing or permitting agency shall hold a
public hearing on the notified neighboring jurisdiction's objection
``unless the objection is withdrawn in accordance with Sec.
121.14(c).'' As discussed further below, EPA finds that including a
provision addressing withdrawal of an objection improves the efficiency
of the neighboring jurisdictions process, as it recognizes the
possibility that neighboring jurisdictions may be able to resolve
objections before the hearing stage of the neighboring jurisdictions
process, and conserves resources that would otherwise be expended to
conduct and participate in such a hearing in these circumstances.
Additionally, the added text regarding withdrawal of an objection in
Sec. Sec.  121.14 and 121.15 of the final rule add clarity by
establishing a uniform procedure for executing withdrawal of an
objection.
    As discussed in greater detail below, EPA is finalizing its
proposed approach to the definition of neighboring jurisdiction, the
scope of the neighboring jurisdictions process, the circumstances
initiating the neighboring jurisdictions process, and the timing in
which a Federal licensing or permitting agency must provide
notification to EPA pursuant to section 401(a)(2). The Agency is also
maintaining its previously stated positions regarding the roles of the
Federal licensing or permitting agency, EPA, and a neighboring
jurisdiction in the neighboring jurisdictions process, but is providing
some further discussion regarding certain aspects of these roles below
to provide added clarity.
2. Summary of Final Rule Rationale and Public Comment
a. Definition of Neighboring Jurisdiction
    The Agency is finalizing the definition of neighboring jurisdiction
at Sec.  121.1(g) as proposed. This final rule revises the definition
of this term used in the 2020 Rule to clarify that it includes ``any
state, or Tribe with treatment in a similar manner as a state for Clean
Water Act section 401 in its entirety or only for Clean Water Act
section 401(a)(2), other than the jurisdiction in which the discharge
originates or will originate.'' See 40 CFR 121.1(g). In contrast, the
definition of ``neighboring jurisdiction'' in the 2020 Rule
inaccurately suggested that a neighboring jurisdiction may only include
a state or TAS Tribe that EPA determines may be affected by a discharge
from another jurisdiction. 40 CFR 121.1(i) (2020). As EPA noted in the
proposed rule, a neighboring jurisdiction's status is not based upon
EPA's ``may affect'' determination, but rather a neighboring
jurisdiction has this status by being a jurisdiction other than the one
where the discharge originates or will originate. Thus, the current
definition is more consistent with the statutory text establishing the
process set forth in section 401(a)(2) for purposes of considering the
water quality effects to ``any other state'' than the previous
definition for the 2020 Rule. The current definition also reflects the
TAS provisions for Indian Tribes to administer section 401 that are
being finalized in Sec.  121.11.
    A few commenters addressing the definition of neighboring
jurisdiction in the proposed rule advocated for EPA to adopt a narrower
definition of this term. EPA finds that a narrower definition of
neighboring jurisdiction is not supported by the statutory text in
section 401(a)(2), which establishes a process for considering water
quality effects to ``any other state.'' This statutory language does
not impose any other requirement on a neighboring jurisdiction other
than not being the jurisdiction in which the discharge originates or
will originate, meaning the jurisdiction with certifying authority.
Accordingly, EPA declines to adopt a narrower definition of neighboring
jurisdiction. Additionally, EPA notes that the definition of
neighboring jurisdiction makes clear that this term is not limited to
adjacent or downstream states or Tribes with TAS for section 401,
consistent with the relevant statutory language in section 401(a)(2).

b. Scope of the Neighboring Jurisdictions Process
    The Agency is also maintaining in the final rule the interpretation
of the scope of section 401(a)(2) stated in the proposed rule. In the
proposed rule, EPA interpreted the scope of section 401(a)(2) as
limited by the statutory language to considering potential effects only
from a ``discharge'' from an activity, explaining that this is based
upon the statutory language in section 401(a)(2) which limits EPA to
considering whether a ``discharge'' from an activity may affect the
water quality of a neighboring jurisdiction, and likewise limits a
neighboring jurisdiction to determining whether a ``discharge'' from
the activity will affect its water quality so as to violate any water
quality requirements. 87 FR 35365 (June 9, 2022). A few commenters
observed that EPA's proposed interpretation of the scope of section
401(a)(2) differed from its proposed interpretation of the scope for
certification, and one such commenter asserted that EPA's differing
interpretations of scope for certification and the neighboring
jurisdictions process in section 401(a)(2) is arbitrary. EPA disagrees.
    The neighboring jurisdictions process established in section
401(a)(2) is distinct from the process for certification, which is a
prior step in the statutory regime. Whereas the text of section
401(a)(1) and section 401(d) refers to a ``certification'' of
compliance with water quality requirements, the text of section
401(a)(2) does not refer to the actions taken by the Administrator or a
neighboring jurisdiction as ``certifications.'' Instead, the text of
section 401(a)(2) is clear that the neighboring jurisdictions process
is distinct from, and follows after, a ``certification'' made pursuant
to section 401(a)(1) and section 401(d). EPA rejects the assertion that
the scope of the neighboring jurisdictions process in section 401(a)(2)
must be the same as the scope of certification, as there are different
statutory provisions relating to certification and the neighboring
jurisdictions process, and interpreting them the same would not be
consistent with the language of these distinct statutory provisions.
Section 401(d), which is key to EPA's conclusion regarding scope of
certification, applies only to certification and not to the neighboring
jurisdictions process established in section 401(a)(2). Likewise, the
Supreme Court's reasoning in PUD No. 1 regarding the proper scope of
certification (which EPA agrees with) does not extend to the
neighboring jurisdictions process in section 401(a)(2).
    In contrast to statutory language pertaining to certification,
which supports a broader scope, the text of section 401(a)(2)
establishes that the Administrator and notified neighboring
jurisdictions consider the potential discharges of the project.
Specifically, pursuant to section 401(a)(2) the Administrator considers
whether ``such a discharge'' may affect the water quality of a
neighboring jurisdiction, and likewise, a notified neighboring
jurisdiction considers whether ``such discharge'' will affect its water
quality so as to violate water quality requirements. EPA interprets
this language as limiting the neighboring jurisdictions process to
discharges from the project. One commenter asserted that the scope of
section 401(a)(2), outlining the neighboring jurisdictions process, is
the same as section 401(a)(1), relating to certification, because
section 401(a)(2) is inextricably linked to section 401(a)(1) through
the use of ``such'' referring to the scope of discharges addressed in
section 401(a)(1).
    While EPA agrees that the ``such'' language employed in section
401(a)(2) refers to discharges from ``any activity'' subject to
certification pursuant to section 401(a)(1), the Agency does not
conclude that section 401(a)(1) compels the scope of the neighboring
jurisdictions process to be the same as the scope of certification. As
discussed above, the scope of certification is based, in part, upon
statutory text within both section 401(a)(1) and section 401(d), and
nothing in either of these statutory provisions or section 401(a)(2)
compels the neighboring jurisdictions process to have the same scope as
certification. This interpretation is also consistent with the
legislative history regarding the neighboring jurisdictions process.
The text of the neighboring jurisdictions process in the Water Quality
Improvement Act of 1970 (in section 21(b)(2)) used ``such a discharge''
and ``such discharge'' language later employed in section 401(a)(2),
even though the 1970 act used the term ``activity'' in place of
``discharge'' in what is now section 401(a)(1). The ``discharge''
language for the neighboring jurisdictions process remained unchanged
during the 1972 amendments that changed the language regarding
certification from ``such activity'' to ``such discharge'' in CWA
section 401(a)(1). The fact that the ``discharge'' language in section
401(a)(2) remained consistent throughout amendments supports that
Congress intended the scope of the neighboring jurisdictions process to
consider ``discharges,'' and it adopted and maintained a statutory
regime with differing scopes for certification and the neighboring
jurisdictions process.
    EPA's interpretation of the scope of the neighboring jurisdictions
process is further supported by procedural differences between this
process and certification. Several procedural differences reflect a
more limited authority for notified neighboring jurisdictions than that